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Which REITS have the most capital upside?

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Which REITS have the most capital upside?

Dear James and Team, Thanks for the "Unloved Sectors" webinar. Very interesting. On the subject of unloved sectors I would like an updated view on REITS. From what I understand rising bond rates have resulted in a substantial reduction in REIT prices. My dilemma is that although bond rates are at, or near, a high and REIT prices at extreme lows, is now a good time to jump in? If so, in what order would you back these four shares: CLW, NSR, DXS and CHC. I know you like NSR but it seems that CLW may have more upside? CHC may not strictly be a REIT but it earns its money from the underlying property developments and holdings and should benefit from a recovery. My gut feel is that in 12 months time these shares could all show total returns of 10-15%. Or am I dreaming? Best Regards, Charles


Hi Charles,

We need to see bond yields turn before REITs improve sustainably. Our preference is DXS, NSR and for the higher risk, higher reward play, we like Centuria (CNI). We agree with your observation around CHC, if the property sector generally improves, on the back of a more supportive macro environment, then CHC will rally. We are less keen on CLW given the duration of its book; this is more like a long-dated bond.

Like you, we think there is value in this area of the market for those with some patience.

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Dexus Group (DXS)
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