VCX, GPT, DXS – 3 ASX REITs with dividend yield of over 4%

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  • Dividend-paying property stocks are included as part of the retirement plans to ensure regular income.
  • High dividends by REITS are largely due to increasing value of real estate and corporations distributing majority of their profit to investors.
  • Real estate has relatively low correlation with other stocks and bonds, allowing value investors to diversify their portfolio and enjoy overall low risk.

Real estate investment trusts or REITs are popular among dividend investors looking for regular income.

The increasing value of real estate, especially during the inflationary period along with these corporations distributing majority of their profit have led to high dividend incomes for investors. Moreover, many include these stocks as part of their retirement plans to ensure regular income. 

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Interestingly, real estate has relatively low correlation with other stocks and bonds, allowing value investors to diversify their portfolio and enjoy overall low risk.

These attractive rationales combined with the skyrocketing property prices in Australia have brought ASX property stocks on the radar. As of 3 March 2022, S&P/ASX 200 A-REIT gave one-year return of 13.36%. Let us look at three property stocks with attractive dividend yield.

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Vicinity Centres (ASX:VCX)

Retail property group Vicinity Centres has a direct portfolio with interests in 60 shopping centres. Moreover, the firm manages 30 assets on behalf of strategic partners, 29 of which are co-owned by Vicinity.

Vicinity posted a statutory net profit after tax of AU$650.2 million for the six months ended 31 December 2021, up by AU$1.04 billion on the prior corresponding period. The statutory net profit majorly includes a non-cash net property valuation gain of AU$320.1 million and funds from operations (FFO) of AU$287.7 million.

Interim dividend of 4.7 cents per share (cps) has been announced for the reported period, compared with 3.4 cps in H1 FY21. Meanwhile, payout ratio stood at 62%.

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GPT Group (ASX: GPT)

GPT is a vertically integrated diversified property group that owns and actively manages portfolio of high-quality Australian office, logistics and retail assets.

For the six months to 31 December 2021, the Group’s net profit after tax was AU$1,422.8 million compared with net loss after tax of AU$213.2 million in the pcp. The relaxation of restrictions during the fourth quarter benefitted most of GPT’s retail assets. Melbourne Central is expected to benefit from the reactivation of the Melbourne CBD and the return of office workers, students, and tourism.

A dividend of 9.9 cents per security for the six months to 31 December 2021 takes the full-year distribution to 23.2 cents per security compared with 22.5 cents per security in 2020.

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Dexus (ASX: DXS)

Dexus is one of Australia’s major real estate groups, which invests only in Australia, and directly owns office, industrial and healthcare properties, and investments.

Dexus’ net profit after tax was AU$803.2 million for the first half, an uptick of AU$361.9 million or 82.0% on the pcp. The increase in net profit was primarily driven by net revaluation gains of investment properties of AU$486.2 million The Group indicated that amidst pandemic impacts, it has witnessed an active start to the year with growth in its funds management business, continued leasing activity, new acquisitions, and selective asset sales.

Distribution per security in the first half of FY22 stood at 28.0 cents, a decline of 2.8% on the pcp due to the amount of trading profits in the first half of FY22.



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