Best-performing REITs for long-term savings portfolio- ARF and GMG

Highlights

  • REIT is one such sector that offers investors competitive total returns based on high, steady dividend income and capital appreciation.
  • ARF and GMG are two players with solid FY2021 results, positive outlook and dividend history.
  • The significant structural changes amid the COVID-19 environment would play a vital role in driving the sector’s performance in the coming days. Jbd cc

REIT or Real Estate Investment Trust allows investors to invest in commercial real estate property without actually buying and managing the property. Historically, REITs have given competitive total returns based on increased, steady dividend income & capital appreciation.

REITs provide strong dividend income. Thus, they are an essential investment source for people planning for retirement and retirees who require a regular income stream to meet living expenses.

On that note, let us look at some of the best-performing REITs on ASX right now.

Arena REIT (ASX:ARF)

Arena REIT is an internally managed Australian REIT that invests in childcare, healthcare, education and government tenanted facilities leased on a long term basis. The Company aims to generate an appealing and anticipated distribution to investors with earnings growth possibilities over the medium to long term.

The Company was listed on 13 June 2013 and has constantly provided dividends since 2016. In the last one year, ARF shares have delivered a return of ~64.1%. In FY2021, the Company announced an interim dividend of AU$0.039 per share, payable 04 November 2021. It generated a net profit of AU$165.4 million, up 116% compared to the previous corresponding period (pcp). Total Assets increased by 14% to AU$1.151.5 million.

Significant growth in share price

In September 2021 quarter, ARF announced a quarterly dividend of 3.95 cents per share.

Also, ARF holds 3.37% as its Annual Yield.  

Goodman Group (ASX:GMG)

Goodman Group is an integrated property group with operations across Australia, NZ, Asia, continental Europe,  the UK, North America and Brazil. The Company was listed on 02 February 2005 and has constantly provided dividends since 2011.  In the last one year, GMG shares have delivered a return of ~22.2%.

In FY2021, the Company provided a final dividend of AU$0.150 per share, paid on 26 August 2021. GMG delivered strong results in FY2021 with a 15% growth in operating profit to AU$1,219.4 million compared to FY2020. Statutory profit for the period was AU$2.3 billion. Total AUM grew 12% to AU$6.68 per share.

The Annual Yield of GMG stands at 1.32%.

ALSO READ: Here’s why Goodman Group (ASX:GMG) should be on investors’ radar

Australian REIT Outlook:

Australian REIT has experienced a number of structural changes across retail, offices and industrial portfolios since the COVID-19 outbreak. As per Fitch Ratings, these changes would drive the long-term performance of this space in the long-term.

There were several structural changes in the industry, and the players have played a significant role by delivering robust results amid the pandemic environment. Australian REIT was benefitted from low cases in most parts of the country. Retail visit plus cash collection rebounded strongly with the ease in lockdown restrictions. Office portfolios were protected by long-dated weighted average lease expires.

At present, the sector may experience challenges in case of lockdown in 2021. However, the ongoing vaccination rate would help to end the lockdown from 2022.

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