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Highlights
- One of the best ways to take exposure in the real estate sector with limited capital is through ASX-listed A-REITs.
- Goodman Group is the largest ASX-listed REIT.
- Before selecting the best ASX REIT to invest in, investors must do proper due diligence.
During high inflation, some investors look for investments in real estate as prices of properties also tend to go up in such a scenario. However, one hinderance in investing in real estate is the requirement of huge sums of money -- which keeps most of the retail investors from investing in properties.
Image Source: © Alexandersikov | Megapixl.com
One of the best ways to take exposure in this sector with limited capital is through ASX-listed A-REITs (real estate investment trusts), which are property managers and/or developers that hold a wide portfolio of real estate assets. Let us have a look at three largest ASX-listed REITs.
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- Goodman Group (ASX:GMG)
The largest REIT listed on the Australian bourse, Goodman Group has a market capitalisation of AU$35.9 billion with 1.86 billion issued shares. The group owns and manages industrial properties such as logistics facilities, warehouses, etc. in 14 countries across the globe.
The group is also consistent with its dividend payout and is currently trading at a dividend yield of 1.56%, having declared the last interim dividend of AU$0.15 per share in February 2022. GMG shares have delivered a year-to-date return of a negative 27.26% so far, as of 11 May 2022.
- Scentre Group (ASX:SCG)
The second-largest REIT on the ASX is Scentre Group, a New South Wales-based property manager and developer with a market capitalisation of AU$14.27 billion and 5.19 billion issued shares. Th group owns and operates 42 Westfield Living Centres across New Zealand and Australia.
SCG shares are trading at a lucrative dividend yield of 5.18% as the yield got a boost on the back of a 15.08% fall in the SCG share price this year to the last closing price of AU$2.76 on 11 May 2022.
- Dexus Property Group (ASX:DXS)
The last REIT on the list is Sydney-based Dexus Property Group, which has a wide portfolio of Australian real estate assets valued at over AU$42 billion. The group has a market capitalisation of AU$11.41 billion with 1.07 billion issued shares. DXS shares are trading at a dividend yield of 4.8%.
DXS shares have shown a bit of resilience against the fall, compared to other REITs in the list. The stock is down 5.58% to the last traded price of AU$10.67 on 11 May 2022 and in the last one year, the stock has delivered a return of 5.23%.
Bottom Line
Investing in REITs could be treated as a proxy to directly investing in real estate but can be started with a much lower amount, which makes it a more viable option to invest in property market for retail investors. However, not all REITs are the same and each of them has different portfolio of properties, managerial experience, etc. Therefore, before selecting the best ASX REIT to invest, investors must do proper due diligence.
