By guest contributor Atchison Consultants
In the current low interest rate environment, institutional and retail investors have been seeking investments with higher yields. Over the last few years, an asset class which has offered attractive yields is Australian real estate investment trusts (AREITs).
As at 30 November 2016, the yield spread for the AREIT sector above the 10-year government bond yield was 3.7%. This is higher than the long term average spread (15 years to 30 November 2016) of 2.6%. Yield spread has fallen by 10bps over the month attributable mainly to a rise in the 10 year bond government bond yield.
Source: RBA, UBS