By guest contributor Jeremy Jiang, analyst, Atchison Consultants
Australian real estate investment trusts (AREITs), as represented by the S&P/ASX 200 REITs Index, were largely flat and returned -0.4% in November 2018. The sector outperformed the S&P/ASX 200, which returned -2.2% over the month.
Over the 12 months to November 2018, AREITs posted a total return of 1.4%, or about 2.4% more than the S&P/ASX 200. November saw merger and acquisition (M&A) activity and buybacks pick up.
Sector Performance
Table 1 below shows the performance of the AREIT sector for various periods ending 30 November 2018.
Table 1
Source: S&P/ASX 200 AREIT Accumulation Index (2018)
The medium-to-long-term performance of AREITs continues to be relative strong. Over 5 years ended 30 November 2018, the sector produced a total return of 8.0% per annum. From a shorter-term perspective, total returns for periods of 3 months and 6 months were poor at -5.2% and 0.4% respectively.
The returns over the year to the end of November sub-sectors were varied. Specialised AREITs produced a return of 1.9%, Office AREITs produced 1.4% and Diversified AREITs returned 1.1%. Industrial AREITs went backwards and returned -1.0% while Retail AREITs returned -1.9%.