Australia real estate investment trusts (AREITs), as represented by the ASX 200 REITs Index, returned 2.7% for the month of August 2018, outperforming the S&P/ASX 200, which returned 1.4% over the same period.
Over the 12 months to August 2018, ASX 200 REITs posted a total return of 15.8% versus 15.4% for the broader Australian share market. The main drivers of performance came from the continuing increase in asset values and merger and acquisition (“M&A”) activity in the sector.
Sector Performance
Table 1 below shows the performance of the AREIT sector for various periods ending 31 August 2018.
Table 1
The medium to long term performance of AREITs continues to be strong. Over the past 5 years ended 31 August 2018 the sector produced a total return of 13.0% per annum. From a shorter-term perspective, total returns for periods of 3 months and 6 months were a respectable 6.0% and 14.2% respectively.
The AREIT sector has recovered from the sell-off activity of the global share markets in the February this year. For the 6-month period to the end of August, the total return of the sector increased from 7.5% to 14.2%.