Australian Real Estate Investment Trusts (AREITs)

Moore Australia part of a global network of offices, providing auditing and financial reporting services, advising local, national and international clients in the public and private sectors. Moore Australia generates annual revenues in the region of $80m. Moore Australia is part of the Moore Global network and has 14 offices with over 450 people nationwide. Moore Australia has extensive experience in state and local government, biotechnology, energy mining and renewables, health and aged care, education, manufacturing, not for profit, property and construction, retail and tourism and hospitality and has a strong presence in the following service lines: Asia Desk, Audit & Assurance, Business Advisory, Taxation, Corporate Finance, Governance and Risk Advisory.

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Many AREITs are now trading above their net asset values so we recommend investors retain a modest underweight exposure.

Australia Strategy

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Overview

The ASX 200 AREIT Accumulation Index returned 12.70% over the six months ending 31 December 2014.

S&P ASX 200 Property Accumulation

Outlook

The outlook for key property sectors is as follows:

Conclusion

Many AREITs are now trading above their net asset values. Valuations are relatively unattractive and operating income growth prospects are low. Nevertheless potential merger and acquisition activity and investor demand for yield may continue to provide some support for the sector. On balance we recommend investors retain a modest underweight exposure.

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2014 Moore Stephens Australia Pty Limited. All rights reserved.

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Authors

Charlie Viola

Martin Fowler

Haris Argeetes

James Totonjian

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