Real estate investment trusts have had a year, broking house Morgans says, with occupancy rates strong but share prices on the wane.
Morgans has put the cause down to the swing in the interest rate cycle, with three increases so far this calendar year.
The broker has identified five companies they rate as buys in the sector.
Fee-earning funds under management is growing strongly, with a high proportion of repeat borrowers underpinning deployment quality.
Morgans said the stock is trading at a discount to its net asset value.
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The article, shortened and in plain language
Real estate investment trusts have had a year, broking house Morgans says, with occupancy rates strong but share prices on the wane.
In a recent research note to clients, Morgans said the A-REIT index had fallen 15.5% over 12 months despite occupancy being at or near full across the industrial and convenience retail sectors.
Morgans has put the cause down to the swing in the interest rate cycle, with three increases so far this calendar year.
Weighted average cost of debt rose for most names and FY27 assumptions are higher again.
The broker has identified five companies they rate as buys in the sector.
They said Qualitas is growing market share as the banks retreat from the sector.
Fee-earning funds under management is growing strongly, with a high proportion of repeat borrowers underpinning deployment quality.
Morgans has a $3.90 share price target on Qualitas.
The data centre has an expansion plan on the cards, with Morgans saying the roadmap to full occupancy is well defined.
Morgans said the stock is trading at a discount to its net asset value.
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