Australians have a love affair with property. Most dislike or are afraid of the stock market. But what if I told you that you could invest in property in the stock market? Without the hassle of fees, maintenance, rates, insurance, dealing with tenants, and so on?
Well actually, those things are still there. It's just that you don't have to deal with them – the company does that. Consider owning a Real Estate Investment Trust (REIT) like these two:
Westfield Corp Ltd (ASX: WFD)
Westfield Corp owns the Westfield-branded malls in Europe and the USA. It's big business and the company is currently selling its 'regional' centres to focus on its more important 'flagship' centres which are more valuable and profitable.
The company has a strong mix of tenants with occupancy at 96% in the flagship portfolio, and 93% in the regional portfolio. Westfield's net assets are valued at US$4.60 per security (the company reports in USD) as of the February annual report and it has gearing of 35%.
Scentre Group (ASX: SCG)
Scentre Group owns the Westfield shopping centres in Australia and New Zealand, and has over $3 billion in its development pipeline. Like Westfield Corp, Scentre has been divesting non-core assets to focus on its more promising prospects, although with occupancy at maximum, most of Scentre's future growth will have to come from development and rent increases.
Scentre has 99.5% occupancy and gearing of 33%. Its Net Tangible Assets are valued at $3.67 per security as of the February annual report.
Foolish Takeaway
There are plenty of viable ways to invest in property on the ASX, and there are a number of property trusts that specialise in all kinds of assets like liquor stores, long-tenure tenants, or Bunnings warehouses (the trust owns the property which it leases to these business tenants). This can give greater flexibility and specialisation to the would-be property investor, just with less legwork.
