市场见解

Why this expert sees an opportunity for ASX property shares in 2022

While inflation fears are building this fund manager offers one sector as a possible outperformer…
The post Why this expert sees an opportunity for ASX property shares in 2022 appeared first on The Motley Fool Australia. –

Key points

A high inflation print has weakened investor sentiment towards unprofitable shares
An expert makes the case for why ASX property shares (AREITs) could be a good investment in 2022
Several AREITs outperformed the benchmark index last year

It has been a disappointing start to the year for the S&P/ASX 200 Index (ASX: XJO), being down 2.4% year-to-date. Concerns of persistent inflation have applied the brakes on many high-growth names. Instead, investors are turning towards cash generative businesses — some of which could be property shares on the ASX.

Pengana Capital Group fund manager, Amy Pham recently explained why this year could be another good one for Australian real estate investment trusts (AREITs). Despite the sector delivering a phenomenal year for shareholders last year, Pham thinks there are still reasons to back it again in 2022.

Making the case for ASX property shares

Although AREITs may not be as exciting as some of the other companies on the ASX, there could be a case to be made for the sector. However, it is worth knowing that the property sector covers a broad spectrum. This includes real estate across retail, logistics, offices, etc.

According to Pham, the macroeconomic environment for ASX property shares appear to be strong. For instance, REITs are holding healthy balance sheets (on average) and household savings are floating around all-time highs. These factors suggest there could be more room for these investments to run in 2022.

Though, there are risks present for investors to be mindful of. Currently, the Omicron variant is running rampant, which could create further supply chain issues. As central banks have been preaching, these supply-side disruptions are feeding into higher inflation.

On the topic of inflation and its potential effect on REITs, Pham says:

We are of the view that inflation is transitory and will subside as the pandemic is contained. With wage growth only approaching the 3% watermark, we don’t expect inflation to be at the high levels seen in the 1970s and early 1980s. To put things into perspective, interest rates are looking to rise but from a very low base.

Additionally, the fund manager believes ASX property shares can continue to deliver a sustainable income yield of 4%.

For Pham, the opportunities lie in REITs with positive free cash flow, good cash reserves, and solid management. Furthermore, the sector looks set for increased merger and acquisition activity in the eyes of Pham in 2022.

How it played out last year

If the property sector can deliver this year it would be a back-to-back winner. Last year, the sector outperformed the benchmark index. This was thanks to some impressive showings from a few ASX property shares.

As detailed in the chart above, National Storage REIT (ASX: NSR) and Goodman Group (ASX: GMG) provided substantial returns to their shareholders. Not too far behind was Centuria Capital Group (ASX: CNI) with a 34.6% gain in 2021.

Finally, REITs more exposed to the retail sector performed to a lesser extent. For example, Scentre Group (ASX: SCG) dished up a 16.9% return last year. However, this was still an outperformance of the broader market.

The post Why this expert sees an opportunity for ASX property shares in 2022 appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

Here are the 3 most heavily traded ASX 200 shares this Friday

How did the VanEck Morningstar Wide Moat ETF (ASX:MOAT) more than double the ASX 200’s returns in 2021?

ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low

5 things to watch on the ASX 200 on Friday

2 outstanding ASX 200 blue chip shares to buy

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

随时随地,交易世界!

移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。

推荐给您的朋友

向您的朋友推荐Monex并赠予他们免费使用我们交易工具的机会

我们尊重您的隐私,只会向您的朋友发送一封邮件 

与您的朋友分享

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!