A-REITs have thumped G-REITs, over the last while.

A CRE (commercial real estate) melt down abroad (every day you hear horror stories about asset market downs now causing distress in regional banks as loan losses mount) is a big part of it.

Also, Goodman Group, which in our local market is a bit like Juptier, i.e. a massive weight to a strongly performing industrial centric (+ funds management) stock.

That’s on the one hand.

One the other, as Rescap are telling us, and as our own eyeballs confirm, there’s some good quality global assets out there, trading at reasonable prices.

Not everything is Office (which on average remains shunned by investors everywhere).

NVIDIA might eat the world, but you still need a roof, somewhere, for someone or something. The relative value compared to some expensive parts of the market, for REITs (e.g. vs NASDAQ) is not bad at all.

If you want Goodman group like exposure, you can go for for Prologis.

If you want semis/AI/tech exposure, you can go for data center exposure.

The point of the note is that a) a performance gap has opened up b) there’s good reasons for it, but there’s also some compelling reasons to be allocated anyway, and we think those dominate c) you still get some of the flavours that are hot (AI/industrials/tech) but in a more reasonably priced, indirect form.

Oh and the balance sheets look fine, certainly compared to history, and the dark days of CRE implosions, e.g. the GFC, which lurks in the back of everyone’s mind.

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