How to benefit from property stocks as rates rise

Ben Richards

Investment Analyst

The real estate sector is currently 10.5% below where it traded 12 months ago. Ben Richards from Seneca joins us to discuss the influence of central bank policy on stock-specific valuation and quality of management. Dexus (DXS), a real estate stock, was discussed, with Ben noting that the occupancy rate is still high and the stock is trading at a 30% discount on asset value.

Lifestyle communities (LIC), which is supported by the ageing population demographic, was also discussed, with Ben noting that the business has been well managed and is achieving greater than 20% IRR on their capital. Lastly, Goodman Group (GMG), an industrial property stock, which Ben notes that it’s well positioned to benefit from the e-commerce thematic and is expected to grow strongly. Ben concluded by noting that it is difficult to pick the exact top in the interest rate hiking cycle, but when it does occur, people will put money back into property

Watch the interview: Ausbiz – How to benefit from property stocks as rates rise