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Abacus Property sells $46 million property – 3 REITs that are better value

The Abacus Property Group (ASX: ABP) share price has opened 0.5% lower in early trade this morning after the company announced the sale of Liverpool Plaza for $46 million.

What are the details of the transaction?

Abacus announced it has exchanged contracts for the disposal of Liverpool Plaza and two small adjoining properties in Liverpool, NSW for $46 million for approximately its current book value.

Following an unsolicited approach from a local group, contracts have been negotiated and exchanged with settlement due by 9 December 2019 with the proceeds to be used to reduce the company’s debt levels.

Liverpool Plaza was identified in August 2018 as a non-core asset and the transaction is in line with management’s evolving Retail strategy to focus on “super convenience” shopping centres in Ashfield (Sydney) and Lutwyche (Brisbane).

What’s been happening to Abacus?

The Abacus share price is up 12% in 2019 as it has marginally outperformed the broader S&P/ASX200 Index (ASX: XJO) which has climbed 10.8% to start the year.

Abacus boasts a market capitalisation of $2.12 billion and an impressive 4.99% dividend yield and provides more of a blend of growth and income than some of the retail real estate investment trusts (REITs) available on the market.

The Shopping Centres Australia Property Group Re Ltd (ASX: SCP) share price has been flat since the start of the year at $2.56 per security but offers securityholders a marginally higher 5.61% dividend yield. Vicinity Centres Re Ltd (ASX: VCX) share price has also been broadly steady at $2.54 per security but compensates with a 6.36% dividend yield, while Westfield owner and operator Scentre Group (ASX: SCG) has seen its securities climb 4.6% year-to-date but pays out a 3.83% dividend yield.

Is Abacus in the buy zone?

Abacus is currently trading at a P/E multiple of ~8.5x which is significantly below the ASX200 average of around 12x. Given the headwinds in real estate and retail that are building throughout 2019, I’d prefer to look at adding one of these top growth shares to my diversified portfolio.

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Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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