These 2 ASX real estate shares could be the best way to invest in property

Brickworks is one of the leading ASX real estate shares.

| More on:
a graphic image of three houses standing next to each other in ascending order of height.

Image source: Getty Images

Key points

  • ASX real estate shares can provide exposure to the property market
  • Charter Hall Long WALE REIT owns a large portfolio of commercial properties with long rental contracts
  • Brickworks is a leader in the building products industry, whilst also owning other assets with growth potential

Financial experts often talk about different asset classes like shares and property. But there are a number of ASX real estate shares out there that might be better options than investing in property.

In other words, the ASX share market can provide exposure to real estate investments so investors can directly or indirectly profit from property.

With that in mind, here are two ideas:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that owns commercial properties. These properties are predominately leased to corporate and government tenants on long-term leases.

The company is invested in a number of core sectors like office, industrial and logistics, and retail.

At the latest count, its portfolio amounts to around 550 properties, with an occupancy rate of more than 98% and a property value of $7 billion. Its weighted average lease expiry (WALE) is more than 12 years, providing substantial income visibility and stability.

It has in-built growth with its rental contracts, providing growth for its rental profit and distributions.

The ASX real estate share is experiencing ongoing valuation growth thanks to the current environment, particularly low interest rates. In its December 2021 update, the business saw an 8.1% rise of property valuations on paper.

This update meant the net tangible assets (NTA) per unit grew 14.4% to $5.85. The current Charter Hall Long WALE REIT share price is around 15% less than the NTA.

Ord Minnett currently rates it as a buy with a price target of $5.46. It’s expecting the business to pay a distribution yield of 6.3% in FY23.

Brickworks Limited (ASX: BKW)

This real estate ASX share provides domestic housing exposure through its Australian building products business. It has a number of businesses including Austral Bricks, concrete products, and Bristle Roofing. It has 28 manufacturing sites and more than 45 design centres and studios across the country.

Brickworks is a 50% shareholder in an industrial property trust with gross assets of more than $2.5 billion and a long development pipeline. One project, which is scheduled to essentially be done by now, is a big new distribution warehouse for Amazon in Sydney.

The company has expanded to North America and has established itself as the largest brickmaker in the northeast of the US.

It also has a major shareholding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which is a leading listed investment conglomerate.

The real estate ASX share’s normal dividend has been maintained or increased every year since 1976. That’s 45 years of stability. Brickworks says it’s proud of its long history of dividend growth and the stability this provides to shareholders.

Brickworks recently announced it had purchased 121 hectares of land at Bringelly in southwest Sydney to be used as a clay resource to support Austral Bricks. Brickworks is also selling 75 hectares of land at Oakdale East where a brick plant is located into the property trust. This will extend the development pipeline in order to meet the unprecedented demand for industrial development.

It’s rated as a buy by the broker Ord Minnett, with a price target of $26.20.

Should you invest $1,000 in Charter Hall Long WALE REIT right now?

Before you consider Charter Hall Long WALE REIT, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Charter Hall Long WALE REIT wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Real Estate Shares

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Real Estate Shares

Goodman share price charges higher on Q3 update and guidance upgrade

Goodman shares are storming higher on Monday morning. Here's why...

Read more »

A man sits at a desk holding a small replica house in his hand, upset at the sale of his property.
Real Estate Shares

Feel the squeeze: 3 ASX property shares with a whole lot of debt

When it comes to debt, it's the more the not-so merrier...

Read more »

two women stand at a computer smiling in a large factory with high shelves piled with goods, as though working in logistics.
Real Estate Shares

E-commerce is booming. Which ASX shares have exposure to warehouses?

Those products aren't going to store themselves...

Read more »

Rising real estate share price with a yellow arrow.
Real Estate Shares

This ASX All Ords share is bucking the sell-off to near all-time highs

One real estate player is outstripping the bunch.

Read more »

A white and black clock face is shown with three hands saying Time to Buy reflecting Wilson Asset Management's two ASX share picks in its WAM Research portfolio
Real Estate Shares

Here’s why the Brickworks (ASX:BKW) share price has loads of growth potential: expert

Brickworks shares have plenty of growth potential according to Ord Minnett.

Read more »

Houses with red declining arrow.
Earnings Results

Lendlease (ASX:LLC) share price tumbles on ‘reset year’ results

COVID-19 restrictions have hit construction projects across the world.

Read more »

A group of men in the office celebrate after winning big.
Real Estate Shares

Return to the office: Did this decision help boost ASX 200 property shares today?

Workers in NSW have been given the nod to head back to the office, with Victoria set to follow suit.

Read more »

A man in a blue collared shirt sits at his desk doing a single fist pump as he watches his Neometals shares rising on his laptop
Real Estate Shares

Merci! Here’s what’s driving the Unibail (ASX:URW) share price 7% higher today

The real estate company's shares are soaring. Here's why.

Read more »