ASX REITs could be set to benefit from reduced headwinds in the short term, according to Macquarie.
The broker has predicted a 75BP cut in the near future.
Macquarie forecasts a further 75bps of RBA cash rate cuts by Feb-2026, which should stimulate improved residential sales for developers and equity flows for fund managers, albeit skewed to 2H26.
ASX REITs can perform better when interest rates fall, as cheaper borrowing, more competitive yields, higher property valuations, and a stronger economy all boost their profitability and investor attractiveness.
REITs, put simply, are companies that own and operate property assets that typically produce income.
Here are three small and mid-cap ASX REITs Macquarie tips to outperform.
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DigiCo Infrastructure REIT (ASX: DGT)
DigiCo is a data center REIT and developer operating across Australia and North America.
It has had a rough past 12 months, seeing its share price fall more than 35% in that span.
However, Macquarie sees upside in the struggling ASX REIT.
Macquarie sees upside potential in the company despite its capital-intensive nature, highlighting several near-term positive catalysts.
DGT is capital intensive with moving variables, although our scenario analysis suggests risk is skewed to the upside, with a number of positive catalysts in the near term. We believe a ~4% DPS yield (fully covered by FFO from FY26) with FY26E-30E EBITDA CAGR of ~18% is attractive.
The broker has an outperform rating on DGT shares and a target price of $4.35. This indicates a 34.26% upside.
Arena REIT (ASX: ARF)
ARF is one of the largest childcare centre-focused real estate investment trusts, or REITs, in Australia. The trust owns a portfolio of 260 long day care centres for children aged under five in Australia.
Its stock price is down approximately 5% from a year ago.
Macquarie has an outperform rating and target price of $3.96 on this ASX REIT, largely thanks to its defensive profile.
This indicates 10% upside from its current share price of $3.60.
ARF's defensive income profile remains attractive, with growth supplemented by development projects at superior yields to the existing portfolio. Upside exists from accretive acquisitions. ARF continues to offer an attractive yield and growth return profile.
Qualitas Ltd (ASX: QAL)
This REIT is an alternative real estate investment manager focused on private credit and equity across commercial real estate sectors.
It has been a share market winner over the last year, rising by almost 50% in that span.
Despite such a big return in the last year, Macquarie still believes there is upside thanks to the company's successful growth of its funds under management (FUM).
The broker has placed an outperform rating and target price of $3.73, indicating 6.27% upside.
QAL is progressing on its strategy to grow committed FUM and deploy proceeds, benefiting from capital interest in private commercial real estate credit, with its best-in-class platform. We believe our forecast 18% EPS growth in FY26 is attractive, even on 24x earnings following the recent re-rate.
