Real estate investment trust (REIT) stocks present interesting opportunities for investors.
Put simply, REITs are companies that own and operate property assets that typically produce income.
These properties can be residential – like apartment blocks. They can also be commercial – offices, hospitals, shopping centres, warehouses.
There are a few reasons investors may turn to REIT stocks.
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The REIT upside
For many investors, buying a block of flats or a warehouse is simply too expensive.
However, ASX-listed REITs can be an attractive investment because they provide exposure to the property market without the large upfront capital, debt, or management responsibilities required when purchasing real estate directly.
Historically, REITs have predictable cash flows and dividend distributions and offer some capital growth opportunities.
One in particular that has shot ahead of the market this past year is Aspen Group Ltd (ASX: APZ).
A strong 12 months
Aspen Group Ltd (ASX: APZ) is a property investment and development company.
It operates across Residential, Retirement, Tourism and Mixed-Use, Corporate, and Other segments, managing assets ranging from apartments and retirement communities to tourism parks and corporate accommodation.
Over the last year, its share price has risen from $2.19 to $4.31 – a 96% rise.
To put that into context, a $5,000 investment a year ago would now be worth $9,840.
The company reported strong results for FY 25 including Underlying Operating Earnings up 22% from pcp and Net Asset Value up 14%.
It also reported:
- EBITDA up 29% to $41.4m
- Underlying Operating Earnings up 35% to $34.1m
- Distribution up 18% to 10.0 cents per security
Can it continue?
Speaking on FY 26 guidance, the company announced guidance would be ahead of 2025:
- Underlying Operating EBITDA of $47.0m – up 14%
- Underlying EPS of 19.0 cents – up 13%
- DPS of 11.0 cents – up 10%"
The company said:
Aspen Group has a massive opportunity to profitably increase in scale given the structural shortages of quality accommodation for the majority of Australian households.
Despite already rising significantly in the past 12 months, broker Bell Potter believes there's more room for growth.
The broker has a "buy" recommendation and price target of $4.85.
From yesterday's closing price of $4.31, this indicates a further upside of 12.5%.
