Despite the rate-cutting cycle almost certainly coming to an end, Bell Potter says it "remains constructive" on the real estate investment trust sector.
In a note to clients on the broker's tips for 2026, the Bell Potter team said there were a number of reasons to be positive on the sector, "and expect that macro-driven weakness could be met with valuation support''.
This was because they expected earnings growth to come from a variety of factors, including growth in rental incomes, the potential for debt-funded acquisitions, and stable underlying property fundamentals with occupancy rates strong across most sectors except for offices.
So who do they like in the sector?
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Aspen Group (ASX: APZ)
This real estate investor targets the provision of "affordable accommodation" to households with income of less than $100,000, Bell Potter says, adding that it is a "very defensive" market segment.
It went on to say:
The national undersupply equation means that this will remain a crucial pillar of the housing market and will be upheld by robust demand and government subsidy for the foreseeable future.
The Bell Potter team said they see "strong runway ahead" for Aspen, which upgraded its earnings outlook in its first-quarter update, and there was "further risk to the upside" for the remainder of the year.
Aspen is a recent ASX300 inclusion but remains under-owned across the market, and recent inclusion into EPRA NAREIT should underpin additional index/ passive buying.
Bell Potter has a $5.95 price target on Aspen shares compared with $5.57 currently.
Centuria Industrial REIT (ASX: CIP)
Centuria, the Bell Potter team said, is Australia's largest pure-play industrial real estate investment trust, with $3.9 billion in total assets.
The trust's portfolio is 85% metro infill, mostly on the eastern seaboard, diversified across 87 assets altogether.
The Bell Potter team went on to say:
The capital transaction market for industrial has improved significantly across calendar year 2025, and indeed, we see strong runway for the sector and in turn valuations into calendar year 2026 with material levels of dry powder capital already raised awaiting deployment. Centuria provides access to a best in class, scaled, east coast portfolio of industrial property yet trades at a circa 14% discount to net tangible assets.
Bell Potter has a $3.65 price target on the shares compared with $3.37 currently.
Region Group (ASX: RGN)
This company is Australia's largest landlord of neighbourhood shopping centres, Bell Potter said, with its 100 or so assets providing "highly resilient" income, with about 90% of rent derived from non-discretionary tenants.
The Bell Potter team went on to say:
As a result Region has historically (and likely will continue to) outperformed the market during volatile equity markets – a characteristic we find particularly attractive in the current climate.
The analysts said there were several positive signals in the market, including robust population growth, strong non-discretionary tenant sales, an undersupply of retail floor space, and increased capital appetite for the sector.
They added:
Whilst the immediate catalyst is valuation uplift, we also see a strong case for medium-term rental growth.
Bell Potter has a $2.70 price target on the shares compared with $2.44 currently.
