Reporting season: A look at recent reported A-REIT results
With the 2016 reporting season now complete for Australian REITs, Property Investment Research has reviewed the results from 25 stocks for the six months ended 31 December 2016. Here are some key observations:
- Earnings: Funds from operations (FFO) increased by an average of 5.4 percent compared with the prior corresponding period. PIR considers the quality of earnings to be relatively strong, supported by a combination of growth in net operating income and income from new acquisitions during the period.
- Asset valuations: The average capitalisation rate was 6.38 percent, with an average reduction of 21 basis points across the 25 stocks. PIR notes the movement in capitalisation rates has been less than the previous reporting season, where cap rate reductions were about 40 basis points to 60 basis points. Net tangible asset (NTA) increased by an average of 5.2 percent over the six months to 31 December 2016.