Residential
BIG DEALS, BIG MONEY: AUSSIES EYE REIT REFOCUS IN US
Author: Kirsten Crazetue Urban Developer
Blackstone, the world’s largest alternative asset manager, this month agreed to acquire Apartment Income REIT for a reported $15.2 billion.
But according to Australian REIT analysts, although the step is an interesting one for the US giant, it isn’t necessarily signalling a path for domestic REITs. With more than $US1 trillion in assets already under management, Blackstone announced plans to invest more than $US400 million (in an all-cash deal worth $US39.12 a share) in Apartment Income REIT, also known as AIR Communities. The AIR Communities acquisition is the latest of several moves into rental housing for Blackstone, a predominantly commercial real estate owner. Blackstone this year agreed to spend $US3.5 billion to take single-family landlord Tricon private. Jack Magann, portfolio manager at Oracle Advisory Group, says that although it is insightful to view from afar what companies such as Blackstone are doing stateside, Australia’s REIT landscape remains largely out of the residential space. “Although we are trying to develop the build-to-rent sector here, it’s only just getting off the ground now. There’s not really a like- for-like comparison here with those apartment REITs in the US. It’s just a different market here,” he says. “Having said that, I think there should be a lot of transactions this year in the REIT sector in Australia. We’ve already seen a merger
Interesting times: Oracle Advisory Group portfolio manager Jack Magann.
between Bunnings’ BWT and Newmark Property REIT at the start of 2024. BWT got in for a really good price.” Magann adds it’s an interesting time for investors in REITs. “Most things are trading below their net tangible assets. So, if you’re going to get takeovers, you’re going to get a good premium at the current share price.” The perceived affordability in Australia’s REIT assets will also be a driver behind an uptick in activity this year, Magann says.
8 – May / June 2024
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