www.jpmorganmarkets.comAustraliaEquityResearch13January2020AustralianREITs2019Review:~20%TSR&$7bninequityraisedAustralianREITsRichardJones,CFAAC(61-3)9633-4038richard.b.jones@jpmorgan.comBenBrayshaw(61-2)9003-8659benjamin.j.brayshaw@jpmorgan.comKrzysztofKaczmarek(61-2)9003-7274krzysztof.kaczmarek@jpmorgan.comJ.P.MorganSecuritiesAustraliaLimitedSeepage38foranalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.REITsdelivereda+19.4%totalreturnin2019,makingitthestrongestyearforREITssince2014inabsoluteterms.RelativetothebroaderS&P/ASX200Index,REITsunderperformedby400bp.ThebestperformingREITsin2019wereINA(+71.3%),CHC(+54.5%)andMGR(+47.5%),whilstunderperformersincludedVCX(+1.9%),CQR(+1.7%)andRFF(-5.5%).2019wasthebusiestyearforREITcapitalraisingssincethepost-GFCrecapitalisationsin2009,withatotalof$5.3bnraisedbyASX200REITs.Thedirectmarketactivitywasbuoyant,withatotalof$41.5bnofassetstransacting,up37%on2018.Keypointsfrom2019included:REITperformance.INA(+71.3%),MGR(+47.5%)andSGP(+39.5%)postedstrongreturnsin2019buoyedbyapost-FederalElectionrecoveryinthehousingmarket.CHC(+54.5%)hadanotherstrongyear,helpedbyperformancefeesandFUMgrowthattributedtostrongofficeandindustrialmarkets.CLW(+36.8%)gainedasbondyieldsmorethanhalvedbetweenJanuaryandAugust.AVN(+43.0%)wasastandoutperformeramongstretailREITsasothershoppingcentrelandlordsunderperformed.RFF(-5.5%)wastargetedbyanactivistshort-seller.Activeyearforequityraisings.ASX-listedREITsraisedatotal$7.1bnofequityin2019,withissuancebyASX200REITstotaling$5.3bn.KeyissuersincludedCLW,whichraised$1.1bninequityacrossfourraisings,DXSwhichraised$964mtofundtheacquisitionof80CollinsSt,GPTwhichraised$867mtofinancetheacquisitionofDarlingQuarterandMGRwhichtapp...
