There has been a sell-off among some of the real estate investment trusts recently, which analysts argue is creating a buying opportunity.
I’ve selected two research reports published this week that make the case that the trusts in question have been oversold and are now worth a look for investors.
Let’s see who the analysts like.
HomeCo Daily Needs REIT (ASX: HDN)
HomeCo is down nearly 20% on a 12-month basis and is trading not far above its low for the period.
The shares have been sold off, particularly since the release of HomeCo’s results on 13 August.
Bell Potter has run the ruler over the company and believes the shares now represent good value.
One major selling point is the dividend yield, which is now sitting at 8.2%.
Bell Potter also argues that the sell-off in the shares has been overdone.
The broker said:
The stock has fallen 13.3% since results and underperformed peers over 3 months, a reaction we view as disproportionate to the underlying 2.2% FY27 earnings decline.
Bell Potter said they expected earnings to trough this financial year, with growth returning in FY28 as the cost of debt reduces, assets are sold, and developments are completed.
The broker added that retail supply was lagging demand, “driving vacancy down and rental growth up”.
Bell Potter has a buy recommendation on HomeCo shares with a price target of $1.20 compared to $1.08 currently.
Charter Hall Group Ltd (ASX: CHC)
UBS believes Charter Hall has been oversold since early August and calls the company a “top pick” in the real estate sector.
The broker said:
Of the large cap REITs, CHC’s relative returns are most negatively correlated to bond yields which are up ~50bp in the past two months. While rising yields are clearly a headwind for the business (e.g. via lower valuations and transaction volumes), we think the market is assigning too much weight to a downside outcome despite a more resilient earnings base this cycle.
UBS said the market was likely wary of the shares, which were heavily sold off during the last interest rate increase cycle in 2022-23.
But the broker said the current rate cycle is far less dramatic, and “property values should hold up better given sharp devaluations booked across 2022-24”.
UBS has slightly reduced their price target on Charter Hall from $24.50 to $24, but that’s still well above the current level of $18.56.
Charter Hall is valued at $8.38 billion.
The post 2 ASX real estate funds that could return 23% to 35% appeared first on The Motley Fool Australia.
Should you invest $1,000 in Charter Hall Group right now?
Before you buy Charter Hall Group shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Charter Hall Group wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 1 August 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- Is this the best ASX dividend share to buy in October?
- HomeCo Daily Needs REIT announces September 2026 quarterly distribution
- How to build a $50,000 passive income from ASX shares
- Buy, hold, sell: Regal Partners, HomeCo Daily Needs REIT, APA Group shares
- How much passive income can I earn off an $800,000 superannuation balance?
Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.