Why these ASX real estate stocks could be sleeping giants

After a sharp sell-off across the ASX real estate sector in 2026, investor attention has begun to shift toward the possibility of opportunity emerging from the downturn. 

The S&P/ASX 200 Real Estate Index (ASX: XRE) is down over 10% year to date. 

Real estate investment trusts (REITs) and property-linked stocks have been heavily affected by higher interest rates, tighter credit conditions, and reduced property valuations, leading to significant share price declines. 

However, for long-term investors, these periods of weakness can also signal potential value, particularly in high-quality assets with strong rental income and solid balance sheets. 

Why invest in REITs

A real estate investment trust (REIT) is a company that owns and operates property assets that typically produce income.

These companies can focus on commercial real estate, such as offices, hospitals, shopping centres, warehouses, and hotels. 

Others specialise in residential property investment, such as aged care villages and apartment buildings.

Many investors see REITs as a way to gain exposure to property markets without directly buying physical real estate, while receiving regular income and potential long-term capital growth.

A new report from Bell Potter has identified several REITs with long-term upside. 

Here are three options that received buy recommendations from the broker. 

Goodman Group (ASX: GMG)

Goodman Group is an integrated property group with operations in 14 countries. It specialises in industrial and commercial properties, owning, developing, and managing a global portfolio worth around $80 billion.

After falling significantly to start the year, it has been on a steady recovery. 

Bell Potter currently has a buy recommendation and $36.45 price target on the real estate stock. 

This indicates an upside potential of more than 18%. 

It has been receiving plenty of positive attention from other brokers too. 

Morgan Stanley put an overweight rating and $36.15 price target on this property company’s shares last week. 

Aspen Group Ltd (ASX: APZ)

Aspen Group engages in property investment and development. 

Its share price has dipped more than 12% year to date, however Bell Potter also sees upside for this real estate stock. 

In its weekly REIT report, the broker placed a buy recommendation and $6.50 price target on the company. 

From yesterday’s closing price of $4.80, this indicates an upside potential of 35%. 

Cedar Woods Properties Ltd (ASX: CWP)

Cedar Woods is an Australian property development company. Its principal interests are in urban land subdivisions and built-form development for residential, commercial, and retail purposes.

Its share price has fallen 20% year to date, but is also tipped to recover. 

Bell Potter currently has a buy recommendation and $9.65 price target on this real estate stock. 

From current levels, this implies a 40% upside. 

It’s worth noting the company also offers an attractive dividend yield projected to be over 5% in the future. 

The post Why these ASX real estate stocks could be sleeping giants appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.