The ASX real estate stocks bouncing back strongest from COVID-19
Link copied to
In the last six months the majority of ASX real estate stocks have bounced back from their COVID-19 lows.
The real estate sector is broad involving Real Estate Investment Trusts (REITs), property developers, landlords and serviced office providers.
All of these have had different issues in 2020 and some are in better positions than others.
Property developer Ultima United (ASX:UUL) is the biggest winner, surging from under 2 cents to 57 cents in just six months.
The company has projects in Australia and Japan is looking at developing special disability accommodation under the National Disability Insurance Scheme.
It hopes to begin construction on its flagship Bentley project in WA next year.
Next is Faster Enterprises (ASX:FE8), up 717 per cent in six months and over 300 per cent in 12 months.
The stock has been suspended for the months on the basis it was to complete a capital raising but has not recommenced trading.
While it revealed a loss of over $1 million, it has overhauled its board and promises shareholders will see the results of a strategic review in the company.
The one other multi-bagger is CAQ Holdings (ASX:CAQ) which has multiple operations on China’s Hainan Island including a shopping centre and a warehouse.
The company has not only benefited from China’s recovery from COVID-19 but Beijing’s intention to make Hainan a free trade zone – giving it trade privileges only Hong Kong and Macau have.
While most other ASX real estate stocks that have been winners were also property developers there were a couple of other stocks on the winners’ list.
One was the ASX’s only real estate agency McGrath (ASX:MEA).
Despite the impact of COVID-19 on the property sector, forcing agencies to transition to digital viewings for a number of weeks, McGrath turned last years’ loss of $9.7 million into a $700,000 profit.
It is tipping a big FY21 and has hinted it may go on the acquisition trail as the industry consolidates.
Property valuation firm Acumentis (ASX:ACU) is another winner among ASX real estate stocks, up 130 per cent in six months.
It is seeing business hold up, crediting government support for the property sector – having feared en masse mortgage defaults – and record low interest rates.
But CEO Tim Rabbitt noted at its recent AGM that defaults end up eventuating as support ease it may not be a bad thing for business.
He noted that may generate extra work via receivership and mortgagee in possession instruction.
With people still working from home, even in states without community transmission in weeks, serviced offices lag behind.
The biggest loser, down 90 per cent in 12 months and 55 per cent in six months is Victory Offices (ASX:VOL).
As the pandemic broke out, Victory cut its casual workforce by 40 per cent and moved its marketing spend online.
Almost half of its landlords had agreed to reduce or defer lease obligations with discussions ongoing with others.