Solid foundations: Is there opportunity in these real estate stocks?
Many investors aren't in a position to buy a home. But one way to gain exposure to the sector is through investing in ASX real estate stocks.
In fact, new data from the Australian Bureau of Statistics revealed the national mean price of residential dwellings recently passed $1 million.
The real estate sector is made up of two industries:
- Equity Real Estate Investment Trusts (REITs) industry covering companies or trusts engaged in the acquisition, development, ownership, leasing, management and operation of property.
- Real Estate Management & Development industry covering companies engaged in activities including development & sales, management or real estate services.
The S&P/ASX 200 REAL ESTATE (ASX:XRE) index has seen modest growth this year, rising 4.92%.
If you are interested in gaining exposure to the real estate sector, especially with interest rates expected to fall, here are some options that could have a strong upside.
Goodman Group (ASX: GMG)
Goodman Group is a global industrial property specialising in digital infrastructure, logistics and data centre developments across major urban markets.
It is the largest ASX Real Estate company on the ASX by market capitalisation.
The GMG share price is down 4.14% YTD.
With further interest rate cuts expected, it could be an opportune time to buy real estate shares like Goodman Group.
Interest rate cuts could benefit Goodman Group by lowering borrowing costs, boosting property valuations, and attracting more investors to income-generating assets.
Cuts to interest rates also support tenant demand by encouraging expansion from logistics and data centre clients, enhancing occupancy and development opportunities.
It seems brokers agree it could be a good time to buy GMG shares.
Broker Bell Potter has a target price of $38.27, indicating 10.8% upside.
Dylan Evans from Catapult Wealth also recently listed Goodman Group shares as a buy.
Lendlease Group (ASX: LLC)
Another ASX REIT stock to consider is Lendlease Group.
It is a property and infrastructure development company. It engages in designing, developing, constructing, funding, owning, co-investing or managing property and infrastructure assets.
So far in 2025 its share price has fallen 11.22%.
Brokers seem to think this is significantly undervalued.
Earlier this month Macquarie placed an outperform rating and $7.79 price target on its shares.
Bell Potter has a price target of $7.12.
From its current share price of $5.54, these price targets indicate an upside between 28.5% to almost 40%.
VanEck Ftse International Property (Hedged) ETF (ASX: REIT)
Another option for investors looking to gain exposure to real estate stocks is through a thematic ETF.
The VanEck Ftse International Property (Hedged) ETF (ASX: REIT) ETF includes approximately 300 international REITs diversified by country and sector.
It provides exposure to commercial, healthcare, retail, office, industrial and other sectors not available in Australia.
It is almost flat YTD, and is down 4.96% over the last 5 years.
The post Solid foundations: Is there opportunity in these real estate stocks? appeared first on The Motley Fool Australia.
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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2025