Here is your complete guide to the Best Australian REITs for 2022.
If you aren’t sure what a REIT is, REIT stands for Real Estate Investment Trust. Up until 2008 REITs in Australia were called Listed Property Trusts (LPT). The name change brought Australia into line with international naming conventions
CANSTAR has a good explainer article on what exactly REITs are and what they do if you want to learn more.
Now we have that out of the way you can head straight on through and read your preferred Australian REIT ETF review using the links below:
- Vanguard VAP Review
- State Street Global Advisors DJRE Review
- VanEck MVA Review
- State Street Global Advisors SLF Review
- Compare the Best Australian REITs
The Best Australian REIT ETF
VAP – Vanguard Australia Property REIT
VAP is the top property ETF in Australia but it does have one drawback:
Vanguard’s VAP only invests in Australian Property REITs
If you want to invest in an Australian REIT ETF that has a more international focus then take a look at DJRE from State Street Global Advisors. DJRE is the best property ETF in Australia to invest in shares of international properties.
What makes VAP the Best Property ETF in Australia?
- Lowest management fee of all Australian REITs on the ASX
- Passive investment ETF
- Diversified portfolio of Australian Property
Read our VAP ETF Review below to get the full story.
Vanguard VAP Review
VAP from Vanguard is our pick if you want to invest in the Best Australian REIT in 2022.
Let’s review the key data to see why:
- VAP invests in 33 REITs listed on the ASX
- There is currently over $2.6 billion dollars invested in the VAP ETF
- VAP tracks the returns of the S&P ASX 300 A-REIT Index
- 100% of the ETF is invested in property shares that trade on the ASX
- The return since inception is 11.97%, with a huge 5.66% historical dividend yield making up a large part of the return
If you are looking to earn dividends to fund your retirement you should definitely consider whether this Vanguard Property ETF needs to be a part of your ETF portfolio.
VAP Dividend Yield
The VAP Dividend Yield is 3.5% as of 16 February 2022.
The VAP dividend distributions are higher now than they have been in the past. Over the past 12 months VAP has yielded 6.10%. Over the past 3 years VAP has paid dividends at a rate of 4.87%. Since inception in 2010 VAP has yielded 5.66% per annum.
VAP pays dividends on a quarterly basis.
Vanguard offers a dividend reinvestment plan (DRP) for VAP that you can enroll in after purchasing your shares.
VAP has the lowest Management Fee on the ASX in terms of Australian REITs at only 0.23%.
This means that you pay Vanguard only $2.30 for every $1,000 you invest in VAP, $23 for every $10,000 you invest in VAP or $230 for every $100,000 you invest in VAP shares on the ASX.
VAP Fact Sheet
For the latest information take a look at the VAP Fact Sheet which is kept up to date by Vanguard Australia. Check in on it every now and then to see if any of the ETF investments have changed.
State Street Global Advisors DJRE Review
DJRE is in a bit of a unique position on the ASX. There is currently no other REIT ETF that allows Australians to invest in International Property.
Almost by default that makes DJRE the Best Australian ETF for International Property.
But DJRE is actually a very good product from our friends at State Street and its existence adds to the diverse range of ETFs now available on the ASX.
Let’s review DJRE:
- DJRE invests in 256 international REITs listed on the stock exchanges of the United States, Japan, UK, Hong Kong, Singapore and others
- There are currently $463 million of assets under management in this ETF
- DJRE tracks the Dow Jones Global Select Real Estate Securities Index
- 66% of the holdings are invested in the USA
- DJRE is unhedged and is affected by moves in international stock and foreign exchange markets
- The return since inception is 9.06%
DJRE gives Australians an easy way to invest in a REIT ETF that holds international property shares listed in a range of countries around the world.
But because it trades on the ASX, DJRE let’s investors benefit from global property rental income in their pockets without ever leaving Australia!
DJRE is one of the Best Australian REITs if you are looking to invest in international property on the ASX.
DJRE Dividend Yield
The DJRE Dividend Yield is currently 3.06% as of 31 January 2022.
This yield has been increasing more recently and is currently above the long term average yield. Over the past 12 months DJRE has yielded 3.94%. Over the past 3 years DJRE has paid dividends at a rate of 2.93%. Since inception in 2013 DJRE has yielded 2.99% per annum.
DJRE pays a half yearly dividend.
State Street Global Advisors offers a Dividend Reinvestment Plan (DRP) for owners of DJRE.
DJRE has a fairly high annual management fee for a passive ETF at 0.50% per year.
Given that DJRE is the only ASX REIT that allows you to invest in international property, the pricing reflects this monopoly position!
When investing in DJRE you will pay State Street Global Advisors $5.00 for every $1,000 you invest in DJRE, $50 for every $10,000 you invest or $500 for every $100,000 you invest in DJRE.
DJRE Fact Sheet
For all the latest information check out the DJRE Fact Sheet on State Street Global Advisors Australia’s website.
VanEck MVA Review
MVA is one of the more interesting Australian REITs because it invests using a rules-based methodology.
This rules-based approach to REIT investing includes rules such as:
- The ETF must have a minimum of 10 holdings
- Each REIT within MVA can have a maximum weighting of 10%
- The market cap of any shares to be included in the index must exceed $150 million US dollars
- The three month average daily trading volume must exceed $1 million US dollars
- At least 250,000 shares must trade each month
These means that MVA steers clear of some of the smaller, less liquid REITs that trade on the ASX.
It also means that MVA is not a truly passive ETF. The rules lead to different trading decisions being made when compared with a typical index ETF such VAP, which tracks every REIT on the ASX no matter what.
Let’s review what else makes MVA interesting:
- MVA currently holds 16 REITs listed on the ASX
- This ETF tracks the MVIS Australia A-REITs Index
- MVA has over $600 million dollars invested in it
- 100% of MVA is invested in Australian REITs
- The return since inception is a massive 10.31%
MVA Dividend Yield
The MVA Dividend Yield is 4.40% as of 31 January 2022.
This yield has been trending down more recently. Over the past 12 months MVA has yielded 4.53%. Over the past 3 years MVA has paid dividends at a rate of 4.41%. Since inception in 2013 MVA has yielded 5.22% per annum.
MVA pays a half yearly dividend.
There is a dividend reinvestment plan available for MVA.
MVA management fees are currently 0.35%
This means that you pay VanEck $3.50 for every $1,000 you invest in MVA, $35 for every $10,000 you invest in MVA or $350 for every $100,000 you invest in MVA.
MVA Fact Sheet
To stay up to date with any changes read the MVA Fact Sheet available on the VanEck Australia website.
State Street Global Advisors SLF Review
SLF is an Australian Property ETF on the ASX that is very similar to VAP. However instead of tracking Australia REITs in the ASX 300 like VAP, SLF tracks Australian REITs in the ASX 200.
Therefore some of the lower value Australian REITs will be excluded from SLF’s investments.
Let’s take a look at what SLF is all about:
- SLF invests in 22 Australian REITs listed on the ASX
- The ETF tracks the S&P ASX 200 A-REIT Index
- SLF has over $630 million dollars invested in the ETF
- 100% of the ETFs holdings are in Australian property REITs
- The return since inception in 2002 is 6.41%
SLF Dividend Yield
The SLF Dividend Yield is 3.64% as of 31 January 2022.
The SLF dividend distributions are much lower now than they have been in the past. Over the past 12 months SLF has yielded 6.51%. Over the past 3 years SLF has paid dividends at a rate of 6.64%. Since inception in 2002 SLF has yielded 6.70% per annum.
SLF pays out dividends on a quarterly basis.
You can enroll in the SLF Dividend Reinvestment Plan once you become invested.
SLF charges an above average management fee for passive ETF at 0.40%
This means that you pay State Street Global Advisors $4.00 for every $1,000 you invest in SLF, $40 for every $10,000 you invest in SLF or $400 for every $100,000 you invest in SLF.
SLF Fact Sheet
The latest SLF Fact Sheet is always available for review and download on the State Street Global Advisors Australia website.
The Best Australian REITs ETF Comparison
VAP vs SLF
If you aren’t sure whether to invest in SLF or VAP consider these points:
- Both SLF and VAP only invest in Australian Property REITs listed on the ASX
- VAP invests in Australian REITs that are part of the ASX 300 whereas SLF is limited to Australian REITs that are part of the ASX 200
- SLF holds fewer property investments than VAP
- Both VAP and SLF pay dividends quarterly
- VAP charges a lower annual management fee than SLF
- There are much more dollars invested in VAP compred with SLF
Check out the Vanguard VAP Review
Take a look at the State Street Global Advisors SLF Review
Recommendation: VAP is the better Australian REIT due to having more diversified property holdings and lower annual fees than SLF.
VAP vs DJRE
Can’t make up your mind whether to buy DJRE or VAP?
- VAP invests in Australian REITs on the ASX whereas DJRE invests in International Property REITs listed around the world
- If you want a diversifed portfolio of both International and Australian Property REITs you would need to invest in both VAP and DJRE
- DJRE invests in 200+ REITs compared with 20+ for VAP
- VAP pays dividend distributions on a quarterly basis but DJRE pays dividends twice yearly
- At 0.23% VAP’s management fee is half that of DJRE’s
Have a read of the Vanguard VAP Review
Consider the State Street Global Advisors DJRE Review
Recommendation: These are two different products serving two different purposes. VAP is the Best Australian Property ETF but DJRE is the Best International Property ETF. Decide if you need one (or both!) of these Australian REITs in your ETF portfolio.
VAP vs MVA
Before deciding whether to buy MVA or VAP remember:
- MVA invests in REITs using a rules based methodology whereas VAP is strictly a passive index ETF
- VAP charges a lower ongoing management fee than MVA
- MVA has fewer dollars invested in it than VAP
- VAP pays dividends quarterly whereas MVA pays dividends half yearly
Read the detailed Vanguard VAP Review
Consider our VanEck MVA Review
Recommendation: It’s VAP again! MVA’s rules based methodology is a little opaque and I don’t see the benefit of using that approach compared with investing in the A-REIT index itself like VAP. VAP is cheaper too!
Australian REITs: Frequently Asked Questions
How many REITs are on the ASX?
There are currently six REITs listed on the ASX. These are SLF, VAP, MVA, DJRE, REIT & RENT. SLF & DJRE are managed by State Street Global Advisors. VAP is managed by Vanguard. MVA & REIT are managed by Vaneck. RENT is managed by AMP.
What are the top 10 REITs in Australia?
Would you believe there are not even 10 REITs that exist in Australia, there are only 6! The top 6 REITs in Australia are SLF, VAP, MVA, DJRE, REIT & RENT.
By now it should be clear which Australian REIT is the best on the ASX.
Have you had a read yet of my reviews on all of the Best Australian ETFs of 2022?
Go on, take a look.