During the 2023 financial year (FY23), the Australian economy grappled with subdued market conditions, exacerbated by the most significant surge in the Reserve Bank of Australia’s cash rate target in over three decades. This had a widespread impact, with various industries and businesses facing considerable challenges. The Australian Real Estate Investment Trusts (A-REITs) were no exception, experiencing notable fluctuations in their returns throughout FY23.

Improving returns

Annually BDO Australia undertakes a survey of Australian Real Estate Investment Trusts. This survey tracks the listed Australian property industry over the year by ranking the S&P/ASX 200 A-REIT Index trusts (A-REIT Index) using key financial and investment indicators. Our analysis reveals that in FY23, the A-REIT Index lagged behind the S&P/ASX 200 Index by 6.6%. A-REITs delivered a positive return of 3.1%, a significant improvement from FY22’s negative return of 15.4%.

All categories outperformed their FY22 result in FY23

Notably, the office and retail sectors performed poorly, delivering negative returns for FY23, while