A-REITs started 2024 with a +1.21% return in January, as weaker Australian inflation and soft employment numbers in the US further pointed to potential near-term rate cuts. In comparison, the Fund returned +0.76% over the month.
The main contributors included our investment in Qualitas Limited (QAL +5.98%) and HomeCo Daily Needs REIT (HDN +4.10%), whilst HealthCo Healthcare and Wellness REIT (HCW -7.14%) and Arena REIT (ARF -5.66%) detracted from performance. We remain positive on HCW and ARF particularly as the ACCC inquiry into the childcare services sector was released on 29 January 2024 with minimal impact on childcare landlords.
We recently recorded an interview between Executive Director Adam Myers and Portfolio Manager Amy Pham, where they discuss how the Fund navigated the challenges of 2023 in the real estate market, highlighting the advantages of being a high-conviction fund and focusing on REITs with high-quality management and assets.