26. April 2021 | 06:50 CET
Vonovia, DIC Asset, The Place Holdings: How real estate investments are doing
Prices for houses and apartments have risen steadily over the past ten years. In many locations, they have even doubled or more. Investors might wonder whether the end of the line has not been reached. But will it come to that? Investors remain flexible with real estate shares and can participate in the real estate boom even with smaller amounts and without debt. We look at three stocks.
time to read:
ISIN: DE000A1ML7J1 , DE000A1X3XX4 , SG1Q02920318
Vonovia: Everything is going according to plan
The Vonovia share is a kind of gold standard among real estate stocks. The Company has almost 400,000 apartments in its portfolio. In addition to Germany, the apartments are also located in Sweden and Austria. The share is listed on the DAX and is a rock within the index. Since Vonovia is able to raise rents bit by bit, even during the crisis, the housing group's figures are impressive. Vonovia manages its real estate portfolio in line with the market and this is demonstrated by the low vacancy rate of around 2%.
The share was included in the Euro Stoxx 50 a few months ago and is therefore likely to attract more attention from international investors. In the last few days, the share came back a little but remains positive in the long term. If it succeeds in rising above the EUR 61 mark, the value could gain additional momentum. In a market phase in which more and more private investors are finding it difficult to buy apartments, shares such as Vonovia's can be good alternatives - after all, it is possible to participate in a balanced real estate portfolio from minimal amounts.
DIC Asset: Logistics real estate as a beacon of hope
In addition to Vonovia, DIC Asset is also a sought-after real estate stock. However, DIC's focus is on commercial real estate. This market has been much more strongly affected by the pandemic. Nevertheless, things do not look so bad for the share in the long term. Only recently, the Company managed to raise fresh capital and, provided that the percentage of sustainable projects in the portfolio grows, DIC may even depress its interest burden in the future.
Although vacancies in German city centers are growing, there are also bright spots in the commercial real estate sector: so-called logistics properties are benefiting from the trend towards more deliveries and are a growth market for companies like DIC. In addition, premium locations in city centers will also be in demand again for the foreseeable future. In many industrialized countries, consumers are sitting on high savings rates and longing to return to the old world of consumption. Therefore, the retail sector's comeback is likely to be dynamic - provided the appropriate brands and concepts are in place.
The Place Holdings: Real estate in Singapore, tourism in China
There is no fear of the pandemic at The Place Holdings. The Singapore-based Company combines the business areas of real estate, tourism and media. The Place is involved in two real estate projects worth around SGD 400 million in Singapore itself and is driving them forward together with partners. The Place emphasizes the importance of working with local partners to take advantage of submarkets and benefit from the particular expertise of these partners. In the tourism sector, The Place holds a 270,000 sqm property in Mount Yuntai Tourist Township.
The sister park of the Grand Canyon National Park is located about 70 km northwest of Zhenzhou City, about an hour away from a region home to forty million people. The scenic spot is increasingly being developed for tourism - a project in which The Place holds a large plot of land and from whose marketing the Company expects to make attractive profits. As an additional mainstay, The Place focuses on outdoor advertising and pushing innovative business concepts around retail and omnichannel strategies. The model is Beijing's mall, "The Place," which attracts many shoppers and tourists with a huge roof onto which videos can be projected.
While companies such as Vonovia or DIC Asset are familiar to many investors and come across as very solid, The Place Holdings exudes a lot of fantasy which also repeatedly causes share prices to twitch nervously. It seems that the market has not yet recognized the Company's potential - its holdings and projects are too diverse. However, as soon as solid figures reveal where the Company's journey can take it, interest in the stock is likely to increase. Until then, the stock is an exciting bet around Asia and the growing domestic tourism in China.