BWP Group Stappled Unit (BWP Trust & BWP Property Group Shares)
BWP: XASX (AUS)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| ?.d | LOCK|vL | LOCK|M>Cyk>q |
BWP Trust: Attractive After Selloff Despite Interest-Rate and Vacancy Headwinds
We retain our AUD 3.80 fair value estimate for no-moat BWP Trust and consider the REIT to be undervalued after recent unit price weakness. BWP trades at a 13% discount to fair value and net tangible asset backing and offers a decent yield of 5.5%. While there are some headwinds from rising costs of debt and vacancies, we forecast distribution growth of 1.5% per year on average for the medium term. With a solid yield, moderate growth potential, defensive revenue, and conservative financial leverage, this small REIT appeals.
