Wilson analysts tip 2 small-cap ASX real estate shares to buy for juicy returns

After ten monster interest rate rises over the past year, the real estate sector, as well as ASX real estate shares, has really taken a hammering. But with the Reserve Bank nearing the end of its rate hike campaign, is it now time to pick up some bargains? Wilson Asset Management senior equity analyst Shaun Weick has a couple of small-cap ideas:

Ready to cash in on ‘a very strong second half’

Lifestyle Communities Ltd (ASX: LIC) shares have been severely impacted by the weak sentiment for real estate, dropping almost 25% since 3 February.

But Weick reckons it can “buck the trend” of the negativity surrounding the property market. “That’s a buy for us. We think stabilisation in interest rates is within sight, and that will put a floor under housing market sentiment,” he said in a Wilson video.

Lifestyle Communities provides residential communities for elderly clients. Weick feels like it will have a bumper finish to the 2023 financial year. “The company has reiterated their FY23 settlements guidance, which implies a very strong second half and the FY24 period,” he said.

“[This] is at the same time when the communities under release is more than doubling, which will drive a material acceleration in earnings growth from here.” After the recent dip, the share price is now looking ripe for pickups. “The valuation on the stock is screaming attractive, at 17 times earnings with significantly above-market earnings growth.”

An undiscovered gem

Qualitas Ltd (ASX: QAL) is a real estate investment manager that deals with private credit and equity in commercial property.

“Qualitas is undiscovered, much like the private credit space. We think it’s a buy.” The crisis in confidence in the sector has also impacted the Qualitas share price, causing it to freefall more than 18% since 13 March.

But the “underlying quality” is “very high”, according to Weick, citing 60% growth in its latest results. “The banks are continuing to retreat from the private credit space, which is underpinning very strong deployment opportunities,” he said.  “And globally, you’re seeing institutional investors want to access a nascent asset class here in Australia.”

The private credit industry also benefits when the official cash rates rise.

Weick is not the only one bullish about Qualitas.

According to CMC Markets, all three analysts currently covering the stock rate it as a strong buy.

alton-towers-holidays listed on couponmatrix.ukblurb listed on couponmatrix.ukchoice-store listed on couponmatrix.uklottoland listed on couponmatrix.ukthierry-mugler listed on couponmatrix.ukwink-bingo listed on couponmatrix.uk
alton-towers-holidays listed on couponmatrix.ukMake your family trip to Alton Towers a time to remember with an overnight stay in the resort, complete with breakfast and early rides access the following morning to kick-start your day. Keep your young ones entertained with instant access to CBeebies land. Meanwhile, the braver souls in the family can use an Alton Towers Holidays discount code to cut the cost of over 40 rides and attractions and bring out the smiles and screams.
blurb listed on couponmatrix.ukAre you a budding writer, design professional or photographer looking to show off your work? Take publishing into your own hands with online platform Blurb and you could create your own e-book, photo album or magazine with ease. Cut the costs of your project with a Blurb discount code from us and turn your creative ideas into professional-quality publications, printing as many copies as you choose.
choice-store listed on couponmatrix.ukWith an incredible range of luxury fashion to help your wardrobe really stand out from the crowd, Choice Store is a retailer streets ahead of its competitors. Pick up a Choice Store discount code and get your hands on some game-changing fashion at prices that won’t break the bank. With some truly iconic brands on offer such as Stone Island and Ralph Lauren, if you’re into big names then they don’t get much bigger than at Choice Store.
lottoland listed on couponmatrix.ukHit the jackpot with the help of Lottoland. You may think the odds are against you, but in one click you could luck out on a scratchcard or even become a millionaire by predicting the outcome of the official Lottery draw. Earn a free Powerball or Mega Millions bet for less with a Lottoland promo code added on to your order and start increasing your odds to win from lotteries all across the world!
thierry-mugler listed on couponmatrix.ukExploring the fluidity of femininity and gender, Thierry Mugler is a fashion and fragrance brand breaking conventions and creating a platform for individuality. From catwalk to the fashion house, every piece of Mugler apparel is branded with the iconic star symbol – all of which can be yours for less with the latest Mugler discount code. Whatever chic style or exotic scent grabs your attention, you can always rely on Mugler to offer something exceptional.
wink-bingo listed on couponmatrix.ukFancy putting your money where your mouth is and trying your luck with online bingo or slots? Turn to Wink Bingo to get your fill of online gambling fun and give the huge collection of games a spin! Grab a Wink Bingo promo code from us to make your precious pennies stretch further and you could end up on a winning streak without busting your budget.