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Brookfield Property: This 6.6% Blue-Chip REIT is a strong buy – Brookfield Property Partners L.P. (NASDAQ: BPY)

This article was co-produced with Dividend Sensei.

There are three things REIT investors should always focus on:

Quality funds. A safe dividend.

That's why you're impressed with Brookfield Property (BPY) (BPR) – double ticker symbols – we & # 39; ll explain shortly. It has these assets and abilities in spades, and so I consider it to be one of the best high-yield REITs you can buy today. And with a quality level of 9/11 (considering dividend security, business model and management quality), I consider it a clear Sleep Well At Night choice … a SWAN quality component capable of delivering safe and growing dividends during a recession.

And that's despite the stock price taking a pounding. As it probably will.

Better than, despite an impressive 33% rally of December downs, Brookfield Property is still very undervalued. It currently sports a 30% discount to boxing value, which in itself probably underestimates its true intrinsic value by at least 5%.

This means that in the long run I am sure that the management has won delivering targeted 12% -15% compound annual growth total return – calculated on the dividend and 5% -8% dividend growth – but possibly even beaten 15% or higher over the next five years if the economy does not fail along the way.

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Brookfield Property: King of Global Real Estate has a strong long-term growth plan

Firstly, it is important to clarify the difference between Brookfield Property Partners and Brookfield Property REIT, the latter being created as part of the previous $ 15 billion of General Growth Properties purchase last year. Because GGP's shareholders were REIT investors, Brookfield created a REIT equivalent to fit everything more smoothly.

As Brookfield himself explains, BPY and BPR are financially the same security, with identical dividends / dividends and the same payout growth

Brookfield Property REIT (NASDAQ: BPR) is a subsidiary of BPY, intended for and offers Investors financial equivalence to BPY entities, but in the form of a US REIT security . Dividends on BPR shares are identical in amounts and timing to payments paid for BPY units, and BPR shares may be exchanged on a 1: 1 basis for BPY units or their cash (weight min).

As shown in the two sets

Source: BPY Website

(Source: income tax)

On the store side, Brookfield owns 8% of all A- shopping malls in America. These centers saw sales per square meter rise 3.7% to $ 765. For context, it's higher than Simon Property (NYSE: SPG). Brookfield's policy is to limit the conversion to 10% or less of assets to carry out conservative risk management.

For example, at Brookfield, only $ 1.5 billion in redevelopment work is expected to deliver 6% 8% cash dividend. It is far below its 4.5% capital cost. And when it comes to core office properties, REIT has about $ 4.5 billion in new developments scheduled through 2025, whose cash return on capital is expected to be around 7%.

The other 20% of the assets are part of the LP (ie, venture capital) investment portfolio, where Brookfield Property investors will participate in six investment funds run by Brookfield Asset Management (BAM).

These funds are where Brookfield invests in deeply undervalued properties that generate stable cash flow. It's a good start, but the company believes it can improve the property and later sell them with profit and realize 15% -21% annual return on investors.

It is also worth mentioning that these LP funds give Brookfield Property exposure to almost every industry in this sector. And another impressive fact is how the first seven property sales in the BSREP 1 fund have delivered more than 29% annual return on investors, 8% above management goals.

(Source: Earnings Grant)

Over the next five years, LP is expected to generate $ 5 billion in cash flow and profits. [Source:

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