It’s time to think about which ASX shares could be good investments for 2025 and beyond. Here are two ideas I like.
Both of my picks revolve around the idea that they’re good businesses at attractive prices and likely interest rate cuts next year could be a real bonus.
Centuria Industrial REIT (ASX: CIP)
The name gives it away, but it’s a real estate investment trust (REIT) provided by property manager Centuria Capital Group (ASX: CNI) which owns a portfolio of industrial properties.
This business is benefiting from a number of trends including increased e-commerce adoption, population growth and higher data centre demand.
This demand is significantly boosting the rent that industrial properties can generate in Australia’s capital cities. In FY24 the ASX share’s total revenue grew 7.4%. But, it was the financing costs that have kept the rental profit from rising strongly. Debt costs are likely to level out in the future considering the RBA has stopped raising rates.
If there’s an interest rate cut, or more than one, in Australia in 2025 I think this REIT could see a good rise of the share price, rental profit and distribution. It’s expecting to pay a yield of 5.6%.
Brickworks Limited (ASX: BKW)
Brickworks is another business I believe would get a good boost from an RBA rate cut next year, though it doesn’t need one to be attractive.
Both Brickworks’ building products businesses and its industrial property segment could significantly benefit from a reduction of interest rates in Australia.
The industrial property trust that it owns 50% of (with Goodman Group (ASX: GMG) owning the other half) is benefiting from the same sort of boosts to demand as Centuria Industrial REIT is experiencing. The completion of additional warehouses is going to add significant value for shareholders in the coming years, in my opinion.
I think the ownership of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares is also very useful for Brickworks because it gives the company a significant asset to help offset cyclical pain related to interest rates, the ASX share pays a growing dividend and provides a good likelihood of capital growth. The WHSP dividend is a major contributor to the Brickworks dividend.
I think the Brickworks share price is a buy because I believe it could experience a rebound in 2025 and beyond as its assets grow in value.
