ASX REIT Stocks to Buy, Hold, and Avoid Right Now as Rate Hikes Return

ASX REITs are back under pressure as rate hikes return

The Reserve Bank of Australia has now delivered two rate hikes in 2026, pushing the cash rate to 4.10%. The March decision was a razor-thin 5-4 split on the board, meaning May is live but far from a foregone conclusion. For ASX REIT investors, the instinct to sell everything makes sense on the surface. But we believe it is the wrong call. Rate hikes are creating real pain for some ASX REITs while leaving others largely untouched. The real skill lies in knowing the difference.

What are the Best ASX REIT Stocks to invest in right now?

Check our buy/sell tips

Why Rate Hikes Hit ASX REITs Harder Than Any Other Sector

REITs carry large amounts of debt to fund their property portfolios. When interest rates rise, borrowing costs go up, and the cash available for distributions gets squeezed. At the same time, higher rates make REIT income look less attractive compared to what investors can earn sitting in a term deposit. This double hit pushes valuations lower. If the RBA hikes again in May, the most exposed names could see another leg down. The question investors need to answer right now is simple: which REITs can absorb that pressure and which cannot?

Buy: GPT Group (ASX: GPT)

GPT Group owns a diversified mix of retail, office, and logistics properties across Australia with around A$34 billion in assets under management. What makes GPT worth buying in this environment is its balance across all three sectors. Its logistics portfolio in particular is benefiting from strong structural demand driven by e-commerce and supply chain investment, and that demand does not slow down just because the RBA hikes rates. Retail occupancy is sitting near full, and the company is guiding for solid earnings growth in FY26. GPT is not immune to rate pressure, but its diversification gives it a meaningful cushion that more concentrated peers simply do not have. In our view, it is the most sensible entry point in the ASX REIT sector right now.

Hold: Mirvac Group (ASX: MGR)

Mirvac is a genuine turnaround story, and the progress is real. Residential sales are surging, earnings are growing, and the balance sheet is in good shape with gearing comfortably within its target range. The concern for new investors is the combination of office exposure and an active residential development pipeline. Both carry more risk if rates keep climbing and consumer confidence softens. Current holders have a credible story to stay with. New investors should watch what happens in May before committing fresh capital. A hold for now with a clear path to upgrade if rate hikes pause.

Avoid: Dexus (ASX: DXS)

Dexus is Australia’s largest office-focused REIT, and that concentration is the core problem. Office assets are doubly exposed in a hiking cycle. Rising rates compress valuations at the same time that hybrid work patterns create ongoing uncertainty about future occupancy. The share price has already fallen significantly from its recent highs, and even with management activating a 10% on-market buyback to address the gap between its market price and underlying asset value, we believe valuation risk in a hiking cycle outweighs the income appeal for new capital. Wait for the rate environment to stabilise before revisiting this one.

The Investor’s Takeaway for ASX REITs

Rate hikes are not done yet, and buying the whole ASX REIT sector on the dip is a mistake. The sector is not one trade. GPT offers the best combination of diversification and resilience to ride out further pressure. Mirvac rewards patience. Dexus carries too much risk ahead of potential further hikes. Be selective. In this environment, selectivity is the entire job.