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What’s happened to Australian REITs this week?

The S&P/ASX200 A-REIT Index (ASX: XPJ) is up nearly 1% this week after robust gains from several of the big-name real estate investment trusts (REITs) on the market.

Which REITs have driven the gains this week?

In terms of the big players, the Scentre Group (ASX: SCG) security price climbed 2% this week while the DEXUS Property Group (ASX: DXS) security price rose 1% as the company provided an update on its $425 million exchangeable notes offering.

The Mirvac Group (ASX: MGR) security price has risen 1.3% today alone to retrace its losses and close the week out broadly unchanged at $2.74 per security.

In the retail REIT space, Stockland Corporation Ltd (ASX: SGP) is marginally lower this week following the REIT’s $143 million retail divestment as headwinds continue to build for Australian retail.

The Centuria Metropolitan REIT (ASX: CMA) yesterday confirmed a quarterly distribution of 4.358 cents per unit (cpu) to be paid on 29 April 2019, while the Centuria Industrial REIT (ASX: CIP) confirmed a 4.6 cpu distribution and the activation of a Distribution Reinvestment Plan (DRP). On a pro-forma basis, this would translate into annualised distribution yields of 7.36% and 5.79%, respectively.

Also updating the market yesterday was Charter Hall Long WALE REIT (ASX: CLW), which announced a 6.90 distribution per security (pro-forma 5.97% p.a. yield).

How have Australian REITs been performing so far this year?

The Centuria Metropolitan REIT unit price is up 6.4% so far this year to just trail both the Centuria Industrial REIT (+10.2%) and Charter Hall Long WALE REIT (+10.9%).

Mirvac has been a standout performer as its security price has climbed 23.2% year-to-date (YTD) to outpace fellow strong performers DEXUS (+19.8% YTD) and Goodman (+25.7% YTD).

Amongst the retail REITs, Stockland (+10.0% YTD) has been the pick of the REITs, outperforming Scentre (+6.0% YTD), Vicinity Centres Re Ltd (ASX: VCX) and Shopping Centres Australia Property Group Re Ltd (ASX: SCP) which are up 1.6% YTD and 0.4%, respectively.

While REITs can provide higher than average yields and a more defensive option in the case of commercial REITs, those seeking capital gains should check out these top growth shares instead.

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Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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