The S&P/ASX 200 A-REIT Index (Index:^AXPJ) (ASX: XPJ) has risen sharply since last Monday, up over 2.5% week-to-date and over 6.61% since the start of the month.
Investors hungry for yield in this low-rate world are definitely keeping A-REITs (or Australian Real Estate Investment Trusts) the flavour of the month. If the Reserve Bank of Australia lowers interest rates further over the rest of the year, we can expect the buying pressure on A-REITs to continue to climb.
Here's how major A-REITs have moved over the past week:
Goodman Group (ASX: GMG) is the largest A-REIT in the XPJ index with a weighting of around 18%. Shares of the industrial property trust are up another 4% week-to-date which continues a strong run up over the past 12 months. Goodman is one of the most expensive A-REITs though and is currently yielding 1.56%.
The Stockland Corporation (ASX: SGP) share price has bounced around a fair bit over the last week but is now trading around the $4.40 mark – pretty much ending up where it started last week at $4.38. Stockland is still up over 27% YTD, a huge gain for this well-diversified trust. With a 9% weighting in the XPJ index, Stockland offers a 6.29% yield on current prices.
Scentre Group (ASX: SCG) shares are up around 3.74% week-to date, reversing most of the previous week's declines. Although Scentre is one of the most well-known A-REITs (due to its past as the Australian branch of Westfield), it has also been a bit of a drag on the XPJ index with its 17% weighting – remaining essentially flat YTD (although has had some wild price swings). Scentre is yielding 5.60% on current prices.
BWP Trust (ASX: BWP) shares continue to storm higher, with a week-to-date price gain of 4.86% backing up a YTD bagging of 9.92%. BWP (which owns industrial land) rents to large-scale clients like Bunnings and has an extremely high occupancy rate. BWP is yielding 4.67% on current prices and only has a small weighting on the XPJ index, currently sitting at 1.49%.
Foolish Takeaway
As discussed, if the RBA continues to remain dovish, you can expect further interest in A-REITs as an investment vehicle. Keeping an eye on the XPJ index is prudent for any income investor in my opinion and this week proves that yet again.
