REIT Report: What's happening with A-REITs this week?

The Stockland Corporation Ltd (ASX: SGP) share price was down last week. What's the story with the ASX REITs this week?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 A-REIT (INDEXASX: XPJ) index has fallen this week, down about 2.5% over last week's levels. A-REITs (or Australian Real Estate Investment Trusts) are still doing very well in 2019 so far, with the XPJ index recording a 19% rise YTD on today's figures. REITs have significant tailwinds behind them at this point of the economic cycle.

With renewed expectations the Reserve Bank of Australia will cut interest rates tomorrow, REITs are likely to keep receiving attention over the next few months.

Here's how the major A-REITs have moved over the past week:

Stockland Corporation Ltd (ASX: SGP)

Stockland (with its 9% weighting on the XPJ) is largely responsible for the index's negative movements this week. Stockland shares went ex-dividend on Thursday, resulting in the stock price falling 4.29% (which incidentally is smaller than the 6.56% Stockland is currently yielding). This was not aided by Citi issuing a sell rating on Stockland shares, citing continuing concerns about the future of retail property. Stockland shares close today trading for $4.22.

Goodman Group (ASX: GMG)

Goodman shares are relatively flat for the week, closing today at $15.25. Goodman, with an index weighting of 18% is the largest A-REIT in the XPJ index. Goodman shares are still looking expensive, with a current price-to-earnings ratio of 25.8 and a running yield of 1.67%.

Scentre Group (ASX: SCG)

Scentre shares are holding last week's gains and close trading today at a price of $3.88. Although Scentre is flat on a week-to-date basis, the shares did spike up to $4.02 on Friday after Goldman Sachs issues a buy rating for the stock and lifting its price target to $4.72. Scentre holds a 17% weighting in the XPJ index and is running on a yield of 5.6%.

Vicinity Centres (ASX: VCX)

Vicinity shares are down over 5% week-to-date, despite there being no major news from this shopping centre renter. Vicinity is now approaching its 52-week low of $2.42 after a volatile 2019 so far. Only a month ago, VCX shares were going for almost $2.70, so it might be some institutional adjusting going on with Vicinity (which can happen at this time of year). Vicinity has a 7% weighting in the index and is yielding 6.46% on current prices.

Foolish takeaway

Despite the ructions happening over the past week in the A-REIT space, I continue to expect further upside in the sector, especially if rates come down again tomorrow. It remains an interesting spot to watch in 2019.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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.

More on REITs

An Australian farmer wearing a beaten-up akubra hat and work shirt leans on a fence with livestock in the background and a blue sky above.
REITs

Why is the Rural Funds share dropping today?

This may be the reason investors are exiting Rural Funds.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
REITs

Want the latest quarterly dividend from Rural Funds? You'd better hurry

Here's what you need to do to secure the latest dividend from this income stock.

Read more »

An industrial warehouse manager sits at a desk in a warehouse looking at his computer while the Centuria Industrial share price rises
REITs

Why bond yields are bruising ASX property shares on Monday

It's a bad day to own property shares this Monday...

Read more »

Rising real estate share price.
REITs

How are ASX REITs smashing 52-week highs despite today's market meltdown?

If you own ASX REITs, you're probably feeling pretty chuffed today.

Read more »

An Australian farming woman of the land wears an akubra hat and work shirt smiles broadly as she looks out over turned soil paddocks with a mountain range far off in the distance and blue sky above.
Dividend Investing

Want passive income? This high-yielding ASX dividend stock pays cash every quarter

The list of ASX dividend stocks making quarterly income payouts isn’t overly large. Here's why I like this one.

Read more »

Increasing blue arrow with wooden property houses representing a rising share price.
Broker Notes

3 ASX 200 REITs receiving broker upgrades today

These three ASX 200 REITs have earned a thumbs up from brokers today.

Read more »

a man sits on a ridge high above a large city full of high rise buildings as though he is thinking, contemplating the vista below.
REITs

Here are 4 ASX 200 REITs results catching the eye on Wednesday

A mixed set of results have been announced by these property companies.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
REITs

2 ASX 200 shares making big moves on strong earnings

These two REITs are soaring, despite swinging to big losses.

Read more »