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

The S&P/ASX 200 A-REIT Index (INDEXASX: XPJ) is down again this week, falling a substantial 2.35% against last week’s levels. This fall was to be expected and reflects a tumultuous few weeks for the ASX as well as global markets, which of course takes a toll on A-REITs (Australian Real Estate Investment Trusts).

Also contributing to the drop is the current earnings season, which has seen some REITs deliver some less-than-exciting numbers. Let’s take a look and see how some of the big ASX REITs have been doing this week.

Goodman Group (ASX: GMG)

Goodman is the king of the A-REIT pile with an 18.89% weighting in the XPJ index. GMG shares are trading today at $14.74, which is down more than 2% on last week’s levels. Despite this, investors have nothing to complain about seeing as the shares are still up a meaty 38.4% for the year so far.

Scentre Group (ASX: SCG)

Scentre comes in second in the XPJ index with a weighting of 16.3%. SCG shares are trading this morning for $3.86, down 4% on last week’s levels. We can give Scentre a pass for this drop though, as the shares went ex-dividend last Wednesday. As the current yield is sitting at 5.8%, it was actually a good week for Scentre, all things considered.

Dexus Property Group (ASX: DXS)

Dexus has a bit of a shocker this week, with DXS shares trading this morning for $12.97, down more than 3% on last week. Dexus reported earnings last week and investors weren’t too thrilled with the 26% profit haircut that this REIT turned up with. Dexus still holds the bronze medal in the XPJ index though, with a weighting of 11.4%

Mirvac Group (ASX: MGR)

Capping off this (slightly depressing) week for A-REITs is Mirvac, with a 10% weighting in the XPJ index. Mirvac shares are currently trading for $3.18, which is more than 2% down on last week. Still, investors who bought MGR shares after New Year’s Day would still be up 43% on their investment, so another big YTD performer we have here.

Foolish takeaway

With earnings coming out and global tensions swirling around the markets this week, I think share prices of our A-REITs are coming a little closer to earth after a big year of growth for the sector. Whether or not this is a consolidation or a correction remains to be seen, but with interest rates at record lows, in my view there still remains some ceiling space yet for the sector. Until next week!

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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.

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