The Scentre Group (ASX: SCG) share price has plummeted 6.51% lower today but is the ASX real estate investment trust (REIT) in the buy zone?
Why is the Scentre Group share price crashing lower?
The S&P/ASX 200 Index (ASX: XJO) has fallen 2.29% lower to 6,007.90 points at the time of writing. Scentre has dropped even lower in today’s trade despite no new announcements.
Scentre isn’t the only ASX REIT to be falling today. The Mirvac Group (ASX: MGR) share price is down 3.6% at $2.41 right now while Stockland Corporation Ltd (ASX: SGP) is down 5.63% to $3.69 per share.
ASX 200 shares have stabilised a lot since the bear market in February and March. However, I think the Scentre share price is one of the harder shares to value right now.
There’s a lot of uncertainty about Aussie real estate. That includes residential, office, commercial and industrial.
The Scentre share price is still down 36% this year despite a rally in recent weeks. Scentre owns and operates Westfield shopping centres around Australia and New Zealand.
That means Scentre is heavily focused on Aussie retail. Given the industry was struggling even before the coronavirus pandemic, there are still big question marks about a rebound in 2020 or 2021.
That means shares in ASX REITs like Scentre remain volatile.
Is the Aussie REIT in the buy zone?
A 6.51% drop in one day’s trade means the Scentre share price may be cheap. However, I think it’s still a speculative buy right now given the current environment.
In contrast, today’s winners have largely been ASX gold shares.
It’s hard to say that there has been a fundamental shift in the Scentre share price from yesterday’s trade. That says to me that investors are still uncertain on where things are headed in the retail sector in 2020.
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Motley Fool contributor Ken Hall 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.