Although the S&P/ASX 200 A-REIT Index (Index:^AXPJ) (ASX: XPJ) has remained relatively flat since the start of last week, the index is still up almost 5% since the start of June. A-REITs (or Australian Real Estate Investment Trusts) are increasingly being sought after by yield-hungry investors and the Reserve Bank of Australia's decision to lower interest rates at the start of the month has only intensified this hunger.
Here's how the major A-REITs have moved over the past week:
Goodman Group (ASX: GMG) is the top A-REIT in the XPJ index with a weighting of around 18%. Shares of this industrial property giant are up 2.24% week-to-date which continues a strong run up over the past 12 months. Goodman's current yield is running at 1.63% – which is very low for a REIT.
Scentre Group (ASX: SCG) shares are down around 3.1% week-to-date. Making up around 17% of the XPJ index, the former Westfield star is something of a fallen angel, bucking the positive trends in the A-REIT sector over the past 12 months and is approaching its 52-week low of $3.63. Concerns over Scentre's debt levels and future of the mall retail landscape continue to weigh on the company's shares. Scentre's current trailing yield sits at 5.83%.
Stockland Corporation (ASX: SGP) is one of the more diversified REITs on the ASX, managing shopping centres, retirement villages, offices and industrial real estate. Stockland is down around 4% week-to-date but still up a massive 25% YTD – with a huge boost after the surprise election result last month. With a 9% weighting in the XPJ index, Stockland offers a 6.14% yield on current prices.
Vicinity Centres (ASX: VCX) – a REIT in the shopping centre space is currently trading at $2.52, down a substantial 4.5% week-to-date after 12 months of yo-yo-ing between $2.40 and $2.70. Currently yielding 6.4%, Vicinity has a weighting of roughly 7% on the XPJ.
Foolish Takeaway
With the hype of both the election and the interest rate decision over, I expect that A-REITs will remain at fairly consistent levels, at least until the Reserve Bank decides to move interest rates again.
