While Australian real estate investment trusts (A-REITs) can provide a handy income for many investors, it hasn't all been smooth sailing in 2019.
So, why did some of the biggest A-REITs, including Cromwell Property Group Ltd (ASX: CMW) and Vicinity Centres Re Ltd (ASX: VCX) see their share prices hammered lower yesterday?
Cromwell share price tanks on institutional placement
The Cromwell share price fell 6.22% on the ASX yesterday to $1.16 per share, after announcing the successful completion of its $375 million institutional placement announced on Wednesday.
Cromwell said the underwritten placement raised approximately $375 million through the issue of approximately 326 million stapled securities at an issue price of $1.15 per share.
This explains the share price decline to $1.16 per share, as investors followed the smart money in lowering the price from the record high of $1.28 per share that Cromwell shares reached briefly on Monday.
Vicinity share price falls lower despite no news
Cromwell wasn't the only A-REIT to see its share price drop sharply yesterday as the Vicinity share price fell 5.04% to $2.45 per share.
Investors headed for the door without any REIT-specific news from Vicinity since last week, when it priced $400 million of medium-term notes – hardly something you'd expect to cause such a negative reaction in the share price.
My thinking is that we're seeing some late end-of-financial-year (EOFY) share price movements as portfolio managers and investors get their tax in order and look to improve their performance as at year-end.
I wouldn't be too concerned by the recent Vicinity moves and think that the EOFY may present some bargain buys on the ASX, due to the white noise created by this late flurry of buying and selling activity in the market.
In better news for A-REIT investors, residential REIT Mirvac Group (ASX: MGR) is continuing to put aside concerns about slowing residential real estate or fears of an apartment glut with its share price that keeps climbing higher.
The Mirvac share price is up 42.3% so far this year, despite the doom and gloom we've seen, with lower interest rates and the re-election of the Coalition government likely to have boosted the residential developer's outlook along with the domestic property market.
