The S&P/ASX 200 A-REIT Index (Index:^AXPJ) (ASX: XPJ) has risen this week, up 1.65% from last week's levels. This rise ends a 3-week losing streak for the XPJ index and proves that (in the face of a global sell-off) A-REITs (Australian Real Estate Investment Trusts) remain an attractive investment vehicle for many investors. We also had earnings week for many REITs, so we saw some big moves as a result. So here's how some big ASX REITs are faring after reporting this week.
Goodman Group (ASX: GMG)
Goodman proved again this week why its king of the A-REIT pile, delivering operating profit growth of 11.4% in its FY19 results and bumping up its distribution by 7% to boot. This impressed investors mightily, who bumped up GMG shares by 4.37% as a result. The share price has since trended slightly lower and Goodman closed trading yesterday at $15.30 – a week-to-date rise of 3.1%.
Scentre Group (ASX: SCG)
Scentre is another REIT which reported this week – and the market wasn't so enthusiastic with the result, despite the fact there was a lot to like. Earnings were up 5%, the distribution was up 2% and income by 5%. Scentre also reported an occupancy rate of 99.3%, which will be of comfort to anyone worried about the company's exposure to physical retail stores. SCG shares are up 1.56% week-to-date and closed yesterday at $3.91.
Stockland Corporation Ltd (ASX: SGP)
Stockland was 'the disappointer' this week, as investors hit the sell button after the company gave its results last Wednesday. This was despite the fact that Stockland reported Funds From Operations (FFO) growth of 4% and a distribution bump up of 4.2%. Investors were clearly spooked by Stockland's predictions that FFO will remain flat for FY20 due to low wage growth and challenging economic conditions. SGP shares are down 3.93% week-to-date.
Foolish Takeaway
This week's earnings have proven that some REITs are more equal than others. In my opinion, investors are very cautious about any REIT with decent exposure to physical retail and are ready to hit the panic button at any signs of stress. This may be overreach as Scentre, in particular, has shown that is has developed a robust, Amazon-resistant business model in the face of online shopping. I still think physical retail has a future, so there may be value in Scentre and Stockland shares this week.
