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

Sebastian Bowen
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The S&P/ASX 200 A-REIT Index (INDEXASX: XPJ) is down this week, falling 0.9% against last week’s levels. It has been a rocky week for the A-REIT (Australian Real Estate Investment Trust) sector, with global markets yet to recover from last week’s US–China trade war escalation and one REIT experiencing a short-seller scare.

Let’s have a look at how the ASX A-REITs are faring this week.

Goodman Group (ASX: GMG)

Goodman remains the king of the REIT pile, with its market capitalisation of $27.37 billion translating to an 18.75% weighting in the XPJ index. Goodman has had a nice week overall, with GMG shares climbing 4.06% week-on-week and closing yesterday at $15.09, so investors have clearly shrugged of the Goldman Sachs sell rating (on valuation grounds) that was issued on 2 August.

Scentre Group (ASX: SCG)

In contrast to Goodman, Scentre shares are relatively flat week-to-week, with this REIT closing yesterday at a clean $4, up from $3.98 a week ago. This share price gives Scentre a $21.27 billion market cap and a 16.71% weighting in the index. At this $4 price, SCG shares are sitting smack bang in the middle of its 52-week range, with a high of $4.44 and a low of $3.63.

Stockland Corporation Ltd (ASX: SGP)

Stockland has had a (modestly) nice week, with SGP shares up 1.77% over the past week and closing yesterday at $4.60 – giving this REIT a market cap of $10.97 billion and an XPJ weighting of 8.79%. Unlike Scentre, Stockland is not too far from its 52-week high of $4.74 (its low is $3.42) and is offering a juicy 6% yield on current prices.

Rural Funds Group (ASX: RFF)

Rural Funds has definitely had the most interesting week of all the REITs. Although this REIT minnow is only worth $616 million, RFF shares were punished last week after a hedge fund released accusations RFF’s management had been cooking the books, overblown the value of the farming assets the REIT holds and estimating that the shares were essentially worthless – prompting RFF shares to go from $2.37 to $1.36 in a single day.

RFF’s management has since rebutted all of the claims as incorrect and investors have regained some confidence in the stock which is now back to $1.84. But still, there are lingering doubts on this REIT and clearly there are some investors who have yet to be convinced.

Foolish takeaway

Apart from RFF, REITs seem to be stabilising around the current levels (minus some trade war-induced jitters, and I don’t expect any major moves until earnings season is over. We have Stockland reporting on 21 August and Goodman on 23 August, so stay tuned for some Foolish updates then!

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019