Australia's property sector slides as RBA rake hike prompts Jefferies to cut earnings estimates

Centuria Industrial Reit

10/06/2022 03:43

(Updates with share moves)
    ** Australian real estate firms  .AXRE  slide as much as
2.3% to hit their lowest level since Feb 26, 2021
    ** Brokerage Jefferies cut its earnings estimates across
Australia's property sector, after the Reserve Bank of Australia
raised its benchmark lending rate by 50 basis points to 0.85%,
the fastest hike in 22 years  urn:newsml:reuters.com:*:nS9N2WQ043 
    ** Brokerage sees risks to the sector as well as declining
consumer sentiment affecting residential and commercial real
estate markets if unemployment rises 
    ** Adds that companies in the sector already trade at
discounts to their net tangible assets, but says consensus
earnings estimates are still too high
    ** Top picks in the sector are Centuria Industrial REIT
 CIP.AX , Dexus  DXS.AX , Goodman Group  GMG.AX , HomeCo Daily
Needs REIT  HDN.AX , Shopping Centres Australasia Property
 SCP.AX , Stockland Corp  SGP.AX  
    ** Top picks chosen as they have strong balance sheets,
hedging to inflation, or pricing power to grow market rents
    ** CIP and HDN fall as much as 2.8% and 2.4%, respectively,
to hit their lowest in more than a year
    ** Heavyweights Charter Hall  CHC.AX  and GMG slump as much
as 2.8% and 1.8%, respectively
    ** The sub-index down about 6.9% this week, set for its
worst weekly fall in over a month
    ** As of last close, AXRE down nearly 20% this year, versus
a 5.7% drop in benchmark index  .AXJO 

 (Reporting by Harshita Swaminathan and Himanshi Akhand in
Bengaluru)
 ((Harshita.Swaminathan@thomsonreuters.com))