Jefferies cuts earnings estimates across Australia's property sector after rake hike

Centuria Industrial Reit

10/06/2022 01:19

** Brokerage Jefferies cut its earnings estimates across
Australia's property sector, after the Reserve Bank of Australia
raised its benchmark lending rate 
    ** Real estate sector index  .AXRE  down as much as 1.4% at
lowest level since March 19, 2021
    ** RBA on Tuesday raised its 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 from the this, 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
    ** Australia's real estate index  .AXRE  down nearly 20%
YTD, as of last close 

 (Reporting by Harshita Swaminathan)
 ((Harshita.Swaminathan@thomsonreuters.com))