Australia REITs bearing brunt of high-interest rate environment- Jefferies

Centuria Office REIT

05/02/2023 21:06

** Analysts at Jefferies say an environment of higher
interest rates and cost of living pressures may subdue the
performance of Australian real estate investment trusts as
retail sales growth lags in every non-food category
    ** Says best and worst performers in the sector are property
investment management firms Charter Hall Group  CHC.AX  and
Vicinity Centres  VCX.AX , respectively  
    ** Says macroeconomic backdrops for Australian markets like
retail sales, house prices, and lending data all suggest
"environment may not be quite as rosy as suggested by recent
retailer trading updates"  
    ** Says Centuria Industrial REIT  CIP.AX  should sell about
A$100 million ($68.93 million) of assets to further improve its
incurred claim ratio as the firm's growth is muted by debt costs
    ** Says increasing debt costs for Centuria Office REIT
 COF.AX  will remain a drag even as easing volumes resulted in
improved occupancy & operating metrics
    ** "Lending data (Nov-22) showed new owner-occupier loan
commitment volumes down 21% below the pcp across Australia with
NSW (New South Wales) down 26%, VIC (Victoria) down 18% and QLD
(Queensland) down 23%"- Jefferies 
($1 = 1.4507 Australian dollars)
 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))