Australian real estate stocks set for worst month since March 2020

Scentre

30/09/2022 06:56

** A sub-index of Australian real estate stocks  .AXRE  down
nearly 15% this month - set for biggest monthly decline since
the early onset of the pandemic in March 2020
    ** Real estate investment trust (REIT) firms typically pay
out high dividends, but their dependency on borrowings to
develop/buy properties makes them vulnerable to interest rate
hikes
    ** With U.S. Treasuries and local Australian bonds at
multi-year highs amid rate hikes, returns on government bonds
are more attractive compared to riskier real estate stocks
    ** Goodman Group  GMG.AX , biggest Australian REIT by market
value, has lost nearly 20% this month and on track for its worst
month since May 2009
    ** Property managers Scentre Group  SCG.AX  and Vicinity 
Centres  VCX.AX  down 13.7% and 10.1%, respectively, this month
    ** Charter Hall Group  CHC.AX  has fallen more than 15% this
month, while Growthpoint Properties Australia  GOZ.AX  set for
its biggest monthly drop since March 2020
    ** AXRE down 0.7% on Friday, vs a 1.1% decline in the ASX
200 benchmark index  .AXJO 
    ** AXRE down 29.6% this year, as of last close
 (Reporting by Harish Sridharan and Sameer Manekar in Bengaluru)
 ((harish.sridharan@thomsonreuters.com))