REITs in Review

A number of REITs announced their 3Q19 operational updates yesterday.

Dexus forecast 5% underlying earnings growth.  reaffirmed its FY19 guidance for 5% growth.

Mirvac indicated their FY19 guidance will be in the 3 – 4% growth range with DPS growth at 5%.

Across the sector it is likely residential and retail remain the weak spots, whilst  office and industrial will continue to provide strong growth. Softening of the retail sector was evident in GPT’s March quarter business update.

Despite GPT’s exposure to retail, the office exposure along with the groups strategy to expand the footprint in logistics, makes the stock one of our preferred opportunities within the REIT sector.

 

 

 

 

 

Mirvac Group – Algo Sell Signal

Our Algo Engine triggered a sell signal in Mirvac at the recent “lower high” formation.

We note the difficulties residential REITs are likely to face in a falling house price environment. Tighter credit conditions will impact Mirvac’s core customer, the investor.

Resistance within the $2.30 – $2.45 range.

Mirvac Group

 

 

Property Exposure – Are You Watching?

The recent market rotation towards growth assets and in particular, materials and financials, has resulted in selling utilities and property trusts. In many cases, these names have seen 10 to 20% correction.

The following post takes a quick look at some of the relevant chart patterns.

SCG.ASX (forward yield 4.9%)

scg

SGP.ASX (forward yield 5.5%)

sgp

WFD.ASX (forward yield 3.5%)

wfd

DXS.ASX (forward yield 5.2%)

dxs

GMG.ASX (forward yield 3.7%)

gmg

GPT.ASX (forward yield 5%)

gpt

MGR.ASX

mgr

On the utilities, we think that both Sydney Airports and Transurban should be back on the radar and maybe looking oversold.

SYD.ASX (forward yield 5%)

syd

TCL.ASX (forward yield 4.8%)

tcl