Publications

- June 1, 2018: Vol. 10, Number 6

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Seeking value: Looking for A-REIT opportunities in a volatile market

by Dinesh Pillutla

The volatility of the equity markets has reached unprecedented levels recently — keeping investors on their toes, with many reassessing their portfolios more often than anticipated. Some of the key themes often reviewed are performance metrics, potential distribution yields and valuations, as well as sector performance. A review of the A-REIT sector provides some interesting insights into how these metrics may provide opportunities for investors in the current investment climate.

Sector performance

The A-REIT sector delivered a negative performance in first quarter 2018, affected by the US Federal Reserve’s decision to increase interest rates. The repercussions flowed through to equity markets, with the A-REIT sector delivering its worst quarterly performance of the past few years, declining 6.4 percent, compared with the broader S&P/ASX 200 sector decline of 3.9 percent. The volatility of the A-REIT sector can be seen in the graph below of its

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