We discussed MGR in detail here earlier in the month, when we bought the stock following recent weakness driven by higher bond yields, not any deterioration in fundamentals, creating what we saw as an attractive entry point into a high-quality REIT. With yields elevated due to oil-driven inflation fears, any stabilisation in energy prices should see bond yields ease and support a recovery in rate-sensitive sectors.
In our Active Growth Portfolio, we now hold 4% in MGR and 5% in Goodman Group (GMG), which would historically have been regarded as a large property exposure, but with GMG now expanding aggressively into Data Centres, its correlation to the sector has fallen, but not gone away.
- We like the risk/reward towards MGR ~$1.80, with technical buy signals generated above $1.90 – MM owns MGR in our Active Income and Active Growth Portfolios.
MM is bullish towards Mirvac (MGR) around $1.80
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