Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Thanks James and team for your clear, concise and helpful answers to questions. Can you please give your opinion on what impact current and near future economic conditions are likely to have on the share price of SCG, VCX, and DXS. Thanks Trish
Hi Trish,
These three property stocks have delivered very different returns over the last 3-years – VCX has been the strongest performer (+47.5%), followed by SCG (+37.5%), while DXS has materially underperformed (-24.6%) amid persistent office-sector headwinds.
All three bottomed in October 2023 alongside the peak in Australian bond yields, before diverging sharply as differing property exposures and fundamentals drove performance. Interestingly bond yields have pushed through the 2023 highs in the last few months, but VCX and SCG only experienced fairly shallow pullbacks whereas DXS continued to underperform posting fresh multi-year lows.
After this week’s buying by the US Treasury of long-dated Treasuries the goalposts may have moved for some real estate stocks, as investors weigh up their yield versus that of government bonds:
So far this week the 3 have lagged the likes of Mirvac (MGR) and Stockland (SGP); we would prefer to buy the improving outlooks on offer from MGR & SGP at this stage.
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