According to Morningstar, Cromwell Property (ASX:CMW)’s equity may face a dilution.

The fair value estimate for the property group has been lowered to A$0.70 from A$0.85 as the stock price plummets following a rise in bond yields.

The brokerage has also stepped up the Uncertainty Rating of the real estate company to Extreme from previously being rated High.

Analysts at Morningstar are doubtful of Cromwell Property’s ability to raise equity at A$0.50 per security and thus, now predict the company will raise A$510 mln at A$0.30 per security.

Rising interest rates and threats to income affecting asset values are expected to cause a further fall in NTA.

In addition to these pressures, a dilutive equity raise is also assumed.

Moreover, all three analysts covering the stock rate it as hold according to LSEG.

Cromwell Property’s stock has fallen 48.5% this year as of the most recent closure.

Cromwell Property focuses on property investment and management.

It operates predominantly in Australia but has presence in other countries as well.