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While REIT space has not drawn a lot of attention in the past, some analysts believe that the dividends offered by the REIT sector - which are substantially higher than most of the other sectors in the ASX – is a possible attraction point for investors who are looking for a regular source of income.
Also, a rise in property prices (2.4% growth in the weighted average of eight capital cities for the quarter ended 30 September 2019) is likely to have an impact on the REIT segment.
S&P/ASX200 A-REIT (Sector) has generated a return of 15.82% for the 1-year period starting from 07 January 2019 to 06 January 2020. During the same period, S&P/ASX200 generated a return of 19.87%.
In this article, we will focus on three REIT stocks – CQR, CMW and VCX - with a relatively high dividend yield.
Charter Hall Retail REIT (ASX: CQR)
Managed by Charter Hall Group (ASX: CHC), Charter Hall Retail REIT operates a convenience-based retail portfolio worth $2.9 billion. The company focuses on supermarket anchored shopping centres across Australia.
Source: Company Website
BP Portfolio Investment and Earnings Guidance Upgrade
On 12 December 2019, Charter Hall Retail Management Limited announced an investment in a Charter Hall managed new partnership that will acquire a 49% stake in a portfolio of BP Australia-leased 225 Long WALE Convenience Retail properties.
Charter Hall Retail REIT (ASX:CQR), Charter Hall Long WALE REIT (ASX:CLW) and Charter Hall Group (ASX:CHC) will jointly own the partnership with a 30%, 50% and 20% stake, respectively. CQR will invest approximately $137 million for its stake in the partnership.
Based on significant acquisitions and strong FUM growth, the Group’s FY20 guidance has been upgraded to ~30% growth in post-tax operating earnings per security over FY19.
FY 2019 Results
For FY 2019 (ended 30 June 2019), CQR generated operating earnings of $128.0 million, 3.9% higher than 123.2 million in FY 2018. Statutory profit stood at $53.1 million, significantly lower than FY 2018 figure of $146.4 million. The operating earnings per unit grew 2% YoY to reach 31.12 cents. Distributions per unit increased by 2% YoY to reach 28.76 cents leading to a payout ratio of 92.4%. Net property income (NPI) grew 2.1% as compared to the 1.8% growth in FY 2018.
For further information on FY 19 results, click here
Dividend Story
Charter Hall Retail REIT announced a dividend of $0.1452 on its fully paid securities for a period of six months. The dividend will be paid on 28 February 2020.
CQR ‘s dividend yield (annual) is 6.73%.
Stock Performance
The stock of CQR closed at $4.345 on 07 January 2020, up 0.81%. The company has a market cap of $1.91 billion and approximately 442.54 million outstanding shares.
The 52-week high and low value of the stock is $4.790 and $4.195, respectively. The stock has generated a negative return of 4.22% in the last six months.
Cromwell Property Group (ASX: CMW)
An ASX-listed real estate investment manager, Cromwell Property Group has $11.9 billion in assets under management (AUM). The company, with a market capitalisation of ~$3 billion, operates across Australia, New Zealand and Europe.
Source: Company Website
FY 2019 Results
For FY 2019 (ended 30 June 2019), Cromwell reported a statutory profit of $159.9 million, a decline compared to FY 2018 ($204.1 million). The company’s operating profit grew 11.1% to reach $174.2 million (FY 2018: 156.8 million). Total AUM grew by $400 million to reach $11.9 billion. FY 2019 distribution per security was 7.25 cents as compared to 8.34 cents in FY 2018.
Dividend Story
Cromwell Property Group announced a dividend of $0.01875 on 23 December 2019 on the security CMW – Fully Paid Ordinary/Units Stapled Securities for a period of three months. The dividend will be paid on 21 February 2020.
CMW’s dividend yield (annual) is 6.19%.
Stock Performance
The stock of CMW closed at $1.192 on ASX on 07 January 2020, an increase of 0.17% from its previous closing price. The company has a market cap of $3.1 billion and approximately 2.61 billion outstanding shares. The 52-week high and low value of the stock is $1.345 and $0.980, respectively. The stock has generated a negative return of 7.03% and 1.24% in the last three months and last six months, respectively.
Vicinity Centres (ASX: VCX)
Vicinity Centres owns and operates retail properties across Australia. The company manages 63 operating centres and has AUM of $26 billion.
50% Stake in Uni Hill Factory Outlets, divestment of Lennox Village
On 23 December 2019, Vicinity announced that it will acquire a 50% stake in Victoria-based Uni Hill Factory Outlets. The company also announced that it will divest its 50% interest in Lennox Village.
The acquisition of Uni Hill from MAB Corporation will be worth $67.8 million while the company stands to make $31.5 million through its share sale in Lennox Hill to Challenger.
FY 2019 Results
For FY 2019 (year ended 30 June 2019), Vicinity reported a statutory net profit of $346.1 million. Funds from operations (FFO) grew 2% (comparable growth) to reach $689.3 million. FFO per security stood at 18 cents, compared to 18.2 cents in FY 2018. Distribution per security stood at 15.9 cents, reflecting a payout ratio of 87.7%
Dividend Distribution
Vicinity Centres announced a dividend of $0.077 on 03 December 2019 on the security VCX – Fully Paid Ordinary/Units Stapled Securities for a period of six months. The dividend will be paid on 02 March 2020.
VCX’s dividend yield (annual) is 6.21%.
Stock Performance
The stock of VCX closed at $2.535 on ASX on 07 January 2020, an increase of 0.6% from its previous closing price. The company has a market cap of $9.48 billion and approximately 3.76 billion outstanding shares. The 52-week high and low value of the stock is $2.720 and $2.415, respectively. The stock has generated a negative return of 1.56% and 4.55% in the last three months and last six months, respectively.
Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
