Christmas shopping for real estate players: CHC, LLC, VCX, GOZ and CMW

The real estate industry includes companies that own, develop, and manage commercial, residential and industrial real estate. Good real estate stocks have numerous benefits including potentially higher returns, stability, inflation hedging and portfolio diversification; hence this class of assets remain one of the most desired options among investors.

It looks like the Australian property market is set for another year of success according to the Reserve Bank of Australia, which is forecasting a price boom in this sector.

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In this article, we are highlighting some real estate stocks which could be a good buy for pre-Christmas shopping-

Charter Hall Group (ASX:CHC)

One of Australia’s leading fully integrated property groups Charter Hall Group (ASX:CHC) has more than 28 years’ experience in property investment and funds management. The company is engaged in utilizing its expertise in property for accessing, managing, deploying and investing equity across its core sectors of social infrastructure, retail, industrial and offices. Charter Hall Group delicately curated more than $38 billion diversified portfolio consisting over 1100 high quality, long-leased properties.

Acquisitions of approximately $1.25 billion-

On 12 December 2019, the company announced that it has secured nearly $1.25 billion acquisitions through the Platform which include $840 million investment in a new managed Partnership. This Partnership has contracted to acquire a 49% interest in $1.7 billion portfolio covering 225 Convenience Retail properties leased to BP Australia Pty Limited with a twenty-year WALE triple net lease.

Let us now discuss the stock information of the company. On 16 December 2019, Charter Hall Group’s stock was trading at $11.210 up by 0.991% (at AEDT 1:16 PM). With its market capitalisation of approximately $5.17 billion, the stock has 52 weeks high and low price at approximately $12.855 and $7.280, respectively.

Lendlease Group (ASX:LLC)

Sydney headquartered and ASX listed real estate company Lendlease Group (ASX:LLC) deals in the retail property and asset management and construction, and operates in four regions- Australia, the Americas, Europe and Asia. The company has delivered a total of 1,623 residential apartments for sale including in Sydney, Melbourne and London, and is identified as a leading international property and infrastructure group.

Financial year 2019 highlights- (year ended 30 June 2019)

• Lendlease Group generated revenue of approximately $13,414 million in the fiscal year 2019 as compared to $13,287.9 million in the fiscal year 2018.
• The company’s profit after tax recorded at $804 million, which is down by 16% on year on year basis on account of inclusion of $500 million pre-tax provision on underperforming projects booked in the first half of the fiscal year 2019.

Let us now have a look at the stock performance of the company. On 16 December 2019, Lendlease Group’s stock was trading at $19.460, up by 2.746% (at AEDT 1:18 PM). With its market capitalisation of approximately $10.69 billion, the stock has 52 weeks high and low price at approximately $19.950 and $11.030, respectively. LLC’s stock has delivered a positive return of nearly 70.48% on year to date basis and a positive return of 45.80% in last six months.

Vicinity Centres (ASX:VCX)

One of Australia’s leading retail property groups Vicinity Centres (ASX:VCX) has a fully integrated asset management business and has its operations in investment, leasing, development, property management as well as funds management. The company is the 2^nd largest listed manager of Australian retail property and has $26 billion in retail assets under management throughout 66 shopping centers.

The company updated its Annual General Meeting (AGM) presentation on 14 November 2019 on ASX. The highlights from AGM presentation are-

• Project completed in November 2019-
  • MGallery by Sofitel hotel;
  • 250 rooms including suites and penthouses;
  • Two restaurants: Pastore by Pickett and Co, and Altus rooftop bar and lounge;
  • Conference facilities and ballroom, rooftop indoor swimming pool;
  • Wellness retreat, day spa and yoga studio.
• Financial year 2019 performance
  • The company delivered a net profit of approximately $346 million;
  • The key earnings measure, funds from operations per security, increased by 2.0% on a comparable basis, driven by 1.5% net property income growth.

Financial year 2020 earnings guidance update-

• The company anticipates the effect on funds from operations (FFO) is nearly 0.3 cents per security decline every year, before any reinvestment of proceeds. The forecast impact on Vicinity’s financial year 2020 FFO per security guidance reduced by 0.2 cents to 17.6 to 17.8 cents due to timing of asset sales, assuming no reinvestment of proceeds.

Approximately $812 million of medium-term notes-

On 29 October 2019, the company announced that it had priced ~$812 million (€500 million) of ten-year fixed rate medium term notes under its European Medium-Term Note (MTN) programme. The Responsible Entity of Vicinity Centres Trust would issue fixed-rate notes which were priced at a coupon of 1.125%. The proceeds would be utilized to pay existing bank services and for general corporate purposes.

Let us now have a look at the stock information of the company. On 16 December 2019, Vicinity Centres’ stock was trading at $2.535, up by 0.996% (at AEDT 1:19 PM). With its market capitalisation of approximately $9.44 billion, the stock has 52 weeks high and low price at nearly $2.770 and $2.415, respectively.

Growthpoint Properties Australia (ASX:GOZ)

An ASX listed Real Estate Investment Trust, Growthpoint Properties Australia (ASX:GOZ) is working with the objective to offer investors with tradeable security, making constantly increasing returns through income and long-term capital appreciation. The company has a diversified portfolio of 598 properties worth nearly $4 billion all over Australia.

The company updated its AGM presentation on ASX on 21 November 2019 and highlighted about its financials, developmental pipeline and company’s outlook.

Quick highlights from AGM presentation are-

Financial year 2019 highlights- (year ended 30 June 2019)

• Funds from operations 25.1cps up by 0.4% on prior corresponding period (pcp).
• The distribution per security for FY2019 was 23.0cps up by 3.6% on pcp.
• The company’s property portfolio value was approximately $4.0 billion as on 30 June 2019, which was up by 18.7% on pcp.
• Net property income for the fiscal year 2019 was nearly $230.4 million, up by 5.4% on pcp.

The company has planned developmental pipeline for upcoming years-

Outlook-

• For the fiscal year 2020 guidance reaffirmed for a minimum FFO of 25.4 cents per security and DPS of 23.8 cents.
• The company has a strong development pipeline which would support the ongoing distribution growth.
• Growthpoint Properties has a strong balance sheet, providing financial flexibility.

Let us now discuss the stock information of the company. On 16 December 2019, GOZ’s stock was trading at $4.230, up by 0.995% (at AEDT 1:20 PM). With its market capitalisation of nearly $3.23 billion, the stock has 52 week high and low price at approximately $4.520 and $ 3.630, respectively.

Cromwell Property Group (ASX:CMW)

An ASX listed entity, Cromwell Property Group (ASX:CMW) is an investor in real estate space and manager which runs in 3 continents across Europe, Australia and New Zealand. The company employs more than 420 employees in 15 countries and 29 offices.

Cromwell Panel Receives Application

According to one ASX announcement 11 December 2019, the Panel has obtained an application on behalf of Cromwell Property Group related to Cromwell’s affairs, concerning about whether various security holders in Cromwell are associated.

As at 4 December 2019 the company’s securities were held by ARA Real Estate Investors XXI Pte Ltd and related entities (23.66%), Ms Jialei Tang (3.88%), Senz Holdings Limited (0.31%), and people and companies connected to Mr Gordon Tang (8%).

Cromwell obtains final orders including-

• Sufficient holdings of the associates vest in ASIC for sale to reduce their combined voting power to 20% or below;
• None of the associates acquire securities in Cromwell for twelve months, and thereafter for section 611 item 9 purposes do not consider any relevant interest or voting power of securities that were vested in ASIC;
• Corrective substantial holding disclosure be made.

AGM presentation-

The company updated the market with its AGM presentation in November and highlighted the overview and financial update of the company.

• The company reported operating profit up by 11.1% for the financial year 2019.
• Cromwell reported NTA per unit of approximately $0.97.
• The company reported operating profit of nearly $174.2 million.

Let us now have a look at the stock information of the company. On 16 December 2019, CMW’s stock was trading at $1.182, up by 1.026% (at AEDT 1:23 PM). With its market capitalisation of nearly $3.05 billion, the stock has 52 weeks high and low price at nearly $1.345 and $0.980, respectively.

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