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Hot Reeling over 10 Real Estate-Related Stocks

  • December 09, 2019 11:10 PM AEDT
  • Team Kalkine
Hot Reeling over 10 Real Estate-Related Stocks

Following a torrid last year for the Australian housing market, many economists have opinioned that the conditions of the housing market has started to heal with a rise in the houses prices observed in many critical cities. However, we are still seeing a decline in the numbers of total dwellings approved.

Gold MTF non-AMP

As per the recently released data by the Australian Bureau of Statistics (ABS), the total dwellings approved declined by 0.8% in October 2019. This includes a decline of 0.9% in private sector houses and 0.5% decline private sector dwellings excluding houses. On trends basis, the value of residential building fell 1.2% while the value of non-residential building declined by 0.2%.

In the light of the above-mentioned scenario, let us now take a look at 10 real estate related stocks trading on ASX.

Stocks Under Discussion

As at 9 December 2019 (Source: ASX)

Scentre Group (ASX: SCG)

Owner and operator of highest quality regional living centres, Scentre Group (ASX: SCG) recently acquired a 50% interest in Garden City Booragoon, Perth for $570 million, in anticipation of expanding its operating business.

It is expected that the acquisition will be slightly accretive to Scentre Group’s earnings from 2020 and it will increase gearing to 31.7 per cent. For full year 2019, the group expects its forecast Funds from Operations (FFO) growth per security to be around 0.7% and its distribution to be around 22.60c per security.

Unibail-Rodamco-Westfield (ASX: URW)

Premier global developer and operator of Flagship destinations, Unibail-Rodamco-Westfield proportionate turnover of €2,729.7 million for the first nine months of 2019, up 26.1% mainly due to the acquisition of Westfield Corporation (WFD). The acquisition of WFD also drove the property services and other activities revenue to grow by 9.3%.

For the full year 2019, the group expects its Adjusted Recurring Earnings per Share to be at the upper end of the €12.10 - €12.30 range.

Goodman Group (ASX: GMG)

Integrated property group Goodman Group (ASX: GMG) has produced a strong first quarter for FY2020 as it continues to deploy capital through development in key urban locations while providing customers access to high-quality facilities close to consumers.

Key highlight September quarter

  • $48.2 billion total assets under management
  • 3% Partnership like for like NPI growth
  • $4.2 billion of development work in progress
  • Reaffirm forecast FY20 operating earnings per security of 56.3 cents, up 9% on FY19

Dexus (ASX: DXS)

Australia’s leading real estate group, Dexus recently settled on the sale of its initial 25% interest in 201 Elizabeth Street, Sydney, securing around $34 million (pre-tax) of FY20 trading profits through the sale of this tranche.

In addition to this, the company has also entered into a put and call option to sell its remaining 25% interest in late 2020, in anticipation of contributing a further circa $34 million in pre-tax trading profits in FY21.

Notably, in the last five years, the company’s stock has provided a return of 72.10% as on 6 December 2019.

Mirvac Group (ASX: MGR)

During the first quarter of the financial year 2020 (FY20), Mirvac group (ASX: MGR) made steady progress with Office & Industrial division performing well and Residential business witnessing an uptick in enquiries.

  • Office Highlights: During the quarter, the company maintained high occupancy of 98.4% and completed approximately 17,700 square metres2 of leasing activity;
  • Industrial Highlights: During the quarter, the company maintained high occupancy of 99.7% with a WALE of 7.5 years while completing around 8,000 square metres of leasing activity;
  • Retail Highlights: During the quarter, the company maintained high occupancy of 99.1% and recorded solid comparable moving annual turnover sales growth of 2.6 per cent and comparable specialty sales growth of 2.0 per cent.

GPT Group (ASX: GPT)

Australia’s largest diversified property group, GPT Group (ASX: GPT) recently announced its operational update for the September 2019 quarter. During the quarter, the company witnessed deliver strong leasing outcomes across the Office and Logistics portfolio.

Key operational Highlights for September Quarter

  • Office leasing of 64,982 square metres (sqm) completed during the quarter, with portfolio occupancy increasing to 97.7 per cent (97.1 per cent at 30 June 2019)
  • Logistics leasing of 45,815 sqm completed during the quarter, with portfolio occupancy increasing to 95.6 per cent (93.4 per cent at 30 June 2019)
  • Acquired a 32.8 hectare logistics development site at Truganina, Melbourne, for $34 million, with settlement expected in 2022
  • Acquired a 33.4 hectare logistics development site at Kemps Creek, Sydney, for $100 million, with settlement to occur in two tranches over 2020 and 2021
  • Retail specialty sales of $11,546 per square metre (psqm), representing growth of 0.5 per cent over the last 12 months

Lendlease Group (ASX: LLC)

International property and infrastructure group, Lendlease Group (ASX: LLC) began FY20 in a strong financial position with gearing at the bottom of the target range and $3.9 billion of available liquidity. The company expects its gearing to increase in FY20 to within its stated target range of 10-20 per cent.

The company is planning for the next phase of investment for growth. A substantial uplift in the amount of institutional grade investment product is expected to be created for capital partners and the Group’s Investments platform as development activity accelerates.

Notably, in the last six months, LLC stock price has increased by 43.87% as on 6 December 2019.

Vicinity Centres (ASX: VCX)

For 2019 financial year, Vicinity Centres (ASX: VCX) reported a net profit of $346 million, driven by steady underlying growth and development completions. During the year, the company’s funds from operations (FFO) per security, increased by 2.0% on a comparable basis, driven by 1.5% net property income growth.

Vicinity Centres is of the view that it is in a strong position to fund its portfolio-enhancing development pipeline.

Charter Hall Group (ASX: CHC)

A leading property investment management company, Charter Hall Group (ASX: CHC) began FY20 with $4.1 billion in available investment capacity which consists of existing cash balances and available lines in its funds and on its balance sheet.

The company has set a target of a 100% reduction in direct emissions (Scope 1 and 2) for the buildings it manages by 2030.

Cromwell Property Group (ASX: CMW)

Cromwell reported a statutory profit of $159.9 million for the 2019 financial year. For the full year, the company reported operating profit of 0.21 cents per security which is ahead of full year guidance at 8.21 cents per security. The company’s FY20 operating profit guidance is forecast to be not less than 8.30 cps and distributions guidance is no less than 7.50 cps, a 3.45% increase on FY19.


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