Let’s Dig Into Some Real Estate Stocks – SCG, RWC, GMG, MGR

Australia Real Estate Sector

Australian REITS enjoyed 2018 as there were strong returns due to various factors such as lower interest rates, robust economic growth and others. On the other hand, 2019 came in with lot of challenges biggest of all being the China and USA trade tensions. Though the Australian economy has been responding positively to such situations still the housing prices and rental prices were falling. Housing market rebounded in June 2019, due to change in sentiment, which was driven mainly by lower interest rates, easier credit access, and certainty about taxation. The increase is prices is expected to continue in coming months but shall not be expected as a "V-shaped recovery".

The Australian Real Estate index

S&P/ASX 200 Real Estate Sector closed at 3842.2 up by 22.6 basis points and 0.59 per cent, and the Australian benchmark index S&P/ASX200 closed at 6,669.1 up by 0.09 per cent (as on 1 November 2019). In this article, we would discuss four stocks from the Real Estate sector

Scentre Group (ASX: SCG)

Scentre Group operates and own the pre-eminent living centres in New Zealand and Australia. The company has a real estate under management of $54.2 billion and $39.1 billion as ownership interests in shopping centre. SCG has strong franchise value with 41 Westfield living centres.

Total in-store sales grew by 2.4 per cent in Q3 2019

The company announced third quarter results for the period ending 30 September 2019, key highlights are as follows:

• The company’s Total in-store sales grew by 2.4 per cent for the three months and 1.6 per cent for the year.
• Specialty in-store sales have been increased by 2.9 per cent for the three months and 1.8 per cent for the year.
• Majors in-store sales was (0.6) per cent for the three months and 1.0 per cent for the year.
• SCG customer visit continued to grow and reached >535 million.
• The leased portfolio was 99.3 per cent, of which the number of completed lease deals stood at 1,859 whereas area wise its 312,566.
• Average specialty in-store sales were $1.52 million.

Stock Performance

The stock of SCG was last traded at $3.870 on ASX on 1 November 2019, higher by 1.044 per cent from its previous close. The company has approximately 5.3 billion outstanding shares and a market cap of $20.29 billion. The 52 weeks low and high value of the stock is at $3.630 and $4.160 respectively.

Reliance Worldwide Corporation Limited (ASX:RWC)

Reliance Worldwide Corporation Limited headquartered in Melbourne, Australia is a publicly listed company. The company designs, manufacture and supplies plumbing solutions and water control systems worldwide. RWC has 15 manufacturing plants and 5 R&D centres with presence in more than 44 locations. Recently on 10 October 2019, the company has announced to change the address of the principal place of business with immediate effect. The new address of the company now will be Level 26, 140 William Street, Melbourne, Victoria 3000.

Results of the Annual General meeting

On 31 October 2019, the Annual General Meeting of the company was held at Melbourne for giving updates on the financials of FY2019. The company had record sales of $1.1 billion, up 43%. Operating earnings up by 66%, with adjusted EBITDA at $263 million.

Guidance for FY20

Net Profit after Tax for FY2020 will be between $150 million to $165 million. The most significant determinants of performance in financial year 2020 are expected to be the extent of Brexit disturbance in the UK.

Stock Performance

The stock of RWC was last traded lower at $4.140 on ASX on 1 November 2019. The company has approximately 790.09 million outstanding shares and a market cap of $3.33 billion. The 52 weeks low and high value of the stock is at $5.315 and $3.085 respectively.

Goodman Group (ASX:GMG)

Goodman Group is a global property group that develops, manages and owns real estate, including industrial facilities, warehouses, logistics, and business parks. Good Group is officially listed on Australian stock exchange.

Financial update for FY19

• The company declared a fully franked final dividend of 5.0 cents
• Operating profit of $942 million, up 11.4% on FY18
• Statutory profit of $1,628 million, up 48% on FY18

The details of company FY 2019 financial performance can be viewed here

Stock Performance

The stock of GMG was last traded at $14.370 on ASX on 1 November 2019, lower by 0.139 per cent from its previous close. The company has approximately 1.83 billion outstanding shares and a market cap of $26.31 billion. The 52 weeks low and high value of the stock is at $9.990 and $16.100 respectively.

Mirvac Group (ASX:MGR)

Mirvac Group is a leading diversified Australia Property Group. The company owns and manages assets across office, retail and industrial sector with more than $18 billion of Asset Under Management (AUM).

Change of Director’s Interest

On 25 October 2019, the company has announced to change one of its directors (Peter Stanley Nash) interest with effect from 23 October 2019. The number of securities held by the director after the change was, 20,221 stapled securities held indirectly, and 13,227 stapled securities held directly

Q1 2020 Operational Update

On 22 October the company has announced the operational update of Q1 2020 for the period ending 30 September 2019. Key highlights of the update are as follows:

• The company has maintained a high occupancy of 98.4 per cent in the Office
• Industrial segment maintained high occupancy of 99.7 per cent with WALE of 7.5 years.
• The industrial segment completed approximately 8,000 square metres.
• Retail segment maintained a high occupancy of 99.1 per cent.
• The Residential segment settled 613 residential lots and achieve over 2,500 settlement for FY 2020.
• The company’s Residential segment maintain a high level of residential pre-sales at $1.3 billion.

The company FY 2019 financial performance can be viewed here

Stock Performance

The stock of MGR was last traded lower at $3.23 on ASX on 1 November 2019, up by 0.623 per cent from its previous close. The company has approximately 3.93 billion outstanding shares and a market cap of $12.63 billion. The 52 weeks low and high value of the stock is at $2.090 and $3.415 respectively.

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