Property Stocks – CLW, SCG, GPT, VVR

  • Feb 11, 2020 AEDT
  • Team Kalkine
Property Stocks – CLW, SCG, GPT, VVR

The property market of Australia generally includes trade of land as well as fixtures within Australia. The market also comprises REITs, which play a prominent role in the sector.

Just like other sectors, the property sector contributes to the development of the economy. As per media reports, the property sector of Australia is expected to witness decent growth in 2020. Sydney and Melbourne are likely to lead this growth. However, the property sector might see some strict measures taken by the APRA (Australian Prudential Regulatory Authority).

In the below article, we will look at some of the ASX-listed property stocks with their recent updates:

Charter Hall Long WALE REIT (ASX:CLW)

Charter Hall Long WALE REIT is an ASX-listed REIT engaged in making investments in Australian real estate assets. On 10 February 2020, the company updated the market with its operational and financial performance for the first half of the financial year 2020 and outlined the following:

  • On the operational front, the company announced new property acquisitions of $1.4 billion, which contributed to extending the portfolio WALE. The acquisitions helped the company in enhancing sector diversification and strengthening the quality as well as diversification of tenants. The new property acquisitions of $1.4 billion primarily include:
    • Acquisition of a 50% interest in a Charter Hall managed a partnership of $349.0 million which secured a 49% interest in a tactical portfolio of 36 Telco Exchange properties, which is leased 100% to Telstra Corporation Limited with a 21-year WALE, triple-net leases and CPI+0.5% rent reviews.
    • Acquisition of a long WALE retail property of $41.3 million under construction in Palmerston.

H1 FY 2020 has proved to be a very active period for the company, where it reported operating earnings of $52.2 million, reflecting a rise of 8.5% as compared to the prior corresponding period. Charter Hall’s statutory profit stood at $80.5 million.

During the period, CLW experienced a growth of around $1.44 billion in the total property portfolio, leading to a portfolio of $3.59 billion. This increase has been generated by $1.37 billion of net acquisitions and capex and $83 million in property revaluations.

Stock Performance

The stock of CLW was trading at $5.570 on 11 February 2020 (at 03:38 PM AEDT), an increase of 0.36% compared to the previous day’s closing price. The stock delivered returns of 3.85% and 3.99% in the last three months and six months, respectively.

Scentre Group (ASX:SCG)

Scentre Group is engaged in the development and management of properties, including living centres, across Australia and New Zealand. The group officially listed on the Australian Stock Exchange in 2014. The company recently announced that it had scheduled to conduct its 2019 Annual General Meeting on 08 April 2020.

In another update, Scentre announced that it has made an acquisition of 50% interest in Garden City Booragoon for a consideration amounting to $570 million. This acquisition includes long-term property management, brand and development rights.

Previously, AMP Capital Diversified Property Fund was a 100% owner of Booragoon. Now, AMP Capital Diversified Property Fund and Scentre Group are currently 50-50% joint venture partners. It is anticipated that the transaction will be marginally accretive to earnings of Scentre Group from 2020 and would increase gearing to 31.7%.

With respect to the outlook for FY 2019, the company is expecting a Funds from Operations (FFO) growth per security of 0.7% and a distribution of 22.60 cents per security.

Stock Performance

The stock of SCG was trading at $3.890 on 11 February 2020 (at 03:38 PM AEDT), an increase of 0.777% compared to the previous day’s closing price. The stock delivered returns of -1.28% and -3.50% in the last three months and six months, respectively.

GPT Group (ASX:GPT)

GPT Group owns as well as manages a portfolio of retail, office and logistics property assets throughout Australia. The company’s portfolio is worth ~$24.8 billion.

GPT recently released its results for the financial year ended 31 December 2019 (FY 2019) and outlined the following:

  • During the financial year, GPT successfully wrapped up the Placement and Security Purchase Plan amounting to $867 million. The company will use the amount to finance its development pipeline as well as the acquisition of a 25% interest in Darling Park 1 & 2 and Cockle Bay Wharf.
  • The company reported a net profit after tax of $880.0 million, indicating a decline of 39.4% as compared to the previous corresponding period. The decrease was due to lower valuation gains.
  • The company secured a 33.4-hectare logistics development site at Kemps Creek, Sydney, for the consideration amounting to $100 million, and a 32.8-hectare logistics development site at Truganina, Melbourne in lieu of $34 million.
  • GPT mentioned that it is making excellent progress on its strategy to grow the Logistics portfolio.

Stock Performance

The stock of GPT was trading at $6.325 on 11 February 2020 (at 03:38 PM AEDT), a decline of 0.237% compared to the previous day’s closing price. The stock delivered returns of 6.02% and 4.11% in the last three months and six months, respectively.

Viva Energy REIT (ASX:VVR)

Viva Energy REIT owns and leases freehold properties, including service station sites. The company was officially listed on the Australian Stock Exchange in 2016.

Viva Energy announced recently that it would be releasing its results for the full year ended 31 December 2019 on 20 February 2020.

The company has recently responded towards a media speculation, that stated about the intention of Charter Hall Group to acquire a stake in Viva Energy REIT. However, the company clarified that it had not received any offer by Charter Hall Group with respect to the acquisition of a stake in Viva Energy REIT.

The responsible entity of the Viva Energy REIT Trust, VER Limited, advised the market that for the half-year ending 31 December 2019, estimated distribution stood at 7.19 cents per security. For the full year 2019, the estimated distribution is 14.37cps or 14.54cps on a weighted average basis.

Stock Performance

The stock of VVR was trading at $2.790 on 11 February 2020 (at 03:38 PM AEDT), an increase of 2.198% compared to the previous day’s closing price. The stock delivered returns of 1.11% and 3.41% in the last three months and six months, respectively.


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