Top ASX Real estate shares garnering investors’ attention – GMG, SCG, VCX

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Top ASX Real estate shares garnering investors’ attention – GMG, SCG, VCX

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Highlights 

  • Australian property prices have grown around 22% in the last 13 months and will increase to 23% by December 2021 end.
  • ANZ has projected that property prices might moderate to 6% in 2022 and drop by 4% in 2023.
  • GMG, SCG, VCX are big retail players on ASX and are well-positioned in the existing environment.

Owning a house or a property is a special thing in one’s life, and the price of the property plays an important role while deciding the type of property an individual wish to own. As per CoreLogic, Australian housing prices increased by ~22% in the last 13 months and would go up to nearly 23% by the end of 2021. Big Australian banks like ANZ and Commonwealth Banks also projected that property prices to rise to more than 21% by the end of 2021. In 2022, ANZ projected that the housing prices might moderate to 6% nationally and then drop by 4% in 2023. Sydney housing prices might increase to 27% by December 2021 end.

However, because of the tighter credit coupled with rising mortgage rates and decreased affordability, property prices may fall in 2022.

RELATED READ: Dramatic slowdown in the Australian property market, house price growth decelerates

DO WATCH: Is Australia’s supercharged property market beginning to cool?

Amid the existing environment in the Australian property industries, let us look at a few top Australian real-estate players and see how they are positioned currently.

INTERESTING READ: 10 tips for Aussie investors to buy property in 2022             

Goodman Group (ASX:GMG)

Goodman Group is a global property group. It own, develops as well as manages quality, sustainable properties. In Q1 FY2022, the Company made a strong start with constant structural changes, substantial customer demand and an increase of the use of sites in GMG’s target markets.

 As at 3 September 2021, the Company has a total asset under management worth AU$62 billion. It noted a 3.2% like-for-like net property income growth in managed partnerships. It had AU$12.7 billion of development work in progress by the end of the September 2021 quarter. It increased its EPS guidance for FY2022, with operating EPS growth projected to be over 15%.

Lately, the Company has noted a significant increase in the demand. However, due to supply restrictions in the markets, there is a shortage of available space. Thus, it is executing its strategy to deliver sustainable opportunities for its customers and investors. At the same time, it is securing cash flow growth for the long term.

GMG closed a tad higher at AU$24.790 per share on 2 December 2021.

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Scentre Group (ASX:SCG)

Scentre Group owns and operates the pre-eminent living centre portfolio in Australia and New Zealand with retail AUM valued at AU$50.1 billion and shopping centre interest valued at AU$34.3 billion.

From January 2021 till October 2021, the Company collected AU$1.8 billion in gross rent, up to AU$607 million since 30 June 2021. In the nine months ended 30 September 2021, the Group completed 2,010 lease deals, comprising 868 new merchants, welcoming 191 new brands to the portfolio.

SCG completed  2,010 lease deals

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By the closure of September 2021, portfolio occupancy was 98.5%. All Westfield Living Centres remained open during the period, operating with COVID Safe protocols. In the September 2021 quarter, SCG’s QLD, WA and SA centres traded well and were in line with the 1H 2021.

With the ease in the restrictions, customers started returning to Westfield Living Centres in NSW, VIC and ACT.

SCG closed the last trading session a tad down at AU$2.980 per share.

Vicinity Centres (ASX:VCX)

Vicinity Centres is one of Australia’s leading retail property groups and has a fully integrated asset management platform and AU$22 billion in retail AUM around 60 shopping centres. Thus, making the Company the second-largest listed manager of Australian retail property. Also, the Group has a Direct Portfolio with interests in 59 shopping centres and handles 29 assets on behalf of Strategic Partners.

In the September 2021 quarter, VCX made progress against its strategic value drivers. It strengthened its asset portfolio with the acquisition of 50% interest in Harbour Town Premium Outlets Gold Coast as well as divestment of a 50% share in Runaway Bay Centre.VCX acquired 50% interest in Harbour Town Premium Outlets Gold Coast

It started investment in ‘Click Frenzy’ owner, Global Marketplace. It also started drone deliveries at Grand Plaza in collaboration with Wing. Other than this, the Company signed a deal with Engie to install electric vehicle fast-charging stations at up to 30 Vicinity assets.

VCX highlighted that September 2021 quarter was the most COVID-impacted period since the start of the pandemic. Post FY2021 end, the Company negotiated two asset transactions to reinforce its portfolio.  It also made several strategic investments to further its data and innovation capabilities, progress its development pipeline and complete various leasing deals as retailers place themselves for post-recovery from the pandemic.

Currently, VCX seems to be optimistic about the positive momentum in Q2 FY2022.

VCX closed a tad down at AU$1.665 per share on 2 December 2021.

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What Next?

Based on the recent quarterly updates, it seems that the companies are well-positioned for the coming period. However, it would be interesting to see how the fear of a new COVID-19 variant influence the projections and the prices in the coming period.

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