Focus on 5 FTSE-listed real estate stocks amid housing market boom

Summary 

  • House prices in May rose at the fastest pace since the financial crisis of 2008.
  • Many homebuyers hurried to take last-minute advantage of the tax holiday in parts of the UK.
  • Northwest recorded a 15.2% jump in prices, the sharpest annual jump in house prices in any region.

As stamp duty holiday began to be gradually phased out, houses prices in May rose at the fastest pace since the financial crisis of 2008. House prices shot up 10 per cent in May in the UK as some homebuyers hurried to take last-minute advantage of the tax holiday in parts of the UK.

According to data from Office for National Statistics (ONS), the northwest recorded a 15.2 per cent jump in prices, the sharpest annual jump in house prices in any region. Prices in Wales jumped 13.3 per cent, 12.1 per cent in Scotland, and northeast England saw an 11.8 per cent rise. London recorded the slowest rise of 5.2 per cent through the year.

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ONS data has put the average price of a property at £254,624. The growth in house prices annually was driven primarily by a demand for outdoor spaces and bigger homes. Savings on stamp duties were largest on properties in Northern Ireland and England that are priced £500,000 and above.

Phasing out of the stamp duty holiday in Northern Ireland and England began on 30 June and ended in Wales on the same date.

Here are the five biggest real estate stocks by market capitalisation and how they have fared amid the rising prices:

Rightmove Plc (LON: RMV)

The shares of the largest online real estate portal were up 0.36 per cent and were trading at GBX 667.60 on 15 July at 08:56 GMT+1.

The shares have a one-year return of 20.51 per cent and a year-to-date return of 2.43 per cent with a market capitalisation of £5,711.05 million. They have a dividend yield of 0.67 per cent and a price-to-earnings ratio of 52.79.

The company’s revenue fell 29 per cent for the year ended 31 December 2020, to £205.7 million from £289.3 million a year ago because of discounts offered to customers through the period of April to September last year. Operating profit fell 37 per cent to £135.1 million from £213.7 million.

 Grainger Plc (LON: GRI)

The shares of the residential property company were down 0.20 per cent, trading at GBX 293 on 15 July at 10:10 GMT+1.

The shares have a price-to-earnings ratio of 20.57x and a dividend yield of 1.86 per cent. They have a year-to-date return of 3.46 per cent, with a market capitalisation of £1,982.36 million.

For the half-year ended 31 March 2021, the company’s adjusted earnings were up 11 per cent, like-for-like rentals grew 1.7 per cent, and rent collection stood at 98 per cent. This year, pipeline delivery is expected to increase to 1,021 new homes.

Savills Plc (LON: SVS)

Shares of the real estate service provider were down 0.62 per cent at GBX 1,125 on 15 July at 10:31 GMT+1.

The shares have given a one-year return of 47.63 per cent. The shares have a price-to-earnings ratio of 19.93x, dividend yield of 1.52 per cent, and a market capitalisation of £1,619.62 million.

Group revenue fell 9 per cent to £1.74 billion in 2020 from £1.91 billion a year ago. Company’s underlying profit before tax fell to £96.6 million from £143.4 million a year ago.

St. Modwen Properties Plc (LON: SMP)

The shares of the property development and investment company were trading at GBX 556 on 15 July at 11:01 GMT+1.

The shares have a one-year return of 51.71 per cent. They have a price-to-earnings ratio of 56.16x and a dividend yield of 0.90 per cent. The shares have a market capitalisation of £1,237.81 million.

Modwen Logistics grew 49 per cent in 2020 compared to a 39 per cent growth seen last year. The total portfolio of Modwen Homes was down 27 per cent compared to a 26 per cent growth seen the year before. Its loss stood at £120.8 million for the year compared to a profit of £49.5 million a year ago. The company also recorded a profit of £13.7 million in the second half of the year.

Sirius Real Estate (LON: SRE)

The shares of the property company were down 0.17 per cent and were trading at GBX 115.60 on 15 July at 11:01 GMT+1.

The shares of the company have a market capitalistaion of £1,221.41. They have a one-year return of 40.90 per cent and a year-to-date return of 23.55 per cent. The shares have a dividend yield of 2.86 per cent and a price-to-earnings ratio of 24.17.

For the year ended 31 March 2021, the company’s profit before tax grew 47.7 per cent to €163.7 million from €110.8 million a year ago. Its annualised rent roll was up 7.6 per cent to €97.2 million from €90.3 million a year ago. It also recorded a 5.2 per cent jump in like-for-like annualised rent roll, which was the seventh straight year of like-for-like rent roll growth, being over 5 per cent.

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