3 Stocks in Property and Real Estate - Stockland, Centuria Industrial REIT and Charter Hall Retail

Stockland Corporation Ltd

SGP Details

Positive outlook: Property developer, Stockland Corporation Ltd (ASX: SGP) has indicated for a positive outlook at the Annual General Meeting and reported that the residential market has been a key driver for growth during the first quarter of 2018. The group also seems to have built a significant deferred profit from residential property valuations. Moreover, the group is on track to deliver over 6,500 settlements in FY18, with a profit skew to the first half of the year. SGP forecasts the residential profit margin to be over 17%, driven by broad market strength and better rates of Sydney settlements. 

Residential net deposits – quarterly performance (Source: Company reports)       

SGP delivered 1,672 net deposits for lots and townhomes during the first quarter of 2018, of which 77% were from owner occupiers. The group targets a distribution per security of 26.5 cents which is a 4% rise in FY18, assuming no material change in market conditions. In retirement living business, established reservations in the first quarter of 2018 have been maintained; and five new releases have been scheduled in the second quarter of 2018. The stock surged 2.9% on October 25, 2017, and we maintain a “Hold” recommendation at the current price of $ 4.47


SGP Daily Chart (Source: Thomson Reuters)

Centuria Industrial REIT

CIP Details

Boosting capital position: Centuria Industrial REIT (ASX: CIP) reported a decent first quarter of FY18 and enhanced the portfolio occupancy by 1.4% to 93.5%. The agreed leases were over 134,000sqm, which is 17.5% of portfolio gross lettable area (GLA). CIP has slashed their FY18 lease expiry from 5.0% to 3.6%; and also decreased their FY20 lease expiry from 24.8% to 13.1%. They also boosted their capital position by raising equity of further $53 million through unit purchase plan (UPP) and institutional placement. The group invested $120 million which enhanced their portfolio value to $1.02 billion. There has been a decrease in their pro-forma gearing by 1.6% to 41.5%. On the other hand, the group enhanced the portfolio WALE by 0.4 years to 4.8 years, which still raises slight concern.We give an “Expensive” recommendation on the stock at the current price of $ 2.59


CIP Daily Chart (Source: Thomson Reuters)

Charter Hall Retail REIT

CQR Details

Sale of Gordon Centre: Charter Hall Retail REIT (ASX: CQR), which has over $2.8 billion Australian retail portfolio, has appointed Colliers International and Stonebridge Property Group to market the Gordon Centre (including the Gordon Village and adjoining assets) for sale. Meanwhile, their Fund Manager, Scott Dundas would step down from the role post the CQR Annual General Meeting on 31 October 2017. Group Executive Retail, Greg Chubb would take over the management of the CQR Fund from Mr Dundas in the newly formed role of Retail - CEO. The group maintains strong tenant relationships, with a healthy tenancy mix through proactive leasing and better overall shopper experience. Given the trading scenario and prospects, we put a “Hold” recommendation on the stock at the current price of $ 4.04


CQR Daily Chart (Source: Thomson Reuters)

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