BWP Trust

BWP Details

Impact from lower lease expiry profile: BWP Trust has recently announced about successful pricing of a new AUD Medium Term Note (AUD$MTN) issue of A$110m unsecured fixed medium term notes (maturing in May 2022). BWP intends to use the proceeds for general funding and repayment of bank debt. For half year results to December 31, 2016, the group’s total income witnessed an increase of 1.5% over the prior corresponding period (pcp) at the back of rental growth from the property portfolio. The group owns about 80 warehouses with 99.9% occupancy. 

Trend for WALE (Source: Company Reports)
 
On the other hand, BWP’s weighted average lease expiry (WALE) at 5.5 years is witnessing a drop from 5.9 years as at June 2016 and 6.4 years as at December 2015. Over the next three years, over 23% of the portfolio is expected to expire and the group now aims to rely on alternative uses for various assets. This, in turn, signals for more risks. We maintain an “Expensive” recommendation on the stock at the current price of $ 3.00


BWP Daily Chart (Source: Thomson Reuters) 

Aventus Retail Property Fund

AVN Details

Acquisition of two large format retail (LFR) centres: Aventus Retail Property Fund recently announced that Aventus Capital as responsible entity for the company has entered into an unconditional agreement to acquire two large format retail (LFR) centres located in Castle Hill and Marsden Park for $436 million. The acquisition will be partly funded from an entitlement offer. Particularly, the Responsible Entity is undertaking an underwritten 1 for 4.3 accelerated non-renounceable entitlement offer of units in the Fund (units) at a fixed issue price of $2.32 per unit to raise about $215 million. The group will fulfil the remaining acquisition requirement using existing debt facility that was increased by $300 million. 

Diversification of the Portfolio (Source: Company Reports)
 
The group had announced about revaluation of the portfolio with a $70 million like for like overall uplift (to be adopted by June 2017). AVN expects its FY17 Funds from Operations per unit to be 17.7 cents while FY18 guidance is expected to be 2%-4% higher than FY17 FFO per unit. The stock has moved up 12% in last six months (as at May 29, 2017). Given that the group is yet to demonstrate high potential, the stock looks “Expensive” at the current price of $ 2.52


AVN Daily Chart (Source: Thomson Reuters) 

Lendlease Group

LLC Details

Strong momentum expected going forward: Lendlease Group’s stock has moved up about 22% in last six months (as at May 29, 2017) and is peaking towards its high levels. The group has a globally diverse pipeline - development pipeline worth $49 billion, construction pipeline worth $20.5 billion and investments pipeline of about $28 billion. The group is getting boost from trends in urbanisation, infrastructure, funds growth, ageing population and technology.
 

Portfolio Management Framework (Source: Company Reports)
 
LLC has highlighted for strong momentum in near and medium terms at the back of apartments settlements and launches (Park Place Residences at PLQ, Singapore phase one (215 apartments) sold out), contractual closes (such as one reached on Lifestyle Quarter at Tun Razak Exchange), entry into US Telco Infrastructure via acquisition of telco tower portfolio, financing efforts and so forth. LLC’s NPAT was up 11.59% to $394.8 million for the half-year ended 31 December 2016 while revenue from ordinary activities surged 8.25% over last year. We maintain a “Hold” at the current price of $ 16.39


LLC Daily Chart (Source: Thomson Reuters) 

GPT Group

GPT Details

Concluded liquidity review process for GWSCF: GPT Group has recently concluded its liquidity review process for the GPT Wholesale Shopping Centre Fund (GWSCF) while reporting about liquidity requests for 78.5 million securities (2.4% of issued capital), during the liquidity review process. GPT has purchased around $116.6 million in securities in GWSCF and its purchase led to an increase in the group’s interest in the Fund from 25.3% to 28.9%. In 2016, GPT reported growth in Funds from Operations of 5.6% at the back of a high-quality portfolio, diversified across the three asset classes of Retail, Office and Logistics. The strong portfolio performance and strong demand for assets delivered revaluation gains of $612 million. GPT has also completed the redevelopment of Macarthur Square (50% owned by GWSCF) in the March 2017 quarter. The group has a strong capital position with gearing of 24.9% as at March 31, 2017. GPT aims to achieve FFO per security growth of 2% for full year 2017. On the other hand, lower retail sales owing to weaker currency and consumer spending seem to offset effects from rising property prices. GPT has highlighted for headwinds from retailer profitability. We maintain an “Expensive” recommendation at the current price of $ 5.19


GPT Daily Chart (Source: Thomson Reuters) 

Stockland Corporation Ltd

SGP Details

Some headwinds for retail profitability but outlook is weighted towards positive scenario: Stockland recently appointed Andrew Stevens to the board. The group had delivered a solid third quarter (3Q17) performance across its diversified property business. Its Residential business reported for 1,891 net deposits in the quarter, and 5,984 net deposits in the financial year to date against a total of 4,844 net deposits in the corresponding period of 2016. Retirement Living business also achieved 244 net reservations in the quarter. SGP has maintained its FY17 guidance for growth in Funds from Operations (FFO) per security of 6 - 7% (in case of no material change in market conditions). Further, FY17 Distribution Per Security (DPS) of 25.5 cents is being aimed to be achieved. Although headwinds to overall retail profitability prevail, specialty sales productivity is still growing. Further, boost from retirement living, residential net deposits, strong leasing in logistics and Business Parks, and overall portfolio’s position in terms of sustainability can be seen flowing in.We maintain a “Hold” recommendation at the current price of $ 4.64


SGP Daily Chart (Source: Thomson Reuters)

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