Cedar Woods Properties Ltd


CWP Details

Reaffirmed guidance:Cedar Woods Properties Ltd (ASX: CWP) reaffirmed FY16 profit guidance of $43 million as well as estimates strong growth for FY17. CWP has nine new projects under pipeline which would contribute to earnings over next three years. Presales for FY17 and FY18 are at $130 million (as per the third quarter FY16 operational update) while a growing national pipeline of development project in Western Australia, Victoria and Queensland is expected to drive revenues for FY17 and FY18. In H1FY16, the company acquired two exciting projects – North Baldivis and Wooloowin project.
 

Building pipeline (Source: Company Reports)
 
Meanwhile, CWP’s NPAT reached 18.1 million while dividend was at 12 cents for 1H 2016. The gearing ratio is at 25.9 with debt of $75.3 million. CWP indicated that Victoria region witnessed rise in prices and good clearance rate while Queensland would report relatively slow growth. Ellendale is benefiting from improving conditions while South Australia is witnessing lower demand. The market in Western Australia continues to ease off its cyclical highs. Trading at attractive P/E and good dividend yield, we recommend a “Buy” on the stock at the current market price of $4.30
 

CWP Daily Chart (Source: Thomson Reuters)
 
GDI Property Group Ltd


GDI Details

New office tower in Townsville: GDI Property Group Ltd (ASX: GDI) bought $53 million office tower in Townsville which is priced below the replacement cost. The group has acquired a total worth of $200 million assets in the last six months. The office tower – Stanley Palace- has total net lettable area of 13,795 sq m and is 79% leased to the Federal government. Meanwhile, GDI Property Group has sold an office building, the James Cook Centre, in the Toowoomba CBD in Queensland for more than $10 million. GDI has established GDI No. 42 Trust for its two properties in Townsville and Ashfield, and GDI is to have 45% interest in the trust. GDI No. 42 Trust would have total assets of $88.5 million. Following the acquisition of stake, GDI debt would be $290 million with undrawn debt of $30 million. GDI stock also has an attractive dividend yield and recently declared a distribution amount of $0.03875. The stock surged 4.71% in last three months (as at July 07, 2016). Trading at a relatively low P/E, we give “Speculative Buy” on the stock at the current market price of $0.905


GDI Daily Chart (Source: Thomson Reuters)
 
Stockland Corporation Ltd


SGP Details

Extending Elara portfolio: Stockland Corporation Ltd (ASX: SGP) has agreed to acquire 95 hectares of residential zoned land bordering its 198-hectare Elara community at Sydney. The acquisition would cost $290 million on capital efficient terms over 30 months. The existing Elara community would yield 2300 residential lots while new acquisition would yield more than 1500 additional lots. Furthermore, Elara has linkages to M7, M2 and M4 motorways, which would benefit Elara residents enhancing the value of the project. For Q1FY16, Stockland reported a 3.5% sales growth for specialty stores and a 2.3% rise for comparable sales. Meanwhile, SGP launched new project at Altrove (Schofields, NSW), Aura (QLD), Newport (QLD) and Pallara (QLD). SGP has undertaken redevelopment of Green Hills (NSW) in January 2016, which would be more than double the size of this highly productive center. SGP announced for distribution of 12.3 cents for six months ended on June 30, 2016 leading to a total distribution of 24.5 cents per ordinary stapled security. The company is on track to achieve the underlying EPS growth of 6.5-7.5% and FFO per security of 9-10% in FY16 and property portfolio is well positioned to achieve sustainable long-term growth and value creation. The stock is trading at an attractive dividend yield and low P/E while being close to its 52- week high point. We give a “Hold” at the current market price of $4.82
 

SGP Daily Chart (Source: Thomson Reuters)
 
Mirvac Group


MGR Details

Reshuffling assets to maintain high quality portfolio: Mirvac Group (ASX: MGR) have completed the purchase of a joint venture interest of Payce Consolidated Ltd in the East Village retail and commercial center at Zetland, Sydney for a consideration of $154.7 million. The company has asset sale strategy for 2016 for total sale of $870 million for the financial year.  Accordingly, MGR had sold 3 Rider Boulevard and 5 Rider Boulevard in Rhodes, New South Wales for a total consideration of $235.0 million. It had also sold Como Centre at Victoria for $236.5 million and 16 Furzer Street in Phillip, Act for $68.1 million. Meanwhile, MGR entered with second JV development with PING, subsidiary of Chinese Insurance Group Ping for development of residential development of Sydney’s lower north shore.
 

Major settlements (Source: Company Reports)
 
MGR issued $536 million (USD 400 million) of long-term US private placement notes with three different maturity period. MGR received long-term issuer rating of Baa1 indicating stable outlook. The group guided for FY16 operating EPS at 12.9 – 13 cents per stapled security and has revised its distribution guidance to 9.9 cps. Consequently, the stock rallied over 7.85% (as of July 07, 2016) in the last six months placing the group at higher levels and close to 52-week high price.  We maintain our “Expensive” recommendation on the stock at the current price of $2.05
 

MGR Daily Chart (Source: Thomson Reuters)
 
Arena REIT No 1


ARF Details

Organic growth plus diversification of income sources: Arena REIT No 1 (ASX: ARF) revalued its healthcare and childcare portfolio and announced for $20.7 million net evaluation uplift leading to FY16 contributions of a total of $50.7 million as on June 30, 2016. The Group declared interim dividend of 2.775 cents and upgraded the dividend guidance to 10.9 cents per share. ARF has an agreement with State of Victoria to construct six ELCs at a net cost of $15 million.
 

Healthcare and childcare portfolio (Source: Company Reports)
 
By FY17, the Group would complete five more project developments of the total pipeline of 15 projects about $ 60 million and one in FY18. The yield on cost for two completed developments is 9.2%. Despite volatile market conditions, ARF is able to maintain a portfolio occupancy of 100%. ARF stock is trading at a decent dividend yield and has a very low P/E. The stock generated returns of 31.6% for over a period of one year (as of July 07, 2016), and we recommend a “Hold” at current market price of $2.05
 

ARF Daily Chart (Source: Thomson Reuters)
 
Industria REIT


IDR Details

FY16 distribution to meet guidance: Industria REIT (ASX: IDR) lately announced that APN Funds Management Limited, the Responsible Entity of Industria REIT declared the distribution of 8.0 cents per security for the period to 30 June 2016 while bringing the total FY16 distribution to 15.5 cents per security, which is towards the top of the 15.2 – 15.6 cents per security range provided in February 2016. This also is subsequent to an active period of leasing to drive portfolio performance. The company further reported its FY17 distribution per security to be greater than or equal to FY16. The FY16 results are due on August 22, 2016. Though the stock is trading at a low P/E but is near its 52-week high price. We believe the stock is “Expensive” at the current price of $2.14
 

IDR Daily Chart (Source: Thomson Reuters)

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