Vicinity Northland Victoria
The Northland shopping centre in Preston, Victoria. Photo – Vicinity.
  • Vicinity Centres (ASX: VCX) is a listed real estate investment trust (REIT)
  • They specialise in the ownership and management of Australian shopping centres
  • The year so far has been touch, especially in Melbourne due to the lockdowns

As we move through the traditional ASX half-yearly results period, so we can gauge the state of various property markets.

Depending on which company is reporting, we can take a temperature check on the supermarket sector, or warehousing and logistics, or offices and retail.

Vicinity Centres (ASX: VCX) is a listed real estate investment trust (REIT) that specialises in the ownership and management of 60 Australian shopping centres.

COVID-19 has impacted physical shops badly, and so it was no surprise that Vicinity plunged to a $394 million loss in the first six months of the current financial year. The same period a year earlier they had made a $243 million net profit.

Although improvement was underway before the end of the period, extended lockdowns in Victoria (which represents just over half of the group’s portfolio) hit the company hard.

City foot traffic was down as people worked from home and international – and many state – borders were closed.

Total income for Vicinity was down to $366 million in the period, compared to $471 million the year earlier. Cash and cash equivalents had slumped to $60 million, as opposed to $218 million 12 months before.

Pre-pandemic, Vicinity’s share price was around $2.50, before falling abruptly in April last year to $1.30. A modest recovery of sorts sees it at $1.56 today, but still 37% below the level of a year ago.

In summarising the results, CEO and Managing Director Grant Kelley said “customers had returned to centres when they [were] allowed” and flagship assets had maintained “strong retailer demand.”

He pointed to higher consumer confidence and evidence of growing sales and visitation rates. Across the 2.4 million square metres of lettable space, occupancy was at 98%.

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