Mid-week ASX property wrap: 23 February

• Significant number of half year reports announced
• Peter Allen to step down as CEO and MD of SCG on 30 September 2022
• Stockland entered into two new capital partnerships

To call it a busy first half is not just an understatement, it’s open to a play on words.

The broader market

The ASX200 closed today at 7,205.70 points, up 44.40 or 0.62%.

Tech and resources had two each in the top five overall performers, with no real estate companies featuring.

Top-performing ASX listed real estate company shares: 23 February 2021

Source: ASX

In addition to the top performers, the bottom five (from fifth lowest to lowest) were:

Least-performing ASX listed real estate company shares: 23 February 2021

Source: ASX

The movement

Monday kicked off with a half year report from Lendlease (ASX: LLC). The company reported reduced revenue of $4.569 billion, down 12.4% from the previous corresponding period. The company also made a loss of $264 million.

Lendlease, however, made a core operating profit after tax of $28 million, with an interim distribution of five cents per share announced. EPS was reported at 4.1 cents.

The company is undergoing some changes, including the simplification of the Group’s operating model to support future growth while managing the ongoing impacts of Covid.

Global Chief Executive Officer and Managing Director, Tony Lombardo, said “As previously flagged, successfully resetting Lendlease’s operating model forms a key part of our future success.”

“Despite the ongoing impacts of COVID-19, we’ve made significant progress in reducing the cost base of the organisation as well as improving operational execution and capital allocation decisions.”

“We also made significant headway progressing projects and initiatives we expect will drive future profits. This includes introducing major new investors to our platform, growing our funds under management, and achieving important planning milestones across projects in San Francisco, London and Sydney.”

McGrath (ASX: MEA) also released its half year results, the company reported increased statutory revenue ($59.369 million) but saw a 15% reduction in profits to $6.91 million. The company’s underlying EBITDA moved up $4 million to $10.6 million, MEA also said it had a strong balance sheet with $41.3 million cash and no borrowings.

MEA announced an interim dividend of 1 cent per share fully franked, and a one-off special dividend of 1.5 cents per share fully franked.

Dexus (ASX: DXS) announced the settlement of 201 Miller Street in North Sydney, the asset was sold for $152.4 million.

Elanor Retail Property Fund (ASX: ERF) continued the flow of half yearly reports, with funds from operations at $4.1 million, and a distribution of 3.01 cps announced. ERF’s portfolio valuation grew by 2.2% or $4.2 million to $191.2 million.

GDI Property (ASX: GDI) was next, with transactions and developments making the company’s half year highlights. GDI sold 50 Cavill Ave in Surfers Paradise for $113.5 million, almost eight million above book value after settlement adjustments and selling costs, the company also acquired two Perth CBD carparks for $68.5 million.

GDI has commenced construction of a new office development on excess land at Westralia Square.

FFO per security was reported at 2.845 cents, distributions of 3.875 cents, and GDI confirmed that it intends to pay a cash distribution of 7.75 cents per security for FY22.

Rounding out Monday was Desane (ASX: DGH), confirming EBIT of $7.2 million, and increases in investment property holdings (25%) and total assets (11%). DGH holds $11.4 million in cash and financial assets in low-risk investments secured by first registered mortgages generating an average return of 6.5% p.a.

On Tuesday, Newmark Property (ASX: NPR) said it delivered on PDS forecasts. The company’s FFO was $1.1 million for the period 8 December 2021 to 31 December 2021. A distribution of 0.68 cents per unit for the same period was also announced, along with FY22 distribution guidance maintained at 9.7 cents per unit.

NPR has a portfolio of eight properties worth a combined value of $519.6 million, with an occupancy of 99%. NPR noted that the remaining space is expected to be leased out soon.

RAM Essential Services Property Fund (ASX: REP) reported a 7.4% increase in NTA to $1.01 per security, above the PDS price of 94 cents. This was driven by strong revaluations across 67% of the portfolio.

Distribution guidance was also increased, now 4 cents per security, up from 3.9 cents, for the period 20 October 2021 to 30 June 2022.

Ingenia (ASX: INA) reported an 8% increase in revenue to $131.4 million and a 23% increase in statutory profit to $39.8 million. EBIT was down, however, 16% to $33.9 million.

The company settled 139 new homes in the half, with a record 465 deposits and contracts on hand.

Today, HomeCo Daily Nees REIT (ASX: HDN) released its half yearly results, with highlights including a 121% increase in FFO, 38% increase in FFO per unit, and pro format December 2021 gearing of 32.2%, versus 35% at Jun 2021.

HDN also had more than 99% unadjusted cash rent collections for the half and since IPO in November 2020, the company also has positive leasing spreads of +4.9% across 69 leasing deals.

Openn Negotiation (ASX: OPN) reported increased income and investment returns from ordinary activities, up 28.44% to $656,045. The company made a loss of $3,266,400.

Servcorp (ASX: SRV) said in its interim report, the company was on target for underlying NPBT of between $33 million and $36 million and underlying free cash of more than $50 million. Underlying NPBT was $17.7 million, and underlying cash was reported to be $29.5 million.

SRV reported a strong liquidity position, with current cash balances in excess of $110 million, and no external debt.

Stockland (ASX: SGP) announced the sale of its retirement living business, with EQT Infrastructure to acquire it for consideration of $987 million. The transaction is expected to settle in late FY22.

SGP also announced its half year results, the company made a statutory profit of $850 million, up from $339 million in the previous corresponding period. NTA also moved up, now $4.23 per security. FFO was down 9.3% to $350 million. Rent collection was strong, 97.5% for its commercial portfolio.

Charter Hall Retail REIT (ASX: CQR) announced increased operating earnings of $82.1 million, up 9.2%, and a statutory profit of $368.6 million. Distributions also moved upward, now 11.7 CPU, and NTA was $4.54.

Scentre Group (ASX: SCG) announced its full-year report, including increased operating profits of $845.8 million, FFO was also up, reported as $862.5 million. The statutory result for the full year, inclusive of unrealised non-cash items was $887.9 million. The result includes property revaluation gains of $81.2 million for the year.

It was also announced that SCG CEO and MD Peter Allen has decided to step down from the positions on 30 September 2022, and retire from the Group in 2023. Mr Allen will have served as Scentre Group’s inaugural CEO for more than eight years.

Stockland (ASX: SGP) announced a new capital partnership with Ivanhoé Cambridge to develop the M_Park life sciences and technology precinct on a programmatic fund-through basis.

SGP also announced a new capital partnership with Mitsubishi Estate Asia, called the Stockland Residential Rental Partnership. The partnership will focus on the development and long-term ownership of land lease communities.

That’s the latest in ASX listed real estate, with a stiff drink certainly needed after the busy half week of half yearlies.