- SCA's valuations has gone up by $386.5M
- Occupancy rate remains high at 98.1%
- Specialty stores has driven sales growth amongst tenants
The SCA Property Group (ASX: SCP) has announced its half-yearly results.
Notably, SCA’s net profit after tax has increased to $432.4 million – a staggering 320.2% rise compared to the same period last year, due to an increase in the fair value of their investment properties. Funds from operations rose too.
Valuations increased by $386.5 million due to acquisitions of $347.5 million offset by the transfer of properties to “held for sale” of $307.6 million. The portfolio is now worth $4.43 billion.
The portfolio maintains a high occupancy rate currently at 98.1% compared to 97.4% at 20 June 2021.
It will continue to be a big year for SCA, with the new fund with GIC – to be called SCA Metro Fund – which will be launched during the second half of the current financial year. SCP will sell seven seed assets tot eh fund for $284.5 million, with the initial target fund size to be $750 million.
Supermarkets flat; specialty stores on the rise
SCA CEO Anthony Mellows said over the last six months, the group’s convenience-based centres have remained resilient with speciality tenants sales growing while supermarket sales remained flat.
“Leasing spreads and cash collection rates were impacted by lockdowns in New South Wales and Victoria but improved toward the end of the half year period,” he said.
“We have made solid progress on our sustainability program, including commencing the rollout of solar panels on our WA assets.”
“We have continued to grow our portfolio in a disciplined manner during the period, contracting to acquire seven convenience-based centres.
“We have also progressed our funds management strategy, announcing a new joint venture fund with GIC, and successfully winding up our final SURF fund.
Anthony Mellowes, SCA CEO
“The SCA Metro Fund positions us to access relatively lower return metropolitan neighbourhoods, in partnership with a high quality and globally recognised partner, while growing asset-light management fee income.”
Specifically, sales growth for supermarkets and discount department stores fell by 0.1% and 4.2% respectively. Mini majors aw a 1.4% rise with speciality stores rising by 5.5%.
“Pleasingly, our earnings per unit forecast for FY22 is now above the pre-COVID level,” added Mark Fleming, SCA CFO.
“This has been the result of solid operational performance in a challenging environment and a strong balance sheet enabling investment in acquisitions, developments and funds management.
Mark Fleming, SCA CFO
“Following the sale of assets to the SCA Metro Fund our gearing will be less than 29%, 70% of our debt will be fixed or hedged and we will have over $450 million of cash and undrawn facilities.”
The group’s guidance for FY22 FFO per unit is at least 17.5 cents per unit, assuming no further major outbreaks, government restrictions or acquisitions.
