Today in A-REIT: 21 June 2022

• The market gained 90.40 points to close at 6,523.80
• Winton confirmed it had paid off the $130M project finance debt facility relating to the Lakeside development
• Dexus recorded an estimated $374M uplift in valuations for its portfolio.

The ASX200 closed today at 6,523.80 points, up 90.40 points or 1.41%. For the week, it is up 39.7 points or 0.6%, and 171.50 points down from Wednesday last week.

Top-performing ASX listed real estate company shares: [DD Month] 2022

Source: ASX

The movement

The morning began with news from Winton Land Limited (ASX: WTN), the company announced that it repaid the $130 million project finance debt facility relating to the Lakeside development. WTN said that, as per its PDS dated 1 December 2021, part of the $350 million raised would go towards repaying the $130 million facility.

The company confirmed it is now debt-free and expected cash and cash equivalents as at 30 June 2022 will exceed $200 million.

HMC Capital (ASX: HMC) announced that the Australian Securities and Investments Commission (ASIC) has granted HMC and its wholly-owned subsidiary Home Consortium Developments Limited (HCDL) relief analogous to ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 (Relief).

The effect of the Relief is that:

• HMC may consolidate HCDL’s financial results into its financial reports, while HCDL is party to a deed of cross guarantee to which HMC is a party; and
• HCDL is relieved from certain obligations under the Corporations Act 2001(Cth) (Act), including the requirement to prepare a standalone financial report, directors’ report and auditor’s report.

This Relief is only required for HCDL’s current financial year ending 30 June 2022. Thereafter, HCDL will automatically become eligible for the exemptions contained in ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785.

Absent this Relief, HCDL would have been required to prepare a financial report and comply with other requirements of the Act, as it was a “disclosing entity” for part of its current financial year by virtue of being listed on ASX before the implementation of the restructure in December 2021.

The reasons that HMC and HCDL sought the Relief include:

• avoiding the cost of preparing standalone audited accounts for HCDL and from having to allocate management time and resources to the preparation of those accounts, of which HMC and HCDL’s auditor would be the sole recipients; and
• former HCDL shareholders and HCDL creditors will receive or have access to HMC’s consolidated audited financial reports for its current financial year which will incorporate HCDL’s financial results.

Dexus (ASX: DXS) announced an estimated total valuation increase of $374 million. The company said that 177 of its 186 assets, comprising 34 office properties, 142 industrial properties and one healthcare property have been externally valued as at 30 June 2022.

The external independent valuations have resulted in a total estimated increase of circa $374 million or 2.2% on prior book values for the six months to 30 June 2022.

Darren Steinberg, Dexus CEO said: “The value of Dexus’s quality portfolio has remained resilient in this latest round of valuations, noting uncertainty in the macroeconomic environment. We have continued to see growth in asset values for well-located industrial and logistics facilities supported by market rent growth.”

The value of the office portfolio increased circa 1.7% on prior book values on the back of recent leasing success. The industrial portfolio increased circa 3.8% on prior book values due to market evidence supporting an increase in market rents and continued tightening of capitalisation rates.

The weighted average capitalisation rate across the total portfolio tightened circa 12 basis points over the past six months from 4.76% at 31 December 2021 to 4.64% at 30 June 2022. The weighted average capitalisation rate of the office portfolio tightened circa ten basis points from 4.85% at 31 December 2021 to 4.75% at 30 June 2022 and the industrial portfolio weighted average capitalisation rate tightened circa 13 basis points from 4.42% at 31 December 2021 to 4.29% to 30 June 2022.

RAM Essential Services Property Fund (ASX: REP) announced a distribution yesterday of 1.4541 cents per stapled security. In the REP statement announcing the distribution, RAM CEO, Scott Kelly, commented:

“Against a backdrop of heightened economic uncertainty and increased volatility in equity markets, our carefully constructed portfolio of essential retail and healthcare assets has remained resilient, stable and secure.

“We are pleased to announce our third distribution since listing in October 2021 and in doing so, have achieved our increased guidance of 4.0 cents per stapled security for FY22. We’ll provide further detail on the operational performance of the fund with our FY22 results.”

That’s the latest in ASX-listed real estate companies.

Meetings and distributions

Distributions/Dividends announced:

For further details, please refer to the relevant company’s announcement.