At the start of the month, we discussed switching MGR to Macquarie (MGQ), which is not a “like for like” move. Still, it was a Trump-inspired contemplation with property names unlikely to outperform the index while the risks of sticky inflation remain. At the same time, MQG should prosper in Trump’s deal-making and increasingly deregulated market. However, we ultimately sold our GPT position to fund a purchase of MQG, i.e. similar logic.
In October, this commercial and residential property company reiterated its full-year guidance for 2025, which we found encouraging in a soft market where rate-sensitive stocks have enjoyed little relief from the RBA. We also thought their assumptions were conservative, which sets up the prospect for a beat when they next report.
In the Medium term, the country desperately needs new residential construction, and while there are some hurdles to clear, the company should eventually be in the right place at the right time.
- We like MGR’s forecasted 4.8% yield as it affords us some time to give this position room, with our initial target a retest of the $2.50 area.
MM is long and bullish MGR
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