We flagged diversified property company Stockland (SGP) in yesterday’s morning note, however, felt it was worth revisiting today as we consider an alternative property exposure to replace National Storage REIT (NSR) that has now become too expensive in our view, trading at ~$2.70, up 36% from initial entry less than a year ago (inclusive of dividends).
Stockland is a well-known, large-cap, diversified property company generating a little over half of its operating income from commercial property endeavours and a little under half from residential. These two segments cover a diverse range of operations spanning shopping centers, retirement living, commercial & industrial precincts, land lease communities, and development activities. The Balgowlah Stockland around the corner from me is a typical sort of development that includes a small shopping centre anchored by a supermarket, specialty shops, restaurants, and residential apartments on top. At $4.26, SGP is trading at a discount to net asset value (NAV) which UBS forecasts will be $4.75 come June 30, its trading ~11x FY22 earnings and paying a forecasts 6.1% yield fully franked.
MM is considering switching from NSR to SGP for the Income Portfolio
Add To Hit List
