Stockland is a diversified property company although they generate the bulk of their earnings from their ‘communities’ division which includes traditional residential plus retirement living solutions. They also have exposure to retail and other commercial assets and this has been a tougher gig.
It seems clear that SGP will be a beneficiary of the strength in residential property prices, offset to some degree by their exposure to bricks and mortar retail. The issue in retail being that COVID in MM’s view has changed the landscape from a structural perspective, rents will ultimately be lower due to reduced demand for floor space and that will have an impact on the value of assets.
MM is neutral SGP around $4.50
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