SCENTRE GROUP OPERATIONAL UPDATE

Scentre Group has released an operational update today. The main points from the announcement are:

• Group collected $1.8 billion in gross rent for the 10 month period to end of October 2021.
• This is an increase of $607 million since end of June.
• Up until the end of September the Group completed 2,010 lease deals which includes 868 new merchants and 191 new brands to the portfolio.
• Portfolio occupancy remains strong at 98.5% as of end of September.

No doubt with the vaccination rates going well and things starting to open up, more people will be flocking to the shops and retailers will look to expand operations and lease new and larger spaces. Hopefully things return to some sort of normalcy for companies like Scentre Group, but the big risk is the push to online shopping. Will be interesting to see numbers after the holiday period.

SCG_Announcement_2A1337374.pdf

DISC: Not Held.

shadow, I have also been accumulating SCG (Well, at least I was in the low ~$2 range) for the same reasons you have listed.

With the SP sitting below the NAV, the risk of losing your shirt on SCG is low. Take the long-term view that SCG will see a return to consistent revenue generation in the coming years and you have yourself a low-risk investment that represents itself as a nice alternative to bonds, HSAs or cash.

A retail REIT that is no doubt an ugly stock right now, with Sydney still locked down with no end in sight. Breakdown of their locations are below, which highlights how much exposure SCG has to Sydney:

• Sydney: 15 centres
• Melbourne: 7 centres
• Brisbane: 6 centres
• Perth: 4 centres
• Adelaide: 3 centres
• Canberra: 2 centres
• NZ: 5 centres 

Rent/cash collection is still likely to be unstable going forward, and I think it would not be shocking to think a trim in the dividend would be coming.  However it is important to note that as at 31 Dec 2020 the net assets per security is $3.63. Even with a portfolio devaluation the stock is still likely to be undervalued. Gearing is not too horrendous. SCG centres are located in prime locations which are arguably better than VCX locations. 

Based on company presentations management has commited to 14.00 c per security for FY 2021 - almost 5% dividend yield. Goldman still has a BUY rating.

Disclosure: I own SCG and have accumulated

New Director Appointment - Mr Guy Russo

https://www.asx.com.au/asxpdf/20200810/pdf/44lbzd4zhtcvw8.pdf
 

"Scentre Group (ASX: SCG / ASX: CDP) today announced the appointment of Guy Russo to the Board, effective 1 September 2020.

Scentre Group’s Chairman, Brian Schwartz AM said: “We are delighted to welcome Guy to the Board. Guy will add significant skills and experience to the Board as a business leader who understands the customer, retail and retail property.

“As part of its ongoing renewal and succession planning, the Board is committed to ensuring a strong and diverse membership. Guy has a highly accomplished career and we welcome him as a valuable addition to the Board”.

Mr Russo will be an independent non-executive Director."

Great addition to the Board. SCG fits right into the category of 'turnaround stock' ATM, and Guy Russo certainly has experience in that area.