Diversified property group Stockland (ASX:SGP) announced the estimated half year distribution for the six months to 31 December 2015 of 12.20 cents, in line with previous guidance. The company also provided details about the revaluation of its commercial property portfolios.
Stockland’s Half year Dividend Steady at 12.20 Cents
Investors who are on the record before or on 31 December 2015 will be eligible to receive the dividend. The dividend will be paid on 29 February 2016, just shortly after Stockland’s half year results presentation on 10 February 2016.
Investors will also be able to participate in the Dividend Reinvestment Plan (“DRP”) which entails shareholders to reinvestment the distribution in additional SGP shares. The discount for the new shares will be 1% to the average price of the 15-day trading period leading up to 5 February 2016.
Investors who wish to participate in the DRP have to nominate their interest prior to 8 January 2016.
Stockland Revaluates its Commercial Property Portfolio
As previously announced Stockland has decided to revaluate its commercial property portfolio in line with current market conditions.
Overall Stockland will acknowledge an increase in value of approximately $430 million which equates to 5% of the total assets. Stockland states that the increase is due to “market evidence of a tightening rate environment”.
The lift in value reflects “both rental growth and a tightening in the portfolio’s weighted average capitalisation rate, from 6.9 per cent at 30 June 2015 to 6.5 per cent.”
The revaluation remains subject to approval by independent auditors.
SGP gained 0.5% on Thursday as the announcement failed to impress investors.
Nevertheless, the outlook for Stockland remains robust and the company continues to meet expectations despite high competition in the sector.
Wise-owl recommended to buy Stockland in 2014 and we continue to hold it firmly in our portfolio. Whilst the steady half-yearly distribution is an attractive quality for yield investors, Stockland has also secured new development contracts and continues to enjoy healthy rental growth.
Author: Simon Herrmann
Dec 17, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.