Jefferies trims PT for Scentre on interest rate hike impact

Scentre

29/06/2022 22:21

** Jefferies trims price target for Australia's Scentre Group
 SCG.AX  to A$2.86 from A$2.95 
    ** Brokerage says the property firm has materially
underperformed its peer Vicinity Centre  VCX.AX  due to its high
leverage and low hedging impacting its funds from operations as
interest rates continue to rise 
    ** Analysts suggest SCG should sell interests in several
assets totalling about A$5 billion ($3.44 billion) to be
accretive and help co re-rate 
    ** Says co should be inclined towards selling assets as
5-year debt costs are above its cap rate and the liquidity
window to sell assets is closing quickly 
    ** Reiterates that rising debt costs remain a major headwind
for SCG, despite its restructure of interest rate hedging book 
    ** Stock down 14.2% this year, as of last close, vs a 10%
decrease in the benchmark S&P/ASX 200 index  .AXJO  



($1 = 1.4539 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))