Morningstar sees Australia's Vicinity Centres as modestly undervalued

Vicinity Centres

07/06/2023 21:09

** Morningstar says the ongoing rate hikes would further
pressure Vicinity Centres'  VCX.AX  remaining asset valuations 
    ** Retail investment firm last Thursday said it will divest
its 50% stake in Broadmeadows Central for A$134.5 mln ($89.51
mln)
    ** Morningstar says the deal with other property
transactions, among others, reaffirms its view that Vicinity
Centres is modestly undervalued
    ** View it as unlikely that rival retail developments would
threaten most of Vicinity’s assets - Morningstar 
    ** Morningstar sees co maintaining its near full occupancy
in most of its centres
    ** However, says to expect a negative impact from rental
performance, with Vicinity unlikely to achieve the high rental
growth that it historically earned
    ** Brokerage says VCX's current revenue strategy will be
less lucrative in the near to medium term due to pressure on
house prices, office values, and tourism
    ** One of 13 analysts rate the stock "buy" or higher, 10
"hold" and two "sell" or lower; their median PT is A$2.04–
Refinitiv Eikon data 
    ** Stock is down nearly 6% so far this year, as of last
close 
    

($1 = 1.5026 Australian dollars)

 (Reporting by Navya Mittal in Bengaluru, editing by Deepa
Babington)
 ((navya.mittal@thomsonreuters.com))