Changes in Household Spending Patterns Prompts 7% Cut to Vicinity’s FVE to AUD 2.70
We’ve cut our outlook for long-term retail rent growth by 0.5% to between 2% and 2.5%, reducing our fair value estimate for narrow moat-rated Vicinity Centres by 7% to AUD 2.70 from AUD 2.90. At current levels, Vicinity screens as fairly valued, offering an attractive yield of 6.8%. Following share price weakness, Vicinity is embarking on a buy-back program, capped at 5% of stock, so this could see Vicinity outlay around AUD 520 million. The buy-back will be all debt-funded, with Vicinity’s gear...Vicinity Centres is engaged in property investment, property management, property development, leasing and funds management.Co.'s operating segments include: Property Investment, which is involved in investment in retail property; and Strategic Partnerships, which is involved in property management, development, leasing and management of wholesale property funds. Co.'s portfolio is comprised of Australian retail assets. As of June 30 2016, Co. had 91 retail assets under management. Co. had an ownership interest in 81 of these assets.
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