Get Rich Slow: While house prices have taken off, ASX commercial property stocks are also in the money
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While the property boom makes it hard yakka if you’re not in the market already, it’s less concerning if you’re already involved — and some property-adjacent ASX stocks demonstrated that this morning with some strong results.
Among them was Brickworks (ASX:BKW) — historically known as a brick maker, but also the owner of a property trust which is focused on industrial properties.
Today, Brickworks told shareholders it is expecting record earnings for the first half of FY22 – $290-$310 million compared to $253 million for the entire FY21.
Brickworks boss Lindsay Partridge credited the trends towards online shopping fuelled by COVID-19, and shareholders can expect more to come with pipeline developments due for completion.
The most notable project in BKW’s portfolio is Amazon’s distribution centre at Oakdale Park in Western Sydney, which will be completed in December.
It also unveiled a new acquisition in Western Sydney – a 121 hectare site in Bringelly which will support Austral’s brick operations.
“The acquisition replenishes our land bank and given its strategic location in close proximity to the western Sydney International Airport, has future development potential once operational needs are exhausted,” said Brickworks boss Lindsay Partridge.
Brickworks shares are up over 25% in the last year.
One of the more direct ways to gain exposure to the property boom on the ASX is through Charter Hall, (ASX:CHC) which is a property manager and investor.
Today the company told shareholders its had just conducted 6-monthly valuation process, and it had uplifted the valuation of its property portfolio by $3.5 billion.
As a result, it expects total funds under management to be $61.3 billion and earnings per security to be no less than $1.05 per share.
While Charter Hall did not mention any specific trends leading to the uplift, because it has assets in multiple spaces (offices, industrial properties, retail and social infrastructure), the company credited the overall quality of its portfolio.
“It is pleasing to see the hard work we have put into curating and growing high quality portfolios for our fund investors over many years has delivered excellent financial returns, well above expectations and performance fee hurdles,” said CEO David Harrison.
Charter Hall was not the first to upgrade its portfolio. On Friday, SCA Property Group (ASX:SCA) upgraded its properties again to $4.656 billion, which was up from $4.0 billion just six months prior.
While acquisitions made up $293 million of the increase, $384 million came from a valuation increase.
Speaking with Stockhead last week, managing director Anthony Mellowes said the geographical profile of SCA’s assets had helped it to benefit from the working-from-home trend.
“Our assets that are out in the suburbs have done well because everyone’s been working from home, they haven’t been going to the cities and the big shopping centres – so that’s been quite good for us,” he said.
Charter Hall shares rose by nearly 5% this morning while SCP shares rose by over 2%.