Investment Matters

Listed Property Allocation Investments - Performance summary for the half year ending 31-Dec-15*

Investment
 Sub-sector
Summary 
Comment 
360 Capital Industrial Fund Industrial  In-line See W&D 26-Feb-16.
Cedar Woods Properties  Residential  In-line  Strong Victorian conditions, and good project positioning plus diversification is offsetting weaker conditions in WA.  Strong pipeline of projects and contracts-on-hand a positive for FY17 outlook.  Full year guidance was increased from $41m to $43m.
Centuria Metropolitan REIT  Office & Industrial  In-line  Good leasing activity, with occupancy increasing from 96.7% at 30-Jun-15 to 97.3% at 31-Dec-15.  Other portfolio metrics remain sound, and full year guidance was affirmed.
Charter Hall Retail  Retail  Slightly below expectations  Moderate growth in operating earnings per security (+2.1% vs pcp).  Strong portfolio metrics have been retained (including 98.4% occupancy at 31-Dec-15).  Long (6.7 years average expiry) and secure debt structure has been enacted, with a second USPP.  Full year guidance was affirmed.
Cromwell Property  Office  In-line  H1 earnings were strong, with H2 forecast to be lower (H1 was boosted by high transactional income) - full year guidance was affirmed.   Earnings from the Valad Europe acquisition flowed through to funds management income. Gearing (ND / ND + E) decreased to 37.3%.  Distribution appears stretched, and we expect it to remain flat in the medium term.
Generation Healthcare REIT Specialty In-line Operating earnings per security increased 5.0% vs pcp, assisted by acquisitions and completed projects, rental growth from existing properties and lower financing costs.  Like-for-like rental growth was lower than expected at 2.1%, but portfolio metrics are strong.  3 major developments are underway. Operating earnings guidance per security for the full year was increased 2.0%.
Industria REIT  Industrial & Business Park  Slightly above expectations  Meaningful improvement in portfolio metrics over the half (which will flow into future earnings), and net assets per security increased from $2.02 at 30-Jun-15 to $2.11 at 31-Dec-15.  Operating earnings per security were flat vs pcp.  Full year guidance was affirmed.
National Storage REIT Industrial  In-line  Like-for-like rate / sq metre was flat (31-Dec-15 vs 30-Jun-15), and occupancy flat at ~70%.  Difficult conditions in Perth were offset by other states.  Earnings from acquisitions are flowing though, this is expected to continue.  Full year guidance was affirmed.
Westfield Corporation*  Retail  Below expectations  Result was in line with guidance.  Development activity is strong, both refurbishments and new flagship centres (including the WTC, which is now fully leased and will open in Aug-16).  Disappointingly, earnings are expected to fall for FY-16 (-8.5% to -9.3%), and the distribution is expected to be flat – as earnings from new developments flow through in future periods.

 *Westfield Corporation's results are for the full year ending 31-Dec-15