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Vicinity Lifts Valuations by 2.6%


Vicinity Centres (Vicinity, ASX:VCX) announces that as at 31 December 2017, 42 of its 74 directly-owned retail properties (56% by value) have been independently valued and the remaining properties have been subject to internal valuations resulting in a net valuation gain for the overall portfolio of $408 million, a 2.6% increase for the six month period.

Across the portfolio, the weighted average cap rate sharpened 15bps to 5.45%.

The December valuations are subject to final audit and will be confirmed in Vicinity’s FY18 interim results to be announced on 14 February 2018.

Mr Grant Kelley, CEO and Managing Director, said: “We are very pleased with the portfolio valuation increase of $408 million in the December half and in particular the net $324.1 million or 12.1% uplift in our investment in Chadstone Shopping Centre. Chadstone was independently valued in the period and is now valued at $6.0 billion (Vicinity share: $3.0 billion), with the capitalisation rate firming from 4.25% to 3.75%. Chadstone continues to trade strongly following completion of the $666 million (Vicinity share: $333 million) major development in June 2017.

“Our DFO centres also contributed to our portfolio valuation gain in the half, driven by strong income growth and capitalisation rate compression, particularly at Homebush (up $41.1 million or 9.7%) and South Wharf (up $42.5 million or 7.1%). Additionally, Box Hill South reported a gain of $15.5 million or 8.0% supported by its solid trading performance and capitalisation rate compression.

“Roselands and Galleria recorded net valuation declines in the period of $19.6 million (down 10.8%) and $16.4 million (down 4.1%) respectively for Vicinity’s 50% share in each asset. Plans for a refurbishment at Roselands and a major redevelopment of Galleria continue to progress well.”

At 31 December 2017, net tangible assets per security (NTA) is estimated to be $2.93 which is up 11 cents, or 3.9%, compared to $2.82 reported at 30 June 2017.

Gearing is estimated to be 26.6% as at 31 December 2017, up from 24.7% at 30 June 2017. This increase during the half is due to development capital expenditure incurred and the on-market security buy-back program, partly offset by valuation gains. Estimated NTA and gearing figures are subject to final audit.

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