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SCA Valuations drop on Lower Rental Growth and Softer Cap Rates

June 13, 2019

 

SCA Property Group announced the results of its property valuations as at June 2019.

 

The total value of investment properties decreased by $6.1m to $3,147.0m due to Net Income growth of 0.4% offset by cap rate softening of 5bps to 6.48% at June 2019 (6.43% at December 2018 and 6.33% in June 2018).

 

Only fifteen of the properties were independently valued as at June 2018. The remaining 70 properties were internally valued. 27 of those assets were externally valued in December 2018.

 

Sub-Regional centre valuations decreased by $5.5m, with NOI increasing by 0.4% and cap rates expanding by 11bps to 6.75% (from 6.64% as at December 2018). This takes into account a softening in demand for centres with greater exposure to discretionary retail categories.

 

Neighbourhood centre valuations decreased by $0.6m, with NOI increasing by 0.4% and cap rates expanding by 3bps to 6.38% from 6.35% as at December 2018.

 

The independent valuations have declined due to a higher proportion of Sub-Regionals being independently valued, including a $4.8m decrease in the value of our centre at Kwinana, WA due to its cap rate softening from 6.50% to 6.75%.

 

The internal valuations included a $3.4m uplift on the properties acquired from Vicinity in October 2018.

 

 

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