Here's why you should invest in quality asset managers like Stockland Corporation Ltd

Here's what you need to know about Stockland Corporation Ltd's (ASX:SGP) latest corporate activity, the 50% divestment of its Townsville development.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After flagging Stockland Corporation Ltd (ASX: SGP) as one of my shares to watch this week following its acquisition of Sugarland Shoppingtown Bundaberg, the company released a second announcement detailing divestment of a 50% stake in its rejuvenated Townsville shopping centre.

Ironically, after purchasing the Bundaberg centre from a subsidiary of AMP Limited (ASX: AMP), Stockland will be selling 50% of Townsville to another AMP Capital managed fund.

Managing Director Mark Steinert said that the sale is part of Stockland's capital management strategy and gains Stockland a secure, high-quality partner whilst allowing the funds from the sale to be recycled into 'accretive opportunities'.

It also reduces Stockland's exposure to the Townsville area – which is currently 8% of Stockland's total portfolio – whilst allowing the company to pursue other high growth areas in Australia.

Investors will be glad to know that Stockland still retains all management, leasing, and development rights over the asset, making the sale a shrewd defensive move whilst still keeping overall control.

The Townsville shopping centre has the potential to be one of the best precincts in Queensland, if not Australia, thanks to insightful development and its commanding position athwart two main roads.

If you picture a major four-way intersection dividing a land mass into four quarters, and then imagine that Stockland owns all the adjacent land in the (arbitrary) south-west, south-east, and north-east quadrants, that's the Townsville asset.

The south-west quadrant consists of the newly revamped Stockland Townsville, containing North Queensland's only full-scale Myer, a Big W, Woolworths, 4 'mini-majors', 180 specialty stores and a 750-seat dining area.

Directly opposite, in the south-east quadrant is a block of vacant land which has been approved for development as an 'entertainment and lifestyle' precinct that will complement existing developments extremely well.

In the north-east quadrant, Stockland owns another shopping centre which generally serves more residential traffic; containing several banks, a butcher, Coles, tyre-fitting services and a number of specialty stores.

Combine the three and you have massive, diverse facilities with enormous potential to capture passing car traffic and draw foot traffic from one centre to the next.

Key problems will be maintaining car parking and effectively channelling traffic between the centres since four-lane roads can be difficult to cross at the best of times.

Stockland has a good record on both fronts so far though, and I'd say it's highly likely that the company's Townsville assets will become even more of a gold mine as they evolve.

Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »