What:
Yesterday Lend Lease Group (ASX: LLC) sold management rights and its 33% interest in the Bluewater Shopping Centre in the United Kingdom, realising approximately $1,221 million. The company now expects to deliver a net profit after tax for FY2014 in the range of $810 to $830 million.
So What:
Lend Lease CEO and Managing Director Steve McCann described it as an "outstanding sale outcome which has realised considerable value for shareholders". In a day when the benchmark S&P/ASX 200 (INDEXASX:XJO) index fell 0.5%, the shares of Lend Lease sank over 3.5%. This was at odds with another global construction company, Leighton Holdings Limited (ASX: LEI) which rose 2 cents to $19.77. One explanation for the Lend Lease fall was that the sale was hiding an underlying weakness in the 2014 financial year.
Yesterday was also the first day for Westfield's new entity named Scentre Group (ASX: SCG).This company will own and operate all Australian and New Zealand assets. The other new entity Westfield Corp (ASX: WFD) which will own and operate all the International assets had a stellar day rising from $6.85 to close at $7.05. This company now has a 75:25 exposure to US and UK retail markets. So the news on the Bluewater sale may have contributed to the rise, as it reflected a very buoyant UK property market.
Now What:
In my opinion, Lend Lease appears to be fully valued at these levels and more upside may be anticipated for Westfield Corp. This is not only because of a substantial existing overseas exposure, but also a sustainable offshore development pipeline and positive momentum in UK and US retail.
However, if your preference is for Australian exposure with a formidable fully franked dividend yield, then significantly higher returns may be achieved by a stock unearthed by our Top Motley fool analysts.
This stock has been nominated as their No 1 pick for 2014 and could be on the cusp of substantial growth. It also offers a fully franked yield of 4.1% (or a grossed up 5.9%).
