For investors looking to build their wealth via a long-term holding in a portfolio of quality stocks then one stock that could be worth considering is global property company Lend Lease Group (ASX: LLC).
Building shareholders a profit
Lend lease operates across a number of regions and multiple segments of the property market which means that the group is exposed to numerous different trends:
- The domestic residential trend remains positive – strong population growth in Australia is being driven by high levels of overseas migration which is fuelling housing demand in Sydney and Melbourne in particular. This demand has boosted prices and has been accentuated by dwelling completions that have lagged underlying housing demand.
- Monetary easing from the Reserve Bank of Australia has led to interest rates falling to record lows which have in turn encouraged property investors and home owners alike to pile into the market.
These trends are a positive for Lend Lease which controls a substantial residential portfolio of over 20,000 units and apartments.
- Cheaper land prices in overseas locations including Asia and North America mean Lend Lease is more focused on expanding its Office Development projects in these foreign markets rather than domestically.
This is a major benefit of Lend Lease's global operations – the ability for the group to shift its focus to where it believes it can add most value.
A recent chart published by the company highlighted that the majority of the group's operations were moving from an "investing" phase into a "cash positive" phase over the next two financial years. This situation bodes very well for earnings momentum across the group and could mean that there is further upside in the stock.
The positive outlook for the property sector was added to this week after builder Avjennings Ltd (ASX: AVJ) announced a profit upgrade – it's another stock that could be worth keeping an eye on.
