Why Blackwall Ltd and BlackWall PropertyTrust shares are heading higher today

Shares in vertically integrated property funds manager Blackwall Ltd (ASX: BWF) and open-ended unit trust BlackWall Property Trust (ASX: BWR) have tracked upwards today to 98c per share and $1.39 respectively, off the back of strong half-year results.

Blackwall Ltd (ASX: BWF)

Blackwall Ltd manage, develop and finance income-producing real estate on behalf of retail, high-net worth and institutional property investors.

Blackwall Ltd posted a strong result for the six months to December 2017 driven by the continued expansion of the WOTSO co-working sites, striking new WOTSO site deals at Westfield Chermside, Bondi and Sippy Downs within the results period reported.

Recurring revenue from WOTSO and the property/funds business has risen 35% on the previous corresponding period with the NPAT of $6.8million increasing more than 500% due to an $8.8million one-off performance fee injection from the resale of the wholesale investment trust controlling 55 Pyrmont Bridge Road and Penrith Fund No 3.

Since listing 7 years ago, Blackwall has generated more than $17 million in performance and transaction fees and at December 31 2017 the company’s net asset backing had grown to 49c per share.

CEO Stuart Brown told Motley Fool Australia the company did not have “passive reliance on market movements” to drive profits and while performance fees may be one-off, the company had a “good track record of generating them”, with an average of $2 million in performance fees logged for each 12-months since they’ve been listed.

More good news for Blackwall Ltd shareholders comes in a fully-franked interim dividend of 1.9c per share payable April 11.

Blackwall has taken on the likes of Servcorp Limited (ASX: SRV) in the shared office space with key institutional investors showing interest in the company by picking up shareholdings in recent times.

Blackwall Ltd has appeared on analysts’ radars as a strong performer in recent times, able to increasingly improve its bottom line and “leverage any uplift the industry is enjoying” to its advantage.

BlackWall Property Trust (ASX: BWR)

BlackWall Property Trust is a total return property investment trust controlling assets of $260 million and posted a $5.2 million NPAT for the half-year period, with property income up 23% on the previous corresponding period and a focus on SME leasing.

CEO Stuart Brown told Motley Fool Australia BlackWall Property Trust would rather have a building “leased to 100 SMEs rather than 1 corporate” to spread leasing risk and generate better cashflow.

The sale of Bakehouse Quarter, expected to be completed by October, will generate about $30 million in cash with an unfranked interim dividend of 5c per share to be paid out too shareholders on April 9.

Savvy growth investors will keep their eyes on both Blackwall Ltd and BlackWall Property Trust in the short-term future.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Servcorp Limited and Blackwall Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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