Is Lifestyle Communities Limited the best small cap real estate development stock on the ASX?

Independent living community developer Lifestyle Communities Limited (ASX: LIC) is beginning to assert itself in the competitive real estate development sector with the $539 million market cap company recently delivering a stronger than expected FY18 guidance.

Lifestyle Communities develops, owns and manages affordable residential communities for semi-retired or retired people – increasing its forecast settlement range from 260 to 290 homes for FY18 to between 310 and 320 homes.

Lifestyle Communities has seen strong demand for its product with sell outs at its Geelong and Berwick Waters communities and the expectation to fully sell out Bittern by June.

CCZ Equities has a price target of $4.80 on the stock, which was up 1.9% to $5.26 at the time of writing, with the broker placing a hold recommendation on the company with upgrades of FY19 and FY20 guidances also expected.

Peers in the space include Gateway Lifestyle Group (ASX: GTY) who recently reported robust enquiry levels but a slight downgrade to settlement numbers for FY18.

At the bigger end of town Lendlease Group (ASX: LLC) shares have been tracking upwards of late after a February slump, buoyed by news of the company’s success in Europe, with major projects in Milan and London bolstering its project pipeline.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Scott Phillips.

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