Why the Stockland (ASX:SGP) share price is on the move today

The Stockland Corporation Ltd (ASX: SGP) share price has jumped in early trade after announcing a new logistics investment partnership.

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The Stockland Corporation Ltd (ASX: SGP) share price is climbing higher this morning after the Aussie real estate investment trust (REIT) announced a new joint venture partnership.

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Why is the Stockland share price climbing?

Stockland announced a "strategic capital partnership" with J.P. Morgan Asset Management to help enhance risk-adjusted returns. The new joint venture will focus on growing the group's logistics investment with a long-term, institutional capital partner.

Stockland Chief Investment Officer Darren Rehn said the initial portfolio will comprise assets valued at $400 million.

Two properties that Stockland has recently exchanged contracts to acquire — 151 Leakes Road, Truganina and 140S Paramount Boulevard, Cranbourne West — will seed the new vehicle. The combined total of the assets is approximately $110 million. 

Stockland requires Foreign Investment Review Board (FIRB) approval for these transactions, with completion expected by mid to late 2021.

Stockland is forecasting $200 million in assets once third-party purchases are included, with a further $200 million of existing assets to be acquired from Stockland's logistics portfolio.

The joint venture will primarily target the acquisition of established assets with solid, reliable income streams. Assets will be purchased on market and be primarily located along the "high-performing" eastern seaboard.

Stockland managing director and CEO Mark Steinert said:

We have a clear goal to introduce third party capital with trusted, quality partners to help fast track the delivery of our development pipeline and expand our acquisition capability, and we're delighted to have partnered with such a highly regarded, international group.

Forming relationships with capital partners like this enables us to scale our management and development capabilities, grow assets under management more quickly, and enhance growth to achieve returns in line with or above our investment hurdles.

Foolish takeaway

Investors have reacted positively to the news, with the Stockland share price climbing 2.9% higher to $4.28 per share. The Stockland share price has slumped 10.5% this year but is up 131.1% since the bottom of the March bear market.

The Aussie REIT has a market capitalisation of more than $10 billion, with a 5.3% dividend yield.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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