Why the SCA Property (ASX:SCP) share price is on watch today

Investors will be on the lookout to see how SCA Propertyshares perform today…

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The SCA Property Group (ASX: SCP) share price will be one to watch on Thursday morning. This comes after the retail property group provided the results of its property valuations as well as a dividend update.

At yesterday’s closing bell, SCA Property shares finished the day at $2.50.

Why is the SCA Property share price on watch?

In its release, SCA Property advised that its investment properties increased in value by $446.2 million to June 2021. This brings the total portfolio value to $3,849.5 million, up from $3,403.3 million in December 2020.

The 13.1% uplift in property valuations was attributed to like-for-like properties which saw a growth of $323.1 million. The company related the increase to capitalisation rates – or yields softening by 48 basis points (bps) to 5.91% over the 6-month period.

Net operating income (NOI) edged $1.5 million higher, representing a 0.7% gain on December 2020 levels.

Acquisitions added $123.1 million with a weighted average capitalisation rate of 6.26%. This included regional assets such as Katoomba Marketplace in New South Wales, Cooloola Cove and Mt Isa in Queensland, and Warnbro Petrol Station in Western Australia.

SCA Property noted that its Net Tangible Assets (NTA) at the end of the month will stand at $2.50 per unit. Although an increase from the $2.25 recorded in December last year, this metric will be slightly diluted primarily due to capital expenditure.

In addition to the valued portfolio, the company has entered a deal to acquire the Marketplace Raymond Terrace shopping complex in Port Stephens. The $87.5 million transaction will be exercised via a call option after 1 July 2021, reflecting a yield of 5.96%.

Once the takeover is complete, SCA’s portfolio of regional and neighbourhood shopping centres will almost be at $4 billion.

Dividend update

Complementing the announcement, management declared a dividend distribution of 6.70 cents per stapled unit from 1 January 2021 to 30 June 2021. This implies a 34% improvement of the prior corresponding period.

The payment date for shareholders is on 31 August 2021, approximately 2 weeks after the release of its full-year results (16 August).

The SCA Property share price has been relatively flat over the last 12 months, up 2%.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Shopping Centres Australasia Property Group. 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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