ASX real estate shares have been a mixed bag in the FY24 reporting season, with some names absolutely crushing it, whilst others booking heavy losses mounting in the billions.
The share price reaction of the sector has been equally as mixed, as you can imagine.
Two real estate stocks showing a split in performance today after their half-year and full-year numbers, respectively, are Scentre Group (ASX: SCG) and PEXA Group Ltd (ASX: PXA).
While Scentre Group shares are seeing red on Wednesday, down 0.74% to $3.38 apiece, investors are sending Pexa shares 1.18% higher, at $13.76.
Let's see what the situation is with these ASX real estate shares and their FY24 numbers.
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ASX real estate shares: One down
Scentre Group operates 42 Westfield shopping centres in Australia and New Zealand. Today, it posted its financial results for the six months ending June 30, 2024.
The company reported funds from operations (FFO) of $568 million, a 2% increase from the previous year. Meanwhile, statutory profit stood at $404 million.
This translates to 10.95 cents per security (cps), prompting management to increase distributions by 4%.
Investors will now enjoy a payment of 8.60 cps to their accounts.
However, its profits were impacted by a $120 million unrealised property valuation decrease, bringing the total portfolio value to $34.3 billion.
This seems to be a common theme amongst ASX real estate shares this year – the write-down in property valuations.
Despite this, CEO Elliott Rusanow expressed optimism about the company's performance, highlighting the 320 million customer visits to its Westfield destinations during the half, a 1.9% increase year over year.
This surge in foot traffic contributed to a 2.4% increase in business partner sales, reaching $13.4 billion for the first half.
Occupancy rates were also strong at 99.3%, up from 99.0% in the previous year.
Investors don't share the optimism and may be looking to the property valuations instead, selling the stock lower today.
One up
Pexa Group also reported earnings today. Unlike Scentre Group, it reported its results for the full year in FY24.
At the top line, statutory revenue climbed 21% to $340 million.
Whereas the ASX real estate share's operating profit rose by 16% to $115 million, and free cash flow increased by a hefty 175%.
Pexa also reported a statutory net loss after tax of $18 million, though this was an improvement from the $21.8 million last year.
Its core business, the Exchange, continued to perform strongly, with revenue reaching $292 million, an 11% increase from FY23.
The company says the platform supported up to 89% of property transactions nationwide.
This would appear to be a key distinction between this ASX real estate share and its peers. It does not actually hold any real estate; rather it is a platform that facilitates transactions.
As such, it would not incur any valuation write-downs or impairments, as others do.
Pexa also achieved its target of reaching pre-tax profit break-even by FY24. This may be another reason the stock is catching a bid today.
Foolish Takeaway
Scentre Group and PEXA Group delivered mixed but promising results in FY24. As such, investors are reacting differently to these ASX real estate shares.
Scentre Group is up 27.84% in the last year, and Pexa is 6.50% in the green over that time.
