A pick up in shopping activity in May and June has seen Vicinity Centres, the country’s second-largest shopping centre landlord, trim the final size of its already announced plan to write down the value of its shopping centres at June 30.
The strains in retailing caused by the COVID-19 pandemic slamming retail sales in April and May has seen Vicinity Centres, one of the biggest shopping mall operators in the country heading for a $2 billion-plus loss for the final six months of its June 30 financial year in what will be the start of a round of huge write-downs for the sector.
The decision by shopping centre operator, Vicinity to flog off more of its malls isn’t surprising given the sale late last year of 11 malls had no real impact on its weak returns which plunged more than 70% in the year to June and saw it cut its final distribution.
The broker believes the threats from consumer weakness and online growth have been overplayed, and an announced 5% buyback and rise in net asset valuation from Vicinity supports this thesis. The broker upgraded to Buy last week.