Ingenia Earnings: Strong Result Amid Boomtime for Landlords; Valuation Up 10%

We raise our fair value estimate for no-moat Ingenia by 10% to AUD 4.30 with half-year earnings, mainly driven by higher assumed rental growth. Ingenia achieved impressive 9% rent increases on its lifestyle sites over the half. We still expect a fade, assuming rent growth moderates to 2.3% by the end of our 10-year discrete forecast period. But strong current rental growth forms a higher base for rental income than can be maintained, given Ingenia’s relative affordability versus traditional housing. This accounts for the vast majority of our valuation increase.