Solid Year for SCA Property, but Retail Headwinds on the Horizon; Shares Slightly Overvalued

We raise our fair value estimate to AUD 2.36 per unit for no-moat Shopping Centres Australasia Property Group following fiscal 2019 results. Earnings were in line with our expectations: Funds from operations were up 6.7% per unit before nonrecurring events such as acquisitions and other adjustments. This was a solid annual result, but the structural headwinds facing retail assets means our forecasts for the company are mostly unchanged. The main driver of the slight increase in our fair value estimate is due to time value of money.