Stock Spotlight: Vicinity Centres (ASX:VCX)

About Vicinity Centres

Vicinity Centres (Vicinity or the Group) is one of Australia leading retail property groups with a fully integrated asset management platform, and $24 billion in retail assets under management across 52 shopping centres, making it the second largest listed manager of Australian retail property. The Group has a Direct Portfolio with interests in 51 shopping centres (including the DFO Brisbane business) and manages 24 assets on behalf of Strategic Partners. Vicinity is listed on the Australian Securities Exchange (ASX) under the code VCX and has circa 21,000 securityholders. Vicinity also has European medium term notes listed on the ASX under the code VCD.

Key Stats

Source: Yahoo Finance. Data as of 26/08/25.

Growth Potential

• Stock trades at a premium to NTA but offers an attractive dividend yield.
• VCX’s focus on upweighting premium assets (51% Premium Jun 2022 versus 66% of the Portfolio exposed to Premium as at Jun 2025) should deliver higher NPI over the long-term. High quality property portfolio (high occupancy, stable rental growth etc.) is more likely to be resilient in a weak retail sales environment.
• The concern for VCX is that cap rates and asset valuations need to be adjusted for weak domestic economic data points around the consumer. However, both the consumer has shown resilience in terms of spending and therefore asset prices have held up better than expected.
• Decent development pipeline to power growth at decent initial yield and IRR
• The RBA is now in an easing cycle which should be supportive of retail & malls.
• Strong than expected growth across retail categories, especially Luxury stores.
  

Key Risks

• Weak retail sales environment which impacts tenants and asset valuations.
• Retailers reduce their store footprint.
• Increasing or elevated interest rates adversely impact VCX’s cost of debt and consumer retail spending.
• Divestment of assets below carrying value due to a deteriorating macro environment.
• Tenancy risk/retailer bankruptcies resulting in higher vacancies across the asset portfolio (e.g. Mosaic store closures) and adverse effects on earnings.
• Development schedule delays and project cost blowouts.
• Any reduction in investor interest for bond-proxy stocks.