Market pessimistic on 'undervalued' Scentre Group, Morningstar says
** Analysts at Morningstar think the market is slightly too pessimistic when it comes to Australia's Scentre Group SCG.AX, adding that the REIT looks moderately undervalued
** Morningstar has a fair value estimate of A$3.50, a premium to stock's current price of A$3.18
** SCG currently trading 0.2% lower
** Scentre’s property management contracts are another source of value, brokerage says
** Adds it is unlikely that rival retail developments could threaten most of Scentre’s assets
** Retailers will continue to be located in Scentre facilities, with near full occupancy in most circumstances - Morningstar
** However, brokerage is concerned about co's balance sheet as it thinks gearing might rise to around 40% if its $2.7 bln in subordinated note is included
** Stock has risen 6.4% this year, as of last close
Reporting by Rishav Chatterjee in Bengaluru
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