Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Vicinity- VicinityCentres (VCX.AX)Centres (VCX.AX)

Transitioning towards premiumisation

PRICE TARGET A$2.63 UNDERWEIGHT THESIS

Scenario values derived from DCF & NAV, weighted 20% bull, 50% base, 30% bear - skew VCX owns a c.A$14bn diversified portfolio of

reflects the diversity of VCX's portfolio. shopping centres across Australia, including

DCF (base case A$2.57): 9.6% Ke (beta 0.85), 2.5% terminal growth, and a c.3% like-for-like CBDs, outlets, and Australia's largest mall,

rental income growth/yr in the short-medium term. Chadstone.

NAV (base case A$2.89): Applies 0bps of cap rate compression.

Consistent across our coverage, we put 75% weighting on DCF, 25% on NAV. We have a cautious view:

is a relatively capex-heavy retail REIT, A$2.59 ▪VCX

especially when pitched against its peer

Consensus Price Target Distribution A$2.30 A$2.80 SCG. At a time when cost of construction is

MS PT

uncertain, we prefer to shy away from REITsSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

involved in large-scale projects;

▪While we see merits in VCX’s mixed use

and third-party capital aspirations, progress

RISK REWARD CHART to date has been limited;

▪VCX is somewhat of a company in

transition - selling assets to fund large capex AUD A$3.60A$3.60(+38.46%)A$3.60(+38.46%)(+38.46%)

programs - good balance sheet

management, but it may be some time

3.2 before these will result in above-average

earnings growth.

A$2.60A$2.60A$2.60 A$2.63A$2.63(+1.15%)A$2.63(+1.15%)(+1.15%)

2.4 Consensus Rating Distribution

20% Overweight

1.6 A$1.95A$1.95(-25.00%)A$1.95(-25.00%)(-25.00%) 50% Equal-weight

30% Underweight

0.8 MS Rating

Source: Refinitiv, Morgan Stanley Research

JUL '25 JAN '26 JUL '26 JUL '27 Risk Reward Themes