This article is from the Australian Property Journal archive
AUSTRALAND has continued to live the residential property market fairytale, lifting its operating profit after tax by 30% to $80.8 million for the half year to June 30.
The group’s statutory result was a net profit after tax of $131.5 million, a 49% increase on the prior corresponding period.
Australand’s managing director Bob Johnston said the significant increase in profit demonstrates the resilience and ongoing strength in the residential sector.
“Residential earnings are up strongly reflecting favourable market conditions and the performance of key projects during the half. Contracts on hand are in a very healthy position securing a significant amount of earnings for delivery in the second half,” he added.
The group’s combined development earnings before interest and tax (EBIT) increased by 21% on the prior corresponding period with residential contributing $30.7 million and commercial & industrial tipping in $8.2 million.
“The commercial & industrial division delivered lower earnings for the half year reflecting weaker occupier demand. Major projects contributing to the result included facilities for Kuehne & Nagel (20,500 sqm in NSW), Goodyear (24,150 sqm in VIC) and Rinnai (14,800 sqm in VIC).
“Our C&I division continues to maintain a strong market share. Enquiry from logistics service providers and large retailers has improved over the last six months and we expect to see higher levels of activity in the second half,” he said.
Johnston said the residential division delivered a strong increase in earnings, reflecting contributions from key projects including settlements at the Parkville medium density project in Victoria along with contributions from key land projects including Greenhills Beach and the Ponds in NSW and Croydon, Greenvale and Clyde North in Victoria.
“Overall sales activity remains strong and the division held 2,170 contracts on hand securing earnings for the second half of 2014,” he continued.
The investment property EBIT was $97.8 million, excluding revaluation gains of $75.7 million. Johnston said earnings continue to grow in line with overall strategic objectives.
“Our portfolio metrics remain solid, with high occupancy, long leases and fixed rental growth providing good visibility of earnings.
“Our industrial and office investment portfolio continued to grow its earnings contribution, driven by comparable rental growth and additional income from internal developments which were completed in 2013,” he continued.
Meanwhile Johnston said Frasers Centrepoint Limited has indicated that should its takeover offer become unconditional and it gains control of more than 50% of Australand securities, Fraser plans to conduct a review of Australand’s corporate structure, assets and operations.
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