This article is from the Australian Property Journal archive
Stockland has ended the first half of this year in strong shape, with a net profit of $482.5 million for the half year to December 31, 2005, an increase of 0.5% over last year.
Meanwhile, the operating profit for the half year was $273.4 million, a 9.3% increase on the previous corresponding period.
Stockland’s managing director Matthew Quinn said this half year results were driven by solid profits from each of the operating divisions.
The group’s development division contributed $110 million, an increased of 13.5% over last year.
During the first half of the year, Stockland launched 9 new projects to market, taking exposure to 84 projects for development across Australia with an estimated end value of $15 billion.
“Our focus on forecasting ahead and understanding residential market dynamics has ensured our business is in a strong position to continue to perform consistently through the market cycles,” Quinn said.
The group’s shopping centre division delivered $114.8 million, an increased of 10.4% over last year.
In the first half of the year, Stockland completed 195 leasing transactions, including 88 renewals, altogether reducing the vacancy rate to only 0.2% of gross lettable area.
The division also underwent property valuations which increased the portfolio value by 13.0% or $278.5 million.
In addition, the delivery of the $800 million plus development pipeline is on track, with five projects successfully completed in the first half of FY2006 at a total cost of $103 million and an average return on cost of 10.9%.
Stockland’s commercial and industrial delivered an operating profit of $102.3 million.
As of December 31, 2005, the portfolio has a 99% occupancy rate with over 103,000 sqm of space leased or renewed, as well a strong tenant retention of 87%.
Property revaluations realised $89.6 million, an increase of 8.7% on previous book value.
Stockland has continued to focus on the delivery of the $500 million development pipeline, a programme that includes major industrial and office park projects in western Sydney, the state’s industrial hub, and the landmark new campus-style Optus headquarters in Macquarie Park.
The group’s Saville Hotel Group recorded profit of $4.5 million.
In addition, a 161-room Brisbane Saville Southbank hotel was opened last month.
“The commercial, industrial and shopping centre businesses continued to perform well, with high occupancy and strong net income growth across the portfolios, while the residential business also had an excellent result, performing in line with our expectations.
“The business is in strong shape at the end of this half year, with our gearing maintained at a conservative 27%,” Quinn said.
Stockland’s unlisted property funds division launched and successfully closed Stockland Direct Office Trust No.2 fund ($180 million) to retail investors.
A highlight included the successful sale of 20% of Macquarie Park Trust to UniSuper, marking the division’s first entry into wholesale funds management.
Stockland recently launch its first residential land development fund, SREEF, to a wholesale investor base.
As of December 31, 2005, the group has a total of $467 million retail and wholesale assets under management.
“We expect our unlisted funds business to continue to grow in partnership with our other divisions to maximise the benefits of the diversity of Stockland’s business model.
“We also focused on broadening our income streams, with the Unlisted Property Funds Division achieving its key goals in this period, partnering with the other divisions to leverage the diversity of the group and extending the success of our brand in the listed market to the unlisted funds management arena,”
Quinn said the group is on track to achieve their full year targets.
“We will continue to focus on leveraging and extending our diversified business platform to deliver future growth and returns to our security holders,” he concluded.
Stockland has declared earnings of 20.7 cents per security, an increase of 5.1%.
The group will pay a dividend of 20.5 cents per security, 6.2% increase over last year.
Net Tangible Assets per security increased by 8.0% to $4.32, gearing ratio is at 27%.
By Adam Parsons
