This article is from the Australian Property Journal archive
STOCKLAND returned a record number of deposits in its residential business to kick off the 2017 financial year, but its retail business was its strongest performer in the first quarter.
Whilst sales growth moderated slightly, total sales increased by 2.4% in the quarter with exclusion of one-third of the portfolio due to redevelopment, including Wetherill Park in western Sydney and Green Hills in the lower Hunter Valley.
Comparable specialty sales grew 3.0% to $9,114 per sqm in the quarter, up 1.1% on the corresponding quarter last year.
Its retail categories were communications technology, food catering and casual dining, and retail services.
John Schroder, chief executive officer commercial property, said the first quarter saw the short-term impact of redevelopment activity and retail remixing within its centres.
“We expect retail sales growth to continue at moderate levels, and we remain confident of achieving 3% – 4% comparable retail FFO growth in FY17, in line with our guidance,” he said.
The group achieved 2,301 net deposits on residential lots, townhouses and completed homes in the quarter, well up on the 1,557 for the corresponding period last year.
Projects in Sydney, Melbourne and south-east Queensland all made “significant” contributions in the quarter, whilst Perth showed signs of stabilisation.
Stockland continues to expect around two thirds of its residential profit to fall into the second half of FY17.
Andrew Whitson, chief executive officer, residential, said there was continued high demand in the Sydney and Melbourne markets and an encouraging return of first home-buyers in south-east Queensland, who are taking advantage of the Queensland First Home Owners’ Grant, which was recently increased to $20,000.
“We remain on track to achieve more than 6,000 residential settlements for the full year and see constructive signs for an elongated property cycle,” he said.
Stockland executed leases on 62,400sqm of floor space and heads of agreements signed on a further 92,500sqm across its logistics and business parks, with the portfolio’s Weighted Average Lease Expiry (WALE) steady at 4.5 years.
“We’ve maintained our disciplined approach to capital recycling and we are using our capabilities to upgrade and reposition our portfolio,” Schroder said. “We have made good progress on our $400 million development pipeline, which is strongly weighted towards the higher-performing Sydney and Melbourne markets.”
In its retirement business, Stockland achieved 255 net reservations in the quarter, underpinned by its development pipeline with 96 net reservations of new homes, including from its development projects at Cardinal Freeman The Residences at Ashfield in Sydney’s inner-west and Willowdale Retirement Village in south-west Sydney.
There were 159 net reservations within its established portfolio, with the figure dented by lower turnover in New South Wales and Queensland.
The group remains on track to achieve target growth in FFO per security of between 5.0% and 7.0% across the entire group, and continues to target an estimated distribution per security of 25.5 cents.
Australian Property Journal
