This article is from the Australian Property Journal archive
STOCKLAND has cut its second half distributions, write down the value of its commercial property portfolio and announced managing director and CEO Mark Steinert is leaving the company.
Chairman Tom Pockett said a flexible period of transition has been agreed with Steinert who has been at the helm for seven and a half year, to provide for a smooth handover and to ensure that there is a strong focus on leading the organisation through the COVID-19 recovery period.
“Mark has made a great contribution to Stockland and will continue to apply his passion and commitment to the delivery of our strategic priorities and our purpose of creating a better way to live during this transition period.
“Mark has overseen the development of Australia’s leading residential business, reshaped and expanded our workplace and logistics portfolio and significantly repositioned our town centre business. Mark has fostered a strong executive team, made significant advances in building innovation and digital capabilities and solidified Stockland’s position as a diverse employer of choice and global leader in sustainability,” Pockett said.
A process will now commence to identify a successor from a field of internal and external candidates.
Steinert said his immediate priority is driving initiatives to take advantage of the COVID-19 recovery period and further accelerate the digitisation of the business and delivery of strategic priorities.
“As confirmed in our recent market updates, Stockland’s strong liquidity position means we are well-placed to deliver on our purpose and identify new opportunities as we meet customer needs through our leading communities and assets across the country,” he said.
Meanwhile Stockland is undertaking independent external valuations of the entire commercial property portfolio and expecting a reduction in the book value of approximately 6%, including a devaluation in the retail portfolio of approximately 10% at 30 June 2020.
Steinert said the difficulty in predicting the future implications of the COVID-19 market disruption on the Australian real estate sector means that independent valuers are adopting a range of qualifications to assessed values which we will continue to monitor.
On the other hand, the group said the recent HomeBuilder scheme announced by the federal government has seen enquiry levels in residential communities recovered to be above pre-COVID-19 levels.
“Our strategic focus remains on affordable, high quality masterplanned communities, targeting owner occupiers. We have a resilient customer base and continue to sell over 80% of our homes and lots to owner-occupiers, with first home buyers representing around half our sales.
“We have also seen an accelerated pace of net sales achieved and have demonstrated our ability to respond quickly to improving customer sentiment and release more stock at our communities, in the areas of greatest demand,” he continued.
Stockland announced an estimated distribution for the six months to 30 June 2020 of 10.6 cents per stapled security, this equates to a full year distribution payment of 24.1 cpss.
Steinert said the reduction against the original guidance of 14.1 cpss is reflective of the impact of COVID-19 on its business during the last quarter of the financial year and the timing of the expected recovery of operational cashflow.
“Due to the continuing uncertainty, funds from operations guidance for FY20 remains withdrawn. We continue to closely monitor the speed and shape of the COVID-19 recovery phase and its implications for our business,” he concluded.
