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Stockland add to North Sydney Development site

November 8, 2019

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Stockland Market Update

October 24, 2018

 


Stockland have retained their outlook for distribution growth of 4% for FY19 however the slowing residential and retail sectors are presenting challenging signals to future earnings.

 

Stockland are continuing to target FFO per security growth of 5 - 7% for FY19, assuming no material change in market conditions, underpinned by:

• Residential settlements over 6,000 lots, with mix and townhomes lifting revenue and a profit skew to 2H19, operating profit margins of around 18% in FY19 and 17% over the medium term

• Expect improved Retirement Living returns

• Commercial Property comparable FFO growth of 2 - 3%

• FY19 distribution per security growth of 4%, 27.6 cents , at bottom end of target payout ratio of 75 - 85% of FFO

 

• Stockland are continuing to pursue capital partners for their Retirement Living business and Retail Town Centres, and progressing their retail centre divestments

 

Retail Centres

  • 4.3% growth in specialty sales to $9,313 per square metre in year to 1Q19, 1.8% for comparable Centres.

  • Continuing to remix towards growth categories, 40 fewer apparel stores in comparable centres basket, and conversion of specialties to larger formats

Workplace & Logistics 

  • Market sentiment remains positive for Logistics, with tenant demand greatest in Sydney and Melbourne

  • High tenant retention reflected in strong leasing

  • Continuing strength in the Sydney CBD and North Sydney commercial markets, where our assets are close to fully occupied

  • Majority of vacancy in Perth with 6,100 sqm remaining

Residential Communities 

  • On track for over 6,000 settlements in FY19, including around 400 Townhomes

  • Lower net deposits (down 15% on last quarter and 44% from Q3, 2017) reflect moderating market in line with expectations, as lending conditions tighten. 

  • Over 85% of 1Q19 customers are owner occupiers.

Retirement Communities

  • Higher net reservations for new projects (up 16% from same quarter last year) reflect timing and quality of development completions

  • Net reservations for existing units in our established villages are consistent with the comparable period for FY18

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