Stockland continues to focus on higher-yielding retail commercial property

Developer Stockland will continue to sell its commercial and industrial assets and use the proceeds to reinvest in higher-yielding and less volatile retail assets, says Stockland CEO Matthew Quinn.

Retail assets have generated returns of 10% for Stockland, while industrial assets have generated 8.3% and office assets 7% returns.

According to Stockland, retail assets consume less non-recoverable maintenance capital, require less incentives to lease and have lower volatility.

Quinn says office and industrial sale proceeds are being reinvested in the redevelopment of existing retail centres.

However, there is time lag of two to three years from asset sale to centre opening, meaning the greater return won’t be reflected in earnings until 2014.

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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