Stockland and Lend Lease most exposed to weaker Queensland and Victoria residential land markets

Stockland, Lend Lease and FKP are more heavily exposed to the weak Queensland and Victoria residential development markets than other listed residential developers, according to research compiled by Merrill Lynch.

The following chart shows the heavy exposure of Stockland (SGP), Lend Lease (LLC) and FKP in green (Queensland) and light blue (Victoria) and smaller exposures of Mirvac (MGR), Australand (ALZ) and Peet Limited (PPC).

Yesterday, following its earnings downgrade, Stockland CEO Matthew Quinn highlighted the particularly soft conditions in Queensland relative to other stronger markets such as WA.

“Stockland, Lend Lease and FKP remain the most exposed of the listed developers to Queensland and Victoria, with each having around 71% of their land bank in these states,” notes Simon Garing, research analyst at Merrill Lynch.

“However, we note these land banks are often in long-dated projects, mitigating near-term risk. E.g. 50% of Stockland’s Queensland exposure is in Caloundra South, with a life span of 20+ years, while 44% of Lend Lease’s Queensland exposure is in Yarrabilba, not scheduled to complete until 2041,” Garing says.