Stockland posts profit, helped by residential projects, commercial muted

Stockland posts profit, helped by residential projects, commercial muted
Stockland posts profit, helped by residential projects, commercial muted

Developer Stockland said funds from operations for the financial year ended June 30 grew 8.5 percent to $802 million on the back of its residential projects though growth on the commercial side was moderate.

The residential business delivered an operating profit growth of 17.4 percent, while settling a record 6,604 lots in FY17.

It said more than 50 percent of net deposits were from first home buyers. 

The Victorian government recently approved Stockland’s plan to develop up to 5,000 new homes as part of its Mt. Atkinson project (above), 24 km from Melbourne’s CBD.

“Our Residential and Retirement Living businesses achieved record results, and Commercial Property delivered a good performance across the different asset classes, despite challenging conditions in the retail market,” said Stockland managing director and CEO Mark Steinert.

It also acquired 9,900 lots with the majority in Melbourne.

In the commercial property segment, Stockland said occupancy at its logistics and business parks increased to 99%. 

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 Stockland posts profit, helped by residential projects, commercial muted

“We continue to see growth in lifestyle and entertainment tenancies, particularly larger format operators such as JB Hi-Fi, Hoyts and Harris Scarfe, and we’ve recently confirmed that H&M will open new stores at our Townsville and Rockhampton centres,” said CEO Commercial Property John Schroder.

The company expects positive economic conditions to continue, and interest rates to remain fairly stable. It will continue to focus on community projects and town centres. 

Stockland, which also owns and manages shopping centres, said its commercial property business should deliver moderate growth, with comparable FFO growth of 2-3 percent including comparable retail FFO growth of around 3%. 

“We will continue to invest, grow and remix our portfolio, increasing our focus on convenient and desirable town centres, with selected divestments funding much of this activity,” said Steinert. 

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Stockland Financial Results

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