Stockland sells industrial, buys retail and residential
Listed property trust Stockland is shifting its focus away from industrial, as it prepares to develop a $1 billion residential and retail development in south-west Sydney at the same time as it is selling $200 million worth of its industrial assets.
The 339-hectare East Leppington development, the property group’s second NSW acquisition this year, is set to become about 3000 homes and a shopping precinct.
“The transaction further increases our geographic diversity and strengthens our presence in NSW,” Stockland chief executive for residential Mark Hunter told the Australian Financial Review.
The vendors are reported to be private landowners Joe Stambe and Vince Lopresti, and the first homes on the site are expected to be sold in the 2014-2015 financial year.
The news comes at the same time Stockland has confirmed it is in negotiations to sell $200 million in industrial properties. Currently about 13% of the group's commercial investment portfolio is made up of industrial properties.
The group's commercial property chief executive, John Schroder, says Stockland is considering an offer of about $200 million, which comprises 20 per cent of its entire portfolio, and that negotiations were advanced.
"We have a clearly articulated strategy to reweight our commercial portfolio towards retail and self-fund our growth opportunities," Schroder says.
Schroder says Stockland was also evaluating a number of acquisition opportunities for reinvestment of the proceeds into assets across the group.
This is in line with Stockland's "3-R strategy", which involves investment in retail, retirement and residential property.
On delivering its half-year result, Stockland said it had sold $148 million of non-core office and industrial assets. At the end of May, Stockland sold 50% of its stake in Waterfront Place, the fifth tallest building in Brisbane, to the Future Fund for $216.4 million.
In the second half of last year, Stockland reported a profit of $425 million.
The company has advised in the next five to seven years, it aimed to own and manage a quality commercial portfolio with 10% industrial assets, 15 to 20% per cent office assets and 75% of retail properties.
