Stockland’s residential business recorded a lift in sales and settlements over the last three months, noting a clear shift in buyer preferences towards masterplanned communities.
ASX-listed Stockland clocked 1,799 sales in the three months to 30 September, its highest quarterly net sales result in three years.
The group completed 1,083 residential settlements in the period, and had 4,261 contracts on hand, and yet to settle—as of the end of September 2020.
Stockland’s outgoing chief executive Mark Steinert said the sales activity reflect the low-interest-rate environment, improved credit availability, government stimulus measures and pent up demand in the market.
“Our residential business experienced elevated sales and settlements delivering the highest quarterly net sales result in over three years,” Steinert said.
“However, these sales levels were more moderate than those achieved late in 4Q20, and builder capacity to meet the demand driven by the stimulus may impact sales over the second quarter,” he said.
The listed developer said that around 3,800 residential contracts are due to settle this financial year.
Increased buyer activity was recorded in all states, except Victoria, with Western Australia and Queensland particularly strong.
Residential communities CEO Andrew Whitson said that enquiry levels were above long term averages despite the Victorian restrictions, adding that two recent digital residential sales releases in Melbourne sold out.
“There has been a clear shift in buyer preferences towards master-planned communities which are well-located, liveable and affordable with good access to open space, schools and local services.”
Founded in 1952, Stockland owns, develops and manages a portfolio of retail town centres, workplace and logistics assets, residential communities and retirement living villages.
Compared to the same time last year, Stockland’s Retirement Living recorded 195 quarterly sales, a 9 per cent decline in net sales, largely led by Victoria.
The group says its logistics portfolio has an occupancy of 96.2 per cent as of the end of September.
While construction of its $125 million building at Macquarie Park in Sydney is expected to start in early 2021, the group lodged a planning proposal in August for its development at Piccadilly, and will lodge a development application for Walker Street in North Sydney by December.
Stockland's update noted a recovery in its retail business over the first quarter, although noted financial provisions as set aside as it finalises tenant negotiations to cover “any remaining risk”.
“Excluding Victoria, which represents 12 per cent of the total retail portfolio by income, these key portfolio metrics approached pre-Covid-19 levels as Australian consumers returned to shopping centres,” Stockland’s Commercial property group executive Louise Mason said.
“For first quarter 2021, excluding Victorian centres and a short-term Covid-19 related decline at Wetherill Park (NSW), the portfolio delivered comparable total sales growth of 3.6 per cent, and total speciality sales growth was 1.7 per cent, a material improvement as restrictions ease.”
Stockland has two retail centres located in metropolitan Melbourne, one of which— The Pines in Doncaster East— is contracted for sale.
The group said its funds from operations and distribution guidance for the full year to 30 June 2021, would not be provided due to uncertainty around the impacts of Covid-19 on the economy.