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Stockland Tops Up Pipeline with 5900 Lots

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Unmet demand in the booming house and land market has led Stockland, the country’s largest listed developer, to restock its pipeline with 5900 lots in the first three months of this year.

Stockland said residential sales jumped by 8 per cent to 1947 lots in the March quarter, prompting the company to forecast 6400 settlements this year, an increase of 18 per cent in residential operating profit.

“We are building on a strong foundation, delivering a statutory profit of $1.1 billon in a testing and challenging environment,” Stockland managing director Tarun Gupta said.

“While we are mindful of the potential for macroprudential measures to have some marginal impact on demand over time, we continue to see very strong levels of enquiry for our residential product.”

The majority of new lots, 5500, were picked up in Western Australia and Victoria, with the consolidation of 400 lots at The Gables in NSW.

Stockland said it was “well positioned” to capitalise on the demand of the “up cycle” with 70 per cent of its current 81,000-lot land bank activated.

The company said the integration of Queensland-based Halcyon, a land lease business developing affordable accommodation for downsizing baby boomers, was also progressing well after the acquisition of the platform for $620 million in July.

“The acquisition demonstrates our determination to leverage our scale, reach and expertise in masterplanned communities to create both additional revenue streams and higher quality recurring earnings in the residential sector,” Gupta said.

Stockland now expects to generate approximately 600 land lease settlements annually within three years—double its previous target.

The company has been actively dialling back its exposure to retirement living and retail, looking to recycle assets within each asset class and add to its $33-billion development pipeline—$9 billion of which is now geared towards commercial property.

It is close to completing its strategic review, the results of which it would report next month.

Gupta said Stockland would now substantially increase capital to the residential, workplace and logistics sectors.

“In undertaking the review, we have considered four key long-term drivers that we expect to shape our industry: urbanisation; the impact of technological advancement; the growth of institutional capital flows; and the importance of environmental, social and governance,” Gupta said.

Stockland said 98 per cent of rent for the first quarter of the 2022 financial year was collected across the group’s workplace and logistics businesses with occupancy lifting to 98.9 per cent after it leased 112,900sq m across its portfolio.

The group said rent across its portfolio of sheds had grown by 2.6 per cent with a further $5.5 billion in logistics projects within its development pipeline.

In contrast, Stockland collected just 75 per cent of the rent due from its retail town centres despite over 96 per cent of the stores within its centres nationally trading.

Stockland completed 156 leasing deals during the quarter, and said negotiated rents were tracking ahead of expectations.

The group reported in a quarterly update that turnover in speciality sales plunged by 31 per cent over the three months, discount department store sales fell 21 per cent, and mini majors were off 11 per cent.

Sales performance growth was seen in two states, Queensland, up 8.5 per cent; and Western Australia, up 9.3 per cent.

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Article originally posted at: https://www.theurbandeveloper.com/articles/stockland-banks-5900-lots-in-wa-and-victoria