Stockland boss Mark Steinert will step down as chief executive of the $6.5 billion ASX-listed property company after seven and a half years in the role.
Steinert’s successor, who has not been announced, will take the helm as negative revaluations drag the book value of the group’s commercial and retail assets by as much as 10 per cent.
The media note confirming Steinert’s retirement on Monday was released alongside the company’s distribution and portfolio valuation updates. The group’s preliminary revaluations, which remain subject to finalisation, indicate a fall in its retail assets of 10 per cent and a six per cent decline across its commercial portfolio.
Stockland will also cut its second-half distribution to 10.6 cents per security from 14.1 cents. The group withdrew its full-year guidance in March.
Stockland owns 35 retail properties with a gross book value of $7.2 billion. The group’s five office assets and 29 logistics assets have a combined book value of about $4 billion.
Valuers have had considerable difficulty accurately forecasting the implications of Covid-19 dislocation on real estate markets. Stockland said that its independent valuers are adopting a range of qualifications to assessed values.
The book value of GPT Group’s Wholesale Shopping Centre Fund fell 11 per cent as a result of negative asset revaluations earlier this month.
As for the group’s $21 billion-plus residential portfolio, Stockland said that the easing of restrictions and the government’s home builder package has pushed enquiry to above pre-Covid-19 levels.
“We have also seen an accelerated pace of net sales achieved.”
The group said that about 95 per cent of its retail town centres are trading, with more openings expected as level three restrictions ease in coming weeks.
In response to increasing credit spreads as Covid-19 set in, Stockland tapped its existing euro medium-term note programs, placing a 10-year HK$805 million (A$180m) issuance in April.
The group’s liquidity position remains at around $1.6 billion.
S&P analyst Craig Parker said that Australian REITs hold a much stronger liquidity position compared to the global financial crisis.
“Rated REITs have sufficient headroom within their debt covenants,” Parker said.
“However, we expect REITs’ loan-to-value covenant to face pressure with falling book values of their assets.”
According to Stockland, Mark Steinert will remain flexible during the handover period as the group begins the process to identify a successor “from a field of internal and external candidates”.
“My immediate priority is driving initiatives to take advantage of the Covid-19 recovery period and further accelerate the digitisation of our business and delivery of our strategic priority,” Steinert said.
The group’s full year results will be lodged on 25 August.