Stockland Builds Market ‘Resilience’ in Slowing Residential Market

ASX-listed Stockland has remained resilient in the face of a changing property cycle, despite weaker housing lot sales in the quarter to September.

In an update to the ASX, Stockland announced a steady start to 2019 financial year in a "variable trading environment", building resilience across its portfolio.

Stockland said that it would deliver an increase in earnings of between 2 per cent to 4 per cent.

It has also set a distribution target of 27.6¢ a share, representing a 4 per cent growth.

Stockland underlined the consistent demand for its newly launch residential projects amid moderate trading conditions, with over 85 per cent of sales for the quarter to owner occupiers.

There was also a gain in market share in across the eastern seaboard, with NSW, Victoria and Queensland rising from 11.4 per cent in June 2017 to 14.5 per cent in June 2018.

Related: Stockland Unveils First Images of Epping Retirement Village Development

“We remain on track to achieve over 6,000 settlements for FY19, including 400 townhomes, with 1,293 net deposits for lots and townhomes during 1Q19 and 5,741 contracts on hand as at 30 September 2018, ” Stockland chief executive Mark Steinert said.

Stockland's commercial property portfolio also continued to deliver results in line with expectations with improvements in specialty sales, up by 4.3 per cent to $9,313 per square metre.

In an attempt to reshape its commercial portfolio, Stockland offloaded $335 million worth of asserts in the 2018 financial year with targets of an additional $400 million in retail divestments planned across the next two years.

“We have also continued to capitalise on the growing demand for logistics assets,” Steinert said.

“We are making good progress with our $600 million development pipeline, and remain focused on our strategy to grow the national workplace and logistics portfolio to greater than 25 per cent of total assets.”

In August, Stockland completed a $50 million development of Ingleburn stage 2, and $26 million development at Yennora in Sydney’s west.

The company's developments at the $23 million Willawong facility in Brisbane and $36 million greenfield project at Truganina in Melbourne are also scheduled to commence in the coming months.

Related: Stockland Kicks Off Townhouse Project in Melbourne’s South East

Stockland kicks off work at Baringa shopping centre

Stockland has also commenced work on its $33 million Baringa Shopping Centre development, the first of a number of shopping centres planned for its $5 billion Aura community on the Sunshine Coast.

The new centre will be anchored by a 2,000sq m Supa IGA, as well as 13 specialty retailers, 300 car spaces, and commercial offices, scheduled for completion mid-2019.

“Our vision is to create one of the best neighbourhood shopping centres in the state, offering customers a fantastic shopping experience with a go-to shopping destination tailored for their everyday convenience needs,” Stockland commercial property chief executive Louise Mason said.

Plans are also in place for for a medical centre, swim school and family-friendly tavern.

Baringa benefits from a strong trade area, with its population projected to grow at an average annual rate of 9.3 per cent to 30,000 by 2021.

“Stockland Baringa is positioned in a prime location within Baringa, the first suburb of Aura, servicing not only our Baringa residents but also the surrounding Bellvista and Bells Reach communities,” Mason said.

It is projected that over the next 30 years, Aura will be home to around 50,000 people across 20,000 new homes, provided by Stockland.

The masterplanned community will be the largest ever undertaken in Australia under single ownership, stretching across 24 square kilometres in Caloundra South on the Sunshine Coast.

It will include also two business parks, 10 sporting grounds, 25 community facilities, 20 schools, 700 hectares of conservation and park areas and 200km of cycle ways and walking paths.