Stockland says booming home sales will boost profits

Stockland said its after-tax net income of $ 1.1 billion – vs. a restated loss of $ 21 million pulled down by revaluation losses of its business and pension assets – included revaluation gains of 432 million dollars mainly on its logistics, life sciences and technology portfolio.

Retail asset valuations stabilized over the year, which the company said reflects a rebound in retail conditions and tenant demand.

The company also said it is undertaking a strategic review, the results of which it will report by the end of this calendar year. Mr Gupta said this would include a reweighting of capital to other forms of residential assets, including construction for rent.

The company also said it expected to secure land lease agreements of 600 per year within three years, double its previous target.

The company, which announced last month that it would pay $ 620 million to acquire the Queensland-based land rental business Halcyon, developing affordable housing for baby boomers, said on Friday it planned now generate around 600 land lease contracts per year within three years – double its previous target.

Mr Gupta, who said last month that the price of the Halcyon portfolio of six established communities, four in development and three more in planning, was fair, repeated earlier comments on Friday that the company was also looking to expand into the land lease sector. through new acquisitions, reinforced by investments from external capital partners.

Stockland reported an operating profit margin of 18% on its residential development business and predicted the same for the current year, lower than the 19.9% ​​recorded a year earlier, a figure lower than analysts’ expectations .

“Overall this looks like a solid result,” JP Morgan analyst Richard Jones said.

“Residential sales remained very strong in the fourth quarter, with Stockland posting a significant carry over to FY22. The residential margin has softened surprisingly slightly and should remain at the level for fiscal year 21. ”

Mr Gupta said the lower margins were due to the housing mix shifting to include a greater proportion of less profitable homes outside the more lucrative state of NSW.

“Last year, and then this year as well, we had a lot more NSW products in production,” he told the Financial analysis. “Some of these projects are finished or are in the process of being completed, like [the $1.2 billion] Willowdale [masterplanned community in Sydney’s south-west] and we have more of WA and other states that have slightly lower margins. “

Shares were little changed after the announcement, trading down 3.5 ¢, or 0.8 percent, to $ 4.52 at noon.

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