Stockland (SGP)

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http://www.stockland.com.au/

http://www.stockland.com.au/investor-centre.htm

Stockland reports strong start in residential business, reaffirms share growth
MICHAEL RODDAN BUSINESS SPECTATOR OCTOBER 28, 2014 3:16PM
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Stockland bursts out of the blocks
An aerial view of Stockland's Newhaven community in Western Australia. Source: Supplied
PROPERTY group Stockland has reported the best quarterly results for its residential business in four years, as it reaffirmed earnings per share growth up to 7.5 per cent for the 2015 financial year.

Stockland (SGP) managing director and chief executive, Mark Steinert, told the company’s annual general meeting the group was on track to achieve EPS growth of 6 to 7.5 per cent over fiscal 2014, assuming no material change in market conditions.

Mr Steinert said the residential business had a particularly strong start to the financial year, aided by positive market conditions, particularly in Sydney and southeast Queensland.

The group’s residential segment saw its strongest first quarter result in four years, with 1,652 net deposits achieved in the September quarter.

Stockland also saw its highest quarterly specialty sales growth since 2009, growing 5.7 per cent in the quarter, compared 4.7 per cent in the prior corresponding period.

Stockland grew its logistics and business park portfolio to $1.6 billion at September 30, up from $1.2 billion at the end of fiscal 2013.

The group saw occupancy of its office portfolio increase to 92.9 per cent, from 90.3 per cent at the end of fiscal 2014.

Stockland chairman, Graham Bradley, said the company had “established a solid platform for future growth, supported by a considered strategy and an executive team focused on delivering sustainable returns for security holders”.

The group said it will maintain its dividend distribution at 24 cents per share for fiscal 2015.


Business Spectator

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Stockland chief still searching

Nichola Saminather
374 words
8 Nov 2014
Herald-Sun
HERSUN
English
© 2014 News Limited. All rights reserved.

PROPERTY STOCKLAND chief Mark Steinert can see few opportunities for acquisitions in Australia after losing the takeover battle for smaller rival Australand Property Group.

But Stockland, Australia’s biggest diversified property trust, remains on the lookout regardless, Mr Steinert says.

Most listed companies in the sector were “efficiently priced and well run” — making them unlikely targets, Mr Steinert said.

“And there’s not that many unlisted companies that are for sale or suitable.” In May, Stockland lost the takeover battle for Australand to Singapore-based Frasers Centrepoint.

While Stockland had sweetened its all-share offer in a bid to snare Australand, Frasers countered with an all-cash offer.

That cost Stockland the chance to expand its industrial and residential development business.

But Stockland still expected earnings growth as high as 7.5 per cent for the year to next June, compared with a target of 5 per cent a year, Mr Steinert said.

Stockland realised an $80 million profit when it sold its 19.9 per cent stake in Australand to Frasers.

“We took the view that we should be disciplined and it would be better to realise the $80 million profit and use some of that money to fund our growth ambitions organically,” Mr Steinert said.

Stockland shares have risen 16 per cent this year, compared with a 2.9 per cent gain in the benchmark ASX 200 index.

The developer was selling completed homes on its lots to investors, self-managed pension funds and buyers who did not want to contract their own builders, Mr Steinert said.

Developers typically subdivide and sell empty lots.

The Highlands community in Craigieburn, on the northern edge of Melbourne, was the first development where the company was selling completed townhouses, he said.

Stockland could fund home building on more than 10 per cent of its residential developments, he said.

At Stockland’s annual meeting last week, Mr Steinert said the company had a 57 per cent increase in operating profit in residential business.

It also had 1652 net deposits on new lots in the three months to September 30. To address cost concerns, Stockland shrunk lot sizes to about 420sq m in 2013-14, from about 450sq m.BLOOMBERG


News Ltd.

Document HERSUN0020141107eab80003v

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Stockland year net profit soars 71pc as it benefits from housing boom
DAVID WINNING DOW JONES AUGUST 19, 2015 9:37AM

Mark Steinert says Stockland is enjoying “positive market conditions”. Source: News Corp Australia

Property developer Stockland has reported rising sales and profit as it became the latest company to benefit from a housing boom underpinned by low interest rates.

Stockland said net profit for the year to June totalled $903 million, up 71 per cent on a year earlier.

The company (SGP) is targeting another strong year ahead, with earnings per share forecast to rise by 6 to 7.5 per cent, and funds from operations tipped to increase by 8.5-10.0 per cent.

Stockland specialises in residential housing developments on land close to schools, shops and transport networks, but has also invested heavily in shopping malls and retirement villages. While low interest rates and population growth are supporting property demand nationally, rising unemployment in resources-dependent states such as Western Australia is a gathering headwind.

The Sydney-based company said it settled contracts on 5,876 residential lots in the year, with the homebuilding division increasing earnings by 74 per cent.

“This result reflected generally positive market conditions in the corridors where we operate and the progress we’ve made launching six key projects in two years and broadening our customer reach with diverse product offerings,” chief executive Mark Steinert said.

However, the uneven nature of Australia’s property boom is worrying policy makers, including the central bank. Gains in home prices in Sydney are outpacing other major cities, leading analysts to question whether Stockland and rivals such as Mirvac Group could be hurt by possible changes to regulations to cool the real-estate market.

In June, Reserve Bank governor Glenn Stevens characterised parts of Sydney’s housing market as seemingly out of control. Australian financial regulators recently ordered banks to curb housing loans to investors, and are debating more extreme measures, including potentially restricting mortgage lending in Sydney specifically.

Stockland has forecast a distribution for the 2016 fiscal year of 24.5 cents per share, up from 24 cents in the previous year.

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Mark Steinert sees undersupply as Stockland posts 71pc lift
THE AUSTRALIAN AUGUST 20, 2015 12:00AM

Turi Condon

Property Editor
Sydney
Samantha Hutchinson

Property Writer

The country’s biggest residential developer, Stockland, has boosted profit 71.4 per cent for the 2015 ­financial year to $903 million, with managing director Mark Steinert labelling Australia’s major housing markets as still ­suffering a dearth of supply.

The group is moving to increase the density on a number of its large-scale residential projects and will start on 500 townhouses in the next year, with 2000 townhouse lots earmarked across its portfolio, Mr Steinert told The Australian.

“We believe every metropolitan market in the country that we operate in is structurally undersupplied, particularly around house and land, and townhomes,” Mr Steinert said.

The diversified developer and landlord, with a market value approaching $10 billion, has urban infill projects in its sights and had submitted four ideas for parts of Urban Growth’s massive Bays Precinct regeneration project in Sydney, Mr Steinert said. The residential division, which accounts for 27 per cent of earnings, saw a 73.5 per cent lift in profit with a record 3742 contracts in hand on the back of hot housing markets.

Mr Steinert said all the core businesses had boosted the bottom line with residential, logistics and business parks, and retirement living divisions each up more than 15 per cent. Retail, which accounts for 60 per cent of earnings, was up 4.2 per cent on a comparable basis.

Stockland flagged a target for earnings per security growth of 6-7.5 per cent for 2016, funds from operations growth of 8.5-10 per cent and a distribution per security of 24.5 per cent.

The group will pay a 2015 ­distribution of 24c, a payout ratio of 93 per cent of underlying earnings per security.

Investors shrugged off the ­results, with analysts noting ­forward guidance was below consensus expectations, while projected residential margins were also softer than expected.

Morgan Stanley analyst David Lloyd questioned the long-term prospects for the residential portfolio, given investment property sales climbed 22 per cent during the year compared to first-home buyers and upgrader sales each falling by 9 per cent.

“It’s a big shift in net deposit growth,” Mr Lloyd said, adding that the spectre of banks limiting exposure to investors could result in a potential slowdown in sales.

Mr Steinert downplayed the risk.

“We’re still seeing a lot of owner demand and if there is a moderation, it will give opportunity for owner-occupiers to take up a more affordable opportunity,” he said.

Shares underperformed the broader market on Wednesday, growing by less than half of a per cent to $4.18 as the market climbed by 1.5 per cent.

Funds from operations (underlying and recurring earnings) rose 14.7 per cent to $657m.

An upbeat Mr Steinert predicted solid housing markets and further rises in values for commercial property.

“If you ask me if I have more or less confidence in the outlook. I have more,” he said.

Mr Steinert continued to pour cold water on Stockland as a predator in merger and acquisitions activity, with the group booking a $80m gross profit on the sale of its stake of former takeover target Australand.

“We are focused on growing organically,” Mr Steinert said. A $1.4bn retail and industrial development pipeline would show 7-8 per cent yields and an internal rate of return of more than 11 per cent, he said.

“Recent transactions were struck at sub 7 per cent IRRs. We have a lot better ways to grow our business than buying assets on those IRRs.”

The strong commercial property market helped deliver a $297m lift in commercial property revaluations during the year, with Mr Steinert noting Stockland had seen 30 basis point tightening in capitalisation rates on its commercial property holdings during the year and expected to see a further 50 basis points lopped off capitalisation rates over the next year.

Stockland made $591m of property acquisitions during the year. Dividends will be paid on August 31.

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·        Aug 20 2015 at 5:45 AM 
 
·         Updated Aug 20 2015 at 5:50 AM 
Housing only into the second quarter of the cycle, says Stockland's Steinert
Australian housing is into the "second quarter" of what is often a seven-to-eight-year housing cycle according to Mark Steinert, the chief executive of the nation's leading provider of housing lots, Stockland.

olumes and activity will stay high for some time to come," Stockland's Mark Steinert says. "Because all cities are undersupplied." Harrison Saragossi

by Robert Harley
Australian housing is into the "second quarter" of what is often a seven-to-eight-year housing cycle according to Mark Steinert, the chief executive of the nation's leading provider of housing lots, Stockland.
"Every market is at a different point on the clock but nationally we are coming into the second quarter," he said.
Which from the Stockland point of view, means there is still a lot of growth to come – in volumes and in margins.
"I am pleased we own a lot of land," he said.
Mr Steinert that that prices in inner city Sydney and Melbourne came out of the "gate roaring" and at some point must slow.
"But volumes and activity will stay high for some time to come," he said. "Because all cities are undersupplied."
Perth is Stockland's weakest market but it has actually surprised Steinert on the upside.
And the group is "really optimistic about Queensland… optimistic and overweight," he said referring to the coming launch of the giant Caloundra South project on the Sunshine Coast.
"The price differential with Sydney is as high as ever before; affordability is as good as ever and now we are seeing some employment growth," he said.
PRICE LAGGING
Mr Steinert acknowledged that the Stockland security price had lagged because of investor concerns about the impact of the restrictions on investor borrowing.
"Seventy-four per cent of our buyers are owner occupiers and 42 per cent are first-home buyers," he said. "Banks are going to be even more focused on first-home buyers and that is in line with what the government wants."
"We need to demonstrate that the moves we have made to de-risk our business and provide sustainable growth through the cycle are working," he said.
Mr Steinert stressed that in most cities Stockland was providing entry-level homes, at prices 10 to 15 per cent below the median in the area, in areas that were now benefiting from new infrastructure, like the Willowdale project and Leppington rail link.
"We are providing stock that was not there before. It is a compelling customer proposition," he said.
YIELDS
In Stockland's commercial business, which is the mainstay of the asset base, Mr Steinert expects yields to firm further, in fact by another 50 to 100 basis points.
Which means Sydney CBD office towers could be selling on yields of 4.5 per cent.
But it is not just the initial yield which in the yardstick. Mr Steinert said that when internal rates of return dropped to 6.5 per cent, investors would look elsewhere, even to housing land.
Stockland tightened its valuations by 30 basis points in the past year, adding $300 million to the portfolio and 4 per cent to Net Tangible Asset backing.

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• Oct 26 2015 at 7:21 PM 
  

Stockland to back mid-tier developers as Sydney and Melbourne 'normalise'

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[img=620x0]http://www.afr.com/content/dam/images/g/k/i/8/f/t/image.related.afrArticleLead.620x350.gkiqgg.png/1445854577511.jpg[/img]Stockland chief executive Mark Steinert told his first-quarter update that the banks had "really tightened" their lending criteria. Paul Jeffers
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by Robert Harley
Leading diversified real estate investment trust Stockland is being offered stakes in apartment projects as traditional finance evaporates for "mid-tier developers".
Stockland chief executive Mark Steinert told his first-quarter update that the banks had "really tightened"  their lending criteria, becoming very selective about the borrower, the level of equity and the capacity of the builder.
"It is an interesting opportunity for us," he said.  "One thing we can bring to the table is equity. If we can get high enough internal rates of return we will participate."
In September, The Australian Financial Review reported that Stockland was making a small but significant investment in two Metro Property Development projects in Brisbane.

Overall, Stockland finished the quarter with 1557 deposits, which is down on the same quarter last year due to the weakness in Perth and delays in Sydney, but is enough to keep the group on track for 6000 sales of residential lots this year.
Mr Steinert said the strong housing markets in Sydney and inner Melbourne would moderate with a "more normalised level of growth".
"Sydney house prices will be flat to up 3 per cent," he said. "There will not be across-the-board declines but there will be some pockets where you will see a pullback in inner-city markets that have gone hard and have lots of supply."
Mr Steinert said Brisbane was showing improvement, Melbourne growth corridors remained sound, and Perth continued to slow.

Perth sales have held up better than expected based on previous downturns. But Mr Steinert surprised analysts by saying the proportion of deposits being cancelled had risen above the normal 15 per cent to near 20 per cent, partly due to title delays but also due to finance knock-backs as the circumstances of buyers changed.
Mr Steinert said Stockland was "well placed for these conditions"  with active projects in "high-demand, low-supply" corridors, with a "clear affordability advantage" and a "reputation for creating desirable, liveable" communities.
"Our new projects continue to strengthen our returns with operating profit margins over 14 per cent," he said.
Mr Steinert noted the warnings about higher supply and lower population growth. "The oversupply is largely in apartments, not in detached houses.

"And yes, population growth has reduced, down to 1.4 per cent, and that lower growth is factored into our demand. Even if growth falls to 1.2 per cent, it still gives Australia the highest growth in the developed world.
"It is not the environment where you see wholesale reductions in house prices."
Mr Steinert said Stockland had kept construction costs relatively flat in the eastern states, up 1 per cent in NSW, and in Western Australia costs were falling for 2016 and 2017 projects.
CLSA analyst Sholto Maconochie said the result was solid. "Stockland reaffirmed full year 2016 guidance, which we believe should be at the top end."