Stockland posts strong half year net profits
The group posted a net profit of $702 million for the first half ending December 31, a 0.7 per cent increase from the previous corresponding period, and generated funds from operations of $369 million, an increase of 7.8 per cent.
In retail, comparable funds from operations was up 3.5 per cent on the first half with results supported by high retail occupancy levels of 99.5 per cent and blended average rental growth on lease renewals and new leases of 2.7 per cent in its portfolio.
John Schroder, commercial property CEO, said retail sales were stable in the first half and the Christmas trading period.
“Our strategy to continuously improve our shopping centre portfolio and actively remix our retail around food, health, services, lifestyle, leisure and technology to match customer demographic changes and trends has helped to drive specialty sales productivity growth of 2.0 per cent to $9,025 per square metre, exceeding the Urbis sub-regional average by 7.7 per cent,” Schroder said.
According to him, the strongest specialty categories in Stockland centres were retail services, up 7.8 per cent, fast casual dining and food catering, up 6.6 per cent and communication and technology, up 3.6 per cent on a comparable basis.
“The rapid stabilisation of Stockland Wetherill Park, following the completion of our $228 million redevelopment well ahead of schedule and before Christmas 2016, is an excellent example of how we are reshaping our portfolio,” he said. “It achieved a development yield of 7.3 per cent and a strong 15.8 per cent incremental IRR in 1H17, ahead of our 10 to 14 per cent target range.”
Stockland has sharpened its guidance for FY2017 to six to seven per cent funds from operations growth, higher than their previous guidance of five to seven per cent.
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