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Artist’s impression of Stockland’s Cloverton residential community. Image: Stockland
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  • Following a $21 million loss in FY20, due in part to a drop in property values, Stockland (SGP) has now turned a $1.1 billion profit in FY21
  • Following the revaluations, Stockland claimed its property assets had increased in value by a net $432 million
  • Funds from operations (FFO) for the diversified real estate player were $788 million, down 4.6 per cent from FY20, with an FFO per security of 33.1 cents
  • The group generated an operating cash flow of $1 billion on FY21, with gearing improving to 21.4 per cent
  • Shares in SGP are down 0.88 per cent to $4.51 at 11:52 am AEST

After property valuations dragged the company into a $21 million loss in FY20 it has now helped Stockland (SGP) post a $1.1 billion profit on FY21.

The robust rebound in net profit is in comparison to a loss the previous year on the back of a valuation fall of $464 million in the company’s commercial property portfolio.

Following the revaluations, Stockland claimed its property assets had increased in value by a net $432 million.

Funds from operations (FFO) for the diversified real estate player were $788 million, down 4.6 per cent from FY20, with an FFO per security of 33.1 cents.

The residential division reported FFO of $331 million, down 10.9 per cent from FY20, but up 20.5 per cent when one-time transaction profits ($107 million from sales in FY20) are excluded.

In FY21, 6374 settlements were completed, up 19.8 per cent, which the company attributes to low borrowing rates, shifts to suburban living, government assistance, and increased output.

With 5620 contracts on hand, the company said it has a good idea of the settlement volumes for FY22.

Retirement living, a sector Stockland plans to reduce its capital exposure to, reported an FFO of $54 million, down 6.9 per cent from FY20. Due to pipeline timing, according to Stockland, the drop represents lower development settlement volumes.

During the period, the group increased its land lease development pipeline by about 1000 lots through a combination of site purchases and the increased yield on existing sites.

Stockland finalised the $620 million acquisition of Halcyon Group‘s land lease communities business this month which included 3800 plots spread over 13 land lease communities.

As the commercial property arm recovered from the effects of COVID-19, comparable FFO increased 3.9 per cent to $587 million.

After taking into consideration rental abatement, 97 per cent of contracted rent has been collected across the portfolio as of July 31, 2021.

On a similar basis, the retail town centre portfolio generated $363 million in FFO, up 5.6 per cent from FY20.

The logistics, life sciences and technology sector, which now represents a quarter of Stockland’s portfolio, had an FFO of $164 million. This reflects a one per cent increase over FY20 with the portfolio producing a net revaluation uplift of $545 million.

The workplace portfolio FFO of $60 million represents a one per cent increase over FY20 with the portfolio’s net value falling by $31 million.

The group generated an operating cash flow of $1 billion on FY21, with gearing improving to 21.4 per cent.

Available liquidity increased to $2.2 billion, approximately $1 billion above pre-pandemic levels.

Stockland also announced that Justin Louis will join the business in the role of Chief Investment Officer.

FY22 estimated FFO per security is forecast in the range of 34.6 to 35.6 cents.

Shares in SGP are down 0.66 per cent to $4.52 at 11:30 am AEST.

SGP by the numbers
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