Stockland’s FY23 Results

20 November 2023

Reflecting an encouraging set of results for Stockland generally for the financial year just ended, the company’s Commercial Property portfolio delivered a strong performance. 

Tony D’Addona, Executive General Manager, Logistics says “The creation of new, high-quality Logistics assets that are accretive to both earnings and net tangible assets is a key part of our strategy to dynamically reshape our portfolio. 

“Since June 2022, the Logistics business has delivered ~$450m of developments and continues to focus on the delivery of its ~$6.4 billion pipeline of Logistics assets” Tony continues. 

Logistics keeps moving in the right direction 

Stockland’s ~$3.4bn Logistics portfolio delivered Funds from Operations (FFO) of $139m over the period, up 11.5% relative to FY22.  

On a comparable basis, the portfolio delivered FFO growth of 4.6% for FY23, which reflected high levels of occupancy at 99.2% and accelerated rent growth across the portfolio.  

Other highlights include:  

  • Stockland expects to deliver a similar quantum of Logistics developments over FY24, taking the end value of total completions over FY23 and FY24 to approximately $0.9bn.  
  • This compares with a previous target of ~$1.2bn over the same timeframe, with the difference almost entirely due to planning delays on expected delivery timing, in particular relating to our project at Kemps Creek, Sydney.  
  • The logistics portfolio delivered a net valuation gain over the period of $100m, or 3.3%, with a 71 basis point softening of the portfolio’s weighted average cap rate more than offset by strong market rent growth. 

A high quality, well-located portfolio  

CEO, Commercial Property, Louise Mason commented 

“We continue to see strong occupier demand for our high quality, well-located portfolio of stabilised Logistics assets and development opportunities.  

“With a weighted average lease duration of 3.3 years, our portfolio is well positioned to capture positive rental reversion and to benefit from strong near-term demand-supply dynamics for the logistics sector.”  

FY23 overview 
Some highlights of Stockland’s financial year ended 30 June 2023) include: 

  • An increase in pre-tax Funds From Operations of 3.8% from FY22 to $883 million 
  • Full-year total distribution per security of 26.2 cents 
  • Strong operational performance across both our Commercial Property and Communities businesses 
  • We have closed the year with a very strong balance sheet and maintain flexibility to consider new opportunities in FY24 

Growing our business 

We continue to make good progress on our strategic initiatives, which are now driving meaningful earnings contributions. We are delivering on our development pipeline with ~$450 million of Logistics developments delivered since June 2022 and a similar volume of deliveries expected in FY24.  

A refreshed ESG strategy 

Stockland has also released a refreshed ESG strategy with a focus on areas where we have an opportunity to demonstrate leadership and make a meaningful impact. This includes: 

  • Decarbonising our footprint 
  • Embedding circularity principles in our operations 
  • Enhancing social impact by supporting housing diversity and affordability, and 
  • Strengthening the climate resilience of our portfolio. 

Looking ahead 

While the business environment isn’t without its challenges, we look forward to the future for both our staff and customers with excitement. As always, we are inspired by possibility and delivering change.