Stockland's FY23 Results: Spotlight on Town Centres
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, reflecting both good planning, quality assets, and timely investment.
Our Town Centre portfolio delivered strong operational and financial performance with FY23 Funds From Operations (FFO) of $379m, up 8.2% relative to FY22. This reflects comparable FFO growth of 4.8%, along with the impact of COVID-19-related rental abatements in FY22.
On a MAT basis, total comparable sales grew by 14.7% and comparable specialty sales was up by 19.8%, versus the prior COVID-19 affected period. The strong sales results delivered by the portfolio resulted in specialty occupancy costs reducing to 14.8% against 15.8% at June 2022.
Sales productivity ‘well above’ benchmarks
Stockland’s CEO, Commercial Property, Louise Mason was positive about performance and prospects:
“Our Town Centres portfolio continues to deliver strong operational and financial results. As expected, the cumulative effect of successive interest rate increases led to a slowing of sales growth in some discretionary categories such as apparel, jewellery and homewares over the June 2023 quarter, but sales growth for the essentials categories to which our portfolio is heavily skewed is tracking in line with inflation.
“Specialty sales productivity for our Town Centres portfolio is well above industry benchmarks. This is reflected in positive leasing spreads and an overall portfolio occupancy rate of over 99%.”
Stockland’s results to the market demonstrate our strong operational performance, our capital discipline and the resilience of our business against a backdrop of ongoing economic uncertainty.
Some highlights of Stockland’s financial year ended 30 June 2023 include:
An increase in pre-tax Funds From Operations of 3.8 per cent 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
Stockland continue to make good progress on our strategic initiatives, which are now driving meaningful earnings contributions.
During the year, we extended our existing relationship with Mitsubishi Estate Asia through an agreement to invest in our renowned Masterplanned Communities.
We also continued to reshape our portfolio with the expansion of our Land Lease (LLC) platform and the realisation of our $6.4 billion Logistics development pipeline.
Additionally, we accelerated the scale-up of our LLC platform with the acquisition of five additional LLC projects which will drive material growth in this business into the future.
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. We continue to add value to our ~$5.8 billion Workplace and mixed-use development pipeline while maintaining necessary flexibility regarding the timing, scope and composition of future developments.
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
View the Stockland Annual Report here.