Australia's largest listed residential property developer said it was confident despite high rates
Stockland Corp., Australia’s largest ASX-listed residential property developer, expressed confidence in the ongoing recovery of the housing market despite higher lending rates and a slowing economy.
The company also said its shopping mall and senior citizen housing divisions continue to perform well, according to a report by The Australian.
The company declined to comment on reports it bid for Lendlease's homebuilding unit, The Australian reported. The firm also did not provide updates on the search for a partner to develop North Sydney's tallest office tower or a partner for a $2 billion logistics portfolio.
Stockland chief executive Tarun Gupta said the company's operational performance in the quarter reflected the resilience of its diverse portfolio in the current economic climate. He noted management is pursuing various strategic initiatives.
“We are dynamically reshaping our portfolio through the targeted divestment of non-core properties and creation of new, high-quality logistics and land lease assets that are accretive to both earnings and net tangible assets,” Gupta said at the company’s annual meeting. “We are progressing the delivery of our $40 billion development pipeline while remaining disciplined regarding the level of development risk we take on and the returns we require.”
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Gupta noted the company's logistics and retail portfolios showed strong metrics, including rental growth and positive rental spreads as new leases were signed at higher rates than existing ones.
Stockland said approximately 991 residential lots were sold this quarter, reflecting improving sale and inquiry volumes, The Australian reported. Sales of senior living homes also increased with higher inquiries. Stockland maintained its earnings and distribution guidance for the current fiscal year.
While Stockland expressed confidence in the ongoing house price recovery, the company’s chief executive for communities, Andrew Whitson, recently warned that the recovery was delicate, citing the challenges posed by lack of affordability. Whitson said the market would likely regain its equilibrium once interest rates stabilised and wage growth became more prominent.
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