Stockland has released its financial results for the full year to 30 June 2023 with statutory profit for FY23 $440m, compared with $1,381m in FY22 and delivered pre-tax Funds From Operations (FFO) of $883m, up 3.8% compared with FY22.
Managing Director and CEO, Tarun Gupta said “Our FY23 result reflects a strong operational performance and the continued implementation of our strategy in an uncertain macroeconomic environment.
“We delivered pre-tax FFO growth of 3.8%, while reducing our gearing by 150 basis points to 21.9%.
“Comparable FFO growth from our Commercial Property portfolio accelerated to 3.5%, leasing spreads remained strong for both our Town Centres and Logistics portfolios, and the disciplined delivery of our $12.9bn Commercial Property development pipeline is flowing through to higher FFO.”
Tarun Gupta, Managing Director and CEO, Stockland
The Town Centre portfolio delivered strong operational and financial performance with FY23 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 corresponding period which was affected by COVID-19 trade restrictions.
The strong sales results delivered by the portfolio resulted in specialty occupancy costs reducing to 14.8% versus 15.8% at June 2022.
Leasing spreads remained positive over FY23, averaging 3.1% versus 1.5% for FY22.
CEO, Commercial Property, Louise Mason said: “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 discretionary categories such as apparel, jewellery and homewares over the June 2023 quarter. 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%.”
The valuation of the Town Centre portfolio declined by $113m, or 2.0%, with market rent growth partly offsetting 26 basis points of cap rate softening.
Today Stockland also released its refreshed ESG strategy which is focused on areas where Stockland has an opportunity to demonstrate leadership and make a meaningful impact. Key features of the strategy include the acceleration and expansion of Stockland’s decarbonisation efforts, with a commitment to net zero Scope 1 & 2 emissions by 2025 and halving most material Scope 3 emission intensity by 2030. Coupled with the decarbonisation pathway is a substantial commitment to create social value, leveraging Stockland’s vision to create and curate connected communities across Australia to invest in local social outcomes more purposefully.
