Stockland seeing green shoots in key markets

THE housing market and retail sales are improving, Stockland says, in a boost for the property and shopping centre developer.

Highland Reserve

THE housing market and retail sales are improving, Stockland says, in a boost for the property and shopping centre developer.

In a trading update yesterday, Stockland said it was on track to lift earnings as much as 6 per cent in the year to next June. Chief Mark Steinert also said the company had made "good progress in restructuring its business" over the past year.

Stockland is among Australia's biggest shopping centre owners, with a portfolio of 41 centres worth more than $5 billion, including five residential communities across the Gold Coast including Ormeau Ridge, Highland Reserve at Upper Coomera, Riverstone Crossing at Upper Coomera and The Observatory at Reedy Creek.

In a presentation for investors yesterday, Stockland management said retail sales were "relatively flat in the first quarter of 2014 (financial year)".

But sales growth in October "showed some improvement'', the company said.

Stockland also said there was clear evidence that the housing market was improving, with prices for existing houses rising in all capital cities.

It said while Sydney was its strongest market, volumes in the south east Queensland residential market were rising and outlook was improving, particularly in Brisbane and the Sunshine Coast.

The company says it is on track to settle about 5000 residential housing lots in the year to June.

But it cautioned about 15 per cent of the lot settlements by number would be impaired stock, on which the company would make no profit.

Stockland has maintained its forecast for growth in earnings per security of 4 per cent to 6 per cent for the year to June, compared with last financial year.

In May, the company said it planned to cut costs by a further 10 per cent as part of a continuing restructure, after already stripping 10 per cent from its expense bill in the previous year.

The group's shares closed steady at $3.80.