Stockland profit drops almost $1b on property revaluations

The news: Developer and real estate investor Stockland reported a 68.3% drop in annual statutory profit, as commercial property valuations swung backwards.

The numbers: Stockland posted a profit of $440 million, down from $1.38 billion the year before, after $250 million in net revaluations. That followed a revaluation uplift of $725 million in FY22. Pre-tax funds from operations were up 3.8% for the year to $883 million, working out to 35.6 cents per security after tax, a 0.3% reduction from FY22. Stockland declared distribution of 26.2 cents per security, down slightly from FY22 but representing a 74% payout of post tax FFO. SGP shares were relatively flat, up 0.35% to $4.255 at 11:45am AEST.

The context: Stockland managing director Tarun Gupta said the company was well-positioned to weather an uncertain macro-environment ahead, after several years of property market volatility influenced by the pandemic, inflation and rapidly rising interest rates. Stockland is also rumoured to be a likely buyer for Lendlease's $1 billion communities business, the Australian Financial Review reported, which would give it even more weight in the sector.