Stockland Reports 1,509 Lot Sales, Logistics Leasing Up 26% in 3Q25 Update

Strategic Development Momentum

Stockland (ASX: SGP) has confirmed the finalisation of contractual negotiations to develop the Waterloo Renewal Project in New South Wales, partnering with a consortium to advance this significant urban renewal initiative. This milestone underscores Stockland’s commitment to its strategic priorities and urban development expertise, positioning the company to deliver long-term value through transformative projects.

Alongside this, the company maintains its full-year 2025 guidance, expecting Funds From Operations (FFO) per security to range between 33.0 and 34.0 cents on a post-tax basis, with distributions forecast at approximately 75% of post-tax FFO. Stockland’s gearing is anticipated to settle near the midpoint of its 20-30% target range by June 2025, reflecting a robust capital position supportive of ongoing development and investment activities.

Residential Development and Sales Outlook

The masterplanned communities (MPC) segment delivered net sales of 1,509 lots during the quarter, aligning with expectations and supported by a strong pipeline of 6,232 contracts on hand. This backlog provides clear visibility into future settlements, with FY25 settlement volumes projected between 6,200 and 6,700 lots. Development operating profit margins are expected to remain in the low 20% range, consistent with prior guidance.

In contrast, the Land Lease Communities (LLC) segment experienced some headwinds due to adverse weather events in Queensland, resulting in net sales of 121 homes for the quarter and a revised FY25 settlement forecast of approximately 500 homes. Despite these challenges, the LLC portfolio remains fully occupied, and the development operating margin is also expected to hold in the low 20% range. The Invesco Land Lease partnership expanded with the addition of Halcyon Bayside and Halcyon Highlands, enhancing the scale and diversity of this asset class.

Commercial and Investment Management Performance

Stockland’s commercial development pipeline continues to advance, with approximately $560 million in logistics projects under construction, 82% of which are pre-leased. The logistics portfolio demonstrated strong leasing momentum, with 268,000 square metres of leases executed year-to-date and positive re-leasing spreads of 26.0%. Occupancy improved to 98.5%, reflecting sustained demand for well-located metropolitan logistics assets.

Workplace assets are being actively repositioned for future development opportunities, including mixed-use projects, and achieved positive re-leasing spreads of 5.5% with occupancy steady at 91.2%. Town Centres, anchored by essentials-based retail, reported total comparable MAT sales growth of 2.4% and specialty sales growth of 1.5%, supported by resilient consumer demand in food retailing and catering categories.

Market Position and Forward Outlook

Stockland’s operational update reflects a balanced portfolio with strong fundamentals across residential, commercial, and retail segments. The company’s ability to maintain guidance amid external challenges such as weather disruptions and market uncertainties speaks to its diversified asset base and disciplined capital management. The ongoing activation of development pipelines and strategic partnerships positions Stockland well to capture growth opportunities as market conditions evolve.

Investors will be watching closely for the pace of residential market recovery, particularly in Victoria, and the impact of interest rate movements on sales conversion rates. The company’s focus on urban renewal projects like Waterloo and expansion in land lease communities signals a long-term vision aligned with evolving housing and workplace trends.