Stockland Posts $826m Profit, Eyes FY26 Growth with New Partnerships
Stockland delivered a robust FY25 with a statutory profit of $826 million, underpinned by strategic portfolio reshaping and expanded capital partnerships. The company sets a confident FY26 outlook, targeting higher funds from operations per security and sustained distributions.
- Statutory profit surged to $826 million, up from $305 million in FY24
- Distribution per security increased 2.4% to 25.2 cents with a 75% payout ratio
- Funds from operations grew 2.8%, supported by capital recycling and cost discipline
- Expanded partnerships including John Boyd Properties, M&G Real Estate, and KKR
- Strong residential settlements and logistics pipeline position Stockland for FY26 growth
Robust Financial Performance
Stockland Corporation Limited has reported a strong finish to FY25, posting a statutory profit of $826 million, a significant leap from $305 million the previous year. This performance reflects the company’s effective strategic execution, including portfolio reshaping and disciplined capital management. The distribution per security rose by 2.4% to 25.2 cents, maintaining a 75% payout ratio, signaling steady returns for investors.
Funds from operations (FFO), a key measure of operational cash flow, grew by 2.8% to $808 million, supported by capital recycling initiatives and stringent cost controls. The net tangible asset per security also improved to $4.22, up from $4.12, underscoring enhanced asset quality and value.
Strategic Portfolio and Partnership Expansion
Stockland’s strategic focus on reshaping its portfolio is evident in its disposal of approximately $289 million in logistics assets and securing over 100MW of power and zoning for data centre development. The company’s acquisition of 12 masterplanned community projects and the securing of the Waterloo Renewal Project in NSW, which will deliver around 3,000 apartments, highlight its commitment to residential growth.
Partnerships have been a cornerstone of Stockland’s growth strategy. The formation of a 50/50 joint venture with John Boyd Properties to develop a $3.5 billion multi-storey logistics hub near Sydney Airport is a marquee deal. Additionally, new logistics partnerships with M&G Real Estate and KKR, along with an exclusive arrangement with EdgeConneX for data centre development, position Stockland at the forefront of emerging asset classes.
Development Pipeline and Market Outlook
The company’s development pipeline remains robust, with approximately 90,800 residential lots and an end value forecast of $56 billion. FY25 saw strong settlement volumes exceeding targets, particularly in Victoria and Queensland, with 6,865 masterplanned community settlements and 526 land lease community settlements. The logistics development pipeline, valued at nearly $10 billion, is anchored by projects in Sydney and Melbourne, with significant leasing activity and construction underway.
Looking ahead, Stockland anticipates a material uplift in production from FY26, targeting 7,500 to 8,500 residential settlements and a funds from operations per security range of 36.0 to 37.0 cents. The distribution per security is expected to remain steady at 25.2 cents, within a revised payout ratio of 60-80% of FFO, reflecting a balanced approach to growth and shareholder returns.
Sustainability and Social Value Commitments
Stockland continues to advance its environmental, social, and governance (ESG) agenda, aiming for net zero Scope 1 and 2 emissions by 2025 and halving Scope 3 emissions intensity by 2030. The company has created approximately $500 million in social value since FY24 through community infrastructure, social procurement, and partnerships aimed at affordable housing, notably delivering 50% social and affordable housing in the Waterloo Renewal Project.
Employee engagement remains high at 84%, supported by initiatives such as the My Stock employee security ownership plan and comprehensive wellbeing programs. These efforts underpin Stockland’s commitment to fostering a motivated and diverse workforce aligned with its growth ambitions.
Bottom Line?
With a strong FY25 foundation and ambitious FY26 targets, Stockland is poised to capitalize on market recovery and deepen its leadership in residential and logistics sectors.
Questions in the middle?
- How will rising interest rates and housing affordability impact Stockland’s residential settlements in FY26?
- What are the risks and timelines associated with the large-scale logistics and data centre developments?
- How will the revised payout ratio affect investor sentiment and capital allocation going forward?