Stockland Posts 20% Profit Rise with Record Residential Settlements and New Partnerships

Strong Earnings Growth Anchored by Residential Settlements

Stockland delivered a robust FY26 result, with statutory profit soaring 20.2% to $994 million and post-tax Funds From Operations (FFO) climbing 10.4% to $892 million. The company’s FFO per security of 36.9 cents landed at the top end of its guidance range, underscoring disciplined execution amid a mixed economic backdrop.

The standout driver was a record 9,679 settlements across its Masterplanned Communities (MPC) and Land Lease Communities (LLC), with MPC settlements up 30% to 8,902 lots and LLC settlements nearly doubling to 777 homes. Net sales volumes surged 49% and 88% respectively, reflecting strong market demand particularly in Queensland and Western Australia, despite some moderation in buyer sentiment following interest rate hikes and tax changes.

Capital Partnering Expands Across Data Centres, Retail, and Land Lease

Capital partnering remains central to Stockland’s growth strategy, enabling the company to scale its platform while maintaining capital discipline. FY26 saw the formation of a 50/50 joint venture with EdgeConneX to develop and operate hyperscale data centres in Sydney and Melbourne, tapping into the surging demand for cloud and AI infrastructure. This partnership leverages Stockland’s land and development expertise with EdgeConneX’s global data centre experience and tenant relationships.

Additionally, Stockland established a strategic retail partnership with Morgan Stanley Real Estate Investing, seeded with three convenience retail centres valued at approximately $250 million, located within its masterplanned communities. The Land Lease platform also grew through expanded partnerships with M&G Real Estate and Invesco, and the entry of Mercer following Mitsubishi Estate Asia’s exit from the Residential Rental Partnership.

Investment Management Portfolio Shows Resilience

The Investment Management segment contributed FFO of $606 million, up 2.6%, with comparable growth of 3.5%. Logistics assets led the way with 8.1% comparable FFO growth, buoyed by strong leasing spreads averaging 33.8% and high occupancy of 97.5%. Retail assets delivered 3.1% comparable growth, supported by positive rental re-leasing spreads and a portfolio weighted heavily towards essentials-based categories.

Workplace assets showed a slight decline in comparable FFO, impacted by asset disposals and lower occupancy at some sites, while Communities Rental Income rose 13.6% driven by development completions and rental growth.

Capital Management and Financial Position

Stockland maintained a strong balance sheet with gearing at 22.7%, comfortably within its 20-30% target range, and available liquidity of $3.2 billion. The weighted average cost of debt remained stable at 5.3%, with a weighted average debt maturity extended to 5.3 years. The company raised approximately $1.5 billion of third-party capital during the year and recycled $0.7 billion of capital into higher-return sectors.

The distribution per security was held steady at 25.2 cents, representing a payout ratio of 69%, aligned with Stockland’s policy of distributing 60-80% of FFO. The Distribution Reinvestment Plan was suspended for the second half of FY26, following earlier confirmation of the final distribution amount.

Outlook and Growth Drivers for FY27

Looking ahead, Stockland expects growth from its diversified platform to more than offset a lower contribution from the MPC business in FY27. The company targets 7,300 to 8,300 MPC settlements with an operating profit margin around 20%, while LLC settlements are forecast between 850 and 950 homes with margins above 22%. The Data Centre operations are expected to become a meaningful contributor to development FFO next year.

FFO per security guidance for FY27 ranges between 38.0 and 39.0 cents, with distributions expected to remain at 25.2 cents per security. These forecasts assume no material changes in market conditions.

Sustainability and Climate Commitments

Stockland marked a major milestone by achieving net zero Scope 1 and 2 emissions in FY26, supported by its renewable energy partnership with Energy Bay and ongoing electrification initiatives. The company continues to embed sustainability across its development and investment platforms, focusing on decarbonisation, circularity, social impact, and resilience.

Social value creation since FY24 has reached $800.6 million, with a target to exceed $1 billion by 2030. Stockland’s Climate Report, prepared under the new AASB S2 standards, details its approach to managing climate-related risks and opportunities, including scenario analysis and capital allocation aligned with a 1.5°C pathway.

Board Renewal and Leadership

In governance, Stockland announced the appointment of Bob Johnston as incoming Chairman, effective after the October 2026 AGM, succeeding Tom Pockett who is retiring. Johnston brings over 30 years of property sector experience, including leadership roles at GPT and Frasers Property Australia, positioning the company well for its next growth phase.

CEO Tarun Gupta and the leadership team continue to focus on capability development, digital innovation including AI integration, and fostering a high-performance culture supported by strong employee engagement metrics.

Stockland’s FY26 results reflect a company executing a clear strategy with diversified income streams, strong capital partnerships, and a commitment to sustainability, setting the stage for continued growth and resilience in FY27 and beyond.