Stockland Reports 2,117 MPC Lot Sales and 29.9% Logistics Leasing Spreads

Guidance and Financial Position

Stockland (ASX, SGP) has released its operational update for the first quarter of FY26, confirming its full-year guidance for funds from operations (FFO) per security and distributions. The company expects FFO per security to range between 36.0 and 37.0 cents, with distributions forecast at 25.2 cents per security, consistent with FY25 levels. Despite anticipated gearing increases by year-end due to capital deployment and masterplanned community settlements, Stockland aims to maintain gearing within its 20-30% target range, moderating toward the midpoint by June 2026.

Residential Development Momentum

Masterplanned Communities (MPC) continue to demonstrate strong demand, with net sales reaching 2,117 lots in 1Q26, a 15% increase over the previous quarter. The company holds 5,276 contracts on hand, providing solid visibility for future settlements. Stockland targets 7,500 to 8,500 settlements for FY26, aiming for development operating profit margins in the low 20% range. Land Lease Communities (LLC) also showed positive momentum, with net sales of 206 homes and 512 contracts on hand at higher average prices than FY25. The LLC segment targets 700 to 800 settlements in FY26, supported by new project launches such as Halcyon Yandina in Queensland and upcoming developments in Bayside, Vasse, and Groves.

Commercial Development and Leasing Strength

On the commercial front, Stockland completed the Stockland Gables development in New South Wales ahead of schedule, fully leased to predominantly essentials-based retailers. The company is progressing a development pipeline valued at approximately $1 billion. Leasing performance remains robust, particularly in logistics where positive re-leasing spreads of 29.9% were achieved alongside a strong occupancy rate of 97.5%. The weighted average lease expiry (WALE) of 3.4 years reflects a strategic focus on brownfield assets primed for redevelopment. Workplace assets also posted positive leasing spreads of 4.5%, with occupancy steady at 89.5% and WALE extending to 6.4 years.

Retail and Community Assets

Stockland’s retail town centres continue to perform resiliently amid cost-of-living pressures, with total comparable specialty sales growth of 3.3% and overall comparable sales growth of 3.4%. The portfolio benefits from a strong exposure to essentials-based categories, which underpin steady foot traffic and sales. Meanwhile, the communities rental portfolio, including land lease communities, remains fully occupied, supporting stable income streams.

Outlook and Market Conditions

While Stockland maintains its FY26 guidance, it acknowledges ongoing market uncertainties, particularly in residential market recovery and interest rate environments. The company’s sales and contract conversion rates will depend on these external factors, especially in Victoria and New South Wales where supply and affordability challenges persist. Nevertheless, Stockland’s diversified portfolio and strong development pipeline position it well to navigate these conditions.