Stockland, Dexus Ready to Build on Solid First Half

By Glenn Dyer | More Articles by Glenn Dyer

More signs of recovery in the property sector from sector leaders Stockland and Dexus.

Developer and mall owner Stockland will meet guidance for the June half with a payout of 13.2 cents a security, taking the full year payout to 24.6 cents a security, in line with guidance previously issued by the group.

The estimate comes two months before the payout will actually be declared, with final figures expected when the firm announces full year financial results on August 20.

The record date for the entitlement is June 30, with the dividend set to be paid on August 3.

There was no word on the other key measure for property investment companies – the Funds From Operations (FFO) measure which investors use to gauge the performance of the company concerned.

In its April update for the March quarter, Stockland said FFO would be “in the range of 16.3 cents to 16.9 cents delivering FFO per security for FY21 of between 32.5 cents to 33.1 cents, in line with prior guidance. Importantly, the likely outcome is currently trending towards the top end of the range.”

The distribution guidance for the year (which will be met) was at the “lower end of a range of our target payout ratio of 75% to 85% of FFO”, Stockland said in the April 20 update.

Meanwhile Dexus says the value of its portfolio rose 2.3% in the six months to June, thanks to the strength in warehousing and industrial properties.

The group had 117 of its 128 assets externally valued resulting in a $362 million uplift to book values. That follows the $160.8million rise in the six months to last December.

The 117 consisted of 41 office properties, 75 industrial properties and one healthcare property, Dexus told the market.

There was no FFO data or the distribution for the year to June 30.

FFO for the December half was 30.1 cents a security on an underlying basis and the distribution was 28.8 cents a security.

In the December half year statement Dexus said It “expects an FY21 full year distribution per security amount that is consistent with FY20 but is subject to there being no reinstatement of any major lockdowns or unforeseen circumstances. The FY20 full year distribution per security amount was 50.3 cents.”

CEO Darren Steinberg said on Wednesday that the property portfolio was improved by consistent focus on leasing, acquisitions, divestments and developments.

“Combined with continued investment demand, [that] contributed to the consistent growth in underlying asset values,” he said.

The value of Dexus’ office portfolio increased marginally on the back of recent leasing deals, improving leasing conditions and capitalisation rate compression.

The value of its industrial portfolio rose 9.8% on previous book values. Dexus said occupancy across the sector remains high, with several development projects completed.

Stockland securities fell 1.5% to $4.73 and Dexus securities dipped 1.4% to $10.82.



About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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