In separate announcements today, Stockland confirmed that its CEO Mark Steinhardt will retire from the business; that it's final dividend will be -25% lower than its pre-COVID forecast and that its portfolio valuations are expect to drop -6%.
Mr Steinert’s intention to retire as Chief Executive Officer and Managing Director of Stockland comes after seven and a half years in the role. Announcing the retirement, Mr Tom Pockett, Chairman of Stockland said: “A flexible period of transition has been agreed with Mark to provide for a smooth handover and to ensure that there is a strong focus on leading the organisation through the COVID19 recovery period.
Mr Pockett commended the work of Mr Steinhardt noting that “We have made significant progress in reshaping our portfolio and creating a customer centric business. In particular, as Chief Executive Officer and Managing Director, Mark has overseen the development of Australia’s leading residential business, reshaped and expanded our workplace and logistics portfolio and significantly repositioned our town centre business. Mark has fostered a strong executive team, made significant advances in building innovation and digital capabilities and solidified Stockland’s position as a diverse employer of choice and global leader in sustainability.”
A process will now commence to identify a successor from a field of internal and external candidates.
Shortly after making the announcement, Stockland also confirmed that its preliminary valuation results for FY20 showed a deterioration in values. The Group advised that the preliminary numbers for the entire Commercial Property portfolio indicating a fall in value of approximately -6%, including a devaluation in the retail portfolio of approximately 10% on its book values.
Stockland have warned that the preliminary numbers may fall further as the level of volatility created by COVID-19 means that independent valuers assumptions and qualifications have made it more difficult to assess values with any certainty.
The Group has indicated that approximately 95 per cent of its Retail Town Centres stores by rental income are now trading, with more openings expected as level three restriction easing begins to take effect during July 2020.
Stockland has welcome the Federal Government's Home Builder program which will benefit a large portion of Stocklands residential customer base. Approximately 80 per cent of Stocklands' homes and lots are sold to owner-occupiers, with first home buyers representing around half our sales. Stockland reported that new enquiry levels in their residential communities have now recovered to be above pre-COVID-19 levels.
Stockland also announced an estimated distribution for the six months to 30 June 2020 (2H20) of 10.6 cents per security, down from the original guidance of 14.1cents per security. This equates to a full year distribution payment of 24.1 cents per security.
The actual distribution will be confirmed in August 2020 once the Groups final results for FY20 are finalised and the full impact of COVID-19 is known. The group withdrew its guidance on 23 March 2020 given the heightened and continuing uncertainty surrounding the COVID-19 pandemic. The reduction in the estimated 2H20 distribution against the original guidance is reflective of the impact of COVID-19 on the business during the last quarter.
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