The Stockland (ASX:SGP) share price is down this morning. Here's why

The Stockland Ltd (ASX: SGP) share price is one to watch in early trade after the REIT's latest quarterly update and forecasts.

| More on:
white arrow dropping down representing the 10 most shorted shares on the ASX

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Stockland Ltd (ASX: SGP) share price was up in early trade after the Aussie real estate investment trust's (REIT's) latest quarterly results. This came as Stockland provided a market update on its performance for the quarter ended 31 March 2021 (Q3 2021). However, at the time of writing, the Stockland share price has retreated to $4.59, down 0.76%. 

What did Stockland report?

The diversified REIT said the quarter began strongly thanks to momentum carried through from the first half of the financial year. 

Highlights included elevated residential business enquiries boosted net sales by 69% on Q3 2020 to 1,891 lots. Additionally, Stockland is forecasting residential settlements of 6,300 lots for the full year. That's largely thanks to "low interest rates, government incentives, and credit availability" boosting demand.

Stockland also reported a total of 33,000 sales enquiries in its residential business — 40% above the long-term average. That comes as the Aussie housing market continues to heat up on the back of favourable macroeconomic conditions.

Stockland said it can meet current demand levels in the current upcycle. The group has an 81,000-strong lot landbank which is ~70% activated. The Stockland share price will be worth watching in early trade after the bullish update and forecast.

The Stockland share price will be on to watch this morning as investors react to the latest figures and forecasts. Stockland is seeing improvements in retail trading conditions as coronavirus restrictions continue to ease in Australia. The Aussie REIT is seeing sales levels and store openings increasing to around pre-COVID levels.

Stockland reported comparable Q3 2021 total retail sales growth of 3.2% with speciality growth of 9.4%. Importantly, the group also reported low levels of "unresolved arrangements with retail tenants" helping to improve outstanding debt balances.

Stockland said strong capital management has allowed it to restock its Communities business. The Aussie REIT has acquired 10,100 lots within the portfolio in the financial year to date. Retirement Living sales were up 16.5% on Q3 2020 figures to 190 units during the quarter.

FY2021 guidance

The Stockland share price is up 7.9% in 2021, outperforming the S&P/ASX 200 Index (ASX: XJO). It will be worth watching after today's update that included a note on FY2021 guidance provided on 25 February.

While guidance levels remain unchanged, Stockland said it expects full-year distributions at the low end of its 75% to 85% target payout ratio of funds from operations (FFO). Recent rent collections trends are expected to continue for commercial properties. Stockland is also forecasting 6,300 residential settlements for the full year per today's release.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on REITs

a shiba inu dog looks happily at eh camera with his tongue out while his owner hods him on his chest as he sleeps on a hammock.
REITs

With its 7% yield, is this recovering ASX 200 stock a passive income earner's dream?

This stock keeps sending wonderful income to investors.

Read more »

Three smiling corporate people examine a model of a new building complex.
REITs

3 top ASX REITs to buy in April 2024

Analysts see these REITs as a great way to invest in the property market.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
Dividend Investing

If I invest $10,000 in Goodman shares, how much dividend income will I receive?

The value of Goodman shares has soared, but what about dividends?

Read more »

An Australian farmer wearing a beaten-up akubra hat and work shirt leans on a fence with livestock in the background and a blue sky above.
REITs

Why is the Rural Funds share dropping today?

This may be the reason investors are exiting Rural Funds.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
REITs

Want the latest quarterly dividend from Rural Funds? You'd better hurry

Here's what you need to do to secure the latest dividend from this income stock.

Read more »

An industrial warehouse manager sits at a desk in a warehouse looking at his computer while the Centuria Industrial share price rises
REITs

Why bond yields are bruising ASX property shares on Monday

It's a bad day to own property shares this Monday...

Read more »

Rising real estate share price.
REITs

How are ASX REITs smashing 52-week highs despite today's market meltdown?

If you own ASX REITs, you're probably feeling pretty chuffed today.

Read more »

An Australian farming woman of the land wears an akubra hat and work shirt smiles broadly as she looks out over turned soil paddocks with a mountain range far off in the distance and blue sky above.
Dividend Investing

Want passive income? This high-yielding ASX dividend stock pays cash every quarter

The list of ASX dividend stocks making quarterly income payouts isn’t overly large. Here's why I like this one.

Read more »