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.

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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.

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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.

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