The Australian newspaper property correspondent Bridget Carter is reporting that Stockland wants to sell its retirement operations, but has little choice but to retain it, given that there is a lack of buyer demand in the current market, sources have suggested. She says the new Stockland CEO, Mark Steinert, has decided to scrap its strategy to focus on the three Rs of retirement, residential and retail. Given it is the largest residential property developer and one of the largest retail developers, that leaves retirement potentially out in the cold, especially with its current low yield currently about 4% against the rest of Stockland at 15%. Stocklands Retirement CEO, David Pitman, has targeted 2017 to hit this 15% return and has been on track each reporting period in his predictions.
The market discussion is that Stockland may try to link up with FKPs Aveo retirement arm, given Stockland owns 14% of FKP and has first option to buy Aveo. The idea is to share operations to reduce costs and increase yield. FKP has also been trying to find a way of converting its retirement arm into cash; major shareholder Mulpha (from Malaysia) stated last December it would like to float Aveo but discussion is that cross ownerships and tax issues that would be crystallised, are preventing this along with wariness by investors.
Stockland is committed to reveal its strategic plans next month.
ATO plans to charge GST on manufactured home parks scrapped
A concerted effort by the Residents Association of manufactured home parks has headed off the ATO which had planned to impose GST in mobile homes. This would have added 10% to the cost of the purchase of a home