Managing Director Mark Steinert (pictured) has told the company’s Annual General Meeting while the operator is continuing to hunt for a capital partner, a transaction is “likely to take considerable time to complete given the operational complexity.”
“Our focus continues to be on driving efficiency and improving returns in the portfolio, including establishing a new land lease business,” he said.
The villager operator announced plans to lodge development applications for two projects in Queensland next month.
As we reported last week, Stockland has 2,000 development sites and eight communities in the pipeline but has yet to put any homes on the ground.
However, Chairman Tom Pockett said they are trialling the delivery of prefabricated homes at several of their communities and have identified opportunities in their existing portfolio for land lease communities.
Historically Stockland’s retirement living business grew its profits year-on-year until the 2017 Fairfax/Four Corners retirement village investigation saw new and established sales fall across the sector.
While the operator has had some uplift in sales – 143 net reservations of established units and 72 for units in development in the first quarter of 2020 – a 9.7% increase compared to the same period in FY19, the figures are still below pre-2017 sales.
Overall, its funds from operations for retirement living are up 5.7% on FY19.
Interestingly, the operator revealed over 80% of customers are now choosing their ‘Peace of Mind’ contract option – where they know the DMF (5% per annum based on the initial price paid for the home and maxes out after five years).
Surveys show resident happiness is at its highest level since 2009 – a sign they are hitting the right spot?