Listed landlord Stockland has said it is on track to achieve its full year guidance after retail sales across its portfolio improved in the third quarter, delivering a 3 per cent increase in comparable specialty sales per square metre to $9,092 since last December.
Stockland said on Monday that improving retail sales reflected remixing and development activity in its centres as it moves away from apparel towards other higher growth categories.
Moving annual turnover (MAT) growth across Stockland’s portfolio was up 2.9 per cent, driven by an 8.8 per cent increase in its other retail category (which includes pad sites).
MAT growth was strongest for smaller specialty stores (under 400sqm) driving a 2.8 per cent increase in specialty MAT growth for the quarter.
Department stores (including discount) saw sales increase by .8 per cent in the three months to the end of March, while supermarkets were up 2.6 per cent.
By specialty category retail services was the standout, booking MAT growth of 8.9 per cent, offsetting a 2.7 per cent decline in apparel.
Food catering MAT growth was 1.2 per cent but comparable sales per sqm were up 3.7 per cent.
Stockland said that the tenant leasing environment remains “cautious”, experiencing a slight decline in specialty occupancy costs from 15.4 per cent to 15.2 per cent.
The landlord’s recently opened Green Hills redevelopment in NSW has traded above expectations since opening, with sales in the centre up almost 10 per cent in March.
“In March we opened the third stage of the flagship $414 million Green Hills redevelopment, where on-average sales for existing retailers are up almost 10 per cent since launch and customer visits to the centre exceeded 135,000 in the first three days alone,” Stockland managing director and chief executive Mark Steinert said.
Stockland expects Green Hills to deliver a stabilised funds from operations yield of 7 per cent and an incremental return rate of 11.9 per cent.
The company expects funds from operations growth per security of 5 – 6.5 per cent for the full year.