However, the group saw increased revenue to $2.7 billion, up 1.1 per cent, and funds from operations to $863 million, up 7.5 per cent.
“The overall results demonstrate the resilience of our diversified business in this variable trading environment,” said Stockland chairman Tom Pockett.
“Close to $1.3 billion of capital has been recycled over the last five years to fund the redevelopment of market leading retail town centres.”
Pocket continues that these redeveloped retail town centres see specialty retail sales 10 per cent above the national benchmarks, with dining, lifestyle, services and entertainment options tailored to the communities.
The group’s retail town centre growth reached 1.3 per cent, with retail town centre’s total FFO increasing to $428 million from $419 million the year prior, despite around $200 million of retail divestments having been completed in FY18.
Stockland managing director and chief executive Mark Steinert noted that retail town centre income growth was adversely impacted by increases in government charges, higher electricity costs and the group’s tenancy remixing and upgrading strategy to future proof its centres.
This remixing strategy has led to an increase of foot-traffic by 2.5 per cent, with income from food, dining, leisure and cinemas now accounting for 41 per cent of specialty store income.
“In line with our commitment to reshape our retail assets and re-weight out commercial property portfolio, we continued to execute our retail divestments strategy and are targeting up to an additional $400 million of divestments over the next 12 – 24 months,” said Steinert.
“This will be achieved by reducing our Retail Town Centre weighting to focus on leading centres in their trade area and continuing to upgrade our combined workplace and logistics portfolio… to greater than 25 per cent of our total assets.”
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