Financial Results

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<div>Lend Lease actually reported its FY2017 results, which confirmed a solid+9 percent lift in post-tax profit to $758.6 million. </div>
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<div>The market wasn't greatly moved, of course, since the group inadvertently dumped a stack of market sensitive information out to to the public at the beginning of the month, including the unaudited EBITDA (oops).</div>
<div> </div>
<div>As accounting stuff-ups go, it was a rather impressive one (disclosure: I made similar goofs in my listed company career) though in the end relatively little harm was done, save a little embarrassment.</div>
<div> </div>
<div>Defaults under 1pc</div>
<div> </div>
<div>Reading through the investor presentation it was interesting to note a +20 per cent uplift in residential unit completions in the 2017 financial year.</div>
<div> </div>
<div>Approximately 90 per cent of apartment completions have already settled, with a default rate of under 1 per cent.</div>
<div> </div>
<div>This follows on from similarly low default rates reported by other developers during earnings season.</div>
<div> </div>
<div>This is very important, for there had been fears of a wave of Chinese investor defaults following on from local lenders pulling up the ladder.</div>
<div> </div>
<div>To date, this does not appear to have transpired.  </div>
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<div>In other news, S&amp;P reported a drop in loan delinquencies from 1.21 per cent in May to just 1.15 per cent in June. </div>
<div> </div>
<div>Declines were recorded "across the board" for 30,60 and 90 day mortgage arrears, with a corresponding fall in outstanding loan balances, with Queensland showing the biggest drop in arrears. </div>
<div> </div>
<div>This broadly mirrors what you'd expect to see given extremely low mortgage rates for homeowners, and a national unemployment rate that has been trending down for several years now.</div>
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<div>No stress?</div>
<div> </div>
<div>Countless media articles have claimed that mortgage stress is rising - often referred to as a "perfect storm" no less! - perhaps based upon household cash flow surveys.</div>
<div> </div>
<div>But in reality so many households have been repaying ahead of schedule into offset accounts that it wouldn't be a surprise if some net monthly cashflows showed an outflow. </div>
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<div>With the aggregate value of the housing stock exploding to $7.1 trillion against mortgage debt of around $1.6 trillion, it also wouldn't be a surprise to me if some of the benefiting households have taken a breather on their earnings either. </div>
<div> </div>
<div>In any event, with the possible exception of Western Australia mortgage arrears remain low to date, which is about the only indicator that matters, when all's said and done. </div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank">Four Green Houses and a Red Hotel</a>.
</div>
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pwargent-M4siyDbqQY

Lend Lease report low apartment default rate

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Bank Australia’s 2016 financial results released today show strong profitable growth with a net profit after tax of $22.6 million.
It came with overall asset growth of 13 percent taking the bank’s assets to more than $4 billion with a trend toward younger customers.
“We’ve also had significant growth in new customers, particularly from our target market of socially aware consumers and we have decreased the average age of customers by attracting younger customers to the bank,” the managing director Damien Walsh said.
He advised the bank’s decision to forgo a portion of profit this year to focus on investing in the bank’s brand and technology had delivered strong business growth.
“We achieved deposit and loan growth both well above system which is pleasing in the current low interest rate and competitive environment,” Walsh said.
Customer deposits grew by 12 percent and customer loans by 21 percent.
“Our profit sees the bank grow customer owned reserves by $24 million to $435.9 million; and with a very strong capital adequacy ratio of 18.66 percent we are well positioned to grow and provide customers with highly competitive prices, products and services in the years to come.
“The result represents a return on assets of 0.59 percent, which is healthy particularly given that we’ve made some significant investments in our technology, people and brand over the past year,” Walsh said.
Each year Bank Australia commissions CANSTAR to compare its pricing (rates and fees) on deposit and loan products with the average advertised rates of the four major banks. Over and above the $22.6 million of after tax profit, the bank returned pricing benefits in the amount of $33.2 million to customers.
Highlights of Bank Australia’s 2015-16 financial performance
<ul>
<li>Full year net profit after tax of $22.6 million is a strong result given the pressure on net interest margin and the ongoing investment in the bank’s brand, service delivery and technology.</li>
<li>Net interest margin declined due to competitive pressures across the market.</li>
<li>Customer owned reserves grew to $435.9 million strengthening our overall capital position.</li>
<li>Capital adequacy at 18.66% remains very strong.</li>
<li>Loan funding of $1,084 million (21% annual growth) was 46% greater than 2015. Importantly, a large proportion of growth continues to come via online and broker channels delivering customer convenience and extending the geographic presence of the bank.</li>
<li>Responsible credit assessment criteria were maintained while achieving growth.</li>
<li>Deposits grew by 12% reflecting confidence in the bank’s responsible approach to banking and price competitiveness.</li>
<li>The bank’s investment grade credit rating with Standard &amp; Poor’s remains BBB+/Stable/A-2.</li>
</ul>
Summary of Bank Australia’s 2015-16 financial performance:
<table class="x_MsoTableGrid8" style="width: 100%;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" nowrap width="34%">
 
</td>
<td valign="top" nowrap width="8%">
 
</td>
<td valign="top" width="14%">
Jun-15
</td>
<td valign="top" width="14%">
Jun-16
</td>
<td valign="top" nowrap width="14%">
Change
</td>
<td valign="top" nowrap width="14%">
% Change*
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Profit After Tax
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
23.96
</td>
<td valign="top" width="14%">
22.59
</td>
<td valign="top" nowrap width="14%">
(1.37)
</td>
<td valign="top" nowrap width="14%">
(5.72%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Interest Revenue
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
75.61
</td>
<td valign="top" width="14%">
80.48
</td>
<td valign="top" nowrap width="14%">
4.87
</td>
<td valign="top" nowrap width="14%">
6.44%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Net Interest Margin
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
2.22%
</td>
<td valign="top" width="14%">
2.11%
</td>
<td valign="top" nowrap width="14%">
(0.11%)
</td>
<td valign="top" nowrap width="14%">
(4.95%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Cost to Income
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
64.30%
</td>
<td valign="top" width="14%">
66.95%
</td>
<td valign="top" nowrap width="14%">
2.65%
</td>
<td valign="top" nowrap width="14%">
4.12%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Return on Assets
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
0.70%
</td>
<td valign="top" width="14%">
0.59%
</td>
<td valign="top" nowrap width="14%">
(0.11%)
</td>
<td valign="top" nowrap width="14%">
(15.71%)
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Assets
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
3.58
</td>
<td valign="top" width="14%">
4.04
</td>
<td valign="top" nowrap width="14%">
0.46
</td>
<td valign="top" nowrap width="14%">
12.85%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Customer Deposits
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
3.03
</td>
<td valign="top" width="14%">
3.40
</td>
<td valign="top" nowrap width="14%">
0.37
</td>
<td valign="top" nowrap width="14%">
12.46%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Gross Loans
</td>
<td valign="top" nowrap width="8%">
$b
</td>
<td valign="top" width="14%">
2.66
</td>
<td valign="top" width="14%">
3.22
</td>
<td valign="top" nowrap width="14%">
0.56
</td>
<td valign="top" nowrap width="14%">
20.98%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Loans Funded
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
742.87
</td>
<td valign="top" width="14%">
1,084.08
</td>
<td valign="top" nowrap width="14%">
341.21
</td>
<td valign="top" nowrap width="14%">
45.93%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Reserves
</td>
<td valign="top" nowrap width="8%">
$m
</td>
<td valign="top" width="14%">
412.00
</td>
<td valign="top" width="14%">
435.95
</td>
<td valign="top" nowrap width="14%">
23.95
</td>
<td valign="top" nowrap width="14%">
5.81%
</td>
</tr>
<tr>
<td valign="top" nowrap width="34%">
Capital Adequacy
</td>
<td valign="top" nowrap width="8%">
%
</td>
<td valign="top" width="14%">
19.74%
</td>
<td valign="top" width="14%">
18.66%
</td>
<td valign="top" nowrap width="14%">
(1.08%)
</td>
<td valign="top" nowrap width="14%">
(5.47%)
</td>
</tr>
</tbody></table>
* The % change calculation is based on the actual full figure
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jonathanchancellor-7SQnKwU6yx

Bank Australia's success in securing younger customers

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Genworth Mortgage Insurance Australia has reported a statutory net profit after tax (NPAT) of $203.1 million for FY16.
Underlying NPAT was $212.2 million following adjustment for the after-tax mark-to-market move in the investment portfolio of $9.1 million.
<a href="https://www.propertyobserver.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2010.57.42%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2010.57.42%20AM.png" alt="">
According to the Investor Report released today the results show lower sales (Gross Written Premium) and lower revenue (Net Earned Premium).
The report said GWP declined 24.8 percent compared with the previous corresponding period due to a number of factors including reduced high loan-to-value (LVR) penetration in the market and a lower LVR mix of business.
"Net Earned Premium decreased 3.6 percent reflecting lower earned premium from current and prior book years," it said.
"Net claims incurred increased due to an increase in the number of delinquent loans relative to a year ago and a higher average claim amount.
"The overall portfolio continues to be supported by strong performance in New South Wales and Victoria. However, the performance in Queensland and Western Australia is challenging, reflecting increased delinquencies, particularly in regions exposed to the slowdown in the resources sector.
"Genworth continues its engagement with policymakers, rating agencies and other industry participants to promote legislative and regulatory policies that support home ownership and continued responsible credit growth.
"Throughout 2016, Genworth has focused on working with APRA to develop and propose suitable capital requirements for the residential mortgage industry. Genworth is leading industry efforts to develop solutions with policy makers and regulators that emphasise the importance of LMI to the Australian mortgage market and stability of the wider financial system, especially its value as a loss absorption and capital management tool for risk management purposes. 
"The figure below shows the evolution of Genworth’s 3 month+ delinquencies (Flow only) by residential mortgage loan book year from the point of policy issuance. 
<a href="https://www.propertyobserver.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2012.25.45%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2012.25.45%20PM.png" alt="">
"Each line below illustrates the level of 3 month+ delinquencies relative to the number of months an LMI policy has been in-force for policies issued within a specific year.
<a href="https://www.propertyobserver.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2012.40.20%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/08/Screen%20Shot%202017-02-08%20at%2012.40.20%20PM.png" alt="">
"The 2008 Book Year was affected by the economic downturn in Australia and heightened stress experienced among self-employed borrowers, particularly in Queensland, which was exacerbated by the floods in 2011.
"The post-GFC book years are seasoning at lower levels as a result of credit tightening, however, accelerated increases for 2012-14 books have been predominantly driven by regional parts of Queensland and Western Australia that are continuing to face challenges as a result of the downturn in the mining sector."
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Resources sector slowdown noted in Genworth FY16 financials

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Listed property group Lendlease Corporation Limited said half-yearly profit after tax rose 12 percent to $394.8 million from a year earlier, helped by a boost in construction earnings.
Revenue in the six months to December 2016 was up 8 percent to $7,945 million over the comparable period the previous year.
The company said remaining end development pipeline grew 5 percent to $49 billion, of which $35 billion comprised urbanisation projects. It said the development segment “continues to maintain a strong residential pre-sales position, closing the period at $5.7 billion.”
Its EBITDA mix comprised a 38 percent growth in development earnings, while investments generated 40 percent.
<img src="https://www.urban.com.au/images/2017/02/27/FEB27LendleaseEBITDA.png" alt="">
Lendlease Group chief executive and managing director Steve McCann said commercial development, in particular the Australian office sector, was a highlight of the first half result. 
“At Barangaroo South, Tower 1 reached practical completion with all three office towers now operational,” said McCann. 
“We had success in converting our pipeline into delivery with the forward sale of three office buildings, in addition to the creation of a capital solution for the Circular Quay Tower.”
Lendlease said it secured new tenants across the commercial development pipeline. New leasing agreements were secured across approximately 85,000 sqm of commercial space in the period, predominantly in Australia. 
The company declared an interim unfranked dividend of 33 cents per stapled security.
Residential settlements included apartments at Victoria Harbour in Melbourne. Its offshore pipeline includes projects in Singapore, London and the Americas.
<ul>
<li>In Singapore, construction at the Paya Lebar Quarter is progressing well and during the period management secured two anchor tenants for the retail component of the development. The project remains on track for completion in FY19. </li>
<li>In Europe, apartment settlements were achieved at the Glasshouse Gardens at International Quarter London and South Gardens at Elephant and Castle in London. </li>
<li>In the Americas, work has commenced at Riverline in Chicago, Clippership Wharf in Boston and 281 Fifth Avenue in New York. These projects are all in the residential sector, representing a mix of multi-family and condominium product. </li>
</ul>
It said communities settlements were down compared to the prior corresponding period due to project timing.
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Lendlease posts double-digit rise in profit on construction boost

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Residential developer Devine Limited (ASX: DVN) reported a loss of $38 million for the full year ending December 31, and said it was in talks with ANZ to extend its banking facility with the lender.
The directors’ report said the 2016 results were hurt as a result of trades’ procurement in an over-heated residential construction market in Queensland, while “major weather events” in Victoria and South Australia caused production delays.
The developer had a debt of $22 million (including bank guarantees) as of December 31, 2016, under the ANZ Multi Option Facility , which is due to mature on March 31, 2017. 
The directors’ report noted that they “do not expect the group to be compliant with the covenants of the ANZ MOF when the debt matures. 
“Under the terms of the ANZ MOF Agreement, a breach of a financial covenant entitles ANZ to request repayment of the facility on demand. In such an event, the Group currently does not have the immediate capacity to repay the facility in full nor does it currently have readily available alternate sources of liquidity,” said the report.
Owing to that, the report expressed doubts about whether the developer can continue as a going concern.
It said the developer and its major shareholder CIMIC Group Ltd were working closely with ANZ Bank to come to a solution. 
The company has said it is winding up operations in the medium density home building market, and completed more than 90% of its medium density projects.
The directors’ report noted it had sold three sites and its stake in two joint ventures.
Total revenue from continuing operations rose to $194.2 million from $190.2 million in the previous year. Operating loss before tax widened to $38.3 million from $33.1 million previously.
The group, established in 1983, became a leading brand in the residential property sector and has operations in Queensland, Victoria and South Australia. It listed on the ASX in 1993.
The company said as at December 31, 2016, its residential development pipeline included the equivalent of nearly 6,400 future homes.
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Developer Devine's yearly loss widens to $38 million, says in talks with lender ANZ 

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Japan-based developer Sekisui House said turnover for its Australian operations for the 2016 financial year grew 52 percent over the previous year to more than $554 million, helped by a robust residential property market.
It settled more than 1,300 properties settled during this period in New South Wales and Queensland. 
The strong performance was driven by active residential property markets and the company’s diversified product offering which currently includes apartments, land subdivisions, integrated land and housing packages, and completed home products. 
Sekisui House Australia’s CEO Toru Abe said the 52 percent growth in turnover was helped by “extremely favourable” conditions for property development in Australia in recent years. The developer entered the Australian market in 2009. 
The company, which has built over 2.3 million homes across the world, said 2016 FY turnover from its global operations came in at ¥2.026 trillion (equivalent to $23.5 billion as at 31/01/17), up 9 per cent on the previous year.
“Collaboration on research and technology between Australia and Japan has helped contribute to our market penetration in Australia,” said Abe.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/14/Sekisuismall.jpg" alt="">
Sekisui House, which is listed on the Tokyo Stock Exchange, said it has delivered more than 8,000 homes in Australia and its pipeline is more than $14 billion with nearly 15,000 properties to deliver over the next decade.   
In 2016, the company invested $570 million on two new sites totalling 17.5 hectares in New South Wales. The Orchards in north west Sydney’s Hills Shire district is a $1 billion masterplanned community comprising 1,300 apartments. The Roads and Maritime Services’ ‘urban activation precinct’ in Wentworth Point will be a $1.6 billion community with 2,000 apartments. 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/14/Sekisui1.jpg" alt=""> 
Abe said the company is diversifying into commercial and retail sectors over the coming years.
Turnover from its international operations in China, USA, Singapore and Australia increased by more than ¥182 billion (equivalent to $2.1 billion), or 103 per cent from the 2015FY.
Sekisui House sold 90 percent of a tranche of SHAWOOD homes within the first week of release at <a href="https://www.urban.com.au/expert-insights/buying/59385-strong-interest-in-sekisui-house-s-shawood-release" target="_blank">The Hermitage</a>, at Gledswood Hills.
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Sekisui says Australian turnover grew to $554 million on strong residential sales

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Mortgage broker Australian Finance Group (ASX: AFG) reported a rise in half-yearly profit of 14% from the same period in the previous year, helped by the strong performance of its AFG Home Loans division.
AFG’s loan book now sits at $127 billion, with the overall residential loan book growing to $120.7 billion from $114.7 billion to in the six months to December 2016. 
It said although start to the year was slow, the lending market in Australia is now picking up and mortgage brokers are winning market share. 
The company expects the mortgage broker market penetration to grow as “an increasing number of consumers recognise that a mortgage broker is in the unique position of being able to provide a comprehensive view of the alternatives available across lenders and products”. 
AFG managing director Brett McKeon said the results reflect the broker’s focus on maintaining a strong core broking business. 
“Consistent growth in our distribution network has assisted in generating a strong result for our own branded AFG Home Loans business. Total AFGHL settlements were $1.24 billion, up 34% from the same period last year and represented 7.2% of AFG’s total residential settlements for the period,” he said.
“Importantly our AFGHL book now stands at $4.6 billion which together with strong settlements has helped deliver a profit before tax for the AFG Home Loans business of $4.8 million up 97% from HY16.”
The company said its net profit after tax was $13.4 million for the six months ending December 31, 2016.
It also announced an interim dividend of 4.2 cents per share, an increase of 40% on the prior period.
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prateek24-ezbwHMbNAk

Mortgage broker AFG says profit up 14% as credit market picking up

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Mirvac has advised its default rate among its apartment buyers remains below 2 percent.
The group noted defaults were tracking below 2 percent which is in line with where they were at the group's first half financial results advised in February.
Its chief executive Susan Lloyd-Hurwitz said the company's strong performance had been driven largely by a "strategic overweight" position in Sydney and Melbourne.
“We believe we will continue to bene t from the densi cation of these cities in the years to come, through our urban asset creation and mixed-use capabilities."
Residential conditions continue to be mixed nationally, it noted.
"Price growth in the Sydney and Melbourne established markets increased materially, following a strong spring and summer season.
"Recent moves by regulators and lenders will likely see price growth ease, however demand is expected to remain sound. Increasing urban population growth, support from low interest rates and demand for quality dwellings in attractive locations is expected to continue.
"In Brisbane, price growth for apartments has moderated with more solid growth for housing and semi-detached dwellings, while Perth has seen signs of improved demand, particularly among rst home buyers, with support from government incentives. 
"We have seen a solid amount of sales activity, up 18 per cent on the prior corresponding period, and we remain on track to achieve a full-year return on invested capital of more than 15 percent," she said in a statement releasing the group's third-quarter update.
"We also expect to settle approximately 3,300 residential lots in FY17."
“With housing affordability becoming an increasingly concerning issue in Sydney, Mirvac launched its The Right Start initiative during the quarter to assist rst time home buyers in securing their own home.
"The Right Start gave over 50 first home buyers the opportunity to purchase at our Sydney Olympic Park development, and we will continue to look at how we can address housing affordability in Sydney.” 
The major apartment project highlights were the settlement of the group's The Moreton project at Bondi which is now 68 percent settled.
Ebsworth at Green Square, Sydney is now 74 percent settled.
Its launch of new projects and continued sales momentum at existing projects, included Olivine, Melbourne where 100 percent of released lots pre-sold; Woodlea, Melbourne: 100 percent of released lots pre-sold; Pavilions, Sydney Olympic Park, Sydney: 67 percent of released lots pre-sold; and Marrick &amp; Co, Sydney: 69 percent of released lots pre-sold.
Mirvac Group recently announce the appointment of Stuart Penklis as head of residential.
Since joining Mirvac in 2002, Stuart has played a lead role in securing and delivering a diverse set of the Group’s large-scale residential and industrial development projects, such as Harold Park, The Moreton, Hoxton Distribution Park and Calibre in Sydney.
Stuart brings more than 20 years of experience in the property industry, including a number of senior roles in his 15 years with Mirvac, across investment and development in multiple sectors.
Most recently, he led the industrial business as group executive, industrial.
Stuart will commence his role as head of residential on 1 May 2017. 
Mirvac posted a 7 percent rise in profit for its first half ended December 31, capitalising on a record $3.1 billion of residential pre-sales, with CEO Susan Lloyd-Hurwitz going to bat for a taskforce to <a href="https://www.urban.com.au/news/65632-mirvac-posts-solid-first-half-results-ceo-bats-for-housing-affordability-taskforce" target="_blank">tackle housing affordability.</a>
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j.ballantyne1990-6AQqhLzZaK

Mixed conditions nationally but Mirvac says apartment default rate below 2 percent

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Developer Stockland said its residential business was on track to meet its full-year target of more than 6,000 settlements and would post operating profit margins of 15-16 percent following the announcement of its third-quarter update.
The developer maintained its FY17 outlook for growth in funds from operations (FFO) per security of 6 percent to 7 percent. 
Stockland managing director and CEO Mark Steinert said the company made good progress in its core businesses.
“Our residential business is benefiting from our well-located projects in high growth corridors, our more diverse and affordable product mix, strong market conditions on the East Coast, and the stabilisation of the Perth market,” he said. 
Stockland said 77 percent of its buyers were owner occupiers in the March quarter while 54 percent were first home buyers.
Its residential business achieved 1,891 net deposits in the quarter and 5,984 net deposits in the financial year to date, compared to a total of 4,844 net deposits up to the corresponding point in time last year. Its 
“We remain focused on providing affordable housing solutions for our customers,” Steinert said. “On average, prices for our house and land packages are more than 15% below the established house prices in the surrounding trade area. 
Stockland said it expected to achieve a FY17 Distribution Per Security (DPS) of 25.5 cents, based on the higher of Total Trust Income (TTI) or 75 – 85 percent of FFO, up 4.1 percent on FY16. 
“In our retirement living business, our resale values are benefitting from the quality of our villages and the strength of the broader residential market. We will continue to improve our long term returns by focusing on new development and the provision of additional services to our residents.” 
Stockland’s retirement living business had 244 net reservations in the quarter and was in line with internal forecasts, it said. 
It said retail had a relatively flat quarter, with our figures impacted by Easter and the Victorian and Queensland school holidays falling in April. 
“We encountered the same headwinds that are affecting the sector with some retail price deflation, above average retailer administrations and a weak start to the calendar year for discount department stores,” Steinert said.
“We’ve continued to invest in our portfolio and remix the centres to deliver good growth of 2.7 percent in specialty sales per square metre across our comparable shopping centre portfolio. Total comparable annual sales across all retail categories were relatively flat at -0.2 percent. We remain on track to achieve Retail FFO growth in line with our guidance of 3 – 4 percent for the full year, driven primarily by specialty stores. 
“We’ve also maintained our momentum in the development and leasing of our logistics and business parks, and our predominantly Sydney-based office portfolio performed strongly,” Steinert added. 
Stockland acquisitions and development update – 3Q17 (and post-date) 
-  Acquired 77 hectares in Craigieburn West to extend Highlands community
-  Acquired 11.5 hectare townhouse development site at Braybrook, 10 km west of Melbourne CBD
-  Commenced construction of Stamford Park townhouse and apartment development at Rowville, 26 km south east of the Melbourne CBD
-  Launched Edgebrook residential community at Clyde North, south east Melbourne
-  Completed Stage One of the $412 million redevelopment and expansion of Stockland Green Hills Shopping Centre
-  Completed and opened the $30 million Stockland Kensington Shopping Centre in Bundaberg
-  Achieved practical completion of Oakleigh Logistics Facility, Stage Two, Melbourne
-  Commenced construction of Warwick Farm Logistics Facility, Sydney
-  Completed and opened Stage Two of The Residences, Cardinal Freeman, comprising a new clubhouse and 40 apartments, with all but one apartment pre-reserved
Stockland recently listed a 22,800sqm retail development site in its <a href="https://www.urban.com.au/expert-insights/investing/65011-stockland-lists-retail-development-site-in-brisbane-s-pallara" target="_blank">residential community south of Brisbane</a>, Pallara.
 
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