THE 2011-12 reporting season was dominated by news of management changes, with three key chief executives announcing retirements that will cause significant changes within the real estate investment trust sector.
Matthew Quinn of Stockland and Peter Brown at FKP Property will be around until the end of the year, and Nick Collishaw at Mirvac leaves at the end of October.
But as the incumbents move on, their replacements will be armed with new strategies and outlooks to take the groups into the next phase of growth.
It is widely expected that a new chief executive at Stockland could look at changing the present three "Rs" strategy of retail, residential and retirement, while at FKP they will also look at the retirement business, which is under review by management.
The hardest hit of the asset classes was residential with all REIT managers marking down expectations for the coming year.
The dichotomy between the weak performance by individual retailers and their landlords persisted, with the latter saying the vacancy rate was a marginal 1 per cent and rents were still growing at about inflation.
For the office sector, despite redundancies in banking, finance and general clerical areas, the lack of new buildings across the country kept a lid on the vacancy levels. The only concern was the longer term impact of the $6 billion Barangaroo South project for the Sydney market.
Industrial property was stable but is starting to benefit from the rise of e-commerce, which requires warehousing for storage.
Analysts said the average REIT increased its 2011-12 financial year earnings per security by 2.7 per cent, which was 0.6 per cent above most forecasts. The head of property research at Bank of America Merrill Lynch, Simon Garing, said eight REITs beat his firm's forecast and there were no misses.
"Our 2013 financial year earnings per unit growth is now 2.4 per cent, with our forecasts being reduced slightly by 0.5 per cent, with the average distribution per security lifted by 0.3 per cent as payout ratios lift," he said.
"Office net operating income growth of 3.5 per cent was the highest, as most markets are below average vacancies and tenant incentive movements are largely unchanged. Retail was still very resilient, showing average net operating income growth of 3.3 per cent, despite negative leasing spreads for new tenants."
Mr Garing said residential developers faced the biggest challenges,, with earnings before interest and tax down 20 per cent, driven by low sales volumes and margins.