Stockland boss expected to change tack
Investors in Stockland will hear from chief executive Mark Steinert about his strategy for the diversified real estate investment trust on Monday which is expected to reverse the former focus on residential, retirement and retail sectors.
The group will also reveal plans to scale back its office and industrial portfolios. After a managament reshuffle last week chief financial officer Tim Foster and head of residential Mark Hunter will leave their positions.
One analyst said the departure of Mr Hunter could signal more pain in the group's residential business in Monday's strategic review.
In the half year results to December 31, 2012, released in February, the group reported a statutory loss of $147 million. The result included $306 million of impairments to asset values, mainly in non-core residential projects that have been identified for sale, and unrealised fair value changes to other assets.
Mr Steinert described the result as "pretty disappointing".
He said at the time that nothing was off limits under his review, which could herald a renewed focus on high-density apartments, less reliance on retirement and mixed-use residential developments, and a revision of the policy to sell commercial and industrial properties.
In the impairments, there were 13 projects identified as more suited to disposal, mainly in Queensland, but also five in NSW including at Warriewood and one at Point Lonsdale, Victoria.
As part of the recent management changes, Stockland has created the new position of group executive strategy and stakeholder relations, and appointed Simon Shakesheff, who will join the company by mid-August.
Current group executive Michael Rosmarin takes up the newly created position of chief operating officer, with responsibilities including human resources, operations, operational risk and marketing.
Mr Steinert said Mr Foster would leave Stockland later this year. He will continue in his role until a successor is appointed.
Goldman Sachs analysts say Mr Steinert's changes are a core part of a restructuring of the business, since transitioning into his new role late in November last year.
In his first outing in February as the new CEO, Mr Steinert put a stop to any more activity in the commercial and industrial divisions pending the outcome of his strategic review.
Market speculation has centred on Stockland dropping the three 'r' focus of residential, retail and retirement, to a two-pronged medium density residential and retail.
That could also encompass Stockland creating a merger or sale with FKP Property for the retirement assets. It is said the two groups have been in discussion over the future of the assets for some time.
Using the term, "centres of excellence" which has been discussed by previous management, Stockland could look at redeveloping its existing land banks to mixed use, medium-density projects. Conversion of older industrial sites to residential is also an option. It is unlikely a return to high-density apartment complexes, such as at Balgowlah, will be contemplated.