Stockland announced a nasty profit warning today, following Mirvac the other day, with some very downbeat comments about new residential property:
“We have also now conducted our regular residential portfolio review and have identified 13 residential projects that do not meet our hurdles and have impaired them for wholesale disposal rather than continuing to develop them out. I am confident this is the right thing to do to ensure our capital is put to best use, given expected returns and the additional $500 million of expenditure required over a number of years to trade them out.
“In addition, we have reviewed the balance of our portfolio against more conservative assumptions about the future performance of the housing market, resulting in the impairment of seven trading residential communities, which we believe is prudent in the current environment. The total residential impairment represents 9% of total lots owned and under option and reduced Net Tangible Assets by 14 cents per security.”
Apologies for interrupting today’s ASX euphoria. Full report below.
