By David Winning

SYDNEY--Stockland set its sights on faster profit growth in the new fiscal year, riding renewed activity in residential homebuying as interest rates come down.

Stockland said it expects funds from operations per security of between 36.0 Australian cents (23.2 U.S. cents) and 37.0 cents in the 12 months through June, 2026. If achieved, that represents a 7.7% rise at the midpoint of the range compared to 33.9 cents reported for the prior year.

The upbeat outlook reflects a positive performance of a dozen masterplanned communities bought from Lendlease late last year for A$1.06 billion in partnership with Supalai Australia Holdings. Demand for residential property has picked up as falling interest rates give buyers confidence around affordability and stoke a fear of missing out.

The Reserve Bank of Australia last week lowered its benchmark rate for the third time this year, and many economists anticipate additional cuts in coming months as inflationary pressures ease and the labor market largely remains tight.

"The acquired MPC portfolio is performing ahead of our acquisition assumptions, delivering FY 2025 settlement volumes above our expectations with new releases from the portfolio being met with strong customer demand," Chief Executive Tarun Gupta said.

Stockland provided the forecast alongside an annual net profit of A$826 million for fiscal 2025, up from A$305 million a year earlier. Revenue totaled A$3.13 billion. Stockland had earlier declared a final dividend of 17.2 Australian cents.

Stockland forecast a flat total dividend of 25.2 cents in the new fiscal year after overhauling its payout policy.

"From fiscal 2026, Stockland will target a distribution payout of between 60% and 80% of funds from operations, aligning with its focus on long term value creation," Stockland said.

Stockland said it settled 6,865 residential lots in its Masterplanned Communities business across the 2025 fiscal year, at an average operating profit margin of 22.9%. The result was above guidance for 6,200-6,700 lots, and well ahead of the 5,637 settlements that it achieved a year earlier.

Stockland expects between 7,500 and 8,500 residential settlements in the 2026 fiscal year. It forecast an operating profit margin from the Masterplanned Communities division in the low 20% range.

Turning to its Workplace business, Stockland said funds from operations fell by 2.2% to A$111 million across the year on a comparable basis, while funds from operations in its Town Centres division rose by 3.2% to A$319 million.

In its logistics business, Stockland said the portfolio's funds from operations rose by 7.1% in the 12-month period to A$172 million.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

August 19, 2025 18:59 ET (22:59 GMT)

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