The 2013 financial year may be a difficult one for Stockland due to soft conditions in the housing market but its retail portfolio, on the other hand, is about to see steady improvements.

Stockland has reported underlying profits for the year ended 30 June 2013 was $494.8 million, down 27 per on the previous corresponding period. Statutory profit was $104.6 million, down 70 per cent.

The operating profit totalled to $482 million with a portion of that being made up of the $324 million retail net operating income, which increased by 5 per cent.

According to group executive and CEO commercial property John Schroder, despite subdued market conditions, the retail business achieved solid sales growth and it’s expected to continue into FY14.

“Our ability to deliver this result in a challenging market demonstrates the strong leasing and development capability we have built over many years, our proactive approach to remixing in centres as conditions change, and our deep commitment to excellent customer service,” he said.

The company attributes the positive retail results to newly redeveloped centres. In FY13 Stockland opened its Merrylands, NSW and Townsville, Queensland centres in late 2012. It also opened Myer at Stockland Shellharbour, NSW in May 2013. Work commenced on a $116 million redevelopment at Hervey Bay in March 2013

“We have a strong redevelopment pipeline with a further 14 projects identified, representing $1.5 billion of investment, with an average incremental IRR of 12-to-14 per cent planned over the next five to six years,” Schroder said.