Stockland to exit UK after posting EUR 1bn loss

Stockland has announced it is to sell its UK holdings after the group posted a statutory loss of A$1.8 bn (EUR 1 bn) in the 12 months to end-June as a result of the slump in property values.

The Sydney-based property trust recorded a A$705 mln profit in the previous year.

Stockland entered the UK and Europe in 2007 at the height of the real estate boom with the acquisition of Halladale, a property investment, trading and development company, for £215 mln. Halladale was rebranded as Stockland Halladale and more recently as Stockland UK.

The UK-based operation posted an operating loss A$700,000, with pre-tax inventory impairment of A$186 mln, for full-year 2008/09.

Stockland said in its report: 'Market conditions in the UK remain difficult, but the property futures market is pricing in a modest recovery in FY10. In light of the changed market conditions and investor sentiment towards offshore expansion, Stockland has decided to embark on an orderly sale of assets over the next two to three years.

'In the meantime, the Group will complete projects underway and manage its assets tightly to maximise returns.'

This is the second time in a matter of days that an Australian listed property trust has announced it is pulling out of Europe. Last week, GPT Group said it planned to withdraw to its home market and exit all overseas and non-core investments over time. 'The strategy is designed to restore shareholder confidence over time and deliver transparency, stability and security to the group's returns,' GPT said in a press release.

GPT developed its European platform with the takeover of Halverton Real Estate Investment Management Limited in 2007.