Stockland Corporation SWOT & PESTLE Analysis

Weaknesses

1. Deterioration in Stockland’s retail portfolio: There are significant “signs of weakness” in Stockland’s retail portfolio visible which may impact the overall performance of the group. Stockland has a $7 billion retail portfolio which has been impacted by structural economic challenges and decreasing sales. Further according to CLSA the key underperformers in the retail sub-segment for Stockland were specialty stores and supermarkets which registered a growth of -0.2 per cent and 0.0 per cent respectively over Q4 FY17. The company’s retail portfolio has also underperformed its peers over the last five years and there are longer-term challenges which will continue to impact Stockland’s retail segment.

Opportunities

1. Opportunities in residential ‘Re-development’ domain: Stockland hasn’t ventured into ‘Re-development’ domain in the Residential space which are offering promising returns. These projects would transform into affordable housing opportunities, a segment which is expected to outperform in otherwise difficult market conditions.

2. Digital revolution to open new market opportunities: The digital revolution is rapidly affecting consumer behaviour and opening up opportunities on new fronts which Stockland can leverage upon. Technology integrations and enhancements including online residential and retirement living engagement opportunities will help in developing business growth. Stockland can transform its retail centres as community hubs by providing e-enabled services and digital solutions. Further, internally in the organization it can encourage a culture of employee innovation through crowdsourcing of ideas.

Political

1. Transparent political policy followed by Stockland: Stockland follows a transparent policy for all political parties in the country. The company since 2008, has been following an organizational wide mandate of not making any donations to political parties or at any levels of government. It expects that the projects it undertakes are judged solely on merit basis and there is complete transparency regarding the same with all its stakeholders.

2. Imposition of surcharge on the non-resident buyers of real estate property: Foreign investment in realty has been a contentious issue for long in Australia. The Australian government imposed 3% surcharge to foreign property buyers who buy apartments, houses and vacant residential-zoned land in Victoria. This came into effect from July, 2014. This was expected to raise about $330mn to the exchequer in the upcoming four years. In addition to these, an absentee land tax of 0.5% is levied on the foreigners who have their property in Australia, but don’t occupy it until 2016. Moreover in 2017, NSW, Queensland and Australian federal governments have imposed additional tax hikes for foreign property owners. This move is seen as a measure to check Chinese property buyers which are the major investors in the Australian market. This will have a tremendous effect on the sales of residential spaces of the Stockland Corporation.