Five years and one month after Stephen Bull took over leadership of Stockland Retirement he is leaving the company following the decision to combine Stockland’s retirement and residential businesses.
The combined business will be led by Andrew Whitson, currently Group Executive and CEO Residential. It will be called Stockland Communities.
Stockland Managing Director and CEO Mark Steinert said: “We have already successfully combined our medium density and retirement living development teams to leverage our capability in delivering built form. Bringing our retirement and residential businesses together will realise further operational synergies”.
Stockland currently has a development pipeline of 82,000 residential lots and 3,000 retirement units.
Stephen Bull has been with Stockland for 11 years. He took over from David Pitman in July 2013. They had 6,300 retirement village units then; they now have 9,653 across 65 villages (53% growth).
At that time their retirement operating profit was $38 million for the year and return on assets was 4.5%. Bull set the target of 8% by 2018.
FY17 operating profit hit $63 million, 66% growth in four years and return on assets of 6.2%.
However, six months later their sales were down 16% (325 to 272) thanks to the Four Corners/Fairfax/ABC damaging coverage of the retirement village sector. This was the best result of the Top 3 (Lendlease, Aveo and Stockland), but still a hit.
The full year impact will be known in the next week when Stockland releases its FY18 results.
Along the journey Bull sold their smallholding of aged care facilities to Opal and entered a long-term co-located care strategy with them, implemented the largest reinvestment in ageing villages of the Top 3, commenced building medium rise villages, launched their Aspire non-DMF community model with two trial villages (now being expanded to possibly eight) and introduced choice of contracts.
In October 2015 Stockland announced a strategy to investigate selling 50% of the villages for $1 billion and gave themselves six months to find a partner. They apparently were not successful.
Lendlease sought to do the same last year, eventually selling 25%. Now Aveo is seeking to do the same, looking for a 50% partner.
It would appear that the return on capital with retirement villages is not big enough or growing fast enough for listed companies.
Stockland has always been a significant and influential backer of the Property Council. Bull was deeply involved in the peak body’s retirement living strategy through the Retirement Living Council.
He departs on 7 September.