The Stockland Corporation Ltd (ASX: SGP) share price is up 3% today, after the company announced the appointment of a new CEO
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The Stockland Corporation Ltd (ASX: SGP) share price is up today after the company announced the appointment of a new chief executive officer.
Industry veteran Tarun Gupta will replace Mark Steinert, who has been at the helm since 2013 and announced his retirement from the company in June. At the time of writing, the Stockland share price is trading up 3.07% at $4.70.
Why is the Stockland share price lifting?
In announcing the appointment, Stockland said Mr Gupta would bring plenty of experience to the CEO position. He is the current chief financial officer at Lendlease Group (ASX:LLC), having first joined that company as a graduate and holding a variety of senior positions across 26 years.
Stockland described Mr Gupta as “the right man for the job”, with deep commercial experience and a proven track record in leading and managing large property operations. The company also said that Mr Gupta was highly regarded in the industry, and had a strong reputation among property investors.
Mr Gupta will join Stockland on 1 June 2021, and Mr Steinart will remain as CEO until then. Meanwhile, Lendlease announced that its deputy chief financial officer, Frank Krile, will step into the group chief financial officer role on an interim basis.
Mr Gupta will earn a fixed remuneration of $1.5 million annually, in addition to long-term and short-term incentives.
Challenging times ahead for Stockland
Mr Gupta will join Stockland at a time of big challenges.
More than half of the Stockland’s earnings comes from its retail property portfolio. Of Stockland’s 34 retail shopping centres, 24 are tenants in the challenged department store sector. The department store business model is under increasing pressure from online competition.
In addition, 9 of Stockland’s 34 sites include Target stores. Target owner Wesfarmers Ltd (ASX: WES) has announced plans to close half its Target stores or rebadge them as K-Mart. Given Stockland already has 14 K-Mart stores, 9 of them at the same locations as its Target stores, this could be challenging scenario for Stockland.
How has the Stockland share price performed in 2020?
The Stockland share price has rebounded strongly after losing 60% of its value in March at the height of the coronavirus pandemic. At $4.70, the Stockland share price is now back to almost the same level it was at the beginning of the year. The company commands a market cap of $10.9 billion.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.