Stockland is on track to meet its full-year guidance and the property developer expects positive economic conditions and relatively stable interest rates to remain.
The company said it expects total funds from operations to grow by between 5.0 and 6.5 per cent from $802 million in 2016/17, and to lift its distribution per security by four per cent to 26.5 cents.
Chief executive Mark Steinert said Stockland has had a positive start to the financial year, driven by all business units - particularly its residential communities division.
"Our diverse portfolio allows us to deliver our purpose of creating a better way to live, and build thriving, affordable communities while continuing to deliver strong profit and sustained growth," Mr Steinert said in a statement.
He noted the strength of the residential market as a key driver of growth for the quarter and forecast Stockland to achieve about 6,500 settlements in the year.
Stockland forecasts a residential profit margin of over 17 per cent, given broad market strength and higher rates of Sydney settlements, Mr Steinert said.
He said conditions remain favourable in Melbourne and Sydney, where the markets are undersupplied and solid price growth continues.
Stockland took 1,672 net deposits for lots and townhomes during the first quarter, a slight reduction on a year ago due to project timing, with a number of projects set to launch later in the financial year.
Its retail town centres division recorded flat sales growth across the quarter due to an overall subdued environment for retail sales, impacted by some price deflation, low wages growth and energy price hikes.
Slower growth has also continued in far North Queensland and Perth following sustained activity during the mining boom.
But Mr Steinert said indicators such as job advertisements point to a return to more stable trading conditions at Stockland centres in these areas.
"Retail conditions remain challenging, however services, food, lifestyle, mini majors, entertainment and leisure offerings continue to perform well and these categories remain the focus for our centre remixing," he said.
Stockland shares gained 13 cents, or three per cent, to a four week high of $4.47.
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