Property group Stockland is offloading struggling residential and commercial office assets after announcing a $147.1 million interim loss.

The result for the six months to December 31 is a deterioration from a net profit of $307.6 million in the second half of 2011.

Delivering his first earnings report as chief executive, Mark Steinert said 13 residential projects, including lifestyle developments in Queensland, would be sold off.

“We have seen a slowing across that part of the business,” he told AAP.

“We also have significantly reduced growth expectations.”

The Australian housing market is expected to post a sluggish recovery in the year ahead, as Queensland’s recent floods dampen consumer confidence.

“We still think there will be modest improvement but we’re not looking for a significant pick-up in growth,” he told reporters.

Mr Steinert also said Stockland would slow down the pace of asset sales as it undertook an internal strategic review, due to be completed by mid-May.

Morningstar property analyst Tony Sherlock said this meant the company would retain more industrial assets, where rents are holding up, but hasten the sale of commercial office space.

“It wouldn’t surprise me … the fundamentals have weakened more than any other category,” he told AAP, adding NSW and Queensland government job cuts were increasing office supply.

Stockland announced on Wednesday the sale of 9 Castlereagh Street in central Sydney for $172.5 million, four years after buying the building.

But the company’s retail business, which generates 63 per cent of its earnings, is expected to underpin growth in 2013/14 as new shopping malls at Merrylands and Shellharbour in NSW, and Townsville, still under construction, started to generate income.

The group is also upbeat about its retirement portfolio.

Stockland’s share price fell in the hour after its results were announced, but recovered into the afternoon to gain 16 cents, to $3.64, by 1523 AEDT.

“The fact the stock’s up by more than 4 per cent means the market was expecting worse,” Mr Sherlock said.

Stockland last December warned investors its underlying earnings would be lower for 2012/13 as it waited for a turnaround in the property market.

Its underlying net profit for the first half, excluding significant items, fell 26 per cent to $255 million.

The disappointing first half result prompted Stockland to downgrade its earnings per security forecast to a drop of between 20 and 25 per cent this financial year.

It had previously predicted a drop of 10-15 per cent.

However, despite the pressure on its earnings, Stockland confirmed it would pay a full year distribution of 24 cents per security.

Stockland’s first half distribution was 12 cents a security.