After the disappointment of January’s initial jobs figures, Australia got a double dose of good news on the employment front. In February, the economy added 47,300 jobs, blowing past the consensus forecast of 15,000. That makes it the single best month of employment gains since early 2012, which was at the height of the resource boom.

Full-time employment jumped by 80,500 jobs, while part-time jobs fell by 33,300 positions.

Almost as good, January’s dismal loss of 3,700 jobs was revised to a gain of 18,000 jobs, thanks to a seasonal re-analysis of the earlier numbers.

February’s unemployment rate still came in at a 10-year high of 6.0 percent, in line with the consensus, but the labor force participation rate improved by a substantial three-tenths of a percentage point, to 64.8 percent.

Over the trailing three-year period, the Australian economy has added an average of 9,900 jobs per month, while over the trailing year employment has grown by 5,800 jobs per month. In fact, last year was the worst for job creation in more than 20 years. So it’s too soon to know whether these stronger-than-expected data are merely a blip or signify a resurgent economy.

Indeed, economists with Westpac caution that a strong jobs number accompanied by a flat unemployment rate usually means that the employment gains can’t be taken at face value. For instance, the total hours worked, which is an important indicator of future labor demand, declined 0.9 percent from a month ago. In other words, March employment data may not be nearly as rosy.

Instead, Westpac advises that the employment-to-population ratio is more instructive about the underlying strength of the jobs market. At 60.9 percent, this figure remains slightly more than seven-tenths of a percentage point below the year-ago number. It’s also nearly six-tenths of a percentage point below the low experienced amid the Global Financial Crisis.

Westpac forecasts that the unemployment rate will ultimately peak at 6.5 percent by mid-2014.

In the newly published minutes from its February monetary policy meeting, which occurred prior to the release of the latest jobs data, the Reserve Bank of Australia (RBA) observed that the labor market remains weak, with the wage price index growing just 2.6 percent year over year during the fourth quarter, the lowest year-end result since the late 1990s.

The central bank’s survey of businesses suggests this trend will persist at least through the first quarter, given the abundance of available labor as the resource sector cuts jobs due to the decline in mining investment.

At the same time, the RBA noted that forward-looking indicators of labor demand appear to have stabilized. As the central bank observed, the labor market tends to lag changes in the underlying economy. And with the country’s gross domestic product (GDP) expected to grow by 2.8 percent in 2014, up a substantial four-tenths of a percentage point from last year, it looks like 2013 will mark the trough of this cycle.

Despite the near-term uncertainty, it’s important to keep sight of the big picture. Although Australia’s GDP is currently growing at a pace below its long-term trend, this year should be the 23rd consecutive year in which the country’s economy has grown.

Portfolio Update

This week, Conservative Holding Australand Property Group Ltd (ASX: ALZ, OTC: AUAOF) rose to a five-year closing high of AUD3.98, as Stockland Corp Ltd (ASX: SGP, OTC: STKAF) swooped in to buy a 19.9 percent stake in the real estate investment trust (REIT) from CapitaLand Ltd (Singapore: CAPL, OTC: CLLDF).

Australand is a diversified REIT, which develops residential property, including land, housing and apartments, and also develops and invests in a portfolio of income-producing commercial and industrial properties. The security consists of a stapled group of ordinary shares and the units of three different property trusts.

As longtime subscribers may recall, this latest deal completes Singapore-based developer CapitaLand’s divestment of its original 59.1 percent majority stake in Australand, while also confirming last year’s rumors regarding Stockland’s intentions.

With its purchase, Stockland’s holdings in Australand are just below the 20 percent threshold that would trigger a takeover bid under Australian regulations. But it’s entirely possible that the AUD8.6 billion firm has laid the foundation for an eventual takeover of the AUD2.3 billion REIT, which would transform it into one of Australia’s largest property companies.

CapitaLand first triggered a wave of speculation early last year when it announced it was looking to sell its 59.1 percent stake in Australand. In late July, however, the company said that it had decided to keep its investment in Australand because of the REIT’s stable stream of recurring income.

At the same time, a number of other suitors were considering buying some or all of the REIT’s portfolio. Fellow Conservative Holding GPT Group’s (ASX: GPT, OTC: GPTGF) two formal bids were rebuffed by Australand, while Stockland was also said to be mulling an offer.

Then toward the end of November, CapitaLand sold roughly a third of its stake, or 20 percentage points, in a secondary placement for a price of AUD3.685 per stapled security. At the time, the move was undertaken to allow the firm to reallocate capital to its core markets in Southeast Asia, where it can earn higher returns on equity, while also helping improve Australand’s liquidity by increasing its free float by roughly 50 percent.

Though the company had said it remained comfortable with its remaining interest in Australand and considered it a key investment, it sold the balance of its holdings, about 226.2 million stapled securities, for AUD849 million in another secondary placement earlier today.

The sale was priced at AUD3.75 per stapled security, a 3.6 percent discount to the prior market session’s closing price. This time around, CapitaLand, which has been a major shareholder in Australand since 1997, said the REIT’s unit-price appreciation since the earlier secondary placement had allowed it to fully unlock the value of its remaining investment. The company will use the SGD970.1 million in proceeds from the sale, of which SGD35.1 million will be booked as a net gain, to invest in Singapore and China, while also paying down some of its debt.

Meanwhile, Stockland’s purchase of nearly 115.2 million of Australand’s stapled securities occurred at an average price of AUD3.78 per unit, totaling around AUD435 million, and was funded with cash and the use of its debt facilities. The firm’s stake comprises a 15.7 percent direct holding and a 4.2 percent indirect interest.

In the near term, the deal is expected to be neutral with regard to Stockland’s earnings per share (EPS), so this transaction is clearly more strategic in nature.

Indeed, as Stockland CEO and Managing Director Mark Steinert put it, “Australand has a diverse and complementary portfolio of assets, including a quality industrial portfolio and medium density residential projects that are well aligned with our strategy. Over time this holding will enable us to explore strategic opportunities with Australand.”

When asked if the latter statement suggested a takeover was imminent, the company declined to comment. Mr. Steinert, who joined Stockland early last year, has said he wants to increase the company’s exposure to retail and industrial properties.

But at least one property analyst was quoted by Reuters as saying he believes Stockland will eventually pursue a full acquisition. However, analysts with Morgan Stanley wrote that Stockland “cannot extract any synergies, either through cost reduction or restructuring Australand’s debt, without launching a full takeover for the group, which could be quite expensive.”

Australand is a buy below USD3.60 in our Conservative Portfolio, while Stockland is a buy below USD3.50 in our How They Rate coverage universe.