Stockland · ASX:SGP
Stockland — H1 2007 Earnings Presentation
42 slides from Stockland's earnings presentation, Feb 7, 2007
Slide 1: 1H07 Results Presentation
1HO7 Results Presentation 6) 7 February 2007 Stockland Strategy + Finarice and Capital Management + Divisional Performarice + New Business initiatives Outlook (S) Stockland:
Slide 2: To create a world class diversified property group
“To create a world class diversified property group” Key Benchmarks For “World Class” Financial performance + People and leadership + Customer satisfaction + Corporate responsibility arid sustainability + Product development and innovation Brand equity Durack Centre, Perth WA, ne ee eer ee ‘S) Stock
Slide 3: The Stockland Team and Culture / Strategy
The Stockland Team and Culture Dynamic, performance based culture + Competitive advantage as employer of choice * Tight knit and focussed Executive Team + High employee engagement (ISR 84%) Financial Performance Change in 40 Globat High ; Performing Companies ‘Tracked for Operating Change in 96 Mont
Slide 4: Financial Highlights and Capital Management
Financial Highlights and Capital Management Hugh Thorburn + Finaricial Highlights + Capital Management Stockland: 1HO07 Results in Summary Nat Profit" 7.2% $293.1m Earnings per Security” 3.9% 21.5 cents Distributions per Security 49% 21.5 cents > PP Pp NTA per Security 9.3% $4.96 * Wel peolé and EPE
Slide 5: Capital Management
Capital Management 1HO7 FYO6 S&P Rating A-/Stable A-/Stable Weighted Average Debt Maturity 7.4 years TA years Debt Fixed | Hedged 1% 61% Weighted Average Cost of Debt* 6.2% 6.4% Gearing (debt/total tangible assets) 26.7% 24.7% Consistent Delivery of Strategy Recurring Income Retail 36% 20% Commercia
Slide 6: Retail Division - 1H07 Financial Highlights
Retail John Schroder + Financial Highlights + Market indicators + Portfolio Performance + Growth Strategy Outlook Stockland: Retail Division - 1H07 Financial Highlights $126.0m / + 6.6% Divisional operating profit Comparable net income growth A 5.1%" Revaluations in 1H07 A $256.3m + Minimal vacancie
Slide 7: Retail Sales Performance and Market Indicators
Retail Sales Performance and Market Indicators Retail trade has proven resilient despite some headwind from rising interest rates + Stockland Centres’ MAT* sales are now at $4.5 billion with comparable growth of 3.1% + Comparable specialty shop growth is above inflation at 4.2% * See Annexures Slida
Slide 8: High Productivity Drives Retail Rental Growth
High Productivity Drives Retail Rental Growth 3 centres recently ranked in the Top 10 for total specialty, sub regional turniover* Sima Specialty saies* 9,000 eatin Ranking Centre Spec MAT $8,140 ; per mi 8,000 1 Stockland Green Hills 10,708 $7,233 7.008 8 Stockland Merrylands 16,086 10 Stockland To
Slide 9: Retail Management Team and Outlook
Retail Management Team - Strengthened + New General Managers appointed ~ Stuart Langeveldt - General Manager, Marketing (internal transfer and promotion) ~ Stewart White - General Manager, Development, Design and Construction ~ Simon Bird - General Manager, Finance + Additional New Business role ide
Slide 10: Commercial and Industrial - 1H07 Financial Highlights
Commercial and Industrial Steven Mann + Finaricial Highlights + Commercial + Industrial + Development Pipeline Outlook ©) stockiand Commercial and Industrial - 1H07 Financial Highlights Divisional operating profit A $113.3m/ + 10.9% Comparable net income growth & 4.2% Revaluations in 1HO7 & $222.8!
Slide 11: Commercial - Market Indicators and Acquisitions
Commercial - Market Indicators + Sustainable growth in “resource” states + Vacancy is at record lows in Brisbane / Perth + Short-term supply side constraints in Brisbane / Perth + Supply to pick up again from 2009 8% Base Office Demand Office Supply 2005-08 2008-06 2007-08 7” 2007.08 2003-19 F 4 % m
Slide 12: Industrial Market Commentary and Development Pipeline
Industrial - Market Commentary/Acquisitions + Strorig supply levels continue to be mostly pre-commitment based + Industrial sector output is forecast to rebound, particularly for transport and storage + 7 acquisitions for $270m / 7.3% yield* + Increased portfolio exposure to Melbourne, now 20% * By
Slide 13: Commercial and Industrial Outlook
Commercial and Industrial Outlook Deliver rental reversions for office acquisitions in QLD / WA + Acquisitions in growth markets and UPF partnership opportunities + Continue the momentum of the development pipeline Target world class sustainability measures Stockland: Development Division Denis Hick
Slide 14: Development Division - 1H07 Highlights
Development Division - 1H07 Highlights Operating profit up 2.4% to $113 million Achieved strong presales in the Apartment projects released Successfully repositioned several Residential Communities projects Achieved a number of key development approvals Continued to make progress on Retirement Livin
Slide 15: Development Division - Results Summary
Development Division - Results Summary Units ? Lots Sold No. { 4,898 \ 1 45899. 2,098 Revenue ra (econ “J som He gad $370m Operating Profit $1 ssiem 110m f Margin (4 26% 30% Gross Assets Sr $1,985m $2,207m Projects on Hand No. 70 84 Units / Lots Controtied Ne. 66,600 2,100 63,900 End Value of Projec
Slide 16: Apartments - Key Achievements
Apartments - Key Achievements Successful pre-sales ori projects launched to market + The Hyde + Prince Henry + Achieved approvals for Tooronga project (circa $500m)} + Continued market leadership in design and sustainability initiatives Toorengs, Giendias? ©) stockland Apartments - Key Achievements
Slide 17: Retirement Living - Key Achievements
strategy Communities Portfolio to form strategic alliances (3,000+ units/lots) villages during CY2007 Retirement Living - Key Achievements Progressing in line with our market entry + Focus on unfocking sites within our Residentiat + Seek acquisitions only when they represented value + No desire to e
Slide 18: Residential Market Overview
Residential Market Overview Ul Has been abnormmaily soft - particularly in the outer suburbs NSW _ | Land sales fallen to record jows Planning complexity and costs have stailed projects. Production relative to population is out of balance Improving demand - A late CY2007 VIC Robust. Trading at histo
Slide 19: Development Division - Summary
Development Division - Summary ¢ Delivered another record profit performance * Well positioned to achieve our full year forecast - strong level of contracts on hand entering into 2HO7 « Continue to build our market share as our development pipeline is released Unlisted Property Funds Highlights + Ov
Slide 20: Strategy
Strategy + Market leadership in each of our businesses + Active Capital Management to provide to lowest cost funding solutions for business growth + Collaborate across the businesses to create value adding solutions + Further diversify our businesses both by sector and geography to broaden our incom
Slide 21: Stockland accelerates UK expansion with acquisition of Halladale
Strategy + Market leadership in each of our businesses + Active Capital Management to provide to lowest cost funding solutions for business growth + Collaborate across the businesses to create value adding solutions + Further diversify our businesses both by sector and geography to broaden our incom
Slide 22: Stockland's UK Strategy
Stockland’s UK Strategy + Acquisition Rationale + Overview of Halladale Business + Stockland Halladale Platform * Transaction Summary Future Growth Strategy Stockland: Stockland’s UK Strategy Leverage Stockland development and asset management skills + Gap in market — integrated mixed use + Align ou
Slide 23: Acquisition Rationale
Acquisition Rationale Why Halladale? + Great strategic fit « Management and development platform across retail and office « Co investment model underpinned by selective use of balance sheet « Established brand and infrastructure * Track record of delivering results « Team oriented culture « The righ
Slide 24: Halladale Portfolio
Halladale Portfolio Total Assets Under! : Asset management 457.4 50% Development 108.1 12% Co-investment fund management !) 344.0 38% TOTAL 210.5 100% Asset Management i | bevelooment, | “Gornvestnent und manzgenent | 2D PPM PEPER ODE BRS EB Rth Costweciment prs Dinecty Creed oe Ries. 27% Halladale
Slide 25: Halladale Funds Management Platform
Halladale Funds Management Platform High quality Institutional Joint Venture Capital partners + Bank of Scotland + Citigroup Property investors + The Carlyle Group + Tyburn Lane Private Equity + Anglo Irish Bank + Co-investment fund management » CReAM + Nelson + Rynda funds management platform + Est
Slide 26: Stockland Halladale Management and Transaction Summary
Stockland Halladale Management David Lockhart Executive Chairman: Ken'Lindsay Lisa Scenna: Joint Managing Director Joint Managing Director Senior Management Team Transaction Summary All cash recommended offer of 225p per Halladale share + Values Halladale at £171m (A$427m) on a fully diluted equity
Slide 27: Financial Impact
Financial Impact + Group earings impact’): + FYO7: No impact on 5% EPS guidance + FYO8: Neutral impact (due to fair value accounting adjustments) + FYO9: Accretive + Funding by debt from existing facilities + Stockland pro forma gearing (D/TTA) as at 31 December 2006 increases from 26.7% to 30.7% +
Slide 28: Outlook
Outlook On track for 5% EPS growth in FY07 + Strong and respected platform and market positioning + Key strategic initiatives to drive future value Clear strategy to drive TSR outperformance Stockland Wetheni Park, Sydney: NSW. ©) stockiand Annexures ($) Stockland: 28
Slide 29: Summary of Results - 1H07
Summary of Results — 1H0 Operating Profi 293.4 245 Net gain from fair value adjustment of investment properties 479.4 Net unrealised lass on financial instruments (0.53 Net joss on sale of investment properties 72 Security halders' finance casts : Reported Statutory Net Profit 778.9 Net transfers to
Slide 30: Capital Management - Debt Maturity Profile
Capital Management - Debt Maturity Profile As at 31 Dec 2006 ii Commercial Paper ml Bank Debt mOomestic Medium Tens Notes US Senior Term Notes mEuro Medium Term Notes Retail Portfolio Sales Supermarkets 1,656 25 17 DDS 904 3.5 14 Speciatties 1.406 64 42 Mini Majors/Cinemas/Other 872 11.8 77 Year lo
Slide 31: Retail Sales - Portfolio Summary
Retail Sales - Portfolio Summary Stockland Bay Village 167.0 NA 2,842 4 Stockland Bathurst 1079 0.3) 9,208 ins Stockland Bautkham Hills 788 NA ta iA Stockland Bull Crack 101.9 22 2aur Fea Stockland Burleigh Hoads 160.2 NA 7,070 12.3 Stockland Cains 240.4 EZ] 7,083 ne Stockland Caloundra 119.9 135 9.
Slide 32: Retail Sales - NZ Portfolio Summary
Retail Sales - NZ Portfolio Summary inclusive of GST Lyrnmail Shopping Centre (NZ) 218.2 43 (NZ) 7,223 13.7 Botany Town Centre (NZ) 302.8 36 (NZ) 7,940 13.4 Manukau Supa Centre NIA NWA NWA NWA Retail Division - Development Pipeline fRCEOS Roe Forster {inc. Bunnings & Bulky Goods Soplasnber 2007 Baul
Slide 33: Retail Division - Revaluations
Retail Division - Revaluations Stockland Shellharbour 252.6 236.9 BA 10.4% 6.00 Stockland Taraigon V2 814 104 18.5% 678 Stockland Bathurst a4.0 M2 En 78% 6.28 Stockland Merrytands 135.0 1297 23 18Aa% 60 125 King Strect 40.0 Mo 60 173% 6.00 Stockland Watherit! Park 307.8 278.5 29.0 10A% 6.0) Stocklan
Slide 34: Industrial and Office Parks - Market Commentary
Industrial and Office Parks — Market Commentary Sydney 782,000 Moderate Melbourne $94,000 80% id Good Brisbane 444,000 60% * Strong Adelaide 165,000, 400% od Moderate Macquarie Park 434,000 73% * Strong Commercial and Industrial - Revaluations Commercial 333 Kent Street, Sydney $60.9 $40.7 $10.2 25.
Slide 35: Commercial and Industrial - Revaluations
Commercial and Industrial - Revaluations Commercial (cont.} Waterfront Place $2375 $378.41 $69.4 33.3% 6.13% 150 Charlotte Street $67.0 $47.0 $106.0 21.4% 7.80% Trace and Todd $21.3 $17.3 $4.0 23.1% 8.50% Cox & Drakeford $24.1 $18.0 $3.1 17 4% 8.75%-9.00% 75 George Street $35.0 $28.0 $7.0 24.8% 7.50
Slide 36: Commercial Lease Expiry Profile
Commercial Lease Expiry Profile June 2006 December 2006 Lease expiry profile Lease expiry profile yo? Vacant A% Fyo8 WALT: 4.2 years WALT: 4.2 years Industrial and Office Parks Lease Expiry Profile dune 2006 December 2006 Lease expiry profile Lease expiry profile Vacant yoy 2% 9 Walt: 4.2 years Walt
Slide 37: Commercial and Industrial - 1H07 Acquisitions
Commercial and Industrial - 1H07 Acquisitions Durack” WA 49 7.3% 78% 26 27-29 High Street™ QL 5 7.4% 3% 20 300 Ann Street" QLo 40 5.8% 7.0% 25 45 St Georges Terrace WA 8? 6.6% BY 54 Garden Square Office Park QLD 5? 7.0% 75% 36 40 Cameron Avenue ACT 62 TIM IM 5.0 Hunt Portfolio"™ vic 420 7.5% 74% 3.8
Slide 38: Development Division - Consistent Strategy
Development Division - Consistent Strategy Gross Assets $516m Gross Assets $2,493m 30 June 2002 341 Decernber 2006 Apartments 20% Apartments 14% Residentiat Communities 89% 80% Rasidential Communities Development Division - Geographic Diversity National Queensland Gold Coast 47% Sunshine” 22% North
Slide 39: Development Division - Product Diversity
Development Division — Product Diversity Rural i wi Y Retirement Living 4% Family ° 18% Courtyard 9) 15% Large 4% C&l & Retail 8% Conventional 19% Townhouses 17% Smail Lots Apartments 10% 3% Residential Communities - Lots Sold + Excluees ine 66% sale of Verty Privat Stockland: New South Wales 96 $33
Slide 40: Annexure: Case study
Annexure: Case study Approach to development: Baytree Centre + Retail and commercial mixed use precinct + Co-investment partner: Bank of Scotland + Refurbishment of existing shopping centre and conversion of commercial tower into residential Sold to core irivestor for £41.6 million Stockland: Annexu
Slide 41: Key Properties under Management
Key Properties under Management 1 ‘Shaftesbury Rouse, Glasgow 2 The Strard, London WC2 3 Becket Howse, Cheapside, London EC2 4 Nioorgato, Loran EC2 3 Cirubb Tower, Sunbury-on-Thames 6 Aldarmary House, London £04 7 Tudor Strvet, Londan ECA 8 Hammersmith, Lemngon Wy 54 9 Founlain House, Edinburgh 10 H
Slide 42: Halladale business overview
Halladale business overview Overview of Key Funds RUM. cee oe ‘Comments. ke a ae 221 Launched in 2004 UK focused retail property fund Launched in partnership with Citigroup Property Investors. Halladale undertakes asset manager and property manager roles Launched in 2004 Aimed at the private investo