Stockland · ASX:SGP
Stockland — Investor Presentation (October 2007)
28 slides from Stockland's investor presentation, Oct 15, 2007
Slide 1: Stockland Halladale Investor Presentation
Stockland Halladale For personal use only Investor Presentation – 15 October 2007 1 Shaftesbury House, Glasgow
Slide 2: Agenda
Agenda • Our International Strategy For personal use only • Why the UK? • Why Halladale? • Stockland Halladale – Business overview – Integration – Growth strategies • Challenges and opportunities • Summary and questions Onesixty, Edinburgh Cochrane Square, Glasgow 2
Slide 3: Our International Strategy
Our International Strategy • Capability led, not capital led For personal use only • Using our competitive advantage – Integrated, diversified real estate model – REIT expertise • In markets where this model can add value 3
Slide 4: Why the UK?
Why the UK? • Strong economy – good population growth For personal use only • Common language, law, culture etc • Integrated mixed use opportunities – UK planning environment supports mixed use developments and brown field regeneration – Limited groups in the market who combine both the diversified
Slide 5: Why Halladale?
Why Halladale? Stockland’s UK Strategy • The right fit For personal use only – Size (not too big, not too small) – Property & capital management skills – Culture – Platform for further substantial growth • Listed entity – Visibility of pricing – Corporate governance – Focus on creating long term sha
Slide 6: Stockland Halladale experience and platform
Stockland Halladale experience and platform • Strong business development skills For personal use only • Focus on asset management, development skills and fee generation • Development pipeline of major projects - Pipeline in excess £300m - Delivery over 4 years • Emerging funds management – linking
Slide 7: Stockland Halladale – Business Diversification
Stockland Halladale – Business Diversification Total Assets Under Management £ million % allocation For personal use only Asset management 439 38% Development 243 21% Co-investment funds management 477 41% TOTAL 1,159 100% Asset Management Development Co-investment fund management Directly Nelson Di
Slide 8: Stockland Halladale – Geographic & Asset Diversification
Stockland Halladale – Geographic & Asset Diversification Yorkshire & East Anglia For personal use only Humberside 2% In Town East Midlands 3% Industrial Retail 1% West Midlands 1% 7% 6% North South West 10% 10% North West 6% Bulky Goods 13% Shopping Centre 41% London 26% South East 28% Office Wales
Slide 9: Stockland's Halladale Strategy – FY08 EBIT Splits
Stockland’s Halladale Strategy – FY08 EBIT Splits For personal use only 100% 90% 80% 42% 51% 70% 60% 50% 19% 40% 9% 30% 49% 20% 30% 10% 0% Income Type Recurring v Trading Rental Development - JVs & Assoc Recurring Other (Inc Fee Income) Development - On Balance Sheet Trading Onesixty, Edinburgh 9
Slide 10: Integration – Key Achievements
Integration – Key Achievements • Integration For personal use only – Re-branding – All staff retained – HR policies and structure – Common IT platform • Lower cost of debt – New £125m revolving credit facility from Bank of Scotland – 3 year term at margin 40bps (previously 150bps) • Transaction acti
Slide 11: Exco Structure
Exco Structure For personal use only David Lockhart Lisa Scenna Ken Lindsay Executive Chairman Joint Managing Director Joint Managing Director Role Person Executive Chairman David Lockhart Joint Managing Director Ken Lindsay Lisa Scenna Finance Director Mark Harkin Corporate Development Simon Taylor
Slide 12: Strategies
Growth Strategies • Upscale existing business For personal use only – Increase pipeline – Larger scale projects – More on balance sheet – More profit share potential • Expand operating platform – Develop residential capability – Grow mixed use capability • Enhance and extend capital partnering Tudor
Slide 13: Strategies – Upscale existing business
Growth strategies – Upscale existing business For personal use only 13
Slide 14: Strategies – Upscale existing business: Harlow Town Centre
Growth Strategies – Upscale existing business Harlow Town Centre, Essex For personal use only Stockland Halladale is on the short list of four parties for the final stage of bids to regenerate the northern quarter of Harlow Town Centre. This significant mixed use development will include the provisi
Slide 15: Upscale existing business: Tudor Street and Warminster
Growth Strategies – Upscale existing business 1 Tudor Street, London EC4 For personal use only The purchase was completed in July 2007 for £9.15m with vacant possession. The existing early seventies building had consent for circa 55,000sq.ft. of offices. Development has commenced. Three Shoes Shoppi
Slide 16: Upscale existing business: Billingham and Cumbernauld
Growth Strategies – Upscale existing business Phase 2 Billingham Town Centre For personal use only Forming a major component of the town centre extending to 170,000sq.ft. A number of retail properties were acquired in July 2007 for £16m, a 6% net initial yield. Combined with our existing holding the
Slide 17: Opportunities – Project pipeline
Growth Opportunities – Project pipeline For personal use only No of Est. Profit on PROJECT STATUS Est. Construction Projects total cost* Cost (£m) (%) On Balance Sheet Assets Under Construction 3 42 Planning Approval Received 1 3 Planning Approval Awaited 5 50 TOTAL ON BALANCE SHEET 9 95 17% Joint V
Slide 18: Opportunities – Major Projects Pipeline
Growth opportunities – Major Projects Pipeline FY08 FY09 FY10 FY11 FY12 For personal use only Balance Sheet Pipeline - (Construction cost) Billingham Town Centre - Phase 1 (£8m) Onesixty (Fountain House), 160 Dundee Street (£13m) 1 Tudor Street (£23m) Shaftesbury House (£14m) William Hunter Way, Bre
Slide 19: Strategic initiatives – Expand Operating Platform
Strategic initiatives– Expand Operating Platform • Residential capability to underpin mixed use For personal use only • Deepening of development capability across all sectors • Increasing project management resources PROJECT LIFECYCLE TRANSACTION Master Sell to Third Party Acquisition Delivery Finan
Slide 20: Strategic initiatives – Residential & Mixed Use Development
Strategic initiatives – Residential & Mixed Use Development For personal use only • Geographic focus on London and the South East • Organic acquisition focus on mixed use development sites • Potential bolt on opportunities of mixed use apartment-focused developers • Supported by the acquisition and
Slide 21: Strategic Initiatives – Residential Development
Strategic Initiatives – Residential Development 400,000 UK Supply Imbalance Local Authorities 350,000 RSLs New Green Paper Dwelling Target Required • Stockland Halladale has For personal use only N u m b er o f Perm an en t D w ellin g s C o m p leted Private Enterprise to Meet Demand (240,000) 300,
Slide 22: Enhance and extend capital partnering
Growth strategies - Enhance and extend capital partnering Sell down and manage assets For personal use only Warehouse assets 22
Slide 23: Strategies – why Capital Partners?
Growth strategies – why Capital Partners? • Larger scale project capacity For personal use only • Diversification of risk • Enhance recurring fee income • Alternative sources of capital • Recycling capital • Ability to take longer term view on asset added value and development initiatives Shaftesbur
Slide 24: Strategies – Capital Partners
Growth strategies – Capital Partners • Established Funds For personal use only – Rynda - ‘En Primeur’ (Wholesale) • Regional French assets • Current assets under Management >€300m* • Target assets under management €600m • Major investors include: GIC and Schroders – CReAM (JV with Citigroup) • 12 sh
Slide 25: Strategies – Capital Partners: Joint Ventures and fees
Growth strategies – Capital Partners • Established Joint Ventures For personal use only • Examples of existing fee structures Tyburn Lane Private Equity Equity Investment 30% Fees 3-5% of rents Promote/Profit Share 50/50 once 10% IRR achieved Citigroup (range only as different from project to projec
Slide 26: Challenges & Opportunities
Challenges & Opportunities • Market Conditions For personal use only – Short term challenges due to reduced asset demand and yield softening – Medium term opportunities as assets reprice and funding costs increase including potential corporate transactions • Our diversity and property skills are a r
Slide 27: Summary
Summary • Our international strategy has commenced and we’re happy with For personal use only progress • The merger of Stockland and Halladale is going well • No shocks or surprises • Good opportunities for significant growth of this platform • Target 10%+ of group EBIT within 3 years 27
Slide 28: Disclaimer
Disclaimer Corporation/ Responsible Entity For personal use only Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741 25th Floor 133 Castlereagh Street SYDNEY NSW 2000 DISCLAIMER OF LIABILITY While every effort is made to provide accurate and complete info