Stockland · ASX:SGP
Stockland — UBS 2009 Global Real Estate Conference
28 slides from Stockland's conference presentation, Dec 1, 2009
Slide 1: UBS 2009 Global Real Estate Conference
For personal use only UBS 2009 Global Real Estate Conference December 2009 www.stockland.com
Slide 2: Stockland's vision is to create a world class diversified property group
Stockland’s vision is to create a world class diversified property group For personal use only • Stockland was founded in 1952 and is Australia’s largest diversified property group • Pioneered the stapled security structure – Alignment of shareholder and management interests – Investors benefit from
Slide 3: Stockland's Strategy
Stockland’s Strategy For personal use only • Use our diversified model to drive competitive EBIT FY09 Assets 30 June 20091 advantage Strategic Strategic Actual Actual weighting weighting • Enhances returns through cross business synergies Recurring • Balance of stable recurring income and trading Re
Slide 4: Stockland - Australia's largest diversified REIT
Stockland - Australia’s largest diversified REIT Australian Commercial Property assets – A$7.9b (72% of assets1) For personal use only Retail – $3.9b Office – $2.9b Industrial / Intermodal – $1.1b Australian Residential and Retirement assets – A$3.0b (25% of assets1) Communities – $2.0b Apartments –
Slide 5: Strategy – by business unit
Strategy – by business unit Residential For personal use only • Leverage Residential Communities’ competitive advantages and grow market share • Target land investment opportunities in growth corridors to deliver short and medium-term profits • Strategic review of Apartments business in light of cap
Slide 6: Strategic investments
Strategic investments GPT Strategic stakes For personal use only • Exposure is in efficient self-funding structure Cost Market value 26 November 09 • Parts of GPT’s portfolio fit with our Commercial Property % Price ($) Total Price ($) Total $m $m strategy and our stake provides option value GPT* 13
Slide 7: Experienced management team
Experienced management team For personal use only Managing Director Matthew Quinn Finance Director EGM, EGM, Human CEO Retirement CEO, CEO, MD, Stockland Corporate Resources Living, Corporate Commercial Residential UK Affairs Strategy Property Hugh Karyn Rilla David John Mark Ken Thorburn Munsie Moo
Slide 8: Residential Strategy
Residential Strategy Market fragmentation provides opportunity to grow: Melbourne acquisition – Aug 2009 For personal use only • We are underrepresented in several key growth corridors • Many smaller developers are sub-scale and undercapitalised Focus on speed to market • Targeting acquisitions that
Slide 9: Australia is undersupplied with housing
Australia is undersupplied with housing For personal use only .. strong population growth is expected Major undersupply of housing has ..causing rental vacancies to fall to to continue, causing further supply / developed since 2006.. record low levels.. demand imbalance Underlying Demand & Supply of
Slide 10: Despite the very weak market, we increased market share and lot sales in FY09
Despite the very weak market, we increased market share and lot sales in FY09 For personal use only Vacant Lot Sales1 Across NSW, WA, VIC and QLD SGP Lot Sales and Market Share In Four Key States (# p.a.) (# p.a., %) Stockland Lot Sales (LHS) SGP market share in 4 States (RHS) 100,000 93,400 5,000 1
Slide 11: We are well prepared for the end of the First Home Owners Boost
We are well prepared for the end of the First Home Owners Boost For personal use only • During 2009 we have transitioned our products towards second home buyers and investors • Over the past 3 months we have seen second home buyers return to be the largest proportion of our leads • Investors are als
Slide 12: Increasing market share by delivering product diversity
Increasing market share by delivering product diversity, meeting all key buyer segments For personal use only Product Diversity 1. Catering to all market segments 2. Flexible House & Land packages 3. Optimising Product Mix “Village Positioning” “Different house, same lot size” “Align lot size and pr
Slide 13: Residential - summary
Residential - summary • Residential Communities is a sustainable growth For personal use only business • Clear strategy to grow market share and leverage our competitive advantage • Lead indicators continue to improve, but all eyes on end of Federal government boost in Dec-09 • February 2010 a key ‘
Slide 14: Retirement Living Strategy
Retirement Living Strategy For personal use only 1. Develop new villages to capture a growing share of the Percentage of Australians aged 65 and over bulging 65+ demographic • Targeting middle and upper-middle Australians in metro and outer- metro areas; along Eastern seaboard and in WA 25% • Make e
Slide 15: Retirement Living combines two basic property businesses
Retirement Living combines two basic property businesses and plays to Stockland’s core strengths For personal use only Residential development Acquire land, re-zone, masterplan a community, build a village Development profit – Sales revenue less costs of development – Lower than pure residential
Slide 16: Commercial Property Strategy
Commercial Property Strategy For personal use only Enhance quality of retail centres through redevelopment and acquisitions • Building a high quality retail portfolio focussed on high performing regional and subregional retail centres with strong market share in their trade area Industrial / Intermo
Slide 17: Commercial Property - asset values
Commercial Property - asset values • Weighted average cap rate softened 130bps since the Commercial Property – book values ($bn) For personal use only peak of the cycle (20% decline) 10 0.5 (0.4)* 0.1 (1.1) 9 • 93% of assets independently valued at 30 June 09 (remaining 7% under development) 8 ($bn)
Slide 18: Commercial Property - summary
Commercial Property - summary • Office and industrial markets: For personal use only Sydney and Melbourne stabilising, while downward pressure remains in Perth and Brisbane Stockland portfolio is in good shape with minimal income at risk in FY10 • Retail sales are holding up reasonably well – re
Slide 19: Capital management strategy
Capital management strategy Key Credit Metrics - as at 30 June 2009 • Target gearing 25 – 30% of tangible For personal use only S&P rating A- / Stable assets Gearing (net debt / total tangible assets) 16.0% Interest cover 2.8:1 • Using “through the cycle” cap rates Available undrawn committed facili
Slide 20: Summary & outlook
Summary & outlook • Stockland is financially strong and well-placed to capitalise on the expected economic recovery For personal use only • Residential Communities - entered FY10 with record contracts on hand and maintaining good rate of sales • Apartments - strong cash flow expected in FY10 from pr
Slide 21: Annexures
For personal use only Annexures www.stockland.com
Slide 22: Overview of FY09 - Residential
Overview of FY09 - Residential For personal use only FY09 recap - Communities Communities FY09 • Strong sales – market leading position Lots settled 4,303 Average retail price* $206k • Adjusted quickly to First Home Buyer opportunity Revenue $873m • Record level of contracts on hand @ June 30 (1,659
Slide 23: Overview of FY09 - Retirement Living
Overview of FY09 - Retirement Living Retirement FY09 For personal use only FY09 recap Operating profit $43m New units settled 163 • Solid profit performance - Average price $313k • Delays at new projects impacted number Established units settled 217 of new units settled (profits now expected - Avera
Slide 24: Overview of FY09 - Commercial Property
Overview of FY09 - Commercial Property FY09 recap Commercial Property operating profit ($m) For personal use only • Strong earnings performance across all asset classes – 24 17 (77) 600 comparable income growth +5.9% 11 500 • High portfolio occupancy 400 300 566 541 • Delivered on asset sales progra
Slide 25: Retail performance
Retail performance • Portfolio is well placed with shopping centres weighted towards non-discretionary expenditure For personal use only • Comparable income growth of +6.8% achieved in FY09 • Vacancies remain low • Minimal oversupply – trade area specific Specialty shop lease expiry profile* Tenant
Slide 26: Office performance
Office performance • Comparable income growth of +5.7% achieved in FY09 For personal use only • Actively managing lease expiry risk with minimal income at risk in FY10 • Office rent reviews due in FY10 – 84% subject to average 4% increase FY10 rent reviews Lease expiry profile* Vacant 1H10 100% 3% 4
Slide 27: Industrial performance
Industrial performance • Comparable income growth of +4.2% achieved in FY09 For personal use only • Vacancies stable at 4.4% • Minimal FY10 lease expiry risk – strong focus on managing lease expiries FY10 rent reviews Lease expiry profile* 100% Vacant 4% 1H10 10% FY14+ 75% 80% 27% 2H10 4% 60% FY11 1
Slide 28: Contact details and disclaimer of liability
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 information, Stockland does not warrant or repr