Stockland · ASX:SGP
Stockland — BAML Australian REIT Conference 2010
22 slides from Stockland's conference presentation, November 2010
Slide 1: BAML Australian REIT Conference November 2010
Settlers Hills, WA BAML Australian REIT Conference November 2010 www.stockland.com
Slide 2: 3-R growth strategy - Diversified model drives competitive advantage
3-R growth strategy - Diversified model drives competitive advantage Retail Retirement Living Residential Communities Strategy Strategy Strategy Extensive $2.5b retail Increase market share and Grow market share through development pipeline, returns through development of geographic and product enha
Slide 3: Fully-funded strategy and strong balance sheet
Fully-funded strategy and strong balance sheet Delivering on growth strategy: • Residential acquisitions of circa 14,000 lots in FY10 / FY11 year to date, including projects in 3 new growth corridors and profit contribution from FY11+ • Retirement Living organic development pipeline ramping up with
Slide 4: Residential
North Lakes, QLD Residential
Slide 5: Market fundamentals driven by housing undersupply in Australia
Market fundamentals driven by housing undersupply in Australia • Housing undersupply due to population growth: Population growth well above housing starts1 Low rental vacancy levels „000 pa „000 pa 375 500 Marginal increase in average household sizes 450 325 • Household starts lag population growth:
Slide 6: Mortgage debt sustainability, bank mortgage lending is responsible
Mortgage debt sustainability, bank mortgage lending is responsible Sustainable repayments - growth in line with incomes Sustainable debt - buyers are taking on less debt Households growth in incomes and repayments1 Average Loan-To-Value ratio2 80% $10,000 (Australia, 1981-2009) $10,000 75% $8,000 $8
Slide 7: The threat of more interest rate rises is dampening sentiment
The threat of more interest rate rises is dampening sentiment Private Detached House Approvals1 National • Interest rate rises have dampened the positive sentiment generated by 4,000 historically low interest rates and the First Home Owners Boost • Activity declining as affordability comes under pre
Slide 8: Strong first quarter sales performance, outperforming the market
Strong first quarter sales performance, outperforming the market Strong first quarter Residential Communities sales Residential buyer composition (no. of deposits) • Entered FY11 with record 2,249 contracts on hand 3,500 2,975 3,101 3,169 3,000 328 568 738 3 months • Record net deposits of 1,767 in
Slide 9: Affordability is a challenge - Product innovation creates opportunities
Affordability is a challenge - Product innovation creates opportunities Affordability moving towards top end of benchmark Mortgage repayments as % of household income 1 • Will come under further pressure if variable 50% mortgage rate rises outpace income growth Masterplanned communities offer produc
Slide 10: Focus on faster speed to market and improved return on NFE
Focus on faster speed to market and improved return on NFE Large and diverse land bank - 65,700 lots; $1.8b net Land bank comprises mostly active projects 1 funds employed (NFE)1 • Provides 90% coverage of revenue targets for next Active projects (live or commencing within 2 yrs) $1.4b - 33,300 lots
Slide 11: Residential Communities - Market leader with strong growth strategy
Residential Communities - Market leader with strong growth strategy Strategy to increase sales by lifting market share Market share in active corridors1 • Extend market-leading position into new growth corridors Stockland • Disciplined acquisition assessment filters: project 24% scale; population gr
Slide 12: Retirement Living
Gowanbrae, VIC Retirement Living
Slide 13: Retirement Living - Key growth business as the population ages
Retirement Living - Key growth business as the population ages Strategy to grow and diversify the village portfolio Growth of >65 year old demographic is an opportunity Population aged 65+ years • Develop new industry-leading villages (m) millions 8 25% • Drive operational efficiencies in establishe
Slide 14: Stockland's strategy is to create a national Retirement Living platform
Stockland’s strategy is to create a national Retirement Living platform 6 projects under construction in 3 states Development pipeline (% of units) • Approx. 900 units to complete • $230m cost to complete ($380m total cost) WA 21% • Development margin range 15% - 20% QLD 39% (pre overhead, excludes
Slide 15: Commercial Property
Rockhampton, QLD Commercial Property
Slide 16: Commercial property markets are stabilising
Commercial property markets are stabilising Rents National retail demand outstrips supply1 • Retail: 24 700 Population growth drives retail sales, in turn 600 23 Supply „000 sqm driving tenant demand for new space Population (m) 500 22 400 Consumers spending less, but still expect 21 300 modest rent
Slide 17: Commercial Property strategy to re-weight to Retail and enhance asset quality
Commercial Property strategy to re-weight to Retail and enhance asset quality • Retail development underpins growth strategy • Strategy to develop larger, higher quality retail assets • Drive returns through internal asset management, leasing and development capability • Recycle capital from sale of
Slide 18: Good progress with Retail development pipeline
Good progress with Retail development pipeline Projects completed in FY10 Estimated Estimated % Estimated cost to fully specialty leased • Balgowlah and Riverton completed total cost ($m) complete ($m) year one shops leased1 yield Projects underway Regional2 retail redevelopments under construction
Slide 19: Capital Management
Triniti Business Campus, NSW Capital Management www.stockland.com
Slide 20: Strong balance sheet
Strong balance sheet Target gearing range 25% - 35% of tangible assets Key FY10 metrics – 30 June 2010 S&P rating A- / Stable • Currently at 18% but will progressively move Drawn debt1 $3.0b towards lower end of target range to fund 3-R Cash on deposit $0.9b growth opportunities Available undrawn co
Slide 21: Distribution policy simplified
Distribution policy simplified Distribution policy • Board policy is to have a high payout ratio reflecting the predictability of earnings, while maintaining some retained earnings to fund growth • Payout ratio changed for FY09 to greater of 80% of AFFO or Trust Taxable Income Further review • Furth
Slide 22: Stockland Corporation Limited - Disclaimer of Liability
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 represent that the informa