Lendlease Group · ASX:LLC
Lendlease — Investor Day (May 2009)
101 slides from Lendlease's investor day presentation, May 13, 2009
Slide 1: Lend Lease Strategy Day — Presentations (ASX cover letter)
— PP Lend Lease Corporation 13 May 2009 The Manager The Manager Companies Section Companies Section Australian Securities Limited New Zealand Exchange Limited Pages: One hundred and one (101) pages Dear Sir Lend Lease Strategy Day — Presentations With reference to the Strategy Day being held today b
Slide 2: Lend Lease's Strategic Direction
For personal use only Lend Lease Strategy Day May 2009 Lend Lease’s Strategic Direction Steve McCann Chief Executive Officer
Slide 3: Agenda
Agenda For personal use only The principles behind our business model Strategy Short term/long term strategy Value Proposition Business Market update Update Business outlook 2
Slide 4: Our Strategy
For personal use only Our Strategy
Slide 5: The Principles of our Business Model
The Principles of our Business Model For personal use only Playing the right components of the property value chain to maximise returns Life cycle of a property to maturity Business DEVELOPMENT CONSTRUCTION INVESTMENT MGMT units Multiple revenue Dev Dev Fee CM, PM, AM Fund streams FM Mgr Fees Profit
Slide 6: Refining our strategy
Refining our strategy For personal use only Lend Lease business review Refining our focus from…. To… Growth in EPS Total Shareholder return Expanding further internationally Leader in home market Diversifying into new sectors Scale platforms Recycling capital to achieve profit Recycling capital to f
Slide 7: Strategic Path Forward
Strategic Path Forward For personal use only LEAD BUILD World Class Property RESTORE Solutions Company Reshape Portfolio 3 Operational Excellence Strong Integrated Offering Right Structure 3 Cost Out Grow Platforms 3 Trusted Investment Manager Drive Efficiency 3 Invest in People
Slide 8: Tactical Actions in the Short Term
Tactical Actions in the Short Term For personal use only Action Strategies Implemented Progress ‘Rightsize’ cost base to align to current business volumes Cost Reduction Enhance operational performance plus sustainable ‘cost out’ 3 Minimal capital for new projects, strict criteria & portfolio
Slide 9: Reshaping the Portfolio
Reshaping the Portfolio For personal use only Goals Results Maximise investment Focus on return on capital performance Right risk/ reward equation Play in the right countries where Completing the Integrated Model we can get to scale in Core Markets Maximise returns through multiple earnings opportun
Slide 10: Operational Excellence and People – Execution is key!
Operational Excellence and People – Execution is key! For personal use only Having the right risk management systems Delivery Have the right capabilities Model is clear and simple Simplicity Businesses to focus on execution Flexibility of approach and strategy Clear accountability and au
Slide 11: Informed Growth Targets: Key 'Trends' Impacting Property
Informed Growth Targets: Key ‘Trends’ Impacting Property For personal use only Trend LL Capability 50% of the world’s population urbanised by ‘08 and 70% by Fully integrated mixed Urbanisation 2050 use expertise Australian Superannuation FUM is forecast to triple in size to Continued growth $2.8
Slide 12: Business Update
For personal use only Business Update Appropriate photo
Slide 13: Market Update
Market Update For personal use only Challenging conditions in all of Lend Lease’s key markets Macro Environment Significant downturn in residential markets in the UK and US Impact on Australia lagged Lack of transactional liquidity impacting on ability to recycle assets Liquidity Cautious
Slide 14: FY2009 Guidance
Earnings Update For personal use only Previous 2009 net operating profit after tax guidance of A$380-400 million With 30% downside risk to guidance if capital recycling and reaching financial close on Asset Sales Deferred certain project could not be achieved FY2009 Guidance Given current mark
Slide 15: Our Current Positioning - December 2008
Our Current Positioning - December 2008 For personal use only Retail Communities Public Private Project Investment Partnerships Management & Management Construction Core Activities Asset ownership, Masterplanned Military housing, Project management Asset ownership, real development, urban communitie
Slide 16: Update on Operating Business
Update on Operating Business For personal use only Retail sales slowing in all regions but prime assets relatively defensive Retail Development pipeline will be continually reviewed to conserve capital Cap rates – continued weakening cap rates, particularly US & UK US & UK markets remain ver
Slide 17: UK Business Update
UK Business Update For personal use only Operational – while we are seeing some small increases in vacancies and retail sales are slowing, our prime assets are relatively defensive Retail Valuation – we are expecting further cap rate expansion across our centres as at June 2009 Development – g
Slide 18: Lend Lease's Strong Positioning – Cautious but Confident
Lend Lease’s Strong Positioning – Cautious but Confident For personal use only Short term focus on cash preservation/cost management Focused strategy Long term focus on maximising returns – driving ROE LLC has strong base of recurring earnings c.30% Economic slowdown PPP earnings 12% counter
Slide 19: Lend Lease Value Proposition
Lend Lease Value Proposition For personal use only We see more value in property 18
Slide 20: Lend Lease Competitive Advantage
For personal use only Lend Lease Strategy Day May 2009 Lend Lease Competitive Advantage Tony Lombardo Head of Strategy and M&A
Slide 21: Agenda
Agenda For personal use only Our Business What differentiates our Model Model Integrated end-to-end property solutions Unique Asset Creation Capabilities Key Model Flexibility in our Model for Property Cycles Attributes Global and Local Property Expertise Leader in Sustainability 2
Slide 22: What differentiates our model vs. our competition
What differentiates our LL has a differentiated model, which requires knowledge & skills model vs. our competition across the complete property spectrum to be “market leader” For personal use only Property players Fund Managers (Internalised) (External) Key Competition: Key Competition: Local & glob
Slide 23: Integrated end-to-end property solutions
Integrated end-to-end property solutions Approach For personal use only 4
Slide 24: Our unique asset creation capabilities
Our unique asset creation capabilities Core Competency For personal use only 5
Slide 25: Flexibility in our model to adapt to property cycles
Flexibility in our model to adapt to property cycles Agility For personal use only Property Property Cycle Cycle Actions Actions Maximise Cost Control 1 Capital 1 Recycling Change Business Mix 2 Strong Cost & Capital Mgmt 2 Change Capital Approach Invest & 3 4 Replenish portfolio Reposition Product
Slide 26: Global and local property expertise
Global and local property expertise Knowledge For personal use only Best practice Intellectual sharing capital Leverage & Research and Globally transfer skills Sector insight Manage Property property market trends 7
Slide 27: Leader in sustainable property solutions
Leader in sustainable property solutions Innovation For personal use only 8
Slide 28: Leader in sustainable property solutions
Leader in sustainable property solutions Innovation For personal use only 9
Slide 29: Lend Lease Competitive Advantage
Lend Lease Competitive Advantage We see more value in property… For personal use only 1 Integrated end-to-end property solutions Approach 2 Our unique asset creation capabilities Core Competency 3 Flexibility in our model for property cycles Agility 4 Global and local property expertise Knowledge 5
Slide 30: Capital Allocation/Management
For personal use only Lend Lease Strategy Day May 2009 Capital Allocation/ Management Brad Soller Acting Chief Financial Officer
Slide 31: Agenda
Agenda For personal use only Financial Metrics Key Financial Targets Current Capital Allocation Capital Allocation Target Capital allocation and Portfolio Parameters Capital Expenditure Financial Strength Financial Position Debt Maturity and Financial Covenants 2
Slide 32: Key Financial Metrics – How we measure ourselves
Key Financial Metrics – How we measure ourselves For personal use only Corporate Targets Return on Equity >15% p.a Gearing 30% - 40% Interest Coverage Ratio 5x Annuity Income c.20% of EBITDA Investment Property Business Units Targets Development Construction Management Ownership Margin/Yield c. 20%
Slide 33: Current Capital Allocation – December 2008
Current Capital Allocation – 31 December 2008 For personal use only Risk Adjusted Capital 1 Earnings Sectors/Business Units Geography Active vs Passive Business Unit Investment vs Operating Earnings PPPs 14% Retail Americas Investment Construction 36% 20% UK/Europe Operating Assets 36% 26% Capital 2
Slide 34: Target Capital Allocation and Portfolio Parameters
Target Capital Allocation and Portfolio Parameters For personal use only Risk Adjusted Capital Earnings Sectors Geography Business Unit Business Unit Asset ownership focused on Future Capital Allocation Passive Earnings c.20% Our Geographic footprint: Focus the following sectors: Investments/Co-inve
Slide 35: Opportunities and Funding
Opportunities and Funding For personal use only Pipeline of Total spend to be $1bn–$2bn up to June 2012 Projects Sources of Debt/Available liquidity Operating Cashflow Asset Sales Capital PPP Equity Delfin IM Co- Australian Key Projects Stratford Stakes Projects investments Opportunities Gearing tow
Slide 36: Financial Strength
Financial Strength For personal use only Key Liquidity Metrics 31 Dec 2008 30 June 2008 Credit Rating – S&P/Moody’s BBB- / Baa3 BBB- / Baa3 Weighted average debt maturity1 2 6.5 years 10 years Fixed / floating debt 1 54% / 46%3 84% / 16% Cash (A$m) 1,563.3 842.8 Net debt4 214.1 86.5 Gearing5 5.2% 4.
Slide 37: Debt Maturity and Financial Covenants
Debt Maturity and Financial Covenants For personal use only Consolidated net borrowings must not exceed 50% of total tangible Key financial covenants assets, less cash under the Group facilities Consolidated EBITDA to net finance charges must not be less than 2.5x Lend Lease has ample headroom u
Slide 38: PPP – Lend Lease's Growth Platform
For personal use only Lend Lease Strategy Day May 2009 PPP – Lend Lease’s Growth Platform Mark Menhinnitt Global Head – Public Private Partnerships
Slide 39: Agenda
Agenda For personal use only Model & Rationale Key Market Observations & Issues PPPs and Fit with LLC Strategy Current Market & Positions PPP Lend Lease’s United Kingdom Growth Platform United States (Actus) Canada Australia PPP Case Study – Fort Drum Summary 2
Slide 40: PPP Model & Rationale
PPP Model & Rationale For personal use only “Public Private Partnerships are partnerships between the public sector and the private sector for the purposes of designing, planning, financing, constructing and/or operating projects which would be regarded traditionally as falling within the remit of t
Slide 41: PPP Model & Rationale: Market Sectors
PPP Model & Rationale For personal use only Two Distinct Market Sectors & Sub Segments: Economic Infrastructure markets (with/without patronage risk) e.g. : Roads & Bridges Transport Ports Segments within Utilities & Municipal Services Social Infrastructure (availability payment - no/limited
Slide 42: Why are Governments attracted to the PPP model?
PPP Model & Rationale For personal use only Why are Governments attracted to the PPP model? Government can accurately measure its “Total Cost of Ownership” of an asset and have this warranted by the private sector – achieves this via the Integration of Design/Construction/Operations/Maintenance/Li
Slide 43: Key Market Observations & Issues
Key Market Observations & Issues For personal use only Observation Opportunity/Impact Impact of new capital adequacy ratios Will limit quantum of equity capital available from banks, requiring more equity will limit availability of and pricing of participants for large projects project equity. P
Slide 44: PPPs and Fit with LLC Strategy
PPPs and Fit with LLC Strategy For personal use only Public Private Partnerships are awarded based on the ability to add value over and above what the government can achieve themselves. To be successful in the PPP space, organisations must : Demonstrate an ability to deliver value via integration
Slide 45: Current Markets & Positions – United Kingdom
Current Markets & Positions United Kingdom For personal use only Market Current Lend Lease PPP Position Sector Dev. Mgmt. FM & Size Growth Origination Construct Fund Mgmt. Asset Mgmt. Proj. Mgmt Lifecycle Health Large Stable 3 3 3 3 3 Education Large Growth 3 3 3 3 3 Justice Small Stable x x x x x x
Slide 46: Current Markets & Positions – United States (Actus)
Current Markets & Positions United States (Actus) For personal use only Market Current Lend Lease PPP Position Sector Dev. Mgmt. FM & Size Growth Origination Construct Fund Mgmt. Asset Mgmt. Proj. Mgmt Lifecycle Health (PPP) Small Slow x x x x x x Education (PPP) Small Slow x x x x x x Justice Small
Slide 47: Current Markets & Positions – Canada
Current Markets & Positions Canada For personal use only Market Current Lend Lease PPP Position Sector Dev. Mgmt. FM & Size Growth Origination Construct Fund Mgmt. Asset Mgmt. Proj. Mgmt Lifecycle Health Large Growth JV x Education Large Growth x Justice Medium Growth JV x Accommodation Small Stable
Slide 48: Current Markets & Positions – Australia
Current Markets & Positions Australia For personal use only Market Current Lend Lease PPP Position Sector Dev. Mgmt. FM & Size Growth Origination Construct Fund Mgmt. Asset Mgmt. Proj. Mgmt Lifecycle Health Large Stable 3 3 x Education Large Growth 3 3 x Justice Medium Stable 3 3 x Accommodation Med
Slide 49: Case Study – Fort Drum
For personal use only Actus Lend Lease Case Study – Fort Drum Home to the US Army’s 10th Mountain Division (Light Infantry)
Slide 50: Fort Drum Operating Performance
For personal use only - Ju 0.5 1.0 1.5 2.0 2.5 3.0 92% 94% 96% 98% 100% n- 0 Se 5 p- Ju n -0 5 0 De 5 c- Se p -0 5 0 M 5 ar -0 D e c-0 5 Ju 6 n- M a r-0 6 0 Actual NOI Se 6 Ju n -0 6 15% > budget Actual p- 0 De 6 Pro Forma c- Se p -0 6 0 M 6 ar -0 D e c-0 6 Ju 7 n- M a r-0 7 0 Se 7 p- Ju n -0 7 0 De
Slide 51: Typical MHPI Earnings Profile
Typical MHPI Earnings Profile (Presented May 2006) For personal use only Typical Deal Profile Total Life Profit Flow Project Size $US300M Cash Equity $US6-9M Annual Rent $US30-35M Typical Margin Profile (GPM) Development Fee 3 – 6% of D&C Value D& C Fee 4 – 6% of D&C Value Asset Mgt. 2 – 3% of Rent
Slide 52: Evolving and Growing Project Scope
Evolving and Growing Project Scope For personal use only Stage Date Sources Uses Original Project May ’05 $ 313M 845 New Homes 2,270 Renovations Bachelor Officer Quarters July ’07 $ 30M 192 Apartment Homes for SNCOs (BOQ) Pilot Project & CGOs Modified Scope Plan (MSP) June ‘08 $ 175M Additio
Slide 53: The Value of Actus' Franchise
The Value of Actus’ 50 Year Franchise For personal use only Fort Drum Development Value 900 • Initial Development value = c$313M $US Millions 10 Yr Outyear Profile 800 • Current Development Value = c$520M 700 • Projected Dev. Value by 2022 = c$700M+ Extended IDP 600 • 10 Year Projection assumes base
Slide 54: Summary
Summary For personal use only PPP Model has been embraced by governments worldwide PPP market will continue to move forward despite the current GFC PPPs are a strong fit with LLC’s integrated platform, but not yet optimised Strong growth opportunities exist for Lend Lease across United Kin
Slide 55: Bovis Lend Lease
For personal use only Lend Lease Strategy Day May 2009 Bovis Lend Lease Murray Coleman Global CEO Bovis Lend Lease
Slide 56: Agenda
Agenda For personal use only How we create value Business Overview Key market trends Americas UK / CEMEA Regional Updates Asia Pacific Competitive landscape Safety and Sustainability Priorities & Approach Plan for Growth Opportunities Case Study – Australian Health Sector 2
Slide 57: Business Overview
Business Overview For personal use only Region Backlog GPM Key Sectors HY09 Americas A$196.5m Residential Education (25%) Healthcare Mixed-use Europe A$245.7m Commercial Waste, Education, health (32%) Mixed-use Government / Civic Defence Rail Retail Nuclear (build) Asia Pacif
Slide 58: How We Create Value
How We Create Value For personal use only Our Strategy Continue to embed basic governance frameworks across the regions Refocus and reposition our business to achieve operational excellence and growth Value Proposition Value Add to Lend Lease Project Management ‘In-house’ capabilities Product
Slide 59: Key Market Trends
Key Market Trends For personal use only Global financial crisis impacting all markets Infrastructure spend continues in key markets Bonding and insurance markets continue to tighten Tendency towards greater risk transference in some markets Escalation risk has diminished significantly Go
Slide 60: Regional Update - Americas
Regional Update - Americas For personal use only Global financial crisis has had an impact Key sector contributors to profitability: Healthcare Education Multi-Unit Residential Resizing business to meet future pipeline of work Significant opportunities for growth: Government / Civic
Slide 61: Regional Update - UK / CEMEA
Regional Update - UK / CEMEA For personal use only UK Decline in activity in Commercial and Retail sectors Good wins in the Education sector Athletes Village will be a key FY10 profit contributor Other key pipeline projects include: St David’s 2 Cardiff Lancashire Waste Target growth s
Slide 62: Regional update - Asia Pacific
Regional update - Asia Pacific For personal use only Australia Strong performance Diversification into Healthcare and Social infrastructure offsetting decline in Commercial and Retail pipeline Significant education contracts won in NSW Other key project profit contributors are: ANZ Head Of
Slide 63: Safety & Sustainability
Safety & Sustainability For personal use only Safety Our Vision To operate Incident & Injury Free wherever we have a presence Decreasing LTIFRs around the world Reinvigorated program – Safety Opex Sustainability Compliance Increasing legislation in all markets Measure and reduce our si
Slide 64: Competitive landscape
Competitive landscape For personal use only Top 5 general building, residential, healthcare & green construction Americas Top 2 contractor in New York, Illinois and North Carolina 6th largest contractor in the UK by turnover UK Key player in defense sector No 1 Commercial construction comp
Slide 65: Plan for growth - opportunities
Plan for growth - opportunities For personal use only Embed operational excellence across the business Eliminate major volatility in earnings Sector focus in our key geographies Viable opportunities to assist clients to ‘green’ their portfolios – refurbishment and rebuild Support the Lend
Slide 66: Case study: Health sector – Australia
Case study Health sector – Australia For personal use only Health project pipeline has developed over the last three to five years Consulting Design Health Construction PPPs services & Portfolio only Construction c$3bn Projects Hunter New England Health case Service study 9 RNS Research & Ed Facilit
Slide 67: Integrated Solutions Model
For personal use only Lend Lease Strategy Day May 2009 Integrated Solutions Model Rod Leaver CEO Asia Pacific
Slide 68: Agenda
Agenda For personal use only Strategy Sources of Capital Investor Appetite Integrated Product Spectrum Solutions Model Competitive Landscape Case Study – Somerset Central & Darling Walk Growth Initiatives 2
Slide 69: Integrated Solutions Model: Strategy
Integrated Solutions Model Strategy For personal use only Vision & Objectives Integrated Approach to Integrated Solutions Research Research led investment decisions Being a world class property solutions provider Origination Access to pipeline across sectors Being a trusted investment manager
Slide 70: Integrated Solutions Model: Sources of Capital
Integrated Solutions Model Sources of Capital For personal use only Source Key Attributes Preference to acquire development sites in JVs Lend Lease and maintain co-investments in co-mingled funds Local partners Look to leverage the skills and experience of Lend Lease to develop land/assets Federal a
Slide 71: Integrated Solutions Model: Investor Appetite
Integrated Solutions Model Investor Appetite For personal use only Investors selectively and cautiously seeking compelling opportunities in core real estate space while awaiting for the valuation environment to stabilise Australian Remain overweight in real estate. Denominator effect has pushed illi
Slide 72: Current Product Spectrum
Integrated Solutions Model Current Product Spectrum For personal use only Access to property funds across the risk / return spectrum Types of properties Total Target Return Development in non-traditional sectors 18%+ Higher risk geographies Opportunistic 16 – 17% Value–add Development in core market
Slide 73: Competitive Landscape
Integrated Solutions Model Competitive Landscape For personal use only Core Fund Performance vs. Mercers Index* Competitive Landscape 20.00% Recent landscape has changed with the entry APPF Retail 5yrs = 15.30% of a number of LPT players – now focused on issues at parent level MUPFI 5yrs = 11.70%
Slide 74: Case Study – Somerset Central & Darling Walk
Integrated Solutions Model Case Study – Somerset Central & Darling Walk For personal use only The Integrated Model provides a significant multiplier effect on the base return on equity of co-investing in a project DEVELOPMENT PHASE OPERATIONAL PHASE Project Investment Property Development Property P
Slide 75: Current Growth Initiatives
Capital Solutions Model Current Growth Initiatives For personal use only Australian Opportunistic Club with small number of aligned investors Opportunistic targeting retail and commercial assets Club APPF Hybrid equity offering to strengthen the Fund’s capital Hybrid Offering management position as
Slide 76: Retail & Communities Asia Pacific
For personal use only Lend Lease Strategy Day May 2009 Retail & Communities Asia Pacific David Hutton CEO
Slide 77: Agenda
Agenda For personal use only Sector focus R&C Portfolio Delfin Lend Lease Vivas Lend Lease Retail & Communities Lend Lease Development Asia Pacific Retirement by Design (RbD) Lend Lease Retail Case Study: Darling Walk Key Market Trends Growth/Outlook 2
Slide 78: Emphasis on Sector focus … why?
Emphasis on Sector focus … why ? For personal use only Market Focussed Depth of Market Knowledge Experience Seasoned Personnel Skills, processes, systems, IT, approach to Business Infrastructure Sustainability Efficiencies to drive profitability and Scale competitive advantage incl. Overhead Managem
Slide 79: The R&C Portfolio
The R&C Portfolio For personal use only Master planned communities in major growth corridors, Australia wide Apartments in Sydney & Melbourne Commercial & mixed use in prime CBD positions Retail regional centres – development/ management Retirement & Aged Care Australia wide * Locations excluding LL
Slide 80: Delfin Lend Lease
Delfin Lend Lease For personal use only • Large scale land development in outer ring locations of major growth corridors • Moving to smaller scale urban development to capture “infill” opportunities • Generally, Medium to Long dated projects • Growing emphasis on delivery of built form • Strong bran
Slide 81: Vivas Lend Lease
Vivas Lend Lease For personal use only • Inner city high density residential apartments • Targeting middle market customers • Focussed on 3 major capital cities (Brisbane, Sydney and Melbourne) • Introduces opportunities for LL synergies • Strong operational capabilities established Competitive • Gr
Slide 82: Lend Lease Development
Lend Lease Development For personal use only • Originator (identifying, securing and converting) of large, mixed use sites in inner urban locations • Development Management of delivery of large scale commercial projects • Significant track record and experience in delivering premium grade office dev
Slide 83: Retirement by Design (RbD)
Retirement by Design (RbD) For personal use only • Owner, developer and manager of retirement villages • RBD to transition to be primarily Development Services provider • 43.2% co-investment in LL Primelife • Market dominance of LL Primelife – largest operator in Australia Competitive • Leverage Len
Slide 84: Lend Lease Retail
Lend Lease Retail For personal use only • Experienced developer/manager of quality retail assets in Australia • Growing platform in Singapore servicing Malaysia and (potentially) China • Strong property management capability Competitive • BLL delivery platform for execution excellence Advantage • LL
Slide 85: Case Study: Darling Walk
Case Study: Darling Walk For personal use only Development Agreement between Sydney Harbour Foreshore Authority and Lend Lease Development Asset with 99yr ground lease owned by Lend Lease managed joint venture fund, 50/50 between APPF and external investor Estimated End Value: $560M Developm
Slide 86: Key Market Trends
Key Market Trends For personal use only Residential Retail Commercial • Consumer confidence still weak – • Spending patterns not yet stabilised • Most cities in weak periods of cycle employment concerns to be a “brake” • Lack of capital availability and • White collar employment in inner city • Vaca
Slide 87: Plan for Growth / Outlook
Plan for Growth / Outlook For personal use only “Manage for Downside, Position for Upside” 9 Tactical decisions for short term – “right size” the businesses and preserve cash positions 9 Long term confidence in each sector 9 Well positioned to become dominant in each sector Use Downside to build
Slide 88: Overview of Retirement Living Business
For personal use only Lend Lease Primelife Overview of Retirement Living Business Rod Fehring CEO Lend Lease Primelife The Brighton on Bay (Retirement Village)
Slide 89: Agenda
Agenda For personal use only A “Pure Play” Senior Living Business Lend Lease Primelife Strategy Overview & Strategy Retirement Living & Aged Care Different Businesses Business Model Retirement Living Australia’s Changing Demographics Future Demand Growing Industry Structure “For Profit
Slide 90: Lend Lease Primelife a "Pure Play" Senior Living Business
Lend Lease Primelife a “Pure Play” Senior Living Business For personal use only Lend Lease Primelife (“LLP”) is largest “Pure ASX Listed Retirement Living Operators - Owned/Managed Portfolio 11,230 ILUs Play” retirement operator listed on the 14,000 2,313 Beds Australian Stock Exchange (“ASX”). 13
Slide 91: Lend Lease Primelife – Strategy Objectives
Lend Lease Primelife – Strategy Objectives For personal use only Pillar Strategy Objective Simplification • A Single Operating Platform • Alignment of Business Risks and Business Systems • Clear Brand Positioning • Partner of Choice • High Quality Earnings Value Creation • Reliable Delivery of Distr
Slide 92: Retirement Living & Aged Care Different Businesses
Retirement Living & Aged Care Different Businesses For personal use only Senior Living Sector Retirement Living Aged Care Serviced ILUs Low Care High Care Apartments Care Level None Personal Services Low Level High Level Regulation Moderate (State Based) High (Federal Based) Revenue New Sales, Re-Sa
Slide 93: Retirement Living – The Business Model
Retirement Living – The Business Model For personal use only Typical Deferred Management Fee (DMF) Operating Model Typical Contract Structure Exit Date Timing Risk $518,000 10 Years Capital Gain Accumulation •Un Capped 50% •Say 4% pa 50% $84,000 Return to Owner $329,000 $350,000 Today DMF Accumulati
Slide 94: Australia's Changing Demographics
Australia’s Changing Demographics For personal use only No. of People % of Australian Population Australia’s Population – the next 15 years Age Range Growth Rate 2009 2024 2009 2024 Australian population projected to grow by 23% 65-74 1,557,025 2,564,121 7.2% 9.6% 64.7% 75-84 985,374 1,622,810 4.5
Slide 95: Retirement Living – Future Demand Growing
Retirement Living – Future Demand Growing For personal use only Increasing Acceptance of Retirement Living in Additional retirement units required to meet future demand Australia No. Of Units 250,000 Penetration Rates have increased to above 5.25% 75,000 Extra units required if of over 65s from 3%
Slide 96: Aged Care – Industry Structure "For Profit Sector"
Aged Care – Industry Structure “For Profit Sector” For personal use only Australian Aged Care Industry LLP fifth largest For Profit operator in Australia (2,313 beds) 183,000 allocated residential aged care places 59% of bed licences held by Not for Profit Sector Highly fragmented industry L
Slide 97: Aged Care – Industry Overview
Aged Care – Industry Overview For personal use only Industry does not operate in a ‘free market’ Heavily regulated by Federal Government However this results in stable and predictable cash flow Operations respond well to scale and systems High barriers to entry Bed license allocations; App
Slide 98: Summary
Summary For personal use only Market changing in favour of Ageing in Place with an intertwining of health & lifestyle services & product offerings – a continuum of care Target market 74 year old couples & 75 year old women Demand for secure, affordable, serviced living housing expected to rise
Slide 99: Appendix
For personal use only Appendix 12
Slide 100: Retirement Living Portfolio is well Diversified
Retirement Living Portfolio is well Diversified but with several sub optimal commercial arrangements For personal use only LLP Retirement Village Portfolio Queensland circa 11,200 units under management Allora Gardens Bellflower Buderim Gardens Carlyle Gardens – Mackay 7,407 units: 100% DMF expo
Slide 101: Aged Care – Asset Portfolio
Aged Care – Asset Portfolio For personal use only LLP Aged Care Portfolio Aged Care Facility Avonlea State Vic HC LC 69 ES Total 69 circa 2,300 total beds under management Bass Hill NSW 78 78 Bayside NSW 84 40 124 Bayside Vic 41 41 Queensland Beechwood NSW 70 40 110 Keperra Sanctuary (RBD) Sylvan