Stockland · ASX:SGP
Stockland — Investor Presentation (April 2008)
33 slides from Stockland's investor presentation, April 2008
Slide 1: Offshore Investor Presentation
Offshore Investor Presentation April 2008 www.stockland.com.au
Slide 2: Stockland's Position in the A-REIT Sector
Stockland’s Position in the A-REIT Sector • Stockland was formed in 1952 and pioneered the stapled security structure • Stockland’s current position* − Top 2 A-REIT^ − Largest diversified A-REIT − Market capitalisation of >A$10bn − 10% of the A-REIT 200 Index The Boardwalk, Queensland − High liquidi
Slide 3: Review & Commentary
Review & Commentary • Unprecedented volatility in debt and equity markets • Key market themes : − Risk has been mispriced − Financial engineering with excessive debt has had its day − Businesses with strong fundamental property skills and solid balance Tooronga, Glen Iris, VIC sheets will prevail Ar
Slide 4: Overview
Overview • Utilise solid business model to drive value in the current volatile market and capitalise on opportunities • Use our expertise and asset diversity / mixed use capability to maximise profits • Capital management – debt / capital via direct partnerships • Focus on driving organic growth thr
Slide 5: Business Model
Business Model The Islands, South Beach, WA Stockland Baldivis, WA *Artist’s impression -5-
Slide 6: Stockland's Integrated Platform
Stockland’s Integrated Platform Capital Partners Retirem ent Retail Living Integrated mixed use Apartm ents Office capability Residential Com m unities Industrial -6-
Slide 7: Australia's largest diversified REIT
Australia’s largest diversified REIT Retail Office Industrial Australian Capital Partners A$937m assets Australian Investment Assets - A$9.3bn under management Communities Apartments Retirement Stockland Halladale (UK) Australian Residential Assets - A$3.2bn A$2.5bn assets under management A$1.0bn d
Slide 8: Financial Performance
Financial Performance (A$m) Financial Performance Net operating profit* Total Shareholder Return 700 3 Yr 1H 611 600 554 5 Yr 2H 20% 503 500 456 18% 16% 400 14% 325 12% 300 10% 200 8% 6% 100 4% 2% 0 0% FY04 FY05 FY06 FY07 1H08 SGP A-REIT 200 EPRA / NAREIT Global * FY01-FY04 is AGAAP, FY05-1H08 is AI
Slide 9: Capital Management
Capital Management Optus Centre, Macquarie Park, NSW Stockland Baldivis, WA -9-
Slide 10: Capital Management: Gearing vs A-REIT200
Capital Management Gearing (Debt / Total Tangible Assets) Capital Management Stockland vs A-REIT200 * 45 SGP 40 A-REIT200 35 30 25 20 15 10 5 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 1H08 ^ * As at 31 December 2008 ^ A-REIT200 Citi Estimate Source: SGP / Citi - 10 -
Slide 11: Capital Management
Capital Management 1H08 S&P Rating A-/Stable Weighted Average Debt Maturity 6.2 years Debt Fixed / Hedged 61% Weighted Average Cost of Debt* 6.6% Gearing (debt/total tangible assets) 28.5% Interest Cover 3.2:1 0.8 0.7 0.6 0.5 $billion 0.4 0.3 0.2 0.1 - FY 0 8 FY 0 9 F Y 10 F Y 11 F Y 12 F Y 13 F Y 1
Slide 12: Diverse Businesses
Diverse Businesses Stockland Baulkham Hills, NSW Stockland Baldivis, WA - 12 -
Slide 13: Residential
Residential PORTFOLIO SUMMARY* Number of Projects Residential Communities 65 Apartments 13 Retirement 20 Book Value (Historic Cost) A$3bn Total End Value Residential Communities A$15.7bn Apartments A$3.2bn No. of Future Lots Residential Communities 67,000 Apartments 2,300 Retirement 3,800 No. of Fut
Slide 14: Market Overview
Market Overview Positives: Residential markets are still performing well • GDP Growth Monthly Dw elling Approvals % • Low Unemployment H o us e s a nd Unit s , priv a t e , m o nt hly 20,000 1.7 • Population Growth 15,000 1.5 • Supply remains constrained 10,000 1.2 Challenges: Issues that hover over
Slide 15: Market Outlook – Residential Sector
Market Outlook – Residential Sector Each market has its own characteristics Last 6 months Next 12 months Tight supply and population growth could NSW Trading conditions remained soft trigger improvement in late 2008 Sound market due to favourable conditions VIC Demand strengthened (affordability and
Slide 16: Residential – Strong Business Model
Residential – Strong Business Model • Scale and reach as Australia’s largest residential developer • Diversity underpins business growth − Geography − Product • Proven track record of managing through market cycles Gross Assets ($3bn) 180 Apartm ents Retirement Living 21% 160 Apartments $152m Reside
Slide 17: Residential Outlook
Residential Outlook • Market conditions generally positive • Strong pipeline from apartments and retirement living will broaden our market reach • Solid position with contracts on hand Contracts on hand - 31 December 700 600 Apartments Residential Communities 500 400 ($m) 300 200 100 0 2004 2005 200
Slide 18: Retail
Retail PORTFOLIO SUMMARY* Number of Properties 45 Book Value A$4.6bn Average Cap Rate 6.2% Total MAT^ A$5.0bn Specialty MAT A$8,600/m2 Vacancy 0.1% (11 shops) Development Pipeline A$2.0bn Est. Return on Cost 7.6% 10 Yr Forecast IRR 13.3% Comp Rent Income Growth 5.5% Occupancy Costs 13% - 18 - ^ Movi
Slide 19: Market Outlook - Retail
Market Outlook - Retail • Retail outlook positive due to: – Steady consumer demand – Strong labour market and growth in real incomes • Sales growth is solid, but may moderate if interest rates rise Real Wage Growth by State Retail Turnover (% yoy) (% yoy, sa.) NSW 4 NSW Victoria Vict oria Queensland
Slide 20: Development Pipeline
Development Pipeline No of Estimated Forecast Current 10 year Project Status* Projects Total Cost Yield on Average Forecast (A$bn) Cost Cap Rate IRR Under Construction 4 0.4 7.1% 6.5% 13.3% DA Approved 2 0.2 7.1% 6.5% 11.4% DA Preparation / Master Planning 13 1.4 7.4% 6.0% 13.6% TOTAL 19 2.0 7.3% 6.
Slide 21: Outlook - Retail
Outlook - Retail • Market outlook favourable • High productivity driving strong income growth • Further upside from development pipeline • Experienced management team to deliver strategy Stockland Baldivis, WA - 21 -
Slide 22: Office & Industrial
Office & Industrial PORTFOLIO SUMMARY* Number of Properties 68 Total Asset Value A$4.7bn Average Cap Rate Office 6.4% Industrial 7.3% Occupancy 98% Development Pipeline A$1.4bn Est. Return on Cost 7.3% 10 Yr Forecast IRR 11.7% WALE 4.1 years - 22 - * As at 31 December 2007
Slide 23: Office Market Outlook
Office Market Outlook • Office market vacancies at record lows • Rental growth in Perth & Brisbane likely to moderate in 2009 • Sydney poised for strong rental growth • Credit crunch could dampen supply CBD Market Rental Growth SGP Portfolio Adelaide, 3% Canberra, 6% $1,000 Dec-06 $800 Sydney, 33% P
Slide 24: Development Pipeline
Development Pipeline No of Estimated Forecast Current 10 year Project Status* Projects Total Cost Yield on Average Forecast (A$bn) Cost Cap Rate IRR Under Construction 4 0.4 7.1% 6.5% 13.3% DA Approved 2 0.2 7.1% 6.5% 11.4% DA Preparation / Master Planning 13 1.4 7.4% 6.0% 13.6% TOTAL 19 2.0 7.3% 6.
Slide 25: Outlook – Office & Industrial
Outlook – Office & Industrial • Office markets are in very good shape • Strong growth from rent reversions • Further upside from development pipeline • Strategic position in the emerging intermodal market Durack Centre proposed development Artist’s impression - 25 -
Slide 26: Stockland Halladale
Stockland Halladale PORTFOLIO SUMMARY* Number of Properties 128 Gross Assets A$452m Assets under Management A$2.5bn Development Pipeline A$1.0bn Portfolio Office 31% Industrial 2% Retail 67% - 26 - * As at 31 December 2007
Slide 27: Stockland Halladale
Stockland Halladale • Integration completed successfully • Strong team and platform • Market conditions very tough, expected to bottom in late 2008 Downside − Pre-sales of several of our projects have been deferred − We will carry them on balance sheet until completion Tudor Street, London Artist’s
Slide 28: Stockland Halladale – Strategy for Growth
Stockland Halladale – Strategy for Growth • Sound strategy of allocating 5% of SGP total value to initial market entry • Strategic target - 10% by 2010 • Upscale existing business − Larger scale projects − More profit share potential − Broaden JV’s / Capital partnerships Shaftesbury House, Glasgow •
Slide 29: Summary & Outlook
Summary & Outlook • Strong property and capital management skills • Solid financial position • Our strategy is sound and well proven Allisee, Gold Coast, QLD - 29 -
Slide 30: Annexures
Annexures Annexures - 30 -
Slide 31: 1H08 Results in Summary
1H08 Results in Summary Quality earnings growth 1H08 1H07 Quality Earnings Growth Operating Profit* $324.6m 10.7% $293.1m Transparent Reporting Earnings per security* 22.4 cents 4.2% 21.5 cents Distributions per security 22.6 cents 5.1% 21.5 cents ** NTA per security $5.68 6.6% Strong Balance Sheet
Slide 32: 1H08 Divisional Financial Highlights
1H08 Divisional Financial Highlights Retail Divisional operating profit $128.2m Comparable net income growth 5.5% Revaluations in 1H08 $174m Office & Industrial Divisional operating profit $157.7m Comparable net income growth 4.9% Revaluations in 1H08 $239m Residential Operating Profit $151.5m - Res
Slide 33: Stockland Corporation Limited / Stockland Trust Management Limited
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