Stockland · ASX:SGP
Stockland — Investor Day (November 2010)
42 slides from Stockland's investor day presentation, Nov 23, 2010
Slide 1: Stockland Investor Day
Level 25, 133 Castlereagh Street T 02 9035 2000 Sydney NSW 2000 F 02 8988 2000 www.stockland.com.au 23 November 2010 ASX/Media Release For personal use only STOCKLAND INVESTOR DAY Please find attached presentation material provided ahead of the Stockland Investor day to be held in Sydney today. For
Slide 2: Group Overview
For personal use only Group Overview Matthew Quinn, Managing Director www.stockland.com
Slide 3: Business update: performance in line with FY11 guidance
Business update: performance in line with FY11 guidance For personal use only Residential Communities • Performance tracking well – increased market share and outperforming general market: Record sales performance in 1Q FY11, and similar sales volumes in October Too early to see full impact of Novem
Slide 4: Business update: capital management and FY11 earnings
Business update: performance in line with FY11 guidance For personal use only Capital management • Proactive management of upcoming debt maturities: $160m new domestic 10-year MTN issue at 240bps – first 10-year issue in sector Dec-04 Simultaneous buy-back of $70m of Jun-11 and May-13 notes Outstand
Slide 5: 3-R growth strategy - Diversified model drives competitive advantage
3-R growth strategy - Diversified model drives competitive advantage For personal use only 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 geogr
Slide 6: Stockland's approach
Stockland’s approach For personal use only Customer COMPETITIVE ADVANTAGE Product Community -4-
Slide 7: Our agenda
Our agenda • Commercial Property strategy For personal use only • Retail development pipeline update • Leasing • Design and project management • Community and customer • Q&A • Asset tours: Wetherill Park Highly productive shopping centre - set for $110m stage 1 redevelopment Merrylands Creating a le
Slide 8: For personal use only
For personal use only -6-
Slide 9: Commercial Property Strategy
For personal use only Commercial Property Strategy John Schroder, CEO Commercial Property www.stockland.com
Slide 10: Commercial Property strategy: re-weight to retail and enhance asset quality
Commercial Property strategy: re-weight to retail and enhance asset quality Retail For personal use only • Strategy to develop larger, higher quality retail assets • Develop assets with a history of strong trading and in areas of market growth • Leveraging Stockland’s diversified model and landbank
Slide 11: High quality retail provides better risk-adjusted returns through the cycle
High quality retail provides better risk-adjusted returns through the cycle Historical total returns by sector Retail Office Industrial For personal use only 40 % % % Total Return (Rolling Annual %pa) Total 11.6 9.2 10.2 30 Last 10 Return years 20 Volatility 6.3 8.0 6.9 Total 10 Retail 10.9 5.8 9.5
Slide 12: Market environment and fundamentals underpin investment in retail
Market environment and fundamentals underpin investment in retail For personal use only Consumer sentiment & retail sales still strong post-stimulus1 Strong population growth drives demand for retail2 8% 140 30 7% 130 28 6% 120 Consumer Sentiment Index Federal Retail Sales Trend 5% stimulus 110 (yea
Slide 13: High quality retail is tightly held and rarely trades
High quality retail is tightly held and rarely trades Barriers to entry For personal use only Commercial property asset sales over the last More demand for retail space with growing three years2 population Market size 2 sqm of retail required for every person in 18 Australia1 16 Planning regul
Slide 14: Stockland's retail portfolio has inherent growth prospects through redevelopment
Stockland’s retail portfolio has inherent growth prospects through redevelopment For personal use only Proposed sub-regional redevelopments largely outperform Urbis averages1 14,000 12,000 Urbis Sub-regional1 SGP comparable average: $7,562psm average: $8,976psm2 Specialty MAT $ psm 10,000 8,000 6,00
Slide 15: Occupancy remains high and occupancy costs sustainable
Occupancy remains high and occupancy costs sustainable 1Q FY11 retail update For personal use only • Occupancy 99.5% - 35 vacant specialty shops • Average occupancy cost of 13.8% of MAT (13.4% at 30 June 2010) 30 September 2010 Annual Total MAT ($m) % MAT Annual Growth % Annual Comparable Growth % 3
Slide 16: Moving retail assets up the retail hierarchy
Moving retail assets up the retail hierarchy 1.2 For personal use only Shellharbour Green Hills Major-Regional1 Townsville 0.8 (Stage 1) Merrylands Regional 0.6 0.4 Sub-Regional 0.2 Neighbourhood 0 50 150 250 350 450 550 650 Total Moving Annual Turnover ($m) - 14 - 1. Size of bubble is indicative of
Slide 17: Re-weighting the current portfolio into higher quality retail
Re-weighting the current portfolio into higher quality retail Book Value Weightings ($m) For personal use only 5 – 7 years 2010 Approx. Major-Regional Approx. (>70,000sqm) 30 - 40% 20% ~10% ~15% Regional Office (45,000- 70-75% 10 - 20% 70,000sqm) Industrial ~50% 70% 15%-20% ~35% Sub-Regional Retail
Slide 18: Building the capability to deliver growth
Building the capability to deliver growth For personal use only CEO John Schroder MANAGEMENT & LEASING DEVELOPMENT PROJECT BUSINESS FINANCE HUMAN MARKETING & DESIGN MANAGEMENT DEVELOPMENT RESOURCES Robyn Stubbs Stewart White Stephen Bull Dale Clark Wendy MacKay Matthew Knight Richard Laidlaw Asset m
Slide 19: For personal use only
For personal use only - 17 -
Slide 20: Retail Development Pipeline Update
For personal use only Retail Development Pipeline Update Stephen Bull, General Manager - Development & Design www.stockland.com
Slide 21: Retail growth strategy
Retail growth strategy Retail development projects spread across For personal use only • Well positioned assets in strong non-metro and metro locations non-metro and metro locations • Grow assets to create value uplift and generate increased recurring income • Drive assets up the retail hierarchy –
Slide 22: Rigorous redevelopment process supported by strong team
Rigorous redevelopment process supported by strong team For personal use only Strategic criteria Strong team capability • Fundamentals of the trade area: • Appropriately resourced & experienced team: Sales volume and growth 45 people with diverse backgrounds Population size and growth Average of 23
Slide 23: Retail development pipeline - a sustainable pipeline for growth
Retail development pipeline - a sustainable pipeline for growth Total Estimated Cost Estimated fully % specialty For personal use only Project to complete leased year one shops 3 PROJECTS Cost ($m) ($m) yield leased FY11 FY12 FY13 FY14 FY15 FY16+ Rockhampton 120 20 8.0% 100% Under Construction: Merr
Slide 24: Rockhampton - consolidating two assets to create a significant regional centre
Rockhampton - consolidating two assets to create a significant regional centre For personal use only Trade area • Total retail spend: $1.9bn (5.8% growth p.a.) • Population: 155,000 (1.8% growth p.a.) Pre-commencement centre performance (2007) • MAT: $265m • MAT per sqm (specs): $7,935 (combined) Th
Slide 25: Rockhampton - pre-development
Rockhampton - consolidating two assets to create a significant regional centre PRE-DEVELOPMENT For personal use only • GLA: 53,000m² • Anchors: 4 • Specialty shops: 148 - 23 -
Slide 26: Rockhampton - post development
Rockhampton - consolidating two assets to create a significant regional centre POST DEVELOPMENT For personal use only • GLA: 58,000m², 21,000m2 redeveloped • Anchors: 4 • Specialty shops: 172 Anchors New shops Existing - 24 -
Slide 27: Merrylands - creating a regional centre out of obsolescence
Merrylands - creating a regional centre out of obsolescence Trade Area For personal use only • Total Retail Spend: $1.4bn (4.5% growth p.a.) • Population: 140,000 (1.3% growth p.a.) Pre-commencement centre performance (2007) • MAT: $159m • MAT per sqm (specs): $10,866 Competitive landscape • No sign
Slide 28: Merrylands - pre and post development
Merrylands - creating a regional centre out of obsolescence For personal use only Pre-development • GLA: 22,000m² • Anchors: 3 • Specialty shops: 85 Post-development • GLA: 58,000m² • Anchors: 6 • Specialty shops: 200 - 26 -
Slide 29: Townsville - creating the only regional shopping centre in the market
Townsville - creating the only regional shopping centre in the market Trade area For personal use only • Total retail spend: $2.5bn (4.9% growth p.a.) • Population: 215,000 (1.5% growth p.a.) Pre-commencement centre performance (2009) • MAT: $222m • MAT per sqm (specs): $10,350 Competitive landscape
Slide 30: Townsville - pre-development
Townsville - creating the only regional shopping centre in the market PRE-DEVELOPMENT For personal use only • GLA: 32,000m² • Anchors: 2 • Specialty shops: 120 - 28 -
Slide 31: Townsville - post development
Townsville - creating the only regional shopping centre in the market POST DEVELOPMENT For personal use only • GLA: 46,000m² • Anchors: 3 • Specialty shops: 180 - 29 -
Slide 32: Shellharbour - an opportunity to capture leakage from the trade area
Shellharbour - an opportunity to capture leakage from the trade area For personal use only Trade area • Total retail spend: $2.3bn (5.3% growth p.a.) • Population: 200,000 (1.4% growth p.a.) • Significant regional escape expenditure: $1.2bn Pre-commencement centre performance (2010) • MAT: $225m • M
Slide 33: Shellharbour - pre/post development and sustainability
Shellharbour - an opportunity to capture leakage from the trade area For personal use only Pre-development • GLA: 39,000 sqm • Anchors: 3 • Specialty shops: 120 Post development • GLA: 75,000 sqm • Anchors: 5 • Specialty shops: 220 A new benchmark in sustainability • Illawarra’s first 4 star Green S
Slide 34: Leveraging the benefits of a diversified model
Leveraging the benefits of a diversified model Making best and highest use of Stockland’s landbank For personal use only • Providing a retail element to Stockland’s masterplanned communities is a significant advantage: Generates stronger and earlier enquiry from residential customers Lower initial y
Slide 35: North Shore - Retail development drives whole of project returns
North Shore - Retail development drives whole of project returns For personal use only • Total land area: 1,000 hectares • Number of residential lots: 5,200 • Future population: 15,000 • Town centre size: 80 hectares • Project timeframe: 15-20 years • Total retail on completion: 40,000 sqm • Commerc
Slide 36: North Shore - How retail development drives whole of project returns
North Shore - How retail development drives whole of project returns For personal use only North Shore - Stage 1 retail development • Development cost: $25m • GLA: 5,400 sqm • NOI on completion: $1.5m • Project fully-leased year-one yield: 6.0% • Initial stage of retail generally achieves lower yiel
Slide 37: Leasing Update: Office and Industrial
For personal use only Leasing Update Office and Industrial www.stockland.com
Slide 38: National Office market
National Office market Office markets are recovering with incentives still high For personal use only National CBD white-collar growth1 Australia’s CBD office supply 40 People (‘000s) pipeline has been 10 year average Supply considerably reduced and has 30 high levels of pre-lease 20 Indicators for
Slide 39: Office and Industrial - enhancing portfolio quality
Office and Industrial – enhancing portfolio quality For personal use only Leasing activity and highlights Low Office and Industrial rent at risk1 • 167,000 sqm of Office and Industrial space leased in 1Q FY11: – Rentals achieved are in excess of previous passing rents – Portfolio incentives are bett
Slide 40: Office and industrial leasing - FY11 year-to-date
Office and industrial leasing – FY11 year-to-date Building FY11 Area Remaining Building Property Area Leased Leased to Vacancy WALE Comments use only (sqm) (sqm) (sqm) (years) Continues our recent leasing success Riverside Plaza 38,373 5,515 Primus 2,701 5.4 with SKM (10,000sqm) in FY10 and reinforc
Slide 41: Tenancy retention and new leasing - FY11 year-to-date
Tenancy retention and new leasing – FY11 year-to-date Operational Portfolio For personal use only NLA Weighted Weighted Retention Increase on New Leases Increase on Office Leased (sqm)1 Base rents Average (sqm)1 Base rents Average (sqm)1 Incentives Incentives Sydney CBD 3,689 3,096 4% 14% 593 (3%) 2
Slide 42: 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