Stockland · ASX:SGP
Stockland — Investor Presentation (May 2008)
24 slides from Stockland's investor presentation, May 8, 2008
Slide 1: Presentation to Shaw Stockbroking
Presentation to Shaw Stockbroking 8th May 2008
Slide 2: Recent Market Overview
Recent Market Overview • 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 The Islands, South Beach WA sheets will prev
Slide 3: The impact on property
The impact on property Strong property fundamentals • Good demand • Supply constraints • Rising rents But can it last? • Rising interest rates • Consumer & business confidence Ð • Economic growth? Durack Centre, WA proposed development Concern about values Artist’s impression • Credit crunch • Force
Slide 4: Strong fundamentals – Office markets
Strong fundamentals – Office markets • Office vacancies at record lows – 3.5% nationally • Decent demand in key markets – financial services sector? • Credit crunch will dampen supply even further CBD Market Rental Growth $1,000 Dec-06 $800 Prime Gross Effective Rent $/m2 Dec-07 Dec-08 (Forecast) $6
Slide 5: Strong fundamentals – Retail
Strong fundamentals – Retail Strong labour market and real income growth has driven buoyant retail sales Real Wage Growth Retail Sales Growth 3% 10% 8% 2% 6% 1% 4% 0% 2% -1% 0% Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 -5- Presentation to Shaw Stockbroking - May 2008
Slide 6: Strong fundamentals - Retail
Strong fundamentals - Retail BUT consumer sentiment is a real worry 160 140 Index 120 100 80 Mar 98 Mar 00 Mar 02 Mar 04 Mar 06 Mar 08 -6- Presentation to Shaw Stockbroking - May 2008
Slide 7: The big housing conundrum
The big housing conundrum Rising population growth drives strong residential demand But we’re not building enough houses 1.8% 60,000 1.5% 50,000 1.2% 40,000 10 yr av 0.9% 30,000 0.6% 20,000 0.3% 10,000 Population Growth Quarterly Dwelling Approvals 0.0% 0 Sep 93 Sep 95 Sep 97 Sep 99 Sep 01 Sep 03 Se
Slide 8: A-REIT Market has changed
A-REIT Market has changed From … … To Performance Trust me Show me Delivery Capital Cheap and abundant Expensive and scarce Availability Investor Safe haven ‘Risky business’ Perception Low and convergent Rising and diverging Valuations cap rates cap rates Source of Cap rate compression and Underlyin
Slide 9: 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 10: 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$1.0bn d
Slide 11: Business Model
Business Model Stockland Recurring Trading Rental Income / Trading / Trust assets Development Profits Management Fees STRATEGIC WEIGHTING 60% - 80% 20% - 40% EBIT Assets 70% - 80% 20% - 30% - 11 - Presentation to Shaw Stockbroking - May 2008
Slide 12: Financial Performance
Financial Performance (A$m) Financial Performance Net operating profit* Total Shareholder Return** 700 1H 611 3 Yr 600 2H 554 503 20% 5 Yr 500 456 18% 16% 400 14% 325 12% 300 10% 8% 200 6% 100 4% 2% 0 0% FY04 FY05 FY06 FY07 1H08 SGP A-REIT 200 EPRA / NAREIT Global - 12 - Presentation to Shaw Stockbr
Slide 13: Capital Management
Capital Management Gearing (Debt / Total Tangible Assets) Capital ManagementStockland vs A-REIT200 * 45 SGP 40 A-REIT200 35 30 25 20 15 10 5 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 1H08 ^ - 13 - Presentation to Shaw Stockbroking - May 2008 * As at 31 December 2007 ^ A-REIT200 Citi Estimate Source: SGP/
Slide 14: 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 15: Strategy & Competitive Advantage
Strategy & Competitive Advantage • Market leadership in each of our Capital Partners businesses Retirem ent • Active Capital Management to provide Retail Living lowest cost funding solutions • Collaborate across the businesses to Integrated create value adding solutions Office mixed use Apartm ents
Slide 16: Summary
Summary • Markets have taken a bashing • Concerns towards property values – perception or reality? • Fundamentals of supply/demand are good • Stockland is in a solid position − Strong balance sheet − Sound strategy Allisee, Gold Coast, QLD − Excellent property skills - 16 - Presentation to Shaw Stoc
Slide 17: Annexures
Annexures Annexures - 17 - Presentation to Shaw Stockbroking - May 2008
Slide 18: 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 19: 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 20: 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% - 20 - Presen
Slide 21: 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 - 21 - Presentation to Shaw Stockbroking - May 2008 * As a
Slide 22: 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 23: 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% - 23 - Presentation to Shaw Stockbroking - May 2008 * As at 31 December 2007
Slide 24: 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