Slide 1: FY07 Results Presentation
FY07 Results Presentation For personal use only 8 August 2007 1 www.stockland.com.au Agenda • FY07 Group Achievements • Capital Management • Divisional Commentary • Stockland Halladale • Growth Strategy • Outlook Waterfront Place, QLD 2 1
Slide 2: FY07 Key Achievements
FY07 Key Achievements For personal use only • Record performance from all operating divisions • Established UK platform through acquisition of Halladale • Delivery of retirement living strategy - acquisition of ARC • Significantly increased development pipeline • Capital recycling – Saville sale and
Slide 3: Divisional Key Financial Results
Divisional Key Financial Results For personal use only Portfolio Summary RETAIL Total Portfolio $4.3bn Operating profit 6.6% Centres 43 Recurring (rent) $243.2m Total MAT* $5.1bn Trading Profits $8.9m MAT Growth** 4.9% Comparable rental income growth 5.5% Speciality MAT $8,200/m2 FY07 Revaluation Ga
Slide 4: Divisional Key Financial Results - Development Division
Divisional Key Financial Results For personal use only DEVELOPMENT DIVISION Gross Assets $3bn 30 June 2007 Record Operating Profit Performance Retirement 300 $273m Living 10% $239m 250 Apartments O p e ra tin g P ro fit $ m 20% $184m 200 14% $157m 30% 150 $94m 17% 100 $63m 67% Residential 49% 50 Com
Slide 5: Divisional Key Financial Results - Apartments, Retirement Living
Divisional Key Financial Results For personal use only Portfolio Summary APARTMENTS Projects Sold Settled Completed Performance % No. %* Revenue 78% $180m Allisee 71 58 50 (Stage 1) EBIT $30m Koko 83 90 81 EBIT Margin % 17% Waterfront 98 51 49 Interest released in COGS $12m Prince Henry 52 4 2 Opera
Slide 6: Capital Management
Capital Management For personal use only Hugh Thorburn • Strong balance sheet • Diversified long-dated debt Waterfront, ACT 11 Capital Management FY07 FY06 S&P Rating A-/Stable A-/Stable Weighted Average Debt Maturity 7.6 years 7.4 years Debt Fixed / Hedged 68% 61% Weighted Average Cost of Debt* 6.2
Slide 7: Group Accounting Matters
Group Accounting Matters For personal use only • Retirement Living accounting • Fair value accounting impact Cameron Close Retirement Village, VIC Waterfront, ACT 13 Retail John Schroder • Strong portfolio – operating upside • Robust development pipeline • Executive team to deliver Stockland Riverto
Slide 8: Market Outlook - Retail
Market Outlook - Retail For personal use only • Consumer sentiment positive • Retail sales continue to grow ahead of CPI • Retail sales outlook positive due to: – Strong employment market and increasing wages – Recovering east coast residential market – Tax cuts • Development margins healthy Stockla
Slide 9: Strategy for Growth - Development Pipeline
Strategy for Growth - Development Pipeline For personal use only • Substantial increase in active projects • Increase in overall pipeline to $1.8bn • Average margin (yield over cap rate) circa 150 bps Estimated Current Project Status No of Forecast Total Cost Average Cap Projects Yield on Cost ($m)
Slide 10: Case Study – Expansion & Integration
Case Study – Expansion & Integration For personal use only Rockhampton – Stage 1 • Est. total value - $320m • Estimated completion – May 2009 • Total GLA – 57,900m2 • Est. yield on cost – 8.5% • Key major tenants – Stage 1 – Kmart – Coles – Big W – Woolworths – Birch Carroll & Coyle – IGA **Artists
Slide 11: Commercial and Industrial
Commercial and Industrial For personal use only Steven Mann • Strong market fundamentals • Portfolio positioned to unlock rental upside • Development pipeline expanded Waterfront Place, BankWest, WA QLD 21 Market Outlook - Commercial • Two speed market - sustainable medium term rental growth in ‘res
Slide 12: Market Outlook - Industrial
Market Outlook - Industrial For personal use only • Transport and storage sector outlook remains positive • WA and QLD continue to outperform with NSW and VIC expected to strengthen • Rise in speculative development due to a shortage of available quality stock • Land values continue to outpace renta
Slide 13: Strategy for Growth – Development Pipeline
Strategy for Growth – Development Pipeline For personal use only • Development pipeline increased by $420m due to acquisitions • 8 projects forecast to commence in FY08 • C&I Projects trading business delivered a $15m profit in FY07 • Average margin (yield over cap. rate) circa 100 bps Estimated Cur
Slide 14: Case Study : Future Developments
Case Study : Future Developments For personal use only Durack Centre 2, Perth • Est. total value - $60m • Estimated completion – Dec 2008 • Total NLA – 7,200m2 • Est. yield on cost – 7.2% • ABGR – 5.0 star • Innovation: – 1,800m2 floor plate with off-set service cores * Artists Impression – Active s
Slide 15: Development Division
Development Division For personal use only Denis Hickey • Record operating performance • Key strategic initiatives • Platform for growth Caloundra Downs, QLD 29 Market Overview Low employment is supporting strong immigration growth Positive Outlook 12% Unemployment rate % [LHS] Immigration p.a. [RHS
Slide 16: Market Outlook – Residential Sector
Market Outlook – Residential Sector For personal use only • Whilst core demand drivers for the residential market remain robust – conditions vary by state FORECAST MARKET PERFORMANCE FY07 FY08 Trading conditions soft. Signs of Improvement in inner ring NSW improvement to flow through to outer ring C
Slide 17: Strategy for Growth – Residential Communities
Strategy for Growth – Residential Communities For personal use only • Extract greater market share as our core projects mature • Continue to bring new projects to market (67,000 lot pipeline) New projects to be launched FY08 9 FY09 8 FY10 9 • R&D products to attract new buyer segments • Affordable h
Slide 18: Strategy for Growth – Retirement Living
Strategy for Growth – Retirement Living For personal use only • Unlock the development pipeline Projects Units Est. Value ($m) Under construction 397 120 Yet to commence 2,880 880 TOTAL 3,277 1,000 • Extend Stockland’s property management skills • Asset management opportunities • Focus on further ac
Slide 19: Stockland Halladale
Stockland Halladale For personal use only Matthew Quinn Newport, Isle of Wight 37 Stockland Halladale • Integration going very well • Performing in line with expectations • EPS neutral in FY07 & FY08 due to fair value adjustments • Accretive from FY09 with potential to outperform • Outstanding platf
Slide 20: Stockland’s Growth Strategy
Stockland’s Growth Strategy For personal use only • Further leverage and extend existing businesses • Stockland Capital Partners • International expansion • New business initiatives • High performing people & culture 39 Stockland’s Growth Strategy • Further leverage and extend existing businesses –
Slide 21: Stockland’s Growth Strategy – Capital Partners
Stockland’s Growth Strategy For personal use only • Stockland Capital Partners – Diversify our capital sources – Grow capability in both UK/Europe & Australia – Bridge between the two markets and create cross border opportunities – New CEO Brett Newman Australia UK/Europe • Over $850m of wholesale a
Slide 22: Stockland’s Growth Strategy – New Business Initiatives
Stockland’s Growth Strategy For personal use only • New Business Initiatives – M&A opportunities – strong balance sheet – Bolt on new business with synergies to existing (eg ARC) – Home Finance – financial services potential down the track North Lakes Retirement Village, QLD 43 Stockland’s Growth St
Slide 23: Outlook
Outlook For personal use only • Operating businesses performing very well • Strategic initiatives on track with potential to outperform • Diversified business allows us to capitalise on market conditions across the sectors • Strong balance sheet – No issues with current credit conditions – Can capit
Slide 24: Consistent Delivery of Strategy
Consistent Delivery of Strategy For personal use only EBIT FY07 Asset 30 June 2007 Actual Strategic Weighting Actual Strategic Weighting Recurring Income Retail 30% 36% Commercial & Industrial 30% 35% Development <1% 1% Capital Partners <1% <1% Stockland Halladale <1% <1% Subtotal 61% 60-80% 73% 70-
Slide 25: Total P&L Effect of Interest – FY07
Total P&L Effect of Interest – FY07 For personal use only Profit and Loss Effect FY07 $m Interest paid 219.0 Interest capitalised: Development assets 134.6 Investment assets 24.1 158.7 Finance costs 60.3 Capitalised interest expensed via COS 63.1 Total P&L effect 123.4 49 Retail Portfolio Sales Tota
Slide 26: Retail Sales - Portfolio Summary
Retail Sales - Portfolio Summary For personal use only Total MAT % MAT Specialities MAT % Occupancy Property ($m) Growth ($/m2) Cost Batemans Bay 86.5 4.0% 7,693 10.6% Bathurst 118.9 1.3% 8,278 11.5% Baulkham Hills 76.2 NA N/A N/A Bay Village 175.8 1.5% 7,151 15.2% Bridge Plaza 44.3 15.0% N/A N/A Bu
Slide 27: Retail Sales - NZ Portfolio Summary
Retail Sales - NZ Portfolio Summary For personal use only Total MAT* % MAT Specialities % Occupancy Property ($m) Growth MAT* ($/m2)* Cost Lynnmall Shopping Centre 196.9 4.7% 7,982 13.9 Botany Town Centre 270.7 1.8% 5,992 13.5 Manukau Supa Centa N/A N/A N/A N/A TOTAL 467.6 * NZ, GST exclusive 53 Ret
Slide 28: Retail Division - Development Pipeline
Retail Division - Development Pipeline For personal use only Forecast Cost UNDER CONSTRUCTION Forecast Yield (%) ($m) Baulkham Hills 51.7 7.4% Forster 48.2 9.4% Wendouree 17.5 8.5% Rockhampton Kmart Plaza 86.5 8.5% Cammeray 51.7 6.3% Total Active Projects 255.6 8.1% Forecast Cost DA APPROVED PROJECT
Slide 29: Retail Division - Revaluations
Retail Division - Revaluations For personal use only Previous BV Valuation % External Property (adjusted for Capex) ($m) Movement Cap Rate ($m) Stockland Wetherill Park 307.5 278.5 10.4% 6.00% Stockland Shellharbour 252.0 228.9 10.1% 6.00% Stockland Green Hills 243.0 168.7 44.0% 5.75% Stockland Town
Slide 30: Retail Division - Revaluations (continued)
Retail Division - Revaluations (continued) For personal use only Previous BV Valuation % External Property (adjusted for Capex) ($m) Movement Cap Rate ($m) Botany Town Centre 50% 173.7 124.2 39.9% 6.00% Lynnmall Shopping Centre 50% 87.5 69.5 25.9% 7.00% Manukau Supa Centa 50% 40.8 33.2 22.9% 7.38% T
Slide 31: Industrial – Market Commentary
Industrial – Market Commentary For personal use only Under Construction Land Rental SGP Portfolio Pre-Commitment m² Values* Growth* Sydney 60% 768,123 42% Ù Ï Melbourne 18% 569,337 52% Ï Ï Brisbane 17% 549,547 53% Ï Ï Adelaide 5% 83,752 85% Ï Ï Perth 0% 198,553 90% Ï Ï * Arrows represent short term
Slide 32: Commercial and Industrial – Revaluations (continued)
Commercial and Industrial – Revaluations (continued) For personal use only Previous BV Property Current Val (adjusted for Capex) % Increment Cap Rate ($m) ($m) 234 Sussex St, Sydney 55.0 49.9 10.2% 6.50% 333 Kent St, Sydney 50.9 40.7 25.0% 6.50% 81-95 Waymouth St, Adelaide 50.0 46.7 7.1% 8.00% Picca
Slide 33: Commercial and Industrial – Revaluations (continued)
Commercial and Industrial – Revaluations (continued) For personal use only Previous BV Property Val (adjusted for Capex) % Increment Cap Rate ($m) ($m) Properties sold during FY07 222 Russell St Car Park, Melbourne* $16.8 $14.8 13.5% 7.50% 541 St. Kilda Rd, Melbourne* $30.1 $28.7 4.9% 7.25% 75 Georg
Slide 34: Lease Expiry Profile – Industrial
Lease Expiry Profile – Industrial For personal use only Dec 2006 June 2007 Vacant 2% FY07 Vacant 7% 5% FY08 FY08 10% 10% FY12+ FY09 43% FY09 15% FY11+ 12% 54% FY10 FY10 15% 14% FY11 13% WALE: 4.2 Years WALE: 4.0 Years Expiry by GLA 67 Commercial & Industrial – FY07 Acquisitions Acquisition Cost Init
Slide 35: Commercial & Industrial – FY07 Acquisitions
Commercial & Industrial – FY07 Acquisitions For personal use only Acquisition Cost Initial Yield - Before Property ($m) costs Industrial Hunt Portfolio 120.0 7.47% Toll Portfolio 58.3 6.93% 3676 Ipswich Rd, Wacol 23.1 N/A Lot 3 Elderslie Rd, Yatala 20.0 N/A Coil Steel, Erskine Park 15.3 7.19% 181 Gr
Slide 36: Development Division - Geographic Diversity
Development Division - Geographic Diversity For personal use only National Queensland TOTAL Lots: 75,500* WA 12% Sunshine Gold Coast VIC & SA 28% Coast 16% 22% QLD 35% Brisbane North QLD 35% 27% NSW & ACT 24% 30 June 2007 * By lots controlled, including Residential Communities, Apartments & Retireme
Slide 37: Residential Communities - Lots Sold
Residential Communities - Lots Sold For personal use only FY07 FY06 Avg Price Avg Price No. Lots Sold No. Lots Sold $(000) $(000) New South Wales 248 $381 372 $346 Victoria & SA 906 $182 936 $165 Queensland 2,202 $263 2,090 $220 Western Australia 714 $263 883 $179 Total 4,070 $252 4,281 $211 * Exclu