Stockland · ASX:SGP
Stockland — Investor Day (March 2016)
73 slides from Stockland's investor day presentation, Mar 30, 2016
Slide 1: ASX/Media Release: Stockland Investor Day Update
133 Castlereagh Street T 02 9035 2552 Sydney NSW 2000 F 02 8988 2552 www.stockland.com.au 23 November 2011 ASX/Media Release STOCKLAND INVESTOR DAY UPDATE Stockland today announced it had recorded continued positive sales momentum in its residential communities in October and November, due to its fo
Slide 2: Caloundra South masterplanned development
The centre piece of the investor update was Stockland’s Caloundra South masterplanned development on the Sunshine Coast, which will eventually become home to around 50,000 people and have an end project value of $5 billion. The early release stage, Bells Reach, will provide immediate supply to the m
Slide 3: Group update
Group update Matthew Quinn, Managing Director www.stockland.com
Slide 4: Agenda
Agenda Presentation and Webcast • Group Update - Matthew Quinn, Managing Director • Residential Communities strategy, performance and market update - Mark Hunter, CEO Residential • Queensland market update - Kingsley Andrew, GM Queensland Residential • Q & A - Matthew Quinn, Mark Hunter, Kingsley An
Slide 5: Our Vision, Strategy and Competitive Advantages
Our Vision, Strategy and Competitive Advantages Our Vision • To be a trusted partner with government to deliver vibrant and sustainable communities, retail centres and social hubs • To deliver our customers ‘a better way to live’ • To be Australia’s preeminent greenfield community developer Our Stra
Slide 6: Our Retail centres are outperforming the market
Our Retail centres are outperforming the market Value and convenience offering continues to be more resilient • MAT performance to 30 September 2011 stronger than market; October sales continued this trend • Centres in regional markets such as Gladstone, Nowra and Traralgon are trading particularly
Slide 7: Business update
Business update Residential market conditions • Too early to determine benefits from 25 bps interest rate cut • Positive Residential sales momentum has continued through October and November: - First Home Buyers are the most active segment - will benefit most from interest rate cut - Affordable prod
Slide 8: Residential Communities – Investor Briefing
Residential Communities – Investor Briefing Mark Hunter, CEO Residential 23 November 2011 www.stockland.com
Slide 9: Agenda
Agenda 1. Our Residential Communities strategy 2. Bringing our strategy to life 3. Financial performance 4. Market Update -1-
Slide 10: Stockland is the leading Residential Community developer in Australia
Stockland is the leading Residential Community developer in Australia • We consistently deliver strong returns Delivering record EBIT in FY11 In FY11 sold five times as many lots in our active corridors as the next competitor High RONFE (return on net funds employed) • We have a unique, divers
Slide 11: Our strategy remains to deliver affordable, high-quality residential communities
Our strategy remains to deliver affordable, high-quality residential communities for middle Australia Our aim • To be Australia’s leading greenfield community developer • To be a trusted partner with government to deliver vibrant and sustainable residential communities • To deliver our customers ‘a
Slide 12: Population and household size create demand for 160,000 dwellings
Strong population and declining household size creates underlying annual demand for 160,000 dwellings1 Population Household Size growth (p.a.) (People per dwelling) 500,000 5 Net international migration 450,000 Natural Increase 400,000 Average Household Size 4 (RHS) 350,000 Strong population 3.0 peo
Slide 13: Vacant land sales are the largest part of the market
Vacant land sales are the largest part of the market Average annual underlying demand1 Australian established dwelling stock1 8.4m ~ 160,000 Our Focus 0.9 Apartments 0.9 ~50,000 Semi-detached Separate House ~25,000 ~ 85,000 79% of 6.6 dwellings are separate houses Total Demand Apartments & Infill Ne
Slide 14: Detached homes in greenfield areas will remain at least 50% of supply
Detached homes in greenfield areas will remain at least 50% of total supply State Governments acknowledge that greenfield is key to meet future urban housing needs1 South East Queensland - 2031 plan 50% Infill Perth target - 2031 plan 50% Greenfield 47% Infill 53% Greenfield Sydney Target -2036 plan
Slide 15: Vacant land is lower risk and less capital intensive
Vacant land is lower risk and less capital intensive than building houses and apartments Vacant land sales House building Apartments • Largest market segment • Greater exposure to supply • Large upfront and ongoing chain risk capital requirement • Can acquire in large parcels with economies of scale
Slide 16: Significant potential for growth by expanding into new corridors
We have significant potential for growth by expanding into new corridors Annual underlying demand for vacant land sales ~85,000 1 ~8,000 1 Our 26 priority ~34,000 corridors FY11 effective demand lower than 1 ~43,000 ~43,000 Not yet entered underlying due to ~4,000 3 corridors low point in the housin
Slide 17: Our competitive advantages enable us to capture market share
Our competitive advantages enable us to capture market share - in FY11 we achieved 29% share in active corridors 1. Identify and • Targeted corridor strategy acquire land • Acquisition of quality land on capital efficient terms • Strong balance sheet and proven track record provides vendor certainty
Slide 18: Customer Insight: informs our business decisions
Customer Insight: informs our business decisions The Customer Journey Understand • Customer behaviours customer • Reasons for key decisions Dream Research Purchase Build Move in journey • Emerging trends First Home Buyer Leads: Perception of Value • Determine what customers can afford 60% Generate •
Slide 19: Customer Insight: who our customers are and what they can afford
Customer Insight: we know who our customers are, what they can afford and what they value1 First Home Buyer Upgrader Investor Retirees • Young couple, singles • Families • Private individuals • Retired couple or looking to buy a safe, widow(er) 70+, looking Description • Looking to get into the • Lo
Slide 20: Product Development: more than just House and Land
Product Development: more than just House and Land • Determine product demand and Leverage Market & supply in key corridors Customer research • Define the needs of all customer segments • Create different neighbourhoods within projects that appeal to different Village positioning market segments − E
Slide 21: Product Development: innovative products from strong partnerships
Product Development: innovative products from strong partnerships Affordable for first home buyers Affordable for families Target price range: $290,000 - $350,000 Target price range: $350,000- $475,000 • 3 bedroom, 2 bathrooms, 1 garage • 4 bedroom, 2 bathrooms, 2 garage • Typical lot size - 212 sqm
Slide 22: Community Development: we create a better way to live
Community Development: we create a better way to live • A sense of community belonging • Access to education Understand our • Access to shops customer needs • Safety • Opportunity to exercise and be healthy • Dedicated Community Development managers assigned to projects Resource appropriately • Comm
Slide 23: In-house capabilities
Our scale enables us to invest in key capabilities Identify Purpose / Plan and Obtain Detailed Design Construct & Complete & Opportunity Opportunity Approval & Tender Deliver Manage Our Focus Buy in the Extract the Obtain Cost Speed to Leave a best location maximum approvals efficiency market legacy
Slide 24: Agenda
Agenda 1. Our Residential Communities strategy 2. Bringing our strategy to life 3. Financial performance 4. Market Update - 16 -
Slide 25: North Shore Townsville - brings our 3-Rs together
North Shore Townsville - brings our 3-Rs together Project snapshot • Acquired in 2003 for $6m • 5,200 lot master planned community • Over 800 lots sold to date Existing and future community • Multiple residential ‘villages’ • Stockland retail centre with Woolworths and 13 speciality shops and future
Slide 26: Early delivery of community infrastructure in North Shore has driven strong sales
Early delivery of community infrastructure in North Shore has driven strong sales North Shore Settlements (#) 247 15% 214 215 108 17 FY07 FY08 FY09 FY10 FY11 FY12 (Net Deposits Approval Works Public launch Commenced Feb. ‘11 - Opened to 31October) obtained commence shopping centre Catholic College O
Slide 27: Lensworth was Australia's largest ever residential land transaction
Lensworth was Australia’s largest ever residential land transaction Lensworth Portfolio • Portfolio acquired in December 2004 • Cost $846m • Portfolio comprised: – 29,600 lots – 17 projects including Caloundra, North Lakes and Highlands – Presence in 3 States (NSW, Vic, Qld) – A mix of active and lo
Slide 28: The Lensworth portfolio has delivered excellent returns
The Lensworth portfolio has delivered excellent returns Lensworth Yield Uplift Portfolio performance ~7,000 ~ 9,000 • Lots settled ~9,000 • Net revenue $2.1bn ~ 30,000 ~ 28,000 • EBIT margin 27%1 • Operating profit margin2 23%1 • Cash flow positive Sep 2011 Yield increased by 7,000 lots through: • M
Slide 29: Lensworth lessons used to refine our strategy
Lensworth taught us several lessons which we have used to refine our strategy 1. We create significant value when we buy large projects e.g. North Lakes, Highlands 2. We have applied these lessons to recent acquisitions e.g. Vale, Lockerbie, Leppington North Lakes (Qld) 3. Take a portfolio approach
Slide 30: Caloundra: Australia's largest project
Caloundra: Australia’s largest project will deliver significant cross business synergies Caloundra – Northern Portion (2,360 Ha) • ~50,000 residents across ~20,000 lots • ~170,000 sqm retail and commercial • Number of retirement villages Funds employed for Northern portion Land cost $117m Southern p
Slide 31: Agenda
Agenda 1. Our Residential Communities strategy 2. Bringing our strategy to life 3. Financial performance 4. Market Update - 23 -
Slide 32: Speed to market delivers strong returns on funds employed
Speed to market delivers strong returns on funds employed Net Funds Return on FY11 Average Employed1 Net Funds Employed Delivering current earnings 38 Active projects $1.1b 23% Strategic Focus Sales, approvals, acquisitions 16% Enhance near 16 New projects term earnings $0.8b Commencing in FY12 & FY
Slide 33: Agenda
Agenda 1. Our Residential Communities strategy 2. Bringing our strategy to life 3. Financial performance 4. Market Update - 25 -
Slide 34: National housing sentiment points to improving activity
National housing sentiment points to improving activity1 100% “Time to buy a dwelling” sentiment (advanced 3 months) 80% 60% Housing Finance (values – ex-refi) 40% Year on Year change (%) 20% Sentiment leads housing finance commitments by ~3 months 0% Sentiment data is pre-November interest rate
Slide 35: Affordability has improved
Affordability has improved • Affordability improving due to: Affordability in most States trending down1 45% Mortgage Repayments as a % of Household Income Weak established house prices 40% Falling interest rate environment 35% 35% “affordable” benchmark Rising incomes 30% 25% 20% • Melbourne,
Slide 36: Our lead volumes are starting to improve
Our lead volumes are starting to improve • Latest quarter leads up on prior quarter Stockland customer leads1 • Growth in latest quarter mainly in WA and Qld 8,000 Total lead volumes 6,000 • Reflective of improving customer sentiment and anticipation of interest rate cuts 4,000 • Prevalence of first
Slide 37: NSW: Acute undersupply continues to grow
NSW: Acute undersupply continues to grow • Current ~130,000 housing supply deficit still growing Undersupply driving up shortage1 due to significant fragmentation of land ownership • Rental market remains very tight (1.3%) and rents are growing • First home buyers returning to market, driven by affo
Slide 38: Vic: Returning to historic levels of activity
Vic: Returning to historic levels of activity • Dwelling completions down 25% from peak but still Dwelling completions returning to above long term average long term average levels1 12,000 • Underlying demand underpinned by robust net 10,000 international migration 8,000 6,000 • Victorian greenfield
Slide 39: WA: improving affordability flowing through to housing finance
WA: improving affordability flowing through to housing finance Houses on market starting to come down2 • Established market listings beginning downward trend as sellers meet the market 40,000 • Housing finance trending up 30,000 20,000 • Household income continues to rise on the back of 10,000 minin
Slide 40: Qld: coming off the bottom of the cycle
Qld: coming off the bottom of the cycle Owner-occupied loans trending up1 • Housing finance trending up 11,000 • New homes sales up 16% in last two months 10,000 9,000 • Recent Builder Boost driving enquiry for affordable 8,000 new homes 7,000 6,000 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 •
Slide 41: Recap of key points
Recap of key points 1. We are the leading and largest residential communities developer in Australia. This scale gives us advantages and access to capabilities 2. We have a unique and geographically diverse portfolio comprising 73 projects, over 90,000 lots, positioning us well for future growth - 1
Slide 42: Queensland Market Update
Queensland Market Update Kingsley Andrew, General Manager – Residential, Queensland www.stockland.com
Slide 43: Key issues
Key issues • Queensland market fundamentals: underpinned by resources • Market conditions: showing signs of improvement • Stockland communities: well placed for growth -1-
Slide 44: Strong outlook led by investment growth and increased employment
Strong outlook led by investment growth and increased employment Qld GSP vs. National GDP1 6% • Strong Gross State Product forecast with 5% more than $40bn of resource projects to 4% commence in FY12 and FY131 3% 2% • Employment growth underpinned by diverse 1% resource sectors including coal, Coal
Slide 45: Diversity of new resource projects to underpin recovery
Diversity of new resource projects to underpin recovery • New projects increase geographical footprint of resources in Queensland • Committed resource investment to generate 45,000 direct full time jobs1 Townsville Mackay • South East Queensland to be beneficiary of white and blue collar employment
Slide 46: Population growth returning to historical levels
Population growth returning to historical levels Queensland population growth and forecast (annual)1 140,000 Forecast growth 120,000 Natural increase Net international migration 100,000 Net interstate migration Steady growth 80,000 60,000 40,000 20,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 47: Key issues
Key issues • Queensland market fundamentals: underpinned by resources • Market conditions: showing signs of improvement • Stockland communities: well placed for growth -5-
Slide 48: Time to buy and consumer sentiment recovering
Time to buy and consumer sentiment recovering Owner occupied housing finance vs. Time to buy sentiment1 120% “Time to buy a dwelling” sentiment (advanced 3 months) • Strong correlation between housing finance 100% and time to buy sentiment: Housing Finance Year on Year change (%) 80% (values – ex-re
Slide 49: Established market remains soft and oversupplied
Established market remains soft and oversupplied Brisbane established houses on market1 35,000 • Levels of established houses on market 30,000 have remained above average for more 25,000 than12 months 20,000 15,000 • Prices have been in decline in most 10,000 Queensland markets throughout the past 1
Slide 50: Key issues
Key issues • Queensland market fundamentals: underpinned by resources • Market conditions: showing signs of improvement • Stockland communities: well placed for growth -8-
Slide 51: First Home Buyers leading the market
First Home Buyers leading the market Leads by segment1 40% • Strong demand from First Home Buyers 35% who are unconstrained by established 30% 25% market 20% 15% • Deposits have bounced off mid year lows: 10% 5% Recovery driven by targeted customer and 0% First Home Buyer Investor Upgrader product
Slide 52: Affordable lots are widely accepted and selling strongly
Affordable lots are widely accepted and selling strongly Reduction in Queensland lot sizes1 • Demand strongest for product under Portfolio (15%) FY10 FY12 $200,000 (<450 sqm) and we continue to 60% adjust product mix to meet this demand: 50% (9%) 40% Lots over 571sqm fallen by 15% in two 30% yea
Slide 53: Stockland delivering most affordable product on the market
Stockland delivering most affordable product on the market Brisbane North corridor - comparable 3 bed product Median Stockland Entry Closest Major House Price Price Competitor • Stockland home and land packages well $380,000 $296,000 $323,000 below the comparable median price Average household incom
Slide 54: Recap of key points
Recap of key points • Sound fundamentals backed by a diverse resource economy • Residential market showing signs of improvement • Stockland communities are located in corridors to benefit from the resource sector • Innovative and affordable product is outperforming the market and driving market shar
Slide 55: Investor Tour November 2011
INVESTOR TOUR NOVEMBER 2011
Slide 56: Content
CONTENT • Caloundra South overview – Ben Allen, General Manager Sustainable Communities • Planning and Approvals status update – Marc Wilkinson, QLD Planning and Approvals Manager • Masterplanning and delivery – Ben Simpson, Project Director - Caloundra South
Slide 57: Project overview
PROJECT OVERVIEW • Location - ideally placed at the gateway to the Sunshine Coast and close to Brisbane • Scale - 2,360 hectares, home to 50,000 people • Value - $5bn end value • Ownership - master developer and single ownership • Diversity - opportunity to leverage 3-R synergies • Certainty - Devel
Slide 58: Leveraging our capability
LEVERAGING OUR CAPABILITY Bells Reach & Neighbourhood Major Activity Centre Centre District Centre District Centre Neighbourhood Centres Industry & Business Zones District Centre Neighbourhood Centres 165ha OF INDUSTRIAL LAND MULTIPLE RETIREMENT LIVING VILLAGES BRUCE HIGHWAY/SUNSHINE MOTORWAY 182,00
Slide 59: Sunshine Coast growing rapidly
SUNSHINE COAST GROWING RAPIDLY • Population growth strong projected population growth (2.1% p.a.) Population expected to grow to 500,000 by 20312 • Trade area growth strong trade area growth (71%) ~132,000 growing to ~226,000 people by 20311 • Public infrastructure investment Kawana Hospital - $2.5b
Slide 60: Fundamentally undersupplied
FUNDAMENTALLY UNDERSUPPLIED Positioned to service undersupply, generate employment and deliver affordable product 1. Office of Economic and Statistical Research (Qld) 2. Urbis
Slide 61: Planning and approvals
PLANNING AND APPROVALS MARC WILKINSON, QLD PLANNING AND APPROVALS MANAGER
Slide 62: Approval capability
APPROVAL CAPABILITY • National Approval and Design Team − National and State capability to ensure pipeline − Seen as valued partner to public authorities • Caloundra South − Expertise in community building and government engagement has wider benefits across portfolio − Leverage of Caloundra South pr
Slide 63: Approval timeframes
APPROVAL TIMEFRAMES 1 1. EPBC – Environmental Protection and Biodiversity Conservation Act 1999
Slide 64: Approved development scheme
APPROVED DEVELOPMENT SCHEME • Approved October 2011 • Secures development entitlements Commercial Property − 117,000m² Retail − 65,000m² Commercial − 650,000m² Industrial/service industry and showrooms Residential − 20,000 dwellings Retirement − Multiple villages
Slide 65: Approval process
APPROVAL PROCESS Bells Reach (Early Release Area) Development Scheme Secure Development Rights Master Plan Approval Detailed Approval EPBC Federal Approval
Slide 66: Infrastructure
INFRASTRUCTURE • Infrastructure charge benchmarks − Comparative charges of $25,000/lot1 − State-wide infrastructure cap $28,000/lot • Key infrastructure − Kawana arterial road extension − Rail connection to city line 2031 − Bruce Highway Interchange – to be funded by Federal Government − Draft Infra
Slide 67: Community consultation
COMMUNITY CONSULTATION • Extensive consultation − Continual stakeholder engagement • Communication process − Key concerns being addressed − Environmental benefits package developed − Public transport strategy to address community needs − Open space Master Plan to cater for environmental conservation
Slide 68: Development certainty
DEVELOPMENT CERTAINTY • Current status − Development Scheme approved − Master Plan in preparation − EPBC response in preparation • Land uses − Preferred locations for main land uses • Infrastructure − Location of major infrastructure identified • Future planning process − ULDA main approval authorit
Slide 69: Masterplanning and delivery
MASTERPLANNING AND DELIVERY BEN SIMPSON, PROJECT DIRECTOR – CALOUNDRA SOUTH
Slide 70: Master plan outcomes
MASTER PLAN OUTCOMES • Master Plan purpose – define next layer of planning, facilitate progressive and orderly development • Certainty - further define development entitlements, allow for flexibility • Vision - provides Stockland’s detailed development vision • Implementation - identifies land uses,
Slide 71: Development staging
DEVELOPMENT STAGING • First stage commenced Bells Reach provides immediate supply and FY12 settlements • Long term pipeline secured 25 – 35 year project • First residential settlements at Caloundra South ~300 lots sales per year from FY14, growing to ~900+ per year with multiple development fronts •
Slide 72: A unique customer opportunity
A UNIQUE CUSTOMER OPPORTUNITY Caloundra South Customer Insights
Slide 73: Key take outs
KEY TAKE OUTS • Strong market dynamics • Certainty and flexibility in approval process • A vibrant and sustainable community