Lendlease Group · ASX:LLC
Lendlease — J.P. Morgan Australasian Investment Conference 2004
42 slides from Lendlease's conference presentation, Oct 8, 2004
Slide 1: Stock exchange announcement: presentation by Group CEO
8 October 2004 The Manager The Manager Companies Section Companies Section Australian Stock Exchange Limited New Zealand Stock Exchange Limited Pages: Forty-two (42) pages Dear Sir STOCK EXCHANGE ANNOUNCEMENT PRESENTATION BY GROUP CEO AT J.P. MORGAN AUSTRALASIAN INVESTMENT CONFERENCE | ae Lend Lease
Slide 2: J.P. Morgan Australasian Investment Conference
J.P. Morgan Australasian Investment Conference Edinburgh — October 2004
Slide 3: Overview
AMI Overview
Slide 4: Quality businesses with strong growth potential
> Quality businesses with strong growth potential — Real Estate Funds Management and Asset Management - Retail Asset Development and Management — Urban Community Development - UKPFls — Project and Construction Management > Key markets in Australia, UK and US > Experienced and qualified workforce, di
Slide 5: Real Estate Funds Management, Asset Management and Ownership
Real Estate Funds Management, Asset Management and Ownership Retail Asset Development | + and Management Urban Community Delfin Lend Lease Development ,° Lend Lease Development it Urban Communities” PFls ' _ Market watch : . _ Market watch i i Project and Construction Boe Lend Lease ee i* Bovis Lend
Slide 6: Lend Lease Group 2004 2003
Lend Lease Group 2004 2003 ASM ASM Core Businesses ‘) 225.9 203.1 Discontinuing REI businesses 79 37.4 IBM GSA Operating Profit 1.4 12.1 Non Core Capital Services 20.7 10.1 Restructuring / Merger Costs (18.5) (32.5) Total Operating Profit 237.4 230.2 REI exit / write-downs (2.3) (945.0) Sale of IBM
Slide 7: Lend Lease / GPT Merger
Be i 6 AMI Lend Lease / GPT Merger
Slide 8: Strategic review determined merger creates best shareholder value
> Strategic review determined merger creates best shareholder value >» Merger implementation facilitated by the existing relationship - Builds on existing skills and market positions - No cultural issues > Merger rationale GPT Lend Lease — Excellent assets — Strong growth and management however ...
Slide 9: Lend Lease initially proposed merger May 2004
> Lend Lease initially proposed merger 24 May 2004 > GPT Board recommendation to proceed 6 August 2004 > Key merger terms - Ratio of 1 stapled security per existing Lend Lease share - Ratio of 1 stapled security per (up to) 3.8 existing GPT units and (up to) 65 cents per unit special distribution >
Slide 10: Leading diversified real estate entity in ASX
Leading diversified real estate entity in ASX Asset Ownership > A$10B in quality property assets > A$5.9B retail portfolio VV - 3of top 10 performing Australian centres — Operating metrics significantly ahead of industry averages - Investment in strongly performing UK & US assets A$3.0B Australian o
Slide 11: Australia and International strategy
Australia > Continue GPT’s current portfolio strategy — Focus on consistency in earnings - Optimise portfolio to maximise performance - Selectively expand to enhance earnings growth — Continue to diversify earnings stream to reduce volatility — Drive development pipeline in retail and industrial > L
Slide 12: Merged Entity Earnings
Merged Entity Earnings > le and growing earnin Operational Earnings tap e and growing ea gs 29% ase > Objective to maintain investment income around 70% — Lend Lease investment income growth in FY04 of 12% > Senior management variable compensation to be based on achieving intended target 7% p.a. gro
Slide 13: Overall allocation of capital for investment versus corporate activity
> Overall allocation of capital for investment versus corporate activity established - Strategy determines capital availability, return requirements and overall allocation between investment and corporate activities > Corporate earnings - Strategy determines identification of opportunities - Busines
Slide 14: Allocation process
> Allocation process ~ Long-term allocation and return requirements create investment template ~ Businesses operating within individual templates to identify opportunities and evaluate risks > Group level sensitivity analysis ~ Identify appropriate outcomes/risk management evaluation ~ Prioritise op
Slide 15: Financial Risk Management
Financial Risk Management > Focus on maintaining strong balance sheet > Total property assets of A$10B > Policy guideline of 25-35% gearing — Maintain appropriate risk profile - “A’ credit rating objective — Standard & Poor's indicating “A” or “A-” and Moody's “A2” or “A3” > Capital raising policy —
Slide 16: Core Businesses
Core Businesses Key Operational Benefits Funds Management, Asset Management and Ownership * Access to assets outside Australia * Access to assets through broader business relationships + Ability to grow the wholesale funds management business faster (co- investment, asset warehousing) * Complete ali
Slide 17: Business Overview
iii AMI Business Overview
Slide 18: Real Estate Funds Management, Asset Management and Ownership
Real Estate Funds Management, Asset Management and Ownership
Slide 19: Retail Portfolio: A$3.9B
Retail Portfolio: A$3.9B Total Assets: A$8.1B at 30 June 2004* Industrial Homemaker Community 4% 11% Office Portfolio: A$3.0B B Grade 2% Premium * {ncludes P&O portfolio of nature based resorts 55% acquired in July 2004 Note: GPT’s current assets are totally Australian based Prime = 98%
Slide 20: Lend Lease has a high quality retail asset portfolio
>» Lend Lease has a high quality retail asset portfolio Total FY04 Investment Income: A$66.7M after tax Non-Retail 1% Other Retail Prussia 24% , Bluewater > > Continued exceptional performance - 69% of retailers are Top 5 performing within the chain, with 25% at No. 4 > Year ended 30 June 2004 ~ Tot
Slide 21: Committed to wholesale funds management
(1) Committed to wholesale funds management A$7.0B FUM globally (AUM A$10.1B) - Asia Pacific A$5.0B — Europe A$2.0B (AUM A$5.1B) Delivering strong returns for investors Merger with GPT to add value to wholesale investors in Australia - Capacity for co-investment and increased alignment Expect growth
Slide 22: Retail Asset Development and Management
Retail Asset Development and Management
Slide 23: Retail: Australia, Asia and UK
Australia > 24 largest owner / manager - 18 centres across Australia - 14 bulky goods centres » Manage 3 of top 10 centres in Australia > Growth from A$1B development pipeline > Retail asset management integrated with development and construction Asia >» Manage Parkway Parade (Singapore's largest re
Slide 24: Quality portfolio with development pipeline embedded
_»® Quality portfolio with a ae development pipeline embedded . 2004 2005 += 2006 = 2007 oboure Central _ a enrith Plaza Complete * Approximate value and timing
Slide 25: Lend Lease is in a strong and leading position in UK Retail
> Lend Lease is in a strong and leading position in UK Retail — 10 year track record of adding value in both asset development and management — Created Bluewater: Uk’s No. 1 ranked centre — Equal 4" (AUM) and growing — Recognised for innovation and high standards (50 awards in 8 years) Total returns
Slide 26: Golden Square, Warrington
Golden Square, Warrington > Major retail development in NW England >» Existing 300,000 sq ft centre owned by 2 UK institutions — Needed partner to manage complexity and achieve point of difference — Lend Lease selected on track record > Plan to reposition and double asset size > Lend Lease taking 50
Slide 27: Urban Community Development
Urban Community Development
Slide 28: Focused on large scale, lower density urban community development
Focused on large scale, lower density urban community development FY04 operating profit after tax up 117% to AS66M No. of lots settled 4,482 in FY04 — up 19% Gross sales value of lots settled up 41% to A$518M — Average price per lot up 19% — Carry forward sales average price up further 20%+ > Backlo
Slide 29: Quality portfolio of projects in strategic growth corridors
> Quality portfolio of projects located in strategic growth corridors > Long term, annuity style earnings profile > Capital efficient model based on land management Backlog Lots Trading The Chase Fairway Riverside Gardens Forest Lake Craigieburn Forest Gardens Varsity Lakes Springfield Lakes Holroyd
Slide 30: Focused on premium, high density urban community development
Focused on premium, high density urban community development Differentiated skills in residential / mixed use communities Achieved scale to produce long term, repetitive earnings Projects well located in strategic growth corridors Capital efficient business model Significant synergies with Bovis Len
Slide 31: Focused on US military housing privatisation program
> Focused on US military housing privatisation program >» Secured 6 projects (50 year contracts) — 3 under construction - 3 preferred bidder > Multiple earnings streams — Development management fees - Construction management fees - Asset management fees - Equity return > Further opportunities beyond
Slide 32: Significant opportunity in UK for urban community development
Significant opportunity in UK for Lend Lease’s Urban Community Development business model - Supply / demand imbalance - UK Government plan to increase supply - 200,000 new homes by 2016 in 4 growth areas in South East England Focus on large land management projects Lend Lease well placed on back of
Slide 33: Greenwich Peninsula
Greenwich Peninsula > New community for London which maximises urban density — 10,000 homes, 20,000 residents - 3.5m sq ft commercial - 0.35m sq ft retail — End value £5B (A$13B) > Largest planning approval in UK - Achieved in record time >» Significant enhancement to Lend Lease’s reputation > Gener
Slide 34: UK / Europe PFIs
iii AMI UK / Europe PFls
Slide 35: Potential UK Health Sector Projects
E Potential UK Health Sector Projects » PFlis a key UK Government long term 2004 ~— 2008 funding strategy ~- Committed to 10 years of investment in Health and Education ~ Total Health market size >£2B p.a. eo ee > Lend Lease has established a leading market . ® share in the UK . é — Building sustain
Slide 36: UK Defence Estates, Government Accommodation and Education
> UK Defence Estates (PPPs) - Focus on long term earnings streams (5-7 years) > UK Government Accommodation - HM Treasury project * Stage 1 completed + Stage 2 completion in October 2004 > UK Education - Current portfolio: 4 projects - Renewed focus HM Treasury, London
Slide 37: Project and Construction Management
Project and Construction Management
Slide 38: Leading project and construction management business
> Leading project and construction management business > Key strengths with client relationships and risk management focus > De-risks Lend Lease’s development activities > Provides skills and global reach (operates in 51 countries) > Well positioned in key markets: Australia, UK and US > Sector dive
Slide 39: Australia and Asia outlook
Australia > Robust medium term outlook for traditional sectors — Commercial, including office and retail - Multi-sites - Residential (ex Development businesses) - Government (Defence and social infrastruct The National HQ, Victoria Harbou infrastruc ure) Docklands, Melbourn > Large proportion of wor
Slide 40: Strong market position in key sectors
> Strong market position in key sectors - No. 1 in Healthcare and Multi-unit Residential - Top 5 in Government Offices, Hotels / Motels, Pharmaceutical plants / R&D labs and Senior Living — No.6 in Commercial / Office (No. 1 in New York) > Key sectors expecting growth over next 3 years > Opportunity
Slide 41: UK market leader in construction
- Established over 120 years ago - UK market leader (No. 1) - Long term client relationships with leading property companies and institutions - Asset clients delivering more than 50% of GPM (mostly negotiated contracts / limited competition) - Market dynamics changing in business’ BBC Broadcasting H
Slide 42: Important information
Important information In making an investment decision, investors must rely on their own examination of the Lend Lease Group and GPT, including the merits and risks involved in the proposed stapling transaction which will be set out in detail in the Explanatory Memorandum which will be sent to secur
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