Stockland · ASX:SGP
Stockland — Corporate Update (September 2006)
38 slides from Stockland's corporate update, Sep 21, 2006
Slide 1: Commercial Update
COMMERCIAL UPDATE 21 September 2006 1
Slide 2: Steve Mann, CEO Commercial & Industrial Division
STEVE MANN CEO, Commercial & Industrial Division • Stockland Commercial Division update 2
Slide 3: Presentation Agenda
PRESENTATION AGENDA • C&I Business Model • C&I Mission – SEE • The Future of Australian Office Markets • SEE Strategic Pillars • C&I Business Wrap 3
Slide 4: C&I Operating Business Model
C&I OPERATING BUSINESS MODEL • Owner Manager Developer • Best practice operating model es Specialist t rc M en t lo s en CR ou ve nes pm e drivers m s g/ nc Re op De usi tin na l an B ve ke Fi m ar De Hu M FUND Operating business ASSET 4
Slide 5: C&I Cluster Asset Model
C&I CLUSTER ASSET MODEL Office Clusters Senior Asset Manager • Sydney CBD Asset • North Shore Manager(s) • Melbourne Portfolio Facilities Accountant Manager • Brisbane • Canberra Portfolio Facilities Administrator Controller(s) 5
Slide 6: Stockland C&I Mission: SEE
STOCKLAND C&I MISSION: SEE GROWTH STAKEHOLDERS SYSTEMS & PROCESSES STOCKLANDC&I ENGAGING PRODUCT & SUSTAINABILITY ENVIRONMENTS BRAND PEOPLE 6
Slide 7: SEE Growth
SEE GROWTH StocklandC&I Engaging Environments • Acquisitions • Development & MPGs To grow by developing new • Joint Ventures opportunities, partnerships & • Industry Relationships excellence in benchmarking • Research & forecasting • Partnering internally with UPF 7
Slide 8: Simon Fairfax: The Future of Australia Office Markets
SIMON FAIRFAX General Manager, Business Development • The Future of Australia Office Markets 8
Slide 9: Office Market Overview – Demand
OFFICE MARKET OVERVIEW – DEMAND Company Profit Growth & Office Demand Growth in Company Profits (% p.a) 40% 600 30% 400 Net Absorption ('000m2) 20% 200 10% 0% 0 -10% Company Profits -200 -20% Net Absorption - Capital City CBDs -400 -30% -40% -600 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY0
Slide 10: Office Market Overview – Supply
OFFICE MARKET OVERVIEW – SUPPLY Current Rent as a % of Economic Development Rent • Brisbane & Perth - the largest gap in rents for existing and brand new space. • Gap expected to close….but supply capped by financial viability • Sydney & Melbourne – relatively small differential. New supply may pose
Slide 11: Sydney – Growth Due to Tight Supply
SYDNEY – GROWTH DUE TO TIGHT SUPPLY Office Market Demand Office Market Supply Sydney CBD Sydney CBD 300 Forecast 9% 300 6% Forecast Office Based Employment Growth (% p.a) 200 6% Net Additions to Stock ('000m2) 200 4% Net Absorption ('0002) 100 3% 100 % of Stock 2% 0 0% 0 FY FY FY FY FY FY FY FY FY F
Slide 12: Melbourne – Solid Demand Base
MELBOURNE – SOLID DEMAND BASE Office Market Supply Office Market Demand Melbourne CBD Melbourne CBD 250 Forecast 6% Forecast 250 6% Office Based Employment Growth (% p.a) 200 5% 200 5% Net Additions to Stock ('000m2) 4% Net Absorption ('000 m2) 150 150 3% 3% % of Stock 100 100 2% 2% 50 1% 50 0% 0% 0
Slide 13: Brisbane – Pent-up Demand Realised
BRISBANE – PENT-UP DEMAND REALISED Office Market Supply & Demand Prime Office Rents Brisbane CBD Brisbane CBD 80 Forecast 8% 600 Forecast 7% Net Additions to Stock & Net 500 Absorption ('000m2) 60 6% Vacancy Rate (%) Gross Rent ($/m2) 5% 400 40 4% 300 3% 200 20 2% 1% 100 0 0% 0 Ju Ju Ju Ju Ju Ju Ju
Slide 14: Perth – Deep Resources Boom
PERTH – DEEP RESOURCES BOOM Office Market Supply & Demand Prime Office Rents Perth CBD Perth CBD 80 16% 700 Forecast 600 Net Additions to Stock & Net 60 12% Absorption ('000m2) Vacancy Rate (%) 500 Gross Rent ($/m2) 400 Forecast 40 8% 300 20 4% 200 100 0 0% 0 FY FY FY FY FY FY FY FY FY FY Ju Ju Ju J
Slide 15: Canberra – Short Term Favourable; Adelaide – Subdued Demand
CANBERRA – SHORT TERM FAVOURABLE ADELAIDE – SUBDUED DEMAND Office Market Dynamics Office Market Dynamics Canberra Region Adelaide CBD 140 Forecast 7% 140 7% Forecast Net Additions to Stock & Net Absorption Office Based Employment Growth (% p.a) Office Based Emp. Growth (% p.a) 120 6% 120 6% Net Addi
Slide 16: James Mah-Chut: Growth Through Development
JAMES MAH-CHUT General Manager, Development • Growth Through Development 16
Slide 17: Growth Through Development - Pipeline
GROWTH THROUGH DEVELOPMENT - PIPELINE Total Cost Building Area Project Status Yield ($m) m2 Pipeline – Under Construction Optus HQ 100% Pre lease 282 7.4% 84,000 66 Waterloo Road 33% Pre lease 34 8.4% 10,400 Yennora Building 8B 100% Pre lease 7 8.0% 8,000 Total Cost Est Building Area Project Status
Slide 18: Mixed Use Development: Eagle Street Pier
MIXED USE DEVELOPMENT Eagle Street Pier Site area 1.0 ha Zoning Multi Purpose Centre 1 (MP1) Design Masterplanning commenced for Apartments, Retail and Commercial Opportunity Prime golden triangle location and views 18
Slide 19: Mixed Use Development: Toowong
MIXED USE DEVELOPMENT Toowong Site area 11,234sqm Acquisitions: 27-29 High St 88 Jephson St Design Masterplanning commenced Zoning Multi purpose Centre (MP2) FSR (Current) 2.5:1 (30,650 sqm) FSR Potential (TOD) 5:1 (61,300 sqm) 19
Slide 20: George Websdale, General Manager, Commercial
GEORGE WEBSDALE General Manager, Commercial • Commercial Portfolio Update • SEE Pillars • SEE Stakeholders • SEE Systems and Processes 20
Slide 21: Office Portfolio Summary
OFFICE PORTFOLIO SUMMARY QLD 13% • Properties: 28 SA 4% • Lettable Area: 516,720m2 VIC 9% • Grade: 72% prime WA 5% NSW 62% • Value: $2.0b ACT 7% Excludes 157 Liverpool Street at 30 June 2006 21
Slide 22: Continued Leasing Momentum
CONTINUED LEASING MOMENTUM Commercial – Lease Expiry – June 06 By Area Vacant <1% FY07 • 13,500sqm of new deals since June 2006 16% • Waterfront Place benchmark rents FY11+ 39% FY08 • Addressing FY08 expiries 12% • Opportunities in strengthening markets FY09 14% FY10 18% WALT: 4.2yrs Excludes 157 Li
Slide 23: Customer Focused Management Drives Growth
CUSTOMER FOCUSED MANAGEMENT DRIVES GROWTH • Strong retention driving occupancy levels • Occupancies remained above 96% since June 2002 • Stockland Commercial have outperformed the National occupancy by over 5% for 5 years 100.0% 100.0% 98.0% 90.0% 96.0% 80.0% 94.0% 70.0% 92.0% 60.0% Occupancy Retent
Slide 24: Major Leasing Success
MAJOR LEASING SUCCESS Edmund Barton Building, Canberra 3 year extension agreed with Department of Agriculture, Forestry and Fisheries over 41,000m² from Mar 07 @ $330 psm. Terms include: • Rent reviews – 5% per annum • Stockland assumes rights of access to undertake refurbishment of the asset, provi
Slide 25: Refurbishment Value Assessment
REFURBISHMENT VALUE ASSESSMENT 175 Castlereagh Street & 50 Pitt Street 175 Castlereagh Street 50 Pitt Street • 40% vacancy with strong • 90% vacancy with no pre-commitment attraction to State Govt tenants • Small, inefficient floors (590m2) with • 880m2 rectangular floorplates, with central core. Lo
Slide 26: SEE Stakeholders
SEE STAKEHOLDERS StocklandC&I Engaging Environments • Stockland Service Centre Foster a customer • CRM program centric culture and • Industry relationships partner with our stakeholders to • Customer satisfaction surveys deliver mutually beneficial outcomes 26
Slide 27: Key Initiative – Stockland Service Centre
KEY INITIATIVE – STOCKLAND SERVICE CENTRE • Globally benchmarked Facilities Management Platform • Integrated Call Centre • FMA award winner 2005 and 2006 • Dashboard performance reporting • Risk Arena • Web portal 27
Slide 28: SEE Systems and Processes
SEE SYSTEMS AND PROCESSES StocklandC&I Engaging Environments • C&I Best Practice Quality systems • Lease admin system & efficient processes • Budget, forecasting & to facilitate best valuation tool practice business operations 28
Slide 29: C&I Best Practice
C&l BEST PRACTICE MOWLEM Stockland Tenant Welcome to C&I BeSt Practice! C&l BUSINESS OVERVIEW C&I BeSt Practice Business Overview Welcome to C&I BeSt Practice - our process and procedure guidelines. These guidelines document the unique way we do ASSET MANAGEMENT things in Stockland C&I, so we are al
Slide 30: Christine Callinan, General Manager, Marketing
CHRISTINE CALLINAN General Manager, Marketing • SEE – Product & Sustainability • SEE - Brand 30
Slide 31: SEE Product and Sustainability
SEE PRODUCT AND SUSTAINABILITY StocklandC&I Engaging Environments • A culture that strives to deliver smart sustainable Manage and solutions develop • Tenant partnering and sustainable & education engaging environments • Social initiatives • Market leadership with benchmark new products 31
Slide 32: Sustainability
SUSTAINABILITY • Energy - Targeting 24% reduction by FY08 - ABGR portfolio average is 2.6 and we are targeting 3.6 by 2007 - New developments are committed to achieve a minimum 4.5 • Water - One of the first to rate portfolio using NABERS - Targeting a 30% water saving • Waste to landfill - 50% dive
Slide 33: SEE Brand
SEE BRAND StocklandC&I Engaging Environments • Business positioning strategy Stockland C&I • Internal culture will be recognised • Promote and communicate and respected for internally and externally creating “engaging environments” 33
Slide 34: Stockland's New Head Office
STOCKLAND’S NEW HEAD OFFICE Project Vision • The Stockland Head Office will be an Engaging Environment that unifies our business, fosters the potential of our people and expresses who we are. Opportunity • To create a benchmark project which showcases our office refurbishment capability and brings E
Slide 35: Steve Mann: SEE – People and Business Wrap
STEVE MANN CEO, Commercial & Industrial Division • SEE – People • Commercial & Industrial Business Wrap 35
Slide 36: SEE People
SEE PEOPLE StocklandC&I Engaging Environments • High calibre people A high performance • Talent management team built on a • Link performance & reward culture of collaboration • A culture of teamwork & and enjoyment individual empowerment • Celebration & enjoyment 36
Slide 37: Commercial & Industrial Business Wrap
COMMERICAL & INDUSTRIAL BUSINESS WRAP •Best Practice Business Model •Depth of management and experience •Strategic Focus to deliver our mission StocklandC&I Engaging Environments •Platform with opportunities for growth 37
Slide 38: Disclaimer
DISCLAIMER Corporation/ Responsible Entity Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741 16th Floor 157 Liverpool Street SYDNEY NSW 2000 Disclaimer of Liability: While every effort is made to provide accurate and complete information, Stockland does