Goldman Sachs JBWere Australasian Investment Forum

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1 Goldman Sachs JBWere Australasian Investment Forum March 2006 Matthew Quinn Managing Director

2 Presentation Outline Australian REIT Sector & Stockland s Position Stockland s Business Model Financial Performance & Shareholder Returns Operating Divisions Profit Drivers Group Strategy Summary 1

3 Australian REIT Sector Australia has one of the world s most highly securitised real estate markets REITs have been a core holding of Australian investors for decades Now attracting more overseas interest as real estate markets are globalised Investment Grade Real Estate % Real Estate Listed REITs as % of Stock Market Australia US$250bn 60% 10% US & Canada US$5,250bn 41% 2% United Kingdom US$1,000bn 31% 2% Source: UBS 2

4 Stockland s Position in Australian REIT Sector Australia s largest diversified property group Market capitalisation over A$8bn 10% of the REIT 200 Index High liquidity (80% moving annual) Strong growth profile Track record of delivering excellent shareholder returns 3

5 Stockland A Snapshot Shopping Centres Residential Development Hotel Management Assets $3.4b Assets $2.3b Assets $20m Office Buildings Assets $2.1b Distribution Centres Assets $0.7b Unlisted Property Funds Assets $470m 4 As at 31 December 2005

6 Stockland s Business Model Type of Income Rent from Investment Properties Trading Profits Funds Management Fees % of Group EBIT 60-80% 20-40% Emerging Business Business Shopping Centres Office Buildings Distribution Centres Residential Development Hotel Management Unlisted Property Funds Diversification reduces volatility in returns Balance of rents vs trading profits optimises risk/return Value add through internal management (no fee leakage) Synergies from integrated cross business platform 5

7 Financial Performance Net Profit A$m Growth in Earnings per security * 14% 12% 10% 8% 6% 4% 2% 0 FY00 FY01 FY02 FY03 FY04 FY05 1H06 0% FY00 FY01 FY02 FY03 FY04 FY05 1H06 * Half Year SGP LPT Sector average FY00-FY05 1H06 AGAAP AIFRS Source: Merrill Lynch 6

8 Total Shareholder Returns (TSR) Strong dividend yield and dividend growth has driven TSR outperformance vs REIT Index & ASX Stockland REIT 200 ASX Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 7

9 Capital Management Solid S&P credit rating: A-/ Stable Outlook Low weighted average cost of debt 6.1%* Long dated debt maturity profile*: <2 years 25% >8 years 41% 5-8 years 15% 2-5 years 19% * As at 31 December

10 Capital Management Strategy to maintain relatively low gearing currently 27% (Debt/Assets) Enables Stockland to capitalise efficiently on opportunities Additional debt capacity currently A$700m within existing covenants 50% Gearing (Debt / Assets) Stockland vs REIT Index 40% REIT Index 30% 20% Stockland 10% 0% FY00 FY01 FY02 FY03 FY04 FY05 1H06 9 Source: SGP / Merrill Lynch

11 Shopping Centres Profit Drivers High barriers to entry (land use, retailer demand) All 40 Stockland centres anchored by Coles Myer and/or Woolworths Focus on non discretionary value/convenience centres A$800m capex budget for expansion of existing centres 5 year programme Accretive returns Derisking before commencement Rental upside from speciality shops 10

12 Office Buildings Profit Drivers Occupancy 1H06 % Stockland 98% Industry Avg 92% Major tenants include Government, Westpac, IBM, Commonwealth Bank, Sony, Singtel Optus 66% of buildings in Sydney, Australia s deepest market Sydney CBD and other major markets at early stage of upswing A$400m development pipeline No speculative build Will only commence with prelease 11

13 Distribution Centres Profit Drivers 100% Occupancy Bluechip industrial and logistics tenants including Wesfarmers, Toll, TNT Rental upside from tightening industrial land supply A$100m development pipeline 12

14 Residential Development Profit Drivers Australia s largest residential developer Over 60,000 future dwelling sites under control end value A$15bn Competitive advantage through in-house expertise: Research Acquisition Planning and design Development management Marketing Sales Consolidation opportunities from fragmented market Stockland market share 5% Top 10 Developers market share approximately 20% 13

15 Australian Residential Market The market has moderated since the peak in 2003 Clear evidence of soft landing rather than major correction Private Building Approvals Market Peak 200,000 Introduction of GST Orderly Slowdown Moving Annual Total. 150, ,000 50, year average 0 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Total Detached Housing Apartments/ Townhouses 14 Source: Australian Bureau of Statistics

16 Group Strategy Balanced diversification across real estate sectors Harness diversity as a competitive advantage Organic growth from existing development pipeline (>A$1bn) Additional growth through prudent acquisitions and new business Risk management a key part of our culture EPS growth and TSR outperformance our key objectives 15

17 Summary Australian REIT Sector is robust Stockland is well positioned High performing business model Strong balance sheet Performance based culture Strong governance and risk management Focus on growth, but no growth for growth s sake 16

18 Disclaimer Corporation/ Responsible Entity Stockland Corporation Limited ACN Stockland Trust Management Limited ACN th Floor 157 Liverpool 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 information in this presentation is free from errors or omissions or is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Stockland accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is subject to change without notice. 17

UBS 2005 Global Real Estate Conference - December 2005 Denis Hickey CEO - Development Division Stockland

UBS 2005 Global Real Estate Conference - December 2005 Denis Hickey CEO - Development Division Stockland 1 Presentation Outline Topic What is the outlook for the housing sector in Australia and how your