STOCKLAND — AGM Information 2008

Oct 20, 2008

133 Castlereagh St Sydney NSW 2000 T +61 (0)2 9035 2000 F +61 (0)2 8988 2000 www.stockland.com.au

21 October 2008 ASX Release

STOCKLAND ANNUAL GENERAL MEETING 2008

CHAIRMAN'S ADDRESS

Ladies and Gentlemen, welcome to our 2008 Annual General Meeting - our 51st since the company first listed in 1957. I am Graham Bradley and I will chair our meeting today. It is now time to start our proceedings.

A quorum is present and I declare the meeting open. The board of directors and I encourage you to take this opportunity to engage with us about the management, governance and performance of your company over the last twelve months.

Our agenda today will be as follows. After my brief report, Matthew Quinn, our managing director, will provide an overview of the performance of the group in 2008 and our strategies for the year ahead. We will then review the financial accounts, followed by the election of directors and the consideration of the remuneration matters on the Notice of Meeting.

We meet at a troubled time in Australian – and world – financial markets. It is not an exaggeration to say that the events of the past six months are without precedent in my lifetime. While it is not usually my practice to comment on our share price, I feel I should do so on this occasion in view of what has happened during the past few months.

The challenging financial market environment has been marked by high profile underperformance and failure by some businesses in our sector, and sentiment towards Australian listed property trusts has suffered severely as a result. As you know, our share price has not been immune from this sentiment.

Many of the factors contributing to this decline are beyond our control, but we believe that our strong balance sheet, our relatively conservative debt levels and our focus on property fundamentals rather than financial structuring has helped us to outperform most of our peers.

Looking at total shareholder returns - that is share price movements plus accumulated distributions and dividends reinvested over the last ten years - you can see that we have outperformed our peer group, the Australian Real Estate Investment Trust Index, over that time. For example, over 10 years, $100 invested in Stockland has returned $293, compared to $224 for average REITs.

Looking at the past five years you can see that we have also outperformed our peers over that time.

Many investors here today will have invested with Stockland in order to receive growing and reliable distributions year on year. Our distributions to security holders have continually increased, with a ten year compound annual growth of 6.5 per cent and growth of 7.7 percent over five years.

The final point I will make on our share price is that we run a quality business, with very sound long-term assets. We confidently expect that our relative competitive strengths should be recognised by investors and reflected in the price of our securities when financial markets stabilise and when economic conditions begin to improve.

That said, we do continue to face unprecedented market volatility. This has meant busy times for us and Matthew will go into more detail about the events that have occurred during recent weeks including our announcement of anticipated write-downs in our UK business, our successful recent share placement to institutional investors and how we have used some of these new funds to increase our investment in the retirement living sector.

As part of the recent placement, we are offering our retail investors an opportunity to purchase securities through a Stapled Security Purchase Plan at the same price as the institutional offering we made. Given the ongoing volatility in share prices, however, I encourage you to consider our current share price at the time of the offer before deciding whether or not to participate.

I'd like to take a moment now to briefly review our performance over the last financial year. Against the backdrop of challenging conditions, we delivered an increase in both net operating profit - indeed, our 26th consecutive year of increasing net operating profit - and an increase in earnings per security in 2008.

Our operating profit of $674 million was an increase of 10.3 per cent over the previous year. We report operating profit rather than accounting profit because we believe it provides the most meaningful indication of the profit we have derived from running our business. Our profit attributable to security holders in 2008 was $705.2 million, but this includes a number of items, such as investment property revaluations, that move from year to year - up and down - not directly related to how our operating businesses are performing. We seek to provide investors with a clear understanding of the true performance of our business.

Another good measure is our earnings per security, which rose 5 per cent to 46.2 cents. Our dividend and distribution were also up 5 per cent to 46.5 cents per security.

Distribution policies have received some attention this year as many of our property sector peers have changed their payout ratios. Our policy is to pay out the equivalent of 100 per cent of the Trust's operating earnings and 90 per cent of the Corporation's operating earnings. While we regularly review this policy, it is the Board's intention to continue this policy for the current financial year.

Of course, delivering good financial performance is not, for us, a short-term goal. We strive to create a sustainable business that will continue to perform in the long term. That requires consideration of the social, environmental and financial sustainability of what we do.

If you've attended our AGMs over the last few years, or read my annual letters to investors, you will be aware of our strong commitment to responsible and sustainable practices. I am pleased to say this is now deeply embedded throughout our organisation and has resulted in some great achievements in 2008. Our inclusion for the second time on the Dow Jones Sustainability Index list of the world's leading sustainability driven companies is recognition of these many achievements.

On the environmental front, in the last year in our commercial offices we reduced greenhouse gas emissions intensity - that is, emissions per square metre of lettable area in our buildings by 11 per cent across our portfolio, and in our shopping centres we reduced emissions intensity by 6 per cent. We also made substantial improvements in water and energy usage.

Demonstrating our commitment to ethical business practices, we recently instituted a formal policy of not making any donations to political parties, at any level of government - local, state or federal. We did this because we expect all our projects to be judged on their merits alone and it is important to us that our community stakeholders are crystal clear about the ethical way we do business.

All of our achievements in these areas, and our goals and plans for the future, are discussed in detail in our Corporate Responsibility and Sustainability Review. This year we sent this review to all investors, together with our Shareholder Review, and I hope you found them to be interesting reading. These documents provide a comprehensive picture of how our business is performing financially, environmentally and socially, and I encourage you to read them.

All our achievements come about thanks to the efforts of our team. Strong leadership and great teamwork are cornerstones of the Stockland culture – and are critical to our success.

We are fortunate to have an experienced, engaged and skilled management team, capably led by our managing director Matthew Quinn, and we continue to invest in developing the skills of our employees. Clearly, the achievements of the past year are evidence of the quality of the team we have in place.

Turning now to the Board - I want to thank my Board colleagues for their support and input. Each of our Directors makes a substantial and diligent contribution to the Board's work. I would like to extend my thanks also to the external directors of Stockland Capital Partners Limited, Tony Sherlock and David Kent, who made a valued contribution over the past year.

The composition of the Board has not changed since our last AGM when shareholders elected Barry Neil as a Director. During the past year Barry has brought to our boardroom a wealth of experience from over 30 years in the property sector, both here and overseas. He has seen many business cycles in our industry and we value his counsel.

This year Peter Scott retires by rotation and offers himself for re-election. Peter has been a valued member of our Board for the past three years and, subject to your vote, we look forward to his continued contribution.

Also this year we farewell Bruce Corlett who retires after 12 years of dedicated service to our Board. The Board has benefited greatly from his experience and counsel during his term as Director and his contribution as a member of our audit, human resources and treasury policy committees, and I thank him on behalf of all investors.

Ladies and gentlemen, I am pleased to announce today that Ms. Carolyn Hewson has agreed to join the Board next March. Carolyn is a prominent public company director with many years experience and is also a finance professional with treasury and financial markets expertise, which will valuably complement the Board's existing experience, particularly in these challenging times.

Finally, I would like to briefly comment on our outlook for the immediate future.

As you would expect, the Board and management have reviewed our operations and strategies very carefully in light of the challenging market conditions we face. We believe that our business direction remains fundamentally sound. We are confident that our focus on property fundamentals, quality assets and our conservative capital management policies, remain the right approach. Our decision to freeze our Directors' fees and the base pay of senior executives for the 2009 financial year further demonstrates our commitment to always manage our business prudently and appropriately.

While we're realistic about the possibility that the property market may take some time to bounce back, we believe that we are well positioned for the recovery, and that we may, in fact, be able to take advantage of opportunities to acquire some high quality long-term assets at good prices in the months ahead.

In closing, I'd like to thank all of our employees, on behalf of the board and our investors, for their dedication and achievements in 2008.

MANAGING DIRECTOR'S ADDRESS

There is no question that global economic and property market conditions during the last year have been extremely challenging and don't look like improving in the short term. Now, more than ever, you need a realistic assessment of our performance in this environment and our outlook for the future. It's my intention to provide that today.

Last financial year we delivered a solid profit result and increased security holder returns. We achieved this result by maintaining our consistent focus on property fundamentals and having a conservative balance sheet.

To illustrate this point I'll briefly review the highlights of our results business by business, then take a more detailed look at the progress we've made against the five key elements of our strategy, and finally, discuss our outlook.

During the year we simplified our structure by merging our retail, office and industrial businesses into one commercial property business, led by John Schroder. Streamlining our operations in this way has enabled us to leverage economies of scale and knowledge transfer across our businesses.

Our Commercial Property portfolio comprises 106 retail, office and industrial properties across Australia. With a total asset value of $8.7 billion, and a development pipeline of over $2.8 billion end value, our Commercial business is focused on maximising investment returns through delivering organic rental growth and developing new investment and trading products.

Our Commercial Property business produced solid results in the last financial year with a combined operating profit of $566 million.

Our Retail operating profit increased 3.1 per cent to $260 million, with comparable rental income growth of 6.7 per cent.

Retail spending has slowed given the current market conditions but we remain well placed with an active asset management approach and low vacancy rates across all our retail centres.

Our Office and Industrial business increased its operating profit by 21.5 per cent to $305.9 million, with comparable net rental income growth of 5.4 per cent.

While valuations have fallen across the board and demand for new office space has tapered off, we have seen a significant improvement in tenant retention rates as businesses decide to stay put during these turbulent times. And the decline in new building construction resulting from the credit crunch will only increase the demand on existing stock.

Our Residential business, led by Denis Hickey, encompasses residential communities, apartments and retirement living. The business has about 100 projects across the country, with an end value of more than $21 billion.

Our Residential business achieved strong results for the financial year and produced an operating profit of $326 million – an increase of 19.5 per cent.

This result included a Residential Communities profit of $273 million – up 10 per cent on last year at a healthy net margin of 25 per cent. Our Retirement Living business outperformed expectations, delivering a net profit of $41.5 million. Our Apartments profit was below expectations at $11 million due to the delay of key projects and soft market conditions.

The residential market came off the boil markedly in March this year when interest rates were increased. The recent interest rate cut and the Federal Government's announcement that it will increase the first home owner's grant should inject some much needed confidence but there is still a long way to go before we see a real resurgence in the housing market.

Despite the strong rental market and record low residential vacancies, many buyers lack confidence to enter the market as there are growing fears about job security and the depth of the fallout from the global credit crisis. We encourage the Federal Government, the RBA and other policy makers to continue to counteract this through proactive fiscal and monetary initiatives.

The good news is that residential market fundamentals remain positive for the medium to long term. Demand will be supported by population growth and there is still a significant supply deficit in key markets.

Moving now to our UK business, which is led by Ken Lindsay. We entered the UK market in May 2007 as part of our long-term strategy to create an integrated property development platform with a focus on large-scale, mixed-use projects.

Our UK operating profit of $11.6 million was lower than expected due to particularly tough market conditions. These conditions deteriorated further over the past couple of months with a sharp fall in confidence, economic conditions and property values. This led us to review our FY09 UK business plan and profit forecast and the carrying value of our UK property assets.

As a result of this review we recently announced that we anticipate our UK business will achieve a break-even FY09 operating result. We expect UK inventory write-downs in the order of $50 million after tax and a goodwill impairment charge in the order of $60 million in the Group's first half results.

While this is disappointing, these assets make up less than 5 per cent of our total asset base and the overall group impact is quite modest. Despite these announcements we remain committed to our UK business platform. I am confident in our team on the ground, and believe we are well positioned to take advantage of future opportunities to grow our UK business in line with our long-term strategy.

Our operating businesses were able to achieve these results thanks to their consistent strategic focus. Throughout the year we maintained our efforts in five key areas: leveraging and extending our existing businesses; new complementary business initiatives; active asset management; capital partnering; and, high performing people and culture.

These have been the key elements of our strategy for many years and remain unchanged today. Let me highlight some of our activities in these areas during the last year.

Our first strategic priority is to optimise our existing businesses. During the last year we did this in a number of ways. Firstly, we continued to utilise our expertise across sectors to create innovative mixed-use developments. We have several projects at different stages of progress that use the know-how we've gained across our portfolios. These developments unlock value from sites by delivering solutions not available in single-use projects.

In our residential and commercial businesses we continued to focus on using our asset management, leasing and development expertise to add value. Our large portfolios include a diverse range of assets which enables us to focus our resources for short, medium and longterm returns. What this means in practice is that we delay developments that don't suit this environment and focus on those that better match market conditions, such as more affordable communities.

Since the acquisition of Australian Retirement Communities in 2007, we have continued to grow Retirement Living as a strong complementary business. In July we acquired Rylands – a boutique retirement village business with a portfolio that includes two recently completed apartment-style retirement villages in Melbourne.

Just last week, we announced another important step with the acquisition of strategic stakes in FKP property group and retirement village operator Aevum. FKP will undertake a strategic review of its retirement living assets which could lead to their separation and we have been granted an exclusive dealing period of two months while the review is undertaken and a first right of refusal over the assets. Our Residential Property CEO, Denis Hickey, will be appointed to the FKP Board.

The Aevum deal saw us take a 14.4 per cent stake in the company. These acquisitions are consistent with our strategy of growing our presence in the retirement living sector, and we will be working hard in the coming months to leverage synergies across our growing retirement living business.

Another key complementary area for us is intermodal terminals. Intermodal terminals are large inland ports where freight can be temporarily stored and transferred from one mode of transport to another. We currently have one major intermodal terminal operating at Yennora in western Sydney, and during the year we also acquired a large potential intermodal site at Moorebank in south west Sydney. We entered into a joint venture to pursue the possibility of developing this site into a substantial inland port.

This is also a great example of our strategy of diversifying our capital sources by seeking joint venture partners in our key growth assets to share the risks and returns. In this case our partners have taken a 40 per cent interest in this important site.

This year we reorganised our capital partnering activities to better align them with our operating businesses. The new structure is designed to empower each team to seek out joint venture opportunities, like this one, to help fund future growth.

Active asset management is about ensuring we are putting our capital to best use and have the right mix in our portfolio. During the last year we disposed of several non-core assets including our interest in retail centres in New Zealand, South Australia and Western Australia. Many of these assets were not wholly owned or managed by us which meant we weren't able to put our leasing and management expertise to use. These sales enabled us to invest in new assets in key growth areas such as retirement living.

It's important to view the sale of assets in the right context. We are in the fortunate position of being able to take our time and make sure each deal meets our risk and reward criteria. Whatever the market situation we will only sell if the price is right and the asset is one that is not the right strategic fit. We're confident the transactions we've made fit that model.

The final element of our strategy is to attract, retain and develop high performing people. During the year we continued to invest in the growth and development of our people in a number of ways.

We place a strong emphasis on our leadership and management training, as well as technical skills, in order to build the capabilities we need to achieve our goals. Our range of leadership development initiatives saw us voted a Hewitt "Top Company for Leaders" - one of only five companies recognised in Australia and New Zealand.

Ultimately, the ability and enthusiasm of our people are demonstrated best by the results we've achieved in this challenging climate. I thank them all for their hard work.

While the extreme market volatility we continue to face poses challenges for our business, it also creates opportunities.

We moved quickly to take advantage of a narrow window of opportunity to strengthen our balance sheet when we announced a $300 million share placement earlier this month. This capital raising was over-subscribed with strong support from both domestic and offshore investors and it reduced our gearing by around 2.3 per cent. The placement will have a mildly negative impact on EPS on a fully diluted basis.

This placement, and our recent acquisitions, demonstrate our ability to move quickly in this changing market when opportunities arise. At the same time, they clearly show our ongoing commitment to act in line with our long-term strategy and maintain a conservative balance sheet.

Finally - our outlook for the future.

As economic conditions have worsened, the two things I'm asked most often are how property values will be affected and how our residential business will fare.

Regarding the fall in property values, this varies significantly by asset class and asset quality. Our view is that cap rates for Australian investment properties have softened by an average of around 50 basis points since 30 June 2008, on top of the 30 basis points in the previous six months. For residential, it is worth noting that our inventories are not revalued, and are carried in our accounts at the lesser of historic cost or net realisable value.

We assess the value of all our assets on a regular basis with the next formal assessment at 31 December 2008 as part of our half year financial reporting process.

In residential markets we saw a clear softening after the rate rises earlier in the year and sentiment has dropped in the face of the market turmoil of the last couple of months. Having said that, the recent reduction in interest rates, and the tripling of the first home buyer's grant for new homes, should encourage buyer confidence and lead to improvements in new home sales in the second half of the financial year.

As we have previously disclosed, we remain on track to achieve our guidance of nominal EPS growth in FY09, before allowing for the write-down in UK asset values that was announced on 3 October, and the dilutive impact of the share placement that was announced on 8 October. After taking these two things into account, EPS in FY09 will be around 7% per cent lower than the previous financial year. In providing this guidance we are also assuming there is no further material deterioration in economic conditions during the rest of the year.

As previously flagged, there will be a skew in profits towards the second half of the financial year due to the timing of major project sales and soft residential market conditions in the first half, which we expect to improve on the back of lower interest rates and the increased first home owner's grant.

While we're realistic about the economic conditions we face, we're confident we have the right strategy and team to see us through these challenging times and position us well for the future. Our strategic and measured approach has served our shareholders well for many decades and we're confident it will continue to do so for many years to come.

Thank you for your attendance today and your continued support of Stockland.

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Karyn MunsieEGM - Corporate AffairsStockland		Katie LennonAssistant Manager,Media and Corporate CommunicationStockland	Karyn MunsieEGM - Corporate AffairsStockland	Joanne TrimboliInvestor Relations ManagerStockland
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Stockland (ASX: SGP) is one of the largest and most diversified property groups in Australia with interests in retail, commercial, industrial, residential and retirement living investment and development, and funds management. Stockland currently has total assets in Australia and the United Kingdom of over $14.7 billion, market capitalisation in excess of $8 billion, and reported an operating profit of $674 million for the year ended 30 June 2008. Additional information can be found on our website <www.stockland.com.au>

Stockland Corporation Ltd ACN 000 181 733 Stockland Trust Management Ltd ACN 001 900 741 AFSL 241190 As Responsible Entity for Stockland Trust ARSN 092 897 348.