133 Castlereagh Street T 02 9035 2552 Sydney NSW 2000 F 02 8988 2552

www.stockland.com.au

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3 May 2011 ASX/Media Release

STOCKLAND ON TRACK TO ACHIEVE FY11 EPS GUIDANCE

Stockland announced today that it is on track to achieve its upgraded FY11 Earnings Per Security (EPS) guidance of 31.6c, representing growth of 8.5% on FY10.

Stockland Managing Director Matthew Quinn told investors at an update in Sydney today that the Residential Communities business is seeing strong customer enquiry levels in all States, but that buyers remain cautious.

After a very strong 1H11, net deposits slowed in 3Q11, due largely to a significant fall in south east Queensland. A total of 1,112 net deposits were achieved in the quarter and April has shown a slightly improved run rate.

Total FY11 lot settlements are now expected to be slightly higher than the FY10 figure of 5,236. FY11 key operating metrics for the Residential Communities business are all expected to show positive movements versus FY10, with the average lot size expected to be down around 6 per cent; average price per sqm up around 12 per cent; average price per lot around 5 per cent higher; and Operating Profit and EBIT margins both up around 1-2 per cent.

Mr Quinn said that while Stockland is seeing increased numbers of enquiries, buyers are cautious - particularly in Queensland - and are taking longer to make a purchase decision.

“Our lead volumes, one of the most accurate lead indicators for sales, were up in 3Q11, with growth coming from a varied customer mix of first home buyers, upgraders and investors in line with long-term targets.

“Overall we are seeing good customer traffic and strong enquiry levels from potential buyers, but they are feeling their way carefully because of the short-term uncertainty over cost of living pressures, and rising utility and petrol prices,” he said.

Mr Quinn said that market conditions varied across states. Buyer sentiment is strong for affordable homes in New South Wales and the market is trending upwards. Victoria is returning to its long term average level of housing approvals as the State first home buyers boost comes to an end. Western Australia has been impacted by an overhang in the established market, but is starting to show more positive signs.

While the direct impact of Queensland‟s January natural disasters on Stockland was minimal, the broader impact on consumer sentiment has been significant with potential customers actively looking, but not buying. While it is too early to predict the timing of a recovery in buyer activity, the long-term fundamentals for the State remain strong.

“Queensland is underpinned by strong population growth with six of Australia‟s 15 fastest growing municipalities.

“The economic and employment impact of billions of dollars worth of new infrastructure projects is yet to be felt and the recent infrastructure charge cap of up to $28,000 per lot provides greater certainty for residential developers.

“Overall, we are encouraged by the long-term sentiment, underpinned by population growth and strong employment,” he said.

Turning to the Commercial Property business, Mr Quinn said the Retail business had experienced solid sales in 3Q11 with 3 per cent comparable sales growth and no material impact from recent retailer administrations.

Retail is on track for similar comparable NOI growth in 2H11 to 1H11, which was up 4.3 per cent. Comparable Office and Industrial NOI growth is expected in to be higher in 2H11 than in the first half.

Stockland also provided investors with a detailed update on its Retirement Living business, and confirmed that the Aevum acquisition is on track to achieve all targets.

„We have a sound and well-articulated 3-R growth strategy, based on Residential Communities, Retail development and Retirement Living, as well as a conservative and disciplined approach to capital management. Overall, our business is in good shape,” Mr Quinn said.

For media enquiries contact		For investor enquiries contact
Karyn Munsie	Sally-ann Parker	Karyn Munsie	Linda Assatoury
EGM – Corporate Affairs	Senior Manager, Communications	EGM – Corporate Affairs	Senior Manager Investor Relations
Stockland	Stockland	Stockland	Stockland
T+61 (0)2 9035 2180	T+61 (0)2 9035 2552	T+61 (0)2 9035 2180	T+61 (0)2 9035 2553
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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.

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Group Update Matthew Quinn, Managing Director

www.stockland.com

Stockland’s integrated model

3-R growth strategy - Residential Communities, Retail development and Retirement Living

Office and Industrial UK and Apartments $3.5b funds employed $0.5b funds employed

Creating vibrant communities by leveraging 3-R integrated model and partnering with others (public and private) to provide social infrastructure, transport, education and employment

Disciplined assessment of opportunities within strategic weightings (60-80% recurring, 20-40% trading)

Growth fully funded - low gearing, $365m net cash flow from trade-out of Apartments, $184m from exit of UK, sale of noncore office and industrial assets, and retained earnings

- 1 -

All figures as at 31 December 2010

Retirement Living Investor Day 3 May 2011

Business update – on track to achieve FY11 EPS guidance

FY11 group earnings

On track to achieve upgraded EPS of 31.6c per security; 8.5% growth on FY10

Residential market conditions

• Varied market conditions across the country: NSW buyer sentiment strong for affordable product, market trending upwards VIC returning to average approval numbers as State first home owners boost comes to an end WA impacted by overhang in established market but showing positive signs

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QLD sentiment very subdued, yet to see recovery from impact of natural disasters in 3Q11

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Private detached house approvals [1]
3,800
3,300
2,800
2,300
1,800
1,300
800
2002 2004 2006 2008 2010
VIC QLD WA NSW
VIC average QLD average WA average NSW average
Monthly approvals
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- 2 -

Source: ABS Cat. No. 8731.0 (Trend Series), Stockland Research to Feb-11

Retirement Living Investor Day 3 May 2011

Residential Communities – strong enquiry but buyers are cautious

Strong 3Q11 Stockland customer traffic:

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Reflects strategy to deliver affordable packages relative to established market

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Solid enquiry from 3Q11 “Make your Move Now” marketing campaign, even in QLD

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Customer mix between first home buyers, upgraders and investors in line with long-term targets

Despite strong enquiry levels, buyers are cautious:

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Stockland customer lead volumes remain strong [1]
Seasonality due to Christmas2
8,000
6,000
4,000
2,000
0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
VIC QLD WA NSW
Total lead volumes
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Mixed sentiment for time to buy a dwelling[2]

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Short-term uncertainty over cost of living pressures, rising utility and petrol prices

Long-term demand underpinned by population growth and strong employment

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180
160
140
120
100 Long-term average
80
60
40
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
QLD NSW WA VIC
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Westpac-Melbourne Institute Consumer Sentiment Survey, Time to buy a dwelling index, April 2011

- 3 -

A potential purchaser who has made a direct enquiry at one or more Stockland Residential project

Retirement Living Investor Day 3 May 2011

Residential Communities – QLD conditions remain subdued post-floods

Sales run rate in SE QLD slowed in 3Q11

Even though the direct impact of the floods on Stockland was minimal, the broader impact on sentiment
has been quite significant
Potential customers are actively looking, but not yet buying
Too early to predict timing of recovery in buyer activity
Strong conditions continue in some regional areas of north QLD

- Long term fundamentals in QLD remain positive

Underpinned by strong population growth; six of Australia’s top 15 fastest growing municipalities are in
QLD
Economic and employment impact of billions of dollars of new infrastructure projects yet to be felt
Infrastructure charge cap of up to $28,000 provides greater certainty for residential developers

- 4 -

Retirement Living Investor Day 3 May 2011

Residential Communities – slower 3Q11 but strong contracts on hand

FY11 lot settlements expected to be slightly higher than 5,236 lots settled[1] in FY10:

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Very strong 1H11

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Deposits slowed in 3Q11

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April numbers showed a slight improvement

Positive movement in key operating metrics expected in FY11:

	Expected FY11 result vs FY10
Average lot size	Down ~6%
Average price per sqm	Up ~12%
Average price per lot	Up ~5%
Operating Profit and EBIT margins	Up ~1–2%

QLD subdued while other states at long-term averages

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3,500
3,101 3,169 3,134
2,975
3,000 428 405 302
351
2,500
2,000 1,870 866 1,173 1,212 1,276 3 months
226
291
1,500
587 277 383 541 1,112
1,000 197 153
1,467 430
500 860 1,223 1,169 1,015 276
253
0
1H09 2H09 1H10 2H10 1H11 3Q11
QLD NSW VIC WA
Net deposits
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Subject to market conditions, settlement volumes

should grow further in FY12:

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Strong contracts on hand – expect to carry >2,000 contracts into FY12

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First settlements at 8 new projects[2]

- 5 -

Includes part-share lots
Brooks Reach (NSW), The Ridge (QLD), Stoneridge (QLD), Sovereign Pocket (QLD), Wungong Reach (WA), Eglinton (WA), The Point (VIC) and Truganina (VIC)

Retirement Living Investor Day 3 May 2011

Commercial Property – solid 3Q11 retail sales and rental growth

Continuing to re-weight capital to retail in line with 3-R growth strategy:

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All major developments on program and budget

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Acquisition of Hervey Bay shopping centre at 7.5% initial yield with development potential to more than double the existing centre to 35,000sqm over next 2 years ($100m - $130m cost)

No material impact from recent retailer administrations
Solid 3Q11 retail sales from Stockland centres

31 March 2011	% 3mth Comparable Growth	% Annual Comparable Growth
Supermarkets	4.6	4.5
Discount Department Stores	(6.6)	(2.2)
Specialties	7.7	0.7
Mini Majors/Cinemas/Other	(3.0)	1.5
Total	3.0	1.9

• 2H11 comparable NOI growth:

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Retail on track for similar comparable NOI growth to 1H11 (+4.3% in 1H11)

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Office and industrial will outperform 1H11 (+1.5% office and +3.7% industrial in 1H11)

- 6 -

Retirement Living Investor Day 3 May 2011

Our agenda

Retirement Living investor briefing

Morning Tea

Development briefing

• Operations briefing

• Asset tours:

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The Willows

Macarthur Gardens

Well established and successful 189 unit retirement village featuring a mix of older style and newly developed independent living units and serviced apartments

New 238 unit greenfield retirement living village currently under construction

- 7 -

Retirement Living Investor Day 3 May 2011

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Retirement Living Investor Briefing David Pitman – CEO, Retirement Living

www.stockland.com

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

3. Strategy for success

4. Recap of key points

- 9 -

Retirement Living Investor Day 3 May 2011

A robust and attractive business well suited to Stockland

• Compelling demand drivers:

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Ageing population demographics well understood; easy to predict

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Expect demand for new developments of circa $35b over next 20 years

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Industry will struggle to meet demand because of fragmented structure

Strong competitive advantage reflecting our history in residential development and commercial property operations:

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Retirement Living combines skills honed in these two asset classes

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Balance sheet provides financial resources to fund development projects to capture demand

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Masterplan our communities around the 3-Rs, giving added market appeal

• Retirement Living delivers attractive long-run investment returns:

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Based on „ground up‟ fundamentals, the business is expected to deliver an overall unlevered IRR, post overheads, of circa 12%pa

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Upside potential with increased scale

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Stockland has outperformed relative to this benchmark over last 4 years

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Turnover cash lags accounting profits - model designed to ease cashflows for residents

• It is sustainable:

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Residents attracted by lifestyle, financial model works for them

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Industry is fragmented; larger operators can create national platforms for advantage

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Government supports retirement living as an important element in the broader community Clear strategy to grow our earnings

- 10 -

Retirement Living Investor Day 3 May 2011

Retirement Living means active communities, not A ed Care or Nursin Homes g g

Retirement villages are active communities of 65-85 year old independent residents

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Retirement villages offer only basic nursing services
Stockland‟s Aged Care/Nursing Homes were part of the 2010 Aevum acquisition:

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Circa 3% Retirement Living net assets; circa 0.3% SGP overall net assets

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Currently looking to outsource or sell these operations

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- 11 -

Retirement Living Investor Day 3 May 2011

Compelling demand fundamentals, even without an increase in take-u rates to international benchmarks p

Australian population aged 65+

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2.7% pa CAGR
Millions of people
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Implied demand for units
4.1% pa CAGR 129
108
82
253
213
162
115
2010 2020 2030 2040
Thousands of units
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65+ population expected to more than double in next 30 years

Baseline demand @ current 5% take-up @ 8% take-up (reflects international benchmarks)

$35b worth of new property required to meet demand (at today‟s prices and take-up rates)

- 12 -

Retirement Living Investor Day 3 May 2011

Stockland‟s integrated model combines proven capabilities to achieve reater market share g

Case Study of Highlands, VIC

Masterplanned community creation
Retail amenity supports increased sales volume and drives whole of project returns
Drives local demand

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----- Start of picture text -----

Retail
Residential
• Asset management • Development capabilities
• Frontline operations • Zoning and approvals
• Procurement savings • Builder relationships
•
• Recurring income Co-operative marketing
•
Cross-sell
• Enhances lifestyle value
Retirement •
proposition for residents Leverage brand
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Higher land bank turnover

- 13 -

Retirement Living Investor Day 3 May 2011

Leveraging group strengths – Stockland‟s competitive advantage

Residential Communities Commercial	Residential Communities Commercial	Commercial
Retirement is similar	• Population growth and projected undersupply • Development profit • Locations driven by local demand and amenity • Development processes	• Lease-like income stream • Resident (tenant) management • On-going asset management • Revaluations below the line

Retirement is different	• On-going income stream • Profits from built-form (construction outsourced to partner builders) • More infrastructure - recovered through the DMF structure	• Gross cash yield higher than Commercial: - Unrecovered overheads also higher as % of asset value - Scale required to spread overheads and achieve appropriate net cash yield • Relatively low risk - underwritten by demographic demand and undersupply

Retirement helps maintain Stockland‟s strategic income weightings[1] Combines stable recurring income with exposure to development profits

- 14 - 1. 20-40% of Operating Profit from trading, 60-80% of Operating Profit from recurring

Retirement Living Investor Day 3 May 2011

The business model delivers trading and recurring income

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Development Established
Target 30% of income Target 70% of income
Benchmark IRR = 20% (pre-overhead) Benchmark IRR = ~15% (pre-overhead)
1 2 3 4 5 6
7
Choose Acquire Masterplan Initial Resident makes ingoing
Build
corridors land & design „sale‟ contribution and moves in
Resident enjoys
lifestyle
11
8
Platform
Asset creation cycle
• Same drivers and activities as Residential
Resident is
12 Village
• re-paid Resident
Community facilities are more extensive Management
and DMF moves out
crystallised 13 Services
Turnover cycle
Deferred Management Fee (DMF):
10
Achieved on re-sale of unit Unit is 9
Based on resident tenure and capital gain Unit re-sold refurbished /
upgraded as
needed
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Deferred Management Fee (DMF): Achieved on re-sale of unit Based on resident tenure and capital gain
Resident receives the re-sale price, less the DMF
Outgoing resident pays for basic refurbishment (new carpet, paint and curtains)
Stockland pays for upgrades (kitchen, bathroom etc) – usually every second turnover

- 15 -

Retirement Living Investor Day 3 May 2011

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

3. Strategy for success

4. Recap of key points

- 16 -

Retirement Living Investor Day 3 May 2011

Favourable risk-adjusted returns vs other property asset classes

Historic returns for various asset classes analysed by Atchison Consultants (independent asset consultant):

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Retirement villages show highest total returns (IRR; pre-overheads) on a „buy and hold‟ basis: circa 15% pa

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Although above volatility of other direct property sectors, retirement village volatility below listed general equities, and listed property

Compared to a single village, a portfolio of villages has reduced volatility because of reduced variation in turnovers (refer slide 27)

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Means volatility may be lower than shown in chart
Analysis confirms Australian retirement villages offer attractive risk-adjusted returns

Total returns and volatilities[1]

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20%
15% Australian Retirement
Villages (proxy)
Australian Residential Property
Australian Direct Property
10% Australian
Shares
Overseas Fixed Interest
Australian Fixed Interest
Cash Australian Listed Property
5%
Overseas Shares
0%
0% 5% 10% 15% 20%
Total Returns (% pa)
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Volatility of Return (% pa)

- 17 - 1. Source: Atchison Consultants; 15 years to December 2010; pre-overheads and pre-tax

Retirement Living Investor Day 3 May 2011

ARC established villages have delivered a 24%pa total return in the 4 ears since ac uisition y q

• ARC acquired in March 2007: Established villages purchased for $148m, including $43m goodwill

• Since acquisition, established villages delivered a total return of 24%pa before overheads: Returns would have been 14%pa even without valuation uplift Excluding goodwill from initial and current values, returns would have been 33%pa

ARC Investment cashflows - established villages

			Value of
			villages
			1H11:
			$228m
FY07 (3 months)	FY08 turnover	FY09 turnover	FY10 turnover 1H11
turnover	cash	cash	cash turnover
cash $6m	$22m	$21m	$22m cash
			$10m

Paid $148m for 15 established villages March 2007

IRR = 24% pa before overheads

54% of initial investment recouped in turnover cash

- 18 -

Retirement Living Investor Day 3 May 2011

Retirement Living is expected to deliver net cash returns of ~12%pa

Pre-overhead unlevered IRR

Less: Overheads = Net unlevered IRR

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Development
• Investment hurdle rate for new village developments
20% • Investment in development is ~35% of total cash funds
Wtd Avg
employed
~17%
• Expected average FY12-13 turnover
Established ~10%
cash yield on cash invested
~15%
•
Capital growth rate of underlying property
~5%
• Valuation assumes 3.7%pa
• Historical actual ~9%pa (refer slide 23)
•
~$50m Overheads at expected FY12-13 run rate
(5%)
~$950m • Estimated average FY12-13 cash funds employed in
established villages, development WIP and stock
• After all overheads and before benefits of tax and gearing
~12%
• Further scale efficiencies will reduce overhead cost and provide IRR upside
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Capital growth rate of underlying property

- 19 -

Note: Excludes Aged Care

Retirement Living Investor Day 3 May 2011

An efficient, low risk, funding model … and affordable for customers

The loan-lease DMF structure enhances resident affordability:

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Typically asset rich, income poor
Average Stockland customer purchases an Independent Living Unit (ILU) for 80% of previous home‟s value:

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Enables circa 20% to be retained for money to live on, travel etc
Loan-lease is stamp duty efficient
Resident loans fund underlying property:

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If held on SGP balance sheet without offsetting loan, rent would exceed most residents‟ ability to service from cash flows

Components of funds employed in Retirement Living[1]

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(at 31 December 2010, $m)
2,949 Cash investment is
earning a weighted
average ~17%pa
(pre-overhead; slide 19)
1,929
1,020
114
122
174
62 Stock
610
548
3
R/L Funds Funded Funded Goodwill DMF Development Cash
Employed By By 2 Revaluation WIP 3,4 investment
Residents Shareholders & Creation in Established
3 Villages 5
Loans from Cost of Zero Target Earning
current industry cash 20%pa IRR ~15%pa IRR
residents entry invested
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Excludes Aged Care net funds employed of $32m
Refer note 22 of 1H11 accounts (existing Retirement Living resident obligations - Gross existing resident loans)
20 -
Refer page 20 1H11 Results presentation dated 9 February 2011
Includes $10m of undeveloped land held for sale (refer Note 9 1H11 accounts)
Includes $62m of stock (~$50m acquired with Aevum); balance is acquired DMF at cost plus cumulative capex on common facilities

Retirement Living Investor Day 3 May 2011

Within the next 12 months, accrued DMF is ex ected to exceed cash investment p

Stockland‟s cash investment in established villages comprises:

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DMFs acquired through M&A (ARC, Rylands and Aevum)

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Ongoing capital invested in maintaining and upgrading common areas in villages

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Legal title to resident units for all loanlease/license units (remaining strata units being converted over time - currently 11% of portfolio)

Accrued DMF represents fees due to Stockland at any given point in time: Contractually owed by residents

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Reflects current residents at current ILU prices

DMF investment vs accrual

($m) 650 Accrued DMF is expected to exceed the cash invested in DMFs during the second half of FY12

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600
Cash investment in
established village DMFs
550
500 Accrued DMF
(Owed to Stockland under
current resident contracts)
450
400
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12
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- 21 -

Retirement Living Investor Day 3 May 2011

Strong, low risk investment returns in the established portfolio

Value drivers - established portfolio

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----- Start of picture text -----

Demand
Price growth Product supply
Capabilities
Portfolio maturity
Strong risk-
Profitability
adjusted returns
Economies of scale
Low volatility
Risk Recoverable investment
Sustainable business model
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Refer detailed slides

- 22 -

Retirement Living Investor Day 3 May 2011

Price growth supported by strength in residential markets and ro ected su l shortfall in retirement p j pp y

Price Growth

Historical price growth comparison

10% 9% 7.6% 5% 3.7% Average 9-year growth Average 9-year ABS index of house Growth rate Growth rate rate of the median growth rate of prices past 25 years adopted for IRR adopted for house price where Stockland[1] village across Australia (wtd modelling statutory reporting Stockland[1] had villages unit prices avg of capital cities) (refer slide 19) (mostly Melbourne)

Historical experience

Conservative relative to historical experience

Does not rely on sustained high residential price growth

- 23 - 1. Ex-Aevum

Retirement Living Investor Day 3 May 2011

Profitability will further improve as the portfolio matures

Portfolio Maturity

Typical retirement village reaches maturity after 10-12 years

% of existing ILU portfolio over 10 years old[1]

At maturity:

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Turnover frequency is 8-10%pa
Stockland weighted average portfolio maturity: Before Aevum 14.5 years After Aevum 17.0 years
63% of existing ILUs are now in villages of 10+ years maturity:

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Will be >80% in 2015 for existing ILUs Excluding new developments

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----- Start of picture text -----

100%
80%
60%
40%
FY10 FY12 FY14 FY16 FY18 FY20
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- 24 - 1. Excluding new developments

Retirement Living Investor Day 3 May 2011

Turnover cash from existing villages to increase as villages mature

Portfolio Maturity

DMF turnover cash forecast to grow at a rate marginally above the price growth rate of the underlying units[1]
Turnover cash lags DMF accrual:

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Lag is greater if portfolio is younger, or capital growth higher

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At a growth rate of 3.7%, ratio of DMF turnover cash / DMF accrual matures at circa 80%

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Excluding price growth, turnover cash will equal DMF accrual within 10 years
Turnover cash forecasts predictable based on: Our database of historic turnovers Actuarial projections

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----- Start of picture text -----

Forecast DMF cashflows: FY12-22 [2]
($m)
100 90%
DMF turnover cash @ 5.0% growth in unit prices
(LHS, $m); CAGR = 5.4%
DMF turnover cash / DMF accrual
@ 3.7% growth in unit prices (RHS, %)
80 80%
60 70%
DMF turnover cash, @ 3.7% growth
In unit prices (LHS, $m); C AGR = 4.0%
40 60%
FY12 FY14 FY16 FY18 FY20 FY22
----- End of picture text -----

Based on pre-overheads, capex, funding costs and tax impacts/benefits. Forecast turnovers, subject to variation in resident turnovers
Established villages only as of December 2010; excludes new developments; based on new residents entering on Stockland standard contract - 5.5% of exit price in the first year, then 3% of exit price pa to a cap of 32.5% of exit price after 10 years

- 25 -

Retirement Living Investor Day 3 May 2011

Scale means we are adding income faster than overheads and will continue to do so ,

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Scale
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Aevum acquisition moved Stockland down scale curve

Retirement Living scale curve

(Fixed costs per living unit - established business only)

FY12 fixed costs per unit in the Established business are expected to be ~20% below the pre-Aevum level
Further benefits available from expansion of the Established portfolio:

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Development pipeline will add significant scale over time

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Selective acquisitions

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----- Start of picture text -----

$ Per
Unit p.a.
Pre-Aevum
Post-Aevum:
~20% lower
Post-completion of
current development
pipeline
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
# Units
----- End of picture text -----

Ability to spread fixed costs over larger base

- 26 -

Retirement Living Investor Day 3 May 2011

Risk

Low risk business model

Low volatility of earnings

Larger portfolios deliver steadier recurring DMF cash flow, especially as maturity increases:

==> picture [17 x 18] intentionally omitted <==

Less susceptible to low turnover years

Development is a repeatable, scalable process leveraging our tested Residential capabilities

Sustainable demand

Underwritten by strong demographic demand
Projected supply shortfall will support continued price growth:

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However, viability of model not reliant on sustained high residential price growth
Affordable for residents

Recoverable investment

Within the next 12 months, the accrued DMF owed by current residents is expected to pay back 100% of Stockland‟s cash investment in acquired DMFs

Turnover volatility and portfolio size

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----- Start of picture text -----

Turnover
Portfolio
Variation
(% p.a.) 100 units
8% 7000 units
6%
4%
2%
0%
-2%
-4%
-6%
-8%
----- End of picture text -----

Time in years

- 27 -

Retirement Living Investor Day 3 May 2011

Sustainable value proposition

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----- Start of picture text -----

Risk
----- End of picture text -----

Residents see Retirement Village living as a lifestyle choice:

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Loan-lease DMF model is affordable; enables assetrich, income-poor customers to buy now, pay later
The DMF contracts offered by major industry participants deliver positive capital gain, even after DMFs are deducted on exit (refer chart):

==> picture [16 x 18] intentionally omitted <==

Assuming 5%pa capital growth and a 12-year stay
A solid defence against potential regulatory change
Overall, Stockland DMF contract terms are positioned well relative to key competitors:

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Our most commonly offered contract accrues at 5.5% of exit price in the first year, then 3% of exit price pa to a cap of 32.5% of exit price after 10 years This contract has been in use for 8+ years, is well accepted and portfolio has minimal vacancies

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----- Start of picture text -----

% of initial loan returned to resident [1]
125%
Most common
121% Stockland DMF
contract on offer
Competitor 1,2,3 120%
115%
Competitor 4 111%
Competitor 5 110%
----- End of picture text -----

28 - 1. Compares the percentage of initial purchase price returned to the resident after deferred management fees are deducted on exit. Competitor contracts illustrated are the most common currently on offer from each company. Examples are based on DMF contracts currently available in the market. Assumes 5%pa unit price growth and 12 year tenure on exit. Highlighted Stockland contract accrues at 5.5% of exit price in the first year, then 3% of exit price pa to a cap of 32.5% of exit price after 10 years. Source: JLL; Stockland analysis

Retirement Living Investor Day 3 May 2011

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

3. Strategy for success

4. Recap of key points

- 29 -

Retirement Living Investor Day 3 May 2011

Good progress being made: actively leveraging Group capabilities, focused on creatin further value g

The journey from cottage industry to institutional-grade asset class

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----- Start of picture text -----

Aevum acquisition has
Build the foundation
made a significant
contribution to this phase
50-60% complete
Leverage group capabilities
20-30% complete
Innovate for advantage
10% complete
Now ~2013
----- End of picture text -----

Aevum acquisition has made a significant contribution to this phase

- 30 -

Retirement Living Investor Day 3 May 2011

Building the foundation

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----- Start of picture text -----

•
Aevum successfully acquired and integrated
•
Growth corridors identified and pipeline defined
What has been
•
Processes redesigned
achieved •
CRM and other information systems developed and refined
•
Scalable organisational structure established
•
Internalise village management (former ARC villages)
•
Still to do Village manager skills development
•
Continue to refine and improve systems and processes
•
Competitively robust national platform
•
Outcomes Improved scale economics
•
Professionalised institutional systems and processes
(6 months)
•
Benefits for residents from a nationally consistent operating model
----- End of picture text -----

- 31 -

Retirement Living Investor Day 3 May 2011

Aevum successfully acquired and integrated

Portfolio size1 National ranking Market share / geographic diversity Existing units turnover Village age Development Pipeline	Before After Change
	 3,881 units 7,027 units +81% Nearly doubled portfolio 28 villages 58 villages +30 villages
	#4 #3 +1 ranking Clear #3 in the market 
	~5% (2 states) ~9% (5 states) +4% (+3 states) National platform; critical mass in key states 
	c250 units p.a. >500 units p.a. > +105% Strong turnover from more mature portfolio 
	14.5 years 17.0 years +17% More mature villages enhance cash yield 
	~2,900 units ~3,400 units +29% Strong organic growth 

- 32 - 1. Excludes aged care / nursing homes

Retirement Living Investor Day 3 May 2011

Aevum acquisition on track to achieve targets

Target	Previous guidance	Update
EPS accretion - FY11	~0.6% accretive in FY11	On track
EPS accretion - FY12	~2.5% accretive in FY12	On track
Cash coverage	Expect to achieve ~45% cash coverage in FY12	On track
Synergies	Estimated savings of ~15% of combined costs per annum by end of FY12	On track

- 33 -

Retirement Living Investor Day 3 May 2011

Leveraging group capabilities

Transferred development skills and best practices from Residential
What has been • Now building on land bank sites (e.g. Highlands, Arilla, Settlers East)
•
achieved Commenced masterplanning and detailed design at land bank sites at Selandra Rise, Mernda; others in early stages
- Leverage builder partner capabilities as in Residential
Invest in raising asset management to Commercial Property
Still to do standards
- Further collaboration with other Business Units on master-planned communities, especially on major land bank sites (e.g. Caloundra)
Faster and lower cost-to-construct built form
Outcomes • Enhanced long term asset values
(12-18 months) • Improved resident satisfaction, driving referral

- 34 -

Retirement Living Investor Day 3 May 2011

Innovating for advantage

Proprietary ILU and Community Centre designs
•
What has been Customer insight and analytics; leading CRM capability •
achieved Resident feedback process (Residents‟ Voice Survey) • Sales professional training
Evolve DMF structure to continue to meet customers‟ needs
• Middle-ring, medium density development solutions
•
Still to do Partnering to offer personal care and lifestyle services • Continue to evolve ILU and common facility designs
• Online customer experience
Enhanced customer choice in DMF options
• Maintain relevance to incoming generations of residents
Outcomes • Wider and more flexible set of growth options
(2-3 years) • Broader customer appeal
• Market share gains

- 35 -

Retirement Living Investor Day 3 May 2011

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

3. Strategy for success

4. Recap of key points

- 36 -

Retirement Living Investor Day 3 May 2011

Recap of key points

• Retirement Living is a strong fit with Stockland‟s wellestablished property skills and capabilities:

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Combination of Residential development and Commercial asset / operational management

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Helps maintain balanced earnings mix between trading and recurring
The asset class is a sound long term investment:

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Strong underlying demand

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Overall IRR after overheads of ~12% with relatively low risk and upside potential

==> picture [16 x 18] intentionally omitted <==

Have outperformed relative to this benchmark over last 4 years
Strategic focus is on continuous improvement and organic growth through development:

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Realise economies of scale

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Continue to develop and upgrade capabilities

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Innovation in product and choice of DMF options Develop new villages to meet demand, drawing extensively from Stockland land bank

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Selective acquisitions

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Rylands Kew Village, VIC

- 37 -

Retirement Living Investor Day 3 May 2011

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Development Overview Barry Mann – General Manager, Development

www.stockland.com

Agenda

1. Process Well defined and leveraging our corporate expertise

2. Product Development

Continually improving to produce a better result

3. Pipeline Strong growth from our land bank

- 39 -

Retirement Living Investor Day 3 May 2011

Residential development for the older generation

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----- Start of picture text -----

Choose Acquire Masterplan
Build Initial „sale‟
corridors land & design
Strategy • Residential • Demographics – • Community centre • Incorporate • Strong database
corridors for large high over 65 and facilities retirement features •
Early display units
sites (8-12ha) population • into homes
Density •
• High population • Close to: benchmarks • Staged construction: Qualify interested
parties
areas for medium density sites Retail • Increase density in 2 to 4 civil stages • On site sales staff
(3-8ha) Advanced care later stages ILU stages of and customer team
• Average residential Medical facilities • Theme precincts of 25 to 35
value $350,000+ 30 to 40 ILUs • Community Centre
Public transport
opens with Stage 1
Skill Set • Aligns with already • Strong market • Internal architect for • Development, project • Internal sales team
strong research knowledge and masterplan and construction are seen as friends
and business research • Internal cost management to our customers
development in • Research from planning • Project home and
Stockland
Retail and medium scale
• Supported by 3-R Residential builders
growth strategy
----- End of picture text -----

Skill Set

- 40 -

Retirement Living Investor Day 3 May 2011

Choose corridors

Acquire Masterplan Build land & design

Initial „sale‟

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Clear site selection criteria

Proximity adds value
High population areas
High over 65 population
Residential values over
$350,000
Align with Residential land bank

- 41 -

Retirement Living Investor Day 3 May 2011

Choose Acquire Masterplan Build corridors land & design

Initial „sale‟

==> picture [684 x 418] intentionally omitted <==

----- Start of picture text -----

Sydney
Macarthur
60 Km
Railway Station
Stockland
Macarthur Macarthur
Gardens Square
Residential Shopping
Development Centre
Macarthur
Gardens
Retirement
Aged Care
Village
1km
Campbelltown
Private
Hospital
Campbelltown
Golf Club
Campbelltown
Public
Hospital
9km 5km
----- End of picture text -----

Example: Macarthur Gardens, NSW

- 42 -

Retirement Living Investor Day 3 May 2011

Choose Acquire Masterplan Build Initial „sale‟ corridors land & design

Nine Stages of 25 to 30 ILUs per stage Example: Macarthur Gardens, NSW Gated access RV & caravan parking to public park

Central Walking access to community regional shopping centre centre Pocket park High impact chess theme and secure entry

- 43 -

Retirement Living Investor Day 3 May 2011

Choose Acquire Masterplan Build corridors land & design

Initial „sale‟

Community facilities

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Health & Wellbeing

Medical Suites, Nurses Room, Podiatrists
Hair Salon and beautician
Pool and gym – movement and flexibility

Community Lifestyle

Security
Café, club lounge, bar, library, media
Town hall for functions, meetings and activities
Bowling green and alfresco spaces

Homes

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Features

Mobility and dexterity
Facilities for grabrails
Easy to use:

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Door handles

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Kitchen drawers

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Oven and microwave heights Taps

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Large format light & power switches

Nurse call system
Pocket parks – chess, bocce, rose gardens

- 44 -

Retirement Living Investor Day 3 May 2011

Choose Acquire Masterplan corridors land & design

Build

Initial „sale‟

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New development customers

Around 70 years old in new developments
30% singles, 70% couples
Majority come from within 10km radius
Move for:

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lifestyle

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downsize

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follow the kids

“We already downsized our property four years ago, but as we‟ve gotten older, it‟s become more important to us to live in a community of like minded people”

“The village has got all the facilities and design features we wanted, at the right price. We‟re looking forward to enjoying a different pace of life and relaxing a lot more”

- 45 -

Retirement Living Investor Day 3 May 2011

Agenda

1. Process Well defined and leveraging our corporate expertise

2. Product Development

Continually improving to produce a better result

3. Pipeline

Strong growth from our land bank

- 46 -

Retirement Living Investor Day 3 May 2011

Homes - continually enhancing our product

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Recent past

Custom built
Wide frontage
Monotonous streetscapes
Monotone colour palette

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Current designs

Custom designed
Narrow frontage
Varied streetscapes
Varied palette

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----- Start of picture text -----

Use this and a picture of
Henley Home at Selandra Rise
----- End of picture text -----

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Near future

Project homes - modified for retirees
Narrow frontage
Ongoing builder product development
Procurement efficiencies
Varied facades and streetscapes

- 47 -

Retirement Living Investor Day 3 May 2011

Community centre - a community within communities

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Health and wellbeing / community lifestyle
Activity hub with a club atmosphere
Open within 6 months of first residents

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- 48 -

Retirement Living Investor Day 3 May 2011

Product development – innovation to enhance affordability

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----- Start of picture text -----

What Why How
• Customers need to preserve • Reduce land m [2] per ILU
capital • Reduce building size
•
Improve Increase customer pool • Increase services provision
• Increase accessible outside ILU
affordability
corridors • Align with partner builder
product
• Land cost is amortised over • Efficient masterplanning
Increase ILU quantity • Narrow lot and ILUs
• Increase product range • Medium density e.g.
site yield •
Lower operating cost per Gowanbrae, Willows
ILU
• Improve efficiency of land • Density Low 22 - 25 ILU per Ha
Benchmarks use Medium 50 ILU per Ha
• Provide consistent village • Community facilities 6 - 7 m [2] per ILU
experience to customers • Village size 170 to 250 ILUs
----- End of picture text -----

- 49 -

Retirement Living Investor Day 3 May 2011

Agenda

1. Process Well defined and leveraging our corporate expertise

2. Product Development

Continually improving to produce a better result

3. Pipeline

Strong growth from our land bank

- 50 -

Retirement Living Investor Day 3 May 2011

Identified development pipeline: ~3,400 ILUs (as at 1 May 2011)

Identified development pipeline: ~3,400 ILUs(as at 1 May 2011)	Identified development pipeline: ~3,400 ILUs(as at 1 May 2011)	Identified development pipeline: ~3,400 ILUs(as at 1 May 2011)	Identified development pipeline: ~3,400 ILUs(as at 1 May 2011)
- 51 - State Project Anticipated Settlements Total Units (approx) Remaining Units (approx) FY11 FY12 FY13 FY14 FY15 FY16 *Current Active Projects* VIC Gowanbrae 190 40 QLD Fig Tree 190 100 VIC Highlands 200 170 QLD North Lakes Extension 100 70 VIC Arilla (South Morang) 200 200 NSW Macarthur Gardens 240 240 NSW Waratah Highlands 170 60 VIC Tarneit Skies 160 40 WA Settlers East 220 220 *Village Extensions* NSW The Willows 70 NSW Lourdes 10 NSW Golden Ponds 40 NSW Maybrook 20 NSW Cardinal Freeman 220 NSW The Cove 60 *Landbank - Not Yet Committed* VIC Selandra Rise 200 VIC Mernda 240 QLD Northshore (Townsville) 180 QLD Pallara 170 VIC Eucalypt 190 VIC Highlands II 200 WA Banjup 200 QLD Caloundra 460 3,400 500 - 600 1,100 – 1,200 1,100 – 1,200 NSW QLD VIC WA Total over two years
*Current Active Projects* VIC Gowanbrae 190 40 QLD Fig Tree 190 100 VIC Highlands 200 170 QLD North Lakes Extension 100 70 VIC Arilla (South Morang) 200 200 NSW Macarthur Gardens 240 240 NSW Waratah Highlands 170 60 VIC Tarneit Skies 160 40 WA Settlers East 220 220 *Village Extensions* NSW The Willows 70 NSW Lourdes 10 NSW Golden Ponds 40 NSW Maybrook 20 NSW Cardinal Freeman 220 NSW The Cove 60 *Landbank - Not Yet Committed* VIC Selandra Rise 200 VIC Mernda 240 QLD Northshore (Townsville) 180 QLD Pallara 170 VIC Eucalypt 190 VIC Highlands II 200 WA Banjup 200 QLD Caloundra 460

























- 51 - 3,400	500 - 600	1,100 – 1,200	1,100 – 1,200
- 51 -

Retirement Living Investor Day 3 May 2011

Strong growth and profit coverage from existing land bank

• Annual volume of new unit settlements expected to triple over next 3 years:

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Improved geographic diversity in 4 states

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Strong lead database

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Early establishment of community centre

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Leveraging Residential communities development progress

Funds employed in development expected to increase by only 50% over the same period: Accelerated development of land bank

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Funds recycled from settlements

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Develop in stages

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Benefits of scale and diversification

Active developments provide substantial profit coverage in next 2 years:

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FY12: 100% FY13: 90%

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15-20% development margin before overheads

Growth in next 5 years covered by village extensions and projects identified in the land bank (circa 3,400 ILU pipeline):

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Active projects – circa 1,140 remaining ILUs

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Village extensions and land bank – circa 2,260 ILUs

- 52 -

Retirement Living Investor Day 3 May 2011

Summary

Process:

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Residential development for the older generation

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Development processes leverage our skill base and corporate expertise

Product development:

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Continue to improve based on deep customer insight

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Innovate to enhance affordability

Pipeline:

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Strong growth delivered from our diversified land bank

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Strong profit coverage from active developments

==> picture [16 x 18] intentionally omitted <==

All growth in next 5 years covered by village extensions and land bank

- 53 -

Retirement Living Investor Day 3 May 2011

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==> picture [90 x 86] intentionally omitted <==

Operations Overview Kate Mathewson – General Manager, Operations

www.stockland.com

Retirement Living Operations

1. Large and scalable platform

2. Stockland management expertise is leveraged across our Retirement Living portfolio

3. Knowing our residents well allows us to run better communities

4. We understand the critical steps in operating a successful village

- 55 -

Retirement Living Investor Day 3 May 2011

Large and scalable platform

ILUs and Serviced Apartments

Age of village profile

==> picture [627 x 196] intentionally omitted <==

----- Start of picture text -----

3%
4%
8%
18%
11%
VIC 28% 57% 57%
NSW
14%
0-5 Years
QLD
5-10 Years
SA
10-20 Years
WA
Over 20 Years
----- End of picture text -----

Total units
Independent Living Units (ILUs)	6,441
Serviced Apartments (SAs)	586
Total1	7,027

- 56 - 1. Excludes aged care

Retirement Living Investor Day 3 May 2011

Retirement Living Operations

1. Large and scalable platform

2. Stockland management expertise is leveraged across our Retirement Living portfolio

3. Knowing our residents well allows us to run better communities

4. We understand the critical steps in operating a successful village

- 57 -

Retirement Living Investor Day 3 May 2011

Retirement Living: a critical and growing need in the community

Residential accommodation by customer segment

First Home Buyers 20-35 yrs	Upgraders 35-50 yrs	Upgraders 35-50 yrs	Upgraders 35-50 yrs	Downsizers 50-70 yrs	Downsizers 50-70 yrs	Retirees 70-85 yrs	Aged Care 85+ yrs
Limited; Leveraged	Building			Life peak		In decline or flat	Winding down

Residential Communities					Retirement Living Villages		Nursing homes

Mortgage					DMF		Aged care bonds / pension

Individual households		Stockland					Specialists (Partnership)

Self-serviced			3rd party health care and Personal care service providers				Specialists (Partnership)

- 58 -

Retirement Living Investor Day 3 May 2011

We are continuing to develop and leverage group capabilities

==> picture [696 x 189] intentionally omitted <==

----- Start of picture text -----

Asset Care and Redevelopment
Sales and Operations
management lifestyle design and
marketing
services approval
----- End of picture text -----

Provide our residents with effective retirement living solutions	Manage our villages to ensure quality of customer offering	Maintain our Villages to ensure consistently high quality product	Co-ordinate access to care and lifestyle services for our residents	Design and obtain approval to add on to or redevelop existing villages to create larger more vibrant villages
• Strong customer insight • Empathetic sales team • Refined resident database • Cross-group sales practices and training	• Aevum acquisition has built on capabilities and business processes • Developing a village manager training and village accreditation program	• Leveraging best practice asset management across the business • Asset management plans	• Refining and standardising our service offering • Building on partnering capabilities	• Dedicated design team with solid master planning capabilities • Development and project management best practice shared across Stockland

- 59 -

Retirement Living Investor Day 3 May 2011

Retirement Living Operations

1. Large and scalable platform

2. Stockland management expertise is leveraged across our Retirement Living portfolio

3. Knowing our residents well allows us to run better communities

4. We understand the critical steps in operating a successful village

- 60 -

Retirement Living Investor Day 3 May 2011

Two segments – „Active and Engaged‟ and „Winding Down‟

Still very active both physically & socially
New retirees
Usually couples
Feel young and independent
Undertaking leisure activities, like travel
Enjoy the „lock up and leave‟ aspect of a
„Active and village • Freedom from home maintenance • Looking to the future
Engaged‟
Reacting to an event (e.g. death of a spouse or serious illness) or planning for an event they believe to be inevitable
Unable to remain in family home
Been retired for longer
Less engaged & less social
Want the security of 24 hour medical assistance
Cherish the sense of community of village life
Often single females
Enjoy low maintenance lifestyle
Like the security of a gated community

„Winding Down‟

Often an event triggers the „Winding Down‟ segment

Some will possess features of both segments, however one segment profile will be dominant[1]

- 61 -

Source: Qualitative segmentation research, Forethought, 2009

Retirement Living Investor Day 3 May 2011

Lifestyle is the primary driver for purchase

Main reasons for moving to a retirement village

==> picture [475 x 332] intentionally omitted <==

----- Start of picture text -----

Health
Other
24/7
Stay
Emergency
11%
independent
support
21%
7%
New
home 7%
More 16% Quality
9%
of life
security
Lifestyle
13%
Less 16%
maintenance
Downsizing
----- End of picture text -----

- 62 - 1. Sources: Stockland Resident Survey and Choice modelling

Retirement Living Investor Day 3 May 2011

Understanding the drivers of satisfaction leads to better communities

Residents Voice survey

The drivers of resident satisfaction

Annual survey to all residents – 63% completed in 2010
Results reflect high level of customer satisfaction:
88% of residents report being satisfied or extremely satisfied with their life in a Stockland village
68% of new residents say their quality of life improved once they moved into a Stockland village
56% of residents have referred at least 1 person to a Stockland village
Detailed feedback drives continual improvements in our product and service offerings

Overall Satisfaction 9/10

The home Social activities

The village manager

Group participation The residents‟ committee

==> picture [253 x 170] intentionally omitted <==

The village nurse Stockland

- 63 -

Retirement Living Investor Day 3 May 2011

Resident testimonials

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- 64 -

Retirement Living Investor Day 3 May 2011

Retirement Living Operations

1. Large and scalable platform

2. Stockland management expertise is leveraged across our Retirement Living portfolio

3. Knowing our residents well allows us to run better communities

4. We understand the critical steps in operating a successful village

- 65 -

Retirement Living Investor Day 3 May 2011

Operations and asset management

Assist residents on arrival

and departure

Sales and • Conveyancing team key marketing liaison with residents and their families
At turnover DMF contract between Stockland and resident is settled

==> picture [61 x 12] intentionally omitted <==

----- Start of picture text -----

Contracts
----- End of picture text -----

==> picture [39 x 40] intentionally omitted <==

Residents have access to village facilities at effectively no upfront cost
• The cost is deferred to the end of their stay (DMF)

==> picture [157 x 156] intentionally omitted <==

----- Start of picture text -----

Day to day
village
operations
----- End of picture text -----

The cost of the day to day running of the village is funded by the monthly resident levy

==> picture [157 x 156] intentionally omitted <==

----- Start of picture text -----

Refurbishment
and upgrade
Capital
expenditure
----- End of picture text -----

Refurbishments: minor / cosmetic make good works such as paint / carpet – funded by outgoing resident
Upgrades: mainly kitchen / bathroom renovations, does not occur every turnover. Capital reinvestment by Stockland; results in significant price uplift

- 66 -

Retirement Living Investor Day 3 May 2011

Retirement village operations vs retail shopping centre operations

==> picture [585 x 447] intentionally omitted <==

----- Start of picture text -----

There are similarities between Commercial Property and Retirement Living
Tenant signs
Retail commercial lease and
takes possession
Tenant trades
Resident makes ingoing
Retirement contribution and moves in Resident enjoys
lifestyle Operating budgets are
funded via monthly
levies and administered
by facility management
Platform
Resident is Village management
Resident
services
re-paid moves out
and DMF Resident is
crystallised Centre re-paid Tenant
management& MF vacates
crystallised
Settling with
outgoing party Unit re-sold Unit is refurbished / Refurbishment/refit
allows process to upgraded as needed
funded by outgoing
commence again
party
Tenancy is re-leased
and refitted
Tenancy is defitted and
Have specialised sales
staff to cater for the refitted as appropriate
specific needs of their
respective customer
group
----- End of picture text -----

- 67 -

Retirement Living Investor Day 3 May 2011

Village services - determined by residents

==> picture [177 x 123] intentionally omitted <==

Dining room
Library
Happy hours

==> picture [210 x 140] intentionally omitted <==

==> picture [198 x 144] intentionally omitted <==

Exercise classes
Sporting activities e.g. bowls, petanque
Pool
Gardens
Internet
Bus - organised day trips and shopping
Gym equipment tailored for seniors
Personal care services e.g. hairdresser, podiatrist, beautician
Social services - clubs and groups e.g. cards, movies, craft, men‟s shed, gardening, dominoes
Community programs

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Nurse
Pharmacy delivery
Grocery store

==> picture [208 x 139] intentionally omitted <==

- 68 -

Retirement Living Investor Day 3 May 2011

In summary…

• National business in relevant growth areas

Leveraging the Stockland Residential and Commercial Property capabilities for the Retirement Living

business

88% satisfaction levels drive low vacancy and referrals
Creating community is important
29% of new residents spoke with current residents prior to making the decision to move

• 56% of residents recommended a Stockland village to at least one other person

34% of new residents wished they had moved in earlier

• Retirement Living is a lifestyle choice

- 69 -

Retirement Living Investor Day 3 May 2011

Appendix

• Portfolio composition

• Step-by-step guide to P&L composition

• DMF Valuation

• Implications of Productivity Commission

- 70 -

Retirement Living Investor Day 3 May 2011

Portfolio profile[1]

Ownership contracts

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11%
Strata/Freehold
8%
Loan-License
Loan-Lease
81%
Village age
18%
0-5 Years
5-10 Years
10-20 Years
11%
20+ Years
57%
14%
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Portfolio

Accommodation types

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3%
9%
Independent
Living
Apartments
Serviced
Apartments
Independent
Living Units
88%
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Unit price point

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7% 11%
16%
<$200k
$200 to $300k
27%
$300 to $400k
$400 to $500k
> $500k
39%
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- 71 -

Figures as at 31 March 2011

Retirement Living Investor Day 3 May 2011

Portfolio

Geographically diversified portfolio

Geographic diversification – Before and After Aevum

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4% 2% South Australia
3% 10%
8% Western Australia
18%
23%
26%
45% Victoria
55%
31%
65%
89%
29%
17% Queensland
11%
38%
28% 28% 22% 28% New South Wales
11%
8%
3%
Before After Before After Before After
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Established Development
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Combined
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- 72 -

Retirement Living Investor Day 3 May 2011

Guide to the P&L

The revenue model and cash flow profile

On taking up occupancy, resident makes an entry payment equal to the market value of the unit; this is recorded as a loan

($,000s)

Example cash flow profile - typical individual unit[1]

During residency, a Deferred Management Fee (DMF) is accrued as income based on the contract terms
The actual DMF paid on exit is calculated on the property value at either the time of entry or time of exit. In the case of entry, Stockland participates in the capital appreciation of the property at between 0% and 100% depending on the contract arrangements
In addition to the DMF, residents pay a regular service fee which is used to fund the day-to-day operation of the village (i.e. cost recovery model)

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----- Start of picture text -----

800
Paid to Resident
Paid to/by Operator
600
525
400
352
200
350
253
170
0
-300
-200
-400
Initial Cost Year 1 Year 11 Year 22
to Construct sales proceeds DMF and DMF and
(Incl. Community from 1st repayment repayment
Facilities) resident to 1st resident to 2nd resident
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When resident vacates, the loan is repaid less the accrued DMF

- 73 - 1.

Assumes: $350k unit price; DMF = 5.5% in Year 1, and 3%pa each year thereafter up to max 32.5%; DMF calculated on re-sale price; capital growth 3.7%pa

Retirement Living Investor Day 3 May 2011

Guide to the P&L

P&L structure reflects key value drivers

Illustration using actual data for 1H11

(Actual 6 months to 31 December 2010 - excluding Aevum)

	(Actual 6 months to 31 December 2010 - excluding Aevum) Illustration using actual data for 1H11
	Components of RL Operating Profit *(excluding Aevum)* 1H11 ($m) Development profit – Settled 4 Development profit–Unsettled 2 Total Development profit 6 Conversion profit 5 DMF Accrual 23 Overheads (15) Operating profit 19 Less accrued DMF (23) Plus Turnover cash 6 Cash earnings 2 Cash coverage 9% # Units Settled x Avg Selling Price x Development Margin # Units Occupied x Avg Market Value x Avg Rate of Accrual Over the next few years, an annual Conversion profit of circa $10m is expected, depending on turnover rate and mix of products turning over Will grow slower than revenues as economies of scale are achieved # Turnovers x Avg Re-sale Value x Avg DMF Margin Progressive recognition of profit for assets under development, as required by AASB140 • Rule-of-thumb: 15-20% of the following year‟s settled profit + 5- 10% of the settled profit in the year after Cash earnings / Operating profit Slide 75 Slide 77 Slide 78 Slide 76
	Total Development profit Conversion profit DMF Accrual Overheads
	Operating profit
	Less accrued DMF Plus Turnover cash
	Cash earnings
	Cash coverage

- 74 -

Retirement Living Investor Day 3 May 2011

Guide to the P&L

Unsettled development profit

Recording unsettled profit through a development

Stage of Development	Accounting Profit	DMF Creation
DA Approval	5%	Nil
Under Construction
• Stage 10% complete	Based on % completion - further 55%	Discount rate of 17.55% applied to DMF creation until sold
• Stage 25% complete
• Stage 50% complete
• Stage 75% complete
• Stage 100% complete
Complete
• Unsold	60%
• Sold	100%	12.55%

Simple rule-of-thumb for modelling purposes

15-20% of development profit for the next year

5-10% of the expected development profit for the year after

- 75 -

Retirement Living Investor Day 3 May 2011

Guide to the P&L

Conversion Profit

Deferred Repayment (DR) contracts represent approximately 20% of our current DMF contract portfolio:

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A legacy of our ARC acquisition, no longer offered to residents

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Under DR contract, resident originally purchased their unit for a price at or near the cost to construct (wholesale price) and pays a greater share on exit
When a resident on a DR contract turns-over, there are 2 sources of profit:

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Conversion Profit
Conversion profit relates to the transition in ILU price from wholesale price (i.e. the cost to construct) to retail price
Conversion profits will decrease as these residents exit and the ILUs are transitioned to standard contracts
Our conversion profit is forecast to be circa $10m pa for the next 10 years, then tapering to zero over the subsequent 10 years:

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Subject to variance in resident turnovers

- 76 -

Retirement Living Investor Day 3 May 2011

Guide to the P&L

DMF accrual

DMF Accrual is the total amount of DMF payments owed by residents to Stockland at a particular balance date:

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Residents lend Stockland an amount equivalent to the market value of the ILU

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DMF Accrual refers to reduction in the liability owed to the resident (i.e. reduction of loan repayment)
Simplified our accounting of DMF accrual in 1H11 - now accrues as per each individual contract: DMF owed by each ILU changes over time in alignment with contract terms and as capital value of ILU grows

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Change in DMF owed by residents is calculated on a „bottom-up‟ basis each period

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Methodology caters for mix of contract terms, better reflecting value creation in diverse, post Aevum DMF portfolio

- 77 -

Retirement Living Investor Day 3 May 2011

Guide to the P&L

Achieved circa 12% gross turnover cash yield in FY10

Drivers of turnover cash yield - FY10 actual results

Impact of Aevum

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----- Start of picture text -----

Conversion profit
+ $12m
Avg. portfolio size
 Almost doubled size of
No. of turnovers 3,626 units portfolio
253 x
Turnover rate
Turnover cash yield 
More mature villages drives
Turnover cash 7.0% higher turnover
12%
+ $14m x
Re-sale value/unit
 No material change
DMF / turnover $240,000
$55,000 x
DMF at cost DMF margin  Increased due to higher share
of capital gain in contracts
23%
$217m
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- 78 -

Retirement Living Investor Day 3 May 2011

DMF Valuation

Portfolio valuation

Stockland‟s policy is to revalue the DMF asset portfolio every 3 years

Last done in June 2009; next due date June 2012
Key valuation metrics have remained unchanged since June 2009:

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Discount rate 12.55%

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Long term capital growth rate 3.7%pa

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Turnover rate 12 years

Aevum acquisition means it is prudent to undertake a valuation review for June 2011 balance date

Currently underway
Internal valuation model and assumptions being validated by independent expert (E&Y)

Any changes to DMF asset value will not affect Underlying Profit

Since 1H10, Stockland has excluded DMF revaluations from Underlying Profit
However, as required by AASB 140, DMF revaluations included in Statutory Profit given classification as an Investment Property asset

- 79 -

Retirement Living Investor Day 3 May 2011

DMF Valuation

Components of a simple DMF model

DMF Creation (below the line)

Addition of new contracts to the balance sheet that have been sold through development activity (PV of expected DMF, all residents through the end of the model term)
Typically 20 to 30% of the gross sale value of a unit, but depends on key assumptions: price growth, discount rate, turnover and tenure on exit assumptions

DMF Revaluation (below the line)

Movements in the Balance Sheet value (PV of the current and future established DMFs)

Assumptions
DMF Creation as % of Gross Sale Value (%) DMF Creation Actual Price Growth (%) Reval for Assumed Price Growth of 3.7% ($/unit) Reval for Price Growth greater than assumed ($) DMF Reval *Book Value of DMF(see next slide)***	V
	*X Y * V** C D E =ƒ(C,D)
	*A D + E** NPV of Turnover Profit

Depends on price growth, discount rate, turnover, and tenure on exit assumptions
Contract terms will also influence this calculation

- 80 -

Retirement Living Investor Day 3 May 2011

Simple DMF Cash-Flow Model of a Mature Portfolio

DMF Valuation

Assumptions Forecasted Cash-Flow Standard Contract: maximum DMF of 32.5% of exit price after 10 years Now Yr +1 Yr +2 Yr +3 …… Yr +29 Yr +30 Yr + 31 (1) Units 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 (2) Average Unit Price ($000s) 300 300 311 323 334 859 891 924 Annual Price Growth Rate (%) 3.70% (3) Turnover (% of units) 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% Tenure on Exit (years) 12 12 12 12 12 12 12 12 (4) DMF per turnover (% of unit price) 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% Discount Rate 12.55% Modelled Cash-Flows DMF Cash Flow ($millions) - 8.4 8.7 9.1 …… 23.2 24.1 25.0 Terminal Value ($millions) - - - - …... - 282.5 - Total Cash Flow (future value) - 8.4 8.7 9.1 …… 23.2 306.6 25.0 Total Cash Flow (present value) - 7.5 6.9 6.4 …… 0.8 8.8 Present Value of 30 Year Cash Flows $95m In this example, this would be the fair value of the current and future DMF contracts on existing units only (1)x(2)x(3)x(4) ILLUSTRATIVE (1) *Note: Figures used in this illustrative example do not reflect Stockland’s actual portfolio or valuation*	Assumptions Forecasted Cash-Flow Standard Contract: maximum DMF of 32.5% of exit price after 10 years Now Yr +1 Yr +2 Yr +3 …… Yr +29 Yr +30 Yr + 31 (1) Units 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 (2) Average Unit Price ($000s) 300 300 311 323 334 859 891 924 Annual Price Growth Rate (%) 3.70% (3) Turnover (% of units) 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% Tenure on Exit (years) 12 12 12 12 12 12 12 12 (4) DMF per turnover (% of unit price) 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% Discount Rate 12.55% Modelled Cash-Flows DMF Cash Flow ($millions) - 8.4 8.7 9.1 …… 23.2 24.1 25.0 Terminal Value ($millions) - - - - …... - 282.5 - Total Cash Flow (future value) - 8.4 8.7 9.1 …… 23.2 306.6 25.0 Total Cash Flow (present value) - 7.5 6.9 6.4 …… 0.8 8.8 Present Value of 30 Year Cash Flows $95m In this example, this would be the fair value of the current and future DMF contracts on existing units only (1)x(2)x(3)x(4) ILLUSTRATIVE (1) *Note: Figures used in this illustrative example do not reflect Stockland’s actual portfolio or valuation*	Assumptions Forecasted Cash-Flow Standard Contract: maximum DMF of 32.5% of exit price after 10 years Now Yr +1 Yr +2 Yr +3 …… Yr +29 Yr +30 Yr + 31 (1) Units 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 (2) Average Unit Price ($000s) 300 300 311 323 334 859 891 924 Annual Price Growth Rate (%) 3.70% (3) Turnover (% of units) 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% Tenure on Exit (years) 12 12 12 12 12 12 12 12 (4) DMF per turnover (% of unit price) 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% Discount Rate 12.55% Modelled Cash-Flows DMF Cash Flow ($millions) - 8.4 8.7 9.1 …… 23.2 24.1 25.0 Terminal Value ($millions) - - - - …... - 282.5 - Total Cash Flow (future value) - 8.4 8.7 9.1 …… 23.2 306.6 25.0 Total Cash Flow (present value) - 7.5 6.9 6.4 …… 0.8 8.8 Present Value of 30 Year Cash Flows $95m In this example, this would be the fair value of the current and future DMF contracts on existing units only (1)x(2)x(3)x(4) ILLUSTRATIVE (1) *Note: Figures used in this illustrative example do not reflect Stockland’s actual portfolio or valuation*	ILLUSTRATIVE

		Now Yr +1 Yr +2 Yr +3 …… Yr +29 Yr +30 Yr + 31 1,000 1,000 1,000 1,000 1,000 1,000 1,000 300 311 323 334 859 891 924 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 8.33% 12 12 12 12 12 12 12 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% 32.50% - 8.4 8.7 9.1 …… 23.2 24.1 25.0 - - - - …... - 282.5 - (1)
	Total Cash Flow (future value) Total Cash Flow (present value) Present Value of 30 Year Cash Flows	- 8.4 8.7 9.1 …… 23.2 306.6 25.0 - 7.5 6.9 6.4 …… 0.8 8.8 $95m In this example, this would be the fair value of the current and future DMF contracts on existing units only

Additional considerations

Each fiscal year, the model‟s start and end points are shifted forward such that the model period is always 30 years
The NPV of the DMF cash flows + development works-in-progress + Goodwill equals the Net Funds Employed. At 31 December 2010, Stockland Retirement Living‟s NFE was $1,020m
The NPV of the DMF cash flows + the capital value of operational retirement living communities is Stockland Retirement Living‟s Investment Property value. At 31 December 2010, the capital value of Stockland‟s operational retirement living communities was $1,929m. The capital value of retirement living communities is offset by the existing retirement living resident obligations. In Stockland‟s case, the capital value of operational retirement living communities and existing resident obligations are excluded from debt covenant calculations

Forecasted cash-flow is driven by growth rate, discount rate and turnover assumptions

- 81 -

The terminal value is calculated by assuming the next year‟s cash flow continues to perpetuity: CF+1/(R-G) where R is the discount rate and G is the growth rate defined in the assumptions above

Retirement Living Investor Day 3 May 2011

Productivity Commission

Impact of recent Productivity Commission review into A ed Care g

Potential implications should all draft recommendations be adopted and implemented[1]

The Productivity Commission recommended no changes to legislation that directly affects Retirement villages: Retirement Living sector would continue to be regulated through state-based Acts Productivity Commission urges greater harmonisation of regulations between states; increased standardisation of contracts – which Stockland supports in principle

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No further details available at this time; Productivity Commission believes COAG should take responsibility
The Productivity Commission recognises the importance of ensuring capacity exists to serve people with the most significant care needs:

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Uncouples accommodation from care, whereas the current system bundles these two aspects

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Government funding would be allocated to individuals rather than institutions (e.g. bed licences)
A key focus is addressing issues surrounding the provision of “high care”:

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High care = “The care which is provided for people who have been assessed by an ACAT (or Aged Care Assessment Services in Victoria) and need almost complete assistance with most daily living activities. It includes accommodation services as well as personal care. Medical needs are managed by a nursing staff.”

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Nationally, 4% of current 65+ population reside in high care

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Some of the industry‟s capacity which is currently being used for low care could be redeployed to high care in order to cope with demographic wave
One potential outcome is that low care could be increasingly absorbed into retirement living villages and homes in the broader community:

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Ageing-in-place would become more important

Potential implications for the retirement sector include:
More efficient utilisation of serviced apartment stock and ILUs to accommodate people with the lowest care needs
Greater demand for personal care services (low care) and other ageing-in-place service and product initiatives

- 82 - 1. “Caring for Older Australians” - report by the Productivity Commission, released January 2011; preliminary recommendations pending industry feedback and final report.

Retirement Living Investor Day 3 May 2011

- 83 -

Retirement Living Investor Day 3 May 2011

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PROJECT DESCRIPTION

The Willows Retirement Village is currently a 141 ILU and 48 serviced apartments Village set on 6 hectares of landscaped grounds. The village has development approval for an additional 75 ILUs and a 92 bed aged care facility, bringing total ILU numbers to 216.

LOCATION

The Village is located at 226-236 Windsor Road, Winston Hills between Parramatta and Baulkham Hills and is approximately 30kms west of the Sydney CBD.

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DEVELOPMENT UPDATE

The new dwellings have been designed to work sympathetically within the context of the older existing Village which was first established in the mid 1980s. The new accommodation is a mix of 1, 2 and 3 bed product and has been designed as apartment, townhouse and villa style housing. Stage 6 comprises 2 apartment style buildings known as Buildings A & B. These buildings are located in the north-east section of the site and each contain 2 levels of residential accommodation, a basement carpark, lifted access and 24 ILUs.

KEY ASSET INFORMATION

Existing Village

ILUs: 141 Serviced Apartments (SA): 48 Ownership: Leasehold/Strata Resident interest: ILU - 31 leasehold/110 strata SA - 22 leasehold/26 strata Service Fees: ILU - strata levies SA - strata levies/ service fee Occupancy: 98%

Occupancy: 98% Number of residents: 196 Average resident entry age: 78 years Average age 81 years Average tenure: 10.5 years

New Developments (DA approved) Stage 6 ILUs: 24 (58% sold[1] ) Stage 8 ILUs : 28 Stage 10 ILUs : 23

KEY DATES

• Stage 6 completed: April 2011 • Stage 8 commenced[2] : June 2011

Stage 10 commenced[2] : December 2011
Reserved or settled
Commencement of construction and marketing for sales

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Summary price information :	Existing village
Independent Living Units (ILU)	Unit Size Configuration Price range
	1 56 sqm Balcony, car space $170,000 - $240,000
	1.5 76 sqm Balcony, car space $295,000 - $335,000
	2 86 sqm Balcony, car space , garage $310,000 - $365,000
Summary price information :	New development (Stage 6)
Independent Living Units (ILU)	Unit Size Configuration Price range
	1 95-112 sqm Open plan, Balcony, car space $375,000 - $465,000
	2 121-134 sqm Open plan, Balcony, car space $485,000 - $545,000
	3 148-158 sqm Open plan, Balcony, car space $550,000 - $610,000

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Village benefits

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 Auditorium  Lounge Areas  Dance Floor  Billiards Room  Library  24 hour assistance  Cafe  Dining Room  Hair Salon  Consult Room  Swimming Pool  Village Bus  Podiatrist  Pharmacy Service

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The Willlows Retirement Village 226 Windsor Road Winston Hills 2153 NSW Phone: (02) 9035 2000 or email [email protected]

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 brochure 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. Note: all figures are in Australian dollars unless otherwise indicated. Information current as 1 May 2011

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PROJECT DESCRIPTION

Macarthur Gardens Retirement Village will provide residents with everything they need to enjoy a social, free and independent life within close proximity to local shopping, transport and health

services. KEY ASSET INFORMATION Total Future Units: 238 Stage 1 sales: 68%[1]

KEY DATES

Project Launched: February 2011
Stage 1 completed: July 2011
Stage 2 commenced: July 2011
Clubhouse opening: January 2012

LOCATION

60km south west of the Sydney CBD

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Reserved or settled

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LOCAL AREA BENEFITS

Shopping Centre
Public transport
Golf course
Medical facilities
Freeway to Sydney
Catholic Club

Summary price information:
Independent Living Units (ILU)	Villa Size Configuration Starting price
	Sienna 102sqm $289,000 2 1 1
	Banksia 101sqm $305,000 2 1 1
	Dahlia 130sqm $342,000 2 1.5 1
	Gardenia 146sqm $399,000 2+S 2 1
	Magnolia 184sqm $422,000 2+S 2 2
	Nandina 170sqm $479,000 2+S 2 2

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Outdoor spaces

Bowling Green
Golf Driving Net
Putting Green

Health & wellbeing

Swimming Pool & Gym
Health Consultant Suites

Salon

BBQ
Outdoor Chessboard
Community Garden
Landscaping and walking paths

Social

Town Hall & Media Room

Café & Lounge with Open Fire
Bar & Billiards Room

 Library & Craft Room

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Macarthur Gardens Retirement Village 100 Gilchrist Drive Campbelltown, NSW 2560 Phone: (02) 9035 2000 or email [email protected]

AI assistant

STOCKLAND — Earnings Release 2011

65781_rns_2011-05-02_be90c3b9-52af-4e7d-ae73-05822b895977.pdf

3 May 2011 ASX/Media Release

STOCKLAND ON TRACK TO ACHIEVE FY11 EPS GUIDANCE

Stockland’s integrated model

3-R growth strategy - Residential Communities, Retail development and Retirement Living

Creating vibrant communities by leveraging 3-R integrated model and partnering with others (public and private) to provide social infrastructure, transport, education and employment

Business update – on track to achieve FY11 EPS guidance

FY11 group earnings

Residential market conditions

Residential Communities – strong enquiry but buyers are cautious

Mixed sentiment for time to buy a dwelling[2]

Residential Communities – QLD conditions remain subdued post-floods

Sales run rate in SE QLD slowed in 3Q11

- Long term fundamentals in QLD remain positive

Residential Communities – slower 3Q11 but strong contracts on hand

QLD subdued while other states at long-term averages

Commercial Property – solid 3Q11 retail sales and rental growth

• 2H11 comparable NOI growth:

Our agenda

Morning Tea

• Operations briefing

• Asset tours:

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

3. Strategy for success

4. Recap of key points

A robust and attractive business well suited to Stockland

• Compelling demand drivers:

• Retirement Living delivers attractive long-run investment returns:

• It is sustainable:

Retirement Living means active communities, not A ed Care or Nursin Homes g g

Compelling demand fundamentals, even without an increase in take-u rates to international benchmarks p

65+ population expected to more than double in next 30 years

Stockland‟s integrated model combines proven capabilities to achieve reater market share g

Case Study of Highlands, VIC

Leveraging group strengths – Stockland‟s competitive advantage

Retirement helps maintain Stockland‟s strategic income weightings[1] Combines stable recurring income with exposure to development profits

The business model delivers trading and recurring income

Agenda

1. A robust and attractive business model

3. Strategy for success

4. Recap of key points

Favourable risk-adjusted returns vs other property asset classes

Total returns and volatilities[1]

Volatility of Return (% pa)

ARC established villages have delivered a 24%pa total return in the 4 ears since ac uisition y q

ARC Investment cashflows - established villages

IRR = 24% pa before overheads

54% of initial investment recouped in turnover cash

Retirement Living is expected to deliver net cash returns of ~12%pa

An efficient, low risk, funding model … and affordable for customers

Components of funds employed in Retirement Living[1]

Within the next 12 months, accrued DMF is ex ected to exceed cash investment p

DMF investment vs accrual

Strong, low risk investment returns in the established portfolio

Value drivers - established portfolio

Price growth supported by strength in residential markets and ro ected su l shortfall in retirement p j pp y

Price Growth

Historical price growth comparison

Profitability will further improve as the portfolio matures

Portfolio Maturity

% of existing ILU portfolio over 10 years old[1]

Turnover cash from existing villages to increase as villages mature

Portfolio Maturity

Scale means we are adding income faster than overheads and will continue to do so ,

Retirement Living scale curve

Selective acquisitions

Low risk business model

Low volatility of earnings

Sustainable demand

Recoverable investment

Turnover volatility and portfolio size

Sustainable value proposition

Agenda

1. A robust and attractive business model

2. Strong, low risk investment returns

4. Recap of key points

STOCKLAND Earnings Release 2011