Investor update & str ic review ateg

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13 May 2013

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Stockland Shellharbour, NSW
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Agenda

Strategy and Group Update - Mark Steinert, Managing Director

Operational and strategy update - CEOs

Summary - Mark Steinert, Managing Director

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Stockland, who we are

Vision: To be a great property company that delivers value to all our stakeholders

Stockland is well positioned and has a diverse portfolio

Primary objective: To deliver EPS growth and total risk-adjusted shareholder returns above A-REIT sector

Strong financial position with an A- stable credit rating (S&P)

Strong commitment to sustainability that creates long term value for Stockland and the community

Listed in the Global 100 Most Sustainable Companies for the fourth consecutive year

Dow Jones Sustainability Index a top rated real estate company

Our purpose: We believe there is a better way to live

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Key
Retail
Office
Industrial
Residential Communities
Retirement Living
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Share of real estate assets at 31 December 2012[1 ]

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Retirement
Living
10%
Residential 21% 47% Retail
Communities
7%
Industrial
15%
Office
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Total assets of AUD12.5b

Strategic review executive summary

We have undertaken a detailed review of our business and markets to define a strategy that:

Our strategic approach

Optimises securityholder returns within an acceptable level of risk through the cycle

Focus on core competencies in property and asset management and development to drive value creation

Delivers reliable profit and EPS growth over time

Focus on cost and efficiency while maintaining a desirable work environment

Ensures a culture of high transparency and accountability

Delivers innovative products that meet customer expectations

We have also tested our structure and confirmed that our diversified stapled trust and corporation structure adds most value for securityholders

Agile capital allocation within a disciplined risk / return framework

Actively divest assets that don’t meet our risk-adjusted hurdle rates of return

Maintain a strong balance sheet and A- credit rating

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Reinvigorating the business for reliable growth and returns

Business position

Business in transition as we position ourselves for growth in FY14 and beyond

Senior management changes to reinvigorate the group

Expect FY13 full year EPS to be 25% below FY12 after impact of restructure provision (prior guidance down 20-25%)

Target financial metrics

Reliable profit growth above A-REIT sector Improved returns (ROE of >11% by FY18)

Continued strength in our balance sheet (20-30% gearing)

FY13 Distribution 24 cps

Maintain 24cps distribution in FY14 assuming no material deterioration in trading conditions

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3Q13 update

3Q13 performance in line with expectations

Retail sales growing:

Comparable MAT per sqm up 2.7%

Comparable specialty MAT per sqm up 3.3%

Retail productivity of $8,841, above national Urbis average and low occupancy costs of 14.1%

Leasing in Industrial and Office progressing well. Weighted average rental growth 3Q13:

Industrial up 3% and Office up 4%

Residential lot volumes improved recently, however margins remain under pressure, due to impaired projects and mix

Additional impairment on previously impaired projects of $49m reflecting further analysis and in some instances divestment negotiations. A material amount of this additional impairment relates to a provision regarding a court appeal, where we have assumed the worst outcome

Since interim results, disposed of one previously impaired project identified for disposal

Retirement Living solid operating result with strong enquiries, steady reservations and reducing cancellations

Key milestones achieved

East Leppington (NSW) rezoning gazetted April 2013

Hervey Bay (Qld) $115m redevelopment commenced, 7.5%[1] yield and 13.8%[1] incremental IRR

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Hervey Bay Schematic
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Pre-AIFRS cash yield and IRR

Macro framework

Economic outlook

Improving global growth, although European weakness and US household deleveraging to mute upside

Australia well positioned with population growth, low unemployment and interest rate cuts offset by moderating mining investment, the high AUD and household deleveraging

Interest rates remain low for medium term

Australian property is seen as a safe haven attractive to offshore investors, cap rates are likely to tighten

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Australia well placed but risks remain; residential market recovery underway

Reasons to be optimistic

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12% 6%
Unemployment
10% Rate (LHS) GDP Growth (RHS) 5%
Forecast
4%
8%
3%
6%
2%
4%
1%
2% 0%
0% -1%
1990 1994 1998 2002 2006 2010 2014 2018
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Established Housing market recovering for 6 months Capital city house prices – Annual Growth

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50%
40%
30%
20%
WA
10%
NSW
0% Vic
Qld
-10%
-20%
2003 2006 2009 2012
Growth(%)
Rolling Annual
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Source: ABS, RBA, APM, Deloitte Access Economics, Charter Keck Cramer, Stockland Research

Reasons to be cautious

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60% 20%
50%40% Credit Growth (RHS) Engineering Construction 15%
Growth (LHS)
30% 10%
20%
5%
10%
0% 0%
-10%
Forecast -5%
-20%
-30% -10%
1990 1994 1998 2002 2006 2010 2014 2018
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Vacant Land market starting to respond Vacant Land Market Sales (quarterly)

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12,000
10,000
8,000
6,000
4,000
2,000
0
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Historical sector risk-return profiles help define target weightings

Risk-return profile of different asset classes based on direct property (1985-2012)

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Retail significantly outperformed. 28 Residential: strong historic returns
Expect solid future, however Residential with commensurate higher risk.
significant outperformance may not 24 Future returns are expected to be
be replicated due to e-retailing and lower due to statutory contributions
supply dynamics and construction costs
20
16
Retail
12 Industrial
Industrial attractive returns
predominantly driven by yield. Office Office returns have historically been
8
This is beneficial in a low growth the lowest of any commercial
environment. Expect underlying property asset class, with highest
demand drivers to be reasonably 4 volatility. Office is also the most
strong capital intensive.
0
0 10 20 30 40
Risk (standard deviation of return) %p.a. Forecast risk/return
Total return (rolling annual) %p.a.
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Note: Based on direct property returns from 1985-2012 for Retail, Industrial and Office; 2001-2012 for Residential subdivision. These are market returns, not Stockland returns Total return = capital growth + yield for commercial property assets. Total residential return = [(price – cost)x(volume)} / (cost x volume)] Source: IPD, ABS, APM, RBA, HIA

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Hurdle rates reflect sector risk profiles

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IRR hurdle rates
20%
17%
14%
11%
8%
5%
Retail - Retail - Sub Industrial Office Retirement Medium Residential
Regional Regional Logistics CBD Living Density Communities
Increase in volatility across asset classes
IRR
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We will maintain a strong diverse portfolio to deliver reliable growth

Asset allocation

Asset mix (%)

Target 70-80% assets with recurring earnings, Retail the core focus

Increase exposure to Industrial (primarily logistics related) from 7% today to 10-15% over time

Retain tactical exposure to Office, and continue to downweight post value add initiatives

Target 20-30% trading assets (Residential and Retirement Living (31% today)

Expand Residential and Retirement Living built form initiatives to extend customer reach with medium density

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Other 6% 10% Residential &
Retirement Living 5%
20-30% Retirement Living
Residential 16% 20% overall: 20-30%
Industrial 10% 7% 10-15%
5-10%
15%
26%
Office
Commercial Property
overall: 70-80%
50-70%
47%
36%
Retail
Jun-09 Dec-12 5 year indicative
allocation
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Continue to drive efficiency and cost management

Ongoing focus on overheads reduction

Achieved ~10% reduction in gross overheads over the past year

70% of overhead headcount reduction has been in support roles

An additional 10% of gross overhead savings (pre inflation increase) are targeted to be captured over the next year

Savings and efficiency improvements have been achieved through:

Continue to drive benefits from these initiatives and seek additional areas of improvement

Centralisation of additional functions

Human resources

Finance

Marketing

Ongoing process improvement

Forecasting

Centralisation of functions

Risk management

Automation of processes

Development management

Procurement savings

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Active capital management

Ensuring optimal mix of funding sources

Debt: continue to maintain conservative gearing ratios

Balance sheet ratios remain within A- metrics and remains a key focus

Gearing maintained within target range (20%-30%)

Expect FY13 cost of debt of 6.2% (FY12: 6.2%)

We will continue to manage our weighted average cost of debt closely and will consider breaking legacy fixed interest swaps to manage our ICR metric

Equity: DRP is appealing as capital inflow is aligned with accretive shopping centre development pipeline. May consider 50% underwritten over the next 12 months

Strong capital management disciplines

Disciplined application of risk adjusted investment hurdles

Reduced Residential and Retirement Living finished goods inventory available for sale down 40%[1] from 30 June 2012

Committed to reducing relative size of Residential land bank over time

Recapitalisation of the Corporation planned

Reallocation of capital from Trust to Corporation proposed for shareholder support at 2013 AGM ~$500m

Capital recycling: We will dispose of assets that don’t meet our risk adjusted targets. Expect $300m asset sales in 2H13, primarily office

Capital partnering: We have undertaken effective capital partnering on select projects and will look to modestly expand this

Continued use of capital effective acquisition structures, particularly in residential

Seek additional partnerships in commercial property. Core stabilised retail is the greatest immediate opportunity given our expertise and investor demand and implied cost of capital

Represents finished goods available for sale on comparable basis (excludes impact of capitalised interest change and industrial sites acquired since 30 June 2012)

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We continue to pursue a range of partnering options, primary focus retail joint ventures

Capital partnering improves our risk-return profile

Undertaken effective capital partnering on select commercial property and will look to expand our activity

We have a preference for a small number of select partners across targeted large, high quality core assets

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Waterfront Place, Brisbane (JV with the Future Fund)
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Joint venture (JV) or project delivery agreement (PDA):

Retail is the greatest immediate opportunity given our expertise and investor demand

Selective opportunities in Office

Residential: focus on large, long dated projects

Capital effective acquisition: Continue to use for residential acquisitions

Delivery partnership: Investigate use of third party capital & capabilities to deliver projects & infrastructure

Unlisted wholesale syndicate or fund: Wind up SREEF1. Consider in the future but focus on JVs first

Unlisted retail fund: Wind up funds & do not create any new retail funds in the foreseeable future

Listed fund: Possible exit option for some asset classes

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Each business unit has a clear focus

Business	What is not changing	What is changing and why	Targets
Retail	Current strategy of being a leader in regional areas and having a clear point of difference in metropolitan areas	More capital partnering to avoid overexposure to some assets and provide funding for accretive $1.5bn development pipeline	Development: 7-8% pre- AIFRS yield; 13-14% incremental IRR
Industrial	Looking to add value to existing assets where appropriate	Increase exposure over time Take advantage of expected future demand for logistics / warehousing Yields important in a lower growth environment	$1.2-1.5b portfolio in five years
Office	Looking to add value to existing assets where appropriate	Retain tactical exposure and maximise value from existing assets prior to disposal	Extract value and progressively down weight
Residential	Focus on delivering differentiated masterplanned communities	Improve returns by: Reshaping the portfolio (no. projects, project size, land bank size) Reducing time to market Reducing the cost base Expanding target customer segments with medium density offering	~23-25% EBIT margin (in the medium term) 5,000 – 6,000 annual settlements
Retirement	Initiatives to create full, happy villages and more of them	Reduce costs Scale-up development	6.5% ROA by FY15 8% ROA by FY18
Residential/ Retirement built form	Delivery of medium density in residential and retirement living businesses	Greater focus on medium density development within our portfolio, to respond to changing customer preferences (not high rise stand-alone apartments) At the appropriate time add infill development opportunities , which exceed risk-adjusted hurdle rates	Look to double from current level of ~100 residential units and ~300 retirement units1p.a. by FY18

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Retirement Living increases are reflected in the Retirement Living ROA targets provided above

We are addressing our immediate business priorities

Improve Residential profitability and separate residential portfolio into core and workout

Improve Retirement Living return on assets and explore capital efficient opportunities to improve scale

Grow Commercial Property through development and acquisitions

Continue to enhance value of retail portfolio through redevelopment

Retain and expand Industrial portfolio

Optimise value of existing Office portfolio for asset recycling

Improve organisational efficiency

Strengthen Corporation by seeking security holder approval to reallocate ~$500m of capital from the Trust to the Corporation

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Stockland offers attractive yield and EPS growth

Growth/yield benchmarking – A-REIT and other sectors[1 ]

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13%
12% Lodging and leisure Industrials
Healthcare
11% Diversified financials
Food and staples
10%
All Ordinaries
9%
8% Insurance
Utilities / infrastructure
7%
Telecommunications
6%
5% Banks Stockland (through cycle)
4% A-REITs
3%
2% 3% 4% 5% 6% 7%
1-year forward dividend yield
FY13-15 forecast EPS growth
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Source: Bloomberg; UBS Research. Sector metrics represent arithmetic averages of the following constituents: Banks – BEN, BOQ, ANZ, CBA, NAB, WBC; Diversified Financials – ASX, CGF, CPU, MQG, PPT, SUN; Food and Staples – WES, WOW, CCL, GFF, TWE; Industrials – LEI, UGL, BLY, LLC, IPL, NUF, ORI, ABC, BLD, CSR, JHX, AMC; Healthcare – ANN, COH, CSL, PRY, SHL, SRX; Lodging and Leisure – ALL, CWN, EGP, TAH, TTS; Insurance – AMP, IAG, QBE; Media – FXJ, NWS, SWM; Telecommunications – TLS, SGT, TEL; Utilities / Infrastructure – AIO, MAP, TCL, TOL, AGK, APA, DUE

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Retail

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Stockland Townsville, Qld
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Summary

We have built strong capability and believe that quality Retail property will continue to deliver attractive risk-adjusted returns

Our Retail strategy is to be the leader in regional areas, and have a clear point of difference in metropolitan areas

At the start of FY07, we had a $3.5b retail portfolio in a compressed cap rate environment. We have since sold $900m of underperforming assets, and assets in passive JVs

By focusing on development, selective acquisitions, and strong leasing and management, we have built a $5.3b[1] portfolio of quality retail assets. Our aspiration is to build a ~$7.5b portfolio in the next five years

We are in the top four Australian listed retail owners and our retailers consider our portfolio key to their future growth plans

Structural change

Technological change, the emergence of new offshore retailers and business models, and demographic shifts all impacting how we shop and where we spend

Majority of spending will be captured in store, despite the continued penetration of online retailing, including omni-channel

The relative strength of different retail categories will continue to shift over time

Our retail mix is well positioned due to our focus on food, convenience and retail services

We will continue to redevelop assets to consolidate and improve their local market position, where development will deliver enhanced returns

18 assets in our development pipeline over the next ten years; eight planned to commence in the next two years

Target returns: 13-14% incremental IRR; 7-8% incremental yield (pre-AIFRS cash)

Hurdle IRR: regional centres 8.25%; sub-regional centres 8.75%

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As at 31 December 2012

Stockland Retail portfolio evolution – 2006 to 2013

June 2006 $3.5b WA December 2013 $5.5b1 WA SA $0.5b $1.8b $0.9b (Net Revals) $0.5b Karrinyup (25%) – FY08 Jimboomba S.C. JV – FY07 Book Value Capital Expenditure Acquisitions Book Value Disposal	June 2006 $3.5b WA December 2013 $5.5b1 WA SA $0.5b $1.8b $0.9b (Net Revals) $0.5b Karrinyup (25%) – FY08 Jimboomba S.C. JV – FY07 Book Value Capital Expenditure Acquisitions Book Value Disposal	June 2006 $3.5b WA December 2013 $5.5b1 WA SA $0.5b $1.8b $0.9b (Net Revals) $0.5b Karrinyup (25%) – FY08 Jimboomba S.C. JV – FY07 Book Value Capital Expenditure Acquisitions Book Value Disposal	June 2006 $3.5b WA December 2013 $5.5b1 WA SA $0.5b $1.8b $0.9b (Net Revals) $0.5b Karrinyup (25%) – FY08 Jimboomba S.C. JV – FY07 Book Value Capital Expenditure Acquisitions Book Value Disposal	June 2006 $3.5b WA December 2013 $5.5b1 WA SA $0.5b $1.8b $0.9b (Net Revals) $0.5b Karrinyup (25%) – FY08 Jimboomba S.C. JV – FY07 Book Value Capital Expenditure Acquisitions Book Value Disposal
June 2006 $3.5b WA SA				WA December 2013 $5.5b1 (Net Revals) $0.5b
NSW 53% QLD 27% VIC 7% NZ 6% 5% 2%	Botany Town (50%) – FY08 Lynnmall (50%) – FY08 Manuka (50%) – FY08 Parabanks – FY08 Batemans Bay – FY09 Lilydale – FY12 Bay Village – FY13	Wallsend – FY08 Cammeray – FY09 Hervey Bay – FY11 Point Cook – FY11 Townsville Kmart – FY12	Devex only Merrylands Rockhampton Townsville Shellharbour (to date) 10 Other projects completed	NSW 57% Qld 27% Vic 12% 4%
39 Retail centres Sub-regionals and neighbourhoods Low cap rates across all retail asset types Average cap rate 6.3%	Actively disposed of holdings in passive JVs and optimised our footprint Over $500m of passive retail sold at the peak of the market in FY08	Maintained our discipline and did not over-acquire in the lead up to the GFC Following the market correction, we have taken a cautious approach and waited for volatility to subside and values to stabilise	Remained committed to a quality portfolio and maintained or reinvested in our assets We have continued to develop and upgrade the portfolio through the cycle 7.0% weighted average yield2 (14 completed retail projects); blended incremental IRR ~ 11.7%	41 Retail centres Positioned for future growth 8 DAs secured Average cap rate 7.0% 1H13 Average IRR 10.5% 1H13

Estimated by 31 December 2013
Pre-AIFRS

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Top four Australian listed Retail property owner

Listed entities, Australian assets on balance sheet Book Value December 2012 ($b)

Number of centres

(including part ownership)

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Westfield Group 13.0 39
Westfield Retail Trust 12.2 38
Colonial (CFX) 8.3 29
Stockland 5.3
Shellharbour will be a 41
major regional on
GPT 4.4 completion; targeting
$7.5b portfolio by 10
FY17/18
Federation 4.1
47
Major and Super Regional
Mirvac 1.7 Regional
Sub Regional 19
Neighbourhood & Other
Charter Hall 1.6
75
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Note: SGP assets include ~$820m WIP at Dec 2012. Federation’s value accounts for $371m co-ownership transaction with ISPT announced in February 2013 (reported book value Dec 2012 (pretransaction) is $4.4b). Westfield Group excludes capital works in progress. CFX excludes capital works in progress and investment in associate trusts. Shopping centre classifications as per PCA database

Source: Colliers International; Company websites; SGP analysis

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Retail spend will grow in real terms but at a slower rate to the last 10 years

Historical real (ex-inflation) retail market sales growth in Australia

Historical retail spending has been driven by population growth and increase in spend per capita

CAGR to March 2013

Growth has moderated in recent years as consumers have become more cautious and deleverage

Population growth alone will contribute ~1.5% p.a. growth in retail spend in the future

Online will continue to capture increased market share but majority of sales will be transacted through the store networks

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4.1%
3.6% 3.4%
2.0% 2.3% 1.5-3%
30 year 20 year 10 year 5 year 2 year 10 year
forecast
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Source: ABS, Stockland Research

Although online will keep growing, shopping centres will continue to play an important role in future growth

Benefits of shopping in store

Stockland Monash University Retail Barometer, Oct and Nov 2012

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Can see the product before purchasing 86%
Can feel/ try the product before purchasing 81%
Can physically compare products 66%
Less risky than shopping online 59%
Supports local retailers 57%
Can get advice from shop staff 56%
Immediate delivery 54%
A more enjoyable experience 23%
More convenient 16%
Better quality products 12%
Better prices in-store 9%
Other (please specify)Other 1%
Shoppers still want the touch and feel benefits of in-store shopping
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Source: Stockland Monash University Retail Barometer (2,016 participants), Oct and Nov 2012

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Some fine retail categories are more impacted than others by online: Retail shop mix adjusting

	% of Retail sales online1 Dec 12	Recent Forecast Growth Trend
Music, Movie & Books	66%	Slowing
Toys, Games & Hobbies	20%	Accelerating
Clothing and Accessories	10%	Slowing
Specialised Food & Alcohol	9%	Steady
Furniture, Electronics & Appliances	8%	Accelerating
Supermarkets	2%	Slowing
Total Retail Sales	6%1	Slowing

Total retail spend excludes cafes, restaurants and take-away food, retail services, travel and non-retail (eg. gyms, cinemas). Total Retail Sales only adjusted for cash transactions. Category level proportions are for specialty retailers only with no adjustment made for cash

Source: A comprehensive commissioned study by The Quantium Group– Market Blueprint

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Structural change creates opportunity

Significant growth in e-Commerce

Rapid uptake in technology, changing the way people shop

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More than 10 million Australians transacted online in 2012

50% of Australians have a smart phone

Online market now exceeds $14b (6% or 9% ex. cash); expected to reach 14% (ex. cash) in 10 years

1 in 5 use mobile searches in-store

Price comparison websites and applications enable immediate price comparisons

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Online as a proportion of total retail spend [1 ]
6%
5%
4% Online offshore
Online onshore
2010 2011 2012
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Social media influences behaviour

Demographic shift and changing consumer preferences

New entrants and evolving business models

Global retailers Manufacturers Growth in coming to Australia opening stores online marketplaces

Underfunded baby boomers

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“Experience-based” spending

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Decline in credit growth

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Real and perceived increases in cost of living

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Total retail spend excludes cafes, restaurants and take-away food, retail services, travel and non-retail (gyms, cinemas) Source: The Quantium Group – Market Blueprint; Google & eBay company presentations

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Quality retail rarely changes hands; development drives returns

Capitalisation rate (%)

Quality retail is especially hard to acquire

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12 Retail Transaction Value by Asset Category ($b)
Includes WDC/AMP
11 JV assets
6.3
10
4.4 4.5
Neighbourhood 3.4
9 & other 2.3
Industrial Sub-Regional 1.8
8 Regional 0.3
Office 2007 2008 2009 2010 2011 2012 2013
7 (to date)
Retail #
6 Neighbourhood 116 79 86 106 115 91 1
& Other
5 Sub-Regional 7 6 12 9 12 13 1
4 Regional 2 1 1 3 2 11 1
1984 1988 1992 1996 2000 2004 2008 2012
Cap rates for Retail property 10 of the 11 regionals sold in 2012 were
have tightened the most since 1984 passive shares purchased by third party capital
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Source: Capitalisation rate1984-1992: BOMA of Australia Limited, 1995- 2012: IPD database. Retail transactions: Jones Lang LaSalle Research

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Retail has experienced greatest capital growth in last 25 years

Capital Change in value - capex Growth %: Start value + capex

Average capital growth (Rolling Annual) % p.a.

Industrial: Industrial Estate Industrial: Specialised Industrial: High-Tech Business… Industrial: Distribution Industrial: Warehouse Retail: Other Retail: Bulky Goods Retail: Neighbourhood Retail: Sub-Regional Retail: Regional Retail: Super & Major Regional Office: Non-CBD Office: CBD 0 1 2 3 4 5 6 7 8

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Source: IPD Australia

Success in Retail is asset specific driven by location, competitive position and product and service offering

	Demand
	Size, composition and growth potential in the main trade area
Attractiveness	It is generally better to be in areas of higher growth than lower growth
of local market	Supply of retail space
	Competitive landscape in the surrounding trade area (quantity and quality)
	It is generally better to be in less competitive areas than more competitive areas
	It is generally more desirable to:
Competitive	Be the leader (the biggest) in the local market to attract the best retailers and more customers so
positioning	we can provide a product and service that is compelling
	Have a clear point of difference
	The right retail tenant mix differs by type of centre:
	Neighbourhood Centres must have a convenience offer, with everyday products and services.
	"One stop for basic needs"
	Sub-Regional & Regional centres require quality anchors and a breadth of offer great enough to
Tenant mix	attract customers and increase the length of stay
	Sustainability of occupancy costs
	For all centres, the retail tenant mix should be appropriate to the local market to maximise revenues
	and increase foot traffic

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Retail sales growing despite consumer caution; changes in retail mix improving productivity

3Q13 Update

Total sales growth strong, pursuant to completing developments

Specialty shop growth in the comparable centres, is stronger per square metre due to active leasing and remerchandising

Discount department store (DDS) performance dragging the total moving annual turnover (MAT) comparable growth

89% of specialty shop leases are on fixed annual increases 4-5%; 11% CPI

Reconfirm post-AIFRS comparable NOI growth in range of 2-3% for FY13. Cash growth slightly higher

Moving annual turnover growth

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5.1%
3.3% 3.3%
2.9% 3.0% 3.0%
2.7%
1.3%
FY12 3Q13 FY12 3Q13 FY12 3Q13 FY12 3Q13
Total MAT growth Comparable Comparable Comparable
MAT growth MAT per sqm specialty MAT per
growth sqm growth
Rent reversion year to date
No. of Deals Rental growth
Lease renewals 168 2.5%
New leases 129 1.1%
Total portfolio 297 1.9%
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Historical MAT sales and MAT $/sqm[1 ] comparable portfolio

Total sales

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4,500 MAT sales 7,900
4,450
MAT psqm [1 ] 7,800
4,400
4,350 7,700
4,300
7,600
4,250
4,200 7,500
4,150
7,400
4,100
4,050 7,300
MAT Sales (Millions)
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Specialty sales

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1,220 8,900
MAT sales
8,800
1,200
8,700
1,180
8,600
MAT psqm [1 ]
1,160 8,500
1,140 8,400
8,300
1,120
8,200
1,100
8,100
1,080 8,000
MAT sales (Millions)
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Specialty shop MAT/sqm growth outperforming overall Specialty shop absolute MAT growth due to:

Improved productivity due to remixing

Conversion of underperforming specialties to mini majors

Conversion to better performing specialty categories such as food catering, retail services and non-reporting retail

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MAT $/sqm based on retailers trading for 24 months

Increasing resilience of the rental base

Rental composition has reduced reliance on some fine discretionary retail categories

Other Retail reduced (pharmacy, toys, pets, music, books, games, sporting goods and newsagents)

Retail Services increased (reporting and non-reporting)

Mini Majors and Specialty Food increased

Department Stores and DDS decreased

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18% 15% Other Retail
13% 16% Retail services – reporting
and non reporting
19% 20% Apparel and Jewellery
13%
14% Speciality Food
9%
10% Mini Majors
14%
13% Supermarkets
14% 12% DDS and Department Stores
June 2006 Gross Rent March 2013 Gross Rent
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Stockland MAT outperformed industry benchmarks

Comparable MAT growth – Specialty 24 month in place per sqm

Solid retail sales growth	Solid retail sales growth	Solid retail sales growth
	SGP Total1 MAT growth	ABS Total2 MAT growth
Specialty shops	 7.7%	 2.6%
Supermarkets	 4.6%	 4.1%
Department / DDS	 2.8%	 1.3%
Other3	 4.0%	n/a
Total MAT growth (12 months to March 13)	 5.1%	 2.9%

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+4.7%
$8,841
$8,642
$8,447
$7,800
Sub-Regional 2011/12 Urbis average for March 2012 Stockland 4 Stockland Dec 2012 March 2013 Stockland
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Total portfolio
ABS Retail Trade, Australia Catalogue: 8501.0
Includes mini-majors and cinemas
March 2012 Specialty MAT is re-based for March 2013 comparable

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We have a significant development pipeline driving growth

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Neighbourhood Sub regional Regional Major regional
Support Stockland Core focus on those with expansion potential Expand bigger centres where
communities demand exists
Development rationale
Keep those that can grow
Repositioning
Completed Merrylands
Defensive
Townsville Stage 1
Under construction Shellharbour
Hervey Bay Growth
Jimboomba 1 Wetherill Park
Baldivis
Next wave of
commencements Gladstone Target returns
(FY14-15) Point Cook
13-14% incremental IRR
Green Hills 1
Wendouree 7-8% incremental yield
Traralgon Glendale (pre-AIFRS cash)
Rockhampton 2
Nowra
Future projects North Shore 2 Townsville 2
Merrylands Ct
Burleigh
Forster
Typical GLA < 10,000 sqm 10,000 to 40,000 sqm 40,000 to 60,000 sqm 60,000 to 85,000 sqm
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*Centre developed on acquired land as part of Residential Community activity

Actively refining our product and our retail tenant mix

1 Defining the trade area 2 Understanding market share and leakage
Expected Actual 3 Retail mix planning and execution
~200,000 people, $2.2b ~375,000 people, $4.5b retail spend retail spend
Confirm development opportunity
Support leasing decisions at a category and specific retailer level
Sophisticated and targeted marketing to retailers and customers

Stockland Shellharbour

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Maximising risk-adjusted returns

Taking advantage of new opportunities

Attract more customers and enhance experience – adopting new technologies

E.g. My Stockland App; Centre Facebook pages; Wi Fi rollout

Continued focus on improving customer amenity

Mitigating risk

Ongoing active investment management of our Retail portfolio

Develop / redevelop / refurbish

Buy / sell / joint venture

Lock down key anchors for the long term

E.g. Upgrading My Funland design; parents room; lounge areas; park assist

Continued shifting of services from the “street into the mall”

Localised tenant / brand mix

E.g. Ivan’s Butchery at Merrylands; Berkelouw Books at Balgowlah

Programs to develop community hubs (asset specific)

E.g. Salvation Army Employment Plus at Shellharbour

Lease changes to capture online sales fulfilled from the stores
Develop centres to provide flexibility for future retail formats
Retailer risk management to inform leasing decisions

Pursue retail asset acquisitions in high growth markets

Number one or two in main trade area, trade area with population of at least 50,000 & growing

Worth at least $100m or with clear pathway to $100m

Key retailer account management – maximise leverage
Mobile iPad leasing – reduce time to open new stores

Management, leasing and development upside

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Active Retail developments

Completed

Merrylands Regional valued at $474m 1H13; 6.25% cap rate; initial trading results encouraging

Under Construction and Completing

Townsville Regional total project cost $181m; external valuation 1H14 Shellharbour Major Regional total project cost $330m; external valuation 1H14

Commenced

Hervey Bay large Sub-Regional $115m investment; 7.5% yield[1 ] and 13.8%[1 ] incremental IRR

Planned to Commence FY14

Wetherill Park (major upgrade and expansion)

Baldivis (expansion)

Jimboomba (greenfield)

Gladstone (tear down, rebuild and upgrade) Green Hills (major upgrade and expansion)

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Shellharbour Major Regional Centre Redevelopment
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Shellharbour Major Regional Centre Redevelopment
Shellharbour Major Regional Centre Redevelopment
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Pre-AIFRS cash yield and IRR

Summary

There has been significant transformation in Stockland Retail in the last seven years, with total value approaching $5.5bn by the end of this year, creating a higher quality portfolio of assets with sustainable cash flows. We are now a scale player among our listed Retail peers in an ownership sense

The execution of our forward Retail development pipeline, delivering growth in recurring income for the Trust, higher fee income and balance sheet value. We are targeting to exceed $7.5bn in value in the next five years

We will continue to organically grow the overall asset base not only through the development pipeline, but also through very active management and leasing, strong investment management of the overall portfolio and selective acquisition in key markets

Hervey Bay Schematic

Quality Retail property assets are scarce and in high demand. The IRRs we can deliver on a weighted average basis are well above our WACC

We have built the internal capability to deliver and are confident about our future

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Industrial

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Yennora, NSW
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Executive summary

Industrial has historically generated reasonably attractive risk-adjusted returns and we expect similar future returns

Average 11% p.a. total return over last 30 years with 8-9% yield; is the highest income yielding commercial property asset class

Future demand is expected to be strong

Asset type and location are critical

Developable land is highly sought after and pre-commitments are competitive

The market favours large, new, high grade facilities that are able to meet changing technology and logistics requirements, and are adjacent to transport nodes

Our $820m portfolio

Is relatively management intensive, including some older assets with short WALEs

In the past 2 years, returns have underperformed the market. Influenced by the fact that we do not have any distribution centres with long term leases

Assets will require investment to maintain their market relevance and attractiveness to tenants

We are making progress and the majority of the portfolio is expected to deliver an average IRR of 10%

We are a top ten player in this market and look to increase our exposure, targeting $1.2 - $1.5b in 5 years

Take advantage of future demand for logistics / warehousing to provide an alternative source of stable income. Higher yields are beneficial in a relatively low growth environment

$1.2-1.5b portfolio would deliver

$90-120m NOI[1]

7.5-8% income yield

IRR investment hurdle 9-9.5%+ for stable assets

We will grow by

Actively managing and leasing our existing portfolio

Take advantage of development opportunities within our portfolio Sourcing pre-commitments and completing design and construct Acquiring assets that fit our strategic filters

Developing internal capability to deliver growth

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Pre-AIFRS

3Q13 Industrial metrics

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Toll Business Park, Melbourne
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Occupancy 88.1%

WALE increased to 3.3 years (up from 2.7 years at FY12)

Executed an additional 50,900 sqm of leases since 1H13, bringing the total leases executed to 3Q13 to 177,900 sqm

A further 70,100 sqm of leases in Heads of Agreement

3Q13 weighted average base rent growth of 3% y/y; weighted average incentive of 7%

Key Industrial leasing deals

Property	Building area (sqm)	Area leased (sqm)	Leased to	Building WALE (years)	Comments
Yennora, Sydney	297,342	71,533	Australian Wool Handlers; Queensland Cotton; Sussan Corporation	3.6	New Tenant, Tenant renewals
20-50 & 76-82 Fillo Drive & 10 Stubb Street, Melbourne	71,326	18,822	Yakka (Pacific Brands)	2.3	Tenant renewal
Toll Business Park, Melbourne	52,448	17,577	Toll	3.7	Tenant renewal
Hendra, Brisbane	83,780	6,889	Global Express (Fastways)	5.1	Tenant renewal
Altona, Melbourne	39,364	6,165	Autonexus	3.0	Tenant renewal

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Outlook for the industrial market is positive

Industrial assets have relatively high income yields and are less capital intensive than office assets

Gross take-up of industrial space in Australia as at 4Q12 (sqm, 000s)

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3,000
2,000 10 year average
1,000
Completed
Plans approved/submitted
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Includes take-up of traditional and high-tech space
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Yield 8-9% on average

Fundamental drivers are strong

Port volumes and warehousing demand continue to grow, supported by population growth and increases in imported goods (including from online and offline retailing)

Imports are expected to grow 10% p.a. in next 10 years

Container movements through Port of Melbourne, Australia’s largest container port, are forecast to double over the next 10-12 years

There are proposals to increase Sydney’s port capacity

Growing tenant demand

National development pipeline as at 4Q12 (sqm, 000s)

Strengthening, now around the 10 year annual average

Vacancy rate for existing A-grade facilities in major Australian markets remains low

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3,000
Incentives for prime logistics facilities are generally ranging from 10-15%
Competitors are actively developing, although supply is currently forecast
to be lower than demand in the short and medium term 2,000
10 year average
Investors favour high quality product
Large, modern logistics/ distribution assets near major transport corridors/ 1,000 Completed
ports Under construction
Blue chip tenants with long leases and attractive lease covenants Plans approved/submitted
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
As at 1Q13
Source: Jones Lang LaSalle Research
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**Stockland currently has 14 Industrial assets* valued at $0.82b**

Asset	Region	Value add potential	Book Value Dec 2012 ($m)	Cap Rate1	10 year IRR
Estates
Yennora Distribution Centre	Sydney Outer Central West, NSW		344	8.00%	10.00%
Port Adelaide Distribution Centre	Adelaide, SA		83	9.50%	9.00%
Hendra Distribution Centre	Brisbane, Qld		82	9.25%	10.50%
Brooklyn Estate	Melbourne West, Vic		80	9.25%	9.80%
Altona Distribution Centre	Melbourne West, Vic		27	9.25%	10.20%
Stand alone assets			616
20-50 & 76-82 Fillo Drive & 10 Stubb Street Somerton Melbourne North, Vic 46 9.00 – 9.25% 10.3%
9-11A Ferndell Street Granville Sydney Outer Central West, NSW  42 9.25 – 10.00% 11.60%
1090-1124 Centre Road Oakleigh	Melbourne South, Vic		32	9.25%	9.50%
11-25 Toll Drive Altona	Melbourne West, Vic		16	8.25 – 8.50%	10.00%
32-54 Toll Drive Altona	Melbourne West, Vic		15
56-60 Toll Drive Altona	Melbourne West, Vic		15
2 Davis Road Wetherill Park	Sydney Outer Central West, NSW		16	9.25%	9.80%
Export Park (9-13 Viola Place, Brisbane Airport) Brisbane, Qld 13 9.00% 9.20%
40 Scanlon Drive Epping Melbourne North, Vic 8 8.75% 9.10%
203
Total Weighted Average: 819 8.70% 10.00%

As at 1H13

Note: *Counting Toll assets separately; excludes M1 Yatala Enterprise Park land

As at 1H13

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Overall, we are a relatively small player in a highly concentrated asset class

Value of Australian industrial assets under management

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WIP
Other
Funds
GTA
Unlisted Funds GAIF
DWPF
DIF
GMG DXS CHC $0.82
On balance sheet
CPIF
Active" developer Goodman Dexus Australand Charter Hall GPT Growthpoint Properties Stockland APPF Mirvac Industrial Fund 360 Capital Challenger Abacus Cromwell
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Note: Includes Australian assets only; based on latest company reports, results presentations and property portfolios

75% of assets by value are larger estates

Greatest exposure is in NSW and VIC

Yennora accounts for >40% of portfolio by value

SA (10%, $83m, 1 asset) Qld Stand alone (12%, $94m, 2 assets) (25%, $204m, 9 assets) Vic (29% $240m, 8 assets) Estates (33% $271m, 4 assets) NSW Intermodal (49%, $402m, 3 assets) (42%, $344m, 1 asset)

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Note: Counting Toll assets separately; Excludes M1 Yatala Enterprise Park

Our portfolio faces some challenges, which also present opportunities for growth

Issue		Challenge		Opportunity
WALE 3.3 years1	>	We don’t have any distribution centres with	>	Get into the D&C deal flow for new
		very long term leases. Our portfolio is		distribution centres with the Retailers
		relatively leasing intensive
Assets generally >10 years old: some from	>	Difficult to compete with newer assets	>	Redevelop old stock that is well located
early 1970s; some buildings date back to				and improve the IRR
1940s
Small portfolio	>	Limited choice for customers in terms of	>	Expand asset base through
		location, quality and price range		redevelopment, D&C and acquisition
Small land bank	>	Limited ability to create new assets for	>	Consider land banking where appropriate
		existing and new tenants
A third of GLA has <6m warehouse	>	Risk of functional obsolescence	>	Redevelop old stock and improve the IRR
clearance

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Weighted average based on GLA, 3Q13

Opportunities to redevelop some of our assets and improve returns

Site	Potential improvements	Target returns 11-14% incremental IRR 8.5-9.5% incremental yield (pre-AIFRS cash)
Yennora Distribution Centre	Develop ~15,000 sqm of surplus land. Rebuild older warehouses 1 and 2 to enhance income and value
Hendra Distribution Centre	Develop ~20,000 sqm of Arterial Land. Demolish and rebuild obsolete sheds. Upgrade existing Kmart building for a proposed light industrial / commercial / showroom use1
2 Davis Road	Development of 6,500 sqm of under utilised land
Brooklyn Estate	Redevelop older stock to increase clearance, improve turning circles, create new hardstand and upgrade
Port Adelaide Distribution Centre	Develop ~14,000 sqm of surplus land, increase warehouse clearances and upgrade
Altona Distribution Centre	Increase clearance and upgrade
Centre Rd Oakleigh	Increase clearance and upgrade (longer term future change of use to medium density residential development)
Ferndell St Granville	Increase clearance (longer term future change of use to medium density residential development)

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At lease expiry

Example of completed development

CEVA building at Altona: 14.0% incremental yield[1]

Development of new warehouse on existing vacant land and redevelopment of existing warehouse

Developed an additional 5,000 sqm of warehouse and 9,100 sqm of hardstand

$5.5m development cost

$9.2m end value based on 8.5% cap rate

5 year lease to CEVA

Ten year incremental IRR [1 ] 18%

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Pre-AIFRS

Example of Pipeline development opportunity

Proposed Warehouse at Hendra

Development of new warehouse on surplus land

15,000 sqm of warehouse, office and parking

Well located site Attractive incremental returns

Pro-forma feasibility
Incremental income $2.0m1
Estimated development cost $18.4m
Incremental yield 10.8%
Cap rate on completion 8.5%
Estimated end value $23.0m
Projected incremental IRR 14%1

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Lot 20
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Pre-AIFRS

There are several superlot opportunities within Stockland’s residential land bank for design and construct

	Possible consolidation / reconfiguration of an existing 32 hectare site
Mango Hill	Potential to create up to 110,000 sqm of developable industrial,
	subject to lease pre-commits
	An undeveloped Residential Communities site located in the south
	western logistics corridor of Brisbane
Pallara	Given proximity to major transport network, the site may lend itself to
	industrial development
	Developable area estimated at 67 hectares
Future master planned communities	Includes opportunities at North Shore Townsville; Caloundra South and Lockerbie over the next 10 – 12 years

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We are developing our capability to deliver growth

We retain control of strategic asset

management, leasing, development, project management and refurbishment in Industrial and Office

Outsourcing arrangement with CBRE working well

Over 50 people dedicated to office and industrial portfolio

The partnership with CBRE has delivered good results and reduced internal overhead. CBRE’s scope includes:

Property management

Facilities management

Property management accounting

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Commercial Property CEO
Stockland– Project Industrial CBRE Office Asset
Management & Delivery Industrial and Office Management
Cost planning Client Relationships Property Management Leasing
Design management National Leasing Facilities Management Asset and investment
management
Procurement Asset Management Property Management
Accounting Refurbishment
Delivery management Redevelopment of
existing assets Development
New Design and
Construction
Acquisitions and
disposals
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Office

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Waterfront Place
Eagle Street Pier
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Executive summary

Office has historically had lower and more volatile returns than retail and industrial assets

In the short to medium term, we expect Office demand to be weak relative to supply

We have been actively managing the composition of our Office portfolio since 2009

Sold $1 billion in investment assets

Our portfolio is valued at ~$1.5b.Premium and A-grade assets make up around 90% of the portfolio by value

We will have a “tactical” exposure to office investment assets

We will optimise income from our office assets in the short to medium term and add value via active management

We will progressively down-weight at the appropriate time, after we have maximised value

We will seek to take advantage of the value-add opportunities within our existing portfolio

We will consider joint ventures (or partial sales) as appropriate

We will not be forced sellers

IRR investment hurdle 9-9.75%+ p.a. for stable assets

The portfolio currently has a WALE of 4.4 years and is expected to generate $118.5m NOI[1] in FY13

The portfolio does have some challenges, including a relatively high exposure to non-CBD markets and a few ageing assets

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Post-AIFRS NOI

3Q13 Office metrics

Occupancy 95.9%

WALE 4.4 years

Up to 3Q13, executed 39,000 sqm of leases with a further:

14,200 sqm of leases pending execution

5,200 sqm of commercial terms agreed

3Q13 weighted average base rent growth of 4%; weighted average incentive of 15%

Executed $336m[1] office sales year to date

Key Office leasing deals

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2 Victoria Avenue, Perth
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Property	Building area (sqm)	Area leased (sqm)	Leased to	Building WALE (years)	Comments
Waterfront Place2	58,754	7,860	Minter Ellison	5.9	Tenant renewal
601 Pacific Highway	12,677	7,283	IBM	3.7	Tenant renewal
135 King Street2	27,159	6,499	Moore Stephens; M&D Services; Regus; Gadens	4.7	New leases
Piccadilly Tower 29,680 2,950 University of Sydney; EWON 4.2 New leases
110 Walker Street 4,417 1,009 Super IQ 3.9 New leases

Settled and unconditionally exchanged
100% shares – these two assets are joint ventured

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Office investment assets: total returns more volatile

Rolling annual total return over time: (% p.a.)

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40
Office
30
Retail
Industrial
20
10
0
-10
-20
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Source: IPD

In the short to medium term, we expect Office demand to be weak relative to supply

Incentives for prime grade office assets - CBD

Overall, demand is weak relative to supply

Has resulted in high incentives in all markets except Perth for the past three years

Sectors that drive office demand, like Finance, Government, Business Services and Mining are expected to be relatively flat in the short to medium term

Businesses continue to consolidate office space to minimise costs

Workspace ratios continue to decline, but at slower rates than seen in last decade because many gains have already been achieved

Workspace ratios forecast to fall by ~1 sqm/person by 2022, compared to ~2 sqm/person between 2002-2012

Although some Office managers are reportedly observing increased levels of enquiry, we expect a challenging year ahead

The global and domestic capital chasing quality office assets is potentially outpacing the underlying fundamentals

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30%
Sydney
Brisbane
25% Melbourne
20%
15%
10%
Perth
5%
0%
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Source: Jones Lang LaSalle Research

We have sufficient critical mass to enable execution of our value add strategy

Australian Office Assets Under Management

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Fund
Balance
sheet
$1.5b
Dexus Charter Hall GPT Brookfield Investa Colonial Mirvac Cromwell Stockland Lend Lease Australand Growthpoint Challenger Abacus Trafalgar
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Note: Includes Australian only assets; based on latest company reports, results presentations and property portfolios. Transactions announced after results presentations may not be reflected. Other assets owned and/or managed by Brookfield are not reflected as not disclosed

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Stockland currently has 19 office assets worth $1.5b

Asset	Region	Book Value Dec 2012 ($m)	Asset	Region	Book Value Dec 2012 ($m)
Premium			B Grade
Waterfront Place (50%)	Brisbane CBD	250
			Garden Square	Brisbane – suburban	38
		250
A Grade
			16 Giffnock Ave	Macquarie Park	36
Piccadilly Tower & Court1	Sydney CBD	309	Macquarie Technology Centre	Macquarie Park	34
Triniti Business Campus	Macquarie Park	168
			110 Walker St	North Sydney	24
Durack Centre	Perth CBD	150			132
Optus Centre (31%)	Macquarie Park	116
			Other(held for mixed use redevelopment)
135 King St (50%)	Sydney CBD	96
			80-88 Jephson St	Brisbane - fringe	19
78 Waterloo Rd	Macquarie Park	71
			23 High St	Brisbane - fringe	3
60-66 Waterloo Rd	Macquarie Park	66
601 Pacific Hwy	St Leonards	67	27-29 High St	Brisbane - fringe	4
77 Pacific Hwy	North Sydney	56			26
40 Cameron Ave	Canberra	23
			Total		1,530
		1,122

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Piccadilly Court separately classified as B-Grade; Classifications as per Stockland Property Portfolio which may not reflect technical grading

Sydney CBD: Expect slight improvement until new supply comes online

The Market

Overall

9% vacancy, likely to remain >8% for at least 3 years

High incentives will remain

Expect limited rent growth

Demand outlook

Reliant on financial & insurance sector – recently impacted by job losses and generally weak demand

Expect companies to continue consolidating and downsizing

Market Forecasts – Sydney CBD[1 ]

	3 Yr. Forecast	Historical Avg. (2001-12)
Net Supply Increase (sqm)	59,105	42,660
Net Absorption (sqm)	40,000	20,386
Total Vacancy	9.98%	8.57%
Prime Gross Effective Rent ($/sqm)	$626	$568
Prime Gross Effective Rental Growth (%)	3.1%	1.1%
Incentives2	28.06%	20.65%

Supply outlook

Limited new supply in next 2 years; 64% of supply currently under-construction is pre-committed

Barangaroo South development will add another 5% to Sydney stock. Level of impact will depend on mid-term demand; a real risk if business confidence does not pick up

Stockland’s Exposure

23% of SGP office portfolio

Prime assets well located with affordable rent

Lease expiries extend past Barangaroo being commissioned

	WALE	Vacancy	IRR	Cap Rate
135 King St3	4.7 years	12%	10.20%	7.30%
Piccadilly Complex3	3.8 years	4%	9.25%4	7.25 - 8.25%

Jones Lang LaSalle Research
Incentives have been calculated on 10 year lease terms 3. As at December 2012
Blended IRR

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North Sydney & St Leonards: will remain weak

The Market

Overall

Relatively small markets, attracting a select pool of tenants Sub-lease vacancy increased slightly in last six months Relatively low rents and high incentives

Demand outlook

Demand expected to be weak over the short term

Supply outlook

No supply currently under construction

Market Forecasts – North Sydney[1 ]

	3 Yr. Forecast	Historical Avg. (2001-12)
Net Supply Increase (sqm)	-3,315	2,769
Net Absorption (sqm)	-833	-1,714
Total Vacancy	6.4%	10.0%
Prime Gross Effective Rent ($/sqm)	$626	$568
Prime Gross Effective Rental Growth (%)	3.1%	1.1%
Incentives2	25.3%	23.2%

120,000 sqm of new supply has been approved but pending pre-commitments

Stockland’s Exposure

8% of SGP office portfolio

601 Pacific Hwy is comparatively the better asset; A grade and well located; being upgraded

Jones Lang LaSalle Research
Incentives have been calculated on 10 year lease terms 3. As at December 2012

North Sydney & St Leonards3	WALE	Vacancy	IRR	Cap Rate
601 Pacific Hwy, St Leonards	3.7 years	2%	10.1%	8.50%
77 Pacific Hwy, North Sydney	2.9 years	6%	9.0%	8.25%
110 Walker St, North Sydney	3.9 years	21%	9.6%	8.75%

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Macquarie Park: potential new supply will restrict rental growth

The Market

Stockland’s Exposure

Overall

Most popular with companies who want corporate headquarters or campus style accommodation

Location close to public transport is important

Demand outlook

28% of SGP office portfolio

Higher cash yields

Good quality assets, located close to new train stations and amenities such as Macquarie Shopping Centre

Demand has fallen as tenants downsize and surrender space

Total vacancy of 4.9% is lower than other Sydney submarkets

Supply outlook

22,000 sqm stock currently under-construction, with 85% pre-committed

A lot of land available for development, including 60,000 sqm with approved plans

Land available for future development

Macquarie Park & North Ryde1	WALE	Vacancy	IRR	Cap Rate
Triniti Business Campus	3.5 years	-	8.5%	7.50%
Optus Centre	9.3 years	-	9.1%	7.50%
60-66 Waterloo Road	1.9 years	-	10.2%	8.50 – 9.25%
16 Giffnock Avenue	3.5 years	10%	9.3%	8.75%
Macquarie Technology Park	2.2 years	7%	11.9%	8.50 – 9.25%
78 Waterloo Road	6.4 years	-	9.1%	7.75%

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As at December 2012

Brisbane CBD: has weakened, but shouldn’t deteriorate much further

The Market

Market Forecasts – Brisbane CBD[1 ]

Overall

Expect performance in 2013 to be weak as a result of recent new supply, government job cuts and a slow down in the growth of the resources sector

High incentives and vacancy likely to remain

Demand outlook

Risks remain around the stability and size of the public sector

Demand from resources-related companies expected to stabilise

Supply outlook

100% of supply currently under-construction is precommitted

Minimal new supply expected over the short term

Supply is expected to pick up from 2016 with forecast 286,000 sqm of planned new office space

	3 Yr. Forecast	Historical Avg. (2001-12)
Net Supply Increase (sqm)	7,941	46,185
Net Absorption (sqm)	6,667	37,850
Total Vacancy	10.93%	5.57%
Prime Gross Effective Rent ($/sqm)	$473	$452
Prime Gross Effective Rental Growth (%)	2.50%	5.38%
Incentives2	26.9%	17.7%

Stockland’s Exposure

14% of SGP office portfolio

Waterfront Place[3] (50%)

Premium grade

WALE: 5.9 years Vacancy: 6% Cap Rate: 7.50%

IRR: 9.4% (excluding development opportunity)

Eagle St Pier (adjacent) significant development opportunity

Jones Lang LaSalle Research
Incentives have been calculated on 10 year lease terms 3. As at December 2012

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Perth CBD: currently the strongest office market

The Market

Market Forecasts – Perth CBD[1 ]

Perth CBD

Resources sector is the predominant driver of growth; but this makes it a volatile market

Continues to have the lowest vacancy rates, lowest incentives and the highest prime gross effective rents of all CBD markets

Demand outlook

Mining investments should continue to support the office market despite the recent slow down

Medium term demand depends on next round of mining investments

Supply outlook

91% of supply currently under-construction is precommitted

Limited new supply over the next 2 years

	3 Yr. Forecast	Historical Avg. (2001-12)
Net Supply Increase (sqm)	36,431	29,168
Net Absorption (sqm)	23,333	29,530
Total Vacancy	5.75%	6.52%
Prime Gross Effective Rent ($/sqm)	$851	$559
Prime Gross Effective Rental Growth (%)	2.24%	9.94%
Incentives2	7.8%	11.6%

Stockland’s Exposure

9% of SGP office portfolio

Durack Centre[3] (2 Victoria Ave & 263 Adelaide Tce)

A grade

Situated at the eastern end of the CBD

WALE: 5 years Vacancy: 0% Cap Rate: 8.75% IRR: 12.3%

Jones Lang LaSalle Research
Incentives have been calculated on 10 year lease terms 3. As at December 2012

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Value add opportunities in our current Office portfolio

Asset	Location	Opportunity
Waterfront Place & Eagle St Pier (JV with Future Fund)	Brisbane, Qld	Secure approvals to redevelop Eagle Street Pier. Current carrying value $32m1; ~130,000sqm GLA of floorspace in the future
Durack Centre and 2 Victoria Ave	Perth, WA	Obtain freehold title / extend ground lease
“Lighthouse” land next to Triniti Business Park	North Ryde, NSW	Secure pre-commitment and develop the site
135 King St & Glasshouse	Sydney, NSW	Complete office leasing, refurbish and remix retail
Macquarie Technology Centre	North Ryde, NSW	Establish the feasibility of replacing existing buildings with new, larger buildings
Toowong (office and retail assets)	Brisbane, Qld	Mixed use redevelopment
Garden Square	Mount Gravatt, Qld	Develop additional 20,000 sqm of office space, (DA approved); subject to pre- commit
Piccadilly Tower, Court & Retail	Sydney, NSW	Complete upgrade and leasing
601 Pacific Highway	St Leonards, NSW	Complete upgrade and leasing
40 Cameron Avenue	Belconnen, ACT	Complete major refurbishment

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Full 100% share

Overall summary

Grow commercial property through organic development and acquisition

Retail

Execute our strategy of being a leader in key regional markets in Australia, and having a clear point of difference in metropolitan areas

Maintain top four position in the listed REIT retail property market

Grow via our accretive development pipeline, active asset and leasing management and strategic acquisitions where we can add value and meet our investment hurdles

Office

Retain tactical asset allocation, adding value to several key assets and down weight over time

Asset recycling

In Retail and Office, pursue more joint-venturing and capital partnering to contribute the accretive Retail development pipeline and overall Group capital management

Industrial

Add value to existing portfolio through organic development, building upgrades, and disciplined asset management and leasing

Complete the internal resourcing to strongly position us in the future greenfield design and construct pipeline, servicing our retailer and industrial logistics clients

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Residential

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Vale, WA
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Executive summary

Operational update

Leading indicators are showing signs of improvement, however the housing market remains challenging

Residential lot volumes have improved recently, particularly in WA, however margins remain under pressure

The significant decline in profitability over time, has been due to the decline of the housing market, growing competition, shifting settlement volumes to less profitable projects and a change to capitalised interest allocation

Strategy update

Fundamentals continue to support our strategy to deliver large masterplanned communities, geographically dispersed in key growth corridors

We will also expand our participation in medium density development organically, leveraging existing assets and skillsets

We will focus on three key areas to enhance the business performance

Reshape the portfolio: launch new projects; recycle capital from poor performing projects

Improve cost efficiency: reduce cost base through strategic procurement; rationalise and centralise overheads

Drive revenue growth: deliver community outcomes; expand target market

We are confident in returning Residential Communities EBIT margins to ~23-25% from FY16 onwards

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Improved volumes in 3Q13 but margins remain subdued

3Q13 achieved strongest net deposits since 1Q11

Strong leads and net deposits primarily driven by WA

WA performing well (47% of 3Q13 net deposits)

Vic improving from low point in 1Q13 but still impacted by competitor rebating

Qld lead indicators suggest confidence is returning, but varies between submarkets

Improving NSW metropolitan market supports FY14 and FY15 performance with launch of new projects (East Leppington 2H14 and Marsden Park FY15)

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8,035 8,145 Leads
7,598 8000
6,798 6,294
6,284
1,757 6000
254 1,401 Net deposits
159 1,125 1,127 1,082 1,163 100 NSW 4000
574 228 170 142 145 657
295 334 393 437 WA
2000
770 362 334 386 330 438 Qld
240 289 161 251 206 Vic 0
1Q11 3Q12 4Q12 1Q13 2Q13 3Q13
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Executing disposal of non core assets - one lifestyle project disposed 3Q13 (Warriewood, NSW)

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EBIT margins impacted by soft market, competition and project mix

Market

Cause: Prolonged market softness Effect: Revenue growth not able to offset cost inflation More conservative escalation rates

Lower forecast sales rates

Competition

Cause: Increasing competition

Effect: Greater rebating to respond to competitor pricing in selected markets

Mix Shift

Cause: Market dynamics and shift to less profitable projects

Effect: A smaller proportion of lots settled from our higher margin projects and increased proportion from lower margin projects

Impact: ~(4)% EBIT (1H12 vs. 1H13)

Moving average Residential sales Number of active projects per state (Moving average #) In SGP Corridors (# in a quarter)

Lots settled by location (lots)

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7,000 200 FY09 to FY13 2,209
180 Increase 2,085
6,000 All States 160 QLD +96% 463 606 WA
5,000 Mortgage Rate Increase 140 WA +91%
120
4,000 VIC +65% 463 493 Vic
100
NSW +54%
3,000 Excl. WA 80
2,000 Mortgage Rate Decrease Market not responding to interest rate cuts as 60 686 Qld
680
in the past 40
1,000
20 422 NSW
210
0 0
2002 2004 2006 2008 2010 2012 2009 2010 2011 2012 1H12 Settled 1H13 Settled
Excl Townsville & Rockhampton
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Source: RBA, Charter Keck Cramer, Stockland Research

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Leading indicators trending positively

Price growth turning slightly positive Capital city house prices – Annual Growth

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

50%
40%
30%
20% WA
10% NSW
0% Vic
-10% Qld
-20%
2003 2006 2009 2012
Growth(%)
Rolling Annual
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Rental markets remain tight Rental Vacancy Rates

Loans for new dwellings trending up slights

Housing Finance for New Dwellings - Monthly

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

12,000
10,000
8,000
Purchase
6,000
4,000
Construction
2,000
0
2009 2010 2011 2012 2013
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Affordability improving Mortgage repayments as % of disposable income

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

4.5%
4.0%
3.5%
3.0%
Melbourne
2.5%
2.0%
Brisbane
1.5% NSW
1.0% Perth
0.5%
0.0%
2010 2011 2012 2013
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----- Start of picture text -----

60%
Less
4.0%
affordable
3.5% 50%
3.0% 40% NSW
Melbourne
2.5% Australia
30% Melbourne
2.0%
Brisbane Brisbane
1.5% NSW 20% More Perth
1.0% Perth affordable
10%
0.5%
0.0% 0%
2010 2011 2012 2013 1983 1987 1991 1995 1999 2003 2007 2011
Source: ABS, RBA, APM, SQM Research, Stockland Research
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Population growth, particularly overseas migration, underpins demand for new dwellings

Population growth remains strong

ABS forecast population growth of 330,000 p.a.

(‘000)

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500
450
400
350
300
250
200
150 Net Overseas Migration (NOM)
100 Net Natural Increase
50
0
1982 1986 1990 1994 1998 2002 2006 2010
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Includes occupied and unoccupied dwellings and knock-down rebuilds Source: ABS, Stockland research

~180,000 net overseas migration

~150,000 national increase

Household formation of 2.56 persons per household equates to annual long run dwelling demand of ~150,000[1 ]

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An increasing number of Gen Ys, who are planning children or have children, aspire to own a detached house

National Stockland deposits by generation[1 ]

Forecast Population Change by Age, 2011 to 2021 (‘000 people)

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2% 2% 2%
Builders 500 Gen Y will reach
wealth accumulation
24% 25% 20% Baby Boomers and family building stage Baby Boomers
400 will reach
retirement age
23% Gen X & consider downsizing
25% 24% 300
Gen X
200
55% Gen Y
49% 49%
100
-
2010 2011 2012
(n = 850) (n = 1231) (n = 1740)
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This is based on a sample of ~30% of Stockland customers who put down a deposit Source: Pulse survey data Jan 2010 - Dec 2012, (n= 3,821), Colmar Brunton; ABS series B population forecast

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The outer suburbs will remain a significant market in the future, due to land availability and affordability

Average annual growth in occupied dwellings by location (2006-11)

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32k
24% 28k
26k
Rest of 39% 19k
State
55%
45% 28%
Outer 30%
30% 51%
18%
Middle 20%
13% 15%
Inner 11% 13% 2% 6%
NSW VIC QLD WA
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Source: ABS, Stockland Research, State of Australian Cities 2012

Real house price by distance from CBD

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

Sydney
1,500
1,200 Affordability level of ~$380K
is >35km from CBD
900
600
300 2009-10
0 1986-87 Affordability seen as a key
driver of outer suburbs
0 10 20 30 40 50
Distance from CBD (km)
Melbourne
1,500
Affordability level of ~$350K
1,200 is >30km from CBD
900
600
300 2009-10
1980-81
0
0 10 20 30 40 50
Distance from CBD (km)
$’000
$’000
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Our projects are located in key population growth areas

Population change between 2006-11

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MELBOURNE Lockerbie SYDNEY
Eucalypt Marsden Park
Mernda Village
Highlands
Allura
Davis Road
East Leppington
Selandra Rise
Arbourlea
Macarthur Gardens
BRISBANE PERTH
Caloundra
Amberton
Stone Ridge
Vale
North Lakes Corimbia
Freshwater
New Haven
Sovereign Pocket
Setters Hill
Augustine Heights
Ormeau Ridge
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Source: ABS, .idplacemaker. Population growth by localities have been represented by a sliding colour scale, with the darker shades indicating higher population growth, and lighter shades indicating lower growth

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Young family growth in our corridors

New Births: 0 to 4 Year change between 2006-11

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MELBOURNE Lockerbie
Eucalypt
Highlands Mernda Village
Allura
Davis Road
Selandra Rise
Arbourlea
BRISBANE
Caloundra
Stone Ridge
North Lakes
Freshwater
Sovereign Pocket
Augustine Heights
Ormeau Ridge
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----- Start of picture text -----

SYDNEY Marsden Park
East Leppington
Macarthur Gardens
PERTH
Amberton
Vale
Corimbia
New Haven
Setters Hill
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Source: ABS, .idplacemaker. Increases in population between 0-4 years have been represented by a sliding colour scale, with the darker shades indicating higher growth, and lighter shades indicating lower growth

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Disciplined execution of our strategic criteria delivers sound returns

Clear strategic criteria since 2009

Core projects deliver superior returns

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Focused on geographic diversity Masterplanned
Growth corridor strategy – attractive demand/supply 9% communities
6%
Wyndham (Vic) / Allura (Vic) / Vale (WA)
10%
Scale to leverage returns and stakeholder engagement
Focus on larger masterplanned communities Communities
Certainty obtained through infrastructure agreement and cost efficiency <1,500 lots
North Shore (Qld) / North Lakes (Qld) / Highlands (Vic)
Buy on capital efficient terms – now ~29% of inventory FY10 FY11 FY12
Reduce funds employed and reduce risk
Lockerbie (Vic) / East Leppington (NSW)
Bring projects to market quickly
Minimise interest and lower funds employed Strategic
East Leppington (NSW) / Marsden Park (NSW) / Allura (Vic) 9% corridor
Broadening product offering to expand market reach 14% 10%
Focus on affordability and innovation, including medium density
e.g. Mode (Qld) / Bower Series (Qld) / Waterside Terraces (NSW) Non strategic
corridor
FY10 FY11 FY12
EBIT margin (%)
EBIT margin (%)
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Current strategic initiatives focus on improving performance

Residential Communities EBIT margin improves from FY16 onwards

We are confident in returning EBIT margins to ~23-25% from FY16 onwards

This will be achieved through the following initiatives

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25% ~23-25%
~3-4%
~18% ~2-3%
FY12 Current Reshaping Improving Target
Portfolio Efficiency
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1. Reshaping the portfolio

Accelerate launch of new projects to create greater geographic diversity and scale

Actively managing portfolio to improve returns Right sizing the land bank

2. Improving efficiency

Continue to manage costs

3. Delivering revenue growth

Increase revenue by creating a better community value proposition that drives higher customer referrals Broaden market reach through medium density offering

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1 Reshaping the portfolio

Accelerate launch of new projects to improve geographic diversity and scale

The disciplined execution of our growth corridor strategy since 2009 is improving geographic diversity

The launch of East Leppington and Marsden Park (NSW) during FY14/15 will take advantage of the strong market conditions in metropolitan Sydney

The WA business is now at scale and benefiting from the strong market conditions

FY12 lot sales (by state)

Indicative future lot sales (by state)

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19% 17% 21%
WA NSW 23%
34% 30%
Vic Qld 23% 33%
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1 Reshaping the portfolio

Actively managing portfolio to improve returns

Capital employed[1]

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

Core projects
Delivering 28 Active projects [2]
current $1.3b
earnings ~26,000 Lots
Bring to 5 New Launch projects
Market $0.2b
FY14/15 ~11,000 Lots
8
Improve
Return 8 Inactive projects [3 ]
Prior to $0.3b [5 ]
~41,000 Lots
Launch
Workout projects
Focus on
7 Impaired develop out projects [4 ]
working
through as -3,000 Lots
soon as
possible $0.4b
15 Impaired disposal [6 ]
~5,000
$2.2b
0 yrs 1 yrs 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs 7 yrs 7+ yrs
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60% of NFE is contributing to current earnings

Accelerate FY14 /15 new launch projects to provide scale, geographic diversity and incremental margin

Prior to launch, improve returns for inactive projects with below target returns

Reduce upfront infrastructure costs Reduce development costs

Caloundra South (Qld) IRR around 10% due to upfront infrastructure requirements. Working with stakeholders to improve return profile One impaired develop out project completed 2H13. Three further projects will complete FY14/15

Executing disposal of non core assets. One lifestyle project under contract for disposal 2H13

Based on net funds employed as at February 2013 2. Excludes five active projects 99% complete 3. One long term project disposed in 2H13 4. One impaired develop out project completed in 2H13
Caloundra is ~$0.2bn capital employed and ~20,000 dwellings 6. Includes disposal of industrial land and excludes apartments

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1 Reshaping the portfolio

Right sizing the land bank for future growth

Consistent settlements from existing land bank

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86,000
5,000
31,000 [1]
30,000 [2 ]
51,000
Lockerbie
& Caloundra 30,000
55,000
Other projects 21,000
Dec 2012 remaining lots Disposal projects Trading to end of FY18 Jun 2018 Remaining
Lots
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Caloundra South is ~20,000 dwellings 2. Includes 2H13 lot settlements. Assumes full pipeline launched

Disposal of workout projects is forecast to be largely complete by FY16

Existing land bank delivers 5,000-6,000 settlements per annum

By FY18, we will have significantly reduced the existing land bank with the exception of Lockerbie and Caloundra South

We will target acquisitions over the next three years, which meet our strategic criteria of scale, within growth corridors and on capital efficient terms to maintain sustainable volumes from FY18 onwards

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~~21~~

2 Improve efficiency

Cost management will deliver sustainable margin improvement

Average annual development expenditure ~$600m

Leverage scale and strategic procurement packaging to reduce development costs per lot

Negotiate national agreements with key vendors for volume discounts – target top 20 vendors representing 60% of development costs

Direct arrangement with vendors where cutting out the middle man produces true cost savings

Leverage group project management expertise for tighter control over costs

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

FY14 FY15 FY16 FY17 FY18
----- End of picture text -----

Improve upfront value management through structured peer review process

Cost efficiency initiatives

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

Rationalise: operating structure 1,017
Centralise: human resources, finance, marketing
Process: streamlining decision making tools
357
170 Devex $M
78 64 20 # of vendors
Below $1m $1m to $10m $10m to $50m
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3 Driving revenue growth

Leveraging our strong community value proposition

Importance

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

Community
27% Design Elements
Community
26%
Perceptions
----- End of picture text -----

20% of all new leads are referred. These leads convert at three times the rate of a non referred lead. There is a strong link between satisfaction and referral

Our proprietary liveability[1] study of over 1,700 residents has enabled the identification of the specific community elements that contribute the most to higher customer satisfaction (or liveability)

By focusing our development and community creation activities on the most important elements, we can increase satisfaction, drive greater referral rates and grow margins over time

General House 20% and Land Elements

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

16%
11%
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----- Start of picture text -----

Personal
Circumstances
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----- Start of picture text -----

My Home
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Liveability survey of over 1,700 residents to understand the community factors that contribute most to higher satisfaction

Majority of customer satisfaction in their community comes from factors other than people’s own home

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3 Driving revenue growth

Medium density is growing and is supported by key stakeholders

ABS Completions: New Medium Density & Apartments (Rolling annual average)

Government planning policies support higher density development

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

60,000
50,000
40,000
30,000
20,000
CAGR 2.5%pa 1985-2012 versus -0.5%pa for detached housing
10,000
1985 1986 1987 1988 1990 1991 1992 1993 1995 1996 1997 1998 2000 2001 2002 2003 2005 2006 2007 2008 2010 2011 2012
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NSW, Victorian and Queensland State Governments each have a target that ~50% of all new dwellings will be infill

In addition, state and local government are encouraging higher density development in middle and outer suburbs

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Note: Dotted line represents the trend line. Completions are for private dwellings only Source: ABS dwelling completions. It includes only new dwellings, which are defined as building activity which will result in the creation of a building which previously did not exist. This number excludes alterations, additions and conversions. It includes knock down-rebuilds

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3 Driving revenue growth

Stockland has relevant and recent medium density experience

	Mernda	Willows	Arilla	Essence	Riverwalk	Waterside	Bower Series
Business	Retirement Living	Retirement Living	Retirement Living	Residential	Residential	Residential	Residential
Product	Medium density	Apartments & medium density	Apartments & medium density	Townhouses & detached houses	Attached & detached houses	Medium density	Medium density
Location	Mernda, Vic	Winston Hills, NSW	South Morang, Vic	Maribyrnong, Vic	Ermington, NSW	Penrith, NSW	Bells Reach, Qld
Year completed	2013	2013	2014	2008	2010	2013	2013
No. of dwelling	272	76	200	111	126	85	11
Density (dwellings/ha)	~26	~35	~25	~26	~22	~80 ex common areas	~100 ex common areas

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3 Driving revenue growth

Medium density development to broaden reach

	Medium density	Low to mid rise apartments
	25-50 dwellings/ha	40-70 dwellings/ha
Indicative density
Description	Semi-detached and attached houses Includes townhouses, terraces and over-unders	Apartment buildings up to six storeys
How Stockland participates	Core Retirement Living product Piloted a number of Residential projects on greenfield and infill sites Partner with builders to deliver; Stockland is a not a builder	Incorporated into a number of Retirement Living developments Have previously delivered some stand-alone apartments projects
Examples	Arilla & Willows (retirement) Essence & Riverwalk (infill) Waterside & Bower (greenfield)	Arilla (retirement) Gowanbrae (retirement) Prince Henry
Stockland volumes FY08-FY12	~940 new independent living units ~160 residential lots	~100 new independent living apartments ~680 residential apartments

We will initially expand our participation in medium density organically, leveraging existing assets and skillsets

Selectively develop land from existing land bank

Leverage capabilities in existing team

Leverage existing builder partnerships

Opportunistically acquire medium density sites based on favourable terms and on appropriate risk-adjusted return metrics

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Summary

Key leading indicators are showing signs of improvement and the established housing market is improving. Although land market remains challenging as it generally lags established by ~6 months

Profitability continues to be impacted by impaired projects, capitalised interest changes and soft market conditions

Fundamentals continue to support our strategy to deliver large masterplanned communities, geographically dispersed in key growth corridors

Residential performance will improve in coming years with the launch of new projects, disposal of non-core assets, reduction in cost base and delivering community outcomes in our larger masterplanned communities

We will expand our participation in medium density organically, leveraging existing assets and skillsets

We are confident in returning residential communities EBIT margins to ~23-25% from FY16 onwards

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Retirement Livin g

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Fig Tree Village, Qld
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Executive summary

Retirement Living is on track for modest growth in operating profit relative to last year despite challenging market conditions

The soft residential established market has impacted customers’ ability to sell their homes to fund their entry into a village and has therefore elevated cancellations

Heading into FY14, we see volume growth coming back as the established housing markets appear to be in the early stages of recovery

Our strategy remains to develop villages organically to enhance scale and to deliver a customer experience which drives high levels of satisfaction, all at a sustainable level of cost

Current strategic initiatives focus on continuing to improve return on assets (RoA)

Emphasis is on driving volume growth, further reducing overheads and streamlining processes

We are targeting an RoA of 6.5% by FY15 and exceeding 8% within the following 2 years

The long run fundamentals of Retirement Living remain compelling

We continue to explore options for accelerating these returns

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3Q13 trading update: strong enquiries, solid reservations and reducing cancellations

Quarterly reservations

High enquiry levels indicative of underlying demand

Autumn 2013 national campaign enquiries achieved 2x target

However, over the last 18 months, many customers have had difficulty selling their home, driving post-reservation cancellation rates to highest levels in several years

Stockland now providing low-cost purchase assistance to mitigate cancellation risk

Solid reservation performance

3Q13 campaign did not offer $10k rebate of previous campaigns, impacting reservation rate

However, post-campaign cancellation rate is materially lower than previous campaigns - indicating reservations without rebate are of higher quality

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268
248
210
100
96
63 New
villages
114
108
168 51
152 61 147 Established
villages
63
47
3Q12 4Q12 1Q13 2Q13 3Q13
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Reservation levels have remained solid since campaign ended

Lead indicators appear to be pointing to an emerging recovery in the established housing markets

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Lead indicators suggest the early stages of a market recovery

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Consumer Sentiment Capital City Median House Prices
160 25%
140 Time to Buy a 20%
Dwelling Index
120 Long term Dwelling Index 15%
Consumer Rolling
100 Sentiment Annual
Long term 10% Growth
Sentiment
80 Average 5%
60 Quarterly
0% growth
1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012
400
2006 2008 2009 2010 2011 2013 -5%
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Days on Market (Established Houses) Capital City Auction Clearance Rates
90 80%
80
Average days 70%
70 on market 60% Clearance
60 rates
50%
50
40%
40
30%
30
20 20%
10 10%
0 0%
2005 2006 2008 2009 2011 2012 2003 2005 2007 2009 2011 2013
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Sources: Westpac – Melbourne University Survey of Consumer Sentiment, RPData/Rismark, APM, SQM Research, Stockland Research

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Strong long run fundamentals

Population is aging

Australian population aged 65 or older

(Millions of people)

Over-65s now 14% of the population, will be 20% by 2030

Current penetration of Retirement Living villages ~ 5%

Overseas penetration benchmarks higher (>10% in US)

Strong growth in demand, currently under-supplied

At 5% continued penetration, the implied demand for new supply is ~100,000 units over 20 years (5,000p.a. average) Sector currently supplying less than half this level

Customer value proposition is proven

The Loan/Lease/DMF model is well accepted and is an affordability solution relative to renting

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6.7m
5.6m
4.2m
3.0m
2010 2020 2030 2040
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Demand for retirement units

(Thousands of units required to meet demand)

Stockland’s DMFs are competitive[1 ]

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129 At 8% take up [2 ]
108
56 Baseline demand at
115 162 213 253 current 5% take up
2010 2020 2030 2040
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High levels of resident satisfaction (90% of Stockland residents rate their overall satisfaction at 7/10 or higher)

Governments are supportive of the sector

Economic and social benefits are increasingly being recognised

Stockland’s current standard DMF contract: 8% of entry price in year one, followed by 3% of entry price per annum of residency up to a maximum of 35%; 50-50 share of capital gain or loss 2. Potential national penetration by 2025 estimated by the RVA in its submission to the Productivity Commission enquiry “Caring for Older Australians”, August 2011

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Our strategy: happy, full villages - and more of them

Our strategy is to achieve happy, full villages (and more of them) by delivering older Australians a better way to live

Targeting middle market socio-economic segment with affordable products and services

Organic growth, with improving returns being driven by increasing scale and ongoing improvement in processes, products, services and culture

Maintaining relevance as customers’ needs evolve over time

Built-form home and community facilities

Service platform Financial solutions

Raising overall RoA to 6.5% by FY15 and exceeding 8% within the following 2 years

Undertake initiatives focused on volume growth and cost containment without being dependent on price growth

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Current strategic initiatives focus on improving returns

Throughout the business

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1 Continuing to manage costs - centralisation and streamlining
2 Differentiated customer experience
Choose Acquire Masterplan Build Initial Resident makes ingoing
Corridors Land & Design ‘Sale’ contribution and moves in
Resident enjoys
lifestyle
Development
3 Continued growth in development volumes - a key driver of RoA improvement Platform
Resident is
4 Continuing to evolve our product – project home builder partnerships re-paid Resident
& DMF Village moves out
5 Increased use of medium density and low rise apartment product crystallised Management
Services
Established
Unit ‘re-sold’ Unit is refurbished /
6 Streamlined and more efficient unit turnarounds - faster, less expensive upgraded as needed
7 Building the service platform with specialist providers - better value proposition
8 Professionalisation and up-skilling - enhanced customer experience and commerciality
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1 Cost management

Ongoing cost management will continue to support RoA

Return on Assets[1 ]

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Scale
12%
4%
Centralisation
Gross
8% ~8%
Yield
~4%
Overheads 7% Marketing
8% strategy
~4%
Net RoA
1%
FY09 Current Target
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Holding costs flat in real terms while expanding volumes will bring overheads down from 12% of revenue in FY13 to 8% in FY18

Increased centralisation of functions into Corporate Centre to drive efficiency

Finance Human Resources Elements of Marketing

Increased emphasis on conversion, reduced investment in lead generation will reduce marketing spend by c25% in FY14

What is meant by ‘overheads’

Salary & wages

Includes Marketing, Sales (incl commissions), Area and Regional Operations, Asset Management, Development, Finance, Legal/Conveyancing, HR

Excludes village employees recharged to residents through monthly levies (eg Village Managers, Maintenance, local admin)

External spend on marketing, professional fees (eg valuations), occupancy, depreciation, travel, general expenses

Head office recharges for shared services (IT, A/P, Finance, Payroll etc)

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Historical data re-stated to reflect current accounting treatment

2 Customer experience

Improving the end-to-end customer experience supports occupancy and price-point objectives

Example #1: Entry Experience

Improved Conversion

High cancellation rate drives added cost per settlement as on average each settlement has to be “made” more than once

A leading cause of cancellations is that the move to the village is seen as overwhelmingly hard

Solution: make it easier by providing more information, advice and guidance via Property Relocation and Consultation Service – free of charge to customer (cost to Stockland ~$200-300)

Achievements to date

Reservation package introduced February 2013

Property and Relocation Consultant partners engaged nationally

Strong feedback from customers and sales team as to efficacy of the service in reducing stress

Cancellation rates for customers using the service halved during the pilot period

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Example #2: Residency Experience

Internalising Villages

Residents can be exposed to risks when self-managing villages, including: regulatory, compliance, economic risk; residents enter village to retire, not run the village

Stockland also exposed to inefficiencies and inconsistencies, brand risk and resident wellbeing issues through stress and administrative workload

Solution : Where Association-managed, internalise village management to leverage Stockland experience, scale economies, common processes

Achievements to date

During FY13, six Association-managed villages have agreed to become managed by Stockland – ie ‘internalise’ (five Vic, one Qld)

Four villages have undergone successful trial periods

Expect 75% of all portfolio villages to be Stockland-managed by end FY13

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Managed
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3 Delivering the pipeline

Delivering the development pipeline is a major contributor to RoA improvement

Development returns

Key Drivers of Improvement in Return on Asset (RoA)[1 ]

Pre-overhead margins averaging ~18-19% (excluding DMF’s)

Expect these to remain stable as we move to project home builder product and lock down construction costs early in projects

Development overheads historically high as % of revenue

Sub-scale

Costs associated with bringing pipeline projects to market before they generate revenues

Post-overhead operating profit margin exceeded break-even point in FY12

Current 3-year unlevered post-overhead IRR on the development business is c18%pa over FY13-15 (excluding DMF’s created)

Operating profit margin highly leveraged to volume

Development platform is well established; overhead growth in near term limited to CPI or less

Growth in volumes a key driver of overall RoA

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Current Development Turnover Price Reinvestment Inflation Target
RoA Volume Rate 2 & Margin Capex RoA
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Not to exact scale
Turnover rate will increase with village maturity; expecting this to trend towards 8% over the next five years

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Strong project pipeline should drive development volume growth by over 15%pa

3 Delivering the pipeline

State	Project	Yet to come online		Anticipated Settlements	Anticipated Settlements	Anticipated Settlements
			FY13	FY14	FY15	FY16	FY17+
Active Developments
VIC	Highlands	118
VIC	Arilla	81
VIC	Tarneit Skies	29
VIC	Selandra Rise	214
VIC	Mernda	272
VIC	Gowanbrae	2
QLD	Fig Tree	99
QLD	North Lakes	40
QLD	Farrington Grove	120
NSW	Waratah Highlands	82
NSW	The Willows	37
NSW	Macarthur Gardens	180
WA	Affinity	216
*Sub-total*		*1,490*
Development Pipeline
VIC	Highlands Extension	200
VIC	Eucalypt	270
VIC	Highlands II	250
VIC	Lockerbie	250
VIC	Davis Road	250
QLD	Caloundra	400
NSW	Lourdes	10
NSW	Golden Ponds	50
NSW	Marsden Park	280
NSW	Cardinal Freeman	240
NSW	The Cove	60
NSW	Leppington	300
WA	Banjup	250
*Sub-total*		*2,810*
Total ILUsyet to be released		4,300

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3 Delivering the pipeline

For ageing downsizers, a Stockland Village offers a strong value proposition relative to new house & land

	Typical House and Land	Retirement Village
Contract
Single contract, fixed price		
No upsell / up spec pressure		
Deal direct with Stockland		
Warranty by Stockland		
Fit for purpose		
Ready to live in		
No stamp duty		
Easy by Design
6-7 Star NATHers rated		
Adaptable housing code		
Elderly friendly lights & taps		
Wide corridors and extra storage		
Security doors and flyscreens		
High ceilings (2550 mm)		
Fence, landscape & driveway		
Window furnishings		

Affordable price-points

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Serviced Apartment
Independent Living Unit
<$150k $150 $200 $250 $300 $350 $400 $450 $500 $550 >600k
-200k -250k -300k -350k -400k -450k -500k -550k -600k
Residential Bottom 20% of house Middle 60% of house
benchmarks: prices nationally ($325k) prices nationally ($540k)
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“I don’t need a big house. I have everything in my backyard – bowls, the theatre and a pool table. It feels like an extension of my house.” Noel, Arilla resident

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Continuing to evolve our Development products

4 Evolve development product

From this[1] :

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Community Centres
Large centralised “cookie-cutter” designs
Salon, nurse, podiatrist, doctor rooms
Cavernous Town Hall
Commercial kitchen with subsidised meals & café
Save $ by delaying Community Centre construction
Carport Custom Designs
2 1
94m [2] house 2 1 Architect fees
Cost $150k, revenue $270k, margin $8k (3%) Poor detailing
Higher supervision required by Stockland
Typically 100-150 RFI’s
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

Club Houses Intimate meeting places customised to local area Day spa Flexible spaces able to seat most residents Food preparation areas, partnerships for food and café operations Build early and promote strongly Courtyard Project Homes 75m[2] house 2 2 1 1 1 1 Home builder design Cost $120k, revenue $290k, margin $58k (20%) Fit for purpose Display quality Proven details

To this[1] :

Illustrative only; typical products shown; wide variation in actual products delivered by village and project



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Better, faster, cheaper development outcomes by working closely with project home builder partners

4 Evolve development product

Case Study: Arilla vs Mernda

(Same builder at both villages)

Stockland design: Arilla (Quartz Type N)

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Project home builder design: Mernda (Coastal Type 5)
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3 Bed, 2 Bath, Laundry & Double LUG
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3 Bed, 2 Bath, Laundry & Double LUG Builder project home at Mernda is 7% bigger, 10% cheaper, has more inclusions and is 10% faster to build

	Arilla	Mernda	Favourable
Building area1(sqm)	178	191	7%
Build cost	$187,000	$168,000	10%
$ / sqm	$1,050	$880	16%
Buildprogram(days)	100	90	10%
Inclusions
Kitchen stone bench tops	No	Yes	Yes
Front landscaping	No	Yes	Yes
Gas solar boosted hot water	No	Yes	Yes
Covered outdoor room	No	Yes	Yes
Energy rating	5 Star	6 Star	Yes
Silver level universal housing standard	No	Yes	Yes
5.8 star deducted heatingand cooling	No	Yes	Yes

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House, garage, porch and alfresco (if applicable)

5 Increased medium density

Medium density product supplements classic villa-style product and offers a strong customer value proposition

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The Willows, Winston Hills NSW

76 apartments and over-under product Avg 94m[2] internal area

Completion June 2013

$41m revenue; pre-overhead margin 15%

Avg sale price $541k (76% of local median house price)

Arilla, South Morang Vic

36 apartments

Avg 81m[2 ] internal area

Completion August 2013

$13m revenue; pre-overhead margin 15%

Avg sale price $355k (83% of local median house price)

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Gowanbrae, Gowanbrae Vic

39 apartments

Avg 78m[2 ] internal area

Completed August 2011

$15m revenue; pre-overhead margin 24%

Avg sale price $387k (79% of local median house price)

Medium Density Even less maintenance, less  fuss for downsizers Higher level of security  Located closer to clubhouse –  more convenient Ease of adding extra services as  required

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6 Turnaround efficiencies

Streamlined and more cost-efficient asset management processes

Established Business Cycle

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

Resident makes ingoing
contribution and moves in
Resident enjoys
lifestyle
Platform
Resident is
re-paid & DMF Management Village moves out Resident
crystallised
Services
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Objectives

Targeting 50% time-out and 20% cost-out of key process steps by FY15 Time reductions will drive up occupancy and drive down vacant unit levies Cost reductions will enhance net turnover margin

Making our processes more scalable

Opportunity to increase speed of turnarounds and upgrade volumes Now seeing ~550+ exits pa

40% requiring reinstatement (carpet, curtains, paint)[1 ]

50% requiring upgrade (above plus new kitchen, bathroom)

10% requiring re-configuration (eg remove walls, add pergola) Volumes will increase as villages mature

Now re-designing processes for significant improvement in efficiency Standardising processes and removing re-work loops Eliminating low-value adding process steps

Standardising and re-defining refurbishment and upgrade specifications Reducing number of suppliers, re-negotiating input costs

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Paid for by outgoing residents

7 Service Platform

Partnering with specialist providers enables customers’ needs to be satisfied without incremental fixed cost or risk to Stockland 7

Strategy

Partnerships already exist within Retirement Living – e.g. Property and Relocation Consultants, Emergency Response Plans

Benefits of a stronger Partnerships Strategy will include improved governance, reduced cost and increased process consistency

Partnerships are defined at the ‘Local’, ‘Regional’ and ‘National’ level

Local: Village maintenance (eg gardening), medical professionals, clubs

Regional: Domestic care (eg cleaning), in-home meal services, clubhouse food & beverage, volunteering services, power and water utilities

National: Insurance, First Responder service, seniors associations, Aged Care providers

Case Study: Careways at Macarthur Gardens

Partnership with not-for-profit community service organisation who are part of Commonwealth Home and Community Care (HACC) program

Operates the community café in the Clubhouse 6 days a week staffed mostly by volunteers

Provides access to fresh and affordable meals and other care and lifestyle services

Enhances affordability and social and intergenerational interaction at the village

Reduces operating overheads

Collateral benefits

Careways have delivered 14,000 hours of quality training

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The pilot has enabled 15 local disadvantaged job seekers to transition into paid employment (averaging one/month since starting)

Partnership has facilitated a dozen residents to easily access HACC and privately funded lifestyle and support services

The program is currently being rolled out at three other NSW villages

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8 Professionalisation

Investing in people skills is driving efficiency and resident satisfaction

Example - PAVE: Pathway to Achieving Village Excellence

Why it is important

Annual Residents Voice survey shows correlation between satisfaction with Manager and overall satisfaction with living in village

Also a key driver of referrals

Yet Village Managers come from diverse backgrounds

No standard industry training or accreditation at the individual level

What is PAVE?

Four module in-house designed and delivered course to provide training in the major components of Village Management ensuring a best practice approach to the way we manage our villages

Managing the Finances Managing Stakeholders Managing Self and Team Managing the Assets

Current status

All Village Managers have completed Module 1; Module 2 by end June 2013

All Village Managers will have completed all modules during FY14

Resident Survey Results 2012

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Satisfaction with Manager
Overall Satisfaction
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Summary

The long run fundamentals of Retirement Living remain compelling despite recent and near-term challenges due to the soft housing market

However, we recognise that current RoA is below an acceptable threshold, despite the improvements of recent years

We see volume growth coming back as the housing markets appear to be in the early stages of recovery

We will continue to actively manage for improving returns

We are confident of reaching an RoA of 6.5% by FY15 and exceeding 8% within the following 2 years

We continue to explore options for accelerating these returns

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Stockland Corporation Limited ACN 000 181 733

Stockland Trust Management Limited ACN 001 900 741

25th Floor

133 Castlereagh Street SYDNEY NSW 2000

DISCLAIMER OF LIABILITY

While every effort is made to provide accurate and complete information, Stockland does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. The information provided in this presentation may not be suitable for your specific situation or needs and should not be relied upon by you in substitution of you obtaining independent advice. Subject to any terms implied by law and which cannot be excluded, Stockland accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is subject to change without notice.

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AI assistant

STOCKLAND — Management Reports 2013

65781_rns_2013-05-12_0c8285b7-a9b6-4cd6-818f-725b41ed3874.pdf

Investor update & str ic review ateg

Agenda

Stockland, who we are

Vision: To be a great property company that delivers value to all our stakeholders

Stockland is well positioned and has a diverse portfolio

Share of real estate assets at 31 December 2012[1 ]

Strategic review executive summary

Our strategic approach

Reinvigorating the business for reliable growth and returns

Business position

3Q13 update

3Q13 performance in line with expectations

Key milestones achieved

Macro framework

Economic outlook

Australia well placed but risks remain; residential market recovery underway

Reasons to be optimistic

Reasons to be cautious

Historical sector risk-return profiles help define target weightings

Hurdle rates reflect sector risk profiles

We will maintain a strong diverse portfolio to deliver reliable growth

Asset allocation

Asset mix (%)

Continue to drive efficiency and cost management

Ongoing focus on overheads reduction

Active capital management

Ensuring optimal mix of funding sources

Strong capital management disciplines

Recapitalisation of the Corporation planned

We continue to pursue a range of partnering options, primary focus retail joint ventures

Capital partnering improves our risk-return profile

Joint venture (JV) or project delivery agreement (PDA):

Each business unit has a clear focus

We are addressing our immediate business priorities

Stockland offers attractive yield and EPS growth

Growth/yield benchmarking – A-REIT and other sectors[1 ]

Retail

Summary

Structural change

Stockland Retail portfolio evolution – 2006 to 2013

Top four Australian listed Retail property owner

Number of centres

Retail spend will grow in real terms but at a slower rate to the last 10 years

Although online will keep growing, shopping centres will continue to play an important role in future growth

Benefits of shopping in store

Some fine retail categories are more impacted than others by online: Retail shop mix adjusting

Structural change creates opportunity

Significant growth in e-Commerce

Rapid uptake in technology, changing the way people shop

Demographic shift and changing consumer preferences

New entrants and evolving business models

Quality retail rarely changes hands; development drives returns

Capitalisation rate (%)

Retail has experienced greatest capital growth in last 25 years

Average capital growth (Rolling Annual) % p.a.

Success in Retail is asset specific driven by location, competitive position and product and service offering

Retail sales growing despite consumer caution; changes in retail mix improving productivity

3Q13 Update

Moving annual turnover growth

Historical MAT sales and MAT $/sqm[1 ] comparable portfolio

Total sales

Specialty sales

Specialty shop MAT/sqm growth outperforming overall Specialty shop absolute MAT growth due to:

Increasing resilience of the rental base

Stockland MAT outperformed industry benchmarks

We have a significant development pipeline driving growth

Actively refining our product and our retail tenant mix

Stockland Shellharbour

Maximising risk-adjusted returns

Taking advantage of new opportunities

Attract more customers and enhance experience – adopting new technologies

Continued focus on improving customer amenity

Mitigating risk

Localised tenant / brand mix

Programs to develop community hubs (asset specific)

Pursue retail asset acquisitions in high growth markets

Active Retail developments

STOCKLAND Management Reports 2013

**Stockland currently has 14 Industrial assets* valued at $0.82b**