STOCKLAND — Remuneration Information 2020

Sep 28, 2020

29 September 2020

133 Castlereagh Street Sydney NSW 2000 www.stockland.com T 02 9035 2000

FY20 REMUNERATION REPORT CORRECTION

Stockland (ASX:SGP) today advised that there is a typographical error in relation to the FY20 Corporate Scorecard included in the FY20 Remuneration Report referred to at pages 70, 74 and 75 of the 2020 Annual Report.

The information regarding the commentary on the metric for 'Return on Equity' should read '11.2%' with an overall rating of 'Slightly below target' and the associated footnote should read 'Including Residential workout projects, ROE was 11.5% excluding these projects.'.

The correct information is included in the updated pages attached to this release.

ENDS

This announcement is authorised for release to the market by Ms Katherine Grace, Company Secretary.

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Stockland

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

Stockland (ASX:SGP) was founded in 1952 and has grown to become one of Australia's largest diversified property groups – owning, developing and managing a large portfolio of shopping centres, residential communities, workplace and logistic assets and retirement living villages. Stockland is consistently rated as one of the most sustainable real estate companies in the world by the Dow Jones Sustainability World Index (DJSI). Stockland is also an Employer of Choice for Gender Equality, as recognised by the Workplace Gender Equality Agency.

Message from the People & Culture Committee

On behalf of the Board, I am pleased to present the Remuneration Report for FY20.

At Stockland, our purpose is that we believe there is a better way to live. The events of the past 12 months have provided a real challenge for our people as we continue to deliver on that purpose. The bushfires during theAustraliansummerhadadevastating impactonmanyof our communities andlikemost organisations,we havebeen affected by the social, health and economic impact of the COVID-19 pandemic.

The Board is immensely proud of how our people have responded to these challenges in prioritising the safety and well-being of our customers, tenants, residents, contractors and their fellow employees; underpinned by our Stockland values and commitment to our purpose.

We also recognise that executive remuneration outcomes need to be sensitive to the experiences and expectations of ourmany stakeholders, given the impact ofCOVID-19on the financial returns of our securityholders and the businesses and lives of many of our customers and communities.

Remuneration outcomes

The Board takes a robust approach to determining executive remuneration outcomes, using judgement and oversightto consider a range of quantitative and qualitative factors. As a first step in determining short-term incentives (STI), we conducted a bottom-up assessment of the STI Corporate Scorecard consisting of financial metrics and measures of financial value-drivers that were set at the start of FY20 without the context of COVID-19.

As a second step in determining the overall STI pool and individual STI awards for the Managing Director & CEO and other members of the Executive Committee, the Board has taken care to balance the expectations of our customers, securityholders, employees and the wider community. In doing so, the Board took into consideration the following factors:

Financial returns to our securityholders were impacted by COVID-19:

• despite the headwinds of COVID-19, our key financial measure of Funds From Operations (FFO) moderately decreased on FY19 and Return on Equity (ROE) was slightly below the target range. This was achieved without the support of JobKeeper

• our total securityholder return (TSR) for the year was -15.8 per cent compared to the sector index of -21.3 per cent
• we have been prudent in the management of our capital to protect our balance sheet and position us well to navigate the ongoing challenges of COVID-19 and set us up for the future. This was a key consideration in our decision to reduce the estimated distribution for the six months to 30 June 2020 by approximately 25 per cent from our original guidance, driving a full year reduction in distribution per security of 12.7 per cent.

We have prioritised the safety and long-term well-being of our tenants, customers, residents and contractors, working with and following the guidance provided by Federal and State authorities:

• we have been prudentin our consideration ofthe impact of the ongoing COVID-19 pandemic and Commercial Code of Conduct. We working within the Code and on a case-by-case basis discussing assistance packages necessary to protect our valuable business relationships into the future
• our commitment to the safe provision of essential services to Australian communities meant our Retail Town Centres stayed open throughout the pandemic and we provided space for COVID-19 testing facilities at certain assets as a community contribution
• we quickly introduced measures to ensure the safety of the residents and staff in our Retirement Living communities, including deep cleaning practices and reduced visitation to mitigate transmission risk as well as initiatives and activities to look after resident health and well-being
• we introduced protocols to protect our staff and customers in sales environments by moving to appointment-only engagements, implementing contact tracing practices, and provision of hygiene supplies including hand sanitiser stations and daily cleaning regimes.

We reduced our people-related costs in a sustainable way that minimised impact on jobs and prioritised the well-being of our people while retaining focus on delivering all operational activities andGrouppriorities:

• our people agreed to a program of accelerated leave which saw the majority take 10 days of annual leave between April and June 2020

2. Performance and remuneration outcomes

2.1. STI CORPORATE SCORECARD ASSESSMENT

The STI Pool is determined by the Board's assessment of performance againsttheCorporate Scorecardwhich is shown below for FY20. The Board then applies discretion to consider otherrelevantfactors on performance notreflected in the scorecard.

Strategicpriority	KPI	Commentary	Overall rating
	BUSINESS AND FINANCIAL PERFORMANCE (60%)
	Group and business unit performance
	Group performance
	•Funds from Operations (FFO) per securityguidance of 37.4 cps	•FFO per security was 34.7 cps	Below target
	•Return on Equity (ROE) of 11.3 – 11.8%	•ROE1was 11.2%	Slightly belowtarget range
	Operating business financial performance
	•Operating Business financial performance inline with plan	Business unit financial performance was mixed:
		•Commercial Property FFO of $537 million wason track to deliver plan as at 31 March 2020but finished below plan due to COVID-19impacted operations	Below target range
		•Residential Operating Profit of $372 millionwas up on FY19	Upper end oftarget range
		•Retirement Living profit of $58 million was upon FY19	Lower end oftarget range
	•Maintain conservative debt profile and remainwithin policy limits for gearing, interest cover,asset mix, credit rating and debt profile	•Weighted average debtmaturitywas 5.7 years	Within target range
		•Credit Rating and liquidity buffer maintained
	•Credit rating maintain A- rating	•Gearing within target range
	•Debt maturity profile >5 years	•Interest cover at 6.1x
	•Liquidity buffer 10% above committed andundrawn facilities
	•Gearing within target range 20 – 30%
	•Deliver against key business priorities	•Good progress against our key business andstrategic priorities with most priorities met	Within target range
		•Divestment of Retail and re-weighting intoWorkplace & Logistics achieved
		•Partial progress on growth opportunities
		•Established two logistics joint venturesvalued at $1.2bn and two residential capitalpartnerships valued at $3bn
		•More than doubled our Workplace andLogistics pipeline to $5.5bn
		•CORE go live was delayed from May 2020 toAugust 2020 due to COVID-19

Strategicpriority	KPI	Commentary	Overall rating
	CUSTOMER AND ORGANISATIONAL PERFORMANCE (40%)
Customer and stakeholder
	•Achieve independent customer satisfactionratings goals for each business unit	•In a difficult year for our customers,satisfaction scores were variable with mostincreasing to be at or above target but somewere below target	Within target range
		•Commercial Property (Retail) was abovetarget however the Workplace & Logisticssurveys were deferred due to COVID-19
		•Residential was slightly below target
		•Retirement Living was above target
People management
	•Achieve employee engagement target – 80%	•Employee engagement score increased to 82per cent, four points above the AustralianHigh Performing Norm	Above target
	•Increase women participation across all levelsof management	•We havemaintained gender diversity in seniorroles with 50 per cent of the ExecutiveCommittee comprising ofwomen and 37.5 percent of senior leadership teams being women	Within target range
	•Progress longer term diversity andinclusiveness objectives	•Received citation as a WGEA Employer ofChoice for Gender Equality•80 per cent of employees had a flexiblework arrangement in place prior to theCOVID-19 pandemic•Good progress on our Reconciliation ActionPlan to create a future that values, respectsand celebrates Australia's First Peoples andcontributes to meaningful reconciliation	Within target range
	Operational excellence, sustainability & risk management
	•Continued Process Improvement andenhanced innovation	•Approximately 2% of FFO due tonew innovation	Above target range
	•Embed sustainable business practices andmake good progress against environmentimprovement goals	•Recognised for global sustainabilityleadership, ranked 2nd in real estate onthe Dow Jones Sustainability Index (DJSI) asassessed by Sustainable Asset Management(SAM - S&P Global)	Above target range
		•Continued strong progress across ourGreenhouse gas targets (exceeding ourcarbon intensity reduction target of 60% for2025 againstthe FY06 baseline achieving 64.6per cent for Commercial Property)	202end0ed 30 June
	•Ensure strong risk compliance and safetymanagement practices	•Strong safety record with reducedLost Time Injuries and continuedimprovement in embedding the risk andcompliance framework	Within targetkeydates

1 Including Residential workout projects. ROE was 11.5% excluding these projects.

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