More annual reports from Stockland:
2023 ReportPeers and competitors of Stockland:
Urban Edge PropertiesA better way to live.Annual report 30 June 2023 Stockland acknowledges the Traditional Custodians and knowledge holders of the land
where we live, work and play, and pay our respects to their Elders past, present and
emerging. We thank all Aboriginal and Torres Strait Islander Peoples for enriching our nation
with their leadership, language, art, story-telling and ongoing connection to Country.
A better way to live
Stockland’s Annual Report demonstrates how we create
value for all our stakeholders. It illustrates how we achieve
our purpose, ‘a better way to live’, as we help create and
curate connected communities across Australia.
Our Annual Report is a consolidated summary of Stockland
Corporation Limited and its controlled entities, including
Stockland Trust and its controlled entities (Stockland
or Group) for the year ended 30 June 2023 (FY23).
It has been prepared with reference to the principles
of the International Integrated Reporting Council (IIRC)
Integrated Reporting (IR) Framework to communicate how
our strategy, operational and financial performance, and
approach to environmental, social, and governance matters
create value for stakeholders over the short, medium and
long term.
Corporate reporting suite
Our corporate reporting suite includes:
• Annual Report
• Results Presentations
• Databook
• Property Portfolio
• ESG Supplements, including FY23 ESG Data Pack and
Management Approaches, Modern Slavery Statement,
Climate Transition Action Plan, Reconciliation Action Plan
Our corporate reporting suite documents are available
for download on the Stockland Investor Centre
www.stockland.com.au/investor-centre
The Directors of Stockland Corporation Limited (ACN 000 181 733) and the Directors of Stockland Trust Management Limited
(ACN 001 900 741, AFSL 241190), the Responsible Entity of Stockland Trust (ARSN 092 897 348), present their report together
with the Financial Report of Stockland and the Independent Auditor’s Report thereon. The Directors’ Report for FY23 has
been prepared in accordance with the requirements of the Corporations Act 2001 (Cth)
02
Stockland Annual Report 2023
A better way to live.
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Year ended 30 June 2023
03
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Contents
Contents
Chairman and CEO letters
FY23 performance and outlook
p.08
p.24
How we create value
Governance
p.16
p.57
04
Stockland Annual Report 2023
Remuneration Report
FY23 Highlights
p.78
Securityholder information and key dates
p.181
Chairman and CEO letters
How we create value
Financial
Assets and land
FY23 performance and outlook
Sustainability
People and capability
Quality relationships
Governance
Our approach to corporate governance
Our approach to tax
Our approach to risk management
Lead auditor’s independence declaration
Remuneration Report
06
08
16
20
22
24
30
45
53
57
63
70
73
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Financial report for the year ended
30 June 2023
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial report
Directors’ declaration
Independent auditor’s report
100
101
102
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174
175
Securityholder information and key dates
181
Glossary
185
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Year ended 30 June 2023
05
FY23 Highlights
FY23 Highlights
Pre-tax Funds From Operations (FFO)
$883m
up 3.8% on FY22
Pre-tax FFO per security
37.1c
up 3.9% on FY22
Distribution per security (DPS)
26.2c
74% payout ratio
Net tangible assets (NTA) per security
$4.24
down from $4.31 at 30 June 2022
Statutory profit
$440m
vs $1,381m in FY22
06
Stockland Annual Report 2023
Image caption:Stockland head office, NSW Strong FY23 operational and financial
results, supported by balance sheet strength.
Development return on invested capital (ROIC)1
Recurring return on invested capital (ROIC)1
18%
upper end of 14-18% target range
3%
below target range of 6-9%
Gearing
21.9%
vs 23.4% at 30 June 2022
Employee engagement
88%
above Australian National Norm2
Commercial Property emissions intensity reduction
Customer satisfaction3
13%
on FY20 baseline
>80%
in line with FY22
Accelerated
Net zero
scope 1 & 2 target to 2025
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1 Recurring return comprises management income and property NOI (net of amortisation and straight-line rental adjustment) less divisional overheads plus
revaluation movements. Development return includes realised development gains and profit on sale of inventories, net of divisional overheads and before
interest and tax.
2 Willis Tower Watson
3 Average across retail shopper satisfaction, retail tenant satisfaction, resident deposit satisfaction, and Workplace and Logistics tenant satisfaction.
Year ended 30 June 2023
07
Chairman and CEO letters
Letter from
the Chairman
Dear Securityholders,
FY23 financial highlights
Our statutory profit was $440m compared with $1,381m in
FY22. The statutory result for FY23 includes $(250)m1 of net
commercial property devaluations, which also contributed
to a decline in our net tangible asset backing (NTA) per
security from $4.31 to $4.24. Statutory profit in the previous
corresponding period included a net revaluation uplift
of $725m1.
On a pre-tax basis, FY23 FFO of $883m was up 3.8 per cent
relative to FY22. FFO per security of 37.1 cents was up 3.9 per
cent, toward the upper end of our guidance range of 36.4 to
37.4 cents. Both the Commercial Property and Communities
segments delivered solid earnings growth over FY23, up ~13
per cent and ~17 per cent respectively.
As previously signalled, Stockland Corporation Limited
returned to an income tax paying position during the year.
On a post-tax basis, FFO for FY23 was $847m or 35.6 cents
per security.
The distribution for the year declined by 1.5 per cent to 26.2
cents per security. The distribution payout ratio of 74 per
cent is marginally below our target range of 75 per cent to
85 per cent of post-tax Funds from Operations.
Stockland finished the year in a strong capital position,
with gearing of 21.9 per cent at the bottom end of our
target range of 20-30 per cent. This provides the Group with
significant capacity for investment in its strategic priorities.
FY23 was a year of solid achievement for Stockland.
Our FY23 result represents a strong financial and
operational performance, with Funds From Operations
(FFO) toward the upper end of our guidance range.
The result also reflects the strength of our diversified
platform and the cumulative results of several years’
worth of focused and disciplined efforts by the Stockland
team to create a high quality, resilient portfolio and
development pipeline. The initial earnings benefits of the
refreshed strategy that we announced in November 2021
are also evident, along with our disciplined approach to
capital management.
Portfolio quality and balance sheet strength come to the
fore during periods of economic and market uncertainty.
The rapid and sustained increase in interest rates
observed since May 2022 has had a material impact on
housing affordability and the confidence of prospective
homebuyers. In recent months the more restrictive
interest rate environment has also started to impact
discretionary consumption, and a combination of higher
return requirements and greater uncertainty regarding the
growth outlook has also led to valuation declines across
some sectors of the real estate market.
Our Town Centres are benefiting from their high weighting
to “essentials” categories, and structural drivers continue to
underpin strong occupier demand for our Logistics assets
and development projects. Demand has also remained
resilient for our Land Lease Communities (LLC) product,
facilitating further price growth for new releases.
We continue to increase our portfolio weighting to the
Logistics and LLC sectors, in line with the strategic targets
that we shared with you in November 2021. We are
also positioning our Masterplanned Communities (MPC)
business for the recovery phase of the residential cycle and
leveraging the scale and breadth of our landbank to provide
more affordably priced product to meet the affordability
challenges faced by our customers.
1 Excludes sundry properties and stapling adjustment, includes investment properties under construction (IPUC) and Stockland’s share of equity
accounted investments.
08
Stockland Annual Report 2023
Focusing on sustainable growth
The focus of the Board and the management team is on
driving sustainable growth.
Disciplined capital management – in the form of prudent
balance sheet settings, targeted capital allocation and
appropriate return hurdles – is one of the ways in which we
endeavour to achieve this outcome.
For FY23, our development activities generated a return on
invested capital (ROIC) of 18 per cent, at the upper end of
our through-cycle target range of 14 to 18 per cent2.
The ROIC for our recurring activities (including management
income and returns from our real estate investment assets)
of 3 per cent was below our target range of 6 to 9
per cent2. This largely reflects the impact of adverse
market cap rate movements on real estate values over
the period. We believe that our target return range for
these activities remains appropriate on a through-cycle
basis, noting that at various stages of the real estate
cycle, valuation movements can have a material impact
on the result.
We are proud to present our first Climate Transition
Action Plan in 2023 together with our refreshed
ESG strategy which sets out our ambitions in the
areas of decarbonisation, circularity, social impact and
climate resilience3.
We have brought forward our net zero target for scope 1 and
2 by three years, to 2025, and are working to halve our most
material scope 3 emissions by 20304. We target net zero for
scope 1, 2 and 3 emissions by 20505.
Importantly, we have identified a pathway to achieving
our decarbonisation goals, with a focus on making a
measurable difference through the implementation of
practical, commercially viable initiatives5.
Our focus on making practical and measurable impact
extends to our social impact ambitions. Our goal is to create
~$1 billion of social value by 2030, targeting areas such as
housing affordability and First Nations engagement6.
Tom Pockett, Chairman
Aligning remuneration to our strategy
As stated in last year’s remuneration report, the Board
conducted a review of the executive remuneration
framework for FY23 to optimise how it supports and aligns
with our strategy.
The review incorporated feedback from securityholders and
their representatives and identified opportunities to further
evolve the framework’s design and execution. These were
set out in the notice of meetings for the 2022 Annual
General Meeting and included:
• Strengthening the performance focus by further
simplifying the Short Term Incentive (STI) scorecard and
aligning measures to the refreshed business strategy,
such as introducing ‘through the cycle’ target ranges for
Recurring and Development Return On Invested Capital
(ROIC) for FY23; and
• Improving the alignment of Long Term Incentives (LTI) to
the strategy and to support transformative growth.
We consider the refreshed executive remuneration
framework to be aligned to Stockland’s strategy during this
period of transformative growth.
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2
Indicative long-term target for return on invested capital. Recurring return comprises Management income and Property NOI (net of amortisation and
straight-line rental adjustment) less divisional overheads plus revaluation movements. Development return includes realised development gains and profit
on sale of inventories, net of divisional overheads and before interest and tax.
3 Roadmap for achieving our ESG targets and the material assumptions, uncertainties and dependencies associated with those targets, are set out in
Stockland’s Climate Transition Action Plan (CTAP) 2023, available on our website.
4 The 2030 scope 3 target includes GHG Protocol Categories 1 (purchased goods and services) and 13 (leased assets), which collectively represent
approximately 89 per cent of Stockland's scope 3 emissions.
5 Stockland’s emissions reduction targets have been prepared by reference to criteria set out by the Science Based Targets Initiative (SBTi). The targets have
been reviewed by Ernst & Young (EY), which has provided limited assurance in relation to their alignment with the published SBTi criteria. Stockland has
also submitted its targets to SBTi for validation.
6 We define social value creation as our intentional effort and investment to deliver social, economic and/or environmental benefits for our communities
and broader society. EY was engaged to provide limited assurance over Stockland’s approach to defining, measuring, and calculating the social value target
– for further detail refer to page 38 within this report.
Year ended 30 June 2023
09
Chairman and CEO letters
People and culture underpin our success
Looking ahead
Our innovative and inclusive culture underpins how we
operate and is essential to our success.
At the heart of our culture is our dialogue with our people.
Our independently administered ‘Our Voice’ employee
surveys provide regular opportunities for our people to
share their feedback about what it is like to work at
Stockland and allow our leaders to listen and respond to
that feedback. In FY23, we achieved a significant increase
in our already-high overall employee engagement, which
at 88 per cent is ~8 points above the Australian National
Norm and for some categories above the Global High
Performing Norm1.
Stockland has a clear strategy and a unique set of strengths
and capabilities that position the group for continued
success: a high quality, resilient portfolio; a strong,
innovative, and customer-centric culture with a focus on
safety; a commitment to ESG leadership supported by
a proud record of achievement; brand leadership; multi-
sector end-to-end capability across a large, nationally
diversified land bank; and a robust balance sheet.
Our purpose, ‘a better way to live’, has driven us for the
last 71 years, and our values of Community, Accountability,
Respect and Excellence remain at the core of everything
we do.
Both employee surveys conducted in FY23 showed
significant improvement in our peoples’ wellbeing
compared with prior years. In our October 2022 survey,
wellbeing levels returned to pre-COVID levels, scoring
significantly above the Australian Norm1.
I would like to extend my thanks to the Board, Leadership
Team and all employees for their hard work and
commitment over the past year. Finally, thank you to all
of our securityholders for your continued support and
investment in Stockland.
Tom Pockett
Chairman
Stockland has a strong track record of encouraging
innovative thinking and behaviour across the business.
As part of my role as Chairman, I have had the
privilege of supporting the annual Stockland Innovation and
Excellence Awards and sponsoring the Chairman’s Award
for Innovation. This year’s award was won by the Cool
Roofs initiative – utilising light coloured roofs, cool roads
and pavements, and increased tree canopy cover – to help
reduce urban heat by 2-4 degrees at our masterplanned
communities. This initiative demonstrates our mindset
around innovation - applying practical solutions that further
our ESG goals while achieving commercial outcomes.
I am also proud of our commitment to First Nations
engagement and reconciliation. During FY23, we developed
our inaugural First Nations strategy, focusing on key areas
where we believe Stockland can make a meaningful
impact, including indigenous employment, procurement,
and designing with Country. To help deliver on our strategy
and further embed our indigenous commitment into our
business, we have established the Stockland Indigenous
engagement team, an all-Indigenous team of experts
across the country.
Our purpose, ‘a better way to live’, has
driven us for the last 71 years, and
our values of Community, Accountability,
Respect and Excellence remain at the core
of everything we do.
1 Willis Tower Watson.
10
Stockland Annual Report 2023
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Year ended 30 June 2023
11
Image caption:Artists’ impression, Affinity Place, NSW
Chairman and CEO letters
Letter from the
Managing Director
and CEO
Dear Securityholders,
In November 2021, we shared our refreshed
strategy, building on Stockland’s strengths to deliver
sustainable growth.
Over FY23, we made further progress in executing this
strategy: reshaping our portfolio through the targeted
divestment of non-core properties and creation of new,
high-quality assets that are accretive to both earnings
and net tangible assets; progressing the delivery of
our $40 billion1 development pipeline; and growing our
existing capital partnerships while executing on new
partnering initiatives.
While progressing our strategy, we also delivered strong
operational and financial results and maintained our focus
on financial strength and flexibility.
The macroeconomic backdrop remains uncertain, and
conditions across the markets in which we operate are
variable. Our strategy is informed by the longer-term
structural and demographic drivers that are shaping the
real estate industry, and designed to produce sustainable
returns through various stages of the real estate and
economic cycles. In the current environment, the quality of
our diversified portfolio and our robust financial position
provide both resilience and the ability to capitalise on
opportunities to drive further sustainable growth for
our stakeholders.
As we progress our Commercial Property development
pipeline, we remain disciplined regarding the level of
development risk we take on and the returns that we
require. Similarly, we continue to balance our investment in
growth areas with the need to maintain a sharp focus on
costs, particularly during this period of macroeconomic and
real estate market volatility.
FY23 financial & operational performance
On a pre-tax basis, FY23 Funds From Operations (FFO) of
$883 million was up 3.8 per cent relative to FY22. FFO per
security of 37.1 cents was up 3.9 per cent and toward the
upper end of our guidance range of 36.4 to 37.4 cents.
The completion of the sale of our Retirement Living
business in July 2022 crystalised a material taxable gain,
resulting in Stockland Corporation Limited returning to an
income tax paying position during the year.
On a post-tax basis, FFO for FY23 was $847 million or 35.6
cents per security. The effective FFO tax rate for the Group
for FY23 of ~4 per cent is post the utilisation of remaining
tax losses and is expected to rise in future periods.
Both the Commercial Property and Communities segments
delivered solid earnings growth over FY23, up ~13 per cent
and ~17 per cent respectively.
The increased contribution from the Communities segment
was delivered in the environment that saw a ~9 per cent
decline in settlement volumes from our Masterplanned
Communities (MPC) business. This was offset by strong
MPC price growth and margin expansion, along with an
increased contribution from our Land Lease Communities
(LLC) business in the form of development profits, rental
income, and management fees.
Underlying demand for our MPC product remains resilient,
as demonstrated by 2H23 enquiry levels that were up
relative to 1H23 and slightly above pre-COVID-19 levels.
Conversion rates remain below historical levels, impacted
by affordability constraints and continued uncertainty
regarding the interest rate outlook.
We do not expect sales rates to improve materially until
the interest rate environment stabilises. The medium-term
outlook for MPC market fundamentals remains strong,
with increasing rates of net overseas migration, low rental
vacancy rates, and a chronic undersupply of new product
across key Eastern Seaboard markets.
1
Total development pipeline, includes projects in early planning stages, projects with planning approval and projects under construction. Includes M_Park
stage 1 at a 100 per cent share.
12
Stockland Annual Report 2023
Demand for our LLC product has remained resilient,
supporting further price growth on new releases. The
average sales price per home in FY23 was ~11 per cent2
above FY22 levels. Our operational LLC portfolio also
continues to perform strongly, with its CPI-linked3 rental
structure providing strong organic growth in the current
inflationary environment, and both occupancy and rent
collection rates remaining at 100 per cent for FY23.
Our $10.5 billion4 Commercial Property portfolio delivered
comparable FFO growth of 3.5 per cent5, up from
3.3 per cent in FY22. This solid comparable growth
was supplemented by contributions from Logistics
developments completed over FY22 and FY23, and
the end of COVID-19-related rental abatements which
affected FY22.
Our ~$3.4 billion6 Logistics portfolio delivered FFO growth
of 11.5 per cent versus FY22. Comparable growth of 4.6
per cent5 was supplemented by income contributions from
developments completed over FY22 and FY23.
Occupancy was maintained at over 99 per cent7 over the
period, and new leases and renewals negotiated over the
year (including those yet to be executed) saw an average
uplift of 21.1 per cent relative to previous in-place rents.
With a weighted average lease duration of 3.3 years7,
our portfolio is well positioned to capture positive rental
reversion and to benefit from strong near-term demand-
supply dynamics for the logistics sector.
Our Town Centre portfolio delivered strong operational
and financial performance over the period, with FY23
FFO of $379m up 8.2 per cent versus FY22. This reflects
comparable FFO growth of 4.8 per cent5, along with the
impact of COVID-19-related rental abatements in FY22.
On a MAT basis, total comparable sales grew by 14.7 per cent
and comparable specialty sales were up by 19.8 per cent
versus the previous corresponding period which reflected
COVID-19 restrictions8. The strong sales results delivered by
the portfolio resulted in specialty occupancy costs reducing
to 14.8 per cent versus 15.8 per cent at June 20228. Leasing
spreads remained positive over FY23, averaging 3.1 per cent
versus 1.5 per cent for FY229.
The cumulative impact of successive interest rate increases
led to a slowing of sales growth in discretionary categories
such as apparel, jewellery and homewares over the June
quarter. However, sales growth for the essentials categories
to which our portfolio is heavily skewed is tracking in line
with inflation.
Specialty sales productivity for our Town Centres portfolio
is well above industry benchmarks, driving positive leasing
spreads and an overall portfolio occupancy rate of over 99
per cent10.
Tarun Gupta, Managing Director and CEO
Comparable FFO for our ~$2.0 billion6 Workplace portfolio
declined by 1.9 per cent5, impacted by vacancy at one
asset. New leases and renewals negotiated over the period
(including those yet to be executed) resulted in an average
increase of 0.9 per cent11.
The majority of this portfolio is currently being positioned
for future development.
Progressing our strategic priorities
The FY23 result also reflected the initial financial benefits
of the strategic initiatives that we implemented during
FY22. In February 2022, we announced the establishment
of two significant capital partnerships – the Stockland
Residential Rental Partnership (SRRP) with Mitsubishi Estate
Asia (MEA), and the M_Park Capital Partnership with
Ivanhoé Cambridge.
The FY23 result included Management Income
and Development Income contributions across the
Communities and Commercial Property segments from
both these partnerships, along with our other joint ventures
and management agreements.
During the year, we extended our existing relationship
with MEA through agreement to invest in masterplanned
communities. The new capital partnership took effect
in July 2023, and has a non-exclusive mandate to
invest in Stockland owned and market originated
masterplanned communities.
We continue to reshape our portfolio in line with our
strategic priorities. We completed the divestment of our
Retirement Living business in July 2022 and executed
on ~$266 million12 of non-core Town Centre asset sales
over FY23.
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2 Average price per home. Excludes sales at Stockland B by Halcyon, QLD where average price points are above $1.1m.
3 Typical site agreement – annual rent escalations at the greater of CPI or 3.5 per cent, and a market rent review every 10 years.
4 Excludes sundry properties and stapling adjustment.
5
Includes comparable assets; excluding acquisitions, divestments and assets under development. Excludes COVID-19 abatements and ECL
where applicable.
6 Excludes WIP and sundry properties.
7 By income. As at 30 June 2023.
8 Occupancy cost reflects stable assets, adjusted to reflect tenants trading more than 24 months.
9 Rental growth on stable portfolio on an annualised basis.
10 Occupancy across the stable portfolio based on signed leases and agreements at 30 June 2023.
11 Excludes Walker Street Complex and 601 Pacific Highway in NSW.
12
Includes disposal of Stockland Bull Creek, WA, Stockland Riverton, WA and Stockland Gladstone, QLD.
Year ended 30 June 2023
13
Chairman and CEO letters
These transactions have strengthened our balance sheet,
providing capital for redeployment into higher returning and
higher growth initiatives, including the expansion of our LLC
platform and the realisation of our $6.4 billion1 Logistics
development pipeline.
The combination of our strong liquidity position, access
to domestic and global debt capital markets, strong
relationships with capital partners and ongoing discipline
around cashflows, positions us well to deliver on our
strategic priorities.
Extending our ESG ambitions
Our refreshed ESG strategy is focused on integrated,
commercially sustainable solutions in areas where we can
have meaningful and measurable impact5.
Our response to climate change remains a key priority.
We have accelerated and expanded our decarbonisation
commitment. We aim to achieve net zero scope 1 & 2 in
20256,7, three years earlier than our previous commitment.
Our new science-based targets across scopes 1, 2
and 3 are designed to leverage our scale and diverse
portfolio to maximise onsite renewable energy generation
across our portfolio and accelerate the adoption of lower-
carbon materials7.
This is coupled with a focus on resilience. We will use
our comprehensive view of climate-related risk across
our asset base to more effectively allocate capital and
operational expenditure to strengthen our portfolio.
Circularity principles will be embedded throughout the
business designed to reduce our use of virgin materials,
and find alternative, higher value uses for materials to stay
in the system longer.
We have also shifted our social investment focus from
inputs (how, what and where we make a contribution) to
measuring the social impacts (what changes) and the social
value we create.
Our social value methodology has been developed into
a digital tool that uses third-party empirical data and
research to forecast social value creation and embed social
outcomes into our decision-making.
We are targeting the creation of $1 billion of social value
by 20308. This will capture our commitment to furthering
our First Nations engagement, with a focus on employment
and procurement, and our role in delivering affordable and
sustainable housing solutions.
We have positioned our LLC business to deliver significantly
higher settlement volumes over the medium term. The
acquisition of five additional LLC projects subsequent to
balance date will enable us to accelerate the scale-up of
our LLC platform and drive material growth in the earnings
contribution from this business in future periods.
We delivered ~$450 million of Logistics developments since
June 20222 and expect a similar volume of deliveries in
FY241. Our targeted FY24 deliveries are now ~62 per cent
pre-leased or subject to signed heads of agreement.
We continue to add value to our ~$5.8 billion1 Workplace
and mixed-use development pipeline while maintaining
optionality regarding the timing, scope and composition of
future development commencements.
Maintaining capital discipline
While progressing our strategic initiatives, we have
remained focused on balance sheet strength and
financial flexibility.
We finished the period in a strong financial position. At
30 June 2023, the Group’s gearing was 21.9 per cent, toward
the lower end of our target range of 20 per cent to 30 per
cent, and compared with 23.4 per cent at 30 June 2022.
The reduction in gearing over the year was achieved despite
a $(250)m revaluation movement, which also contributed to
a decline in our net tangible asset backing (NTA) per security
from $4.31 to $4.24. Approximately 97 per cent (by value)
of the Commercial Property portfolio was independently
revalued over FY23. This resulted in a 2.3 per cent decrease
on previous book values, reflecting the net impacts of
softer market capitalisation rates and strong income growth
across our high-quality portfolio.
We maintain significant headroom under our financial
covenants, and strong investment grade credit ratings
of A-/A3 with stable outlook from S&P and
Moody’s, respectively.
Our weighted average cost of debt for FY23 was 4.3 per
cent3. We expect this to average approximately 5.3 per
cent for FY24, reflecting the higher floating interest rate
environment and the increased cost of hedging put in place
over FY234. Our weighted average debt maturity sits at
5.0 years, and our fixed hedge ratio averaged 62 per cent
over the period. Available liquidity at 30 June 2023 was
~$1.6 billion.
1
2
Forecast end value on completion, subject to relevant approvals. Workplace includes M_Park at 100 per cent share.
Including ~$270m of FY23 development commencements delivered post balance date.
3 Average over the 12-months to 30 June 2023.
4 Assuming average BBSW of ~4.3 per cent over FY24.
5 Roadmap for achieving our ESG targets and the material assumptions, uncertainties and dependencies associated with those targets, are set out in
Stockland’s Climate Transition Action Plan (CTAP) 2023, available on our website.
6 Offsets of residual emissions will commence in FY26 and will be subject to third-party offset verification and assurance. Emissions removal carbon credits
will be preferenced where possible. The 2030 scope 3 target includes GHG Protocol Categories 1 (purchased goods and services) and 13 (leased assets),
which collectively represent approximately 89 per cent of Stockland's scope 3 emissions.s
7 Stockland’s emissions reduction targets have been prepared by reference to criteria set out by the Science Based Targets Initiative (SBTi). The targets have
been reviewed by Ernst & Young (EY), which has provided limited assurance in relation to their alignment with the published SBTi criteria. Stockland has
also submitted its targets to SBTi for validation.
8 We define social value creation as our intentional effort and investment to deliver social, economic and/or environmental benefits for our communities
and broader society. EY was engaged to provide limited assurance over Stockland’s approach to defining, measuring, and calculating the social value target
– for further detail refer to page 38 within this report.
14
Stockland Annual Report 2023
Outlook
We are well-positioned for an uncertain macro-
economic environment.
We are reshaping our portfolio by delivering new, high-
quality Logistics assets and scaling up our Land Lease
platform, and we continue to engage with a range of capital
partners for opportunities across our platform.
Our Town Centres portfolio has a high weighting to
“essentials" categories, and structural drivers continue to
underpin demand for our well-located Logistics portfolio.
Importantly, we enter FY24 in a very strong balance
sheet position, with gearing toward the lower end of our
target range.
We are seeing sustained demand for our Land
Lease product and are positioning our Masterplanned
Communities business for the recovery phase of the
residential cycle.
I thank the Stockland team for their contribution to this
year’s results, and on behalf of the Stockland team, I thank
you for your ongoing support.
Tarun Gupta
Managing Director and CEO
The quality of our diversified portfolio
and robust financial position provide both
resilience and the ability to capitalise on
opportunities to drive further sustainable
growth for our stakeholders.
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Year ended 30 June 2023
15
How we create value
Our strategy
Our vision to be the leading creator and curator of connected communities is underpinned
by our purpose – a better way to live.
Our vision and purpose are supported by the four key
pillars of our Group strategy – to dynamically reshape the
portfolio, accelerate delivery in our core business, scale
our capital partnerships and generate sustainable long-
term growth.
Our strategy is designed to leverage and respond to the
major trends in our operating environment:
• Urbanisation and urban renewal
• Growth in the availability of long-term institutional capital
and demand for real-estate
• Acceleration in the adoption of digital and technology
changing the future of real estate
• Growing momentum on ESG driving demand for
investments with superior ESG credentials
Using our capital inputs, resources, relationships and a
clear strategy, we create value by delivering on a range
of outcomes for our stakeholders. As a purpose-led
organisation, our core values of Community, Accountability,
Respect and Excellence (CARE) drive our innovative and
customer-focused culture and set the foundations of how
we execute our strategy and deliver on our vision to be the
leading creator and curator of connected communities.
We track and manage our progress on delivering value
through clear, tangible targets across our business.
Inspired by a better way to live
Stakeholder expectations continue to evolve and we
continue to elevate and evolve our approach to ESG
in accordance with our leadership commitment. We
have developed a new ESG strategy underpinned by
four key pillars: decarbonisation, circularity, social impact
and resilience.
Our ESG strategy is supported by targets grounded in
science and driven by possibiities1
• 1.5 degree aligned decarbonisation pathway
• Net zero scopes 1 & 2 by 20252
• Most material scope 3 emissions intensity halved
by 2030
• Net zero scopes 1, 2 & 3 by 2050
• Create over $1 billion in social value by 2030
Initiatives under these pillars focus on innovation, scale
and economically sustainable solutions. Our ESG Strategy
is where our ambition meets tangible, real-world actions.
Actions that will help us pioneer more connected, resilient,
future ready communities. Stockland will commence
reporting progress against key ESG targets in FY24. For more
information, see page 30.
1
Further detail on our ESG strategy is set out in pages 30 to 45 of this Annual Report and our Climate Transition Action Plan which includes our
decarbonisation pathway and assumptions used to set targets.
2 Offsetting of residual emissions will commence 1 July 2025.
16
Stockland Annual Report 2023
Our vision and purpose are brought to life by more than 1,600 employees who are guided by Stockland's values of
Community, Accountability, Respect and Excellence (CARE).
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Year ended 30 June 2023
17
How we create value
The value we create
Customers
Securityholders
We are committed to delivering a better way to live for our
customers and being truly customer centric. With our diverse and
growing customer base, we help more Australians achieve the
dream of home ownership and create places and spaces full of
energy, soul and life - from residential and land lease communities
through to retail town centres. We aim to optimise our landbank
and develop innovative and resilient places that will provide the
highest value use for communities now and in the future. Through
our workplaces and logistics assets we are shaping the future of
work and enabling more flexible and efficient last mile delivery
and fulfillment.
To maximise value for our securityholders we are structured as
a stapled security, an innovation pioneered by Stockland in the
1980s. A Stockland stapled security (ASX:SGP) represents one
ordinary share in Stockland Corporation Limited and one ordinary
unit in Stockland Trust. This allows us to efficiently undertake
property investment, management and development activities,
offering investors end-to-end exposure to the property life
cycle. Our focus is on generating high-quality recurring income
supplemented by growth from disciplined development activity.
Executing on our strategy will help us to drive diversified income
streams and increase return on invested capital.
18
Stockland Annual Report 2023
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Our people
Capital partners
Community
Stockland fosters a culture of connection
and collaboration where our people can be
themselves and thrive. Our diverse career
opportunities and passion for learning means
our people can grow as we grow and make
a real contribution towards our strategic
objectives, creating a better future for our
people, communities and the planet.
We provide high-quality, commercially
attractive investment prospects for third-
party investor partners by leveraging
our demonstrated leadership and proven
expertise in asset development and
management. Our strategic capital
partnerships enable us to scale our
management and development capabilities
and grow assets under management more
quickly to enhance long-term, sustainable
business growth for us and our partners.
We are proud of our 71-year history creating
and curating communities with people
at the heart of the places we create.
Through our work, we impact and engage
with diverse stakeholders representing all
the Australian community. Through our
approach to accessible physical and social
infrastructure, as well as our Reconciliation
Action Plan, we work to provide welcoming
and inclusive places and spaces where
people of all backgrounds and abilities
can come together to play, work, shop
and socialise.
Year ended 30 June 2023
19
How we create value
Financial
Financial capital
High quality business with
sustainable growth
Stockland is structured as a stapled security. Each
stapled security represents one ordinary share in Stockland
Corporation Limited and one ordinary unit in Stockland
Trust. This structure allows us to efficiently undertake
property investment, management and development
activities, and offers investors end-to-end exposure to the
property life cycle.
Our focus is on generating high-quality recurring income
supplemented by growth from disciplined development
activity that drives sustainable growth for our stakeholders.
Executing on our strategy delivers diversified income
streams and increased return on invested capital.
Capital structure
Stockland's capital structure determines how much is
raised from securityholders (equity) and how much is
borrowed from financial institutions and global capital
markets (debt) to finance our activities.
This is monitored through our gearing ratio, in line with
the Board's risk appetite. Stockland has a disciplined
target gearing ratio of 20-30 per cent and maintains
credit ratings of A-/stable and A3/stable from S&P and
Moody's, respectively.
Our disciplined approach to capital management across
our business means we actively manage our gearing level
and hedging profile to maintain a strong balance sheet,
while providing sufficient liquidity and optionality to invest
appropriately in existing and emerging opportunities.
Capital allocation and Return on Invested
Capital (ROIC)
We actively manage the strategic allocation of capital
across our diversified portfolio to minimise risk, maximise
return on our investments and create sustainable value for
our stakeholders.
Our focus is on generating high-quality recurring
income and disciplined development activity that drives
sustainable growth. We target 60 per cent development
income and 40 per cent recurring income, and capital
allocation to those sectors of 70-80 per cent, and 20-30 per
cent, respectively.
By investing in partnership with third-party capital,
we can generate higher returns on Stockland’s capital
while achieving a greater diversification of earnings,
and accelerating the execution of our high-quality
development pipeline.
Stockland maintains a distribution payout ratio target range
of 75-85 per cent of pre-tax FFO to support growth
opportunities across our business.
20
Stockland Annual Report 2023
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Year ended 30 June 2023
21
How we create value
Assets and land
We are one of the largest diversified real
estate groups in Australia with $15.5 billion
of real estate assets and a development
pipeline of $40 billion, as at 30 June 2023.
We own, manage and develop a portfolio of high-
quality income-producing investment assets across leading
Town Centres, Workplaces and Logistics centres. We also
create communities and whole-of-life housing solutions
across our Masterplanned and Land Lease Communities.
Our focus is on leveraging our specialist end-to-end, multi-
sector capability to create value at each stage of the
real estate life cycle. This includes optimising our land
bank to highest value uses and delivering our secured
development pipeline.
22
Stockland Annual Report 2023
Image caption:Stockland Aura Town Centre, QLD Our portfolio as at 30 June 2023
Logistics
Masterplanned Communities
Strategically positioned assets in key locations for
logistics, infrastructure and employment.
We're building thriving, connected communities across
our nationally diversified land bank.
• 27% portfolio weighting1
• 26 properties2
• 17% portfolio weighting1
• ~68,000 lots remaining
• $3.4bn ownership interest value
• $2.4bn net funds employed
Workplace
Land Lease Communities
High-quality portfolio with an attractive
development pipeline, providing the opportunity to
create vibrant workplaces focused on innovation,
well-being and sustainability.
• 13% portfolio weighting1
• 10 assets
• $2.0bn ownership interest value
Creating and managing Land Lease Communities that offer
lifestyle, amenity, and social connectivity.
• 5% portfolio weighting1
• 333 Land Lease Communities
• ~9,2003 home sites
Town Centres
We're focused on suburban and regional locations,
providing a curated and convenient essentials-based mix to
our communities.
• 38% portfolio weighting1
• 20 properties
• $5.2bn ownership interest value
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1
Includes WIP and sundry properties of $0.6 billion. Cost to completion provision, deferred land payments and option payments are excluded.
2 Excludes development and inventory land.
3 Excluding post balance date acquisition of five LLC projects.
Year ended 30 June 2023
23
How we create value
FY23 performance and outlook
Group performance
Stockland’s FY23 result reflects the continued
execution of our strategy and a focus on
driving operational and financial performance while
maintaining a strong capital position in an uncertain
macroeconomic environment.
On a pre-tax basis, FFO of $883 million was up 3.8 per cent
relative to FY22. Pre-tax FFO per security of 37.1 cents was
up 3.9 per cent and toward the upper end of our guidance
range of 36.4 to 37.4 cents.
Both the Commercial Property and Communities segments
delivered strong earnings growth over the period, up ~13 per
cent and ~17 per cent, respectively.
The increased contribution from Communities was driven
by strong Masterplaned Communities (MPC) price growth
and margin expansion, along with an increased contribution
from our Land Lease Communities (LLC) business in
the form of development profits, rental income and
management fees.
Our $10.5 billion1 Commercial Property portfolio delivered
comparable FFO growth of 3.5 per cent2, up from
3.3 per cent in FY22. This solid comparable growth
was supplemented by contributions from Logistics
developments completed over FY22 and FY23, and the end
of COVID-19-related rental abatements.
The FY23 result also reflected the initial financial benefits
of the strategic initiatives that we implemented during
FY22. In February 2022, we announced the establishment
of two capital partnerships – the Stockland Residential
Rental Partnership (SRRP) with Mitsubishi Estate Asia
(MEA), and the M_Park Capital Partnership with Ivanhoé
Cambridge. The FY23 result included Management Income
and Development Income contributions across the
Communities and Commercial Property segments from
both these partnerships, along with other existing joint
ventures and management agreements.
During the year, we extended our existing relationship with
MEA through an agreement to invest in masterplanned
communities. The new capital partnership took effect in
July 20233.
We continue to reshape our portfolio in line with our
strategic priorities. We completed the divestment of our
Retirement Living business in July 2022 and executed
on ~$266 million4 of non-core asset sales over FY23.
These transactions have strengthened our balance sheet,
providing capital for redeployment into higher returning and
higher growth initiatives, including the expansion of our LLC
platform and the realisation of our $6.4 billion5 Logistics
development pipeline.
$883m
Pre-tax FFO up 3.8%
We have positioned our LLC business for growth and
expect to deliver significantly higher settlement volumes
over the medium-term. The acquisition of five additional
LLC projects subsequent to balance date will enable to
us to accelerate the scale-up of our LLC platform and
drive material growth in the earnings contribution from this
business in the future.
The sale of the Retirement Living business realised a
material taxable gain, resulting in Stockland Corporation
Limited returning to an income tax paying position during
the year. On a post-tax basis, FFO for FY23 was $847 million,
or 35.6 cents per security. The effective FFO tax rate
for the Group for FY23 of ~4 per cent is post the
utilisation of remaining tax losses and is expected to rise in
future periods.
Statutory profit for FY23 was $440 million, compared
with $1,381 million in FY22. The statutory result for this
period includes $(250) million6 of net commercial property
devaluations. Statutory profit in the previous corresponding
period included a net revaluation uplift of $725 million6.
While progressing our strategic initiatives, we have
remained focused on balance sheet strength and financial
flexibility. Gearing sits toward the lower end of our
target range and we have maintained a prudent hedging
profile and substantial liquidity. Our strong balance
sheet provides the capacity to take advantage of
1 Excludes sundry properties and stapling adjustment.
2
Includes comparable assets; excluding acquisitions, divestments and assets under development. Excludes COVID-19 abatements and ECL provision
where applicable.
3 Effective 31 July 2023. The Capital Partnership has a non-exclusive mandate to invest in on and off market residential masterplanned
community opportunities.
Includes disposal of Stockland Bull Creek, WA, Stockland Riverton, WA and Stockland Gladstone, QLD.
4
5 Forecast end-value on completion, subject to relevant approvals.
6 Excludes sundry properties and stapling adjustment, includes investment properties under construction (IPUC) and Stockland’s share of equity
accounted investments.
24
Stockland Annual Report 2023
opportunities that may emerge and fund our near-term
development commitments.
Capital management
Stockland finished the period in a strong financial
position. At 30 June 2023, the Group’s gearing was 21.9
per cent, at the lower end of our target range of 20 per
cent to 30 per cent, and compared with 23.4 per cent
at 30 June 2022. We maintained significant headroom
under our financial covenants, and strong investment
grade credit ratings of A-/A3 with stable outlook from
S&P and Moody’s, respectively.
Our weighted average cost of debt for FY23 was 4.3 per
cent7. We expect this to average approximately 5.2 per
cent8 for FY24, reflecting the higher floating interest rate
environment and the increased cost of hedging put in place
over FY23. Our weighted average debt maturity sits at 5.0
years, and our fixed hedge ratio averaged 62 per cent7 over
the period.
Available liquidity at 30 June 2023 was ~$1.6 billion.
The combination of our strong liquidity position, access
to domestic and global debt capital markets, strong
relationships with capital partners and ongoing discipline
around cashflows, positions us well to deliver on our
strategic priorities.
Cashflow management
Net cash flows from operating activities for the year of
$332 million were down from $918 million in FY22 primarily
due to a higher level of development expenditure in our
MPC business. Before land acquisitions, operating cash flow
was $981 million, and comfortably above FFO and the
distribution for the period. Over time, we expect operating
cash flow to approximate FFO. However, this can vary from
year to year depending on the timing of items such as
development expenditure and payments for land.
Net cash flows from investing activities were up strongly to
$763 million (versus $(976) million in FY22). This primarily
reflects receipts from the disposal of our Retirement
Living business in July 2022 and proceeds from the sale
of non-core assets, offset by ongoing investment in our
Commercial Property development pipeline.
Financing activities produced a net cash outflow of
$1,223 million for FY23, reflecting a reduction in our
borrowings over the period along with the payment of
previously-announced dividends and distributions.
Distributions
The distribution for FY23 is 26.2 cents per security,
compared with 26.6 cents per security in FY22.
The distribution payout ratio of 74 per cent is marginally
below our target range of 75 per cent to 85 per cent of FFO.
26.2c
Distribution per security
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7 Average over the 12-months to 30 June 2023.
8 Assuming average BBSW of ~4.3 per cent over FY24.
Year ended 30 June 2023
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Image caption:Waterlea, VIC
How we create value
Commercial Property
The Commercial Property segment delivered a strong
FY23 result, with FFO of $636m up by ~13 per cent
relative to the previous corresponding period. This
reflects comparable growth of 3.5 per cent1 from
the ~$10.5 billion2 Commercial Property investment
portfolio, contributions from completed Logistics
developments and strong growth in Development
and Management Income. This includes the initial
contributions from the M_Park Stage 13 development.
As at 31 July 2023, the rent collection rate across the
Commercial Property portfolio was 99.5 per cent4 for the
period, compared with 99.7 per cent for FY22.
Approximately 97 per cent (by value) of the Commercial
Property portfolio was independently revalued over FY23.
This resulted in a $250 million, or 2.3 per cent decrease
on previous book values, reflecting a 41 basis point (bp)
softening in the portfolio’s weighted average capitalisation
rate, partially offset by strong income growth across our
high-quality portfolio5.
Over the year, we made further progress on our key
strategic priorities for the Commercial Property business:
progressing the delivery of our ~$6.4 billion6 Logistics
development pipeline; maintaining optionality over our
~$5.8 billion6 Workplace development pipeline while
continuing to add value to the assets; continuing to
reposition our Town Centre portfolio; and maximising the
value of our existing asset base through exploring mixed use
and densification opportunities.
We have delivered ~$450 million7 of Logistics developments
since July 2022, and expect a similar volume of deliveries
in FY24. Our targeted FY24 deliveries are now ~62 per cent
pre-leased or subject to signed heads of agreement.
The disposal of ~$266 million8 of non-core Town Centre
assets over the period brings the total value of Town Centre
disposals since FY16 to ~$2 billion. The quality of our Town
Centre portfolio has been reflected in the strong sales and
comparable FFO results delivered over the period.
Logistics
Our ~$3.4 billion9 Logistics portfolio delivered FFO of
$139 million in FY23 million, up 11.5 per cent versus FY22.
Comparable growth of 4.6 per cent1 was supplemented
by income contributions from developments completed
over FY22 and FY23. The portfolio continues to benefit
from strong occupier demand for high quality, well-located
logistics properties.
Occupancy was maintained at over 99 per cent10 over the
period, and new leases and renewals negotiated over the
year (including those yet to be executed) saw an average
uplift of 21.1 per cent relative to previous in-place rents.
With a weighted average lease duration of 3.3 years10,
our portfolio is well positioned to capture positive rental
reversion and to benefit from strong near-term demand-
supply dynamics for the logistics sector.
The Logistics portfolio delivered a net valuation gain over
the year of $100 million, or 3.3 per cent, with a 71 bp
softening of the portfolio’s weighted average capitalisation
rate more than offset by strong market rental growth.
Workplace
The majority of our ~$2.0 billion9 Workplace portfolio
is currently being positioned for future development,
including mixed use opportunities. This is reflected in the
portfolio’s weighted average lease duration of 4.2 years11,12.
The Workplace portfolio delivered FFO of $108 million for
FY23, compared with $110 million in FY22. Comparable
FFO declined by 1.9 per cent1, reflecting vacancy at one
asset. New leases and renewals negotiated over the period
(including those yet to be executed) resulted in an average
increase of 0.9 per cent12.
Stockland’s exposure to well-located workplace sites
provides the Group with a potential pipeline of longer-dated
mixed use developments.
Stage 1 of the M_Park development is progressing in
partnership with Ivanhoé Cambridge, with completion of
the first two buildings and commencement of the final
two buildings in 1H24. The mixed use M_Park stage 2
development is currently going through the masterplanning
approvals process.
The valuation of our Workplace portfolio declined by
$237 million, or 11.1 per cent, reflecting 56 bps of cap
rate expansion.
1
Includes comparable assets; excluding acquisitions, divestments and assets under development. Excludes COVID-19 abatements and ECL provision
where applicable.
2 Excludes sundry properties and stapling adjustment.
3 M_Park Capital Partnership with Ivanhoé Cambridge.
4 Rent collection rates across the portfolio up to 31 July 2023 on FY23 billings.
5 Excludes sundry properties and stapling adjustment, includes investment properties under construction (IPUC) and Stockland’s share of equity
accounted investments.
6 Forecast end value on completion, subject to relevant approvals. Workplace includes M_Park at a 100 per cent share.
7
Including ~$270m of FY23 development commencements delivered post balance date
Includes disposal of Stockland Bull Creek, WA, Stockland Riverton, WA and Stockland Gladstone, QLD.
8
9 Excludes WIP and sundry properties.
10 By income.
11 By income. As at 30 June 2023.
12 Excludes Walker Street Complex, NSW and 601 Pacific Highway, NSW in FY23.
26
Stockland Annual Report 2023
Commercial Property Management
and Development Income
Commercial Property (CP) Development Income comprises
development revenues net of direct costs, along with profit
from the disposal of build-to-sell development projects.
CP Development Income rose to $43 million versus
$30 million for FY22. This reflects the recognition of initial
development profits relating to M_Park stage 1 in FY23 and
Logistics build-to-sell Development Income.
CP Management Income comprises ongoing fee income
from third parties relating to the provision of investment,
development and property management services.
CP Management Income of $32 million over FY23
comprised development management fees relating to
M_Park stage 1 along with ongoing fees from third parties
for development and property management services
provided across our CP assets. The result for the previous
corresponding period of $12 million did not include any
development management fee contribution.
Town Centres
Our Town Centre portfolio delivered strong operational and
financial performance over the period, with FY23 FFO of
$379 million up 8.2 per cent versus FY22. This reflects
comparable FFO growth of 4.8 per cent13, along with the
impact of COVID-19-related rental abatements in FY22.
On a MAT basis, total comparable sales grew by 14.7 per
cent and comparable specialty sales were up by 19.8
per cent versus the previous corresponding period, which
was impacted by COVID-19 trade restrictions14. The strong
sales results delivered by the portfolio resulted in specialty
occupancy costs15 reducing to 14.8 per cent versus 15.8 per
cent at June 2022. Leasing spreads remained positive over
FY23, averaging 3.1 per cent16 versus 1.5 per cent for FY22.
The cumulative effect of successive interest rate increases
led to a slowing of sales growth in discretionary categories
such as apparel, jewellery and homewares over the June
2023 quarter. Sales growth for the essentials categories
to which our portfolio is heavily skewed is tracking in line
with inflation.
Specialty sales productivity for our Town Centres portfolio
is well above industry benchmarks. This is reflected in
positive leasing spreads and an overall portfolio occupancy
rate of over 99 per cent17.
The valuation of the Town Centre portfolio declined by
$113 million, or 2.0 per cent, with market rent growth partly
offsetting 26 bp of cap rate softening.
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Includes comparable assets; excluding acquisitions, divestments and assets under development. Excludes COVID-19 abatements and ECL provision
where applicable.
14 Comparable basket of assets as per SCCA guidelines, which excludes assets which have been redeveloped within the past 24 months. Excludes the Mobile
Phones category, due to reporting changes by one retailer resulting in sales data being not comparable. Prior corresponding period impacted by COVID-19
trading restrictions over July 2021-October 2021.
15 Occupancy cost reflects stable assets, adjusted to reflect tenants trading more than 24 months.
16 Rental growth on stable portfolio on an annualised basis.
17 Occupancy across the stable portfolio based on signed leases and agreements at 30 June 2023.
Year ended 30 June 2023
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Image caption:Coopers Paddock, NSW
How we create value
Communities
The Communities segment FFO contribution of
$412 million was ~17 per cent per cent above the FY22
result for the business. The result includes an improved
Development FFO contribution from our MPC business,
delivered in an environment of rising interest rates.
The contribution from our Land Lease development
business was up by $41 million to $58 million for FY23,
driven by growth in the platform and gains on the transfer of
two development communities1 into the SRRP partnership.
The creation of the SRRP partnership has resulted in an
uplift in Management Income relating to the Communities
business over the period.
Over FY23, we generated high-quality recurring income
from our rent-generating assets across our Communities
business, including from the established Land Lease
Communities home sites.
We are positioned to extend our residential leadership
and drive growth in our platform as we activate our
extensive landbank.
With an average age of ~10 years and a skew to the
undersupplied Eastern Seaboard markets, our ~68,000-lot
MPC landbank provides strong embedded margins and a
differentiated platform as we look to further expand our
Land Lease platform.
Masterplanned Communities
The MPC business delivered Development FFO of
$464 million for FY23, up from $443 million in FY22.
The business achieved 5,4032 settlements during the period
(versus 5,964 settlements in FY22), representing a resilient
result in an environment of supply chain constraints, rising
interest rates and significant inclement weather.
The development operating profit margin was 26 per cent
(versus 24.3 per cent in FY22), benefiting from high margin
projects completing in FY23.
Underlying demand for our MPC product remains
resilient, as demonstrated by 2H23 enquiry levels
that were up relative to 1H23 and slightly above pre-
COVID-19 levels. Conversion rates remain below historical
levels, reflecting affordability constraints and continued
uncertainty regarding the interest rate outlook.
Net sales for the year totaled 3,770 lots, compared with
6,992 lots for FY22, with default and cancellation rates
slightly above long-run average levels3.
The business ended the period with 4,275 contracts on
hand, providing good visibility into FY24.
We expect conversion rates to improve once the interest
rate environment stabilises. The medium-term MPC market
fundamentals remain strong, with increasing rates of
net overseas migration, low rental vacancy rates, and a
chronic undersupply of new product across key Eastern
Seaboard markets.
1 Stockland Halcyon Nirimba, QLD and Stockland Halcyon Berwick, VIC.
2
Includes 1,944 settlements under joint venture/project development agreements (FY22: 2,128).
3 On a rolling 12-month basis.
28
Stockland Annual Report 2023
Image caption:The Gables, NSW We are positioning the business for the recovery phase of
the residential cycle with the expected launches of up to six
new communities over FY24, while also leveraging the scale
and breadth of our landbank to provide more affordably
priced product.
The rate of construction cost escalation continues
to moderate. Construction timeframes remain above
historical levels, with some normalisation expected
over FY24.
Land Lease Communities
The LLC development business delivered FFO of $58 million
for the period (versus $17 million in FY22) comprising
our share of SRRP development income and cash-backed
gains from transferring two development communities4
into SRRP in 1H23.
Development settlement volumes for FY23 totaled 382
homes, at a development operating profit margin of 29.6
per cent.
We continue to experience sustained demand for our LLC
product, supporting further price growth on new releases.
The average sales price per home in FY23 was ~11 per cent5
above FY22 levels.
The FY23 net sales rate of 270 homes (versus 405 for FY22)
continues to reflect a deliberate slowing of of releases to
allow production to catch up.
We have good visibility into FY24, with 387 contracts
on hand at an average price ~7 per cent6 above FY23
settlement pricing.
We have positioned our Land Lease platform for further
growth and to deliver significantly higher settlement
volumes over the medium-term. The acquisition of five
additional LLC projects subsequent to balance date will
accelerate the scale-up of our LLC platform and help
drive material growth in the earnings contribution from this
business in future periods.
At the end of FY23, we were actively selling from
five communities7. We expect to launch up to 128 new
communities over FY24, which will see the number of
communities from which we are actively selling more than
triple over the period.
Communities Rental and
Management Income
Over FY23, we generated $15 million (up ~27 per cent
vs FY22) in high-quality Communities rental income,
reflecting contributions from the established Land Lease
Communities portfolio as well as from stand-alone medical
and childcare centres within our communities.
Our operational LLC portfolio performed strongly over the
year, with FY23 rental income benefiting from CPI-linked
rental growth9, high occupancy and rent collection rates10
and net operating margins maintained at 65 per cent across
the stabilized portfolio.
Communities Management Income of $48 million over
FY23 comprised development management and property
management fees relating to SRRP and existing MPC joint
ventures. The result for the previous corresponding period
of $32 million included only a partial year contribution from
fee income relating to SRRP.
Outlook
We are well-positioned for an uncertain macro-
economic environment.
Our Town Centres portfolio has a high weighting to
“essentials” categories, and structural drivers continue
to underpin demand for our well-located Logistics
portfolio. We are seeing sustained demand for our Land
Lease product and are positioning our Masterplanned
Communities business for the recovery phase of the
residential cycle. We are reshaping our portfolio by
delivering new, high-quality Logistics assets and scaling
up our Land Lease platform, and we continue to engage
with a range of capital partners for opportunities across
our platform.
Importantly, we enter FY24 in a very strong balance
sheet position, with gearing toward the lower end of our
target range.
FY24 FFO per security is expected to be in the range of
34.5c to 35.5c cents on a pre-tax basis, with tax expense
expected to be a high single-digit percentage of pre-tax
FFO. Distribution per security is expected to be within
Stockland’s targeted payout ratio of 75 to 85 per cent of
post-tax FFO.
Current market conditions remain uncertain. All
forward looking statements, including FY24 earnings
guidance, remain subject to no material deterioration in
market conditions.
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4 Stockland Halcyon Nirimba, QLD and Stockland Halcyon Berwick, VIC.
5 Average price per home. Excludes sales at Stockland B by Halcyon, QLD where average price points are above $1.1m.
6 Average price per home of contracts on hand vs FY23 settlements (FY23 average settlement price per home: ~$707,000).
7 Excluding Stockland Halcyon Greens, QLD which is close to fully stabilised; and Stockland Halcyon Evergreen, VIC and Stockland Halcyon Horizon, VIC,
formally launched in July 2023.
8 Subject to relevant approvals and planning. Includes the post balance date acquisition of five LLC projects.
9 Typical site agreement – annual rent escalations at the greater of CPI or 3.5 per cent, and a market rent review every 10 years.
10 Occupancy and rent collections rates at 100 per cent as at 30 June 2023.
Year ended 30 June 2023
29
How we create value
Sustainability
Inspired by a better way to live
Stockland has received global recognition1 for many years
for our holistic approach to environmental, social and
governance (ESG) matters.
Our strategy identifies the ESG matters where we
have an opportunity to lead and to meet and exceed
stakeholder expectations.
We recognise that ESG awareness and stakeholder
expectations are growing, and we continue to elevate and
evolve our own approach to these issues in accordance
with our leadership commitment.
Our refreshed ESG strategy has been informed by a
thorough materiality process, and stakeholder insights, and
supported by leadership and Board engagement.
Underpinning the strategy are four pillars and targets
that are grounded in science2 and driven by possibilities.
Initiatives under these pillars support our targets
and focus on innovation, scale and economically
sustainable solutions.
Our ESG Strategy is where our ambition meets tangible,
real-world actions. Actions that will help us pioneer more
connected, resilient, future ready communities.
30
Stockland Annual Report 2023
Image caption:The Gables, NSW
An enterprise-wide delivery model will support the
execution of our ESG strategy and we are committed to
reporting back to our stakeholders on an annual basis on
the progress we are making. Stockland will commence
reporting progress against its key targets in FY24.
The following chapter highlights our FY23 performance in
alignment with these new pillars.
More detail on our ESG performance is available in
our ESG Supplements:
• ESG Data Pack
• ESG Management Approaches
• Modern Slavery Statement
• Climate Transition Action Plan
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Year ended 30 June 2023
31
How we create value
Decarbonisation
Our decarbonisation approach is
designed to be a commercially
sustainable reduction pathway.
Our targets recognise where we can
take immediate action in the short
term across areas under our control,
how we will partner with our suppliers
and tenants in the medium term to
reduce embodied emissions and advocate
through research and development and
cross sector engagement for broader
long-term decarbonisation.
Targets grounded in science1
We are accelerating and expanding our carbon
commitment to reduce and align our business carbon
emissions with a science-based 1.5°C aligned trajectory
and pathway. We have set new decarbonisation targets
and and detailed our plan to meet them in our Climate
Transition Action Plan (summarised below, and available on
our website)
Through this plan, we are taking action that is designed
to enable our business, our supply chain, and our tenants
and communities to move towards net zero greenhouse
gas emissions. Our actions aim to realise social and
commercial benefits that support more resilient and lower-
carbon communities.
We have set science-based targets across Stockland’s
scope 1, 2 and 3 emissions over the short, medium
and long-term.
1 Stockland’s emissions reduction targets have been prepared by reference to criteria set out by the Science
Based Targets Initiative (SBTi). The targets have been reviewed by EY, which has provided limited assurance
in relation to their alignment with the published SBTi criteria. Stockland has also submitted its targets to
SBTi for validation
32
Stockland Annual Report 2023
Image caption:Stockland Aura Town Centre, QLD
Net zero scope 1 & 2 in 20252
Most material scope 3 emissions intensity halved by 20303
Net zero scope 1, 2 & 3 by 2050
Climate Transition Action Plan
Published with our FY23 Corporate Reporting is Stockland's first Climate Transition Action Plan (Plan). The Plan
outlines how Stockland is addressing climate change risk and opportunities and delivering on our purpose. Our Plan
has been developed with reference to the Science Based Targets Initiative (SBTi) criteria and in response to the
Task Force on Climate Related Financial Disclosures (TCFD). The Plan has received independent third-party limited
assurance the scope and results of which are available on our website4. Our roadmap for achieving our targets,
the material assumptions, uncertainties and dependencies associated with those targets, are set out in the Plan.
Progress against our Plan will be included in our Annual Report from FY24 onwards. A summary of where we have
made our TCFD recommended disclosures is set out in the table below.
In our Plan we have published our FY21 Scopes 1, 2 and 3 baseline and inventory for our business activities and
targets. This has been calculated using the GHG Protocol, the most recognised global greenhouse gas accounting
standard. The Protocol covers scopes 1, 2 and 3 emissions and provides guidance on how to establish a boundary
which accurately reflects the GHG emissions inventory of an organisation. We will report on our annual scope
3 emissions in alignment with the GHG protocol and boundary established in our Plan from FY24 onwards. For
information on our FY23 scopes 1 & 2 emissions and the climate resilience of our portfolio refer to our ESG Data Pack.
Task Force on Climate Related Financial Disclosure References
Recommended disclosures
Reference
Recommended disclosures
Reference
Governance
Risk Management
A. Describe the board’s oversight of climate-
related risks and opportunities.
B. Describe management’s role in assessing and
managing climate-related risks and opportunities.
Plan - Governance
A. Describe the organisation’s processes for
identifying and assessing climate-related risks.
B. Describe the organisation’s processes for
managing climate-related risks.
C. Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall
risk management.
Plan -
Risk Management
Strategy
Metrics and targets
A. Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
B. Describe the impact of climate related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning
C. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate related scenarios, including a 2°c or
lower scenario.
Plan –
Decarbonisation
Pathway; Climate
Resilience;
Scenario Analysis
A. Disclose the metrics used by the
organisation to assess climate related risks and
opportunities in line with its strategy and risk
management process
Plan – Our
Decarbonisation
Pathway; Climate
Resilience
B. Disclose scope 1, scope 2, and, if appropriate,
scope 3 greenhouse gas (GHG) emissions, and the
related risks.
Plan – Our
Footprint; ESG
Data Pack
C. Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets
Plan – Our
Decarbonisation
Pathway; Climate
Resilience; ESG
Data Pack
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2 Offsetting of residual emissions will commence 1 July 2025 and will be subject to third-party offset verification and assurance. Emissions removal carbon
credits will be preferenced where possible, as opposed to emissions reduction / avoidance credits.
3 The 2030 scope 3 target is by 30 June 2030 and includes GHG Protocol Categories 1 (purchased goods and services) and 13 (leased assets), which
collectively represent approximately 89 per cent of Stockland's scope 3 emissions.
4 The Basis of Preparation for our Climate Transition Action Plan including decarbonisation roadmap and its associated calculation methods were reviewed
by EY as third-party assurers.
Year ended 30 June 2023
33
How we create value
Scope 1 & 2 emissions
We have opportunities to partner on large-
scale onsite renewable energy generation.
Throughout FY23, we continued to reduce our emissions
intensity of our Town Centre and Workplace portfolio
through energy efficiency initiatives and onsite renewable
energy generation. We have achieved a 13 per cent
emissions intensity reduction1 across our Commercial
Property portfolio since FY20, outperforming our FY24
target of 10 per cent and 70 per cent since 2006. This
was largely due to our increased onsite renewable energy
generation. At the end of FY23, we had total solar capacity
of 13.5MW with an additional 4.3MW in construction or out
to tender. Progress across the FY19-22 period has been
recalculated based on an update to our scope 2 emissions
methodology resulting in slightly higher emissions. Refer to
our ESG Data Pack for more information.
Our average NABERS Energy portfolio rating for Workplaces
is 5.0 stars achieving our 5 Star target. Our Town Centre
portfolio average decreased from 5 to 4.7 stars due to
the divestment of higher-rated assets during FY23. We
continue to roll out our building upgrade program across
the Commercial Property portfolio with investment in LED
lighting and Building Management Systems throughout
the year.
We are bringing forward our 2028 net zero scopes 1 & 2
target to 2025, three years ahead of our previous target.
We have opportunities to partner on large scale onsite
renewable energy generation to enable the achievement
of 100 per cent renewable energy across our portfolio. We
will also continue to include energy saving features in all
our property developments as standard and accelerate our
transition to all electric developments.
The challenge remains to eliminate all emissions. In 2025,
we plan to achieve an absolute reduction in our scope 1 and
2 emissions of over 90 per cent leaving a small proportion
of residual scope 1 emissions, such as refrigerants and gas
which are harder to abate, that will need to be neutralised
to meet our scope 1 and 2 net zero target. Historically,
our scope 1 emissions have been less than 10 per cent
of our overall scope 1 and 2 emissions. Offsetting of any
residual scope 1 emissions will commence in 2025 when we
will seek to purchase a minimal amount of high-integrity,
high-quality carbon credits from nature-based projects as
these support social and environmental outcomes.
13%
Commercial Property
emissions intensity
reduction since FY201
1 Emissions intensity is base building emissions per square metre (kgCO2-e/m2 – net lettable area or gross lettable area)
34
Stockland Annual Report 2023
Image caption:Highlands, VIC
Scope 3 emissions –
value chain
The most demanding aspect of our new targets is the
reduction of our scope 3 emissions and, more specifically,
the embodied carbon in the materials we use. This requires
timely access to commercially sustainable zero or lower-
carbon materials in the market. We will seek to move to
lower-carbon concrete at scale and significantly reduce our
reliance on carbon-intensive steel.
We will also seek to transition tenancies to renewable
energy as part of lease renewals. We expect to benefit from
ongoing grid decarbonisation2 to help meet our leased
assets intensity reduction target. We are investigating
options to support tenants with access to renewable
energy via a potential extension of our onsite renewable
energy generation.
Our ability to achieve emissions reduction beyond 2030
and net zero scopes 1, 2 and 3 emissions by 2050 largely
depends on factors over which we have limited control.
We will leverage commercially sustainable opportunities
for emissions reduction where available, relying heavily on
the transition of industry to a low carbon future. We will
continue to advocate and work with industry bodies on
opportunities to accelerate the transition. In alignment with
our science-based targets, we consider offsets a last resort
that follows our efforts to reduce emissions.
Embodied carbon reductions
at M_Park
Supporting our customers
with lower-carbon living
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Work to reduce the embodied carbon of our
developments is already underway. At our M_Park
development in Sydney, NSW, upfront carbon
assessments have been used to identify the
largest sources of embodied carbon in our building
materials to enable the team to target the most
impactful materials.
Concrete and steel have the most significant
contribution to Buildings C and D embodied carbon.
Through optimisation of design to minimise the use of
these materials, utilising lower-carbon concrete which
is engineered to have a Portland Cement reduction of
40 per cent and utilising lower carbon reinforcement
steel produced by electric arc furnace, the buildings
are expected to deliver a reduction in the embodied
carbon of these buildings of up to 38 per cent.
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At our Land Lease Communities (LLC), we have
continued to expand our solar program with new
solar systems installed on community centres across
our LLC portfolio including a 15kW solar system on
Halcyon Berwick’s club house and a 36kW solar
system on Haylcon Nirimba’s community centre.
In addition, Stockland Halcyon Greens, Rise, B by
Halcyon, Promenade and Nirimba in Queensland all
include solar as standard for resident sites ranging
from 2.5kW to 5kW. In our residential communities
portfolio, we continue to offer discounted solar
packages to selected residential communities
through our partnership with a solar provider.
We are also supporting the transition to electric
vehicles with recently established Land Lease
communities Rise, B by Halcyon, Promenade and
Nirimba all including a Tesla electric vehicle for use as
a car share by residents.
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*Australian Energy Market Operator (AEMO) Integrated Systems Plan 2022 scenarios project Australia’s electricity grid in 2050 to reach 95 per cent
emissions reduction from 2021 baseline.
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Image caption:Yennora Distribution Centre, NSW
How we create value
Circularity
Implementing circular models
We understand that the circular economy is a bigger
concept than simply switching one material for another
or recycling better – it is about creating solutions to
meet interconnected challenges such as climate change,
biodiversity loss, and waste.
During FY23, we focused our efforts on understanding what
the circular economy means to Stockland and how we can
develop this vision into circularity principles to be utilised
across our operations. A fundamental part of this is trialling
new ways to advance circularity, such as considering how
we design our assets and close material loops.
To support this work, we have created a business-
led circularity workstream. A cross-business knowledge
sharing workshop brought together key team members
across the business to share insights on projects piloting
circularity principles. The workshop provided shared
learnings across teams and a path forward in our plan
to maximise short-term wins and create opportunities for
a more substantive shift towards circularity across the
business. Examples showcased were upcycling and reuse
at The Gables and M_Park in NSW.
A key element of developing assets with leading
sustainability credentials is understanding the embodied
impact of materials. We have performed Materials Flow
Analysis and Life Cycle Analysis (LCA) in collaboration with
third-party consultants to inform our target setting and
identify ways to reduce our embodied carbon impacts. This
process involved measuring the quantity of each material
used during the construction and operation of buildings and
their associated environmental impacts.
We have used this information on current projects
to identify impact hotspots and opportunities for
improvement across a building’s life cycle, including
materials selection, future renovations and end-of-life.
These opportunities and circularity principles will be
embedded into how we do business with our D-Life
(our development process) acting as a key enabler of
business integration.
36
Stockland Annual Report 2023
Adaptive reuse at The Gables, NSW
Our masterplanned community, The Gables, in NSW, has
successfully embraced and integrated circular economy
principles to construct the site’s temporary food
precinct. Through a partnership with our contractors
and the application of adaptive reuse, the project
has increased its use of reclaimed, salvaged, or
reused materials.
function room and an old school bus repurposed into a
food truck. The materials ecosystem has been tracked
to strengthen our data, improve material transparency
and increase our understanding of the materials’ value
for their recovery and reuse. To date the project has
repurposed over 2,000 metres of corrugated iron and
close to 900m2 of bricks.
Repurposing of existing assets has been championed on
site with a shearing shed repurposed into a glass house
Upcycling at M_Park Stage 1
Resource management
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As part of our ongoing development at M_Park in
NSW, Stockland recognised an opportunity to identify
building items within the existing asset due for
deconstruction that were suitable for reuse. The
team engaged a third-party consultant to identify
appropriate partners for the materials and create a
material reuse catalogue for the site.
All materials identified within the internal fit out
of the existing asset as well as 40 per cent
of building materials were deemed salvageable,
including elements of the aluminium façade, steel
handrails, glass partitions and carpet tiles.
For more information on our water performance, refer to our
ESG Data Pack.
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In FY23, we sought to increase water efficiency
in our Commercial Property portfolio through our
sub-metering network, which saved approximately
27,700 kL through prevented leaks. We maintained
our NABERS Water portfolio average rating for our
Workplace portfolio at 4.7 stars, however our Town
Centre portfolio average decreased from 3.7 to 3.6
stars due to the divestment of high-performing assets
during the year.
In FY23, we continued working with our centralised
waste management contractor to improve collection
and reporting data and increase waste diversion rates
across our portfolio, particularly in our Town Centres.
We continue to deliver above our waste diversion
benchmarks with a 93 per cent average diversion rate
for Commercial Property developments and 94 per
cent average diversion rate across Masterplanned and
Land Lease Communities.
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Image caption:The Gables, NSW
How we create value
Social impact
In the development of our refreshed
ESG Strategy we have enhanced our
understanding and determination of
social value in alignment with the
global framework, B4SI (Business for
Societal Impact).
We define social value creation as our
intentional effort and investment to deliver
social, economic and/or environmental
benefits for local communities and our
broader society.
By embedding social considerations and
investment decisions across our business,
we can amplify our positive impact
across Australia.
We are committed to creating over
$1 billion of social value by 20301.
1 EY was engaged to provide limited assurance over Stockland’s approach to defining, measuring, and calculating the social value target
38
Stockland Annual Report 2023
From input to impact – our Social Value Framework
As part of our refreshed ESG strategy, we have shifted our
social investment focus from inputs (how, what and where
we make a contribution) to measuring the social impacts
(what changes) and the social value we create.
During FY23, we developed an enterprise-wide approach
that aims to deliver consistent, impact-orientated social
investment and a framework that guides our intentional
investment in social outcomes in line with our refreshed
ESG strategy.
We approach social value at both a societal and local level,
as informed by needs analysis:
• Universal needs – impact all of our communities,
including accessibility, inclusion, health, education
and employability.
• Bespoke needs – are unique to each community
and are influenced by multiple socio-economic and
environmental factors.
Solutions to these needs are determined through
community collaboration, with outcomes and impact both
forecasted and reported through our Social IQ tool during
our design phase.
Social IQ tool
Our social value methodology has been developed into
a digital tool that uses third-party empirical data and
research to forecast social value and embed social
outcomes into our decision making.
• Social IQ determines the social value we create and we
use this to inform alignment between commercial and
social value.
• A leading global framework, Business for Societal Impact
(B4SI), has been used to inform our definition of social
impact and has been complemented with Australian2 and
OECD wellbeing frameworks to map Stockland’s social
impact areas.
• The tool covers 18 outcome domains across environment,
economic and social areas and behind each outcome
domain sits an auditable logic model that covers source
data, outcome valuation data, methodology, assumption
and attribution calculation.
• Social IQ was used to forecast our Social Value Target for
FY24-FY30 and will be used to report against progress
from FY24.
• EY was engaged to provide limited assurance over
Stockland’s approach to defining, measuring, and
calculating its Social Value Target of $1 billion by 2030. The
assurance statement is available on our website.
Housing continuum –
adapting core business for
social impact
As Australia’s largest developer of masterplanned
communities, Stockland is committed to
collaborating with our government and industry
partners to deliver more affordable, diverse and
sustainable housing solutions.
We recognise that solutions are required across the
housing continuum – from investment in social and
affordable housing, build-to-rent and shared equity, to
the sale of private houses.
We are rethinking existing models and considering
how we can provide diverse and affordable
housing options to move people through the
housing continuum.
In Queensland, our Aura, Providence, and Botanica
communities have dedicated five per cent of their
respective sites to social housing and 25 per cent to
affordable housing.
Sienna Wood in WA has a median price of $450,000
which represents a 20 per cent discount to the
Perth median house price (with prices starting
from $350,000).
Our provision of affordable housing is expected to be
a significant contributor to our social value creation
target. The economic and social value derived comes
from third party empirical data and research and
will come from factors such as key worker retention,
housing stress relief and improved mental health. Our
Social IQ tool, together with our deep community
needs analysis, allows our teams to determine
how to optimise access to affordable housing and
social mobility along the housing continuum in an
economically sustainable way.
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2 Frameworks referenced include the ACT Wellbeing Framework and Tasmanian Wellbeing Budget
Year ended 30 June 2023
39
How we create value
The Stockland CARE Foundation is a
charitable trust established to deliver
programs and initiatives to improve
the lives of people living in or near
Stockland communities.
Indigenous procurement
– diverting spend for
social impact
In FY23, we spent over $4.3m in Indigenous
procurement across 24 Supply Nation suppliers1.
This included spend from our All-Indigenous Tenders
program which aims to increases Indigenous inclusion
in our tender process. Specifically, this has resulted
in the appointment of a new national Indigenous
stationery supplier, as well as the awarding of
contracts to Indigenous businesses and suppliers at
multiple construction projects, including Stockland
Wetherill Park revitalisation, Stockland Shellharbour
food court remix, Stockland Nowra car park and
Stockland Wetherill Park Kinchin Lane in NSW.
The value of working with Indigenous owned
businesses extends well beyond economic impact.
By procuring from First Nations business we
increase the development of skills and improve
livelihoods contributing to long-term economic
resilience and wellbeing of the communities in which
the business operates.
Indigenous procurement is also expected to be a
significant contributor to our social value creation
target. We aim to engage over 50 Supply Nation
suppliers by FY25 increasing our annual addressable
spend on First Nations suppliers to 3 per cent by FY25.
We recognise the increasing demand for Indigenous
owned and operated businesses through state
governments' social procurement policies and are
committed to supporting capability building with
Indigenous suppliers to scale to meet this demand.
CARE Foundation –
Beyond giving
Founded in May 2015, the Stockland CARE Foundation
is a charitable trust established to deliver programs
and initiatives to improve the lives of people living in or
near Stockland communities.
In alignment with our refreshed ESG Strategy and
our focus on impact, we are evolving the CARE
Foundation’s strategy beyond community investment
to place-based social innovation and the identification
of partnerships that will enable us to deliver on the
ESG Strategy. Our Foundation will be an enabler and
exemplar of social value creation at Stockland.
During FY23, the CARE Foundation continued
to support the important role of giving and
volunteering in fostering community connection and
building organisational culture. In FY23, Stockland
employees spent over 1,640 hours volunteering,
including Australian Business and Community
Network (ABCN) mentoring, team volunteering and
personal volunteering.
This year, we achieved a total community contribution
of $7.65 million, comprising close to $1.3 million
community development spend, which delivers social
infrastructure and programs across our strategic
focus areas, and over $6.4 community investment,
which encompasses our employee giving and
volunteering programs.
1 Supply Nation provides Australia’s leading database of verified Indigenous businesses https://supplynation.org.au/
40
Stockland Annual Report 2023
First Nations engagement
Stockland has a clear vision and
commitment for reconciliation and
aspires to contribute to a just, equitable
and reconciled Australia.
During FY23, we developed our inaugural First Nations
Strategy which aims to embed our commitment to
Indigenous engagement and reconciliation into the way we
operate our business. Our strategy is focused on those
areas that we believe we can contribute to including
employment, procurement, cultural learning, designing with
Country and cultural heritage and land management.
To help deliver these priorities, we have a highly-engaged
and active Reconciliation Working Group. We have
also increased our internal capacity and capability by
establishing the Stockland Indigenous Engagement Team,
an all-Indigenous team of experts across the country with
over 80 years of collective knowledge and experience in
Indigenous affairs, community engagement, reconciliation
strategies, Indigenous employment and procurement
initiatives as well delivering and implementing cultural
awareness and learning programs.
Our strategy builds on our recent Innovate Reconciliation
Action Plan2 (RAP) 2020 – 2022, whereby we achieved over
90 per cent of our RAP targets and commitments that had
either been completed or that had commenced and will
continue into our next RAP cycle.
We will continue this work in our Stretch RAP 2023 –
2025, which has recently been submitted to Reconciliation
Australia for its consideration and endorsement.
Key achievements in FY23 have included:
• expansion of our internal Indigenous
Engagement Team
• More than 90 per cent of employees completed
cultural learning training
• $4.32m of indigenous procurement with 24 Supply
Nation suppliers engaged
• Conducted caring for Country initiatives across
multiple projects including at Aura and Providence
in Qld and M_Park and Western Sydney University
in NSW.
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2 Reconciliation Australia's RAP Framework provides organisations with a structured approach to advance reconciliation. The four RAP
types – Reflect, Innovate, Stretch and Elevate – allow organisations to continuously develop their reconciliation commitments. https://
www.reconciliation.org.au/reconciliation-action-plans/
Year ended 30 June 2023
41
How we create value
Killara Cafe at Stockland Mt Atkinson in Victoria
Killara Cafe is a partnership between Stockland Mt.
Atkinson, the Killara Foundation and Edmund Rice
Services Mt. Atkinson (ERSMA), in Truganina, Victoria
on Wurundjeri Woi Wurung Country. The café, which
opened in June 2023, is a social enterprise run by the
community, providing opportunities for employment, on-
the-job training, and education for Aboriginal and Torres
Strait Islander people.
Historically, Mt Atkinson was a meeting place for
Indigenous communities, where ceremonies took place
and trade occurred. The Killara Café brand and design
is inspired by this history, providing a social hub for
the growing Mt. Atkinson community, and a shared safe
space for storytelling, knowledge sharing, connection to
place, education and learning.
Designing with Country at M_Park in NSW
• Caring: By developing systems and processes for
ensuring Country is protected and cared for, our
team worked through an interactive terrain map
of ‘Wallumatta’ that has now been gifted to the
Dharug working group. From these discussions around
the extraction of the ochre and its handling, the
preservation of significant trees and the development
of our terrain map, in addition to the future
maintenance and educational opportunities which are
integral to the project and the site, the journey of
‘yanaladyi budyari gumada’ (Dharug language: walking
together with good spirit) continues.
....we are working to embed Designing
with Country principles and better
understand Country...
Through our relationship with Wallumatta (Dharug
Ngurra/Country), Her Traditional Custodians, the Dharug
people, and the broader Indigenous community, we are
working to embed Designing with Country principles into
our projects, and better understand Country at M_Park
in NSW. We have considered the following Designing with
Country principles so that they are applied to the benefit
of Country, humans, and non-human lives:
• Sensing: A critical connection point which included
walks to local places of significance to Wallumattagal
(Dharug) Community such as Sugarloaf Point, Brown’s
Waterhole and Shrimpton’s Creek. These experiences
of walking on Country have inspired the design of the
landscape for M_Park Stage 1, such as the selection of
plant species that have cultural relevance, medicinal
and healing properties.
• Hearing: A process of deep listening throughout from
which we investigated the history of the land, its
topography and geology.
• Envisioning: This process involved translating Dharug
cultural knowledge and community ambitions into
design principles to inform our work. This includes
cultural narratives around the white ochre and its
importance to the Dharug women, the presence of
water and its purification, the Spirit Woman who is
omnipresent on site, and the higher point of the ridge
and potential presence of Bora rings. These narratives
informed our design and construction methodology,
so that they can be respected and celebrated, cared
for, and shared as part of the long-term educational
journey for all.
42
Stockland Annual Report 2023
Image caption:Tarun Gupta, Managing Director and CEOImage caption:Stockland Mt Atkinson, VIC Resilience
Climate resilience1
As a systemic risk, climate change poses unprecedented
economic, social, and environmental challenges for the
global economy and the communities and industry sectors
in which Stockland invests.
Our Climate Resilience Assessments are aligned with
the Stockland Enterprise Risk Framework and focus
on the vulnerability of an asset to climate change,
particularly its ability to endure severe weather impacts
and operate without disruption. In FY23, we completed
72 asset level Climate Resilience Assessments applying
the Intergovernmental Panel on Climate Change’s
Representative Concentration Pathway 8.5 projections,
taking our total number of asset level climate resilience
assessments to 141, representing 100 per cent coverage
of assets and development projects within our portfolio.
The results of these assessments are available in our ESG
Data Pack.
These assessments indicate varying levels of climate-
related risk across our portfolio and have given us a
portfolio view of where to most effectively allocate capital
and operational expenditure to strengthen our portfolio
over time. climate resilience
With a complete view of our climate-related risk across our
portfolio, our actions can be planned for greatest impact
and business plan alignment. Assets with higher risks will
incorporate resilience plans into their ongoing asset plans.
We have identified consistent initiatives with business asset
teams that can be incorporated into design guidance and
operational policies.
In design and development:
• Addressing future extreme storms by updating
roof design specification for cyclone integrity and
setting minimum standards for siphonic drainage to
address hail-storms.
• Addressing extreme heat risks with a minimum
specification for roof insulation, based on predictive
climate modelling, through on-going implementation of
our cool roofs policy and tree canopy coverage goals.
• Incorporating climate-risk mitigation measures into
existing asset emergency management plans provided
to tenants.
• Reducing risks of damage from extreme storms by
updating our asset preparation plans to provide ongoing
inspection to ensure fixtures are secured and storm
protection systems remain intact.
In operation:
• Incorporating climate-risk mitigation measures into
existing asset emergency management plans provided
to tenants.
• Reducing risks of damage from extreme storms by
updating our asset preparation plans to provide ongoing
inspection to ensure fixtures are secured and storm
protection systems remain intact.
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1 Stockland's approach to climate resilience is detailed in our Climate Transition Action Plan available on our website.
Year ended 30 June 2023
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Image caption:Willowdale, NSW
How we create value
Contributing to a
nature-positive future
Nature is a key part of our approach to resilience in our
refreshed ESG strategy. Our first steps towards a nature-
positive transition are to understand and manage the
nature-related risks and opportunities across our business.
We are a member of the Taskforce on Nature-related
Financial Disclosures (TNFD) Forum and Science Based
Targets Network (SBTN) Corporate Engagement Program.
Understanding our business’ impacts and
dependencies on nature
In FY23, Stockland undertook significant work to
understand our business’ impacts and dependencies
on nature and the associated risks and opportunities
in the transition to a nature-positive economy. In
alignment with the draft TNFD recommendations, we
have completed a whole-of-business nature risk and
opportunity assessment as well as site-level assessments
of cumulative biodiversity impacts.
In FY23, Stockland also coordinated one of four nature
scenario workshops globally with our senior Stockland and
TNFD management, providing feedback that has helped
the TNFD refine its scenario guidance and toolkit, and
Stockland's approach to assessing how our use of materials
and our design principles could present nature risks and
opportunities under two future scenarios.
With the draft TNFD framework not yet final (expected
September 2023 release), our view of impacts and
dependencies may need to be adapted as global
standards emerge and the tools and data to support
full understanding of nature risks and opportunities,
particularly in supply chains, continue to mature.
We will continue to review and update our approach to
contributing to a nature-positive future.
Assessing biodiversity at
our developments
In FY23, Stockland completed a review of how we
measure positive and negative impacts on biodiversity
associated with our developments. We found that there
have been advances in relation to the quantification
of biodiversity outcomes since we first deployed our
proprietary biodiversity calculator in 2015. Following this
review, Stockland has started work on the development of
an updated calculator and approach to tracking biodiversity
outcomes associated with our developments. Data on our
biodiversity impacts is available in our ESG Data Pack.
Stockland Aura fostering the thriving habitat of the
Wallum Sedge Frog
For more than 10 years, Stockland has partnered with a
renowned expert in frog habitat restoration, to identify
and create a habitat where frogs with distinctive habitat
requirements can thrive. New research has revealed
positive results from conservation efforts at Stockland
Aura in Qld, with the Wallum Sedge Frog found to be
using and breeding in specially created wetland habitats
across the masterplanned community.
Through collaborative efforts involving local community,
environmental groups and international experts, we
are actively rehabilitating 700 hectares of previously
degraded pine plantation land into a fully functional
ecosystem for frog species at Aura. Upon completion
of the development, these areas will transform into
permanent conservation lands.
Stockland continues to protect and regenerate the
significant conservation zone in Aura as part of its
development approach, bringing back the biodiversity
values in the region.
44
Stockland Annual Report 2023
People and
capability
At Stockland, we continue to enhance
our culture and capability to deliver on
our business strategy. We believe that
our dedication to skills and learning,
diversity and inclusion, new ways of working,
and rewarding performance supports our
strength in attracting, developing, and
retaining talent.
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leaders. Both programs aim to accelerate the growth of
talented people and support our leaders to deliver on our
ambitious strategy.
In an uncertain environment we continue to ready ourselves
for the future of work and of real estate, and to prioritise
investment in talent development to futureproof our
people and our organisation.
We invest in our people and our leaders to evolve our strong
and differentiated culture as our organisation grows. Our
performance culture embraces wellbeing as a pillar of a
sustainable work environment, where all people can truly
thrive. Our wellbeing program includes new initiatives such
as our voluntary mental health peer supporter network and
our focus on psychological safety. We remain focussed on
our culture priorities of being bold, curious and creative.
Like most organisations, we experienced a post-covid
reduction in our retention rate and this has now returned to
within our normal range.
How we create value
Exceptional people
Developer of talent
Stockland is committed to investing in the next generation
of talent. In February 2023, we welcomed 36 graduates
into our two-year Graduate Program, reflecting our focus
on building our pipeline of talent. We achieved a diverse
representation of graduates with a balanced gender split.
Our unique option to ‘Create Your Future’ allows graduates
to craft their program and gain experience across a variety
of roles in our business. Our graduate program has been
awarded a Top 100 program by GradConnection for seven
consecutive years, and over the last two years has received
similar awards by Prosple and the Australian Association of
Graduate Employers. We continue to evolve and improve
the program every year.
We are investing in our current and future leaders through
our leadership development programs. Supported by multi-
year investments and strong sponsorship from our senior
leadership team, our leadership programs help us to build
the quality of our leaders across our organisation as we
grow. The programs are tailored to various career stages,
with our “Next Generation” program focused on emerging
talent and our “Bold Futures” program designed for senior
Stockland’s Graduate Program
Through four six-month rotations, our graduates
are exposed to different asset classes, teams,
skills and projects. This approach allows them to
develop broad, transferable skills to complement their
developing technical expertise, nurturing true enterprise-
minded leaders.
In building our talent pipeline, we recognise it is
important to connect talent with talent. Each graduate
is matched with a senior manager 'Career Coach', fast-
tracking growth and sharing their knowledge.
2022 graduate, Sugandi Doratiyawa, says: “I joined
Stockland because of its impressive reputation and
alignment with my personal values and career goals.
The Stockland Graduate Program has offered me a
chance to grow professionally and personally, and has
exceeded my expectations. The inclusive culture is great
and I’ve felt welcome from day one. I’ve completed
rotations in Masterplanned Communities and Land
Lease Communities and I’m now in the learning and
development area in our People & Culture team. This
has not only broadened my skillset but also helped
me discover where my strengths and interests lie. As a
commerce graduate with a finance major, learning and
development isn’t necessarily where I thought I’d be, but
I’ve found that it allows me to be creative and think
outside the box. I’m particularly enjoying the emphasis
on innovation; having the freedom to explore new ideas
and solutions keeps me fully engaged and genuinely
excited about the projects I’m involved in. I’m excited
about where my career with Stockland might take me.”
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Stockland Annual Report 2023
Image caption:Sugandi Doratiyawa, Stockland graduate Employer of choice
Diversity and inclusion
At the heart of Stockland’s culture is our dialogue with
our people. Our independently administered ‘Our Voice’
employee surveys provide regular opportunities for our
people to share their feedback about what it is like to
work at Stockland and allow our leaders to listen and
respond to that feedback. In FY23, we achieved a significant
increase in our already-high overall employee engagement,
which is now eight points above the Australian National
Norm1 and for some categories above the Global High
Performing Norm1.
Both employee surveys conducted in FY23 showed
significant improvement in our peoples’ wellbeing
compared with prior years. In our October 2022 survey,
wellbeing levels returned to pre-COVID levels, scoring
significantly above the Australian Norm. The survey also
revealed strengths in the leadership of our people.
We are recognised as a leading
organisation in the sector:
2021-23 WGEA Employer of Choice
citation for the 13th successive year.
2023 Top 100 Global Workplace
ranking for Gender Equality
by Equileap.
2022 Property Council of Australia
“People First Award” for our leading
Parental Leave Policy
Silver Employer in the
Australian Workplace Equality Index
(AWEI) 2022 Australian LGBTQ
Inclusion Awards
At Stockland, we aim to foster a safe, inclusive and
culturally diverse environment that helps achieve our
vision of representing and celebrating the communities
we serve. We strive to create a culture within our
communities where people feel a sense of belonging;
a place where they feel safe and valued.
To achieve our vision, we invest in our Diversity & Inclusion
strategy as an integral part of our evolving culture. We
believe creating a more diverse and inclusive environment
helps empower our people to create more inclusive
communities for our customers and stakeholders.
We communicate our commitment clearly and encourage
open discussion with our people about how everyone can
bring their authentic selves to work.
Our Diversity & Inclusion strategy is guided by
five principles:
1. Recognise psychological safety as key to unlocking
our best
2. Mirror and represent the communities we serve
3. Identify and develop diverse and inclusive leaders
4. Create a culture of everyday respect
5. Recognise the uniqueness of all our people
Our strategy is supported by four focused Employee
Advocacy Groups (EAGs) across Gender Equity, LGBTQ+,
Cultural Diversity, Wellbeing and Disability. These groups
include employees at various levels in the organisation
and from a mix of backgrounds to encourage diversity
of thought, more representative decision making and
improved delivery on our initiatives.
During FY23, our EAGs have led a series of
initiatives to promote diversity and inclusion in our
workplaces, including:
• Our second Everyday Respect campaign aimed at
increasing awareness and understanding of acceptable
and unacceptable behaviour, equipping employees to
deal with everyday sexism and encouraging them to
speak up.
• Acknowledgement of various days of significance
throughout the year, including the commissioning of
powerful images created by First Nations artist and proud
Noongar woman, Janelle Burger, to illustrate our assets
and echo World Pride’s strong partnership with First
Nations people.
• The establishment of Stockland’s first Disability Ally
Network with over 100 employees signing up within two
months of launch.
• A live employee webinar and short film titled ‘You can ask
that’ to help dispel cultural myths and generate greater
understanding of cultural backgrounds and norms across
our workforce.
Our First Nations Engagement Strategy is detailed on
page 41,
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Year ended 30 June 2023
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How we create value
Gender pay equity
We conduct regular analysis of gender pay equity to
understand any differences in pay between men and
women in our organisation.
Our long-term objective is to achieve zero gender pay
gap. This can only be achieved by addressing inequalities
between men and women such as under-representation of
women in higher-paid jobs and leadership roles.
In the short term, our objective is to maintain no systemic
instances of pay inequity in ‘like-for-like’ roles. To do this,
we analyse pay for ‘like-for-like’ roles as well as average
pay for men and women across different levels of our
organisation. We also conduct statistical analysis to help
determine the extent to which gender is a driver of pay
differences after allowing for other factors such as location,
seniority and occupation.
Stockland has no known instances of gender pay
inequity. While this is pleasing, we recognise we have more
work to do to achieve gender equality and zero gender
pay gap.
At Stockland, women hold the majority of our lower-paid
administrative and customer care roles and are under-
represented in some higher-paid areas. This results in the
average fixed pay of men at Stockland being higher than the
average fixed pay of women.
Through initiatives to create pathways for women to enter
and thrive in more senior, higher-paying roles traditionally
filled by men, we reduced our gender pay gap by four
percentage points in FY23 and with ongoing focus we
expect this gap to further reduce over time.
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Stockland Annual Report 2023
Image caption:Stockland head office, NSW
Health, safety and wellbeing
We are committed to providing physically and
psychologically safe and healthy environments for
everyone who works with us or attends our
communities, workspaces and places.
During FY23, we trained 30 mental health peer supporters
across our business to support a positive mental health
environment in our workplaces. These voluntary, non-
clinical roles are trained to work collaboratively with
their peers to help recognise signs of distress, listen to
concerns and refer colleagues who could benefit from
additional support.
Following an earlier program of work to better understand
levels of psychological safety within our business, why it’s
important for Stockland and what it looks like, we engaged
an external organisation to measure our progress. This
analysis showed that we made progress over the last year,
while there is still room for improvement, and we remain
focused on strengthening this aspect of our culture.
Stockland has long valued the benefits of flexible work, and
we have continued to evolve our approach to flexibility. Our
hybrid working model is an enterprise approach to flexibility
involving a mix of working in asset, offices, local workplaces
and at home or remote locations. Leaders and teams
build plans aligned to our principles. Each team develops
working rhythms aligned with our recommended blueprint,
highlighting the importance of face-to-face collaboration
for complex problem solving and learning. Our approach
encourages a focus on the goals and needs of the
organisation (our strategic mission), each team and each
employee. This approach has supported our people to
work more collaboratively, enhance social cohesion, and
deliver performance.
In FY23, our employee Lost Time Injury Frequency Rate
(LTIFR) was 1.6, which represents an improvement on our
FY22 rate of 2.6. Our employee Medical Treatment Injury
Frequency Rate (MTIFR) was 3.6, our rate in FY22 was 3.2.
We also monitor the safety performance of our contractors
on our development sites. In recognition that global
supply chain issues and labour shortages are affecting
contractor safety performance, we have developed a
Serious Incidence Response Plan with a range of key
initiatives to support our contractors. The initiatives include
independent audits, stop work meetings, commercial
property safety briefings, and civil and infrastructure on-site
safety training. The Serious Incidence Response Plan has
been successful in reducing our development contractor
LTIFR to 6.2 in FY23 down from 9.9 in FY22.
More information on our safety performance is available in our
ESG Data Pack.
1.6
Lost Time Injury
Frequency Rate (LTIFR)
Down from 2.9 in FY22
Our values and conduct
Stockland believes in doing business professionally
and in line with our CARE values and we have
developed a framework to guide our decision making
and engagement in relation to social and ethical matters.
We ask all employees to confirm they have read and
acknowledged our Code of Conduct both on commencing
with Stockland and as part of their annual compliance
statement. We act promptly to investigate any breaches of
our Code of Conduct and apply penalties for substantiated
breaches up to and including dismissal.
We regularly monitor compliance with corporate
policies and investigate breaches, as outlined
below. In FY23:
• Employee Conduct – there were nine substantiated
breaches of our Code of Conduct in FY23, which
resulted in four terminations of employment and
five formal warnings. Four of these breaches
resulted in formal grievances being raised.
• Privacy – there were no notifiable data breaches
reported to the regulator, Office of the Australian
Information Commissioner (OAIC).
• Grievances – there were seven formal grievances
raised in FY23, with investigations carried out
in accordance with our grievance handling
procedures with appropriate actions taken to
address matters raised. Of the seven cases, one
remains under investigation.
• Whistleblower – Stockland’s Whistleblower
Protection Officers (WPOs) received a total of
five concerns via our whistleblower escalation
channels in FY23, with investigations carried out in
accordance with our Whistleblower Policy including,
where appropriate, actions taken to address
matters raised.
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How we create value
Investing in capability
End-to-end multi-sector capability
Stockland is focused on leveraging our specialist end-to-end, multi-sector capabilities to build resilient assets
and create liveable communities. To drive future growth and support the delivery of our strategy, we are investing in
supporting our people to build these capabilities through our Future Ready Careers program of work.
Future Ready Careers
In FY23, we launched Future Ready Careers as part of
our reimagined learning and development strategy. The
program expands opportunities for learning and opens
up career pathways for our people.
Being Future Ready at Stockland means
developing seven key capabilities including: customer
centricity, adaptive mindset, collaboration and
teamwork, judgement and decision making, building
high performing teams, leading change, and
enterprise leadership.
Since its introduction in late 2022, more than 400
employees have completed their Future Ready Profile.
We have introduced a new partnership with LinkedIn
Learning to enable our people to learn as they work.
Focused on the subjects that matter to them, LinkedIn
Learning is an educational platform that helps our
employees develop business, technology-related, and
creative skills through expert-led course videos. Over 50
per cent of employees have activated their accounts,
completing over 276 courses with 11,035 videos viewed.
A Future Ready Profile, a preference-based psychometric
assessment, is designed to test and measure the
mindsets of our people and assist them identifying
areas of strength and where they can further develop
their skills.
Our Future Ready Careers program is complemented
by a refreshed approach to individual development
conversations to build our employees’ future
career focus.
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Stockland Annual Report 2023
Driving an innovative culture
When we foster a culture of innovation, we grow
capacity within our organisation.
A culture of innovation brings a diversity of thinking
which helps our people to reimagine how we work in
line with our purpose of a better way to live, and be
supported to drive everyday innovation in their role. This
enhances our ability to accelerate our strategy and deliver
competitive advantage.
In FY23, we held our first Innovation Week, where
more than 1,200 of our employees engaged with our
program spotlighting innovators across the business
and demonstrating the strong link between ESG and
innovation. We have also extended our people’s digital
and data capabilities, with both theoretical and targeted
practical learning experiences around data, robotic process
automation, and the emerging area of generative artificial
intelligence (AI).
Our internal 2023 Innovation & Excellence program received
59 entries across eight strategically aligned categories.
Highlights include:
• A sales and service model designed to manage
the changing customer journey and to scale our
business, connecting customers with the right person
at the right time, increasing the new enquiry contact
rate by greater than 20 per cent and empowering
sales professionals to focus on maximising sales and
minimising settlement cancellations.
• In FY23 we designed a new, integrated and scalable
business planning and forecasting solution that has
supported the growth of our Halcyon land lease business.
This has delivered tangible efficiency benefits for our
people, streamlining processes and digital capability.
• Several project and asset-based innovations delivering
sustainable outcomes, delivery excellence across our
assets including our Halcyon communities, M_Park
staged delivery, and leveraging data and analytics to
deliver efficiencies to our project and business teams.
Chairman’s award for innovation:
'cool communities' reducing urban heat stress
Our Aura community on the Sunshine Coast is
well known for its white roofs or cool roofs policy
implemented to reduce Urban Heat Island Effect. To
understand the impact of the framework in action,
heat mapping was conducted and revealed that there
was a difference in temperature of 1.5-2 degrees
celsius between Aura and surrounding suburbs, which
contributes to increased comfort levels for our residents.
To better understand what contributes to urban heating
our team undertook an assessment of key trends
and implementation strategies for cooling measures at
our communities.
A data-driven scalability framework was established to
provide a system of measurement and cost/benefit
analysis of cooling mitigation measures and how they
could be scaled across our portfolio.
High-performing reduction measures identified as part
of the framework included cool roads and cool roofs,
increased tree canopy cover and vegetation, orientation
related decisions and green roofs. The framework also
includes engagement with First Nations communities
to understand appropriate local vegetation to maximise
heat mitigation.
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How we create value
Cyber security
Our business is digitally enabled to deliver efficient
operations, great customer experience, and value
through the property lifecycle. Our cyber resilience
continues to be a focus as a strategic risk and a priority for
building and maintaining stakeholder trust and confidence.
To protect Stockland, our people and our customers
from current and emerging cyber threats, we are focused
on maintaining and strengthening our technical and
cyber resilience through culture, capability, and strategic
partnerships. This helps us manage the risk of sensitive
information loss and operational disruption, as well as other
reputational, financial, regulatory, or customer impacts
associated with adverse events.
Our cyber resilience program is guided by industry
frameworks including ISO27001, the international
standard for information security, and the National
Institute of Standards and Technology Cybersecurity
Framework (NIST CSF). These complementary frameworks
focus on identifying risks, implementing controls and
monitoring performance.
As part of our cyber program, we continue our
disciplined focus on:
• Equipping and training our people for a cyber-aware
culture, and to proactively identify and manage
emerging and potential threats.
• Providing digitally safe and protected working and
system environments.
• Preparing resilience and recovery capabilities
through planning for and simulating cyber
threat response.
• Proactive risk management through security testing,
supply-chain management, and targeted reviews.
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Stockland Annual Report 2023
Quality relationships
As a business, we recognise that building strong, mutually beneficial customer, partner,
supplier and business relationships is essential for our long-term success. The strength
and quality of our relationships underpins our strategic goals of reshaping our portfolio and
scaling our capital partnerships to improve our return on capital and further accelerate the
development of our pipeline.
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Image caption:Stockland head office, NSW
How we create value
Our commitment to customer excellence
Through our focus on delivering a superior customer experience we can cultivate
trust, strengthen our relationships, improve our competitiveness and drive sustainable
growth. Our commitment to customer excellence sees us striving to develop meaningful
connections through a deep understanding of our customers and leveraging data-driven
insights to provide a great customer experience that sets us apart from our competitors.
Measuring customer satisfaction and wellbeing
We take a data-driven approach to understanding customer
values and aspirations, uncovering timely and actionable
insights and leveraging predictive intelligence to deliver
personalised customer experiences across our portfolio.
Our annual Liveability Index Survey measures what
matters to our residents and helps inform our design
and development processes, including strategic planning,
placemaking guidelines and sustainability initiatives and
partnerships. This year, we enhanced the survey to
address feedback from residents and better reflect our
diversified portfolio. This included streamlining the survey,
the inclusion of advanced analytics to better identify drivers
and opportunities of liveability and the extension of the
survey to include Halcyon home owners.
In FY23, our national Liveability index score across MPC
communities remained stable at 70 per cent. This is below
our target of 75 per cent. Among early-stage communities,
key priorities for improvement include access to amenities
such as retail, transport and community spaces. Our
Halcyon communities performed well on home design
along with safety and security and further improvements
are planned to improve community updates and address
perceptions in relation to ongoing costs.
Our Workplace and Logistics Satisfaction monitor takes the
pulse of our tenants annually, allowing them to provide
feedback on their relationship with Stockland. The insight
from this research enables us to address tenant pain points
and identify future opportunities for improvement.
In FY23, we sought to better understand and assess our
performance in the marketplace by enhancing our survey
design and incorporating industry benchmarks.
Our logistics and workplace tenant satisfaction score
increased two per cent on FY22 to 82 per cent against
our target of 80 per cent. These improvements were driven
largely by strong property and employee relationship ratings
particularly among our logistics tenants.
Across our retail portfolio, derived shopper satisfaction
increased to 82.1 per cent above our target of 78
per cent. Overall, our retail tenant satisfaction score
was 82.5 per cent, remaining above our 75 per
cent target. We maintain a strong focus on customer-
centric engagement with improved tenant relationship
management practices and the implementation of a new
customer relationship program.
Residential Communities Customer Service Centre
Our Communities business successfully rolled out the
Customer Service Centre (CSC) based on customer
data, resulting in a 25 per cent increase in sales team
productivity and an improved customer journey. First
piloted in FY22, the initial data led to an expansion to
all Masterplanned Communities and medium density
projects this year, and more recently to our Land Lease
Communities customers.
Our previous operating model required the sales team to
contact and service all potential customers as well as
manage all sales from deposit to settlement. Customer
data showed us there was an increased demand for
frequent engagement. To address this, we introduced the
CSC, a dedicated phone/digital team assisting customers
from initial inquiries to sales readiness, where sales
professionals can then guide them to settlement.
This approach resulted in three times more customers
moving forward to being sales ready and an increase in
satisfaction scores with sales professionals rated as very
good or excellent since the implementation of this new
operating model.
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Stockland Annual Report 2023
WELL ratings
In November 2022, Stockland was recognised by the
International WELL Building Institute (IWBI) as the first
Australian property group to achieve a WELL Health-
Safety Rating in the retail sector, obtaining a rating for
eight of its shopping centres across New South Wales,
Victoria, Queensland, and Western Australia.
The rating was achieved by working collaboratively with a
team of contractors, consultants, facilities managers and
retailers at each centre to assist us in adopting strategies
to support the health and wellbeing of Stockland
customers and retailer staff. Some of the strategies
implemented are visible – like keeping spaces clean and
sanitised – while others less so, like having best-practice
emergency procedures in place and ensuring we have
high-quality clean air and water supplied within our
buildings. This allows our customers and retailers to have
a heightened experience in our spaces knowing their
health and safety is prioritised.
Capital partner of choice
We provide high-quality, commercially attractive investment prospects for third-party investor partners by leveraging our
demonstrated leadership and proven expertise in asset development and management. Our strategic capital partnerships
enable us to scale our management and development capabilities and grow assets under management more quickly to
enhance long-term, sustainable business growth for us and our partners.
Our strategic capital partnerships enable us
to enhance long-term sustainable business
growth for us and our partners
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Year ended 30 June 2023
55
Image caption:Stockland Green Hills, NSW
How we create value
Digital and data excellence
Innovation gives us a platform for customers and stakeholders to have an exceptional
experience with Stockland, develop and extend trust, and to create sustainable growth.
Innovation is essential to what we do, every day.
Our focus on innovation is demonstrated in the leading
assets we develop for our communities, and the
transformation of the capabilities that deliver them,
leveraging leading digital and data.
Data-enabled solutions continue to drive customer
centricity, operational excellence, and enhanced decision
making across our asset lifecycles.
We are expanding our leading-edge analytics capability,
including artificial intelligence (AI) and advanced geospatial
analytics, harnessing the power of our technology
capabilities to create value from data for our business,
stakeholders, and customers.
We have embraced digital technology to create leading
customer experiences. In December 2022, we launched
The Stockland Hub to provide our customers with an
enhanced and personalised digital experience across 22
of our Masterplanned communities. The Hub supports new
digital enquiries, and provides a streamlined engagement
path for our customers by personalising their experience
based on their buyer type, and guiding customers through
the home buying and building process in a self-service
digital portal. This digital platform will continue to be
leveraged across our portfolio in line with our growth plans.
For our Retail Town Centres, we are leveraging digital
solutions to support our tenants and shoppers for example,
our Stockland Marketplace is an online hyper-local platform
allowing retailers to list their products, and shoppers find,
browse, click and collect locally.
Stockland Terra
Stockland Terra, our proprietary and tailored geospatial
analytical application, is improving the way our
teams explore, track, and evaluate land acquisition
opportunities across Australia. In FY23, we further
embedded our 'customer first' thinking into our Terra
platform, including:
• Surfacing demographic data for land corridors,
allowing us to rapidly understand the
addressable market.
• integrating aggregated customer data such as lifestyle
needs, household characteristics, product and location
preferences, and likelihood to move – all of which
provide a richer understanding of our customer base.
• incorporating ESG-related datasets and intelligence,
allowing for ESG analysis earlier in the
development process.
Expanding Stockland Terra’s capability to make insights
more dynamic and accessible empowers us to make
decisions quickly and with conviction, and it helps the
communities we develop to be fit-for-purpose, delivering
on our customers’ needs and values, and in line with our
ESG Strategy.
56
Stockland Annual Report 2023
Governance
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Year ended 30 June 2023
57
Image caption:Stockland head office, NSW
Governance
Board of Directors
Tom Pockett
Chairman
Tom Pockett was appointed to the Board on 1 September
2014 and became Non-Executive Chairman on
26 October 2016.
Mr Pockett has extensive experience in both the property
and financial sectors having held a number of senior
executive positions including Chief Financial Officer and
Executive Director of Woolworths Limited, Deputy Chief
Financial Officer at the Commonwealth Bank of Australia
and several senior finance roles at Lendlease. He is also the
Chairman of Insurance Australia Group Limited. In addition
to his role as the Chair of the Stockland Board, Mr Pockett
is a member of the People & Culture Committee. Mr Pockett
was also Chairman of the Stockland CARE Foundation
Board until April 2022.
Qualifications and age
BComm, FCA, 65
Directorships of listed entities in last three years
Directorships of listed entities in last three years:
Autosports Group Limited (29 August 2016 to 30 November
2021), Insurance Australia Group Limited (1 January 2015
to present).
Tarun Gupta
Managing Director and Chief
Executive Officer
Tarun Gupta was appointed Managing Director and Chief
Executive Officer of Stockland on 1 June 2021. Mr Gupta
was also appointed to the Board of Directors on 1 June
2021. Mr Gupta has over 25 years’ experience in the
property industry and has held a number of senior roles
at a large listed Australian property company including
Chief Executive Officer, Property Australia, Group Head of
Investment Management, Chief Investment Officer, Asia
Pacific, Fund Manager, Australian Prime Property Funds and
most recently Group Chief Financial Officer.
Qualifications and age
BA (Econ) (Hons), MBA, GAICD, 53
Directorships of listed entities in last three years
None.
58
Stockland Annual Report 2023
Melinda Conrad
Non-Executive Director
Melinda Conrad was appointed to the Board on 18 May 2018.
Ms Conrad has more than 25 years of expertise
in consumer- related industries, including as a retail
entrepreneur and CEO, and roles at Colgate-Palmolive and
Harvard Business School.
Ms Conrad is currently a Director of ASX Limited, Ampol
Limited and Penten Pty Ltd. She is also a Non-Executive
Director of The Centre for Independent Studies, a member
of the AICD Corporate Governance Committee and an
Advisory Board Member of Five V Capital.
Ms Conrad is Chair of the People & Culture Committee.
Qualifications and age
BA, MBA, FAICD, 54
Directorships of listed entities in last three years
ASX Limited (1 August 2018 to present), Ampol Limited
(1 March 2017 to present).
Kate McKenzie
Non-Executive Director
Kate McKenzie was appointed to the Board on
2 December 2019.
Ms McKenzie’s executive career included over 30 years’
experience in the telecommunication and government
sectors in Australia, New Zealand and Hong Kong. She
was most recently the chief executive officer of Chorus,
New Zealand’s largest provider of telecommunications
infrastructure, a top 50 New Zealand Stock Exchange
listed company. Prior to this, Ms McKenzie held several
senior roles at Telstra from 2004 – 2016, including Chief
Operating Officer, where she oversaw the group’s extensive
property portfolio, and seven years in senior roles in NSW
Government, including the Department of Commerce and
Department of Industrial Relations.
Ms McKenzie is currently the Chair of NBN Co Limited, and
a director of Healius Limited and AMP Limited.
Ms McKenzie is a member of the Audit Committee and
Sustainability Committee.
Qualifications and age
BA, LLB, 62
Directorships of listed entities in last three years
AMP Limited (18 November 2020 to present), Healius
Limited (25 February 2021 to present).
Stephen Newton
Non-Executive Director
Stephen Newton was appointed to the Board on
20 June 2016.
Mr Newton has extensive experience across real
estate investment, development and management
and infrastructure investment and management. Mr
Newton is a Principal and Director of Arcadia
Funds Management Limited, a real estate investment
management and capital advisory business and prior to
this, he was the Chief Executive Officer - Asia/Pacific for
the real estate investment management arm of Lendlease.
Mr Newton is currently a Director of BAI Communications
Australia, Boldyn Networks Group, Waypoint REIT Group,
Arcadia Funds Management Group Companies, Sydney
Catholic Schools Limited, and Chairman of the Finance
Council for the Catholic Archdiocese of Sydney.
Mr Newton is Chair of the Audit Committee and a member
of the Risk Committee.
Qualifications and age
BA (Ec and Acc), M.Com, MICAA, MAICD, 70
Directorships of listed entities in last three years
Viva Waypoint REIT Group (10 July 2016 to present).
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Christine O’Reilly
Non-Executive Director
Christine O’Reilly was appointed to the Board on
23 August 2018.
Ms O’Reilly’s executive career included 30 years’ experience
in both financial and operational entities both domestically
and offshore. Following an early career in chartered
accounting and investment banking, she has held a number
of senior executive roles in diverse industries including CEO
and Director of the GasNet Australia Group and Co-Head of
Unlisted Infrastructure Investments at Colonial First State
Global Asset Management.
Ms O’Reilly is currently a Director of ANZ Limited, BHP Group
Limited and Baker Heart and Diabetes Institute.
Ms O’Reilly is the Chair of the Risk Committee and a
member of the Audit Committee.
Year ended 30 June 2023
59
Governance
Qualifications and age
BBus, 62
Directorships of listed entities in last three years
Directorships of listed entities in last three years: CSL
Limited (16 February 2011 to 14 October 2020), Transurban
Limited (12 April 2012 to 8 October 2020), Medibank
Private Limited (31 March 2014 to 12 November 2021), BHP
Group Limited (12 October 2020 to present), ANZ Limited
(1 November 2021 to present).
has previously been a director of Westfield Retail
Trust and Scentre Group. Mr Brindle holds a Bachelor of
Engineering (Honours), Bachelor of Commerce and Master
of Business Administration.
Mr Brindle is a member of the Audit Committee.
Qualifications and age
BE, BComm, MBA, 65
Directorships of listed entities in last three years
National Storage REIT (19 December 2013 to April 2022),
Waypoint REIT (10 July 2016 to present).
Andrew Stevens
Non-Executive Director
Andrew Stevens was appointed to the Board on 1 July
2017. Mr Stevens’ executive career at Price Waterhouse,
PricewaterhouseCoopers and IBM, has provided him with
experience in change management, business and ICT
program design and risk evaluation, governance and
delivery, and in business transformation and regional/
global expansion. Mr Stevens is Chair of Industry Innovation
and Science Australia and the Chairman, Data Standards
for the Consumer Data Right in Australia. Mr Stevens also
serves as a Director of Ooh Media Limited.
Mr Stevens is a member of the Champions of Change.
Mr Stevens is the Chair of the Sustainability Committee
and a member of the Risk Committee and the People and
Culture Committee.
Qualifications and age
BComm, MComm, FCA, 63
Directorships of listed entities in last three years
Thorn Group Limited (1 June 2015 to 4 December 2019), OoH
Media Limited (25 September 2020 to present).
Adam Tindall
Non-Executive Director
Mr Tindall was appointed to the Board on 1 July 2021.
Mr Tindall has over 30 years’ experience in investment
management and real estate. Mr Tindall was the Chief
Executive Officer of AMP Capital from 2015 to 2020
where he led a global team overseeing funds and separate
accounts for clients across a range of asset classes
including real estate, infrastructure, equities, fixed income
and multi-asset capabilities. Mr Tindall's prior roles at
AMP Capital include Director and Chief Investment Officer
for Property, leading a team managing a $19 billion
portfolio of real estate investments of behalf of domestic
and international institutional investors. Prior to 2009 Mr
Tindall held senior leadership roles at Macquarie Capital
and Lendlease.
Mr Tindall holds a Bachelor of Engineering (Civil)
(Honours) and is a Fellow of the Australian Institute of
Company Directors.
Mr Tindall is a member of the Audit Committee and the
Sustainability Committee.
Qualifications and age
BE (Hons), 58
Directorships of listed entities in last three years
CSR (16 January 2023 to present).
Laurence Brindle
Non-Executive Director
Mr Brindle was appointed to the Board on 16 November
2020. Mr Brindle has extensive experience in the
acquisition, development and management of landmark
property assets. His executive career included 21 years
with QIC where he served in various senior positions
including a long-term member of QIC’s Investment
Strategy Committee and Head of Global Real Estate where
he was responsible for a $9 billion portfolio.
Mr Brindle is currently the Chairman of Waypoint REIT.
He is a former Chairman of both National Storage
REIT and Shopping Centre Council of Australia and
60
Stockland Annual Report 2023
The Stockland
Leadership Team
Tarun Gupta
Louise Mason
Managing Director and Chief
Executive Officer
Refer to biography on page 58.
Katherine Grace
Chief Legal & Risk Officer
Katherine Grace was appointed General Counsel and
Company Secretary on 21 August 2014 and in her current
role as Chief Legal and Risk Officer has responsibility
for Stockland’s legal and risk functions. As the Company
Secretary Ms Grace is directly accountable to the Board,
through the Chairman, for all matters relating to governance
and the proper functioning of the Board.
Ms Grace has practised as a solicitor for over 20 years
with extensive experience in corporate, property, debt
and capital markets transactions working with a wide
range of stakeholders including listed board directors,
equity investors, regulators, media and financiers.
Prior to joining Stockland, Ms Grace held roles as General
Counsel and Company Secretary for Westfield Retail Trust
and Valad Property Group.
Ms Grace is a key management person for the purposes of
the Remuneration Report.
Qualifications
BA (Hons), LLB (Hons), MPP, GAICD
CEO Commercial Property
Louise Mason was appointed Group Executive & CEO
Commercial Property on 18 May 2018. Ms Mason has more
than 30 years’ experience in real estate and is responsible
for all aspects of Stockland’s extensive Commercial
Property portfolio of Retail Town Centres, Workplace and
Logistics assets with a combined value of $10.5 billion as at
30 June 2023.
Prior to joining Stockland, Ms Mason was Chief Operating
Officer of AMP Capital Real Estate. She has also held several
senior executive operational and development roles at AMP
in retail, office, and industrial, as well as retail management
positions at Lendlease.
Ms Mason is a past President of the NSW Division of the
Property Council of Australia.
Ms Mason is a key management person for the purposes of
the Remuneration Report.
Qualifications
BA, LLB (Hons), GAICD
Alison Harrop
Chief Financial Officer
Alison Harrop joined Stockland as Chief Financial Officer on
10 January 2022. Ms Harrop has over 25 years’ experience in
finance and operations in Australia and overseas across
a diverse range of sectors including property, financial
services and government. Ms Harrop has previously held
senior finance roles at Macquarie Group, Australia Post and
Westpac, and prior to joining Stockland was Chief Financial
Officer at Dexus.
Ms Harrop is a key management person for the purposes of
the Remuneration Report.
Qualifications
BSc (Hons), FCA, GAICD
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Year ended 30 June 2023
61
Governance
Andrew Whitson
CEO Communities
Andrew Whitson was appointed Group Executive &
CEO Communities on 1 July 2013. Mr Whitson
oversees Stockland’s 51 residential masterplanned
communities with a portfolio of approximately 68,000 lots
and an approximate end value of $21.4 billion. At as 30 June
2023, Mr Whitson is also responsible for 33 land lease
communities with a development pipeline of approximately
7,100 lots.
Mr Whitson joined Stockland in early 2008 as Regional
Manager for Greater Brisbane and Far North Queensland. He
was appointed General Manager Residential, Victoria in July
2009 and in November 2012, his role expanded to include
NSW. He was Group Executive and CEO of the Residential
business in 2013 before his role was expanded to lead both
the Residential and Retirement Living businesses as the
combined Communities function in August 2018. Andrew is
the former Chair of the Residential Development Council
of Australia and a Director of the Green Building Council
of Australia.
Mr Whitson is a key management person for the purposes
of the Remuneration Report.
Qualifications
BE (Civil)
Karen Lonergan
Chief People & Stakeholder
Engagement Officer
Karen Lonergan joined Stockland as Group Executive,
People and Culture on 11 March 2019. Ms Lonergan has
over 25 years’ experience working in senior roles in HR
strategy development, organisational development, and
leading transformation and change in the Transportation,
FMCG, and Retail sectors across Australia, Asia, the USA
and Europe. She was previously the Chief People Officer at
David Jones and Country Road Group, after being a People
Director at Woolworths Group Limited. Prior to her role
at Woolworths, Ms Lonergan was the Executive Manager,
Human Resources for Qantas International.
Qualifications
BBus, MMgt, GAICD, FAHRI
Sharmila Tsourdalakis
Chief Innovation, Marketing and
Technology Officer
Sharmila Tsourdalakis was appointed Chief
Innovation, Marketing and Technology Officer on 27 April
2020 and leads our Innovation, Marketing, Technology
and Customer teams. She has over 20 years’
experience working in senior roles in technology, innovation,
customer and digital transformation for ASX-listed
companies. She was previously the Executive General
Manager for Suncorp’s Banking and Wealth Technology
and Portfolio Management responsible for the strategic
direction and operational leadership of technology. Prior to
Suncorp, Ms Tsourdalakis was Chief Information Officer at
The GPT Group.
Qualifications
BComm, LLB, GAICD
Justin Louis
Chief Investment Officer
Justin Louis joined Stockland as Chief Investment Officer
on 1 November 2021. Mr Louis has more than 20 years’
experience working in senior roles in real estate investment
and development across a number of sectors. With a mix
of sell-side and buy-side experience, Mr Louis has worked
with a number of leading Australian real estate companies
and global investors. Mr Louis was previously Australian
Managing Director, Real Estate, Real Assets at the Canada
Pension Plan Investment Board (CPPIB). Prior to CPPIB, Mr
Louis was General Manager Investment Operations, Asia
for Lendlease.
Mr Louis is a key management person for the purposes of
the Remuneration Report.
Qualifications
BComm (Property Economics), MBA, MAICD
62
Stockland Annual Report 2023
Our approach to
corporate governance
Stockland Corporation Limited, Stockland Trust Management Limitd as Responsible Entity
for Stockland Trust and their related entities (collectively, Stockland) are committed to
achieving and demonstrating the highest standards of corporate governance.
Stockland has reviewed its corporate governance practices against the Corporate Governance Principles and
Recommendations (4th edition) published by the ASX Corporate Governance Council. The Board places a high importance
on its corporate governance responsibilities and in FY23 was in compliance with all of the recommendations in the ASX
Corporate Governance Principles and Recommendations (4th edition).
This Corporate Governance Statement reflects the corporate governance practices in place throughout the 2023 financial
year, is current as at 24 August 2023, and has been approved by the Board.
Stockland's governance and risk management documentation including key policies, charters, and Stockland’s Appendix
4G Key to Disclosures under the Corporate Governance Principles and Recommendations for the year ended 30 June 2023
can be viewed at www.stockland.com.au/about-stockland/corporate-governance.
Corporate Governance Framework
The roles, responsibilities and accountabilities of the Board, Board Committees and Stockland Leadership Team are set
out in the Board and Board Committee charters, which have been summarised below.
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Year ended 30 June 2023
63
The Board Charter describes the matters reserved for
the Board and its Committees, and determines the
level of authority delegated to the Managing Director
and Stockland Leadership Team for the day-to-day
management of Stockland. A copy of the Board Charter
can be found on our website at www.stockland.com.au/
about-stockland/corporate-governance.
The Board has delegated certain responsibilities to standing
Committees which operate in accordance with the
Committee Charters approved by the Board.
The Board actively engages with management in overseeing
the operations of the Group. In addition to Board and
Committee meetings held across Stockland offices, the
Board meets with employees at operational sites and
undertakes asset tours across the portfolio on a regular
basis. A number of asset tours were conducted by
members of the Board and Stockland Leadership Team
in the last 12 months including to development and
operational assets in Brisbane, Melbourne, Sydney and the
Sunshine Coast.
A copy of the Board Charter can be
found on our website www.stockland.com.au/about-
stockland/corporate-governance.
Governance
The Board
The constitutions of Stockland Corporation Limited and
Stockland Trust Management Limited each establish
a Board of Directors (collectively referred to as the
Board) which has overall responsibility for the governance
of Stockland.
Our Board is accountable to securityholders and
responsible for demonstrating leadership and oversight so
that the operations of Stockland are effectively managed in
a manner that is properly focused on its economic, social
and community objectives.
The roles, responsibilities and accountabilities of the Board
are set out in the Board Charter, which confirms that the
Board is responsible for:
• Overseeing the development and implementation of
Stockland’s corporate strategy, operational performance
objectives, Group environmental and social targets, and
management policies with a view to creating sustainable
long-term value for securityholders;
• Overseeing the development and implementation of
Stockland’s overall framework of governance, risk
management, internal control and compliance which
underpins the integrity of management information
systems, financial reporting and fosters high ethical
standards throughout Stockland;
• Appointing the Directors (subject to Stockland’s
constitution), appointing the Managing Director, approving
the appointment of the Company Secretary and
Stockland Leadership Team members reporting to the
Managing Director and determining the level of authority
delegated to the Managing Director;
• Setting Executive remuneration policy, monitoring
Stockland Leadership Team members’ performance and
approving the performance objectives and remuneration
of the Managing Director and his or her direct reports and
reviewing Executive and Board succession planning and
Board performance;
• Approving and monitoring the annual budget, business
plans, financial statements, financial policies and
financial reporting and major capital expenditure,
acquisitions and divestitures;
• Determining and adopting dividend and distribution
policies; Overseeing compliance with applicable laws and
regulations; and
• Appointing and monitoring the independence of
Stockland’s external auditors.
64
Stockland Annual Report 2023
Board committees
Four permanent Board Committees covering Audit, Risk, People & Culture and Sustainability have been established to
assist in the execution of the Board’s responsibilities.
The Board’s policy is that a majority of the members of each Board Committee are independent Directors. For the reporting
period each of the Audit Committee, People & Culture Committee, Risk Committee and Sustainability Committee comprise
only independent Directors.
The Board reviews the composition of each Board Committee periodically, balancing the benefits of rotation with those
of maintaining continuity of experience and knowledge, and to ensure Board Committee members have skills appropriate
to their roles. Committee Chairs provide reports to the Board on key matters and Committee memberships provide for
overlap of membership between the different Committees to facilitate connections across the respective areas of
responsibility.
Current members of the Board Committees
Audit Committee
Stephen Newton (Chair)
Laurence Brindle
Christine O’Reilly
Kate McKenzie
Adam Tindall
People & Culture Committee
The Audit Committee is responsible for the oversight of the integrity of Stockland’s consolidated financial statements and
disclosures, and the maintenance of a sound financial control environment. The purpose of the Audit Committee is to
assist the Board to discharge its responsibilities for:
• The integrity of Stockland’s financial reports and external audit
• The appropriateness of Stockland’s accounting policies and processes
• The effectiveness of Stockland’s financial reporting controls and procedures
• The effectiveness of Stockland’s internal control environment
• Compliance with Stockland’s Australian Financial Services Licenses and Compliance Plans
• Compliance with relevant laws and regulations including any prudential supervision procedures.
Melinda Conrad (Chair)
Tom Pockett
Andrew Stevens
The People & Culture Committee incorporates the functions of two board committees recommended by the ASX Corporate
Governance Principles and Recommendations: a Nominations Committee and a Remuneration Committee. The purpose
of the People & Culture Committee is to consider and make recommendations to the Board on:
• The size, composition and desired competencies of the Board
• Director independence, performance, remuneration and succession arrangements
• The content of the annual remuneration report and remuneration details contained within other statutory reports,
including financial statements
• Stockland’s policies for employment, performance planning and assessment, training and development, promotion and
people management.
• In August 2023, the Board approved the establishment of a stand alone Nominations Committee to be chaired by Ms
Conrad. The Nominations Committee will have responsibility for making recommendations to the Board on succession,
and Board and Committee appointments.
The purpose of the Risk Committee is to assist the Board to discharge its responsibilities in relation to:
• Assessing the effectiveness of Stockland’s overall risk management framework
• Supporting a prudent and risk aware approach to business decisions across Stockland.
In FY23 the Risk Committee was involved in discussions and reviews relating to a variety of matters including Stockland's
risk management framework, regulatory compliance obligations, work health and safety, cyber security management and
data governance.
The purpose of the Sustainability Committee is to consider and make recommendations to the Board on:
• The sustainability impacts of Stockland’s business activities including social and environmental.
• Approve specific external stakeholder communications.
• Major corporate responsibility and sustainability initiatives and changes in policy
• The Group’s external sustainability policies and publicly disclosed sustainability targets and policies.
In FY23, the Sustainability Committee undertook a review of Stockland's Modern Slavery Statement and Climate Transition
Action Plan prior to consideration by the Board.
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Risk Committee
Christine O’Reilly (Chair)
Stephen Newton
Andrew Stevens
Sustainability Committee
Andrew Stevens (Chair)
Kate McKenzie
Adam Tindall
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Further information about our Board Committees can be
found in the Committee Charters, available on our website
www.stockland.com.au/about-stockland/corporate-
governance.
Year ended 30 June 2023
65
Governance
Board and Committees Meetings
The number of Board and standing Board Committee meetings held during the financial year that each Director was
eligible to attend, and the number of meetings attended by each Director is set out in the table below. In addition to the
meetings below from time to time, ad-hoc briefings are also held with Board members.
Scheduled
Board
Audit
Committee
People & Culture
Committee
Sustainability
Committee
Risk
Committee
A
10
11
11
11
11
11
10
10
11
B
11
11
11
11
11
11
11
11
11
A
–
6
–
–
6
6
6
–
6
B
–
6
–
–
6
6
6
–
6
A
4
–
4
–
–
–
–
4
–
B
4
–
4
–
–
–
–
4
–
A
B
-
-
-
-
6
-
-
6
6
-
-
-
-
6
-
-
6
6
A
–
–
–
–
–
4
4
4
–
B
–
–
–
–
–
4
4
4
–
Director
Mr T Pockett
Mr L Brindle
Ms M Conrad
Mr T Gupta
Ms K McKenzie
Mr S Newton
Ms C O’Reilly
Mr A Stevens
Mr A Tindall
A – Meetings attended / B – Meetings eligible to attend
66
Stockland Annual Report 2023
Board effectiveness
Stockland is committed to having a Board composition which is informed by the principles
set out in the ASX Corporate Governance Principles and Recommendations.
Board composition
Stockland is committed to ensuring that its Board is comprised of a majority of independent Non-Executive Directors,
with the diversity of experience, skills and expertise necessary to deliver long-term sustainable returns to securityholders.
The Board currently comprises one Executive Director and eight Non-Executive Directors. The membership of the Board
is reviewed periodically having regard to the ongoing and evolving needs of Stockland. The Board considers a number of
factors when filling a vacancy including:
Qualifications, skills
and experience
The right mix of skills, expertise
and experience to enable it to deal
with current and emerging risks
and opportunities, and to effectively
review and challenge the effectiveness
of management.
Tenure
The Board balances longer-serving
directors with a deep knowledge of
Stockland’s business, policies and
history, and newer directors with
fresh perspectives and different but
complementary experience.
Independence
The Board will comprise a majority of
Non-Executive Independent Directors
and the Chair of the Board must be
an independent director in accordance
with the Board Charter.
Diversity
The Board recognises the benefits
of diversity both across the
organisation as well as in relation to
Board composition.
Tenure
As at 30 June 2023, the tenure profile of the Board is shown
in the below diagram.
Tenure profile
55% 1-4 years =
5 Directors
45% 5-10 years =
4 Directors
The Board believes that it is important to maintain a range
of director tenures to facilitate orderly Board renewal while
maintaining valuable continuity and corporate knowledge
among directors.
The Group has an induction program for new Directors
including detailed briefings from management, meetings
with external advisors and asset tours. This complements
the existing program of site tours, topic deep dives,
portfolio and strategy briefings presented to the Board
under an annual program agreed with the Chairman.
In FY23 deep dive presentations to the Board included
detailed consideration of the Group’s strategic priorities
including key underlying thematics regarding the future
of workplace and mixed-use development, retail and
technology, innovation and continued evolution of ESG
including decarbonisation, social impact and nature.
Ultimately, the full Board determines who is invited to fill a
casual vacancy after extensive one-on-one and collective
interviews with candidates and thorough due diligence and
reference checking. Written agreements setting out the
terms of their engagement are entered into for all Directors
and senior executives. Directors coming up for re-election
are also reviewed by the People & Culture Committee and
the Board considers whether to support their re-election.
It is the Board’s policy that Directors offer themselves for
re-election only with the agreement of the Board.
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Year ended 30 June 2023
67
Governance
Board skills matrix
Stockland is committed to having a Board whose members have the capacity to act independently of management,
and have the collective skills and diversity of experience necessary to optimise the long-term financial performance of
Stockland to deliver long-term sustainable returns to securityholders.
68
Stockland Annual Report 2023
Board composition
The Board has identified a range of core skills and
experience that will assist the Board collectively to fulfil
its oversight role effectively.
These include:
• Experience with property investment and management
• Property and community development
• Construction and project management
• Retailing and consumer marketing
• Technology and digital innovation
• Data analytics and insights
• Industrial supply chain logistics
• Funds management
• Banking and finance
• Government and regulatory relations
• Environmental, social and governance matters
• Strategy development
• Significant senior executive experience
It is also advantageous for some Directors to have
experience in the audit and risk management field,
Independence criteria
The Board regularly assesses the independence of each
director in light of the interests that they have disclosed
and such other factors as the Board determines are
appropriate. In FY23 each Non-Executive Director satisfied
the requirements for independence.
The criteria applied to determine whether a director
is independent is set out in the Board Charter
available on our website www.stockland.com.au/about-
stockland/corporate-governance.
capital management, mergers and acquisitions, people
management and executive remuneration. Climate risk is
a key focus for Stockland. Directors have a wide range
of experience in assessing, managing and responding
to environmental risk with insights and learnings from
different sectors and industries which complement the
skills set identified in the matrix. During FY23 the Board
received various presentations and briefings on a range of
topics tailored for professional development, key thematics
for Stockland and the ongoing responsibilities of the Board.
The Board believes that it has the right experience and
skills to oversee the high standard of corporate governance,
integrity and accountability required of a professional and
ethical organisation as shown in the Skills Matrix diagram.
The Board has a process for regularly evaluating its
performance with an external review undertaken every
three years and internal feedback provided annually
between each external survey. In FY23, the Board undertook
an external review of performance with feedback from
the review provided to the Board and individual directors.
The review provided an opportunity to evolve the meeting
cadence and format for the Board and Committees as well
as further leverage the existing asset tour program.
37.5%
Female Non-Executive Directors
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Year ended 30 June 2023
69
Governance
Our approach to tax
Stockland’s tax strategy is to conduct all its tax affairs in a transparent, equitable and
commercially responsible manner, having regard to all relevant tax laws, regulations and tax
governance processes, to demonstrate good corporate citizenship.
Tax disclosures and information
For information and detailed reconciliations of Stockland’s
tax expense, effective tax rate and deferred tax balances
please refer to notes 21 (Income Tax) and 22 (Deferred Tax)
in the Financial Report.
Tax contribution summary
As one of Australia’s largest diversified property groups,
which owns, develops and manages commercial property
assets and residential communities, Stockland contributes
to the Australia economy, through the various taxes levied
at the federal, state and local government level.
In FY23 these taxes totalled more than $356 million, and
were either borne by Stockland as a cost of our business or
collected and remitted as part of our broader contribution
to the Australian tax system.
The chart below illustrates the types of taxes that
contributed to the taxes paid and/or collected and remitted
for the 2023 tax year.
Total tax contribution (%)
33.33% Net GST Paid
23.84% PAYG Withholding
24.33% State Taxes (includes
Land Tax and Payroll
Tax)
18.35% Other Duties & Levies
Fringe Benefit Tax and
0.15%
Income Tax
Tax control and governance
policy framework
Stockland maintains a Tax Control and Governance
Framework (TCGF), reviewed and approved by the Audit
Committee, which outlines the principles governing
Stockland’s tax strategy and risk management policy.
The TCGF is consistent with the guidelines published
by the Australian Taxation Office (ATO) regarding tax
risk management and governance processes for large
business taxpayers.
We undertake periodic reviews of the TCGF to
test the robustness of the design of the framework
against ATO benchmarks and to demonstrate
the operating effectiveness of internal controls
to stakeholders.
The key principles of the TCGF are summarised
as follows:
• A tax strategy to conduct all tax affairs in a transparent,
equitable and commercially responsible manner, whilst
having full regard to all relevant tax laws, regulations
and tax governance processes, to demonstrate good
corporate citizenship;
• A balanced tax risk appetite that is consistent with
the Board approved risk appetite, to ensure Stockland
remains a sustainable business and a reputable and
attractive investment proposition;
• A commitment to engage and maintain relationships
with tax authorities that are open, transparent and
co- operative, consistent with Stockland’s Code of
Conduct; and
• An operating and trading business based in Australia,
with no strategic intentions of engaging in any tax
planning involving the use of offshore entities or low-
tax jurisdictions.
Voluntary Tax Transparency Code
As part of Stockland’s commitment to tax transparency
and demonstrating good corporate citizenship, Stockland
has adopted the Australian Federal Government’s Voluntary
Tax Transparency Code (TTC), which provides a set of
principles and minimum standards to guide medium and
large businesses on public disclosure of tax information.
70
Stockland Annual Report 2023
General information
Directors' securityholdings
Particulars of securities held by Directors are set out in the
Remuneration Report that forms part of this Report. No
options have been granted to Directors during the period.
No proceedings
No application has been made under section 237 of the
Corporations Act 2001 (Cth) in respect of Stockland, and
there are no proceedings that a person has brought or
intervened in on behalf of Stockland under that section.
Indemnities and insurance of officers
and auditor
Subject to the following, no indemnity was given or
insurance premium paid during or since the end of the
Financial Year for a person who is or has been an officer or
auditor of the Group.
The Group has paid an insurance premium in respect
of Directors and Officers liability insurance contracts as
permitted by the Corporations Act 2001. The terms of
the insurance policy prohibit disclosure of details of the
nature of the liabilities covered by, and the amounts of the
premiums payable under, that insurance policy. Premiums
are also paid for fidelity insurance and professional
indemnity insurance to cover certain risks for a broad range
of employees including Directors and senior executives.
In addition, each Director and some Key Management
Personnel have entered into a Deed of Access, Indemnity
and Insurance which provides for indemnity against liability
as a Director or officer of the Group, except to the extent
of indemnity under an insurance policy or where prohibited
by statute. The deed also entitles the Directors and officers
to access company documents and records subject to
undertakings as to confidentiality.
Non-audit services
During the financial year the Group’s auditor, PwC, provided
certain other services to the Group in addition to their
statutory duties as auditor.
The Board has considered the non-audit services provided
during the financial year by the auditor and is satisfied that
the provision of those services is compatible with, and did
not compromise, the auditor independence requirements
of the Corporations Act 2001 (Cth).
The non audited services included services relating to:
• Traffic planning for Aura Town Centre and reviewing
planning assumptions and updating traffic model
• Review of model and capital partnership strategy for
confidential pipeline development project
The Audit Committee resolved that the provision of
non-audit services during the financial year by PwC as
auditor is compatible with, and did not compromise, the
auditor independence requirements of the Corporations
Act 2001 (Cth).
The Board’s own review conducted in conjunction with the
Audit Committee, having regard to the Board policy set out
in this Report, concluded that it is satisfied the non-audit
services did not impact the integrity and objectivity of the
auditor; and the declaration of independence provided by
PwC, as auditor of Stockland.
Details of the amounts paid to the auditor of the Group,
PwC, and its related practices for audit and non-audit
services provided during the financial year are set out in
note34 of the accompanying financial statements.
Lead Auditor’s Independence Declaration
under section 307C of the Corporations
Act 2001
The external auditor’s independence declaration is set out
on page77 and forms part of the Directors’ Report for the
year ended 30 June 2023.
Rounding off
Stockland is an entity of the kind referred to in ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that
Instrument, amounts in the Financial Report and Directors’
Report have been rounded to the nearest million dollars,
unless otherwise stated.
Other Information
Associates and joint ventures, which the Company and
Trust do not control, are not dealt with for the purposes
of this statement, however management confirms that
procedures are in place to assess the integrity of the
financial information from these associates and joint
ventures for the purposes of consolidating information into
the financial accounts for the Company and the Trust.
To support the Executive Confirmations a robust framework
exists to verify the integrity of the reporting provided to
securityholders. For financial reporting periods this includes
a structured series of management questionnaires, sign
offs, direct interviews and engagement with auditors. All
information released to the market is reviewed for accuracy,
supported by a verification and management approval
process and approved by the Continuous Disclosure
Committee and, where required, the Board, as set out in
the Continuous Disclosure and External Communications
Policy available on our website www.stockland.com.au/
about-stockland/corporate-governance.
The Board is promptly provided with a copy of all material
market announcements after they have been made. Signed
on behalf of the Board in accordance with a resolution of
the Directors.
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Tom Pockett
Chairman
Dated at Sydney, 24 August 2023
Tarun Gupta
Managing Director
Year ended 30 June 2023
71
Governance
Executive confirmations
The Managing Director and the Chief Financial Officer have provided a written statement to the Board that:
1. With regard to the integrity of the financial statements of Stockland Corporation Limited (the “Company”) and its
controlled entities and Stockland Trust (the “Trust”) and its controlled entities for the financial year, being the year ended
30 June 2023, that having made appropriate enquiries, in our opinion:
a. The financial records of the Company and the Trust and of the entities whose financial statements are required to be
included in their respective consolidated financial statements (the consolidated entities) for the financial period, have
been properly maintained in accordance with section 286 of the Corporations Act 2001 (Cth)
b. The financial reports of the Company, the Trust and the respective consolidated entities, for the financial period, being
the financial statements and notes thereto, comply with relevant accounting standards in accordance with section
296 of the Corporations Act 2001 (Cth) and give a true and fair view of the financial position and performance of the
Company, the Trust and the respective consolidated entities, in accordance with section 297 of the Corporations Act
2001 (Cth).
2. With regard to the risk management and internal compliance and control systems of the Company, the Trust and
the respective consolidated entities in operation for the year ended 30 June 2023, that having made appropriate
enquiries to the best of our knowledge and belief:
a. The statements made in (1b) above regarding the integrity of the financial reports are founded on a sound system of
risk management and internal compliance and control systems which, in all material respects, implement the policies
which have been adopted by the Board of Directors either directly or through delegation to senior executives.
b. The risk management and internal compliance and control systems are operating effectively, in all material
respects, based on the risk management model adopted by the Company and Trust.
c. While these statements are comprehensive in nature, they provide a reasonable but not absolute level of assurance
about risk management and control systems and do not imply a guarantee against adverse events or more volatile
outcomes occurring in the future.
d. Nothing has come to our attention since 30 June 2023 that would indicate any material change to the
statements made above.
Associates and joint ventures, which the Company and Trust do not control, are not dealt with for the purposes of this
statement, however management confirms that procedures are in place to assess the integrity of the financial information
from these associates and joint ventures for the purposes of consolidating information into the financial accounts for the
Company and the Trust.
72
Stockland Annual Report 2023
Our approach to
risk management
Stockland adopts a rigorous approach to understanding and proactively managing the
material risks and opportunities we face in our business. We recognise that making
business decisions which involve calculated risks and managing these risks within sensible
tolerances is fundamental to creating long-term value for securityholders and meeting the
expectations of all Stockland’s stakeholders.
Stockland’s risk appetite is the degree to which we are
prepared to accept risk in pursuit of our strategic priorities.
We continuously engage with our stakeholders and use
these views, together with research and evidence, to
maintain a register of the material risks and opportunities
that influence our ability to deliver on our vision and
purpose. The Board has determined that Stockland will
maintain a balanced risk profile so that we remain
a sustainable business and an attractive investment
proposition over the long term.
We also recognise the importance of building and fostering
a risk aware culture so that every individual takes
responsibility for risks and controls in their area of authority.
Our Code of Conduct applies to all employees and provides
clear guidance on how we expect our people to accept,
engage and respond to each other and our stakeholders.
The performance scorecard for our employees, including
our Managing Director and CEO and the Stockland
Leadership Team also contains key performance indicators
linked to effective risk management. The Board provides
oversight of Stockland’s risk management framework
which is underpinned by our risk management framework
and Three Lines of Defence model. Our governance
framework is provided on page 57.
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Year ended 30 June 2023
73
Governance
Our materiality assessment
Stockland has adopted the materiality definition from the International Integrated
Reporting Framework (Integrated Reporting) to disclose information about matters that
may substantively affect the organisation’s ability to create value over the short, medium,
and long term. Our Leadership Team and Board regularly review these key risks and disclose
them on a bi-annual basis.
We identify material matters using the following process:
1. Identify
2. Evaluate and prioritise
Each year we conduct an operational and strategic
risk assessment and identify draft material matters by
capturing internal and external perspectives. Stakeholder
perspectives included:
• Investor research and engagement
• Customer and tenant feedback and insights
• Supplier and partner feedback
• Employee surveys
• Political and regulatory developments
• Industry engagement and advocacy
• Social and mainstream media.
Members of our Leadership Team and participated in
structured workshops to evaluate the material matters,
assess them in terms of greatest significance and prioritise
them based on their ability to affect and impact on value
creation over the short, medium and long term.
As part of the development of our refreshed ESG
strategy, we assessed environmental, social, and economic
matters that are material from an 'impact' perspective,
commonly referred to as ‘double materiality’. The
areas we identified where we have an actual or
potential positive and/or negative impact include housing
affordability, decarbonisation, climate resilience, indigenous
engagement, social inclusion, health and wellbeing,
biodiversity, and the transition to a circular economy.
These matters are being incorporated in our risks and
opportunities and other key work streams underway across
our business.
3. Review and disclose
The following risks and opportunities are considered
the most relevant current material matters which are
developed and mapped over time; (S) short, (M) medium,
and (L) long term. There are a number of material matters
which have an enduring impact across the time horizon
which may require a phased response.
These have been reviewed and approved by Stockland’s
Leadership Team and Board. The process and associated
disclosures have been assured by Ernst & Young (EY).
74
Stockland Annual Report 2023
Risks and opportunities
Our ability to adapt to new ways of working and maintain a strong corporate culture
The ability to attract, engage and retain our employees is critical to our ongoing success. We have continued to adapt post COVID-19 ways
of working by accelerating the adoption of new technology enabling greater workplace flexibility and new ways of working. Our strong
employee engagement scores reflect our culture. We will continue to use this to mitigate compliance risk and the challenges posted by new
ways of working.
We continue to focus on how we support employees by:
• maintaining a focus on fostering a strong and constructive culture to deliver value to all stakeholders;
• evolving our enterprise approach to flexibility. Our hybrid working model involves a mix of working in asset, office and at home or remote
locations. This allows all employees to work flexibly, be productive, collaborative and supports their wellbeing;
• training our senior leaders to be more agile and resilient through Stockland leadership programs;
• communicating regularly with all our people across Stockland;
• continuing to invest in new ways of working to drive efficiency and improve our practices to increase accountability and build on core
strengths; and
• supporting Employee Advocacy Groups focused on enhancing diversity, inclusion, flexibility and wellbeing.
Our ability to provide environments that support the health, safety, and wellbeing of our employees, tenants, residents, customers
and suppliers
The health and wellbeing of our people, suppliers and customers has always been and continues to be our priority. Health and safety
incidents, including security threats can have long term impacts on our stakeholders. We are proactively reviewing our risk appetite on safety
to align with the execution of our Group strategy.
We are committed to delivering communities and assets where our employees, tenants, residents, customers and suppliers always feel safe.
We will continue to:
• foster a culture where health, safety and wellbeing are core values and continuous improvement of our safety performance is part of our
normal business practice;
• Proactively review our safety management framework to align with the execution of our Group strategy;
• Further evolve our ‘Sights on Safety’ contractors, consultants and suppliers which has assisted in reducing incidents in key focus areas
on our projects;
• train our employees and increase their risk awareness including undertaking regular scenario testing relevant to our business and
operations; and
• deliver liveable communities for our residents, customers, and tenants, with a focus on embedding health safety and wellbeing into the
design and operation of our assets.
Our ability to respond to geopolitical conditions that lead to economic uncertainty or volatility
Changing geopolitical conditions that impact the global economy have led to and may continue to result in extended periods of increased
uncertainty and volatility in the global financial markets and supply chains, which could adversely affect our business. This includes ongoing
Russia/Ukraine conflict, macro-economic conditions (inflationary pressures and interest rate movements), changes in government, trade
tensions, climate change, and technology and data.
We will continue to closely monitor political and economic risks and opportunities and continue enhancing our enterprise resilience.
We adopt a Group-wide strategic approach to managing our procurement and supply chain activities. Our Supply Chain Framework
continues to support us in managing our suppliers and addressing supply chain risks as they arise. This includes a robust process for the
selection, management, and oversight of our contracting partners to manage solvency risks.
Climate change may have adverse affects on our business
Climate-related risks will persist and escalate for the foreseeable future and the nature of these risks depends on complex factors such
as policy change, technology development and market forces (transition risk). This is coupled with physical risk associated with changes
in climatic conditions. These risks have the potential to damage our assets, disrupt operations and impact the health and wellbeing of our
customers and communities.
We are committed to creating resilient assets that operate with minimal disruption in the event of increased climate events, as well as
building strong communities that are equipped to adapt to long-term climate change risks and opportunities.
To do this, we will continue to:
• assess our portfolio for climate and community resilience and implement action plans;
• embed climate resilience within our standard asset risk assessment and investment governance;
• invest in asset upgrades and adapt community designs;
• work with our communities to build awareness of climate risks including cyclone, flood and bushfire risk to provide safe environments
for people in and around our assets;
• assess and implement wholesale energy strategies and renewable energy installations, to provide alternative sources of energy to
mitigate the risk of price shocks;
• actively manage our corporate insurance program to provide adequate protection against insurable risks; and
• continue to incorporate scenario analysis into our climate risk process to understand how physical and transition climate-related risks
and opportunities may evolve over time.
We refreshed the climate scenarios used to assess the physical and transition risks and opportunities that could emerge from a changing
climate. Insight from this analysis, which uses data from the International Energy Agency (IEA) and the latest climate science and models
from the Intergovernmental Panel on Climate Change (IPCC), was used to inform the strategic priorities of our Climate Transition Action
Plan.The Plan details our decarbonisation commitment to reduce and align our business carbon emissions with a science based 1.5°C
trajectory and pathway as well as our approach to climate adaptation and resilience.
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Year ended 30 June 2023
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Governance
Information and technology system continuity and cybersecurity breaches mayimpact our business
Our business leverages IT systems, networks, and data to operate efficiently. Managing potential IT system failures and cybersecurity
breaches is a focus area to ensure we manage the risk of loss of sensitive information, operational disruption, reputational damage,
fines and penalties. We also use technology and data to create a leading edge and differentiated customer offering through innovation
and partnerships.
Technology and data security are integral to our overall working environment and there are measures in place to help protect our business
and employees from cyber security related threats, including:
• providing a digitally safe working environment both in the office and for remote working;
• protecting systems, networks and end-point devices;
• embedding policies to safely control, access and manage data and privacy, for both employees and third parties;
• Equipping and training our people to identify and manage potential threats;
• vulnerability testing and security event monitoring to identify and respond to threats; and
• simulated cyber attacks and recovery exercises to enhance resilience and identify potential improvement opportunities.
Housing affordability continues to impact the dynamics of the Australian housing market
Relative affordability of housing continues to be challenged in the Australian market. To help address affordability we will continue to:
• partner with government and industry to drive solutions including innovative construction processes to lower costs; proactively engage
with industry bodies and governments in implementing support measures for the housing and construction sector;
• provide a broad mix of value for money, quality housing options including house and land packages, completed housing, medium density,
apartments and Land Lease Communities.
• balance the demand from owner occupiers and investors so that our Masterplanned Communities remain attractive to future buyers.
Differences between community and customer expectations or beliefs and our current or planned actions could harm our reputation
and business
Standards for interaction with customer and the community have been under intense scrutiny in Australia for some time. It is important
that we engage with our customers in a considered manner consistent with our Stockland CARE values.
At Stockland, we have prioritised our focus on customer engagement including regular customer surveys, extra training for our customer-
facing employees, development of a framework to guide our people in making ethical decisions and introduction of the ‘Stockland Listens’
initiative which connects our people to our customers to listen and learn from their experience. In addition, we have implemented a
customer feedback framework with reporting through to our Board and Committees. There are consequences for behaviours that do not
reflect Stockland’s values including potential remuneration and employment impacts.
Our ability to anticipate and respond to changing consumer preferences for our products and services
We will continue to:
• foster a culture of innovation to identify and take advantage of opportunities to leverage movements in stakeholder preferences;
• evolve our market-leading product innovation and deepen our customer insights using our proprietary Liveability Index research,
Stockland Exchange (our online research community) and other data sources;
• create sustainable and liveable communities and assets, resilient to changes in climate;
• enhance our design excellence, providing greater functionality and value for money that meet the demands of Australia’s changing
socio-demographics, including an ageing population and more socially conscious millennials; and
• continue to optimise our portfolio to meet changing conditions and customer and stakeholder preferences.
Regulatory and policy changes impact our business and customers
Failure to anticipate and respond to regulatory and policy change could have an adverse effect on our ability to conduct business. We will
continue to:
• implement forward-looking practices to remain well positioned for regulatory change;
• engage with industry and government on policy areas including taxation and planning reform;
• focus our development activity in areas where governments support growth; and
• carry out mandatory training for all employees in relation to the compliance areas and obligations relevant to our business.
Our ability to deliver on strategic priorities in challenging market conditions
We will continue to monitor the impact of macro-economic conditions and its implications for our strategy and business. We will continue
to carefully assess market conditions in the delivery of our strategic priorities. In addition, we will:
• dynamically reshape the portfolio towards sectors supported by long term trends;
• accelerate delivery in our core business;
• scale institutional capital partnerships in each sector;
• maintain a rigorous execution focus and pace while building enterprise capabilities; and
• maintain a strong financial position and capital discipline.
Capital market volatility impacts our ability to transact and access suitable capital
We will continue to drive growth in our business and deliver on our strategic priorities by:
• allocating capital strategically across our diversified portfolio in response to changing markets;
• progressing capital partnering opportunities across all sectors;
• acquiring new assets on capital efficient terms;
• retain a strong balance sheet at appropriate levels of gearing within our target range of between 20 to 30 per cent;
• access diverse funding sources across global capital markets on competitive terms and tenors;
• maintain our disciplined and prudent capital management approach;
• retain investment grade ratings across multiple credit agencies to demonstrate our strong credit value proposition; and
• engage with existing and potential debt and equity investors to regularly update them about the business.
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PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999 Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999 Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor for the audit of Stockland Corporation Limited and Stockland Trust for the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been: (a)no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; and(b)no contraventions of any applicable code of professional conduct in relation to the audit.This declaration is in respect of Stockland Corporation Limited and the entities it controlled during the year and Stockland Trust and the entities it controlled during the year. Jane Reilly Sydney Partner PricewaterhouseCoopers 24 August 2023
Remuneration Report
Remuneration
Report
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Stockland Annual Report 2023
Image caption:Willowdale, NSW Message from the Chair
of the People &
Culture Committee
On behalf of the Board, I am pleased to present the Remuneration Report for FY23
FY23 was a year of ongoing macroeconomic and
geopolitical uncertainty. Against this backdrop, Stockland
has delivered a solid FY23 result reflecting the continued
execution of our strategy and focus on driving operational
and financial performance while maintaining a strong
capital position.
Guided by our strong connection to purpose, safety and
our CARE values, Stockland’s people have delivered positive
outcomes for our stakeholders.
Our people & culture
At Stockland, we recognise our people are our most
valuable asset. We foster a culture of connection and
collaboration where our people can be themselves and
thrive. Our diverse career opportunities and passion for
learning means our people can grow as we grow, and make
a real contribution towards our strategic objectives, creating
a better future for our people, communities and the planet.
We are proud of our achievements in FY23 including:
• maintaining high levels of employee engagement during
the year
• continuing to enhance our flexible approach to working
and supporting the wellbeing of our teams
• investing in the capability of our leaders through
programs designed to improve strategic alignment and
building skills to lead our people through change
• the recognition of our graduate program in the Australian
Financial Review annual survey as one of Australia’s top
100 graduate employers
• supporting Chief Executive Women to launch its report
exploring the experiences of culturally and racially
diverse women in some of Australia’s biggest companies.
This builds on the work of our employee advocacy groups
to drive gender equity and cultural diversity; and
• reducing our organization-wide gender pay gap by four
percentage points. We have also maintained parity in
like-for-like roles through the creation of pathways for
women to enter and thrive in more senior, higher paying
roles traditionally filled by men.
Performance and remuneration outcomes
The Board spends considerable time each year assessing
performance and remuneration outcomes for the Managing
Director and CEO and other members of the Stockland
Leadership Team (SLT). The Board considers a range of
quantitative and qualitative factors in its decisions. The
remuneration outcomes for FY23 reflect:
• Stockland’s performance against a range of measures of
financial performance and financial value-drivers in our
Short-Term Incentive (STI) Corporate Scorecard
• the quality of Stockland’s performance in the context of
the operating environment, peer financial performance
and feedback from our stakeholders
• the importance of retaining our people and the talent
required to execute our strategy and achieve our
purpose; and
• how well we have managed risk, compliance and
both the financial and non-financial issues that impact
our reputation.
In determining the overall STI pool and individual STI awards
for the Managing Director and CEO and other members
of the SLT, the Board has taken care to balance the
expectations of our stakeholders and the wider community.
In doing so, the Board has used relevant data points,
along with its judgement, and taken into consideration the
following factors:
• Our focus on operational excellence continues to deliver
strong performance across our diversified portfolio.
• We have achieved a strong FY23 financial result in
a challenging environment, with pre-tax Funds From
Operations (FFO) of $883 million reflecting a 3.8 per cent
growth on FY22, and FFO per security towards the upper
end of guidance at 37.1 cents.
• The increasing interest rate environment through FY23
has led to cap rate expansion across Commercial
Property, which in turn has contributed to valuation
declines. This has impacted Recurring Return On Invested
Capital (ROIC) which at 3 per cent has fallen below the
through the cycle long-term target range of 6-9 per cent.
• Development ROIC of 18 per cent, is at the top end of our
target range of 14-18 per cent.
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Remuneration Report
• We have retained a clear focus on financial discipline
in response to the current macroeconomic uncertainty.
By maintaining a strong balance sheet, and actively
managing our gearing level and hedging profile to provide
substantial liquidity, we have retained the option to invest
in existing and emerging opportunities.
After careful consideration of these factors, we consider the
following outcomes in FY23 to be appropriate:
• an STI award for the Managing Director and CEO equal to
77 per cent of his maximum STI opportunity; and
• awards to Other Executive Key Management Personnel
(KMP) in the range of 62-79 per cent of maximum
STI opportunity.
The grant of performance rights made to the Managing
Director and CEO on commencement as compensation
for incentives forfeited on ceasing employment with his
previous employer to join Stockland has vested at 67.51
per cent and the 2020 Long-Term Incentive (LTI) Plan
has vested at 100 per cent. These outcomes reflect
Stockland’s strong relative performance versus our peer
index comparator group over multiple years.
Aligning remuneration to our strategy
As we stated in last year’s Remuneration Report, the
Board conducted a review of the executive remuneration
framework for FY23 to optimise how it supports and aligns
with the strategy.
The review incorporated feedback from securityholders and
their representatives and identified opportunities to further
evolve the framework’s design and execution. These were
set out in the Notice of Meetings for the 2022 Annual
General Meeting and included:
1. Strengthening the performance focus by further
simplifying the STI scorecard and aligning measures to
the refreshed business strategy, such as introducing
‘through the cycle’ target ranges for Recurring and
Development ROIC for FY23; and
2. Improving the alignment of LTI to the strategy and to
support transformative growth.
To further align the interests of executives and
securityholders and provide executives with a clear line
of sight over LTI outcomes while driving security price
growth, the Board introduced a second LTI measure in
the form of absolute Total Securityholder Return (TSR)
measure for 40 per cent of the LTI. The combination of
Relative TSR and Absolute TSR creates strong alignment
between our executives’ performance and the experience
of our securityholders.
To continue our focus on growing sustainable, high-quality
earnings and delivering strong returns to securityholders,
we also increased the maximum vesting opportunity for LTI
in FY23 from 100 per cent to 150 per cent. Outcomes at
this level will require significant out-performance on both
an absolute and relative basis.
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Stockland Annual Report 2023
Melinda Conrad, Chair, People & Culture Committee
We consider that the refreshed executive remuneration
framework to be aligned to Stockland’s strategy during this
period of transformative growth. We are also conscious that
as we deliver on our strategy, retaining our best people will
be increasingly critical. The ability to reward them more
competitively for delivering strong securityholder returns
provides a compelling proposition to remain in place during
the execution of the strategy.
Looking ahead
While we continue to review our executive remuneration
framework for ongoing alignment with our business
strategy, no changes to the structure or the target level
of remuneration (including fixed pay) for Executive KMP are
planned for FY24. We continue to simplify our STI scorecard
and have set challenging but achievable targets aligned to
our strategic priorities.
We have made a small increase to the fees of non-
executive directors who are members of the People &
Culture, Risk, and Sustainability Committees to better
reflect the workload of these committees and market
practice. From 1 July 2023, the member fees for these
committees increased from $17,500 p.a. to $20,000 p.a.
Thank you for your support. We look forward to
your feedback.
Melinda Conrad
Chair, People & Culture Committee
This report forms part of the Directors’ Report and has
been audited in accordance with section 308(3C) of the
Corporations Act 2001. The Remuneration Report covers
Stockland and the Trust.
Remuneration Report
Contents
1 Remuneration framework at a glance
2 Performance and remuneration outcomes
3 Remuneration governance
4 Executive remuneration in detail
5 Executive KMP remuneration tables
6 Non-Executive Director remuneration
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Key Management Personnel
Individuals who were KMP at any time during the financial year were as follows:
Name
Non-Executive Directors
Mr Tom Pockett
Mr Laurence Brindle
Ms Melinda Conrad
Ms Kate McKenzie
Mr Stephen Newton
Ms Christine O’Reilly
Mr Andrew Stevens
Mr Adam Tindall
Executive Director
Mr Tarun Gupta
Other Executive KMP
Ms Katherine Grace
Ms Alison Harrop
Mr Justin Louis1
Ms Louise Mason
Managing Director and Chief Executive Officer
Chief Legal & Risk Officer
Chief Financial Officer
Chief Investment Officer (from 1 July 2022)
CEO Commercial Property
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Mr Andrew Whitson
CEO Communities
1 While Justin Louis commenced employment with Stockland as Chief Investment Officer on 1 November 2021, he was assessed as KMP with effect from
1 July 2022 following changes to Stockland's decision making framework to align with its key strategic priorities.
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1. Remuneration framework at a glance
Our executive remuneration framework is designed to reflect our purpose and strategy.
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Stockland Annual Report 2023
2. Performance and remuneration outcomes
2.1. STI Corporate Scorecard assessment
The Board takes a robust approach to determining the STI pool and executive remuneration outcomes using judgement
and oversight to consider a range of quantitative and qualitative factors. As a first step, an assessment is made of
performance against the STI Corporate Scorecard shown below.
KPI
Commentary
Overall Assessment
Financial Performance (60%)
Financial
Drive Group Financial
Performance through
• FFO of 36.4 to 37.4 cents per security
• FFO was $883 million (37.1 cents per security) towards the upper end
of guidance
Min
Max
• FFO of $867 million to $891 million
• Recurring ROIC was 3 per cent, below the target range
• Recurring ROIC through-cycle target
range of 6-9 per cent
• Development ROIC through-cycle
target range of 14-18 per cent
Financial Value Drivers (40%)
Strategy
• Development ROIC was 18 per cent, at the upper end of our target range
Min
Max
Delivering on our strategic pillars
• Dynamically reshape portfolio
• continued to upweight our capital exposure towards our high conviction
sectors of logistics, land lease and residential
• Accelerate delivery in our
• continued to reshape our portfolio in line with our strategy. We
core businesses
• Scale capital partnerships
• Sustainable long-term growth
Customers and Partners
Find, create and capture customer
value by enhancing and embedding a
customer-centric culture
completed the divestment of our Retirement Living business in July 2022
and executed on ~$266 million of non-core Town Centre asset sales
• extended our existing relationship with Mitsubishi Estate Asia through an
agreement to invest in masterplanned communities
• increased our land lease portfolio to more than 10,5001 home sites
and accelerated the creation of high quality Land Lease Communities
investment assets
• completed the integration of the Halcyon Group’s land lease business
• progressed master planning and authority approvals on our existing land
bank, with apartments projects in advanced planning and design
• refreshed our ESG strategy which is underpinned by a focus on
innovation, scale and economically sustainable solutions
• continued our focus on elevating the risk and safety performance of
the Group
• while progressing our strategic initiatives, we have remained focused on
balance sheet strength and financial flexibility
• continued to drive customer-centric culture. The results from our
employee survey that measure customer focus show significant
progress and are well above the Willis Towers Watson Australian
National Norms
• launched a new learning pathway tailored to Stockland's business
model, focusing on linking customer experience to commercial value
• exceeded targets for five out of seven customer experience metrics
• continued focus on building strong relationships with capital partners
Min
Max
People and Capability
Min
Max
Position Stockland as an employer
of choice by providing leadership in
attracting, integrating and retaining
talent and continuing to drive an
inclusive and diverse workplace
• the implementation of our people and culture strategy is delivering a
highly engaged workforce, improved leadership capability and strong
talent retention
• achieved an employee engagement score of 88 per cent which places us
8 points above the Willis Towers Watson Australian National Norm
• launched our Bold Futures leadership program designed to improve
strategic alignment and build skills to lead our people through our
ambitious change agenda
• achieved 41 per cent of women in our leadership team
• recognised in the Australian Financial Review annual survey as one of
Australia’s top 100 graduate employers
1
Includes post balance date acquisition of five Land Lease Communities projects.
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How the Board uses discretion
To deliver an STI outcome which is a fair reflection of the quality of our overall performance and aligned to the experience
of our stakeholders, the Board undertakes a second step which involves reviewing a range of other data points, agreed and
identified at the start of the year, to consider factors not explicitly included in the STI Scorecard:
• the perspectives of our stakeholders, including securityholders, customers and employees
• the alignment of incentive outcomes with market and community expectations
• any one-off or unusual items and the impact of unforeseen events on the business and securityholder outcomes
• our operational and sustainability performance
• prudent management of capital
• how effectively we have managed risk and safety, and any other issues that may affect our brand and reputation.
Following an assessment of the STI Scorecard and all other relevant factors, the Board approved an STI pool for FY23
funded at 105 per cent of target opportunity.
The Board places great weight when determining incentive outcomes on how effectively risk, safety and other matters
that may impact our brand and reputation have been managed. After careful consideration, the Board made no further
adjustments to the STI outcomes for the Managing Director and CEO, other SLT members or the overall STI pool for FY23.
The Board considers an STI pool funded at 105 per cent of target opportunity appropriate in the context of a solid result
and reflects the strength of our diversified platform and the cumulative results of several years’ worth of focused and
disciplined efforts by the team to create a high quality, resilient portfolio and development pipeline.
Incorporating ESG performance into incentive outcomes
It is our responsibility to find the right balance between economic, social and environmental outcomes for our
communities and stakeholders by proactively responding to global and industry matters that are impacting us today and
into the future.
Stockland's ESG performance, in alignment with our 2030 Sustainability Strategy that was active in FY23, is considered in
both the STI Corporate Scorecard (i.e. the first step) as a strategic business priority and as part of the discretionary overlay
(i.e. the second step) in determining short term incentive outcomes. Incorporating ESG performance in this way means
that all measures in the scorecard, including financial, are impacted by ESG performance.
By way of example, our Investment Governance framework includes initial filters to identify and assess ESG risks and
opportunities across categories such as physical climate risk, nature / biodiversity risk and First Nations engagement.
This framework supports decision-making at the commencement of our projects and creates a solid foundation for the
delivery of commercially sound ESG outcomes as well as embedding a culture of awareness of ESG considerations within
business development teams.
With the launch of our new ESG Strategy and work to embed ESG into our business-as-usual activities, we will continue
to consider how performance against our strategy and targets is incorporated in executive remuneration going forward.
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Stockland Annual Report 2023
2.2. Executive KMP STI outcomes
The table below sets out the STI awards for FY23. STI incentives are awarded in both cash and Stockland securities with
deferred vesting. In accordance with the normal operation of the STI plan, half of the STI award for the Managing Director
and CEO will be paid in cash (two-thirds of the STI award for Other Executive KMP will be paid in cash) with the remaining
amount delivered in deferred securities. Half of the deferred STI securities will vest 12 months after the award, with the
remaining half vesting 24 months after the award, subject to service conditions and clawback provisions.
In determining individual STI awards, the Board took into account Stockland's overall performance as well as performance
of the individual in meeting business unit / functional and personal objectives, including risk and safety behaviours
and conduct.
Target
STI
(as % of
Fixed
Pay)
Maximum
STI
(as % of
Fixed
Pay)
STI
awarded
(as % of
Target)
STI
awarded
(as % of
Maximum
STI)
STI
awarded
for FY23 STI paid in cash1
DSTI
securities
to be
granted3
STI deferred
into equity2
Executive Director
Tarun Gupta
Other Executive KMP
Katherine Grace
Alison Harrop
Justin Louis
Louise Mason
Andrew Whitson
%
100
90
90
90
90
90
%
150
135
135
135
135
135
%
115
105
93
105
118
105
%
$
$
%
$
77
1,725,000
862,500
50
862,500
70
62
70
79
70
614,250
409,500
702,513
468,342
708,750
472,500
903,656
602,438
803,250
535,500
67
67
67
67
67
204,750
234,171
236,250
301,218
267,750
%
50
33
33
33
33
33
212,822
50,522
57,782
58,295
74,326
66,068
1 The portion of STI awarded for the FY23 performance year which is paid as cash.
2 The portion of STI awarded for the FY23 performance year that is deferred into Stockland securities which will vest over the next two years.
3 The number of securities granted for deferred STI is based on the Volume Weighted Average Price for the ten business days after 30 June 2023. This price
was $4.0527.
2.3. Performance against LTI measures
The table below shows Stockland’s performance against the relative TSR performance hurdle for awards for which the
performance period ended on 30 June 2023. This includes the 2020 LTI award which will vest at 100 per cent subject
to further serivce conditions and the special grant of performance rights granted to Tarun Gupta on 1 July 2021 as
compensation for incentives forfeited on ceasing employment with his previous employer to join Stockland which will vest
at 67.51 per cent subject to further service conditions.
The table below also shows the 2021 and 2022 LTI awards for which the performance period is ongoing.
LTI award
Performance
period
Performance
condition
Target/
benchmark
performance
Actual
performance
Out/(Under)
performance % vesting Weight
Vesting
outcome
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1 July 2020 –
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2021 Special
Grant
1 July 2021 –
30 June 2023
2021 LTI
2022 LTI
1 July 2021 –
30 June 2024
1 July 2022 –
30 June 2025
Relative TSR1
16.81%
37.00%
20.19%
100.00%
100%
100.00%
Relative TSR1
-1.71%
0.04%
1.75%
67.51%
100%
67.51%
Relative TSR1
Performance period ongoing
Relative TSR1
Performance period ongoing
Absolute TSR
Performance period ongoing
100%
60%
40%
3
0
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1 For LTI awards, the relative TSR performance benchmark is a tailored A-REIT 200 index comprising the largest five companies forming 80% and a number
of smaller companies forming 20%.
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2.4. Realised remuneration table (NON-IFRS DISCLOSURE)
The table below outlines the cash remuneration that was received in relation to FY23 which includes Fixed Pay and the
non-deferred portion of any FY23 STI. The table also includes the value of deferred STI awards from FY21 and FY22 which
vested during FY23, prior year LTI awards which vested during FY23 and any other payments made.
This information differs from that provided in the remuneration table for executives set out in section 5.1 which was
calculated in accordance with statutory rules and applicable Accounting Standards.
STI
awarded
and
received
as cash2
Previous
years’
DSTI
which
were
realised3
Previous
years’ LTI
which
were
realised4
Total
Remuneration
(received
and/or
realised)
Other
Payments5
Awards
which
lapsed or
were
forfeited6
$
Fixed Pay1
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
1,500,042
1,557,340
862,500
1,087,500
878,633
-
-
-
-
3,241,175
650,000
3,294,840
649,932
674,603
823,758
420,000
763,248
-
851,169
830,380
851,367
830,380
409,500
525,256
468,342
302,102
472,500
-
602,438
610,560
535,500
696,039
219,389
282,840
81,321
-
281,504
-
802,937
388,436
298,744
410,085
621,962
295,504
-
-
-
-
768,501
369,379
768,501
369,379
-
-
-
-
-
-
-
-
-
-
1,900,783
1,778,203
1,373,421
722,102
1,517,252
-
3,025,045
2,198,755
2,454,112
2,305,883
-
-
-
300,724
-
-
-
-
-
375,906
-
375,906
Executive Director
Tarun Gupta
Other Executive KMP
Katherine Grace
Alison Harrop7
Justin Louis8
Louise Mason
Andrew Whitson
1 Fixed Pay includes cash salary, superannuation and packaged benefits (and associated taxes). Following an internal and external benchmarking exercise,
the Fixed Pay for both Louise Mason and Andrew Whitson increased from $800,000 to $850,000 for FY23.
2 FY23 STI awards are shown in section 2.2. Other Executive KMP received an STI split reflecting two thirds cash and one third equity. The Managing Director
and CEO received an STI split reflecting half cash and half equity.
3 This represents the value of all prior years’ deferred STI which vested during FY23 using the 30 June 2023 closing security price of $4.03 (FY22: $3.61). For
Tarun Gupta, this includes tranche 1 of the securities awarded as a one-off grant as compensation for incentives forfeited on ceasing employment with his
previous employer to join Stockland which vested on 1 September 2022. For Justin Louis, this includes tranche 1 of a special grant of securities awarded
as a one-off grant as compensation for incentives forfeited on ceasing employment with his previous employer to join Stockland which vested on 30 June
2023. For Louise Mason, this includes securities awarded as a one-off retention award which vested on 30 June 2023.
4 This represents the value of all prior years’ LTI which vested during FY23 using the 30 June 2023 closing security price of $4.03 (FY22: $3.61).
5 This represents the cash payment paid to Tarun Gupta in September 2021 as compensation for incentives forfeited to join Stockland.
6 The value shown represents the value of any previous years’ equity awards which lapsed or were forfeited during the financial year. The FY23 values are
based on the closing 30 June 2023 security price of $4.03 (FY22: $3.61).
7 Alison Harrop commenced with Stockland on 10 January 2022, as a result her prior year remuneration represents a portion of the year.
8 Justin Louis became KMP on 1 July 2022.
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2.5. Financial performance over the past five years
The remuneration outcomes for our executives vary with short-term and long-term performance outcomes. The table
below summarises Stockland's performance for the past five years and shows the link to incentive outcomes.
FY19
FY20
FY21
FY22
FY23
Financial performance
Pre-tax FFO ($m)1
Post-tax FFO ($m)2
Statutory profit ($m)
Pre-tax FFO per security (cents)
Statutory EPS (cents)
Recurring ROIC (%)3
Development ROIC (%)
Returns to securityholders
Security price as at 30 June ($)
Distribution per security (cents)
Stockland TSR – 1 year (%)
Tailored index TSR (%)4
Incentive outcomes
Cash STI ($m)5
DSTI ($m)
Company-wide STI pool ($m)
Managing Director and CEO STI (% of target)
LTI vested (% of grant)6
Managing Director and CEO total incentive outcome
(% of maximum opportunity)
897
897
311
37.4
13.0
4.17
27.6
13.9
27.0
22.1
6.6
28.7
80.0
47.1
49.8
825
825
-21
34.7
(0.9)
3.31
24.1
(15.8)
(21.3)
16.0
7.4
23.4
76.6
0.0
21.9
788
788
1,105
33.1
46.4
4.66
24.6
48.5
19.9
24.2
5.4
29.6
100.0
48.4
56.27
851
851
1,381
35.7
57.9
10
16
3.61
26.6
(17.2)
(3.6)
36.6
9.4
46.0
145.0
48.3
883
847
440
37.1
18.5
3
18
4.03
26.2
19.4
(0.6)
33.1
8.8
41.9
115.0
100.0
96.78
76.78
1 This is the measure for incentive purposes
2 FFO is a non-IFRS measure and recognises the importance of FFO in managing our business and its use as a comparable performance measurement tool
in the Australian property industry. The reconciliation of FFO to statutory profit after tax is presented in note 2A of the Financial Report.
3 Not measured prior to FY22.
4 Tailored A-REIT 200 index comprised five large companies forming 80% and several smaller companies forming 20% as detailed in Section 4.5. Used since
FY17 as a LTI hurdle.
5 Includes applicable superannuation.
6 Represents the achievement of performance hurdles tested during the year.
7 Applies to the former Managing Director and CEO, Mark Steinert. The current Managing Director and CEO was not eligible to receive an STI or LTI award
for FY21.
8 There was no LTI tested in FY22 or FY23 for the current Managing Director and CEO.
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3. Remuneration governance
3.1. Governance framework
Stockland has a robust remuneration governance framework overseen by the Board. This ensures remuneration
arrangements are appropriately managed and the agreed frameworks and policies are applied across Stockland.
3.2. The role of the People & Culture Committee
The People & Culture Committee is responsible for reviewing, monitoring, and making recommendations in relation to the
appointment, performance and remuneration of the Managing Director and CEO and senior executives. Where decisions
are being made on the variable remuneration outcomes of executives, the executives being discussed are not present at
the meeting.
The Committee also oversees the implementation of all major employment and remuneration policies, at all levels in the
organisation to seek fairness and balance between reward, cost, and value to Stockland, whilst also reflecting risk, safety
and compliance performance using input from the Audit Committee and Risk Committee, and ESG performance using
input from the Sustainability Committee.
The Committee approves the remuneration framework for all employees, including risk and financial control personnel
and employees whose total remuneration includes a significant variable component.
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3.3. The use of external advisors
Remuneration consultants are engaged from time to time to provide independent information and guidance on
remuneration for executives, facilitate discussion, conduct benchmarking and provide commentary on a number of
remuneration issues. Any advice provided by external advisors is used as a guide and is not a substitute for the
considerations and procedures of the Board and People & Culture Committee.
During the year, the People & Culture Committee engaged Ernst & Young (EY) as needed on executive remuneration
matters. EY provided market practice, remuneration data, trends and assistance with stakeholder engagement matters.
Stockland also subscribes to a number of independent salary and remuneration surveys, including property sector specific
surveys run by AON Hewitt, Avdiev, PwC and Mercer.
During FY23, no recommendations in relation to the remuneration of KMP were provided as part of these engagements.
3.4. Other governance practices
Managing risk
Stockland’s remuneration structure is underpinned by our CARE values and prudent risk management. The way
executives manage risk and conduct themselves are key considerations of the Board in determining incentive
outcomes. Specific practices include:
Use of discretion
Consequence
management
• a joint meeting of the People & Culture Committee and Risk Committee is held to discuss input from the Group
Risk Officer on material risk and safety issues, behaviours and / or compliance breaches which are considered when
determining remuneration outcomes;
• incentive plans that balance both short and long-term performance against a range of financial metrics and financial
value drivers aligned to Stockland’s long-term strategic priorities;
• the deferral of a significant portion of the STI award in Stockland securities which vests over an extended time frame;
• plan rules which provide the Board with discretion to take other factors not included in the corporate scorecard into
account when determining incentive outcomes; and
• the use of a clawback (malus) provision
The Board retains the right to apply discretion over remuneration decisions to ensure outcomes for executives
appropriately reflect the performance of the individuals and Stockland and reflect the expectations and experience
of stakeholders. In this regard, Stockland has established a framework for applying discretion to adjust remuneration
outcomes upwards or downwards, including to zero, where appropriate.
Our consequence management framework considers two key aspects:
1. The materiality of matters using an agreed materiality scale taking into account the seriousness of the matter and
impact to the business, customers and other stakeholders, and
2. An assessment against our CARE values to assess that the intent, behaviours and response aligns to our expected
cultural behaviours. For example,
• Were the associated behaviours inconsistent with our Code of Conduct?
• Was the response appropriate, considered and timely?
• Was there appropriate accountability from relevant stakeholders?
Change in control
A change in control is defined in the plan rules governing Stockland’s incentive plans as a circumstance where any
person together with their associates acquire Stockland securities which when aggregated with securities already held
by that person and their associates, comprises more than 50 per cent of the issued securities of Stockland. The Board
will not accelerate the vesting of unvested incentives in the event of a change in control, except to the extent that
applicable performance conditions (determined as at the date of the change of control) have been satisfied.
Minimum securityholding
The Managing Director and CEO is required to build and maintain a minimum holding of Stockland securities equivalent
to at least two times fixed pay (one times fixed pay for Other Executive KMP) for any securities granted after 1 July 2010.
This aligns the interests of executives to those of securityholders and encourages a mindset of business ownership.
Securities Trading Policy
The Stockland Securities Trading Policy prohibits employees from dealing in Stockland securities while in possession
of price-sensitive information that is not generally available to the public.
Clawback (malus)
The Managing Director and CEO and senior executives may otherwise only deal in Stockland securities during permitted
trading windows after first obtaining consent of the Chairman of the Board.
The policy also prohibits employees entering into any derivative or margin lending arrangements over Stockland
securities at any time.
The Board may in its absolute discretion determine that some or all of an employee's unvested STI and/or LTI awards
be forfeited if, in the Board’s reasonable opinion, adverse circumstances affecting the performance or reputation of the
company have come to the Board’s attention which had they known at the time when the incentive award was being
made, would have caused the Board to make a different decision. Clawback may apply both while the employee is
employed or after termination of employment.
Loans to KMP and related
party transactions
There were no loans provided to KMP during the year ended 30 June 2023.
There are no related party transactions between KMP and the Company during the current year and the previous year.
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4. Executive remuneration in detail
4.1. Remuneration delivery
To deliver our strategy, our executive remuneration framework needs to reflect Stockland’s desire to attract and retain the
best people. Stockland’s executive remuneration framework is structured so that a substantial portion of remuneration is
delivered as Stockland securities through STI and LTI. This section sets out our approach in FY23.
4.2. Remuneration mix
Generally, Stockland’s executives have a greater proportion of remuneration subject to performance conditions than their
counterparts in comparable companies, with 75 per cent of the Managing Director and CEO and 68 per cent of Other
Executive KMP remuneration performance based. We believe this provides strong alignment between executive outcomes
and performance.
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Stockland Annual Report 2023
4.3. Key changes for FY23
We introduced four changes to the executive remuneration framework for FY23 as follows:
Elements
Change
Rationale
STI scorecard
performance
measures
LTI measures
Introduced Recurring ROIC and Development
ROIC targets (replacing Return on Equity)
Improves alignment to the refreshed strategy and strengthens performance orientation.
Introduced absolute TSR as a second measure
alongside relative TSR
Through the combination of relative and absolute TSR, executives are strongly aligned
to the interests and experience of securityholders. The inclusion of absolute TSR
increases the line of sight for executives between the delivery of strategy and
reward outcomes.
LTI vesting
schedule
Extended the maximum vesting opportunity to
150 per cent for the FY23 LTI award
Incentivises executives for accelerating the execution of the strategy and
delivering strong returns to securityholders through the creation of transformative,
sustainable growth.
Provides a compelling proposition for executives to remain in place for the execution of
the strategy.
Leaver
provisions
Removed acceleration of unvested time-based
incentives on 'good leaver' termination
Strengthens risk management and aligns to best practice.
4.4. Fixed Pay
Elements
How Fixed Pay Works
Purpose
Includes
Changes during
the year
Benchmarking
approach
To attract and retain the executives capable of leading and delivering the strategy
• Comprises cash salary, superannuation contributions and packaged benefits (including associated taxes)
• Package benefits may include novated leases on vehicles and parking
• Following an internal and external benchmarking exercise, the Fixed Pay for both Louise Mason and Andrew Whitson increased from
$800,000 to $850,000 for FY23.
• Quantum and remuneration mix are benchmarked to test that total remuneration remains market competitive Remuneration is
reviewed annually against independently provided external data sources and market benchmarks and considers the relative size,
scale and complexity of roles
• A target fixed and total remuneration position is established with reference to the market median and 75th percentile
• Aim to provide total remuneration above the market median if outstanding performance is achieved.
Sources of data
The People & Culture Committee typically uses several sources for benchmarking for the Managing Director and CEO and Other
Executive KMP members including publicly available data for similar roles in companies of a similar size, such as:
• Market Capitalisation Group: ASX listed companies that are ranked between 11 and 100 by market capitalisation (excluding companies
domiciled outside Australia)
• Publicly available data for comparable roles at our Property sector peers
• Companies where we compete for talent
• Published remuneration surveys, remuneration trends and other data sourced from external providers.
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4.5. Short-Term Incentives
Elements
Purpose
How Short-Term Incentives work
To reward the achievement of annual targets aligned to the delivery of sustainable stakeholder outcomes
Target and maximum
STI opportunity
Per cent of fixed pay
Managing Director and CEO
STI
performance measures
Other Executive KMP
Performance measures
Target
100%
90%
Maximum
150%
135%
Reason for choosing this measure
Financial outcomes (60%)
• Funds from operations
• Key measures of progress against our
• Recurring ROIC
• Development ROIC
Financial value-drivers (40%)
• Strategy
• Customers and partners
strategy to grow asset returns
• Reflects how well Stockland is investing
capital to generate high quality,
sustainable earnings
• Drives focus on the delivery of
important initiatives aligned to our
strategic priorities
• A measure of how well we are meeting
the expectations of our customers
and partners
• People and capability
• Recognises that organisations with a
diverse, inclusive and engaged workforce
deliver superior returns
Performance
assessment
The Board takes a robust approach to determining executive remuneration outcomes, using judgement and oversight to consider
a range of quantitative and qualitative factors. As a first step, a bottom-up assessment of the STI Corporate Scorecard is
conducted to provide an initial view of the potential pool. A discretionary overlay is then applied to allow for other factors
affecting performance that were not reflected in the scorecard.
Individual awards are proposed by the Managing Director and CEO, endorsed by the People & Culture Committee and approved
by the Board. For the Managing Director and CEO, the People & Culture Committee proposes the STI award for Board approval.
Delivery
Managing Director and CEO
Other Executive KMP
Cash
50%
Two thirds
Deferred Securities
50%
One third
Leaver provisions
• On voluntary termination or termination for cause or due to poor performance, all awards are forfeited.
• In the circumstances of death, disability, retirement, redundancy or mutually agreed separation, the Board has discretion to
retain deferred awards.
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Stockland Annual Report 2023
4.6. Long-Term incentives
Elements
How Long-Term Incentives work
Purpose
To align executive outcomes with long term securityholder returns
Instrument
• LTI awards are made in the form of performance rights to Stockland securities granted under the Stockland Performance
Rights Plan.
• A performance right is a right to acquire, at no cost to the executive, one fully paid Stockland security subject to certain
performance and service conditions.
• No distributions are paid on performance rights
Target and
maximum
LTI opportunity
Per cent of fixed pay
Managing Director and CEO
Other Executive KMP
Target
200%
120%
Maximum
300%
180%
Stockland uses a ‘face-value’ methodology for allocating performance rights, being the volume weighted average price of Stockland
securities for the 10 trading days post 30 June. For the FY23 award, this price was $3.7429.
Performance period 1 July 2022 – 30 June 2025
LTI performance
measures
• The 2020 and 2021 Grants are subject to relative TSR as the sole performance condition with maximum vesting at 100 per cent.
• From 2022, vesting of LTI awards are subject to relative TSR and absolute TSR as the performance conditions. The Board believes
that these measures provide a suitable link to long term securityholder value creation.
Relative total securityholder return (RTSR) – 60%
Absolute total securityholder return (ATSR) – 40%
Rationale
Through the combination of relative and absolute TSR, executives are strongly aligned to the interests and experience
of securityholders. The inclusion of absolute TSR increases the line of sight for executives between the delivery of
strategy and reward outcomes.
Definition
TSR measures the growth in the price of securities plus cash distributions notionally reinvested in securities.
Target
Setting
TSR is measured against a composite index of 15 A-REIT
200 peers excluding Arena, Charter Hall Group, Cromwell
Property Group, Goodman Group, Home Consortium
Limited and Waypoint (as either their revenues are driven
by funds management fees or are organisations who
have assets predominantly outside of Australia or are
misaligned to Stockland's assets).
Each of the five largest capitalised companies from the
peer group has been allocated a 16 per cent weighting,
while each of the other 10 smaller capitalised companies
has been allocated a 2.2 per cent weighting
The absolute TSR targets (for 50 per cent and 100 per
cent vesting) are aligned to low and top end of stated
ROIC ranges. Vesting in excess of 100 per cent requires
further outperformance.
Relative TSR
Absolute TSR (from 2022)
TSR performance
Vesting
TSR performance
Vesting
Less than or equal to
Peer Index
Nil
Less than 8% pa
Greater than Peer Index
50%
Equal to 8% pa
Nil
50%
Up to 10% greater than
Peer Index
50%-100%
Between 8% pa and 11% pa 50% - 100%
10% - 15% greater than Peer
Index (from 2022)
100%-150%
15% or more than the Peer
Index (from 2022)
150%
Between 11% pa and 13% pa 100% - 150%
13% pa or more
150%
Vesting date
Performance rights that meet the performance conditions at the end of the performance period are converted to Stockland
securities and vest in two equal tranches, subject to service conditions and clawback provisions.
Tranche 1: 30 June 2025 Tranche 2: 30 June 2026
Leaver provisions
Circumstance
Treatment
Death, disability, retirement, redundancy or mutually agreed separation At the discretion of the Board, a pro-rata number
of performance rights may be retained with vesting
determined in accordance with the original performance
conditions and clawback provisions
All other circumstances
Forfeited
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Year ended 30 June 2023
93
Remuneration Report
4.7. Employment terms
The Managing Director and CEO and Other Executive KMP are on rolling contracts until notice of termination is given by
either Stockland or the senior executive. The notice period for the Managing Director and CEO is twelve months and six
months for Other Executive KMP. In appropriate circumstances, payment may be made in lieu of notice. Where Stockland
initiates termination, including mutually agreed resignation, the executive would receive a termination payment of up to
twelve months’ Fixed Pay (including applicable notice) and be considered for a cash pro-rata payment in respect of STI in
the year of termination, subject to the Board’s assessment of performance against KPIs.
Where the termination occurs as a result of misconduct or a serious or persistent breach of contract (termination
for cause), Stockland may terminate employment immediately without notice, payment in lieu of notice or any other
termination payment.
In cases of termination for cause or resignation, all unvested employee securities or rights lapse. In other circumstances,
the Board has the discretion to adjust the vesting conditions. Typically, this discretion is applied as outlined below.
Death or total and
permanent disablement
Full vesting of any unvested equity awards.
For termination other than for
cause or resignation
Unvested Deferred STI (DSTI) is retained and vests in accordance with the terms of the STI plan and original
vesting schedule.
For LTI, unvested rights are vested prorated based on service to the date of termination. Any applicable prorated
hurdled rights remain subject to the applicable performance hurdles over the full performance period. Any
applicable restricted rights vest in accordance with the terms of the LTI plan and original vesting schedule. Other
unvested LTI awards are forfeited.
94
Stockland Annual Report 2023
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Year ended 30 June 2023
95
Remuneration Report
5.2. Performance rights movements
LTI awards are made in the form of performance rights which are subject to performance conditions as detailed in section
4.6. The number of performance rights held during the year are set out below.
Granted during year Vested and exercised
Balance
at 1 July
2022
Value
Number
$1 Number
Value
$2
Exercised into
securities &
remain
subject to
service
conditions
Balance
at
30 June
2023
Forfeited /
Lapsed
Executive Director
Tarun Gupta
959,338
801,518
1,049,989
-
-
-
-
1,760,856
Other Executive KMP
Katherine Grace
562,033
208,395
272,997
(38,835)
140,194
(38,835)
(83,303)
609,455
Alison Harrop
Justin Louis
Louise Mason
-
-
269,310
352,796
240,456
314,997
-
-
694,829
272,516
356,996
(48,544)
Andrew Whitson
694,829
272,516
356,996
(48,544)
-
-
175,244
175,244
-
-
-
-
(48,544)
(104,129)
(48,544)
(104,129)
269,310
240,456
766,128
766,128
1 The value as at the grant date calculated in accordance with AASB 2 Share-based Payment.
2 The closing price as at the vest date.
5.3. Executive securityholdings
The table below details movements during the year in the number of Stockland securities held by executives, including
their personally related parties. Unvested securities which are time based only will count towards the balance of
securities held.
Executive Director
Tarun Gupta
Other Executive KMP
Katherine Grace
Alison Harrop
Justin Louis
Louise Mason
Andrew Whitson
Balance at
1 July 20221 DSTI granted2
LTI performance
rights exercised
Purchased /
(Sold or
Forfeited)
Balance at
30 June 2023
346,414
290,551
370,983
-
89,006
319,835
642,792
70,167
40,357
50,698
81,563
92,982
-
77,670
-
-
97,088
97,088
-
-
-
-
(180,000)
-
636,965
518,820
40,357
139,704
318,486
832,862
1 For Tarun Gupta, this includes the securities awarded as a one-off grant as compensation for incentives forfeited on ceasing employment with his previous
employer to join Stockland. 100% of tranche 1 of this award (72,747 securities) vested on 1 September 2022. Tranches 2-5 will vest over the next four
years subject to further service conditions. For Justin Louis, this includes 89,006 securities awarded as a one-off grant as compensation for incentives
forfeited on ceasing employment with his previous employer to join Stockland, tranche 1 of which vested on 30 June 2023. Tranche 2 will vest on 30 June
2024 subject to further service conditions. For Louise Mason, this includes 130,819 securities awarded as a one-off retention award. The award, which
was subject to a two-year vesting period that required her ongoing employment with Stockland as at 30 June 2023, vested at 100% on 30 June 2023. For
Andrew Whitson, this includes 188,569 securities awarded as a one-off retention award. The award is subject to a two-year vesting period that requires
his ongoing employment with Stockland as at 31 December 2023. 100% of the 2021 STI tranche 2 and 100% of the 2022 STI tranche 1 which were due to
vest in 2023 vested.
2 The number of securities granted 1 July 2022 for the 2022 STI that vest over one and two years (i.e., 50% at 30 June 2023 and 50% at 30 June 2024).
96
Stockland Annual Report 2023
5.4. Unvested equity holdings
The table below details unvested Stockland securities and performance rights granted to executives as part of their
remuneration in the previous, current or future reporting periods.
Performance
period
start date
Grant
date
Vesting
date1
Unvested
equity at
30 June
2023
Maximum
value of
award
to vest $2
Fair value per Instrument3
Relative
TSR
Absolute
TSR
DSTI
Grant
Executive Director
Tarun Gupta
FY22 LTI Tranche 1
FY22 LTI Tranche 2
Instrument
Rights
Rights
Special Grant Tranche 1
Rights
Special Grant Tranche 2
Rights
Special Grant Tranche 3
Rights
Special Grant Tranche 4
Rights
Special Grant Tranche 2
Securities
Special Grant Tranche 3
Securities
Special Grant Tranche 4
Securities
Special Grant Tranche 5
Securities
DSTI FY22 Tranche 2
Securities
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Rights
Rights
Other Executive KMP
Katherine Grace
20-Oct-21
20-Oct-21
23-Aug-21
23-Aug-21
23-Aug-21
23-Aug-21
21-Jun-21
21-Jun-21
21-Jun-21
21-Jun-21
18-Oct-22
18-Oct-22
18-Oct-22
1-Jul-21
30-Jun-24
1-Jul-21
30-Jun-25
1-Jul-21
1-Sep-23
1-Jul-21
1-Sep-24
1-Jul-21
1-Sep-25
1-Jul-21
1-Sep-26
1-Jun-21
1-Sep-23
1-Jun-21
1-Sep-24
1-Jun-21
1-Sep-25
1-Jun-21
1-Sep-26
1-Jul-21
30-Jun-24
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
FY21 LTI Tranche 2
Securities
25-Feb-21
1-Jul-20
30-Jun-24
FY22 LTI Tranche 1
FY22 LTI Tranche 2
Rights
Rights
DSTI FY22 Tranche 2
Securities
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Alison Harrop
Rights
Rights
DSTI FY22 Tranche 2
Securities
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Justin Louis
Rights
Rights
DSTI FY22 Tranche 2
Securities
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Rights
Rights
18-Oct-21
18-Oct-21
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
18-Oct-22
1-Jul-21
30-Jun-24
1-Jul-21
30-Jun-25
1-Jul-21
30-Jun-24
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
1-Jul-21
30-Jun-24
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
1-Jul-21
30-Jun-24
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
Special Grant Tranche 2
Securities
24-Nov-21
1-Nov-21
30-Jun-24
Louise Mason
327,047
327,047
51,518
51,518
51,518
51,517
83,140
83,140
72,747
34,640
145,275
400,759
400,759
115,497
85,033
85,032
35,083
104,198
104,197
20,178
134,655
134,655
25,349
120,228
120,228
44,503
578,873
578,873
111,279
111,279
111,279
111,277
387,432
387,432
339,001
161,422
483,766
524,994
524,994
312,997
151,359
151,357
116,826
136,499
136,498
67,193
176,398
176,398
84,412
157,499
157,499
198,483
FY21 LTI Tranche 2
Securities
25-Feb-21
1-Jul-20
30-Jun-24
142,151
385,229
FY22 LTI Tranche 1
FY22 LTI Tranche 2
Rights
Rights
DSTI FY22 Tranche 2
Securities
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Andrew Whitson
Rights
Rights
18-Oct-21
18-Oct-21
18-Oct-22
18-Oct-22
18-Oct-22
1-Jul-21
30-Jun-24
1-Jul-21
30-Jun-25
1-Jul-21
30-Jun-24
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
104,655
104,655
40,781
136,258
136,258
186,286
186,286
135,801
178,498
178,498
FY21 LTI Tranche 2
Securities
25-Feb-21
1-Jul-20
30-Jun-24
142,151
385,229
FY22 LTI Tranche 1
FY22 LTI Tranche 2
DSTI FY22 Tranche 2
Retention Grant
FY23 LTI Tranche 1
FY23 LTI Tranche 2
Rights
Rights
Securities
Securities
Rights
Rights
18-Oct-21
18-Oct-21
18-Oct-22
1-Feb-21
18-Oct-22
18-Oct-22
1-Jul-21
30-Jun-24
1-Jul-21
30-Jun-25
1-Jul-21
30-Jun-24
1-Jan-21
31-Dec-23
1-Jul-22
30-Jun-25
1-Jul-22
30-Jun-26
104,655
104,655
46,491
188,569
136,258
136,258
186,286
186,286
154,815
850,446
178,498
178,498
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
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O
l
e
t
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r
s
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p
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m
u
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r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
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t
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e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
1.77
1.77
2.16
2.16
2.16
2.16
1.47
1.47
2.71
1.78
1.78
1.47
1.47
1.47
1.47
1.47
1.47
2.71
1.78
1.78
1.47
1.47
2.71
1.78
1.78
1.47
1.47
4.66
4.66
4.66
4.66
3.33
3.33
3.33
3.33
4.46
3.33
3.33
4.51
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1.07
1 For LTI grants, vesting date refers to the date at which the performance and service conditions are met. The rights convert to securities subject to the
three-year performance period. Any rights that convert to securities then vest at the dates shown. The securities remain under a holding lock until the
10th anniversary of the grant date except at Board discretion. The rights issued have an expiry date that is the later of the date of announcement of the
full-year results following the end of the performance period or 31 August of that year.
2 The maximum value to vest represents the fair value at grant date for all unvested conditional rights. The minimum amount Executive KMP may receive
will be zero if awards do not vest for any reason.
3 The fair value of performance rights at the grant date is determined using appropriate models including Monte Carlo simulations, depending on the vesting
conditions. The value of each performance right is recognised evenly over the service period ending at the vesting date. The fair value of DSTI securities
is determined as the close price of Stockland securities on the offer acceptance date of the relevant award.
Year ended 30 June 2023
97
Remuneration Report
6. Non-Executive Director remuneration
6.1. Policy and approach
Stockland’s remuneration policy for Non-Executive Directors aims to help Stockland attract and retain suitably skilled,
experienced and committed individuals to serve on the Board and remunerate them appropriately for their time and
expertise and for their responsibilities and liabilities as public company directors.
The People & Culture Committee is responsible for reviewing and recommending to the Board any changes to Board and
committee remuneration, taking into account the size and scope of Stockland’s activities, the responsibilities and liabilities
of Directors and the demands placed upon them. In developing its recommendations, the People & Culture Committee
may take advice from external consultants.
With the exception of the Chairman, Non-Executive Directors receive additional fees for their work on Board committees.
Where a special purpose Board committee is established by the Board, committee members may receive a fee in line with
those paid for existing Board committees. Non-Executive Directors do not receive performance-related remuneration or
termination benefits other than accumulated superannuation.
The Member fees for the Risk Committee, People & Culture Committee and Sustainability Committee were increased from
$17,500 to $20,000 with effect from 1 July 2023 to align internally with the Member fees of the Audit Committee and
to market.
Stockland Board
Chairman
Non-Executive Director
Stockland Board Committees
Audit
Risk
People & Culture
Sustainability
FY24
FY23
$500,000
$175,000
$500,000
$175,000
$45,000
$20,000
$45,000
$20,000
$45,000
$20,000
$45,000
$20,000
$45,000
$20,000
$45,000
$17,500
$45,000
$17,500
$45,000
$17,500
Chair
Member
Chair
Member
Chair
Member
Chair
Member
Total remuneration available to Non-Executive Directors is approved by securityholders and is currently $2,500,000
(including superannuation payments) as approved at the 2007 Annual General Meeting. No increase in the total fee pool
is proposed for FY24.
Total fees of $2,072,500 (83 per cent of the approved limit) were paid to Non-Executive Directors in FY23. This amount was
consistent with the total fees paid in FY22.
98
Stockland Annual Report 2023
6.2. Remuneration details for non-executive directors
The nature and amount of each element of remuneration for each Non-Executive Director is detailed below.
Short-term
Board and
Committee Fees
Non-
monetary benefits
Post-employment
Superannuation
contributions
Non-Executive Directors
Tom Pockett
Laurence Brindle
Melinda Conrad
Kate McKenzie
Stephen Newton
Christine O'Reilly
Andrew Stevens
Adam Tindall
Consolidated
remuneration
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
20222
474,708
476,432
195,000
190,568
199,095
193,182
212,500
201,222
224,216
231,975
240,000
211,364
230,769
206,123
192,308
182,929
1,968,596
1,893,794
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 The fees for each Director are paid on a total cost basis which includes any applicable compulsory superannuation (the amount of superannuation
included in the total fees will vary depending on the timing of payments and in line with applicable legislation).
2 The total disclosed in the FY22 Remuneration Report ($2,082,826) includes remuneration of former non-executive director, Barry Neil, which is excluded
from the above ($67,526).
6.3 Non-executive Director securityholdings
To align the personal financial interests of Non-Executive Directors with securityholder interests, the Board believes
that Non-Executive Directors should hold a meaningful number of Stockland securities. Each Non-Executive Director is
required to acquire 40,000 securities within three years of commencing as a Non-Executive Director. The relevant interest
of each Non-Executive Director in Stockland securities at the date of this Report are as follows:
Balance at 1 July 2022
Purchased / (Sold) Balance at 30 June 2023
Non-Executive Directors
Tom Pockett
Laurence Brindle
Melinda Conrad
Kate McKenzie
Stephen Newton
Christine O'Reilly
Andrew Stevens
Adam Tindall
50,000
40,000
60,000
40,000
40,000
50,000
40,000
40,000
-
-
-
-
30,000
-
-
-
50,000
40,000
60,000
40,000
70,000
50,000
40,000
40,000
Total1
500,000
500,000
195,000
195,000
25,292
23,568
–
4,432
20,905
220,000
19,318
–
–
13,284
14,547
212,500
212,500
201,222
237,500
246,522
–
240,000
21,136
24,231
20,211
20,192
18,293
232,500
255,000
226,334
212,500
201,222
103,904
2,072,500
121,506
2,015,300
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
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p
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r
a
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i
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3
0
J
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2
0
2
3
f
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c
a
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i
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p
o
r
t
Year ended 30 June 2023
99
Financial report for the year ended 30 June 2023
Financial report
for the year ended
30 June 2023
100 Stockland Annual Report 2023
Image caption:Stockland head office, NSW Consolidated statement of comprehensive income
Year ended 30 June
$M
Revenue
Cost of property developments sold:
• land and development
• capitalised interest
• utilisation of provision for impairment of inventories
Investment property expenses
Share of profits/(losses) of equity–accounted investments
Management, administration, marketing and selling expenses
Impairment loss on trade and other receivables
Net change in fair value of investment properties
Net (impairment)/reversal of impairment of inventories
Net gain on other financial assets
Net gain on sale of other non–current assets
Finance income
Finance expense
Net gain on financial instruments
Transaction costs
Profit before tax
Income tax expense
Profit from continuing operations
Profit/(loss) from discontinued operation net of income tax
Profit after tax attributable to securityholders of Stockland
Items that are or may be reclassified to profit or loss, net of tax
Cash flow hedges – net change in fair value of effective portion
Cash flow hedges – reclassified to profit or loss
Other comprehensive (loss)/income
Total comprehensive income
Basic earnings per security (cents)
Diluted earnings per security (cents)
Continuing operations
Basic earnings per security (cents)
Diluted earnings per security (cents)
Stockland
Trust
Note
1
2023
2,808
2022
2,844
2023
666
2022
657
(1,317)
(1,448)
(82)
7
(225)
84
(406)
–
(256)
(26)
1
13
10
(84)
9
(21)
515
(77)
438
2
440
(5)
3
(2)
438
18.5
18.3
18.4
18.2
(78)
7
(220)
40
(378)
(23)
702
6
–
22
3
(75)
191
(106)
1,487
(62)
1,425
(44)
1,381
30
5
35
1,416
57.9
57.7
59.8
59.6
–
–
–
(231)
(22)
(3)
–
(288)
–
–
5
226
(161)
9
–
201
–
201
–
201
(5)
3
(2)
199
8.4
8.4
8.4
8.4
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
E
O
l
e
t
t
e
r
s
C
h
a
i
r
m
a
n
a
n
d
c
r
e
a
t
e
v
a
l
u
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H
o
w
w
e
G
o
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r
n
a
n
c
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R
e
p
o
r
t
R
e
m
u
n
e
r
a
t
i
o
n
–
–
–
(226)
40
(7)
(23)
682
–
–
20
194
(138)
191
–
1,390
–
1,390
–
1,390
30
5
35
1,425
58.3
58.1
58.3
58.1
6
23
8
7
6
16
16
16
21
14
3
3
14
14
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
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e
n
d
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d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
101
Financial report for the year ended 30 June 2023
Consolidated balance sheet
As at 30 June
$M
Cash and cash equivalents
Receivables
Inventories
Other financial assets
Other assets
Discontinued operations, disposal group and non-current assets held for sale
Current assets
Receivables
Inventories
Investment properties
Equity–accounted investments
Other financial assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other assets
Non–current assets
Assets
Payables
Borrowings
Development provisions
Other financial liabilities
Other liabilities
Current tax liabilities
Discontinued operations and disposal group liabilities held for sale
Current liabilities
Payables
Borrowings
Development provisions
Other financial liabilities
Deferred tax liabilities
Other liabilities
Non–current liabilities
Liabilities
Net assets
Issued capital
Reserves
12
8
6
17
14
8
6
7
23
17
13
22
9
15
6
17
10
21
14
9
15
6
17
22
10
20
Stockland
Trust
Note
2023
2022
271
330
1,289
35
138
4
2,067
169
2,584
10,532
675
285
137
62
–
129
14,573
16,640
885
200
453
20
121
30
–
1,709
178
3,707
201
151
42
476
4,755
6,464
10,176
8,652
29
1,495
10,176
378
120
1,076
21
159
4,075
5,829
159
2,660
10,491
592
290
164
65
6
158
14,585
20,414
980
936
261
10
86
–
2,774
5,047
313
3,536
465
188
–
504
5,006
10,053
10,361
8,655
25
1,681
10,361
2023
102
22
–
35
93
–
252
2,389
–
2022
219
2,987
–
21
97
248
3,572
116
–
10,169
10,169
662
270
–
–
–
115
13,605
13,857
443
200
196
20
20
–
–
879
–
3,707
–
151
–
27
3,885
4,764
9,093
7,355
85
1,653
9,093
553
280
–
–
–
138
11,256
14,828
459
936
40
–
27
–
–
1,462
–
3,536
158
184
–
27
3,905
5,367
9,461
7,358
25
2,078
9,461
Retained earnings/undistributed income
Securityholders’ equity
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
102 Stockland Annual Report 2023
Consolidated statement of changes in equity
Attributable to securityholders of Stockland
Reserves
$M
Balance at 30 June 2021
Profit for the year
Other comprehensive income, net of tax
Total comprehensive income
Dividends and distributions
Security based payment expense
Acquisition of treasury securities
Securities vested under Security Plans
Other movements
Balance at 30 June 2022
Profit for the year
Other comprehensive loss, net of tax
Total comprehensive income
Dividends and distributions
Security based payment expense
Acquisition of treasury securities
Securities vested under Security Plans
Other movements
Balance at 30 June 2023
Note
Issued
capital
8,663
4
32
20
20
4
32
20
20
–
–
–
–
–
(17)
9
(8)
8,655
–
–
–
–
–
(15)
12
(3)
8,652
Security
based
payments
35
–
–
–
–
13
–
(9)
4
39
–
–
–
–
18
–
(12)
6
45
Cash
flow
hedges
(49)
–
35
35
–
–
–
–
–
(14)
–
(2)
(2)
–
–
–
–
–
(16)
Retained
earnings
Equity
935
1,381
–
1,381
(635)
–
–
–
(635)
1,681
440
–
440
(626)
–
–
–
(626)
1,495
9,584
1,381
35
1,416
(635)
13
(17)
–
(639)
10,361
440
(2)
438
(626)
18
(15)
–
(623)
10,176
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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3
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O
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r
s
C
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v
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n
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p
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m
u
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r
a
t
i
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3
0
J
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2
0
2
3
f
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t
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e
y
e
a
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n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
103
Financial report for the year ended 30 June 2023
Consolidated statement of changes in equity
Attributable to securityholders of Trust
$M
Balance at 30 June 2021
Profit for the year
Other comprehensive income, net of tax
Total comprehensive income
Distributions
Security based payment expense
Acquisition of treasury securities
Securities vested under Security Plans
Other movements
Balance at 30 June 2022
Profit for the year
Other comprehensive loss, net of tax
Total comprehensive income
Distributions
Capital contribution
Security based payment expense
Acquisition of treasury securities
Securities vested under Security Plans
Other movements
Balance at 30 June 2023
Reserves
Issued
capital
Security
based
payments
Cash
flow
hedges
Undistri-
buted
income
Other
Equity
Note
7,365
34
(49)
–
–
–
–
–
(15)
8
(7)
7,358
–
–
–
–
–
–
(14)
11
(3)
7,355
–
–
–
–
13
–
(8)
5
39
–
–
–
–
–
16
–
(11)
5
44
–
35
35
–
–
–
–
–
(14)
–
(2)
(2)
–
–
–
–
–
–
(16)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
57
–
–
–
57
57
1,323
1,390
–
1,390
(635)
–
–
–
(635)
2,078
201
–
201
8,673
1,390
35
1,425
(635)
13
(15)
–
(637)
9,461
201
(2)
199
(626)
(626)
–
–
–
–
(626)
1,653
57
16
(14)
–
(567)
9,093
4
20
20
4
20
20
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
104 Stockland Annual Report 2023
Consolidated statement of cash flows
Year ended 30 June
$M
Receipts in the course of operations (including GST)
Payments in the course of operations (including GST)
Payments for land
Distributions received from equity–accounted investments
Receipts from Retirement Living residents
Payments to Retirement Living residents, net of DMF
Interest received
Interest paid
Net cash flows from operating activities
Proceeds from sale of investment properties
Payments for and development of investment properties
Payments for plant, equipment and software
Payments for investments (including equity–accounted)
Repayments from/(extension of) loans to related entities
Receipts from sale of/(payments to acquire) a business
Net cash flows from investing activities
Payments for treasury securities under Security Plans
Proceeds from borrowings
Repayments of borrowings
Payments for derivatives and financial instruments
Dividends and distributions paid
Net cash flows from financing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Less: amounts classified as held for sale
Cash and cash equivalents at the end of the year from continuing operations
Note
28
20
28
28
4
14
Stockland
Trust
20231
2,918
(1,871)
(649)
97
10
(11)
10
(172)
332
346
(363)
(23)
(111)
–
914
763
(15)
3,062
(3,639)
–
(631)
(1,223)
(128)
399
271
–
271
20221
2023
2022
3,001
(1,511)
(618)
25
311
(145)
3
(148)
918
491
(605)
(22)
(185)
–
(655)
(976)
(17)
3,980
(4,058)
(7)
(603)
(705)
(763)
1,162
399
(21)
378
835
(291)
–
69
–
–
226
(172)
667
253
(389)
–
(110)
684
–
438
(14)
3,062
(3,639)
–
(631)
(1,222)
(117)
219
102
–
102
750
(272)
–
24
–
–
194
(148)
548
313
(520)
–
(138)
(320)
–
(665)
(15)
3,980
(4,058)
(7)
(603)
(703)
(820)
1,039
219
–
219
1
Includes cash flows relating to both continuing and discontinued operations. Net cash flows relating to discontinued operation has been disclosed in
note 14A.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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p
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m
u
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r
a
t
i
o
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3
0
J
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2
0
2
3
f
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t
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e
y
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a
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i
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a
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Year ended 30 June 2023
105
21. Income tax
22. Deferred tax
Group structure
23. Equity-accounted investments
24. Joint operations
25. Controlled entities
26. Deed of cross guarantee
27. Parent entity disclosures
154
154
155
157
157
161
161
164
166
Other items
167
28. Notes to the consolidated statement of cash flows 167
29. Commitments
30. Contingent liabilities
31. Related party disclosures
32. Personnel expenses
33. Key management personnel disclosures
34. Auditor's remuneration
35. Accounting policies
36. Adoption of new and amended accounting
standards
168
168
169
170
170
171
171
172
Financial report for the year ended 30 June 2023
Notes to the financial report
Basis of preparation
107
Taxation
Results for the year
1. Revenue
2. Operating segments
3. EPS
4. Dividends and distributions
5. Events subsequent to the end of the year
Operating assets and liabilities
6. Inventories
7. Investment properties
8. Receivables
9. Payables
10. Other liabilities
11. Leases
12. Cash and cash equivalents
13. Intangible assets
14. Discontinued operations, disposal groups and
assets held for sale
Capital structure and financial
risk management
15. Borrowings
16. Net financing costs
17. Other financial assets and liabilities
109
109
111
115
115
116
117
117
121
128
129
129
130
132
133
134
137
138
140
141
18. Fair value measurement of financial instruments
144
19. Financial risk factors
20. Issued capital
146
151
106 Stockland Annual Report 2023
Basis of preparation
In this section
This section sets out the basis upon which Stockland’s financial report is prepared as a whole. Specific accounting
policies are described in the section to which they relate.
A glossary containing acronyms and defined terms is included at the back of this report.
Stapling arrangement
Stockland represents the consolidation of Stockland Corporation Limited (Corporation) and Stockland Trust (Trust)
and their respective controlled entities. Stockland Corporation Limited and Stockland Trust were both incorporated
or formed and are domiciled in Australia.
Stockland is structured as a stapled entity: a combination of a share in Stockland Corporation Limited and a unit
in Stockland Trust that are together traded as one security on the ASX. The constitutions of Stockland Corporation
Limited and Stockland Trust provide that, for so long as the two entities remain jointly quoted, the number of
shares in Stockland Corporation Limited and the number of units in Stockland Trust shall be equal and that
the shareholders and unitholders be identical. Both Stockland Corporation Limited and the Responsible Entity of
Stockland Trust must at all times act in the best interest of Stockland. The stapling arrangement will cease upon the
earlier of either the winding up of Stockland Corporation Limited or Stockland Trust or either entity terminating the
stapling arrangement.
As permitted by Class Order 13/1050, issued by ASIC, this financial report is a combined financial report that presents
the financial statements and accompanying notes of both Stockland and the Trust as at and for the year ended
30 June 2023.
Statement of compliance
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Stockland Corporation
Limited and Stockland Trust are both for-profit entities for the purpose of preparing the financial statements.
The financial statements are presented in Australian dollars, which is Stockland Corporation Limited’s and Stockland
Trust’s functional currency and the functional currency of Stockland and Stockland Trust’s subsidiaries.
Historical cost convention
The financial statements have been prepared on a going concern basis using historical cost conventions, except for
investment properties (including non-current assets held for sale), derivative financial instruments and certain financial
assets and liabilities which are stated at fair value.
Compliance with International Financial Reporting Standards
The financial statements of both Stockland and the Trust comply with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board.
Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the
financial report.
Change in accounting policies and new and amended accounting standards
Stockland's financial position as at 30 June 2023 and its performance for the year ended on that date have not been
impacted as a result of the adoption of new and amended Accounting Standards and Interpretations effective for annual
reporting periods beginning on or after 1 July 2022. Refer to note 36 for further details of the amended Accounting
Standards adopted during the year.
Net current asset deficiency position
The Trust has a prima facie net current asset deficiency of $627 million (2022: $2,110 million surplus). The net current asset
deficiency in the Trust primarily arises due to the intergroup loan receivable which is classified as a non-current asset.
The Trust generated positive cash flows from operations of $667 million during the year. Undrawn bank facilities of
$1,425 million (refer to note 15) are also available should they need to be drawn. In addition, Stockland and the Trust have
successfully refinanced external borrowings and raised new external debt when required. Based on the cash flow forecast
for the next 12 months, which reflects an assessment of the current economic and operating environment, Stockland and
the Trust will be able to pay their debts as and when they become due and payable. Stockland also has a robust capital
management framework and available liquidity, allowing flexibility in foreseeable business environments. Accordingly, the
financial statements have been prepared on a going concern basis.
C
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a
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G
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n
a
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p
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m
u
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r
a
t
i
o
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3
0
J
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2
0
2
3
f
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t
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e
y
e
a
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e
n
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a
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a
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i
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Year ended 30 June 2023
107
Financial report for the year ended 30 June 2023
Rounding
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, amounts in the
financial report have been rounded to the nearest million dollars, unless otherwise stated.
Significant accounting estimates and judgements
Stockland makes estimates and assumptions concerning the future. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial
year are discussed in this financial report.
Estimates and judgements are continually evaluated and are based on historical experience as adjusted for current
market conditions and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
Assumptions underlying management’s estimates of fair value and recoverability are:
• Inventories – net realisable value, profit margin recognition and Whole of Life (WOL) accounting – Note 6
• Investment Properties – fair value – Note 7
• Derivatives – fair value – Note 17
• Valuation of security based payments – fair value – Note 20
108 Stockland Annual Report 2023
Results for the year
In this section
This section explains the results and performance of Stockland.
It provides additional information about those individual line items in the financial statements that the Directors
consider most relevant in the context of the operations of Stockland, including:
• accounting policies that are relevant for understanding the items recognised in the financial report; and
• analysis of the results for the year by reference to key areas, including revenue, results by operating segment
and taxation.
1. Revenue
As at 30 June
$M
30 June 2023
Development revenue2
Management revenue3
Property revenue - outgoings recoveries4
Revenue from contracts with customers
Property revenue5
Statutory revenue from continuing operations
Amounts classified as discontinued operations
Statutory revenue
Amortisation of lease incentives
Straight–line rent
Share of revenue from equity
accounted investments6
Unrealised DMF revenue5
Segment revenue
Less: amounts classified as discontinued operations1
Segment revenue from continuing operations
30 June 2022
Development revenue2
Management revenue3
Property revenue - outgoings recoveries4
Revenue from contracts with customers
Property revenue5
Statutory revenue from continuing operations
Amounts classified as discontinued operations
Statutory revenue
Amortisation of lease incentives
Straight–line rent
Share of revenue from equity
accounted investments6
Unrealised DMF revenue5
Segment revenue
Less: amounts classified as discontinued operations1
Segment revenue from continuing operations
Communities
Commercial
Property
Other1
Stockland
Trust
1,866
48
–
1,914
19
1,933
–
1,933
–
–
127
–
2,060
–
2,060
1,940
32
–
1,972
20
1,992
–
1,992
–
–
12
–
2,004
–
2,004
136
32
68
236
626
862
–
862
90
10
26
–
988
–
988
107
12
61
180
622
802
–
802
87
2
28
–
919
–
919
3
8
–
11
2
13
10
23
–
–
–
(7)
16
(10)
6
6
1
–
7
43
50
129
179
–
–
–
(28)
151
(129)
22
2,005
88
68
2,161
647
2,808
10
2,818
90
10
153
(7)
3,064
(10)
3,054
2,053
45
61
2,159
685
2,844
129
2,973
87
2
40
(28)
3,074
(129)
2,945
–
–
66
66
600
666
–
666
–
–
70
70
587
657
–
657
1
Includes the results of the Retirement Living business for the period from 1 to 29 July 2022 when the business was sold (2022: 12 months to 30 June 2022).
Refer to note 14A for further details.
2 Development revenue is recognised under AASB 15 Revenue from Contracts with Customers at the point in time when control of the asset passes to the
customer, or over time as the performance obligations are met.
3 Management revenue is recognised under AASB 15 Revenue from Contracts with Customers at the point in time when the service is provided, or over time
as the service is provided.
4 Revenue related to outgoings recoveries is recognised under AASB 15 over time in the accounting period in which the performance obligations are met.
5 Property revenue, which includes Commercial Property and Communities rental income, and Retirement Living DMF revenue meets the definition of a
lease arrangement. Therefore, they fall outside the scope of AASB 15 and are accounted for in accordance with AASB 16 Leases.
6 Operating segment information in note 2 for equity accounted investments is reported in each line item proportional to the Group’s interest in
the investments.
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a
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i
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3
0
J
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2
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2
3
f
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y
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a
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Year ended 30 June 2023
109
Financial report for the year ended 30 June 2023
Development revenue
Development revenue is revenue earned from development projects. It comprises revenue from sales of properties to
external customers and associated revenues. Development revenue is recognised in accordance with AASB 15 Revenue
from Contracts with Customers, either at the point in time at which services are performed, or over time where the related
services are performed over time.
The revenue recognised for the performance of services is the agreed fee for the services. Where multiple agreements are
entered into at the same time with the same parties as part of a single commercial transaction, the total consideration
under the combined contracts is allocated to each unique performance obligation, with revenue recognised as Stockland
performs each obligation either at a point in time or over time. Where a fee is charged to a joint venture or capital
partnership, Stockland only recognises revenue from fees charged to the joint venture or partnership to the extent that it
relates to the partner's ownership interest.
For development revenue recognised at a point in time, such as residential lot sales to customers, revenue is recognised
when the customer gains control over the asset. The customer is deemed to have control over the asset where Stockland
has a present right to payment for the asset, where the customer is exposed to the risks and rewards of ownership of the
asset, and where the customer is deemed to have accepted the asset.
For development revenue recognised over time, such as through fund-through developments, Stockland recognises
revenue based on a measure of completion. Stockland assesses the most appropriate recognition method for each
contract type, with the input method based on costs incurred typically applied to development contracts.
There may be timing differences between the recognition of revenue and the receipt of cash. Where cash is received in
advance of the revenue being recognised, a contract liability is recognised within payables. Where revenue is recognised
in advance of the receipt of cash, a contract asset is recognised within receivables.
Management revenue
Management revenue is revenue earned from services performed by Stockland relating to the establishment and
management of investment structures, established and development assets, and developments. It includes fees for
related administrative, sales, leasing and marketing activities. Management revenue is recognised in accordance with AASB
15, either at the point in time at which services are performed, or over time where the related services are performed
over time.
The revenue recognised for the performance of services is the agreed fee for the services. Where multiple agreements are
entered into at the same time with the same parties as part of a single commercial transaction, the total consideration
under the combined contracts is allocated to each unique performance obligation, with revenue recognised as Stockland
performs each obligation either at a point in time or over time. Where a fee is charged to a joint venture or capital
partnership, Stockland only recognises revenue from fees charged to the joint venture or partnership to the extent that it
relates to the partner's ownership interest.
There may be timing differences between the recognition of revenue and the receipt of cash. Where cash is received in
advance of the revenue being recognised, a contract liability is recognised within payables. Where revenue is recognised
in advance of the receipt of cash, a contract asset is recognised within receivables.
Property revenue
Property revenue is revenue earned from operating assets, and includes lease revenue, outgoings recoveries and
contingent rent associated with general building and tenancy operation from lessees in accordance with specific clauses
within lease agreements.
Lease revenue is recognised in accordance with AASB 16 Leases on a straight-line basis over the lease term, net of
any incentives.
Outgoings recoveries are recognised in accordance with AASB 15 and are typically invoiced monthly based on an annual
estimate. The consideration for the current month is typically due on the first day of the month. Revenue related to
outgoings recoveries is recognised over time as the estimated costs are consumed by the tenant. Should any adjustment
be required based on actual costs incurred, this is recognised in the balance sheet within the same reporting period and
billed annually.
Property revenue includes $10 million (2022: $7 million) of contingent rents billed to tenants. Contingent rents are derived
from the tenants’ revenues and represent 1.4% (2022: 1.0%) of gross lease income.
Dividends and distributions
Revenue from dividends and distributions are recognised in other revenue on the date they are declared by the relevant
entity but are only recognised in the statement of cash flows upon receipt.
110 Stockland Annual Report 2023
2. Operating segments
To reflect Stockland's new strategy, the disposal of the Retirement Living business, and changes in the way the business is
managed, Stockland has updated its assessment of the Chief Operating Decision Maker (CODM) and reportable operating
segments in the current year. The operating segment information relating to the prior comparative periods in notes 1 and
2 has been updated to reflect the revised disclosures.
Chief Operating Decision Maker
The CODM is a management function which makes decisions regarding the allocation of resources and assesses the
performance of the operating segments of an entity.
Stockland's CODM is comprised of five members of the Stockland senior leadership team who collectively perform this
function, being the Managing Director and Chief Executive Officer, the Chief Financial Officer, the CEO - Communities, the
CEO - Commercial Property, and the Chief Investment Officer.
Reportable Segments
Stockland has three reportable segments:
• Commercial Property – invests in, develops, and manages Retail Town Centres, Workplace, and Logistics properties;
• Communities – invests in, develops, sells, and manages a range of Masterplanned Communities, Land Lease
Communities, and Apartments; and
• Other – includes the Retirement Living business which was disposed on 29 July 2022, and other items which are not
able to be classified within any of the other defined segments.
Measurement of segment results
Funds From Operations
FFO is a non-IFRS measure that is designed to present, in the opinion of the CODM, the results from ongoing operating
activities in a way that appropriately reflects Stockland's underlying performance.
FFO is the primary basis on which dividends and distributions are determined, and together with expected capital returns
and AFFO impacts, reflects the way the business is managed and how the CODM assesses the performance of Stockland.
It excludes certain items which are non-cash, unrealised or of a capital nature, and profit or loss made from realised
transactions occurring infrequently and those that are outside the course of Stockland’s core ongoing business activities.
FFO includes income tax expense relating to FFO, less any tax losses utilised in the year. A reconciliation from FFO to profit
after tax is presented in note 2.A.
Adjusted Funds From Operations
AFFO is an alternative, secondary, non-IFRS measure used by the CODM to assist in the assessment of the underlying
performance of Stockland. AFFO is calculated by deducting maintenance capital expenditure, incentives and leasing costs
from FFO.
Segment revenue
Segment revenue is used by the CODM to assist in the assessment of each segment's execution of the Group's strategy.
Segment revenue is comprised of Property revenue, Development revenue, and Management revenue.
Material customers
There is no customer who accounts for more than 10% of the gross revenue of Stockland or the Trust.
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3
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2
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2
3
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F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
111
Financial report for the year ended 30 June 2023
2A. Reconciliation of FFO to profit after tax
Year ended 30 June
$M
FFO
Adjust for:
Amortisation of lease incentives
Amortisation of lease fees
Straight–line rent
Net change in fair value of investment properties2
Unrealised DMF revenue
Net gain on financial instruments
Net gain on other financial assets
Net gain/(loss) on sale of other non–current assets
Net (impairment)/reversal of impairment of inventories
Non-FFO income tax
Other one–off costs3
Profit after tax
(Profit)/Loss from discontinued operations net of income tax
Profit after tax from continuing operations
Stockland
20231
847
20221
851
(90)
(14)
(10)
(230)
7
9
1
12
(26)
(41)
(25)
440
(2)
438
(87)
(14)
(2)
575
28
191
–
19
6
(43)
(143)
1,381
44
1,425
1
Includes the results of the Retirement Living business for the period from 1 to 29 July 2022 when the sale of the business was completed (2022: 12
months to 30 June 2022). The Retirement Living business was classified as a discontinued operation held for sale at 30 June 2022. Refer to note 14A for
further details.
2 Includes Stockland’s share of revaluation relating to properties held through joint ventures (2023: $26 million gain; 2022: $32 million gain) and fair value
unwinding of ground leases recognised under AASB 16 (2023: $1 million; 2022: $1 million).
3 Other one-off costs predominantly include costs relating to the acquisition and integration of Halcyon's land lease communities business and one-off
capital partnering transaction costs. In the prior period they also related to the disposal of the Retirement Living business, one-off capital partnering costs,
restructuring costs, and provisions for expected onerous contract costs. To be classified as a one-off, these costs were assessed to be highly unlikely to
reoccur in future years.
112 Stockland Annual Report 2023
2B. FFO and AFFO
The contribution of each reportable segment to FFO and AFFO for Stockland is summarised as follows:
Year ended
$M
30 June 2023
Development revenue
Management revenue
Property revenue2,3
Segment revenue
Segment EBIT2,3
Amortisation of lease fees
Interest expense in cost of sales4
Finance income
Finance expense
Unallocated corporate and other expenses
FFO Tax expense
FFO5,1
Maintenance capital expenditure6
Incentives and leasing costs7
AFFO1
30 June 2022
Development revenue
Management revenue
Property revenue2,3
Segment revenue
Segment EBIT2,3
Amortisation of lease fees
Interest expense in cost of sales4
Finance income
Finance expense
Unallocated corporate and other expenses
FFO5,1
Maintenance capital expenditure6
Incentives and leasing costs7
AFFO1
Communities
Commercial
Property
Other1
Stockland
1,989
48
23
2,060
492
–
(80)
–
–
–
–
136
32
820
988
626
14
(4)
–
–
–
–
412
636
1,954
32
18
2,004
428
–
(74)
–
–
–
354
107
12
800
919
553
14
(3)
–
–
–
564
3
8
5
16
3
–
–
13
(88)
(93)
(36)
(201)
6
1
144
151
96
–
(2)
3
(75)
(89)
(67)
2,128
88
848
3,064
1,121
14
(84)
13
(88)
(93)
(36)
847
(56)
(58)
733
2,067
45
962
3,074
1,077
14
(79)
3
(75)
(89)
851
(53)
(69)
729
C
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t
s
F
Y
2
3
H
g
h
i
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i
g
h
t
s
C
E
O
l
e
t
t
e
r
s
C
h
a
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m
a
n
a
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d
c
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e
a
t
e
v
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l
u
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w
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G
o
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r
n
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c
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R
e
p
o
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t
R
e
m
u
n
e
r
a
t
i
o
n
1
Includes the results of the Retirement Living business for the period from 1 to 29 July 2022 when the sale of the business was completed (2022: 12
months to 30 June 2022). The Retirement Living business was classified as a discontinued operation held for sale at 30 June 2022. Refer to note 14A for
further details.
2 Commercial Property property revenue and EBIT adds back $90 million (2022: $87 million) of amortisation of lease incentives and excludes $10 million
(2022: $2 million) of straight–line rent adjustments.
3 Other property revenue and EBIT excludes $7 million (2022: $28 million) of unrealised Retirement Living DMF revenue.
4 Interest expense in cost of sales in Communities includes Stockland's share of interest expense in cost of sales from equity accounted investments of
$2 million (2022: $nil).
5 Commercial Property FFO includes share of profits from equity-accounted investments of $17 million (2022: $21 million) and Communities FFO includes
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
share of profits from equity-accounted investments of $41 million (2022: $14 million).
6 2022 included Retirement Living maintenance capital expenditure of $7 million (2023: $nil).
7 Expenditure incurred on incentives and leasing costs during the year excluding assets under construction.
i
F
n
a
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c
a
l
i
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e
p
o
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t
Year ended 30 June 2023
113
Financial report for the year ended 30 June 2023
2C. Balance sheet by operating segment
The balance sheet of each reportable segment for Stockland is summarised as follows:
As at
$M
30 June 2023
Real estate related assets2,3
Other assets
Assets
Borrowings
Other liabilities
Liabilities
Net assets/(liabilities)
30 June 2022
Real estate related assets2,3
Other assets
Assets
Borrowings
Other liabilities
Liabilities
Net assets/(liabilities)
Communities
Commercial
Property
Other1
Stockland
4,242
412
4,654
–
1,658
1,658
2,996
4,179
356
4,535
–
1,904
1,904
2,631
11,070
115
11,185
–
686
686
10,499
11,314
95
11,409
–
548
548
10,861
142
659
801
3,907
213
4,120
(3,319)
3,781
689
4,470
4,472
3,129
7,601
(3,131)
15,454
1,186
16,640
3,907
2,557
6,464
10,176
19,274
1,140
20,414
4,472
5,581
10,053
10,361
1 The comparative period includes the assets and liabilities of the Retirement Living business, which was classified as a discontinued operation held for sale
at 30 June 2022. Refer to note 14A for further details.
2 Includes non–current assets held for sale, inventories, investment properties, equity–accounted investments and certain other assets.
3 Includes equity–accounted investments of $570 million (2022: $476 million) in Commercial Property and $105 million (2022: $116 million) in Communities.
Refer to note 23 for further details.
114 Stockland Annual Report 2023
3. EPS
Keeping it simple
EPS is the amount of post–tax profit attributable to each security.
Basic EPS is calculated as statutory profit for the period divided by the weighted average number of securities
(WANOS) outstanding. This is highly variable as it includes unrealised fair value movements in investment properties
and financial instruments.
Diluted EPS adjusts the basic EPS for the dilutive effect of any instruments, such as Security Plan rights, that could
be converted into securities.
Basic FFO per security is disclosed in the Directors’ report and more directly reflects the underlying income
performance of the portfolio.
Year ended 30 June
Profit after tax attributable to shareholders ($M)
Stockland
2023
440
2022
1,381
Trust
2023
201
2022
1,390
WANOS used in calculating basic EPS
2,382,387,660
2,383,353,753
2,382,387,660
2,383,353,753
Basic EPS (cents)1
18.5
57.9
8.4
58.3
Effect of rights and securities granted under Security Plans2
17,523,015
8,212,562
17,523,015
8,212,562
WANOS used in calculating diluted EPS
2,399,910,675
2,391,566,315
2,399,910,675
2,391,566,315
Diluted EPS (cents)1
18.3
57.7
8.4
58.1
1 Amounts include both continuing and discontinued operations. Earnings per security for continuing and discontinued operations have been separately
disclosed in note 14A.
2 Rights and securities granted under security plans are only included in diluted EPS where Stockland is meeting performance hurdles for contingently
issuable security based payment rights.
4. Dividends and distributions
Stockland Corporation Limited
There were no dividends from Stockland Corporation Limited during the current or previous financial years. The dividend
franking account balance as at 30 June 2023 is $14 million based on a 30% tax rate (2022: $14 million).
Stockland Trust
For the current year, the interim and final distributions are paid solely out of the Trust and therefore the franking
percentage is not relevant.
Date of payment
Cents per security
Total amount ($M)
Non attributable (%)
2023
2022
2023
2022
2023
2022
2023
2022
Interim distribution
28 February
28 February
Final distribution
31 August
31 August
Total distribution
11.8
14.4
26.2
12.0
14.6
26.6
282
344
626
286
349
635
25.3
37.6
32.1
39.2
36.7
37.8
The non-attributable component represents the amount distributed in excess of Stockland Trust’s taxable income (with
trust taxable income calculated to include the impact of the 50% CGT discount which would apply, for example, to
Australian tax resident individuals who have held their securities on capital account for more than 12 months).
C
o
n
t
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n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
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C
E
O
l
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t
t
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r
s
C
h
a
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c
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u
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H
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w
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G
o
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r
n
a
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R
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p
o
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t
R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
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a
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i
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p
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t
Year ended 30 June 2023
115
Financial report for the year ended 30 June 2023
Basis for distribution
Stockland’s distribution policy is to pay the higher of 100% of Trust taxable income or 75% to 85% of FFO on an annual basis
over time. The payout ratio for the current and comparative periods is summarised as follows:
Year ended 30 June
FFO ($M)1
Weighted average number of securities used in calculating basic EPS
FFO per security (cents)
Distribution per security for the year (cents)
Payout ratio
Note
2
3
2023
847
2022
851
2,382,387,660
2,383,353,753
35.6
26.2
74%
35.7
26.6
75%
1 FFO is a non–IFRS measure. A reconciliation from FFO to statutory profit after tax is presented in note 2A.
5. Events subsequent to the end of the year
On 26 July 2023 Stockland entered into binding agreements to acquire five LLC projects in Queensland from the
Living Gems Group for $210 million, comprising four development communities and one established community with
development opportunities.
Other than disclosed in this note or elsewhere in this report, no transaction or event of a material or unusual nature has
arisen in the interval between the end of the current reporting year and the date of this report that, in the opinion of
the Directors, is highly probable to significantly affect the operations, the results of operations, or the state of affairs of
Stockland and the Trust in future years.
116 Stockland Annual Report 2023
Operating assets and liabilities
In this section
This section shows the real estate and other operating assets used to generate Stockland’s trading performance and
the liabilities incurred as a result.
6. Inventories
Keeping it simple
A Whole of Life (WOL) methodology is applied to calculate the margin percentage over the life of each project. All
costs, including those costs spent to date and those forecast in the future, are allocated proportionally in line with
net revenue for each lot to achieve a WOL margin percentage. The WOL margin percentage, and therefore allocation
of costs, can change over the life of the project as revenue and cost forecasts are updated.
The determination of the WOL margin percentage requires significant judgement in estimating future revenues and
costs and can change over the life of the project as revenue and cost forecasts are updated. The WOL margin
percentages are regularly reviewed and updated in project forecasts across the reporting period to ensure these
estimates reflect market conditions through the cycle.
As at 30 June
$M
Completed inventory
Cost of acquisition
Development and other costs
Interest capitalised
Completed inventory1
Development work in progress
Cost of acquisition
Development and other costs
Interest capitalised
Impairment provision
Masterplanned Communities
Cost of acquisition
Development and other costs
Apartments
Cost of acquisition
Development and other costs
Land Lease Communities
Cost of acquisition
Development and other costs
Interest capitalised
Logistics
Development work in progress
Less: amounts classified as held for sale
Stockland
2023
2022
Current Non–current
Total
Current Non–current
Total
145
414
15
574
384
111
37
(7)
525
–
–
–
144
16
160
29
–
1
30
715
–
–
–
–
–
2,015
150
245
(94)
2,316
76
14
90
60
6
66
112
–
–
112
2,584
–
2,584
145
414
15
574
2,399
261
282
(101)
2,841
76
14
90
204
22
226
141
–
1
142
3,299
–
3,873
139
135
5
279
418
185
54
(5)
652
–
–
–
28
27
55
88
42
6
136
843
(46)
1,076
–
–
–
–
139
135
5
279
2,028
2,446
244
265
(77)
2,460
76
12
88
99
13
112
–
–
–
–
2,660
–
2,660
429
319
(82)
3,112
76
12
88
127
40
167
88
42
6
136
3,503
(46)
3,736
Inventories
1,289
1 Comprises Communities inventory of $546 million (30 June 2022: $274 million), logistics inventory of $26 million (30 June 2022: $nil), and Other inventory
of $2 million (30 June 2022: $5 million). No apartments projects are included in completed inventory in the current or prior year.
Year ended 30 June 2023
117
C
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F
Y
2
3
H
g
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C
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O
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s
C
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a
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a
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a
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d
c
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a
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u
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H
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w
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G
o
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n
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R
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p
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R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Financial report for the year ended 30 June 2023
The following impairment provisions are included in the inventory balance with movements for the period recognised in
profit or loss:
$M
Balance at 1 July 2022
Amounts utilised
Reversal of provisions previously recorded
Additional provisions created
Balance at 30 June 2023
Stockland
82
(7)
(5)
31
101
Properties held for development and resale are stated at the lower of cost and NRV. Cost includes the costs of acquisition,
development and holding costs such as borrowing costs, rates and taxes. Holding costs incurred after completion of
development activities are expensed. Inventory is classified as current if it is completed or work in progress expected to
be settled within 12 months, otherwise it is classified as non-current.
Cost of acquisition
The cost of acquisition comprises the purchase price of the land, including land under option, along with any direct costs
incurred as part of the acquisition including legal, valuation and stamp duty costs.
The payments for land of $649 million (2022: $618 million) reported in the statement of cash flows are in respect of land
that will be developed over time.
Land under option
Stockland has a number of option arrangements with third parties to purchase land on capital efficient terms.
Where the arrangement uses call options only, the decision to proceed with a purchase is controlled by Stockland and
therefore Stockland has no obligation until it exercises the call option. As a result, no asset or liability for the land under
option is recognised on the balance sheet until the option has been exercised. The call option is not disclosed as a capital
commitment as there is no commitment to purchase until the option is exercised.
Where the arrangement includes both put and call options and the put option requires Stockland to purchase the land
at the discretion of the seller, it creates a present obligation once the option is exercised by the holder and the land is
then recognised in inventories with a corresponding liability. If Stockland also presently exhibits control over the future
economic benefits of the asset such as via a presently exercisable call option or physical control of the asset, the land is
recognised in inventories with a corresponding liability recognised in provisions for development costs at the exercise price
of the option.
Any costs incurred in relation to the options, including option fees, are included in inventories.
Development and other costs
Costs include variable and fixed costs directly related to specific contracts, costs related to general contract activity which
can be allocated to specific projects on a reasonable basis, and other costs specifically chargeable under the contract
including under rectification provisions.
Interest capitalised
Financing costs on qualifying assets are also included in the cost of inventories. Finance costs were capitalised at interest
rates ranging from 3.3 to 4.7% during the financial year (2022: 3.1 to 3.7%).
Allocation of inventories to cost of sales
A WOL methodology is applied to calculate the margin percentage for each project. On settlement, all costs, including
those spent to date and those forecast in the future, are proportionally allocated to each lot in line with net revenue and
released from inventories to cost of sales. The allocation of costs can change throughout the life of the project, as revenue
and cost forecasts are updated to reflect market conditions through the cycle.
Impairment provision
The NRV of inventories is the estimated selling price in the ordinary course of business less estimated costs of completion
and costs to sell. NRV is based on the most reliable evidence available at 30 June 2023 of the amount the inventories are
expected to be realised at (using estimates such as revenue escalations) and the estimate of total costs (including costs to
complete). These estimates take into consideration fluctuations of price or cost directly relating to events occurring after
the end of the period to the extent that such events confirm conditions existing at the end of the period. This is an area
of accounting estimation and judgement for Stockland.
118 Stockland Annual Report 2023
In accordance with AASB 102 Inventories, key estimates are reviewed each period, including the costs of completion,
sales rates and revenue escalations, to determine whether an impairment provision is required where cost (including
costs to complete) exceeds NRV. Management undertook an extensive impairment review of all development projects,
taking into account the current economic and operating environment. Based on information available at 30 June 2023 and
the information arising since that date about conditions at that date, the Directors have determined that the inventory
balances reported are held at the lower of cost or NRV.
The sensitivity of key inventory recoverability drivers to the evolving economic and operating conditions has been analysed
across all inventory projects. Production options continue to be available to Stockland to mitigate the risk of future
impairments. While it is unlikely that these drivers would move in isolation, these sensitivities have been performed
independently to illustrate the impact each individual driver has on the reported NRV of inventory and they do not
represent management's estimate at 30 June 2023.
Stockland
$M
Additional impairment charge on inventories:
• Masterplanned Communities and Apartments
• Land Lease Communities
• Logistics
Sales price
Average 3
year price
growth1
5% decrease
0%
1 year sales
rate
25%
reduction
Cost
5% increase
(48)
–
–
(110)
–
–
(1)
–
–
(14)
–
–
1 The average 3 year price growth underpinning the 30 June 2023 impairment assessment is 3.0% (2022: 3.4%).
Key inputs used to assess impairment of inventories are:
Item
Sales rates
Current sales price
Description
Assumptions on the number of lot sales expected to be achieved each month.
Sales prices are generally reviewed semi-annually by the sales and development teams in light of internal
benchmarking and market performance and are ultimately approved by the CEO, Communities.
Revenue escalation rates
The annual growth rate by which a lot is expected to increase in value until point of sale.
Costs to complete
The cost expected to be incurred to bring remaining lots to practical completion, including rectification provisions
and other costs.
Cost escalation rates
The annual increase in base costs applied up to the period in which the costs are incurred.
Financing costs
Selling costs
Assumptions on the annual interest rates underpinning future finance costs capitalised to the cost of inventories.
The costs expected to be incurred to complete the sale of inventories.
Impact of climate-related events on inventory impairments
Climate change may affect inventory impairment considerations in two main ways. Firstly, adverse climate conditions and
events, such as floods and bushfires, may cause damage and result in reduced demand in affected developments. Risk
factors for this include property location and whether the property has been designed to mitigate the impacts of adverse
events. Secondly, elevated design standards to enhance resilience and the decarbonisation of the supply chain may lead
to increased build costs.
When conducting impairment assessments, management incorporates an assessment of the cost to develop inventory
to required design standards, and factors in project-specific factors such as building design and locations when assessing
sales volumes and pricing.
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
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i
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C
E
O
l
e
t
t
e
r
s
C
h
a
i
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m
a
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a
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d
c
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e
a
t
e
v
a
l
u
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H
o
w
w
e
G
o
v
e
r
n
a
n
c
e
R
e
p
o
r
t
R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
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a
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i
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p
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t
Year ended 30 June 2023
119
Financial report for the year ended 30 June 2023
Development cost provisions
As at 30 June
$M
Development cost provisions1
Less: amounts classified as held for sale
Development cost provisions from
continuing operations
2023
Non–
current
201
–
201
Current
453
–
453
Total
Current
654
–
654
300
(39)
261
2022
Non–
current
465
–
465
Total
765
(39)
726
1
Includes $256 million (2022: $241 million) of provisions relating to Commercial Property investment property assets. $196 million (2022: $198 million) of
the Commercial Property provisions are recorded in Stockland Trust.
$M
Balance at 1 July 2022
Additional provisions
Amounts utilised
Amounts derecognised
Balance at 30 June 2023
Stockland
726
39
(110)
(1)
654
The development cost provisions reflect obligations as at 30 June 2023 that arose as a result of past events. This
balance includes deferred land options, and cost to complete provisions for both active and traded out projects. They are
determined by discounting the expected future cash outflows at a pre-tax rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability.
120 Stockland Annual Report 2023
7. Investment properties
Keeping it simple
Investment properties comprise investment interests in land and buildings, including integral plant and equipment
held for the purpose of producing rental income, capital appreciation, or both.
Investment properties are initially recognised at cost, including any acquisition costs, and are subsequently stated at
fair value at each balance date. Investment properties under development are classified as investment property and
stated at fair value at each balance date.
Any gain or loss arising from a change in fair value is recognised in profit or loss in the year.
As at 30 June
$M
Commercial Property investment properties
Communities investment properties
Other investment properties
Investment properties
Subsequent costs
Note
7.A
7.B
7.C
Stockland
Trust
2023
10,083
449
–
10,532
2022
10,118
373
–
10,491
2023
10,097
72
–
2022
10,169
–
–
10,169
10,169
Stockland recognises in the carrying amount of an investment property the cost of replacing part of that investment
property if it is probable that the future economic benefits embodied within the item will flow to Stockland and the cost
can be measured reliably. All other costs are recognised in profit or loss as an expense as incurred.
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment and its fair value
at the date of reclassification becomes its cost for accounting purposes.
A property interest under a lease is classified and accounted for as an investment property on a property-by-property
basis when Stockland holds it to earn rental income or for capital appreciation or both.
Lease incentives
Lease incentives provided by Stockland to lessees are included in the measurement of fair value of investment property
and are treated as separate assets. Such assets are amortised over the respective periods to which the lease incentives
apply using a straight-line basis.
Disposal of revalued assets
The gain or loss on disposal of revalued assets is calculated as the difference between the carrying amount of the asset
at the time of disposal and the net proceeds on disposal and is recognised in profit or loss in the year of disposal.
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2
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Year ended 30 June 2023
121
Financial report for the year ended 30 June 2023
7A. Commercial Property investment properties
Stockland owns, operates, and develops a portfolio of Commercial Properties across the Retail Town Centre, Logistics and
Workplace sectors.
As at 30 June
$M
Town Centres
Logistics
Workplace
Capital works in progress and sundry properties
Book value of commercial property
Less amounts classified as:
• cost to complete provision
• property, plant and equipment
• non–current assets held for sale
• other assets (including lease incentives and fees)
• other assets (including lease incentives and fees) attributable to
equity–accounted investments
• other receivables (straight–lining of rental income)
• other receivables (straight–lining of rental income) attributable to
equity–accounted investments
Investment properties (including Stockland’s share of investment
properties held by equity–accounted investments)
Less: Stockland’s share of investment properties held by equity–
accounted investments
Investment properties
Net carrying value movements
Opening balance
Acquisitions
Expenditure capitalised
Transfers to non–current assets held for sale
Movement in ground leases of investment properties
Disposals
Net change in fair value
Balance at 30 June
Stockland
Trust
2023
5,152
3,382
2,023
627
11,184
(2)
(131)
–
(193)
(5)
(48)
(10)
2022
5,492
3,065
2,170
522
11,249
(13)
(133)
(248)
(220)
(5)
(63)
(7)
2023
5,089
3,382
2,023
570
11,064
(2)
–
–
(191)
(5)
(47)
(10)
2022
5,426
3,065
2,203
467
11,161
(13)
–
(248)
(218)
(5)
(59)
(7)
10,795
10,560
10,809
10,611
(712)
10,083
10,118
58
294
–
(1)
(130)
(256)
(442)
10,118
9,286
193
333
(241)
(1)
(143)
691
(712)
10,097
10,169
58
289
–
(1)
(130)
(288)
(442)
10,169
9,352
193
327
(241)
(1)
(143)
682
10,083
10,118
10,097
10,169
122 Stockland Annual Report 2023
7B. Communities investment properties
Stockland owns, operates and develops a portfolio of Land Lease Communities (LLC) and Community real estate
investment properties.
LLC are an over-50s affordable lifestyle residential offering, where residents pay an initial purchase price for the home
and ongoing site rental costs (without departure costs), and are entitled to the total capital gain or loss upon sale of the
home. Stockland operates and retains ownership of the land on which the homes sit and the common amenity at each
community, while the homes, which are built on site, are engineered to be relocatable and remain the property of the
residents. The costs to build the homes are recognised within inventory and allocated to cost of sales using the WOL
methodology described in note 6. The land retained by Stockland at each community is recognised at fair value within
investment property. Any change in the fair value of the land on initial settlement of the homes is recognised as a net
change in fair value of investment properties and is included in FFO. Any subsequent changes in fair value are excluded
from FFO. The clubhouse facilities are initially recognised at cost in investment property, and are included in the fair value.
Community real estate investment properties comprise non-residential properties retained from Communities
developments which are leased to tenants, and includes childcare and medical centres.
As at 30 June
$M
Land Lease Communities investment properties:
• Established communities
• Communities under development
Community real estate investment properties
Communities investment properties (including investment properties
held for sale)
Less: amounts classified as held for sale
Communities investment properties
Net carrying value movement
Opening balance
Acquisitions
Expenditure capitalised
Disposals1
Transfers to disposal group assets held for sale
Transfer in
Net change in fair value
Balance at 30 June
Stockland
Trust
2023
2022
2023
2022
197
166
86
449
–
449
373
44
17
–
–
15
–
449
183
218
70
471
(98)
373
90
522
22
(177)
(98)
–
14
373
–
–
72
72
–
72
–
72
–
–
–
–
–
72
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Disposals relate to the communities acquired in the acquisition of Halcyon which were subsequently sold to the Stockland Residential Rental
Partnership (SRRP).
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Year ended 30 June 2023
123
Financial report for the year ended 30 June 2023
7C. Other investment properties
Stockland announced the sale of the Retirement Living business on 23 February 2022 and the sale completed on 29 July
2022. Refer to note 14.A for further details. Stockland retained ownership of the Affinity, WA retirement village and that
property, along with its resident obligations, is held for sale at 30 June 2023. Refer to note 14.C for further details.
As at 30 June
$M
Retirement Living operating villages
Retirement Living villages under development
Other investment properties1
Existing Retirement Living resident obligations2
Net carrying value of Other investment properties
Plus: retained Retirement Living resident obligations
Less: amounts classified as held for sale
Net carrying value of Other investment properties from continuing operations
Net carrying value movement
Opening balance
Expenditure capitalised
Cash received on first sales
Realised investment properties fair value movements
Unrealised investment properties fair value movements
Unrealised Retirement Living resident obligations fair value movements
Other movements
Transfer to discontinued operations and assets held for sale
Balance at 30 June
Stockland
2023
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
3,572
118
3,690
(2,704)
986
2
(988)
–
1,055
57
(64)
9
(29)
(126)
86
(988)
–
1 At 30 June 2023, $46 million (2022: $47 million) was classified as investment properties held for sale. At 30 June 2022, $3,643 million of Retirement Living
investment property was classified as discontinued operation assets held for sale. The sale of the Retirement Living business was completed on 29 July
2022 and the related assets have therefore been derecognised. Refer to notes 14A and 14C for further details.
2 At 30 June 2023, $42 million (2022: $40 million) of existing resident obligations has been included in investment properties held for sale. At 30 June 2022,
$2,662 million of existing resident obligations was classified as discontinued operation liabilities held for sale. The sale of the Retirement Living business
was completed on 29 July 2022 and the related liabilities have therefore been derecognised. Refer to notes 14A and 14C for further details.
124 Stockland Annual Report 2023
7D. Fair value measurement, valuation techniques and inputs
The adopted valuations (both internal and external) for investment properties are a combination of the valuations
determined using the discounted cash flow (DCF) method, the income capitalisation method, the direct comparison
method, and transaction prices where relevant.
Based on available information at 30 June 2023 and information arising since that date about conditions at that date,
and the economic and operating conditions evolving since, the Directors have determined that all relevant and available
information has been incorporated into the reported valuations.
Valuation process
The valuation team is responsible for managing the valuation process across Stockland’s investment properties portfolio.
The aim of the valuation process is to ensure that assets are held at fair value in Stockland’s accounts and facilitate
compliance with applicable regulations (for example the Corporations Act 2001 and ASIC regulations) and the STML
Responsible Entity Constitution and Compliance Plan.
Stockland’s external valuations are performed by independent professionally qualified valuers who hold a recognised
relevant professional qualification and have specialised expertise in the investment properties valued. Internal tolerance
checks have been performed by Stockland’s internal valuers who hold recognised relevant professional qualifications.
External valuations
The STML Responsible Entity Compliance Plan requires that each asset in the portfolio must be valued by an independent
external valuer at least once every three years.
In practice, assets are generally independently valued more than once every three years primarily as a result of:
• A variation between book value and internal tolerance check. Refer to the internal tolerance check section below.
• The asset undergoing major development or significant capital expenditure.
• An opportunity to undertake a valuation in line with a joint owners’ valuation.
• Ensuring an appropriate cross-section of assets are externally assessed at each reporting period.
Internal tolerance check
An internal tolerance check is performed every six months with the exception of those properties being independently
valued during the current reporting period. Stockland’s internal valuers perform tolerance checks by utilising the
information from a combination of asset plans and forecasting tools prepared by the asset management teams.
Appropriate capitalisation rates, terminal yields and discount rates based on comparable market evidence and recent
external valuation parameters are used to produce an income capitalisation and DCF valuation. The internal tolerance
check gives consideration to both the income capitalisation and DCF valuations.
The current book value, which is the value per the asset’s most recent external valuation adjusted for capital expenditure
and capitalisation and amortisation of lease incentives since the independent valuation date, is compared to the internal
tolerance check.
• If the internal tolerance check is within 5% of the current book value (higher or lower), then the current book value is
retained, and judgement is taken that this remains the fair value of the property.
• If the internal tolerance check varies by more than 5% to the current book value (higher or lower), then an external
independent valuation will be undertaken and adopted as the fair value of the property.
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The internal tolerance checks are reviewed by senior management who recommend the adopted valuation to the Audit
Committee and Board in accordance with Stockland’s internal valuation protocol above.
A development feasibility is prepared for each of the investment properties under development. The feasibility includes
an estimated valuation upon project completion based on the income capitalisation method. During the development
period, fair value is assessed with reference to reliable estimates of future cash flows, status of the development and the
associated risk profile. Finance costs incurred on properties undergoing development or redevelopment are included in
the cost of the development. The fair value is compared to the current book value as follows:
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• If the internal tolerance check is within 5% of the current book value (higher or lower), then the current book value is
retained, and judgement is taken that this remains the fair value of the property under development
• If the internal tolerance check varies by more than 5% to the current book value (higher or lower), then an internal
valuation will be adopted with an external valuation obtained on completion of the development.
The valuation of investment properties is a key area of accounting estimation and judgement for Stockland.
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Year ended 30 June 2023
125
Financial report for the year ended 30 June 2023
Key inputs and methodologies
Key inputs and methodologies used to measure fair value for investment properties are:
Item
DCF method
Description
Under the DCF method, a property’s fair value is estimated using explicit assumptions regarding the benefits
and liabilities of ownership over the asset’s life including an exit or terminal value. The DCF method involves the
projection of a series of cash flows on a real property interest. To this projected cash flow series, an appropriate,
market-derived discount rate is applied to establish the present value of the income stream associated with the
real property.
Income capitalisation method
This method involves assessing the total net market income receivable from the property and capitalising this in
perpetuity to derive a capital value, with allowances for capital expenditure reversions.
Net market rent
A net market rent is the estimated amount for which a property or space within a property should lease between a
willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing
and where the parties have each acted knowledgeably, prudently and without compulsion. In a net rent, the owner
recovers outgoings from the tenant on a pro rata basis (where applicable).
10 year average market rental growth The expected annual rate of change in market rent over a 10 year forecast period in alignment with expected
market movements.
10 year average specialty market
rental growth
An average of a 10 year period of forecast annual percentage growth rates in Retail specialty tenancy rents. Specialty
tenants are those tenancies with a gross lettable area of less than 400 square metres (excludes ATMs and kiosks).
Adopted capitalisation rate
The rate at which net market income is capitalised to determine the value of a property. The rate is determined with
regards to market evidence and relevant external valuations.
Adopted terminal yield
Adopted discount rate
The capitalisation rate used to convert income into an indication of the anticipated value of the property at the end
of the holding period when carrying out the DCF method. The rate is determined with regards to market evidence
and relevant external valuations.
The rate of return used to convert a monetary sum, payable or receivable in the future, into present value. It reflects
the opportunity cost of capital, that is, the rate of return the capital can earn if put to other uses having similar risk.
The rate is determined with regards to market evidence and relevant external valuations.
The following table shows the valuation techniques used in measuring the fair value of each class of investment property,
excluding assets held for sale, as well as the significant unobservable inputs used:
Class of property
Fair value
hierarchy
Valuation
technique
Significant unobservable Inputs
used to measure fair value
2023
2022
Retail Town Centres
Level 3
DCF and income
capitalisation method
Logistics
Level 3
DCF and income
capitalisation method
Workplace
Level 3
DCF and income
capitalisation method
Net market rent (per sqm p.a.)
$193 - $692
$186 - $700
10 year average specialty market
rental growth
2.34 - 3.51%
2.44 - 3.40%
Adopted capitalisation rate
5.25 - 7.00%
5.00 - 6.75%
Adopted terminal yield
Adopted discount rate
5.75 - 7.25%
5.25 - 7.00%
6.25 - 8.00%
5.75 - 7.75%
Net market rent (per sqm p.a.)
$86 - $235
$77 - $195
10 year average market rental growth
3.20 - 4.32%
2.99 - 3.75%
Adopted capitalisation rate
4.25 - 5.50%
3.63 - 5.00%
Adopted terminal yield
Adopted discount rate
4.50 - 5.75%
3.75 - 5.25%
5.75 - 7.00%
5.25 - 6.00%
Net market rent (per sqm p.a.)
$337 - $922
$332 - $934
10 year average market rental growth
3.18 - 3.74%
3.01 - 3.69%
Adopted capitalisation rate
4.88 - 9.00%
4.75 - 8.25%
Adopted terminal yield
Adopted discount rate
5.25 - 9.25%
5.00 - 8.50%
6.00 - 9.00%
5.75 - 8.50%
Commercial properties
under development
Level 3
Income
capitalisation method
Net market rent (per sqm p.a.)
$105 - $493
$85 - $474
Adopted capitalisation rate
3.88 - 5.25%
3.30 - 4.80%
Land
Lease Communities
Level 3
DCF and income
capitalisation method
Communities
Real Estate
Level 3
DCF and income
capitalisation method
Net market rent (per lot p.a.)
$7,682 - $9,930
$7,510 -$8,981
Capitalisation rate
Terminal yield
Discount rate
4.75%
5.00 - 5.25%
6.25%
Net market rent (per place p.a.)
$2,700 - $3,803
Capitalisation rate
Terminal yield
Discount rate
4.75 - 5.50%
5.15 - 5.75%
6.0 - 7.75%
4.75%
5.25%
6.00%
n/a
n/a
n/a
n/a
126 Stockland Annual Report 2023
Sensitivity information
Significant unobservable input
Net Operating Income (NOI)
• Net market rent
• 10 year average market rental growth
• 10 year specialty market rental growth
Adopted capitalisation rate
Adopted terminal yield
Adopted discount rate
Impact on fair value of
an increase in input
Impact on fair value of
a decrease in input
Increase
Increase
Increase
Decrease
Decrease
Decrease
Decrease
Decrease
Decrease
Increase
Increase
Increase
Generally, a change in the assumption made for the adopted capitalisation rate is accompanied by a directionally similar
change in the adopted terminal yield. The adopted capitalisation rate forms part of the income capitalisation approach and
the adopted terminal yield forms part of the DCF method.
When calculating the income capitalisation approach, the NOI has a strong interrelationship with the adopted
capitalisation rate given the methodology involves assessing the total NOI receivable from the property and capitalising
this in perpetuity to derive a capital value. In theory, an increase in the NOI and an increase (softening) in the adopted
capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the NOI
and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the NOI and the adopted
capitalisation rate could potentially magnify the impact to the fair value.
When assessing a DCF valuation, the adopted discount rate and adopted terminal yield have a strong interrelationship
in deriving a fair value given the discount rate will determine the rate at which the terminal value is discounted to the
present value.
In theory, an increase (softening) in the adopted discount rate and a decrease (tightening) in the adopted terminal yield
could potentially offset the impact to the fair value. The same can be said for a decrease (tightening) in the discount rate
and an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and
the adopted terminal yield could potentially magnify the impact to the fair value.
The sensitivity of key drivers to further fair value movements has been analysed across the carrying value of investment
properties at 30 June 2023. Investment properties valuations remain subject to market-based assumptions on discount
rates, capitalisation rates, market rents and incentives. While it is unlikely that these reported drivers would move in
isolation, these sensitivities have been performed independently to illustrate the impact each individual driver has on the
reported fair value. They do not represent management's estimate of likely movements at 30 June 2023.
Stockland
$M
Fair value gain/(loss) on:
• Retail Town Centres
• Logistics
• Workplace
• Land Lease Communities
• Communities Real Estate
Fair value gain/(loss) on investment properties
Capitalisation rate
Discount rate
Net operating income
0.25%
decrease
0.25%
increase
0.25%
decrease
0.25%
increase
5%
decrease
5%
increase
236
206
81
11
4
538
(217)
(213)
(74)
(10)
(4)
(518)
98
64
33
4
1
(96)
(87)
(32)
(3)
(1)
(276)
(204)
(94)
(10)
(4)
200
(219)
(588)
276
204
94
10
4
588
Impact of climate-related events on property valuations
Climate change, and associated regulations, may affect property values in two main ways. Firstly, adverse weather
conditions may cause damage, lost income, and/or reduced useful lives at affected properties. Risk factors for this include
property location and whether the property has been designed to mitigate the impacts of adverse weather. Secondly, there
is a growing trend amongst investors to pay premiums, and for regulators to require additional measures, for buildings
which minimise their impact on the environment, both during construction and throughout their operating life. Properties
which minimise their impact will usually have lower operating expenses due to operational efficiency and attract premium
rents which may support higher valuations, however increased regulation is likely to lead to an increase in compliance
costs which may reduce valuations.
Valuers incorporate an assessment of the impact of specific identified risk items, such as flooding or bushfires, on the
value of each property when conducting their valuations, applying both property-specific overlays and benchmarking to
market transactions that evidence premiums and discounts for low- and high-risk properties.
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Year ended 30 June 2023
127
Financial report for the year ended 30 June 2023
8. Receivables
As at 30 June
$M
Trade receivables1
Allowance for expected credit loss
Net current trade receivables
Other receivables
Receivables due from related companies
Allowance for expected credit loss
Net other receivables
Straight–lining of rental income
Current receivables
Less: amounts classified as held for sale
Current receivables from continuing operations
Straight–lining of rental income
Other receivables
Receivables due from related companies
Allowance for expected credit loss
Non–current receivables
Stockland
Trust
2023
2022
2023
2022
124
(4)
120
61
146
(9)
198
12
330
–
330
40
129
–
–
169
75
(6)
69
53
–
(7)
46
11
126
(6)
120
52
107
–
–
159
7
(4)
3
14
–
(7)
7
12
22
–
22
39
72
2,283
(5)
2,389
7
(4)
3
18
2,967
(12)
2,973
11
2,987
–
2,987
48
68
–
–
116
1 Lease receivables from tenants total $8 million (2022: $20 million).
Expected credit losses
Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance under the Expected Credit Loss (ECL) model. Stockland applies the simplified
approach to the ECL calculation used for trade receivables, lease receivables and contract assets, and measures
the ECL allowance at an amount equal to lifetime ECL. The lifetime ECL calculation is based on an unbiased and
probability-weighted amount determined by evaluating a range of possible outcomes, the time value of money, and
reasonable and supportable information that is available at the reporting date about past events, current conditions and
forecasts of future economic conditions.
Given the possible extended timeframe over which receivables will be collected, the receivables balance has been split
between current and non-current based on the expected timing of cash receipts, with cash receipts expected beyond 12
months booked as non-current. This ensures adequate emphasis is placed on the risk of default as the debt ages and the
time value of money.
The loss allowances for trade receivables and the intergroup loan as at 30 June 2023 reconcile to the opening loss
allowances as follows:
As at 30 June
$M
Opening ECL balance
Provision raised during the year
Provision released during the year
Bad debts written off in the year1
Closing ECL balance
Stockland
Trust
2023
2022
2023
2022
13
4
(4)
–
13
28
9
(17)
(7)
13
16
4
(4)
–
16
34
9
(20)
(7)
16
1 Rent abatements driven by COVID-19 of $nil were also expensed in the current year (2022: $28 million).
Receivables due from related entities
The Trust has applied the ECL model under AASB 9 Financial Instruments to its unsecured intergroup loan receivable from
Stockland, repayable in 2030. While there has been no history of defaults, and the loan is considered to be low credit risk,
an impairment provision determined as the 12-month ECL has been recorded at balance date. During the year the loan was
refinanced. Management has determined that there has not been a significant increase in credit risk on the intergroup loan
since its inception as the Corporation maintains a strong capital position, forecasts positive cash flows, and has sufficient
assets that are capable of generating cash inflows above their carrying value in order to repay the loan to the Trust in
accordance with agreed repayment terms. There is no impact on Stockland as this loan eliminates on consolidation.
128 Stockland Annual Report 2023
9. Payables
As at 30 June
$M
Trade payables and accruals
Land purchases
Distributions payable
GST payable/(receivable)
Current payables
Less: amounts classified as held for sale1
Current payables from continuing operations
Other payables
Land purchases
Non–current payables
Stockland
Trust
Note
2023
2022
2023
2022
4
349
213
344
(21)
885
–
885
19
159
178
439
253
349
(47)
994
(14)
980
19
294
313
100
–
344
(1)
443
–
443
–
–
–
106
12
349
(8)
459
–
459
–
–
–
1 At 30 June 2022, $2 million of current payables was classified as disposal group liabilities held for sale and $12 million of current payables was classified
as discontinued operations held for sale. Refer to notes 14A and 14B for further details.
Trade and other payables are initially recognised at fair value less transaction costs and are subsequently carried at
amortised cost.
The carrying values of payables at balance date represent a reasonable approximation of their fair value.
10. Other liabilities
As at 30 June
$M
Land purchases
Other liabilities
Current other liabilities
Less: amounts classified as held for sale
Current other liabilities from continuing operations
Land purchases
Other liabilities
Non–current other liabilities
Land purchases
Stockland
Trust
2023
2022
2023
2022
49
72
121
–
121
421
55
476
54
91
145
(59)
86
453
51
504
–
20
20
–
20
–
27
27
–
27
27
–
27
–
27
27
As part of its normal restocking process, Stockland acquires land on deferred terms from vendors who enter into reverse
factoring arrangements with a financier in order to receive their aggregated deferred payments early. All future amounts
payable under these arrangements have been recognised on the balance sheet within other liabilities rather than trade
payables as is the case for land creditor transactions not subject to a reverse factoring arrangement.
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3
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2
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2
3
f
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F
n
a
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Year ended 30 June 2023
129
Financial report for the year ended 30 June 2023
11. Leases
Stockland as a lessee
Amounts recognised in the consolidated balance sheet
The consolidated balance sheet contains the following amounts relating to leases:
As at 30 June
$M
Right–of–use assets
Investment properties (non–current)1
Other assets (non–current)2
Total right–of–use assets
Lease liabilities
Other liabilities (current)
Other liabilities (non-current)
Total lease liabilities
Stockland
Trust
2023
2022
2023
2022
24
10
34
3
36
39
25
11
36
2
38
40
24
–
24
–
27
27
25
–
25
–
27
27
1 Right–of–use assets capitalised to investment properties include ground leases for Durack Centre, WA.
2 Right–of–use assets capitalised to other assets includes the lease for Stockland's Brisbane office, Stockland's Melbourne office and a number of other
individually immaterial operating leases.
Additions to the right-of-use assets during the year were $nil (2022: $nil).
Amounts recognised in the consolidated statement of comprehensive income
The consolidated statement of comprehensive income contains the following amounts relating to leases:
Year ended 30 June
$M
Depreciation charge of right–of–use assets
Investment properties
Other assets
Total depreciation charge of right–of–use assets
Other expenses relating to leases
Interest expense (included in finance expense)
Expense relating to short–term leases (included in management,
administration, marketing and selling expenses)
Total other expenses relating to leases
Stockland
Trust
2023
2022
2023
2022
1
3
4
2
–
2
1
2
3
2
2
4
1
–
1
1
–
1
1
–
1
1
–
1
The total cash outflow for leases in the year was $5 million (2022: $5 million).
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets
Right–of–use assets are measured at cost less depreciation and impairment and are adjusted for any remeasurement of
the lease liability. The cost of the asset includes the amount of the initial measurement of lease liability and any lease
payments made at or before the commencement date, less any lease incentives received, any initial direct costs, and
restoration cost.
Right–of–use assets are depreciated on a straight–line basis from the commencement date of the lease to the earlier of
the end of the useful life of the right–of–use asset or the end of the lease term, unless they meet the definition of an
investment property. Right–of–use assets which meet the definition of an investment property form part of the investment
property balance and are measured at fair value in accordance with AASB 140 Investment Property (refer to note 7 and
below section on ground leases).
The lease term is the non–cancellable period of a lease together with the lease period under reasonably certain extension
options and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise
that option.
Management considers all the facts and circumstances that create an economic incentive to exercise an extension
option or not exercise a termination option. This assessment is reviewed if a significant event or a significant change in
130 Stockland Annual Report 2023
circumstances occurs which affects this assessment and is within the control of the lessee. No lease terms were revised
during the year.
Stockland tests right–of–use assets for impairment where there is an indicator that the asset may be impaired. An asset’s
carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Payments associated with lease terms of 12 months or less and leases of low value assets are recognised in profit or loss.
Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments discounted using the interest rate implicit
in the lease. If that rate cannot be determined, Stockland’s incremental borrowing rate is used. Lease payments used in
calculating the lease liability include:
• fixed payments less incentives receivable;
• variable lease payments that are based on an index or a rate, initially measured using the index or rate at
commencement date;
• payments of penalties for terminating the lease if the lease term reflects Stockland exercising that option; and
• lease payments to be made under options for extension which are reasonably certain to be exercised.
Lease liabilities are subsequently measured by increasing the carrying amount to reflect interest on the lease liability,
reducing the carrying amount to reflect the lease payments made, and remeasuring the carrying amount to reflect any
reassessment or lease modifications. Interest on the lease liability and any variable lease payments not included in the
measurement of the lease liability are recognised in profit or loss in the period in which they relate.
Stockland is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Incremental borrowing rate
The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term,
and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. To determine the incremental borrowing rate, Stockland uses interest rates from recent
third-party financing or a risk-free interest rate, which is then adjusted for lease-specific factors, including security and
lease term.
Investment properties with Ground Leases
A lease liability reflecting the leasehold arrangements of investment properties is disclosed in other liabilities in the
balance sheet and the carrying value of the investment properties are adjusted so that the net of these two amounts
equals the fair value of the investment properties. The lease liabilities are calculated as the net present value of the future
lease payments discounted at the incremental borrowing rate.
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0
J
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2
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2
3
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Year ended 30 June 2023
131
Financial report for the year ended 30 June 2023
Stockland as a lessor
Information relating to Stockland's accounting for revenue from operating leases is contained in note 1. Information relating
to Stockland's accounting for lease incentives is contained in note 7.
Maturity analysis of future lease receipts
The following table shows a maturity analysis of undiscounted, contracted lease payments to be received under
operating leases:
$M
Undiscounted lease payments due to Stockland or the Trust in the years ending 30 June:
2023
2024
2025
2026
2027
2028
Beyond 2028 (2022: Beyond 2027)
Total undiscounted lease payments due
Lease modifications
Stockland
Trust
2023
2022
2023
2022
n/a
594
461
369
281
204
753
580
460
351
281
200
n/a
720
n/a
592
455
364
278
201
737
583
458
346
277
197
n/a
702
2,662
2,592
2,627
2,563
Lease modifications arise when there is a change in the scope of a lease or a change in the consideration for a lease that
was not part of its original terms and conditions. Stockland accounts for lease modifications from the effective date of
the modification. Existing unamortised lease incentives capitalised to investment property will continue to be amortised
over the remaining lease term. Any amounts prepaid or owing relating to the original lease are treated as payments for the
new lease. During the year, Stockland granted a combination of rent abatements and deferrals to tenants.
Rent abatements
Where an abatement is granted retrospectively on uncollected past due rent, the abatement is expensed as an impairment
of trade receivables. Where an agreement on past due receivables has not been reached by 30 June 2023, an estimate of
the expected abatement on the outstanding balance is made and incorporated into the expected credit loss calculation.
Where an abatement has been agreed between Stockland and the tenant and is considered under the lease agreement,
there is no lease modification. Instead, the abatement is treated as a variable lease payment whereby Stockland
recognises a reduction in rental revenue in the current year.
For abatements or other lease modifications accompanied by extensions of lease terms or other changes in lease scope,
Stockland has accounted for these as a lease modification. The abated portion will be capitalised as a lease incentive and
amortised on a straight-line basis over the remaining life of the lease.
12. Cash and cash equivalents
Cash and cash equivalents comprise cash balances, at call deposits and other short-term investments. Included in the
cash and cash equivalents balance of $271 million is $137 million (2022: $147 million) in cash that is relating to joint
operations and/or held to satisfy real estate and financial services licensing requirements, and is not immediately available
for use by Stockland.
132 Stockland Annual Report 2023
13. Intangible assets
The consolidated balance sheet contains the following amounts relating to intangible assets:
As at 30 June
2023
Stockland
Software
Under
development
Total
Software
2022
Under
development
Total
$M
Cost
Opening balance
Additions
Retirements
Transfer
Closing balance
Accumulated amortisation and impairment
Opening balance
Retirements
Amortisation
Closing balance
Intangible assets
Software
81
9
–
–
90
(26)
–
(8)
(34)
56
10
5
–
(9)
6
–
–
–
–
6
91
14
–
(9)
96
(26)
–
(8)
(34)
62
92
3
(14)
–
81
(21)
4
(9)
(26)
55
6
7
–
(3)
10
–
–
–
–
10
98
10
(14)
(3)
91
(21)
4
(9)
(26)
65
Software is carried at cost less accumulated amortisation and impairment losses. Amounts incurred in design and testing
of software are capitalised, including employee costs and an appropriate part of directly attributable overhead costs,
where the software will generate probable future economic benefits.
Costs associated with maintaining software are recognised as an expense as incurred.
All software is amortised using the straight-line method at rates between 10 to 100% (2022: 10 to 100%) from the point
at which the asset is ready for use. Amortisation is recognised in profit or loss. The residual value, the useful life and the
amortisation method applied to an asset are reviewed at least annually.
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3
0
J
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2
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2
3
f
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Year ended 30 June 2023
133
Financial report for the year ended 30 June 2023
14. Discontinued operations, disposal groups and assets held for sale
KEEPING IT SIMPLE
Discontinued operations relate to a component of the Group, including its corresponding assets and liabilities,
that have been classified as held for sale and represent a separate major line of business or geographical area of
operation. The group of assets and their corresponding liabilities (together referred to as a 'disposal group'), may only
be classified as held for sale once the following criteria are met:
• The carrying amount will be recovered principally through a sale transaction rather than through continuing
use; and
• The sale must be highly probable.
A disposal group is measured at the lower of its carrying amount and fair value. Where fair value is lower than the
carrying amount, the difference is recognised as an impairment loss in profit or loss. The results of discontinued
operations are presented separately in the Statement of Comprehensive Income and corresponding notes in both
the current and prior periods.
14A. Discontinued operations held for sale
On 23 February 2022, the Group entered into an agreement with EQT Infrastructure (EQT) whereby EQT acquired
ownership of Stockland’s Retirement Living business for $934 million. The transaction completed on 29 July 2022, and
the associated assets and liabilities were consequently derecognised by Stockland. At 30 June 2022, the Retirement Living
business was presented as a discontinued operation held for sale.
The financial performance of the discontinued operation, representing the Retirement Living business sold, for the current
and prior year is as follows:
Results of discontinued operations1
$M
Revenue
Investment property expenses
Management, administration, marketing and selling expenses
Net change in fair value of investment properties
Net change in fair value of resident obligations
Net (loss) on sale of non–current assets
Profit/(loss) before tax
Income tax (expense)/benefit
Profit/(loss) after tax from discontinued operation
Stockland
2023
10
(1)
(4)
(2)
–
–
3
(1)
2
1 Excludes the results of Aspire villages and sundry assets not included in the transaction.
The impact of the discontinued operation on EPS is as follows:
Stockland
Year ended 30 June
2023
2022
Profit after tax attributable to
securityholders ($M)
Basic EPS (cents)
Diluted EPS (cents)
Continuing
operations
Discontinued
operations
438
18.4
18.2
2
0.1
0.1
Total
440
18.5
18.3
Continuing
operations
Discontinued
operations
1,425
59.8
59.6
(44)
(1.8)
(1.8)
2022
129
(10)
(36)
(17)
(126)
(3)
(63)
19
(44)
Total
1,381
57.9
57.7
134 Stockland Annual Report 2023
The cash flow information of the discontinued operation, representing the Retirement Living business sold, for the current
and prior years is as follows:
Year ended 30 June
$M
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash (utilised)/provided by discontinued operation
Stockland
2023
2
(6)
(4)
2022
198
(60)
138
The carrying amounts of the major classes of assets and liabilities, representing the Retirement Living business sold, are
as follows:
As at 30 June
$M
Cash and cash equivalents
Receivables
Current assets
Investment properties
Non–current assets
Assets
Payables
Retirement Living resident obligations
Development provisions
Other liabilities
Transaction cost provision
Current liabilities
Retirement Living resident obligations
Non–current liabilities
Liabilities
Net carrying value
Stockland
2023
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
21
6
27
3,643
3,643
3,670
12
2,610
39
21
38
2,720
52
52
2,772
898
C
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p
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m
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a
t
i
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3
0
J
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2
0
2
3
f
o
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t
h
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y
e
a
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n
d
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F
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Year ended 30 June 2023
135
Financial report for the year ended 30 June 2023
14B. Disposal group held for sale
On 23 February 2022, the Group announced it entered into a binding agreement with Mitsubishi Estates Asia (MEA)
to establish SRRP, a long-term partnership to develop and own land lease communities. Stockland has taken a 50.1%
ownership stake in SRRP, refer to note 23 Joint Ventures for more information.
The initial portfolio comprised six land lease communities. Three of these communities settled into SRRP on 31 May 2022.
The remaining three communities were held for disposal by Stockland at 30 June 2022 and settled into SRRP during the
current year.
As at 30 June
$M
Disposal group assets held for sale
Disposal group liabilities held for sale
Disposal group held for sale
Stockland
2023
–
–
–
2022
150
(2)
148
The major classes of assets and liabilities classified as disposal group held for sale in the current and prior periods are
as follows:
As at 30 June
$M
Inventories
Property, plant and equipment
Investment properties
Assets
Payables
Liabilities
Stockland
2023
–
–
–
–
–
–
2022
46
6
98
150
2
2
14C. Non-current assets held for sale
As at 30 June
$M
Investment properties transferred from Commercial Property
Investment properties transferred from Other1
Non–current assets held for sale
Stockland
Trust
2023
2022
2023
2022
–
4
4
248
7
255
–
–
–
248
–
248
1
Includes $46 million Retirement Living investment property net of $42 million Retirement Living resident obligations.
The following investment properties were held for sale at 30 June 2023:
• Stockland Affinity retirement village, WA
During the current year, Stockland completed the sale of the following properties which were classified as non-current
assets held for sale at 30 June 2022:
• 49% of The M_Park Trust, which holds the M_Park technology development at Macquarie Park, NSW
• Stockland Bull Creek, Bull Creek WA
• Stockland Gladstone, Gladstone QLD
• Sundry properties at Caloundra, QLD
Investment properties are classified as held for sale if their carrying amounts will be recovered principally through a sale
transaction rather than through continuing use. This condition is met only when the sale is highly probable and the asset
is available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year from the date of classification.
Investment properties held for sale remain measured at fair value.
136 Stockland Annual Report 2023
Capital structure and financial risk management
In this section
This section outlines how Stockland manages the market, credit and liquidity risk associated with its capital structure
and related financing costs.
Capital management
The Board determines the appropriate capital structure of Stockland, specifically, how much is raised from
securityholders (equity) and how much is borrowed from financial institutions and global capital markets (debt), in
order to finance Stockland’s activities both now and in the future. The Board considers Stockland’s capital structure
and its dividend and distribution policy at least twice a year ahead of announcing results, in the context of its ability
to continue as a going concern, to deliver its business plan, and execute its strategy.
Stockland’s capital structure is monitored through its gearing ratio, together with other key financial metrics, and
the Board maintains a capital structure to minimise the overall cost of capital in line with the Board’s risk appetite.
Stockland has a stated target gearing ratio range of 20% to 30%, together with a look-through gearing ratio of up to
35%, and credit ratings of A-/stable and A3/stable from S&P and Moody’s respectively.
Financial risk
Capital and financial risk management is carried out by a central treasury department. The Board reviews and
approves written principles of overall risk management, as well as written policies covering specific areas such as
capital management, financial risks, interest rates, foreign exchange and credit risks, the use of derivatives, and the
Group's liquidity. The Audit Committee assists the Board in monitoring the implementation of these treasury policies.
Borrowings
The Trust borrows money from financial institutions and debt investors globally in the form of bonds, bank debt,
and other financial instruments. As a result, Stockland is exposed to changes in interest rates on its net borrowings
and to changes in foreign exchange rates on its transactions, assets and liabilities denominated in foreign currencies.
In accordance with risk management policies, Stockland uses derivatives to appropriately hedge these underlying
exposures. Furthermore, there has been no change in the Group's hedging policy for interest rates or currencies, with
the resulting derivative portfolios operating as expected and in line with market movements.
The Group continues to meet both the general and financial undertakings required under its financing arrangements.
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3
0
J
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2
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2
3
f
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Year ended 30 June 2023
137
Financial report for the year ended 30 June 2023
15. Borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs and are
subsequently stated at amortised cost. Any difference between amortised cost and redemption value is recognised in
profit or loss over the period of the borrowings using the effective interest method. However, where a qualifying fair value
hedge is in place, borrowings are stated at the carrying amount adjusted for changes in fair value of the hedged risk. The
changes are recognised in profit or loss.
The table below shows the fair value of each of these instruments measured at Level 2 in the fair value hierarchy. Fair value
reflects the principal amount and remaining duration of these notes based on current market interest rates and conditions
at balance date. Stockland has complied with all covenants throughout the year ended 30 June 2023 and up to the date
of authorisation of these accounts.
The weighted average cost of debt for the year was 4.3% (2022: 3.4%).
As at 30 June
$M
Stockland and Trust
2023
2022
Note Current
Non–
current
Carrying
value
Fair
value Current
Non–
current
Carrying
value
Fair
value
Offshore medium term notes
Domestic medium term notes and
commercial paper
Drawn bank facilities
Borrowings
15.A
15.B
15.C
–
3,085
3,085
2,980
200
–
200
547
75
747
75
3,707
3,907
696
75
3,751
123
343
470
936
2,964
3,087
3,075
497
75
840
545
810
545
3,536
4,472
4,430
The difference of $156 million (2022: $42 million) between the carrying amount and fair value of the offshore medium
term notes (MTNs), domestic MTNs and commercial paper is due to notes being carried at amortised cost under AASB 9
Financial Instruments.
15A. Offshore medium term notes
The Trust has issued fixed coupon notes in the US private placement market and under its Euro MTN program in Europe
and Asia. These notes have been issued in USD, EUR and HKD and converted back to Australian dollars (AUD or $) principal
and AUD floating coupons through cross currency interest rate swaps (CCIRS).
As at 30 June 2023, the fair value of the US private placements and European and Asian MTNs is $1,177 million (2022:
$1,988 million) and $1,803 million (2022: $1,087 million) respectively.
15B. Domestic medium term notes and commercial paper
Domestic MTNs and commercial paper have been issued at either face value or at a discount to face value and are carried
at amortised cost. The discount or premium is amortised to finance costs over the term of the notes. The MTNs are issued
on either fixed or floating interest rate terms.
15C. Bank facilities
Bank facilities are unsecured, working capital facilities held at amortised cost. As at 30 June 2023, Stockland and the Trust
have undrawn bank facilities of $1,425 million (2022: $730 million) of which $500 million is due to expire within 12 months
of balance sheet date.
138 Stockland Annual Report 2023
15D. Drawn debt
The composition and maturity profile for the Group's drawn debt of $3.8 billion is shown below at face value
Drawn debt maturity profile1
Drawn debt composition %1
78% Offshore MTNs
20% Domestic MTNs
2%
Bank debt
Offshore MTNs
Domestic MTNs
Bank debt
250250
1,489
1,489
890890
300300
228228
7575
220220
200200
112112
FY24
FY25
FY26
FY27
FY28
FY29+
1 Face value in AUD at 30 June 2023 after the effect of the CCIRS.
C
o
n
t
e
n
t
s
F
Y
2
3
H
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l
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s
C
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O
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r
s
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p
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r
a
t
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3
0
J
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2
0
2
3
f
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d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
139
Financial report for the year ended 30 June 2023
16. Net financing costs
Keeping it simple
Stockland generates interest income on cash and other financial assets and incurs interest expense on borrowings
and other financial liabilities. The presentation of the net financing costs in this note reflects income and expenses
according to the classification of the financial instruments.
Fair value movements reflect the change in fair value of Stockland’s derivative instruments between the later of
inception or 1 July 2022 and 30 June 2023. The fair value at year end is not necessarily the same as the settlement
value at maturity.
Net financing costs are as follows:
Year ended 30 June
$M
Interest income from related parties
Interest income from other parties
Finance income
Interest expense relating to borrowings
Interest paid or payable on other financial liabilities at amortised cost
Finance expense on lease liabilities
Less: interest capitalised to inventories
Less: interest capitalised to investment properties
Finance expense
Designated hedge accounting relationships
Fair value hedges – gain/(loss) on change in fair value of derivatives
Fair value hedges – (loss)/gain on change in fair value of borrowings
Net (loss)/gain on designated hedge accounting relationships
Non-designated hedge accounting relationships
(Loss)/gain on foreign exchange movements
Gain on fair value movements
Net gain on non–designated hedge accounting relationships
Net gain on financial instruments
Stockland
Trust
2023
2022
2023
2022
–
10
10
(178)
(37)
(2)
114
19
(84)
4
(14)
(10)
(1)
20
19
9
–
3
3
(148)
(35)
(2)
96
14
(75)
(199)
201
2
6
183
189
191
219
7
226
(178)
–
(1)
–
18
(161)
4
(14)
(10)
(1)
20
19
9
191
3
194
(149)
–
(1)
–
12
(138)
(199)
201
2
6
183
189
191
Finance income is recognised in profit or loss as it accrues using the effective interest method.
Finance expense includes interest payable on short-term and long-term borrowings calculated using the effective interest
method and payments of interest on derivatives. These borrowing costs are expensed as incurred except to the extent
that they are directly attributable to the acquisition, construction, or production of a qualifying asset, such as investment
properties or inventories. Qualifying assets are assets that necessarily take a substantial period of time to reach the stage
of their intended use or sale.
In these circumstances, borrowing costs are capitalised to the cost of the assets while in active development until the
assets are ready for their intended use or sale. Total interest capitalised does not exceed the net interest expense in
any period. Project carrying values, including all capitalised interest attributable to projects, continue to be recoverable
based on the latest project feasibilities. In the event that development is suspended for an extended period of time, or
the decision is taken to dispose of the asset, the capitalisation of borrowing costs is also suspended. Borrowing costs
are capitalised using a weighted average capitalisation rate applied to the expenditures on the asset excluding specific
borrowings. The rate at which interest has been capitalised to qualifying assets is disclosed in note 6.
The accounting policy for fair value of derivatives are discussed in notes 17 and 18.
140 Stockland Annual Report 2023
17. Other financial assets and liabilities
Keeping it simple
A derivative is a type of financial instrument and is typically used to manage an underlying risk. A derivative’s value
changes over time in response to underlying variables, such as exchange rates or interest rates, and is entered into
for a fixed period. A hedge is where a derivative is used to manage underlying exposures. Stockland uses derivatives
to manage exposure to foreign exchange and interest rate risk.
Based on the nature of the assets and their purpose, movements in the fair value of other financial assets are
recognised either through profit or loss or other comprehensive income.
As at 30 June
Other
financial assets
Other
financial liabilities
Other
financial assets
Other
financial liabilities
$M
2023
2022
2023
2022
2023
2022
2023
2022
Stockland
Trust
Instruments in a designated fair value hedge1
CCIRS
–
Instruments in a designated cash flow hedge1
CCIRS
–
Instruments held at fair value through profit or loss
CCIRS
IRS
Other
Current
–
35
–
35
–
19
–
2
–
21
–
–
–
(20)
–
(20)
–
–
–
–
(10)
(10)
–
–
–
35
–
35
–
19
–
2
–
21
–
–
–
(20)
–
(20)
–
–
–
–
–
–
Instruments in a designated fair value hedge1
CCIRS
121
126
(111)
(117)
121
126
(111)
(117)
Instruments in a designated cash flow hedge1
CCIRS
48
41
(6)
(14)
Instruments held at fair value through profit or loss
CCIRS
IRS
Other2
Non–current3
12
90
14
285
12
102
9
290
–
(34)
–
(151)
–
(53)
(4)
(188)
48
12
90
–
270
41
(6)
(14)
12
102
–
280
–
(34)
–
(151)
–
(53)
–
(184)
1 No interest rate swaps are in designated hedge relationships.
2 Other financial assets include investments by the Corporation in Stockland Care Foundation Trust and other third party digital start-up entities.
3 Totals may not add due to rounding.
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
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h
t
s
C
E
O
l
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t
t
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r
s
C
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m
a
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a
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d
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a
l
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H
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G
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R
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p
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R
e
m
u
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e
r
a
t
i
o
n
Derivative financial instruments
Derivative financial instruments are recognised initially at fair value and are remeasured at each balance date. The
valuation of derivatives is an area of accounting estimation and judgement for Stockland. Third party valuations are used to
determine the fair value of Stockland’s derivatives. The valuation techniques use inputs such as interest rate yield curves
and currency prices/yields, volatilities of underlying instruments and correlations between inputs.
The gain or loss on remeasurement to fair value is recognised in profit or loss. However, where derivatives qualify for hedge
accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
3
0
J
u
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e
2
0
2
3
f
o
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t
h
e
y
e
a
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n
d
e
d
Stockland enters into ISDA Master Agreements with its derivative counterparties. Under the terms of these arrangements,
where certain credit events occur, the net position owing/receivable with a single counterparty in relation to all outstanding
derivatives with that counterparty will be taken as owing/receivable and all the relevant arrangements terminated. As
Stockland does not presently have a legally enforceable right of set-off, these amounts have not been offset in the balance
sheet. If a credit event had occurred, the ISDA Master Agreement would have the effect of netting, allowing a reduction to
derivative assets and derivative liabilities of the same amount of $162 million (2022: $153 million).
i
F
n
a
n
c
a
l
i
r
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p
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t
Year ended 30 June 2023
141
Financial report for the year ended 30 June 2023
Derivatives that qualify for hedge accounting
Stockland holds a number of derivative instruments including interest rate swaps, forward exchange contracts and CCIRS.
Stockland assesses whether the derivative designated in each hedging relationship is expected to be and has been
effective in offsetting changes in the fair value or cash flows of the hedged item using the hypothetical derivative method.
In order to qualify for hedge accounting, prospective hedge effectiveness testing must meet all of the following criteria:
• an economic relationship exists between the hedged item and hedging instrument;
• the effect of credit risk does not dominate the value changes resulting from the economic relationship; and
• the hedge ratio is the same as that resulting from actual amounts of hedged items and hedging instruments for
risk management.
In these hedge relationships, the main sources of ineffectiveness are:
• the effect of the counterparty and Stockland’s own credit risk on the fair value of the swaps, which is not reflected in
the fair value of the hedged item; and
• changes in interest rates will impact the fair value of the Australian dollar margin and implied foreign currency
margin respectively.
At the inception of the transaction, Stockland designates and documents these derivative instruments into a hedging
relationship with the hedged items, as well as its risk management objective and strategy for undertaking various
hedge transactions.
Stockland documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives used
in hedging transactions have been and will continue to be effective in offsetting changes in fair value or cash flows of
hedged items.
CCIRS hedging foreign currency borrowings are designated in either dual fair value and cash flow hedges or fair value
hedges only.
Fair value hedge
A fair value hedge is a hedge of the exposure to changes in fair value of an asset or liability that is attributable to a
particular risk.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Hedge accounting is discontinued when the hedging instrument matures or is sold, terminated or exercised, or until such
time where the hedging relationship ceases to meet the qualifying criteria. Any adjustment between the carrying amount
and the face value of a hedged financial instrument is amortised to profit or loss using the effective interest method.
Amortisation begins when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk
being hedged.
Cash flow hedge
A cash flow hedge is a hedge of the exposure to variability in cash flows attributable to a particular risk associated with
an asset, liability, or highly probable forecast transaction that could affect profit or loss.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are
recognised in equity in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss within finance income or expense.
Amounts in the cash flow hedge reserve are recognised in profit or loss in the periods when the hedged item is recognised
in profit or loss.
Hedge accounting is discontinued when the hedging instrument matures or is sold, terminated or exercised, no longer
qualifies for hedge accounting, or when Stockland revokes designation. Any cumulative gain or loss recognised in equity
at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is
recognised immediately in profit or loss.
Additionally, there are a number of derivatives that are not designated as fair value and/or cash flow hedges. These are
used to hedge economic exposures and the gains or losses on remeasurement to fair value of these instruments are
recognised immediately in profit or loss.
142 Stockland Annual Report 2023
Stockland and Trust
Borrowings
Derivatives
Carrying amount
Mark to market
2023
2022
Move
ments
(Repaid)
Drawn
(122)
(105)
(60)
(64)
16
103
(40)
(65)
–
91
1,864
1,535
328
471
758
1,986
1,595
392
455
655
3,093
3,096
(3)
(14)
75
750
–
(11)
545
843
–
(12)
(470)
(470)
(93)
(93)
–
1
–
–
Gain/
(loss)
on FV
of
debt
19
20
(1)
(16)
(12)
(9)
–
–
–
2023
2022
Cash
flow
hedge
reserve
impact
Gain/
(loss)
on FV
of
deriva-
tives
Move
ments
124
113
11
(29)
(31)
64
–
–
71
149
137
12
(44)
(38)
67
–
–
50
(25)
(24)
(1)
15
7
(3)
–
–
21
18
(5)
(4)
–
2
1
(2)
–
–
–
(2)
(21)
(20)
(1)
13
6
(2)
–
–
21
19
3,907
4,472
(565)
(577)
(9)
135
117
As at 30 June
$M
US Dollar
• Effective
• Other2
Euro3
HK Dollar3
Foreign exposure
AUD bank debt
AUD MTNs and commercial paper
AUD IRS
Borrowing costs
Total1
Net
gain/
(loss)
recog-
nised
in
profit
or
loss1
(2)
–
(2)
(4)
(6)
(12)
–
–
21
9
1 Totals may not add due to rounding.
2 Relates to instruments which are in economic hedge relationships but do not qualify for hedge accounting or have not been designated in hedge
accounting relationships.
3 These hedge relationships were deemed effective accounting hedges in the current and prior years.
Reconciliation of cash flow hedge reserve
Year ended 30 June
$M
Opening cash flow hedge reserve
Net change in fair value of cash flow hedges
Reclassified to profit or loss
Closing cash flow hedge reserve
Stockland
Trust
2023
2022
2023
2022
(14)
(5)
3
(16)
(49)
30
5
(14)
(14)
(5)
3
(16)
(49)
30
5
(14)
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
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O
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s
C
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R
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p
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m
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r
a
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3
0
J
u
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2
0
2
3
f
o
r
t
h
e
y
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a
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n
d
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d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
143
Financial report for the year ended 30 June 2023
18. Fair value measurement of financial instruments
Keeping it simple
The financial instruments included on the balance sheet are measured at either fair value or amortised cost. The
measurement of fair value may in some cases be subjective and may depend on the inputs used in the calculations.
Stockland generally uses external valuations based on market inputs or market values (e.g. external share prices). The
different valuation methods are called hierarchies and are described below:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
There were no transfers between levels during the year.
Determination of fair value
The fair value of financial instruments, including offshore MTNs and derivatives, is determined in accordance with generally
accepted pricing models by discounting the expected future cash flows using assumptions supported by observable
market rates. While certain derivatives are not quoted in an active market, Stockland has determined the fair value of these
derivatives using quoted market inputs (e.g., interest rates, volatility, and exchange rates) adjusted for specific features
of the instruments and debit or credit value adjustments based on the current creditworthiness of Stockland or the
derivative counterparty.
The following tables set out the financial instruments included on the balance sheet at fair value:
As at 30 June
$M
Derivative assets
Other investments
Financial assets carried at
fair value
Offshore MTNs1
Derivative liabilities
Other financial liabilities2
Financial liabilities carried
at fair value
Stockland
2023
2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
–
14
14
–
–
–
–
306
–
306
(2,765)
(171)
–
(2,936)
–
–
–
–
–
(42)
(42)
(42)
306
14
320
(2,765)
(171)
(42)
(2,978)
(2,658)
–
13
13
–
–
–
–
13
302
–
302
(2,704)
(184)
–
–
–
–
–
–
(2,716)
302
13
315
(2,704)
(184)
(2,716)
(2,888)
(2,716)
(5,604)
(2,586)
(2,716)
(5,289)
Net position
14
(2,630)
1 Offshore MTNs not in an accounting hedge relationship are carried at amortised cost. This table only reflects offshore MTNs carried at fair value according
to their hedge designation.
2 At 30 June 2023, $42 million of existing resident obligations has been included in investment properties held for sale (2022: $40 million). At 30 June 2022,
$2,662 million of existing resident obligations was classified as discontinued operation liabilities held for sale (30 June 2023: $nil). Refer to notes 14A and
14C for further details.
As at 30 June
$M
Derivative assets
Financial assets carried at
fair value
Offshore MTNs1
Derivative liabilities
Financial liabilities carried
at fair value
Net position
Trust
2023
2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
–
–
–
–
–
–
306
306
(2,765)
(171)
(2,936)
(2,630)
–
–
–
–
–
–
306
306
(2,765)
(171)
(2,936)
(2,630)
–
–
–
–
–
–
302
302
(2,704)
(184)
(2,888)
(2,586)
–
–
–
–
–
–
302
302
(2,704)
(184)
(2,888)
(2,586)
1 Offshore MTNs not in an accounting hedge relationship are carried at amortised cost. This table only reflects offshore MTNs carried at fair value according
to their hedge designation.
144 Stockland Annual Report 2023
The following table shows a reconciliation from the opening to closing balances for fair value measurements in Level 3 of
the fair value hierarchy:
$M
Opening balance
(Losses)/gains recognised in profit or loss
Cash receipts from incoming residents on turnover
Cash payments to outgoing residents on turnover, net of DMF
Amount disposed in the sale of the Retirement Living Business
Balance at 30 June1
Stockland
2023
2022
Retirement
Living
resident
obligations
(2,716)
–
(3)
6
2,671
(42)
Retirement
Living
resident
obligations
(2,512)
(38)
(311)
145
–
Total
(2,512)
(38)
(311)
145
–
(2,716)
(2,716)
Total
(2,716)
–
(3)
6
2,671
(42)
1 At 30 June 2023, $42 million of existing resident obligations has been included in investment properties held for sale (30 June 2022: $40 million). At 30 June
2022, $2,662 million of existing resident obligations was classified as discontinued operation liabilities held for sale (30 June 2023: $nil). Refer to notes
14A and 14C for further details.
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
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t
s
C
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s
C
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a
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p
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t
R
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m
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r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
145
Financial report for the year ended 30 June 2023
19. Financial risk factors
Keeping it simple
Stockland’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. Stockland’s
overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on financial performance.
The sensitivity analysis included in this note shows the impact that a shift in the financial risks would have on
the financial statements at balance date, but is not a forecast or prediction. In addition, it does not include any
management action that might take place to mitigate these risks, were they to eventuate.
19A. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect Stockland’s financial performance or the value of its financial instrument holdings. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising returns.
Currency risk
Currency risk arises when anticipated transactions or recognised assets and liabilities are denominated in a currency that
is not Stockland’s functional currency, being Australian Dollars (AUD). Stockland manages its currency risk by using CCIRS
and forward exchange contracts.
Stockland’s offshore MTNs create both an interest rate and a currency risk exposure. Stockland’s policy is to minimise its
exposure to both interest rate and exchange rate movements. Accordingly, Stockland has entered into a series of CCIRS
which cover 100% of the principals outstanding and are timed to expire when each note matures. These CCIRS also swap
the obligation to pay fixed interest to floating interest. When these swaps are no longer effective in hedging the interest
rate and currency risk exposure, management will reassess the value in continuing to hold the swap.
These CCIRS have been designated as fair value and cash flow hedges and are accounted for in line with the accounting
principles in note 17.
The effects of foreign currency-related hedging instruments on the Group's financial position and performance are
as follows:
As at 30 June
Carrying amount
Notional amount
Maturity date
Hedge ratio
Change in discounted spot value of outstanding hedging instruments since inception of
the hedge
Change in value of hedged item used to determine hedge ineffectiveness
Weighted average hedged rate for outstanding hedged instruments against AUD$1
Stockland and Trust
2023
2,765
2,623
2022
2,704
2,572
Aug 2024 – Mar 2036
Aug 2022 – Mar 2036
1:1
53
(65)
USD 0.77
HKD 5.57
EUR 0.63
1:1
54
(53)
USD 0.78
HKD 5.59
EUR 0.63
146 Stockland Annual Report 2023
Sensitivity analysis – currency risk
The following sensitivity analysis shows the impact on the profit or loss and equity if there was an increase/decrease
in AUD exchange rates of 10% at balance date with all other variables held constant, being the movement Stockland
determines is reasonably possible (2022: 10%). In determining what constitutes a reasonably possible movement,
management gives consideration to their best estimate at balance date of the range of possible future exchange
rate movements.
Stockland and Trust
2023
2022
As at 30 June
Profit or loss
Equity
Profit or loss
Equity
$M
EUR
HKD
USD
Impact
Increase Decrease
Increase Decrease
Increase Decrease
Increase Decrease
–
–
–
–
–
–
–
–
(2)
(5)
(10)
(17)
2
6
12
20
–
–
–
–
–
–
–
–
(2)
(5)
(11)
(18)
3
6
14
23
Interest rate risk
Interest rate risk is the risk that the fair value or cash flows of financial instruments will fluctuate due to changes in
interest rates.
The Trust’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Trust to cash flow
interest rate risk. Borrowings issued at fixed rates expose the Trust to fair value interest rate risk. Stockland’s treasury
policy allows it to enter into approved derivative instruments to manage the risk profile of the total debt portfolio to
achieve an appropriate mix of fixed and floating interest rate exposures. The Trust manages its interest rate risk through
CCIRS and fixed-to-floating interest rate swaps.
Sensitivity analysis – interest rate risk
The following sensitivity analysis shows the impact on profit or loss and equity if there was an increase/decrease in
market interest rates of 200 basis points (bps) at balance date with all other variables held constant, being the movement
Stockland determines is reasonably possible (2022: 100bps). In determining what constitutes a reasonably possible
movement, management gives consideration to their best estimate at balance date of the range of possible future interest
rate movements.
As at 30 June
2023
2022
2023
2022
Stockland
Trust
$M
Impact on interest
income/(expense)
Impact on net gain/(loss) on
derivatives – through profit
or loss
Impact on profit or loss
Impact on equity
Increase Decrease
Increase Decrease
Increase Decrease
Increase Decrease
5
113
118
27
(5)
(122)
(127)
(28)
4
50
54
17
(4)
(53)
(57)
(18)
48
113
161
27
(48)
(122)
(170)
(28)
32
50
82
17
(32)
(53)
(85)
(18)
C
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t
s
F
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2
3
H
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m
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r
a
t
i
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3
0
J
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2
0
2
3
f
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t
h
e
y
e
a
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n
d
e
d
i
F
n
a
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c
a
l
i
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p
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Year ended 30 June 2023
147
Financial report for the year ended 30 June 2023
19B. Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations
resulting in a financial loss to Stockland.
Risk management
Stockland has no significant concentrations of credit risk with any single counterparty and has policies to review the
aggregate exposure of tenancies across its portfolio. Stockland also has policies to ensure that sales of properties with
deferred payment terms and development services are made to customers with an appropriate credit history.
Derivative counterparties and cash deposits are currently limited to financial institutions approved by the Audit
Committee. As at 30 June 2023, these financial institutions had an Investment Grade rating greater than A- provided by
S&P. There are also policies that limit the amount of credit risk exposure to any one of the approved financial institutions
based on their credit rating and country of origin.
The maximum exposure to credit risk at the end of the reporting period is the gross carrying amount of each class of
financial assets mentioned in this report.
Bank guarantees and mortgages over land are held as security over certain receivables balances.
Impairment of financial assets
As at 30 June 2023 and 30 June 2022, there were no significant financial assets that were past due. Financial assets are
subject to the expected credit loss model as per AASB 9. Refer to note 8 for details of the loss allowances recognised on
trade receivables and the intercompany loan.
19C. Liquidity risk
Liquidity risk is the risk that Stockland will not be able to meet its financial obligations as they fall due. Due to the dynamic
nature of the underlying businesses, Stockland aims to maintain flexibility in liquidity and funding sources by keeping
sufficient cash and cash equivalents and/or undrawn committed credit lines available, while maintaining a low cost of
holding these facilities. Management prepares and monitors rolling forecasts of liquidity requirements on the basis of
expected cash flow.
Stockland manages liquidity risk through monitoring the maturity profile of its debt portfolio. At 30 June 2023, the current
weighted average debt maturity is 5 years (2022: 4.8 years).
148 Stockland Annual Report 2023
Keeping it simple
The following tables summarise Stockland’s financial liabilities including derivatives into relevant maturity groupings
based on the period remaining until the contractual maturity date. The amounts disclosed in the table are
the contractual undiscounted cash flows (including interest) and therefore may not reconcile with the amounts
disclosed on the balance sheet.
Refer to note 18 for the fair value of derivative assets to provide an analysis of Stockland and Trust total derivatives.
As at
$M
30 June 2023
Non–derivative
Payables (excl. GST)
Other liabilities
Lease liabilities
Distributions payable
Borrowings
Other financial liabilities1
Derivative
Interest rate derivatives
CCIRS
• Inflows
• Outflows
Financial liabilities
30 June 2022
Non–derivative
Payables (excl. GST)
Other liabilities
Lease liabilities
Distributions payable
Borrowings
Other financial liabilities1
Derivative
Interest rate derivatives
CCIRS
• Inflows
• Outflows
Carrying
amount
Contractual
cash flows
1 year or
less
1 – 2 years
2 – 5 years Over 5 years
Stockland
(740)
(470)
(39)
(344)
(3,907)
(42)
(54)
(117)
–
–
(5,713)
(740)
(470)
(39)
(344)
(4,843)
(42)
(59)
1,698
(1,889)
(6,728)
(1,003)
(1,003)
(507)
(40)
(349)
(4,472)
(2,716)
(53)
(131)
(507)
(40)
(349)
(5,292)
(2,716)
(60)
1,628
(1,899)
(10,238)
(562)
(49)
(3)
(344)
(348)
(42)
(20)
40
(86)
(1,414)
(689)
(54)
(2)
(349)
(617)
(2,660)
(6)
37
(59)
(4,399)
(58)
(48)
(2)
–
(302)
–
(10)
40
(85)
(465)
(125)
(48)
(2)
–
(322)
–
(15)
37
(76)
(551)
(101)
(373)
(7)
–
(19)
–
(27)
–
(2,157)
(2,036)
–
(21)
595
(659)
(2,723)
(147)
(405)
(7)
–
(2,147)
–
–
(8)
1,023
(1,059)
(2,126)
(42)
–
(29)
–
(2,206)
(56)
(24)
(15)
656
(777)
(2,851)
898
(987)
(2,437)
C
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t
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n
t
s
F
Y
2
3
H
g
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O
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C
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p
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u
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e
r
a
t
i
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3
0
J
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2
0
2
3
f
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a
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c
a
l
i
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p
o
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t
Financial liabilities
(9,271)
1 At 30 June 2022, $2,662 million of existing resident obligations was classified as discontinued operation liabilities held for sale. $42 million of existing
resident obligations has been included in investment properties held for sale at 30 June 2023 (2022: $40 million). Refer to notes 14A and 14C for
further details.
Year ended 30 June 2023
149
Financial report for the year ended 30 June 2023
Financial liabilities
(4,549)
Carrying
amount
Contractual
cash flows
1 year or
less
1 – 2 years
2 – 5 years Over 5 years
Trust
(100)
(27)
(344)
(100)
(27)
(344)
(3,907)
(4,843)
(100)
–
(344)
(348)
–
–
–
–
(2)
–
–
(25)
–
(302)
(2,157)
(2,036)
(54)
(117)
(59)
(20)
(10)
(21)
(8)
1,698
(1,889)
(5,564)
(118)
(28)
(349)
(118)
(28)
(349)
(4,472)
(5,292)
40
(86)
(858)
(118)
–
(349)
(617)
40
(85)
(357)
–
(1)
–
595
(659)
(2,244)
–
(1)
–
1,023
(1,059)
(2,105)
–
(26)
–
(322)
(2,147)
(2,206)
(53)
(131)
(5,151)
(60)
(6)
(15)
(24)
(15)
1,628
(1,899)
(6,118)
37
(59)
(1,112)
37
(76)
(377)
656
(777)
(2,293)
898
(987)
(2,336)
As at
$M
30 June 2023
Non–derivative
Payables (excl. GST)
Lease liabilities
Distributions payable
Borrowings
Derivative
Interest rate derivatives
CCIRS
• Inflows
• Outflows
30 June 2022
Non–derivative
Payables (excl. GST)
Lease liabilities
Distributions payable
Borrowings
Derivative
Interest rate derivatives
CCIRS
• Inflows
• Outflows
Financial liabilities
150 Stockland Annual Report 2023
20. Issued capital
Keeping it simple
Issued capital represents the amount of consideration received for securities issued by Stockland. Transaction costs
of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.
The balances and movements in equity of Stockland are presented in the consolidated statement of changes
in equity.
For so long as Stockland remains jointly quoted, the number of shares in Stockland Corporation Limited and the
number of units in Stockland Trust shall be equal and the securityholders and unitholders shall be identical.
Holders of stapled securities are entitled to receive dividends and distributions as declared from time to time and
are entitled to one vote per stapled security at securityholder meetings. The liability of a member is limited to the
amount, if any, remaining unpaid in relation to a member’s subscription for securities. A member is entitled to receive a
distribution following termination of the stapling arrangement (for whatever reason). The net proceeds of realisation must
be distributed to members, after making an allowance for payment of all liabilities (actual and anticipated) and meeting
any actual or anticipated expenses of termination.
The following table provides details of securities issued by Stockland:
Stockland and Trust
Stockland
Number of securities
$M
Trust
$M
As at 30 June
2023
2022
2023
2022
2023
2022
Ordinary securities on issue
Issued and fully paid
2,387,171,662
2,387,171,662
8,692
8,692
7,393
7,393
Other equity securities
Treasury securities
(5,275,982)
(4,197,304)
Issued capital
2,381,895,680
2,382,974,358
(40)
8,652
(37)
8,655
(38)
7,355
(35)
7,358
20A. Movements in ordinary securities
Stockland and Trust
Stockland
Number of securities
$M
As at 30 June
Opening balance
2023
2022
2,387,171,662
2,387,171,662
Securities issued during the year
–
–
Closing balance
2,387,171,662
2,387,171,662
2023
8,692
–
8,692
2022
8,692
–
8,692
Stockland did not issue any ordinary staples securities during the year.
Trust
$M
2023
7,393
–
7,393
2022
7,393
–
7,393
C
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3
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i
o
n
20B. Other equity securities
Treasury securities
Treasury securities are securities in Stockland that are held by the Stockland Employee Securities Plan Trust. Securities are
held until the end of the vesting period affixed to the securities. As the securities are held on behalf of eligible employees,
the employees are entitled to the dividends and distributions.
3
0
J
u
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e
2
0
2
3
f
o
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e
y
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a
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a
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Year ended 30 June 2023
151
Financial report for the year ended 30 June 2023
Movement of other equity securities
Stockland and Trust
Stockland
Number of securities
$M
Trust
$M
Opening balance
Securities acquired1
Securities transferred to
employees on vesting
2023
4,197,304
4,494,605
2022
3,517,364
3,619,294
(3,415,927)
(2,939,354)
Closing balance
5,275,982
4,197,304
2023
2022
2023
2022
(37)
(15)
12
(40)
(29)
(17)
9
(37)
(35)
(14)
11
(38)
(28)
(15)
8
(35)
1 Average price: $3.44 per security (2022: $4.67).
20C. Security based payments
Keeping it simple
Stockland operates three Security Plans at its discretion for eligible employees which are described below:
Long term incentives (LTI)
Under the LTI plan, employees have the right to acquire Stockland securities at nil consideration when certain
performance conditions are met. Since FY21, grants may vest based on a relative or absolute TSR performance
measure over a three-year performance period, provided employment continues to the applicable vesting date. Prior
to FY21, two equally-weighted performance measures were used, being underlying EPS growth and relative TSR.
Eligibility is by invitation of the Board and is reviewed annually.
Deferred short term incentives (DSTI)
For Executives and Senior Management there is a compulsory deferral of at least one third of STI incentives
into Stockland securities to further align remuneration outcomes with securityholders. Half of the awarded DSTI
securities will vest 12 months after award with the remaining half vesting 24 months after award, provided
employment continues to the applicable vesting date.
Tax exempt employee security plan
Under this plan, eligible employees receive up to $1,000 worth of Stockland securities.
The security options granted under the three Security Plans are held at fair value. The valuation of security options
is a key area of accounting estimation and judgement for Stockland.
The number and weighted average fair value of LTI rights and DSTI securities under the Security Plans are as follows:
Details
Opening balance
Granted during the year
Forfeited and lapsed during the year
Rights converted to vested Stockland stapled securities
Outstanding at the end of the year
LTI
Weighted average price
per right/security
Number of
rights/securities
2023
$3.19
$2.34
$2.91
$3.67
$2.69
2022
2023
2022
$3.16
$3.23
$2.65
$3.48
$3.19
13,331,666
11,958,396
8,373,415
5,792,383
(1,499,664)
(1,672,246)
(3,429,633)
(2,746,867)
16,775,784
13,331,666
The fair value of LTI rights is measured at grant date using the Monte Carlo Simulation option pricing model taking into
account the terms and conditions upon which the rights were granted. The fair value is expensed on a straight-line
basis over the vesting period, the period over which the rights are subject to performance and service conditions, with a
corresponding increase in reserves.
Where the individual forfeits the rights due to failure to meet a service or performance condition, the cumulative expense
is reversed through profit or loss in the current year. The cumulative expenditure for rights forfeited due to market
conditions are not reversed.
Where amendments are made to the terms and conditions subsequent to the grant, the value of the grant immediately
prior to and following the modification is determined. This occurs upon resignation or termination where the amendment
152 Stockland Annual Report 2023
relates to rights becoming vested in terms of beneficial ownership, which would otherwise have been forfeited due to the
failure to meet future service conditions. In this situation, the value that would have been recognised in future periods in
respect of the rights not forfeited is recognised in the period that the rights vest.
The number of rights granted to employees under the plan for the year ended 30 June 2023 was 5,504,051 (2022:
3,738,527). The number of LTI rights awarded is based on the Volume Weighted Average Price of Stockland securities for the
ten working days post 30 June (face value methodology). This is consistent with the approach for determining the number
of DSTI awards.
Assumptions made in determining the fair value of rights granted under the security plans are:
Details
Grant date
Fair value of rights granted under plan
Securities spot price at grant date
Exercise price
Distribution yield
Risk–free rate at grant date
Expected remaining life at grant date
Expected volatility of Stockland's securities
Expected volatility of index price
2023
2022
18 October 2022
18 October 2022
18 October 2021
$1.47
$3.33
–
7.06%
3.40%
$1.07
$3.33
–
7.06%
3.40%
$1.78
$4.60
–
6.09%
0.52%
2.70 years
2.70 years
2.70 years
33%
23%
33%
0%
32%
22%
The LTI rights outstanding as at 30 June 2023 of 12,411,904 (2022: 9,729,369), have a fair value ranging from $1.07 to $4.59
(2022: $1.11 to $4.59) per right and a weighted average restricted period remaining of 1.6 years (2022: 1.1 years).
During the year, 1,393,163 rights (2022: 987,175) vested and will convert to securities with a weighted average fair value of
$3.20 per security (2022: $3.02).
DSTI
The fair value of securities granted under the DSTI plan has been calculated based on the weighted average share price
on grant date of $3.34 (2022: $4.22).
The DSTI outstanding as at 30 June 2023, included in the table above, are 3,734,093 (2022: 3,088,229). The DSTI outstanding
have a fair value ranging from $3.33 to $4.76 (2022: $2.72 to $5.12) per security.
Employee Security Plan
Stockland securities issued to eligible employees under the Tax Exempt Employee Security Plan ($1,000 Plan) are
recognised as an expense with a corresponding increase in issued capital. The value recognised is the market price of the
securities granted at grant date.
C
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3
0
J
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2
0
2
3
f
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a
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Year ended 30 June 2023
153
Financial report for the year ended 30 June 2023
Taxation
In this section
This section sets out Stockland’s tax accounting policies and provides an analysis of the income tax expense/benefit
and deferred tax balances, including a reconciliation of tax expense to accounting profit. Accounting income is not
always the same as taxable income, creating temporary differences. These differences usually reverse over time.
Until they reverse, a deferred tax asset or liability must be recognised on the balance sheet, to the extent that it is
probable that a reversal will take place. This is known as the balance sheet liability method.
21. Income tax
21A. Income tax recognised in profit or loss
Year ended 30 June
$M
Current tax
Adjustments for prior years
Current tax
Deferred tax recognised during the year
Origination and reversal of temporary differences
Deferred tax
Income tax in profit or loss
Less: income tax (expense)/benefit relating to discontinued operations
Income tax in profit or loss from continuing operations
Stockland
2023
2022
(30)
–
(30)
–
(48)
(48)
(78)
(1)
(77)
–
–
–
–
(43)
(43)
(43)
19
(62)
2022
1,424
(1,390)
(5)
29
(9)
(69)
(5)
42
(2)
(43)
147%
66%
21B. Reconciliation of profit before tax to income tax recognised in profit or loss
Year ended 30 June
$M
Profit before tax
Less: Trust (profit)/loss before tax
Adjust for: intergroup eliminations
Profit before tax of Stockland Corporation Group
Prima facie income tax calculated at 30%
Impact on income tax recognised in profit or loss due to:
Permanent adjustments
Amounts which are non-deductible in the year
Cost base not previously able to be recognised in relation to goodwill of Retirement Living business
Under–provided in prior years
Income tax in profit or loss
Effective tax rate1
Effective tax rate (excluding discontinued operations)
Stockland
2023
518
(201)
(64)
253
(76)
1
(1)
–
(2)
(78)
31%
31%
1 The effective tax rate for the year ended 30 June 2022 is higher than the 30% statutory tax rate because of the permanent components of the gains on
the sale of the Retirement Living business (both the capital gain and the recognition of cost base on goodwill).
Stockland
Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised in other
comprehensive income (OCI) or directly in equity. Income tax expense is calculated at the applicable corporate tax rate of
30%, and is comprised of current and deferred tax expense.
Current tax expense represents the expense relating to the expected taxable income at the applicable tax rate for the
financial year. Deferred tax expense represents the tax expense in respect of the future tax consequences of recovering
or settling the carrying amount of an asset or liability.
154 Stockland Annual Report 2023
Tax consolidation
Stockland Corporation Limited is head of the tax consolidated group which includes its wholly-owned Australian resident
subsidiaries. As a consequence, all members of the tax consolidated group are taxed as a single entity.
Members of the tax consolidated group have entered into a tax sharing agreement and a tax funding arrangement. The
arrangement requires that Stockland Corporation Limited assumes the current tax liabilities and deferred tax assets
arising from unused tax losses, with payments to or from subsidiaries settled via intergroup loans. Any subsequent period
adjustments are recognised by Stockland Corporation Limited only and do not result in further amounts being payable or
receivable under the tax funding arrangement. The tax liabilities of the entities included in the tax consolidated group will
be governed by the tax sharing agreement should Stockland Corporation Limited default on its tax obligations.
Trust
Under current Australian income tax legislation, Stockland Trust and its sub-trusts are not liable for income tax on their
taxable income (including any assessable component of net capital gains) provided that the unitholders are attributed the
taxable income of the Trust. Securityholders are liable to pay tax at their effective tax rate on the amounts attributed.
22. Deferred tax
As at 30 June
$M
Inventories
Investment properties
Property, plant and equipment
Payables
Retirement Living resident obligations
Provisions
Leases
Reserves
Tax losses carried forward
Tax assets/(liabilities)1
1 Totals may not add due to rounding.
Movement in temporary differences
Assets
Liabilities
Net
2023
2022
2023
2022
2023
2022
40
37
18
16
–
30
1
8
–
150
32
18
21
10
–
44
–
7
233
365
(68)
(115)
–
(9)
–
–
–
–
–
(60)
(112)
–
(1)
(185)
–
(1)
–
–
(28)
(78)
18
7
–
30
1
8
–
(192)
(359)
(42)
As at 30 June
Recognised in
Recognised in
$M
Inventories
Investment properties
Property, plant and equipment
Payables
Retirement Living resident obligations
Provisions
Leases
Reserves
Tax losses carried forward
Tax assets/(liabilities)1
1 Totals may not add due to rounding.
Stockland
2021
(132)
(341)
32
26
11
15
–
7
431
49
Retained
earnings
Profit or
loss
2022
Retained
earnings
Profit or
loss
–
–
–
–
–
–
–
–
–
–
104
247
(11)
(17)
(196)
29
(1)
–
(198)
(43)
(28)
(94)
21
9
(185)
44
(1)
7
233
6
–
–
–
–
–
–
–
–
–
–
–
16
(3)
(2)
185
(14)
2
1
(233)
(48)
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the temporary differences can be utilised. Deferred tax is based on the expected manner of realisation or settlement of
the carrying amount of assets and liabilities using the applicable tax rates.
Deferred tax arises due to temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences:
Year ended 30 June 2023
155
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
E
O
l
e
t
t
e
r
s
C
h
a
i
r
m
a
n
a
n
d
c
r
e
a
t
e
v
a
l
u
e
H
o
w
w
e
G
o
v
e
r
n
a
n
c
e
R
e
p
o
r
t
R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
(28)
(94)
21
9
(185)
44
(1)
7
233
6
2023
(28)
(78)
18
7
–
30
1
8
–
(42)
Financial report for the year ended 30 June 2023
• initial recognition of goodwill;
• the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (for example acquisition of
customer lists); and
• differences relating to investments in subsidiaries to the extent that they are unlikely to reverse in the foreseeable future.
Trust
There are no deferred tax assets or liabilities in the Trust. As the Trust limits its activities to deriving income from leasing
Commercial Property and interest on the cross staple loan with Stockland Corporation, all of the Trust's taxable income
each year is attributed to its investors and the Trust is not subject to tax. However, all of the annual taxable income is
subject to tax in the hands of Stockland’s investors. The Trustee of Stockland Trust would be liable to pay tax to the extent
that Stockland Trust does not distribute all of its ‘net income’, as determined under Stockland Trust’s trust deed.
156 Stockland Annual Report 2023
Group structure
In this section
This section provides information which will help users understand how Stockland's structure affects the financial
position and performance of Stockland as a whole. Stockland includes entities that are classified as joint ventures
and joint operations.
Joint ventures are accounted for using the equity method, while joint operations are proportionately consolidated.
This section of the notes contains information about:
1. Interests in joint arrangements; and
2. Changes to the structure that occurred during the year as a result of business combinations or the disposal of a
discontinued operation.
23. Equity-accounted investments
Stockland has interests in a number of joint ventures that are accounted for using the equity method. Stockland did not
have investments in associates at 30 June 2023 or 30 June 2022.
A joint venture is an arrangement over whose activities Stockland has joint control, established by contractual agreement,
where Stockland has rights to the net assets of the arrangement. Investments in joint ventures are accounted for on an
equity-accounted basis. Investments in joint ventures are assessed for impairment when indicators of impairment are
present and if required, written down to the recoverable amount.
Stockland’s share of the joint venture’s profit or loss and other comprehensive income is from the date joint control
commences until the date joint control ceases. If Stockland’s share of losses exceeds its interest in a joint venture, the
carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that Stockland has
incurred legal or constructive obligations or made payments on behalf of the joint venture.
Transactions with the joint venture are eliminated to the extent of Stockland’s interest in the joint venture until such time
as they are realised by the joint venture on consumption or sale. Additionally, Stockland's carrying amount and share
of total comprehensive income from joint ventures are adjusted as required to align the accounting policies of the joint
venture to Stockland's accounting policies.
A summary of Stockland's joint ventures and their primary activities are as follows:
Joint venture
Primary activities
Macquarie Park Trust
Also known as MPT, this joint venture owns and operates the Optus Centre in Macquarie Park, NSW. The Optus Centre is
a 6-building campus style workplace asset.
Riverton Forum Pty Limited and
Willeri Drive Trust
Riverton Forum Pty Ltd is the trustee of Willeri Drive Trust. Willeri Drive Trust owned Stockland Riverton, Riverton, WA.
During the year the property was sold.
Stockland Fife Kemps
Creek Trust
Also known as Fife Kemps Creek Trust, this joint venture is developing industrial build to hold assets in Kemps Creek, NSW.
Stockland FIfe Willawong Trust Also known as Fife Willawong Trust, this joint venture is developing industrial build to hold assets in Willawong, QLD.
Stockland Residential Rental
Partnership Trust and SRRP
Development Trust
Also known as SRRP, this joint venture is developing and operating Land Lease Communities. The Development Trust is
responsible for the development activities and sale of houses, while the Partnership Trust owns the land on which the
communities are being development and is responsible for operating the communities and collecting rental income.
The M_Park Trust
Also known as TMPT, this joint venture is developing the M_Park Stage One project at Macquarie Park, NSW as a build to
hold asset. The project contains one data centre and three commercial office buildings.
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
E
O
l
e
t
t
e
r
s
C
h
a
i
r
m
a
n
a
n
d
c
r
e
a
t
e
v
a
l
u
e
H
o
w
w
e
G
o
v
e
r
n
a
n
c
e
R
e
p
o
r
t
R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
157
Financial report for the year ended 30 June 2023
23A. Interest in joint ventures
The ownership interest and carrying amount in each joint venture is presented below:
Stockland
Ownership interest as at
Carrying amount as at
Share of total
comprehensive income /
(loss) for the period ended
Macquarie Park Trust
Riverton Forum Pty Limited
SRRP Development Trust
Stockland Fife Kemps
Creek Trust
Stockland Fife Willawong Trust
Stockland Residential Rental
Partnership Trust
The M_Park Trust
Willeri Drive Trust
Total
%
2023
51.0
50.0
50.1
50.0
50.0
50.1
51.0
50.0
%
2022
51.0
50.0
50.1
50.0
50.0
50.1
100.0
50.0
$M
2022
333
–
46
61
27
70
n/a
55
592
$M
2023
330
–
21
121
28
84
88
3
675
Trust
Ownership interest as at
Carrying amount as at
%
2023
51.0
50.0
50.0
50.0
50.1
51.0
50.0
%
2022
51.0
50.0
50.0
50.0
50.1
100.0
50.0
$M
2023
336
–
121
28
85
88
3
662
$M
2022
339
–
61
27
70
n/a
55
553
Macquarie Park Trust
Riverton Forum Pty Limited
Stockland Fife Kemps
Creek Trust
Stockland Fife Willawong Trust
Stockland Residential Rental
Partnership Trust
The M_Park Trust
Willeri Drive Trust
Total1
1 Totals may not add due to rounding.
Changes to joint ventures
$M
2023
15
–
43
–
1
(13)
36
2
84
$M
2022
49
–
–
–
–
(13)
n/a
4
40
Share of total
comprehensive income /
(loss) for the period ended
$M
2023
$M
2022
15
–
–
1
(12)
(28)
2
(22)
49
–
–
–
(13)
n/a
4
40
During the year, Stockland sold 49.0% of its interest in The M_Park Trust (TMPT) to Ivanhoé Cambridge.
There were no other changes to the above list of investments in joint ventures during the year.
158 Stockland Annual Report 2023
23B. Summary of financial information for joint ventures and associates
The tables below provide summarised financial information for all joint ventures in the Group. The information disclosed reflects the amounts presented in the financial statements of
the relevant joint ventures and not Stockland’s share of those amounts. They have been amended to reflect adjustments made by Stockland when using the equity method, including
fair value adjustments and modifications for differences in accounting policies.
As at 30 June
$M
Cash and cash equivalents
Inventories
Other current assets
Current assets
Inventories
Investment properties
Other non-current assets
Non–current assets
Assets
Other current liabilities
Current liabilities
Borrowings
Other non-current liabilities
Non–current liabilities
Liabilities
Net assets
Reconciliation to carrying amounts
Opening balance
Capital contributions
Total comprehensive profit/(loss) for the year
Distributions paid
Net assets at 30 June2
% ownership
Group's share of net assets2
Adjustments on consolidation with Trust
Carrying amount Trust2
Adjustments on consolidation with Stockland
Carrying amount Stockland2
Macquarie
Park Trust
Fife Kemps
Creek Trust
SRRP Trust1
2023
9
2022
2
2023
2
2022
24
2023
15
2022
4
–
1
10
–
724
28
752
762
5
5
–
99
99
104
658
665
–
30
(37)
658
51.0
336
–
336
(6)
330
–
–
2
–
720
24
744
746
7
7
–
74
74
81
–
–
2
–
241
–
241
243
1
1
–
–
–
1
665
242
608
–
96
(39)
665
51.0
339
–
339
(6)
333
122
120
–
–
242
50.0
121
–
121
–
121
–
16
40
–
240
–
240
280
158
158
–
–
–
158
122
21
101
–
–
122
50.0
61
–
61
–
61
–
2
17
–
291
98
389
406
21
21
216
–
216
237
169
142
53
(25)
(1)
169
50.1
85
–
85
(1)
84
–
27
31
–
170
–
170
201
4
4
55
–
55
59
142
–
168
(26)
–
142
50.1
70
–
70
–
70
SRRP
Development
Trust
TMPT
Other
joint ventures
Total
2023
52
179
17
248
–
–
–
–
248
74
74
98
–
98
172
76
92
–
46
(62)
76
50.1
38
n/a
n/a
(17)
21
2022
55
2023
5
2022
n/a
2023
1
2022
1
2023
84
2022
86
105
9
169
–
–
–
–
169
78
78
–
–
–
78
91
n/a
92
–
–
92
50.1
46
n/a
n/a
–
46
–
–
5
–
391
–
391
396
93
93
130
–
130
223
173
–
228
(55)
–
173
51.0
88
–
88
–
88
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
–
14
15
–
37
18
55
70
1
1
–
–
–
1
69
162
–
5
(98)
69
n/a
35
(4)
31
(4)
31
–
12
13
–
149
1
150
163
1
1
–
–
–
1
162
154
8
8
(8)
162
n/a
82
–
82
–
82
179
34
297
–
1,684
144
1,828
2,125
195
195
444
99
543
738
1,387
1,183
401
1
(198)
1,387
n/a
703
(4)
662
(28)
675
105
64
255
–
1,279
25
1,304
1,559
248
248
55
74
129
377
1,182
783
369
78
(47)
1,183
n/a
598
–
553
(6)
592
1 Legal entity name is Stockland Residential Rental Partnership Trust.
2 Totals may not add due to rounding.
Year ended 30 June 2023
159
u
n
e
2
0
2
3
y
e
a
r
e
n
d
e
d
e
p
o
r
t
Financial report for the year ended 30 June 2023
Year ended 30 June
$M
Revenue
Cost of property developments sold
Net change in fair value of investment properties
Net finance income/(expense)
Other expenses
Profit/(loss) after tax2
Total comprehensive income/(loss)
% ownership
Group's share of total comprehensive income/(loss)2
Adjustments on consolidation with Trust
Trust's share of profits/(losses) from equity
accounted investments
Adjustments on consolidation with Stockland
Stockland's share of profits/(losses) from equity
accounted investments
1 Legal entity name is Stockland Residential Rental Partnership Trust.
2 Totals may not add due to rounding.
Macquarie
Park Trust
Fife Kemps
Creek Trust
SRRP Trust1
SRRP
Development
Trust
TMPT
Other joint
ventures
Total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
41
–
–
(5)
(6)
30
30
51.0
15
–
15
–
15
40
–
63
(1)
(6)
96
96
51.0
49
–
49
–
49
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16
–
(24)
(7)
(10)
(25)
(25)
1
–
(15)
–
(12)
(26)
(26)
50.0
50.0
50.1
50.1
–
–
–
–
–
–
–
–
–
–
(12)
–
(12)
(1)
(13)
(13)
–
(13)
–
(13)
249
(187)
–
–
(16)
46
46
50.1
23
n/a
n/a
20
43
24
(18)
–
–
(7)
(1)
(1)
50.1
–
n/a
n/a
–
–
2
–
(55)
–
(2)
(55)
(55)
51.0
(28)
–
(28)
64
36
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
10
–
2
–
(7)
5
5
16
–
(1)
–
(6)
9
9
318
(187)
(77)
(12)
(41)
1
1
81
(18)
47
(1)
(31)
78
78
n/a
n/a
n/a
n/a
3
–
3
–
3
4
–
4
–
4
1
–
(22)
83
84
40
–
40
–
40
160 Stockland Annual Report 2023
24. Joint operations
A subsidiary of Stockland has a 50% interest in a joint arrangement called the Aura Co-Venture which was set up as a
partnership to develop the Aura masterplanned residential community on the Sunshine Coast, QLD. It is a for-profit joint
operation. This joint operation is unincorporated and domiciled in Australia.
Interests in unincorporated joint operations are consolidated by recognising Stockland’s proportionate share of the joint
operations’ assets, liabilities, revenues and expenses on a line-by-line basis, from the date joint control commences to the
date joint control ceases and are not included in the above table.
25. Controlled entities
The following entities were 100% controlled during the current and prior years:
Controlled entities of Stockland Corporation Limited
Albert & Co Pty Ltd1
Armstrong Creek Pty Ltd1
AW Bidco 1 Pty Limited1
AW Bidco 2 Pty Limited1
AW Bidco 4 Pty Limited1
AW Bidco 5 Pty Limited1
AW Bidco 6 Pty Limited1
AW Bidco No. 7 Pty Limited
AW Bidco No. 8 Pty Limited
AW Bidco No. 9 Pty Limited
AW Bidco No. 10 Pty Limited
AW Bidco No. 11 Pty Limited
AW Bidco No. 12 Pty Limited
Stockland Development (PR4) Pty Limited
Stockland Development (Sub3) Pty Limited
Stockland Development (Sub4) Pty Limited
Stockland Development (Sub5) Pty Limited
Stockland Development (Sub7) Pty Limited1
Stockland Development Holding Trust
Stockland Development Pty Limited1
Stockland Eurofinance Pty Limited1
Stockland Financial Services Pty Limited1
Stockland Highett Pty Limited
Stockland Highlands Pty Limited1
Stockland Kawana Waters Pty Limited1
Stockland Lake Doonella Pty Limited1
AW Bidco No. 13 (NSW) Pty Limited
Stockland Land Lease Communities Holdings Pty Limited1
Compam Property Management Pty Limited
Stockland Land Lease Landlord Pty Limited1
Eisha Pty Ltd
Enaard Pty Ltd
Endeavour (No. 2) Unit Trust
Glengar Capital Pty Limited
Glenmore Park Investments Pty Limited
Halcyon Constructions QLD Pty Ltd1
Halcyon Resales Pty Ltd1
Halcyon Resales Unit Trust
Halcyon TF Pty Ltd1
Jimboomba Trust
JT Bid Co No. 1 Pty Limited
JT Bid Co No. 2 Pty Limited
LAB-52 Bricklet Pty Limited
LAB-52 Holdings Pty Limited
LAB-52 SMRTR Pty Limited
LAB-52 Yodel Pty Limited
Mayflower Investments Pty Ltd1
Merrylands Court Pty Limited
Mulgoa Nominees Pty Limited
Northpoint No. 1 Trust
Northpoint No. 2 Trust
Northpoint No. 3 Trust
Northpoint No. 4 Trust
Stockland Land Lease Management Pty Limited1
Stockland Lensworth Glenmore Park Limited1
Stockland LLC Aura Pty Limited1
Stockland LLC B by Halcyon Trust
Stockland LLC Burpengary Trust
Stockland LLC Curlewis Trust
Stockland LLC Evergreen Trust
Stockland LLC General Pty Limited1
Stockland LLC Glades Trust
Stockland LLC Greens Trust
Stockland LLC Lakeside Trust
Stockland LLC Landing Trust
Stockland LLC No. 2 Pty Ltd1
Stockland LLC No. 3 Pty Ltd1
Stockland LLC No. 4 Pty Ltd1
Stockland LLC Parks Trust
Stockland LLC Peregian Beach Trust
Stockland LLC Piara Waters Trust
Stockland LLC Providence Pty Limited1
Stockland LLC Pty Limited1
Stockland LLC Rendezvous Road Trust
Stockland LLC Rise Trust
Stockland LLC SLC SPV Pty Limited1
C
o
n
t
e
n
t
s
F
Y
2
3
H
g
h
i
l
i
g
h
t
s
C
E
O
l
e
t
t
e
r
s
C
h
a
i
r
m
a
n
a
n
d
c
r
e
a
t
e
v
a
l
u
e
H
o
w
w
e
G
o
v
e
r
n
a
n
c
e
R
e
p
o
r
t
R
e
m
u
n
e
r
a
t
i
o
n
3
0
J
u
n
e
2
0
2
3
f
o
r
t
h
e
y
e
a
r
e
n
d
e
d
i
F
n
a
n
c
a
l
i
r
e
p
o
r
t
Year ended 30 June 2023
161
Financial report for the year ended 30 June 2023
Northpoint No. 5 Trust
Northpoint No. 6 Trust
Nowra Property Unit Trust
S1 Commercial Property Pty Limited
S1 Communities Pty Limited
S2 Commercial Property Pty Limited
S2 Communities Pty Limited
S3 Commercial Property Pty Limited
S3 Communities Pty Limited
S4 Commercial Property Pty Limited
S4 Communities Pty Limited
Stockland LLC St Germain Trust
Stockland LLC Vision Trust
Stockland LLC Waters Trust
Stockland Management Limited
Stockland Mature Holding Trust
Stockland Miami (Fund) Unit Trust
Stockland Miami (Non–Fund) Unit Trust
Stockland Miami (QLD) Pty Limited1
Stockland MPC Hold Co Pty Ltd
Stockland MPC Mid Co Pty Ltd
Stockland North Boambee Valley LLC Trust
S5 Commercial Property Pty Limited
Stockland North Lakes Development Pty Limited1
S5 Communities Pty Limited
SCP Hold Co Pty Ltd
SCP Lyra Pty Ltd
SCP Victoria Pty Ltd
Stockland (Boardwalk Sub 2) Pty Limited
Stockland (Queensland) Pty. Limited1
Stockland (Russell Street) Pty Limited1
Stockland North Lakes Pty Limited1
Stockland Ormeau Trust
Stockland PR1 Trust
Stockland PR2 Trust
Stockland PR3 Trust
Stockland PR4 Trust
Stockland Property Management Pty Ltd1
Stockland A.C.N 116 788 713 Pty Limited1
Stockland Retail Services Pty Limited1
Stockland Aevum SPV Finance No. 1 Pty Limited
Stockland Retain (Retirement) Pty Limited1
Stockland Affinity Retirement Village Pty Limited
Stockland Richmond Retirement Village Pty Limited
Stockland Armstrong Creek LLC Trust
Stockland Bells Creek Pty Limited1
Stockland Berwick LLC Trust
Stockland RRP No. 1 Pty Limited1
Stockland Scrip Holdings Pty Limited
Stockland Services Pty Limited1
Stockland Birtinya Retirement Village Pty Limited1
Stockland Singapore Pte Ltd
Stockland Buddina Pty Limited1
Stockland South Beach Pty Limited1
Stockland Caboolture Waters Pty Limited1
Stockland Syndicate No. 1 Trust
Stockland Caloundra Downs Pty Limited1
Stockland The Grove Retirement Village Pty Limited
Stockland Capital Partners Limited
Stockland Town Centres Pty Ltd
Stockland Care Foundation Pty Limited
Stockland Trust Management Limited
Stockland Care Foundation Trust
Stockland CH Finance Pty Limited
Stockland Urban Development Pty Limited
Stockland WA (Estates) Pty Limited1
Stockland Communities Partnership Pty Ltd
Stockland WA Development (Realty) Pty Limited1
Stockland Development (Holdings) Pty Limited1
Stockland WA Development (Vertu Sub 1) Pty Limited
Stockland Development (NAPA NSW) Pty Limited1
Stockland WA Development Pty Limited1
Stockland Development (NAPA QLD) Pty Limited1
Stockland Wallarah Peninsula Management Pty Limited1
Stockland Development (NAPA VIC) Pty Limited1
Stockland Wallarah Peninsula Pty Limited1
Stockland Development (PHH) Pty Limited1
Stockland Wholesale Funds Management Pty Limited1
Stockland Development (PR1) Pty Limited
Stockland Willawong Industrial Pty Ltd
Stockland Development (PR2) Pty Limited
Toowong Place Pty Limited
Stockland Development (PR3) Pty Limited
1 These entities are parties to the Deed of Cross Guarantee and members of the Closed Group as at 30 June 2023.
Controlled entities of Stockland Trust
9 Castlereagh Street Unit Trust
Acimon Pty Ltd
ADP Trust
Advance Property Fund
Advance Property Fund No. 2
162 Stockland Annual Report 2023
Stockland CRE Medical Trust
Stockland Direct Diversified Fund
Stockland Direct Office Trust No. 4
Stockland Direct Retail Trust No. 3
Stockland Eastern Creek Trust
AVMW Pty Ltd
Baratheon Developments Pty Ltd
Capricornia Property Trust
Caitjan Pty Ltd
CP Trust No. 4 Trust
CP Trust No. 5 Trust
CP Trust No. 6 Trust
Endeavour (No. 1) Unit Trust
Eriwill Pty Limited
Faxrow Pty Limited
Flinders Industrial Property Trust
Stockland Finance Holdings Pty Limited1
Stockland Finance Pty Limited1
Stockland Gables Retail Trust
Stockland Harrisdale Trust
Stockland Industrial No. 1 Property 1 Trust
Stockland Industrial No. 1 Property 4 Trust
Stockland Industrial No. 1 Property 5 Trust
Stockland Industrial No. 1 Property 6 Trust
Stockland Industrial No. 1 Property 7 Trust
Stockland Industrial No. 1 Property 8 Trust
Stockland Industrial No. 1 Property 9 Trust
Flinders Industrial Property Subtrust (No. 1)
Stockland Industrial No. 1 Property 11 Trust
Hervey Bay Holding Trust
Hervey Bay Sub Trust
Horlyd Pty Ltd
Industrial Property Trust
Stockland JV Trust
Stockland Kemps Creek Industrial Trust
Stockland Leppington Industrial Trust
Stockland Logistics Capital Partnership Trust
Jimboomba Village Shopping Centre and Tavern Trust
Stockland Logistics Trust
Landdoc Pty Ltd
Marinatas Pty Ltd
Mariste Pty Ltd
Mattlix Pty Ltd
Moncas Pty Ltd
Pallawell Pty Ltd
Racjen Pty Ltd
Rigburn Pty Limited
Sandtor Pty Ltd
SDOT 4 Property # 1 Trust
SDOT 4 Property # 2 Trust
SDOT 4 Property # 3 Trust
SDRT1 Property # 3 Trust
SDRT3 Property # 1 Trust
SDRT3 Property # 2 Trust
SDRT3 Property # 3 Trust
Sequoia Victoria Trust
Sequoia Victoria Trust No. 2
Shellharbour Property Trust
Stockland 161 Walker Street Trust
Stockland Marrickville Unit Trust
Stockland Mornington Unit Trust
Stockland Mt Atkinson Industrial Trust
Stockland Mulgrave Unit Trust
Stockland North Ryde Unit Trust
Stockland Padstow Trust
Stockland Padstow Unit Trust
Stockland Parkinson Unit Trust
Stockland Quarry Road Trust
Stockland Retail Holding Sub-Trust No. 1
Stockland Retail Holding Trust No. 1
Stockland Richlands Unit Trust
Stockland RRP Holding Trust
Stockland Sienna Wood Retail Trust
Stockland St Marys Unit Trust
Stockland Tingalpa Unit Trust
Stockland Truganina Industrial Trust
Stockland Walker Street Trust
Stockland Wholesale Office Trust No. 1
Stockland Wholesale Office Trust No. 2
Stockland Baringa Shopping Centre Trust
Stockland Willawong Industrial Trust
Stockland Bayswater Unit Trust
Stockland Willawong Industrial Trust No. 2
Stockland Birtinya Shopping Centre Trust
Stockland Willawong Industrial Trust No. 3
Stockland Brooklyn Industrial Trust
Stockland Wonderland Drive Property Trust
Stockland Bundaberg Trust
Stockland Castlereagh Street Trust
Stockland Community Real Estate Trust
Stockland CP Acquisition Trust
Stockland CPR Industrial Trust
Stockland CRE Childcare Trust
Stockland CRE Holding Trust
Stockland Yatala Industrial Trust
Sugarland Shopping Centre Trust
SWOT2 Sub Trust No. 1
SWOT2 Sub Trust No. 2
SWOT2 Sub Trust No. 3
Tianmar Pty Ltd
1 These entities are parties to the Deed of Cross Guarantee (Finance) as at 30 June 2023.
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Year ended 30 June 2023
163
Financial report for the year ended 30 June 2023
26. Deed of cross guarantee
Stockland Corporation Limited and certain wholly-owned companies (the Closed Group, also the Extended Closed Group)
are parties to a Deed of Cross Guarantee (the Deed). The effect of the Deed is that the members of the Closed Group
guarantee to each creditor payment in full of any debt in the event of winding-up of any of the members under certain
provisions of the Corporations Act 2001.
ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 provides relief to parties to the Deed from the
Corporations Act 2001 requirements for preparation, audit, and lodgement of Financial Reports and Directors’ reports,
subject to certain conditions as set out therein.
Pursuant to the requirements of this instrument, a summarised consolidated balance sheet as at 30 June 2023 and
consolidated statement of comprehensive income for the year ended 30 June 2023, comprising the members of the
Closed Group after eliminating all transactions between members, are set out on the following pages.
Summarised consolidated balance sheet
As at 30 June
$M
Cash and cash equivalents
Receivables
Inventories
Other assets
Current assets
Receivables
Inventories
Investment properties
Equity–accounted investments
Other financial assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other assets
Non–current assets
Assets
Payables
Borrowings
Provisions
Other liabilities
Current tax liabilities
Current liabilities
Payables
Borrowings
Provisions
Other liabilities
Non–current liabilities
Liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Securityholders’ equity
Closed Group
2023
20221
1
193
785
46
1,025
53
2,584
584
15
42
15
62
–
14
3,369
4,394
174
–
257
31
30
492
140
2,834
242
429
3,645
4,137
257
1,311
3
(1,057)
257
22
115
693
59
889
46
2,647
2,623
46
39
86
65
6
20
5,578
6,467
266
2,602
221
1,469
–
4,558
308
–
307
468
1,083
5,641
826
1,311
2
(487)
826
1 Balances at 30 June 2022 include the entities disposed in the sale of the Retirement Living Business on 29 July 2022 which were party to the Deed of
Cross Guarantee for the year.
164 Stockland Annual Report 2023
Summarised consolidated statement of comprehensive income
Year ended 30 June
$M
Profit before tax
Income tax
Profit after tax
Other comprehensive income
Total comprehensive income
Closed Group
20231
20221
152
(78)
74
–
74
17
(43)
(26)
–
(26)
1 Balances include the entities disposed in the sale of the Retirement Living Business on 29 July 2022 which were party to the Deed of Cross Guarantee
for the year.
Summarised movement in consolidated accumulated losses
As at 30 June
$M
Opening balance
Adjustment for entities added/removed
Profit after tax
Accumulated losses at 30 June
Closed Group
2023
(487)
(644)
74
(1,057)
20221
(307)
(144)
(36)
(487)
1 Balances at 30 June 2022 include the entities disposed in the sale of the Retirement Living Business on 29 July 2022 which were party to the Deed of
Cross Guarantee for the year.
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p
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a
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i
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3
0
J
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2
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2
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Year ended 30 June 2023
165
Financial report for the year ended 30 June 2023
27. Parent entity disclosures
$M
Results for the year ended 30 June
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Financial position as at 30 June
Current assets
Assets1
Current liabilities
Liabilities
Net assets
Issued capital
Other Reserves
(Accumulated losses)/retained earnings
Equity
1 There were no intangible assets as at 30 June 2023 (2022: $nil).
Parent entity contingencies
Stockland
Corporation Limited
Stockland Trust
2023
2022
2023
2022
(77)
–
(77)
3,781
3,834
1,423
2,941
893
1,298
(6)
(399)
893
(46)
–
(46)
3,895
4,745
1,730
3,764
981
1,298
5
(322)
981
206
(2)
204
363
24,472
10,918
14,763
9,709
7,342
93
2,274
9,709
1,398
34
1,432
3,473
24,801
11,665
15,355
9,446
7,348
28
2,070
9,446
There are no contingencies within either parent entity as at 30 June 2023 (2022: $nil).
Parent entity capital commitments
Neither parent entity has entered into any capital commitments as at 30 June 2023 (2022: $nil).
ASIC Deed of Cross Guarantee
Stockland Corporation Limited has entered into a Deed of Cross Guarantee with the effect that it has guaranteed debts
in respect of its subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are
disclosed in notes 25 and 26. Stockland did not enter into any other guarantees of debt in respect of subsidiaries during
the year ended 30 June 2023.
166 Stockland Annual Report 2023
Other items
In this section
This section includes information about the financial performance and position of Stockland that must be disclosed
to comply with the Accounting Standards, the Corporations Act 2001, or the Corporations Regulations 2001.
28. Notes to the consolidated statement of cash flows
28A. Reconciliation of profit after tax to net cash flows from operating activities
$M
Profit after tax
Adjustments for:
Net impact on fair value hedges
Net impact on derivatives
Interest capitalised to investment properties
Net impact on sale of non–current assets
Net (gain)/loss on other financial assets
DMF base fee earned, unrealised
Net additional/(release of) inventories impairment provision
Depreciation and amortisation
Straight–line rent adjustments
Net unrealised change in fair value of investment properties
Share of profits of equity-accounted investments, net of
distributions received
Equity–settled security based payments
Other items
Adjustments for movements in:
Receivables
Other assets
Inventories
Deferred tax liabilities
Current tax liabilities
Payables and other liabilities
Resident obligations (net of impact of village disposals)
Other provisions
Net cash flows from operating activities
Less: cash flows relating to discontinued operations held for sale
Net cash flows from operating activities from continuing operations
Stockland
20231
440
20221
1,381
Trust
20231
201
20221
1,390
10
(19)
(19)
(13)
(1)
(7)
26
17
10
256
97
18
(2)
(225)
52
(91)
48
30
(263)
2
(34)
332
–
332
(2)
(178)
(14)
(22)
–
(28)
(6)
17
5
(685)
(15)
13
24
11
23
(414)
43
–
325
290
150
918
(198)
720
10
(19)
(18)
(5)
–
–
–
–
10
288
110
16
4
51
26
–
–
–
(6)
–
(1)
667
–
667
(2)
(178)
(12)
(20)
–
–
–
–
(2)
(682)
(16)
13
–
41
29
–
–
–
(33)
–
20
548
–
548
1 Amounts include cash flows relating to both continuing and discontinued operations. Net cash flows relating to discontinued operation has been disclosed
in note 14A.
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Year ended 30 June 2023
167
Financial report for the year ended 30 June 2023
28B. Reconciliation of movement in financial liabilities arising from financing activities
As at 30 June
$M
Offshore medium term notes
Domestic medium term notes and
commercial paper
Bank facilities
2023
Offshore medium term notes
Domestic medium term notes and
commercial paper
Bank facilities
2022
Stockland and Trust
Non cash movements
Opening
balance
Net cash
flow
Foreign
exchange
movements
Fair value
changes1
Closing
balance
3,087
840
545
4,472
3,932
747
75
4,754
(14)
(93)
(470)
(577)
(641)
93
470
(78)
1
–
–
1
(6)
–
–
(6)
11
–
–
11
(198)
–
–
(198)
3,085
747
75
3,907
3,087
840
545
4,472
1
Includes amortisation of capitalised transaction costs.
29. Commitments
Capital expenditure commitments
Commitments for acquisition of land and future development costs not recognised on balance sheet at reporting date are
as follows:
As at 30 June
$M
Inventories
Investment properties
Capital expenditure commitments
Stockland
Trust
2023
2022
2023
2022
569
286
855
427
334
761
–
286
286
–
311
311
Joint venture and associate capital expenditure commitments
The above commitments include capital expenditure commitments for joint Ventures of $92 million (2022: $163 million)
relating to The M_Park Trust, $73 million (FY22: $nil) capital expenditure commitments relating to SRRP and $7 million
(2022: $13 million) capital expenditure commitments relating to Macquarie Park Trust.
30. Contingent liabilities
Keeping it simple
A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a provision where
uncertainty may exist regarding the outcome of future events.
Contingent liabilities at 30 June 2023 comprise bank guarantees, letters of credit, property indemnities and insurance
bonds issued to local government and other authorities against performance contracts. Stockland maintains a facility
for contingent liabilities with a limit of $1,500 million (30 June 2022: $1,275 million). The amounts currently issued are
as follows:
As at 30 June
$M
Contingent liabilities
168 Stockland Annual Report 2023
Stockland and Trust
2023
549
2022
605
31. Related party disclosures
Year ended 30 June
$’000s
Responsible Entity fees
Development management and service fee
Property management, tenancy design and leasing fees
Rental income
Finance income
Revenue from related parties
Responsible Entity fees
Property management, tenancy design and leasing fees
Recoupment of expenses
Development management fee capitalised to investment property
Expenses to related parties
Responsible Entity, management and other fees
Stockland
Trust
2023
126
71,626
1,113
–
–
2022
120
2,503
1,246
–
–
72,865
3,869
–
–
–
–
–
–
–
–
–
–
2023
2022
–
–
–
14,569
224,637
239,206
37,560
26,389
72,114
6,285
142,348
–
–
–
14,096
191,248
205,344
38,477
24,508
60,004
3,036
126,025
Stockland received Responsible Entity, management, and other fees from capital partnerships and joint ventures managed
by Stockland during the financial year.
The Trust pays responsible entity fees to Stockland Trust Management Limited, calculated at 0.30 to 0.35% of gross assets
of the Trust less intergroup loans (2022: 0.30 to 0.35%).
Property management expenses and tenancy design fees were paid by the Trust to Stockland Trust Management
Limited (the Responsible Entity) or its related parties provided in the normal course of business and on normal terms
and conditions.
Rental income
Rent was paid by Stockland Corporation Limited, a related party of the Responsible Entity, to Stockland Trust in the normal
course of business and on normal terms and conditions.
Finance income
The Trust has an unsecured loan to Stockland Corporation Limited of $2,283 million (2022: $2,961 million) repayable in
June 2030. Interest on the loan is payable monthly in arrears at interest rates within the range of 7.23% - 10.06% during the
year ended 30 June 2023 (2022: 6.06% - 7.24%).
Interest was paid by Stockland Corporation Limited to Stockland Trust, a related party of the Responsible Entity, provided
in the normal course of business and on normal terms and conditions.
Development Management Fee
A development management deed was executed between Stockland Trust and Stockland Development Pty Limited (a
controlled entity of Stockland Corporation Limited) effective 1 July 2012 in relation to a management fee in respect
of Commercial Property developments. The fee represents remuneration for the Corporation’s property development
expertise and for developments which commenced after 1 July 2016. It is calculated based on a fixed 4% of total
development costs in line with recent changes to benchmark methodologies (for developments which commenced prior
to 1 July 2016, the fee is calculated as 50% of the total valuation gain or loss on the completion of a development). Fees
are paid by Stockland Trust to Stockland Development Pty Limited.
Capital partnering fees
A number of Stockland consolidated entities provide services to capital partnerships which include the SRRP and TMPT
partnerships. In exchange for those services Stockland is entitled to fees, including investment management, development
management, and other capital partnership fees. During the year, fund through fees of $38 million (2022: $nil) and
management fees of $34 million (2022: $1 million) were recognised from capital partnerships.
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p
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3
0
J
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2
0
2
3
f
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d
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Year ended 30 June 2023
169
Financial report for the year ended 30 June 2023
32. Personnel expenses
Year ended 30 June
$M
Wages and salaries (including on–costs)
Equity–settled security based payment transactions
Contributions to defined contribution plans
Movement in annual and long service leave provisions
Personnel expenses
Personnel expenses
Stockland
Trust
2023
270
18
18
4
310
2022
247
13
17
6
283
2023
2022
–
–
–
–
–
–
–
–
–
–
The total personnel expenses for the year was $310 million (2022: $283 million), which includes $18 million of equity-
settled security based payment transactions (2022: $13 million).
Annual leave
Accrued annual leave is presented in current liabilities as Stockland does not have an unconditional right to defer
settlement for any of these obligations. Based on past experience, Stockland expects all employees to take the full amount
of accrued leave within the next 12 months.
Long service leave
The current portion of long service leave includes all unconditional entitlements where employees have completed the
required period of service and also those where employees are entitled to pro rata payments in certain circumstances.
The liability for long service leave expected to be settled more than 12 months from the balance date is recognised in
the provision for employee benefits and measured as the present value of expected payments to be made in respect of
services provided by employees up to the balance date.
Consideration is given to expected future wage and salary levels, past experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the balance date on corporate bonds with terms
to maturity that match, as closely as possible, the estimated future cash outflows.
Bonus entitlements
A liability is recognised in current trade and other payables for employee benefits in the form of employee bonus
entitlements where there is a contractual obligation or where there is a past practice that has created a constructive
obligation. Liabilities for employee bonus entitlements are expected to be settled within 12 months and are measured at
the amounts expected to be paid when they are settled.
Superannuation plan
Stockland contributes to employee defined contribution superannuation plans. Contributions are recognised as a
personnel expense as they are incurred.
33. Key management personnel disclosures
Year ended 30 June
$000’s
Short term employee benefits
Post–employment benefits
Other long term benefits
Termination benefits
Security based payments
Key management personnel compensation
Stockland
Trust
2023
10,632
256
72
–
5,343
16,303
2022
10,643
246
13
633
4,397
15,932
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
Information regarding individual Directors’ and Executives’ remuneration is provided in the remuneration report on pages
78 to 99 of the Directors’ report.
Other transactions with key management personnel
There are transactions between Stockland and entities with which key management personnel have an association. These
transactions do not meet the definition of related parties since the key management personnel as individuals are not
considered to have control or significant influence over the financial or operating activities of the respective non-Stockland
entities. Furthermore, the terms and conditions of those transactions were no more favourable than those available, or
170 Stockland Annual Report 2023
might reasonably be available, on similar transactions to non-key management personnel related entities on an arm’s
length basis.
34. Auditor's remuneration
Year ended 30 June
$000’s
PricewaterhouseCoopers Australia
Audit and review of financial report
Audit of unlisted property fund financial reports
Regulatory audit and assurance services
Remuneration for audit services
Other non–audit services
Remuneration for non–audit services
Auditor remuneration
Stockland
Trust
2023
2022
2023
2022
2,053
213
464
2,730
107
107
2,837
2,284
135
628
3,047
158
158
3,205
625
–
340
965
–
–
965
607
–
314
921
–
–
921
Auditor’s fees are paid by Stockland Development Pty Limited on behalf of Stockland, except for audit fees which are paid
by certain unlisted property funds.
35. Accounting policies
Keeping it simple
Accounting policies that apply to a specific category in the profit or loss or balance sheet have been included within
the relevant notes.
The accounting policies listed below are those that apply across a number of Stockland's profit or loss and balance
sheet categories and are not specific to a single category.
35A. Principles of consolidation
Controlled entities
The consolidated financial statements of Stockland incorporate the assets, liabilities, and results of all controlled entities.
Controlled entities are all entities over which the parent entities, Stockland or the Trust, are exposed to, or have a right to,
variable returns from their involvement with the entity and have the ability to affect those returns through their power to
direct the relevant activities of the entity.
Intergroup transactions, balances, and unrealised gains on transactions between controlled entities are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
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Transactions
Foreign currency transactions are translated into the entity’s functional currency at the exchange rate on the
transaction date.
Assets and liabilities denominated in foreign currencies are translated to Australian dollars at balance date using the
following applicable exchange rates:
Foreign currency amount
Monetary assets and liabilities
Non-monetary assets and liabilities measured at historical cost
Applicable exchange rate
Balance date
Date of transaction
Non-monetary assets and liabilities measured at fair value
Date fair value is determined
Foreign exchange differences arising on translation are recognised in the profit or loss.
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Financial report for the year ended 30 June 2023
35B. Reserves
Security based payments reserve
The security based payments reserve arises due to the rights and deferred securities awarded under the LTI and DSTI plans
being accounted for as security based payments. The fair value of the rights and deferred securities is recognised as an
employee expense in profit or loss with a corresponding increase in the reserve over the vesting period. On vesting, the LTI
and DSTI awards are settled by either an issue of securities or by allocating treasury securities to the rights holder and the
cost to acquire the treasury securities is recognised in the security based payments reserve by a transfer from treasury
securities. Where rights are forfeited due to failure to satisfy a service or performance condition, the cumulative expense is
reversed through profit or loss in the current year. The cumulative expenditure for rights forfeited due to market conditions
is not reversed.
Hedging reserve
The hedging reserve captures both cash flow hedges and fair value hedges.
Cash flow hedging
The hedging reserve is used to record the effective portion of changes in the fair value of derivatives that are designated
and qualify as cash flow hedges. Refer to note 17.
Fair value hedging
The hedging reserve comprises the cumulative net change in the fair value of available for sale financial assets until the
assets are derecognised or impaired.
36. Adoption of new and amended accounting standards
A. New and amended accounting standards adopted
AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and
Other Amendments
AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other
Amendments sets out a number of amendments to existing Accounting Standards. The amendments are effective
for annual reporting periods beginning on or after 1 January 2022. The amendments did not have any impact on the
amounts recognised in prior or current periods, and are not expected to significantly affect future periods.
B. Accounting standards issued but not yet in effect
A number of accounting standards have been issued but are not yet in effect for the current reporting period. Stockland
has not elected to early adopt any accounting standards during the year.
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current
provides clarity on the classification of liabilities as either current or non–current. The amendment requires a liability to
be classified as current when companies do not have a substantive right to defer settlement at the end of the reporting
period. The amendment is effective for annual reporting periods beginning on or after 1 January 2023, as revised in
AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current –
Deferral of Effective Date. Stockland has assessed the revised definition and does not currently expect any material impact
on adoption.
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of
Accounting Estimates updates the concept of materiality in the context of financial statement disclosures and the level
of disclosure required as a result of changes in accounting policies and estimates. The amendment is effective for annual
reporting periods beginning on or after 1 January 2023. Stockland has assessed the impact of the standard, and expects
that the level of accounting policy disclosures may need to increase for the financial statements for the year ending
30 June 2024.
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax Related to Assets and
Liabilities Arising from a Single Transaction
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from
a Single Transaction modifies AASB 112 Income Taxes to clarify the treatment of deferred tax on transactions that, at the
time of the transaction, give rise to equal taxable and deductible temporary differences. The amendment is effective for
172 Stockland Annual Report 2023
annual reporting periods beginning on or after 1 January 2023. Stockland has assessed the impact of the standard and
does not expect any immediate material impact. Each future transaction will be assessed on a case by case basis.
International Sustainability Standards Board - IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures
The International Sustainability Standards Board (ISSB) is an initiative of the IFRS Foundation to establish a global
framework for the disclosure of climate and sustainability information in financial reports. In June 2023, the ISSB released
their first two sustainability standards, being IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information and IFRS S2 Climate-related Disclosures.
Similar to the accounting standards issued by the International Accounting Standards Board (IASB) with which Stockland
complies, these standards will not be mandatory until they are adopted by the Australian Accounting Standards Board.
Stockland will assess the impact of these standards once the Australian Accounting Standards Board issues the Australian
equivalent to the ISSBs. Refer to Stockland's Climate Transition Action Plan released alongside the 30 June 2023 Annual
Report for Stockland's assessment of climate risks and decarbonisation.
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Year ended 30 June 2023
173
Financial report for the year ended 30 June 2023
Directors’ declaration
1. In the opinion of the Directors of Stockland Corporation Limited, and the Directors of the Responsible Entity of Stockland
Trust, Stockland Trust Management Limited (collectively referred to as the Directors):
• the financial report and notes of the consolidated stapled entity, comprising Stockland Corporation Limited and its
controlled entities and Stockland Trust and its controlled entities (Stockland), and Stockland Trust and its controlled
entities (the Trust), set out on pages 101 to 173, are in accordance with the Corporations Act 2001, including:
• giving a true and fair view of Stockland’s and the Trust’s financial position as at 30 June 2023 and of their
performance for the financial year ended on that date; and
• complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• there are reasonable grounds to believe that both Stockland and the Trust will be able to pay their debts as and when
they become due and payable.
2. There are reasonable grounds to believe that Stockland Corporation Limited and the Stockland entities identified in
note 25 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of
the Deed of Cross Guarantee between those Group entities pursuant to ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785.
3. Stockland Trust has operated during the year ended 30 June 2023 in accordance with the provisions of the Trust
Constitution of 29 October 2013, as amended from time to time.
4. The Register of Unitholders has, during the year ended 30 June 2023, been properly drawn up and maintained so as to
give a true account of the unitholders of Stockland Trust.
5. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing
Director and Chief Financial Officer for the year ended 30 June 2023.
6. The Directors draw attention to the basis of preparation section to the financial statements, which includes a Statement
of Compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Tom Pockett
Chairman
Tarun Gupta
Managing Director and CEO
Dated at Sydney, 24 August 2023
174 Stockland Annual Report 2023
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Year ended 30 June 2023
175
PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999 Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999 Liability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s report To the stapled securityholders of Stockland and Stockland Trust Group Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Stockland, being the consolidated stapled entity, which comprises Stockland Corporation Limited and its controlled entities, and Stockland Trust and its controlled entities (together the “Stockland Trust Group” or the “Trust”) are in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the financial position of Stockland and the Stockland Trust Group financial position as at 30 June 2023 and of their financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The financial reports of Stockland and the Stockland Trust Group (collectively referred to as the “financial report”) comprise: ● the consolidated balance sheet as at 30 June 2023 ● the consolidated statement of comprehensive income for the year then ended ● the consolidated statement of changes in equity for the year then ended ● the consolidated statement of cash flows for the year then ended ● the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information ● the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of Stockland and the Stockland Trust Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Financial report for the year ended 30 June 2023
176 Stockland Annual Report 2023
Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of Stockland and the Stockland Trust Group, their accounting processes and controls and the industry in which they operate. Materiality Audit scope Key audit matters ● For the purpose of our audit of Stockland and the Stockland Trust Group we used overall materiality of $42.35 million and $30.5 million, respectively, which represents approximately 5% of Funds from Operations. The metric is defined in note 2 of the financial report. ● We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. ● We chose Funds from Operations because, in our view, it is the primary metric against which the performance of Stockland and the Stockland Trust Group are ● Our audit focused on where Stockland and the Stockland Trust Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. ● The audit team consisted of individuals with the appropriate skills and competencies needed for the audits, and this included industry expertise in real estate, as well as IT specialists, economists, valuation, tax and treasury professionals. ● Amongst other relevant topics, we communicated the following key audit matters to the Audit Committee: − Valuation of Investment properties − Carrying value of inventory and cost of property developments sold ● These are further described in the Key audit matters section of our report. C
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most commonly measured in the industry. ● We chose 5% based on our professional judgement, noting that it is within the common range relative to profit-based benchmarks. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period and were determined separately for Stockland and the Stockland Trust Group. Relevant amounts listed for each part of the stapled group represent balances as they are presented in the financial report and should not be aggregated. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. Key audit matter How our audit addressed the key audit matter Valuation of Investment properties (Refer to note 7) Stockland’s ($10,532 million) and the Trust’s ($10,169 million) Investment Property portfolio consisted primarily of Commercial Property investment properties and Communities investment properties at 30 June 2023. Investment properties were valued at fair value as at reporting date using a combination of the income capitalisation, discounted cash flow and the direct comparison methods, as well as transaction prices where relevant. The value of investment properties was dependent on the valuation methodology adopted and the significant assumptions and inputs into the valuation model. Factors such as economic and operating conditions inform the reported valuations. Amongst others, the following assumptions were key in establishing fair value: • net market rent • average market rental growth • capitalisation rate • discount rate • terminal yield. At the end of each reporting period, the directors determine the fair value of the investment properties in accordance with their valuation policy as described in note 7. This was a key audit matter given: Our procedures, amongst others, included: • we developed an understanding of Stockland and the Stockland Trust Group’s processes and controls for determining the valuation of investment properties; • we assessed the scope, competence and objectivity of the independent valuation experts engaged by Stockland and the Stockland Trust Group to provide independent external valuations at reporting date; • we met with a sample of the independent external valuation experts used by Stockland and the Stockland Trust Group to develop an understanding of their methodology, data and assumptions; • we compared the valuation methodology adopted by Stockland and the Stockland Trust Group with commonly accepted valuation methodologies used in the real estate industry for investment properties; • we assessed the appropriateness of the considerations related to the impact of climate-related events on investment property valuations; • we agreed the rental income used in a sample of investment property valuations to relevant lease agreements and assessed the
Financial report for the year ended 30 June 2023
178 Stockland Annual Report 2023
Key audit matter How our audit addressed the key audit matter • the relative size of the investment properties portfolio to the net assets and related valuation movements, and • the inherent subjectivity of the key assumptions that underpin the valuation and the general market uncertainty. appropriateness of a sample of income related assumptions; • we assessed the appropriateness of adopted capitalisation rates and discount rates for a sample of investment properties with reference to market data and comparable transactions, where possible; • we tested the mathematical accuracy of a sample of the investment property valuations; • we agreed the fair value of each investment property to the independent external valuation or Stockland’s internal tolerance checks, as applicable; • we assessed the reasonableness of the disclosures against the requirements of Australian Accounting Standards. Carrying value of inventory and cost of property developments sold (Refer to note 6) Stockland Trust Group - this KAM is not applicable as the Trust does not hold inventory assets Carrying value of inventory Stockland has a portfolio of development projects that it develops for future sale which are classified as inventory ($3,873 million). Stockland’s inventory is accounted for at the lower of the cost and net realisable value for each inventory project, as assessed at each reporting date as outlined in note 6. The cost of the inventory includes the cost of acquisition, development and other costs and interest capitalised. The net realisable value (NRV) of inventory is the estimated selling price in the ordinary course of business less estimated costs of completion and costs to sell. The NRV is impacted by the current economic and operating environment. Where an inventory project’s net realisable value is lower than its cost, the inventory project is written down to its net realisable value under Australian Accounting Standards. Cost of property developments sold On settlement, all costs, including those spent to date and those forecast in the future, are proportionally allocated to each lot in line with net revenue and released from inventory to cost of sales based on the margin percentage for the relevant project. Our procedures, amongst others, included: • we developed an understanding of Stockland’s processes and controls for determining the net realisable value (NRV) of inventory and the related forecast margin percentage that informs the cost of property developments sold; • we agreed a sample of additions included in inventory that related to the cost of the project (e.g. project development costs) to the relevant invoice to check the nature and amount of the costs capitalised. We also assessed the appropriateness of the interest capitalised; • we agreed the carrying value of each of the projects to the accounting records and compared the carrying value to each project’s NRV; • we assessed the appropriateness of significant assumptions for a sample of Inventory projects, including engaging PwC Economists to assess the appropriateness of revenue and cost escalation assumptions; • we agreed a sample of recorded settlements to the underlying sale contracts and recalculated the related margin percentage recognised; C
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Key audit matter How our audit addressed the key audit matter These were key audit matters given: • the relative size of the inventory balance to the net assets, and • Inherent subjectivity of the key assumptions that underpin the net realisable value, and the margin percentage recognised. • we assessed the appropriateness of the considerations related to the impact of climate-related events on the determination of NRV; • we assessed the reasonableness of the disclosures against the requirements of Australian Accounting Standards. Other information The Directors of Stockland Corporation Limited and the Directors of Stockland Trust Management Limited, the Responsible Entity for Stockland Trust (collectively referred to as the “Directors”) are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The Directors are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the ability of Stockland and the Stockland Trust Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate Stockland and the Stockland Trust Group or to cease operations, or have no realistic alternative but to do so.
Financial report for the year ended 30 June 2023
180 Stockland Annual Report 2023
Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report. Report on the remuneration report Our opinion on the remuneration report We have audited the remuneration report included in pages 81 to 99 of the directors’ report for the year ended 30 June 2023. In our opinion, the remuneration report of Stockland and the Stockland Trust Group for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. Responsibilities The Directors are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Jane Reilly Sydney Partner 24 August 2023 Securityholder
information
and key dates
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Securityholder information and key dates
Securityholders
As at 31 July 2023, there were 2,387,171,662 securities on issue and the top 20 are securityholders set out in the
table below.
Securityholders
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
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