LEND LEASE INVESTOR DAY 2011 25 MAY 2011 STEVE McCANN: Good morning everyone and thank you for attending today. Just want to take an opportunity firstly to introduce the key members of the Lend Lease senior management team who are here, and I hope I cover you all. We've got Scott Charlton, Brad Soller, Mark Menhinnitt, Bob McNamara from the US, David Hutton, Tarun Gupta, Tony Lombardo, William Hara I'm expecting at any minute, Jocelyn Harvey on the table at the back with Iwona Polski and Andrew Muller. From the newly acquired infrastructure business, pleased to have here also Peter Brecht, Darrell Hendry, David Jurd, Ian Luck and David Marchant. We have other members of the Australian business in the audience as well. So hopefully you'll get the opportunity to talk to a number of the members of the senior management team as we go through the day. In terms of what we're going to cover today, you will hear from a number of us. Before morning tea, Brad and I will take you through an update on strategy and on our capital position and an operational update on Asia and Europe. We'll then break for morning tea and then come back and hear an update from Scott Charlton on the progress of the integration of the Valemus business. Then we'll also hear from Peter's infrastructure senior management team, including some thoughts on their respective markets and a bit of a trading update on their businesses. Bob McNamara will then take us through an update on the Americas before we break for lunch, then after lunch you'll hear from Mark Menhinnitt on the Australian business followed by David Hutton who'll give you an update on our major projects including Barangaroo. Then I will close the day with a few comments around about three o'clock. So, just to keep the flow of the day moving, if we could keep questions until the end of each individual speaker's presentation and we'll take those questions then. So thanks for that. So, just moving through to the next slide. Firstly, touching on an area which is the number one priority for Lend Lease and for the Board and senior management, and that's safety. Our safety vision is to operate incident and injury free wherever we have a presence. This means that every person who comes to work has the right to go home safely to their family and their loved ones at the end of their working day. This applies whether it's one of our projects, one of our shopping centers, one of our office buildings or any other asset site that we work at. It applies to all of our people, all of our employees and all of our contractors. Being incident and injury free is about the people, about the actions that we take constantly and about the business relationships we have, and it's not just about the numbers. Over the past year we've spent a lot of time embedding our global minimum requirements in every region around the world, and this has been supported by some extensive training and reinforcement of the focus that's required on all of our sites and some very significant compliance oversight across all of our sites and assets. We do continue to invest in safety and we're confident we're on the right track. We have lagging LEND LEASE INVESTOR DAY 2011 25 MAY 2011 and leading indicators and they all show that we are making significant progress. We're determined to move closer to the goal of being incident and injury free. We've made some great progress and as the slides show, we've had reduction in the amount of lost time injuries over a significant trend period now. I'm also very pleased to announce that to date we have had no fatalities in the financial year ended June 30, 2011, which is the first time since we've kept records. I always hate to touch on that because it makes me feel nervous, but hopefully that will continue. But we do have to remain vigilant and we do continue to have accidents that could become serious injuries or fatalities, so we will be relentless in pursuing the incident and injury free outcome. Just want to spend a little bit of time now on the external environment for the Group around the globe and reinforce some key messages. Those messages are that despite the uncertainty in global markets and regions, Lend Lease is in very good shape and we're extremely well placed to deliver growth for security holders. In Australia, most of our sectors are presenting attractive opportunities, particularly in the infrastructure sector. Despite some short term impact from weak consumer sentiment, the outlook across our businesses here is positive. I do share concerns that are often spoken about these days, about a two speed economy and the impact that further interest rate rises are likely to have on the average household and also the continuing strength of the Australian dollar. However, on balance I think that our businesses are in a strong position and the economy is obviously also in a strong position overall. In Asia there are very strong market fundamentals and they continue. In the Americas we do continue to see signs of a market recovery, and Bob will talk a little bit more about this in his presentation. In the UK the recovery is at an earlier stage. But we are pretty well placed with our major urban regeneration projects and they have quite low holding costs and minimal capital requirements in the short term. So we're well positioned to develop these into recovery. So across the business and across all of our regions, we've got a pretty strong outlook. I just want to re-emphasize the key priorities for management over the next two years, and the criteria against which you as investors ought to judge our success in delivering these outcomes in that timeframe. On Valemus, the integration of the business into the wider group and the extraction of synergies and the delivery of our target earnings accretion will be our key measurables. As Scott, Peter and the infrastructure team will talk to later in the day, the integration is on track and we do have a stronger overall backlog and growth opportunities than we initially anticipated in that business. 2 LEND LEASE INVESTOR DAY 2011 25 MAY 2011 In relation to our major projects, the next six to 12 months is crunch time for sourcing of tenants and for locking in capital for our major projects and we do remain on track for these projects to begin delivering returns in the second half of financial year 2012. I just might take the opportunity to make some comments on Barangaroo which has obviously seen a lot of media commentary in recent times. I just want to emphasize Lend Lease has a binding project delivery agreement with the government for the development of Barangaroo South. The site has got an approved master plan, with approved project applications for basement works, and the first major commercial building. The preparation of works are continuing on the site, and we are on program to commence construction of the basement from late June, and then major building works by Christmas, which will enable first occupancy from the end 2014. Detailed negotiations are underway as we flagged previously with major tenants and capital partners, and we continue to expect these negotiations to conclude over the coming months. We welcome the recent comments from the Planning Minister, on the importance of Barangaroo, some very positive statements that were made in Parliament. Also the commitment to undertake a short, sharp review of the processes concerning Barangaroo. The reason we say this is it will create certainty for the project and it will enable the State Government to fully engage and understand the quality and merit of Lend Lease's proposed plans. We're very confident of the quality of the project and also of the integrity of the processes we've undertaken at Barangaroo. We will continue to work cooperatively with the New South Wales Government. Our focus will remain to be on delivering a great outcome for Sydney and certainly the dialogue we've had with government confirms that that's their priority as well. So over the next two years we'll focus on portfolio management through divesting mature assets and redeploying that capital into our significant pipeline of opportunities including Barangaroo. You will have seen yesterday that we announced the divestment of our 50% stake in King of Prussia which will deliver a material profit amount of circa A$100 million. It's a great outcome for the business. Obviously we've owned that asset for some time, but in particular in recent times there's been a significant amount of redesign and redevelopment proposals put through on that asset which has helped us to deliver the outcome we delivered. We took a deliberate decision to focus on the repositioning over the last couple of years. The team's driven a fantastic outcome beyond our expectations in terms of sale price. So very happy to be able to confirm that. So with those clear priorities for the Group in mind just a reminder of the significant pipeline of opportunities that we have already secured. We did go into the GFC with a very strong balance sheet as you know, probably the strongest in the property sector, certainly in Australia and even against our international peers.