Mark Baillie Banking & Property
Banking & Property Group Key Milestones in North America 1997 2001 2002 2003 2004 2005 2006 CHICAGO CHICAGO LOS ANGELES LOS ANGELES MCW acquires NEW YORK NEW YORK RESF $US2.7 billion MBL forms JV to M CalPERS establish Macquarie JV with DDR portfolio with Capital Partners to form Macquarie Regency (MCP) / Macquarie DDR Trust (MDT) Centers Real Estate Inc, Real Estate Capital (REC) Macquarie CountryWide Trust JUPITER JUPITER SEATTLE IRVINE SEATTLE IRVINE MOF establishes (MCW) forms JV with MBL and Greg M Real Estate RESF $US1.2billion JV Regency Centers Norman’s Great Structured Finance with Maguire White Shark (RESF) Macquarie Office Properties MEMPHIS MEMPHIS Enterprises form trust (MOF) acquires Macquarie Mortgages Medallist JV with ProLogis Principal America USA (MMUSA) Developments to form Macquarie Office Trust (PAO) (Medallist) ProLogis Trust (MPR) Strategic alliance with Archstone Smith 50 Columns represent growth in US assets under management
Banking & Property Group Staff & Office Locations in North America 181 staff across 7 offices in North America (including Macquarie Capital Partners and Medallist JVs) Chicago Chicago • Real Estate Capital • Real Estate Investment Banking Seattle Seattle • Real Estate Structured Finance New York New York • Real Estate Capital • Real Estate Investment Banking Los Angeles Los Angeles • Real Estate Structured Finance Jupiter Jupiter • Residential Community Development Irvine Irvine • Real Estate Structured Finance Memphis Memphis • Residential Mortgages 51
Banking & Property Group North American Business Snapshot Macquarie Real Macquarie Macquarie Capital Medallist Business Name Estate Structured Partners Mortgages USA Developments Finance Residential Real Estate Residential Real Estate Activity Community Investment Banking Structured Finance Mortgages Development Joint Venture between Joint Venture between Type Wholly owned by MBL Wholly owned by MBL MBL and MCP MBL and Great White Management Shark Enterprises 21 Staff 32 staff Staff & Office Seattle 94 staff 21 staff Chicago Locations Los Angeles Memphis Jupiter New York Irvine Provides innovative One stop shop for all home financing Developer of premier Global investment Description capital tranches up to solutions that allow banking and advisory residential firm 100% of project cost borrows to enhance communities wealth and lifestyle Closed largest deal in Licensed in 34 states & 6420 residential lots Completed 164 the US: $US105 million written $US2.3 billion, transactions totaling and 3 golf courses Key Milestones senior financing for or 8,787 mortgages $US40.1 billion since across 5 communities condo conversion, under the Macquarie 1991 in 4 states in the US Downtown LA – Jan 06 brand in the US 52
Macquarie Real Estate Real Estate Capital Business Snapshot Drivers How do we make money for MBL? � Australian superannuation flows � Management fees ie base, performance and asset management � Significant global increase in demand for securitized real estate product � Sponsorship fees Strategy � Principal positions in managed trusts � Building off expertise developed in Australian Staff market to continue to develop our business 13 � as a leading global manager of securitized real estate funds, both listed and unlisted Office Locations � Using a combination of investment banking � Chicago and New York and funds management skills to continue to develop and manage products that provide attractive risk adjusted returns to global real estate investors 53
Australian LPT market Superannuation drives growth Very large and growing superannuation industry � 70% of the total investment management market � Australian superannuation funds have grown 16.9% per annum since 1983 � Superannuation funds projected to double by 2011 Government mandated 9% � � Due to limited domestic product, offshore investments have increased Growth in Australian Superannuation Market Australian Superannuation Asset Allocations ($A billions) Other $2,500 Cash Australian 7% Forecasted 10% Equities $2,000 International 28% Fixed Interest 4% $1,500 Australian Fixed Interest $1,000 18% Property $500 International 13% Equities $0 20% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Rainmaker 54
Australian Real Estate Capital Raisings Macquarie is the leading issuer of listed real estate capital in Australia Capital Raised January 2003 - March 2006 for assets acquired in Australia/New Zealand, United States, Asia and Europe 3,500 3,000 2,500 A$ in Millions 2,000 1,500 1,000 500 0 Macquarie Galileo Centro Multiplex Stockland ING James Fielding Tishman Babcock & Brown Rubicon APN Valad Lend Lease Colonial Gandel Mirvac Westfield Charter Hall Ronin Reckson Abacus Trafalgar Mariner Investa Village Life MacArthur Cook Aspen AUS / NZ US Asia Europe 55 Source: UBS Real Estate Weekly 2003, March 2006
Key to Success Partnering with Best of Breed Macquarie Macquarie Macquarie Macquarie CountryWide ProLogis DDR Office Trust (MCW) Trust (MPR) Trust (MDT) Trust (MOF) Partner Sector Focus Neighbourhood Industrial/ Community Class-A Retail Distribution Retail Office US Assets 149 1 139 2 72 17 3 US States (incl. DC) 23 18 + Mexico 24 10 Square Footage 17.3m 1 35.2m 15.0m 11.3m JV AUM $US2.8b 1 $US1.6b $US1.9b $US2.2b Commencement Jun 01 Jun 02 Nov 03 Dec 03 MBL has a strategic alliance with Archstone-Smith to explore US investment and Australian capital raising opportunities 1. Includes some properties previously identified for disposal. 2. MPR owns 22 assets in Mexico. 3. MOF owns 4 assets in JV with Equity Office Properties, 1 with Brandywine, 1 with KanAM, 5 with no JV partner and 6 with Maguire. All figures are as at March 31, 2006. 56
Macquarie’s North American Real Estate Assets $US10.75 billion real estate assets under stewardship with JV partners 78.8 million sq ft of gross leaseable area across 377 properties in 33 US states + Mexico 4 MA - 3 488 1,096 $75 $332 4 5 406 4 2,702 $103 1,370 1 5 $380 $211 217 965 14 CT - 2 $34 $92 2,946 744 7 $331 11 $148 1,191 13 14 1 3,546 $86 2,537 21 5,516 150 NJ - 5 61 $269 12 2,513 $917 $258 1,169 $6 12,245 $665 2,680 1 1 $97 $2,394 7 $609 344 386 1 4 1 $ 0 2 5 2 , 1,307 7 $56 $66 DE - 4 12 4,280 $199 $106 1,048 5 6 536 $208 395 1 $85 36 $48 400 2 MD - 19 6,019 $56 173 2,095 $667 $29 $424 37 Mexico 8,051 DC - 4 22 27 $506 544 4,540 3,932 $791 $171 Properties $223 Gross Leaseable Area (sq ft ‘000s) Value ($US m) All figures are as at March 31, 2006. 57
No. 1 Foreign Investor in US Real Estate $12,000 $10,000 $8,000 $US millions $6,000 $4,000 $2,000 $0 2001 Q1 2001 Q2 2001 Q3 2001 Q4 2002 Q1 2002 Q2 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 Australia Canada Europe (ex. Germany & UK) Germany Middle East Other Pacific Rim United Kingdom Macquarie kçíÉW=cçêÉáÖå=Å~éáí~ä=áåîÉëíÉÇ=áå=íÜÉ=rp=Äó=êÉÖáçåK==qê~áäáåÖ=íïÉäîÉ=ãçåíÜë=Äó=èì~êíÉê=Ñçê=~ää=ÅäçëÉÇ=íê~åë~Åíáçåë=Ñêçã=^éêáä=OMMM=Ó j~êÅÜ=OMMSK pçìêÅÉW=oÉ~ä=`~éáí~ä=^å~äóíáÅëK 58
2006/07 & Beyond Real Estate Capital � Continue to grow and enhance the performance of our existing managed trusts in conjunction with our partners � Enhance our access to US capital sources – both institutional and retail � Expand the number of trusts under management in alternative real estate sectors � Take principal positions to unlock value in US real estate sector Real Estate Structured Finance Expand real estate structured finance into new markets: USA: San Francisco, Phoenix, Chicago, Atlanta; Canada � and Latin America � Services to include: debt advisory and placement and further leverage to opportunities through strategic use of principal commitment to deals and development entity co-investment Macquarie Mortgages � Volumes down this year – inverse yield curve � Plan to launch retail (direct-to-consumer) presence in late 2006 � Goal to be licensed in majority of US states by 2007 � Existing core adjustable rate products to be enhanced with fixed interest loan products 59
Mark Baillie Banking & Property
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