INVESTOR INSIGHT

OCTOBER 2016

CELEBRATING 30 YEARS

SUCCESS THROUGH PROPERTY

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MESSAGE FROM THE MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER

Following three consecutive years of double-digit

profi t growth, Villa World has made a positive start

to FY17 with strategic project site acquisitions in

Queensland, development approval for a

fl agship community at Logan Reserve,

a start to construction at the Gold Coast’s last

ever centrally located land release, as well as

a successful re-entry to the New South Wales

market.

These project milestones exemplify our strategy

of Focus, Grow and Lead as we continue to deliver

success through property.

Our success is something I am rightly proud

of, and I therefore extend an invitation to all

our shareholders to attend Villa World’s Annual

General Meeting in Broadbeach, Gold Coast,

on 3 November 2016.

Among other business at the AGM, we will put

forward Donna Hardman for election as a

non-executive Director. Donna was appointed

to the Board as an independent non-executive

Director on 17 February 2016. She is the Chair of

the Remuneration and Nomination Committee

and a Member of the Audit and Risk Committee

and has made a signifi cant contribution to our

Board in that time.

Together with Chairman Mark Jewell and

non-executive Director David Rennick, the

Villa World Board has played an important role in

focussing our business strategy and positioning

the Company for sustainable growth over the

next decade.

We are continuing to forge ahead to become

recognised as a leading east coast residential

house and land developer, and ultimately a leading

Australia property company.

So far in FY17 we have added more than 1,100 lots

to our portfolio as we maintain our fi ve to six-year

project pipeline. Further information on these

acquisitions is provided on page 3.

We have also seen our It’s So Easy Spring sales

campaign take off and highlight key points of

diff erence in the Villa World business model –

our one contract, one deposit, one fi nal payment

approach – which we know appeals to our target

customer segments.

Spring is traditionally a great time for house buying

and we have entered the season and FY17 with

continued sales momentum in our key Queensland

and Victorian markets, having brought forward

$165.6 million in pre-sales from FY16.

With positive market conditions, including

Queensland’s increase to the fi rst home buyer

grant, low interest rates and fl uctuating but

upward-trending consumer confi dence, Villa World

is targeting statutory profi t after tax growth of

at least 5% to $35.4 million in FY17. The Company

continues to operate with a prudently geared

balance sheet and expects net debt to assets to

remain comfortably within our target range of

15% to 30%.

Our Board is committed to continuing to pay

strong dividends, in accordance with the stated

payout policy of 50% to 75% of NPAT, paid semi-

annually. The Board anticipates paying a dividend

of at least 18 cents per share fully franked in FY17,

representing continued strong yield.

As we move beyond our 30th year in business,

Villa World has its sights fi rmly fi xed on the long

term. We are positively diff erentiated from our

competitors, highlighted by our unique business

model, our nominal overseas customer base and

100 per cent focus in the residential land and

housing market, and continue to maintain a strong

balance sheet and an upscale in delivery.

We look forward to bringing you continued success

through property throughout the year.

Craig Treasure

1 INVESTOR INSIGHT OCTOBER 2016

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“So far in FY17 we have added more than 1,100 lots to our portfolio as we maintain our fi ve to six-year project pipeline”

Killara - Logan Reserve, Queensland

2INVESTOR INSIGHT OCTOBER 2016

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ACQUISITIONS

The strength of the Villa World balance sheet

is refl ected in the maintenance of our fi ve to

six-year pipeline of strategic acquisitions within

growth corridors in east coast states.

Villa World has increased its footprint in

identifi ed Queensland property hotspots such

as Logan in the south east, Arundel on the Gold

Coast, and Strathpine on Brisbane’s northside.

The Company continues to target increased

geographic diversity as it moves towards a

40/40/20 split across its three major east coast

markets, being Queensland, Victoria and New

South Wales. We continue to pursue growth in

our Victorian land bank to match our already

substantial Queensland portfolio. This has been

buoyed by continued sales strength in the

Victorian market and increased market uptake of

the unique Villa World build model.

The Company continues to benefi t from strong

sales in Queensland, supporting further recent

acquisitions that give Villa World a greater

presence in the high-growth Logan market in

south east Queensland, while also increasing

the overall product mix. This includes a 700 plus

lot land project called Killara in Logan Reserve,

which will off er a selection of house and land

packages from leading builders, many of which

will be featured in the future Builders’ Display

Village (due to open mid 2017).

The Company purchased a 9ha site in Park Ridge,

adjoining and almost doubling the lot yield at

the Villa World Cottonwood estate to 300 lots.

Off ering house and land packages, this estate

will target the owner occupier market and is

expected to contribute revenue in 2H18.

A successful joint venture acquisition of 153

development-ready hectares at Greenbank

secured one of the most substantial residential

land parcels in South East Queensland, and also

further strengthened the Company’s relationship

with the Sydney-based Greenfi elds Development

Company. With Logan identifi ed as one of the

Top 10 best locations for property buyers seeking

capital growth, Greenbank will be developed into

a vibrant community, eventually home to around

4,000 residents.

It was another demonstration of the Company’s

use of capital effi cient means to progress

expansion of our footprint. Development and

project management fees will provide an ongoing

and growing revenue stream.

PROJECT NAME LOCATION STATE REGION PRODUCT # LOTSPURCHASE PRICE ($M)ii

Harmony (capital lite)i Cobbitty NSW SW Sydney H&L 10 $4.0m

Concourse (capital lite)i Oran Park NSW SW Sydney H&L 12 $4.8m

The Chase (development agreement)i Oran Park NSW SW Sydney H&L 93 tba

Dakabin Dakabin QLD N-Brisbane LO 108 $7.0m

Cottonwood (adjoining site) Park Ridge QLD Logan H&L 144 $7.3m

Greenbank (50% share) Greenbank QLD Logan H&L 750 $27.5m

South Morang South Morang VIC NE-Melbourne TH 60 $4.4m

1H17 Acquisitions         1177  

(i) Announced on 17 August 2016.

(ii) Inclusive of GST as applicable

LO = Land Only; H&L = House & Land; TH = Townhomes

3 INVESTOR INSIGHT OCTOBER 2016

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SPRING SALES CAMPAIGN

The Company’s Spring sales campaign delivers

on the Villa World promise of architect

designed homes, complete and ready to move

into. The It’s So Easy campaign highlights the

unique selling points of the Villa World model,

including the one deposit, one contract, one

fi nal payment approach.

Executed across digital, print and television

during the high-rating Olympics coverage, the

campaign generated strong leads.

The campaign was timed to coincide with the

Company’s new look website which highlights

the extensive range of ‘addresses’ we off er

across the east coast.

Designer Living - 32 page magazine

Full page press ad

Website

Billboard Signage

TV Campaign

4INVESTOR INSIGHT OCTOBER 2016

into Summer

Spring

BRING THE OUTSIDE IN

Think about your dining room table

and kitchen, and try adding a bunch of

flowers or some greenery to make for

a lighter atmosphere and organic feel.

ADD COLOURFUL ACCENTS

Consider investing in a few accent

table pieces like some dishes in

summery shades.

LIGHT UP YOUR OUTDOOR AREA

Some coloured string paper lanterns

and fairy lights wrapped around tree

branches are both inexpensive and

effective ways to create a gorgeous

outdoor space.

SWAP UP YOUR WALL ART

It’s a great idea to invest in

something floral or beachy for the

warmer months. All you have to do

is make sure it complements the

accompanying furniture in the room.

IT’S ALL IN THE SCENT!

Believe it or not, the best thing you

can do to give your home a summer

feel is to choose a summery scented

candle and light it for an hour or two

each day to have your home smelling

like summer!

THE CHANGE OF SEASONS IS UPON US AND MANY OF US GET

THE URGE TO CHANGE IT UP A BIT AT HOME! THERE ARE A FEW

SMALL AND SIMPLE THINGS YOU CAN DO AROUND YOUR

VILLA WORLD HOME TO MAKE IT TRULY FEEL LIKE SUMMER.

In the Winners’ CircleMustafa and Fermude Karacan

Villa World is celebrating its 30th birthday by giving away $30,000

worth of holidays in 2016. Meet Mustafa and Fermude Karacan,

the Melbourne couple who were lucky enough to win the second

draw in early May, receiving a $5,000 travel voucher courtesy of

helloworld.

These new home owners at Lavinia in Greenvale love the low

maintenance design and the quality of finish of their new home.

Join Villa World, Mustafa and Fermude in the celebrations.

All buyers who purchase a Villa World property in 2016 are

automatically entered into the

draw. Terms & conditions online

at VILLAWORLD.COM.AU

It was so easyCassandra & Christopher Bennett

First home buyers Cassandra and

Christopher Bennett weren’t even

looking when they stumbled across their

Villa World home at Era in Capalaba.

The young couple enjoy the benefits of a

complete Villa World address and home

as well as the stylish design features.

“Having something ready made really

appealed to us. We were able to pick

from all the different designs but

have a professional do the specifics

for us,” Cassandra says.

“We had our first Christmas in the

house and when the tree went up,

it felt like home.”

05Designer Living 05Designer Living

Christopher Bennett weren’t even

looking when they stumbled across their

Villa World home at Era

SPRING 2016

CHOOSE YOUR ADDRESS

CHOOSE YOUR HOME

It’s so easy! SEE IT for yourself at one of our

20 addresses across Queensland

and Victoria

Completed designer homes now selling

VILLA WORLD

BRINGS YOU

NEW DESIGNER

HOMES

NOW SELLING

THIS SPRING

SPRING

2016

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Whilst care has been taken in the preparation of this advertisement, the particulars are not to be construed as containing any representation of the facts upon which any interested party is entitled to rely. All interested parties should make their own enquiries. Information contained is correct as at the time of publication.

CELEBRATING 30 YEARS

SUCCESS THROUGH PROPERTY

CHOOSE YOUR ADDRESS

CHOOSE YOUR HOME

It’s so easy! SEE IT for yourself at a Villa World

address in Redlands

For 30 years, Villa World has been creating new

homes for Queenslanders - completed homes in

complete communities, landscaped and ready to

move into.

We ask for only one deposit and one final payment.

It’s so easy! No wonder more than 40,000 Australians

call a Villa World address their home.

SEE IT for yourself at a Villa World address near you.

Completed homes now selling from $445,000

3 NEW DESIGNER

HOMES OPEN!

DISPLAY HOME NOW OPEN

LAST CHANCE TO LIVE AT ERA

Seascape is a modern coastal village just 900m

from the proposed Weinam Creek Marina.

• 3 bedroom designer homes • Swimming pool,

barbecues and community garden

3 bedroom homes from $445,000

Display home open 10am – 5pm daily

Salisbury Street, Redland Bay

Phone 1800 312 983

A contemporary address set beside a natural

bushland sanctuary • Latest range of 4 bedroom

designer homes • Stages 6 and 7 is a secluded

pocket of Era that can never be built out

4 bedroom designer homes from $508,000

Display home open 10am – 5pm daily

Springbrook Dr, off Redland Bay Rd, Capalaba

Phone 1800 726 720

Master planned beside a bushland creekway,

Ellabay offers a modern family lifestyle

• Stunning new range of 4 bedroom designer

homes ready to inspect • Prestige land now selling

4 bedroom designer homes now selling

Display home open 10am – 5pm Sat to Wed

(closed Thurs & Fri) 2 Muller Street, Redland Bay

Phone 1800 019 515

Looking for land in Redlands? SEE IT on our website: villaworld.com.au

Click on Affinity and Waterline in Thornlands

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MARKET UPDATE

The Queensland residential housing market remains

strong, particularly in the South East corner of the

state where fi rst home buyer incentives continue to

contribute to solid growth.

Villa World’s popular Bayside portfolio recorded

strong sales during the fi rst quarter and off ers a

reliable mix of project and price off erings. Waterline,

off ering 227 land lots at Thornlands, and the nearby

118-lot Affi nity are both selling well, having benefi ted

from the opening of Waterline’s Display Village on

27 August at the Bayside Homes Expo. With display

homes by 10 national builders, Villa World is an

emerging name in the ‘land’ space in this market, as

well as an established ‘house and land’ provider.

The fi nal lot sale at Mt Cotton Village has been

quickly followed by the last construction stage at the

200-lot Era at Capalaba, released for sale in October

and selling strongly. Homes and homesites at Ellabay,

comprising 84 lots at Redland Bay, will also sell out

in FY17. Nearby Seascape, with 187 lots, was released

into the market this quarter with an onsite display and

construction underway.

On Brisbane’s northside, Villa World’s completed

projects are being replenished with new developments

in the pipeline at Caboolture and Strathpine.

Construction at the very successful Park Vista (533

lots) is complete, with just a few homesites remaining

for sale. This fl agship project has delivered consistently

strong sales, with similar interest expected at the

replacement project at Strathpine where 383 lots are in

the planning.

Only a few homes from the 209-lot Circa at Nudgee

are available, and just under half of the 81 premium

homesites at Riva in Joyner, remain on the market.

Adding to the Company’s market diversifi cation is the

167-home development at the fl agship community of

Rochedale Grand, on Brisbane’s south (see back page).

Under a Joint Venture with Ausin Rochedale Pty Ltd,

Villa World is building premium architect-designed

residences to be off ered under traditional progress-

payment contracts. Momentum is building with this

project as civil works for stages one and two are

complete and home construction has commenced.

Strong interest from local upgraders prompted a

sell-out at the 81-lot designer home development at

Woodlands in Logan, called The Sanctuary.

This strong response has created momentum for

the Company’s planned 726-lot Logan land project

called Killara, where civil construction is set to start

in 2Q17. Nearby Cottonwood, at Park Ridge, and the

newly acquired Greenbank joint venture round out

the Company’s expansive footprint within the Logan

market.

Home buyer incentives in Queensland’s Fraser Coast

region are expected to boost sales of Stage 9 of

the Augustus estate at Hervey Bay, due to market in

early 2017. With the Destination Hervey Bay grant

extended beyond the initial June 30, 2016 expiration

date, eligible buyers will benefi t from a $12,000 grant

for new land or house-and-land packages at approved

residential developments, including

Villa World’s Augustus. And as of July 1, the

Queensland Government’s First Home Owners Grant

has increased from $15,000 to $20,000 for eligible

buyers.

An infrastructure boom on the Gold Coast is

spearheading the Queensland construction industry,

evidenced by strong sales at Villa World’s residential

developments. Only a handful of the 179 lots remain

at Parkside, Coomera, with stage one of Seabright,

at Jacobs Well, close to sold out and stage two to

be released with the opening of a display village in

October. This project will comprise 107 designer

homes at completion.

Villa World’s master planned 305 homesites and 90

townhomes at Arundel Springs will soon take shape

with construction commenced and sales ready to

begin. Homesites will range in size from 306m2 to

954 m2, with strong appeal to a diverse buyer profi le.

QUEENSLAND

Arundel Springs - Arundel, Queensland

5 INVESTOR INSIGHT OCTOBER 2016

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Positive market conditions for residential

property continue in Victoria where sales from

the Company’s turnkey housing model are

gaining increased popularity, and land-only sales

have strengthened.

Cardinia Views (320 land lots), in Pakenham

south-east of Melbourne, is in its fi nal stages

with builders taking advantage of family-sized

blocks, close to amenities.

To the city’s north, at Greenvale, house and

land product at Lavinia (131 lots) is near to

sold out. The mix of land and house and land

off erings at Sienna in Plumpton to the north

west, is also contributing strong sales, with

more than 80% of the project sold out. This

project is expected to lead in to another 254-

lot development in Plumpton. Settlement of

Villa World’s unconditional acquisition is tied to

the gazettal of a Precinct Structure Plan for the

area, expected mid CY17. Villa World plans to

deliver a turnkey house and land development

with average lot sizes of 429m2.

Conditional sale of the Company’s Donnybrook

joint venture is expected to free up capital

to develop the remainder of the project and

reinvest in new sites. This delivers Villa World

further geographic diversity in Melbourne

growth corridors while maintaining a signifi cant

project in the Donnybrook precinct.

Villa World opened a Sydney offi ce during FY16

to manage its re-entry into the New South

Wales market and to evaluate further market

opportunities, particularly around the western

Sydney regional growth corridor.

Project milestones have included completion

of 55 land lots at Lacosi Hill in Schofi elds, with

capital allocation rolled into Allure in Box Hill,

for a 44-lot land project, where civil works

commence in FY17.

The Company also commenced construction

of two capital lite house and land projects at

Cobbity and nearby Oran Park, both in south

west Sydney, comprising a total of 22 lots.

Also at Oran Park, the Company is fi nalising

a development agreement with Greenfi elds

Development Company to deliver an initial

90-plus homes.

Lavinia - Greenvale, Victoria Sienna - Plumpton, Victoria

Cardinia Views - Pakenham, Victoria

NEW SOUTH WALESVICTORIA

6INVESTOR INSIGHT OCTOBER 2016

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QUEENSLAND

Level 1 Oracle West, 19 Elizabeth

Avenue, Broadbeach QLD 4218

PO Box 1899, Broadbeach QLD 4218

+61 (0) 7 5588 8888

info@villaworld.com.au

VICTORIA

99 Coventry Street,

Suuthbank VIC 3006

+61 (0)3 9693 7800

info@villaworld.com.au

NEW SOUTH WALES

Level 3, 201 Miller Street,

North Sydney NSW 2060

+61 (0)2 8923 1900

info@villaworld.com.au quadra

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wVilla World Limited ABN 38 117 546 326 villaworld.com.au

Rochedale Grand - Rochedale, Queensland

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