Stockland (SGP) Earnings Call Transcript & Summary

Good morning, and thank you for joining Stockland's Half Year 2026 Financial Results Update. Before we begin, I'd like to acknowledge the traditional owners and custodians of the land on which we meet, the Gadigal people of the Eora Nation and pay my respects to elders past, present and emerging. Joining me today is Josh Mchutchison, our CFO; Kylie O'Connor, CEO of Investment Management; and Andrew Whitson, CEO of Development. In the first half of FY '26, we delivered a strong financial result while continuing to invest for future growth. The execution of our strategy over the last 4 years has translated into strong operational and financial performance. We have significantly lifted production volumes across our platform, activating more of our pipeline to deliver attractive, sustainable returns. We have positioned our MPC and LLC platforms to deliver for our customers and our security holders in an environment of a continuing structural imbalance between supply and demand. Now turning to the result. Funds from operations for the period was $325 million, up almost 30% with FFO per security of $0.135. The result reflects a significant lift in MPC settlement volumes, higher fee income from development partnerships and a strong underlying performance from our investment management portfolio. Importantly, we have delivered this growth while maintaining balance sheet strength and risk discipline. Net tangible assets increased to $4.25 per security. And as anticipated, gearing ended the half at 28.1%. Over the last 4 years, we have focused on reshaping our portfolio, embedding additional growth pathways and positioning the business for sustainable performance. FY '26 represents a step change in delivery of our strategy, and we are seeing that clearly reflected across the business this half. In our residential platforms, MPC and Land Lease sales were up 87%, reflecting higher project activation and improving conversion as we focus on increasing delivery into a supply-constrained market. We have seen increased demand from first home buyers for our affordably priced product. We launched 4 communities during the half across Queensland and Western Australia, with 2 additional launches targeted for the second half. We have created additional drivers for longer-term growth in sectors such as data centers, Apartments and Logistics, maximizing the value of our land holdings and leveraging our end-to-end capabilities. We secured approximately 350 megawatts of power at 2 of our existing Victorian logistics assets, supporting future data center development. This brings our total secured power bank to approximately 450 megawatts. We are progressing final documentation for our data center partnership with EdgeConneX, exploring both near- and medium-term opportunities across our portfolio. Across our commercial development pipeline, we completed approximately $420 million of build-to-hold projects and commenced a further $620 million of developments across Logistics, Town Centers and communities real estate. And we are pleased to have recently expanded our relationship with an existing investor by forming a new 50-50 partnership in the Land Lease sector. The new partnership will be seeded with 2 existing development projects, with an initial gross asset value of approximately $200 million. Across our business, we are focused on maximizing our options for future growth while always maintaining our focus on risk, capital efficiency and sustainability. To that end, we have now met our target of net zero Scope 1 and 2 emissions. Importantly, this has been achieved through initiatives such as our rooftop renewable energy partnership, decarbonizing our footprint and generating commercial returns for Stockland. I will now hand over to Josh to provide an overview of the financial results.

Thanks, Tarun, and good morning, everyone. As Tarun mentioned, the consistent execution of our strategy has delivered strong operational and financial outcomes over the half. The first half '26 result is characterized by significant earnings growth, a strong balance sheet and capital settings that support future growth. Turning to the financial result in detail. Funds from operations of $325 million was up 29.5% on the prior corresponding period, with FFO per security of $0.135. The Investment Management segment delivered consistent FFO with strong comparable FFO growth, high IM fee income and build-to-hold completions, offset by the strategic recycling of assets into capital partnerships in the previous period. We have almost tripled development FFO, primarily driven by significantly higher MPC settlement volumes from our expanded platform and growing development fees, consistent with increased development activity in partnerships. Growth in unallocated corporate overheads was consistent with the growth in our platform and investment in capability, increasing 8%. Over the last 3 years, our overheads across the business have grown by 4.6% per annum versus revenue growth of 9.3% per annum, and we remain focused on continuing to generate positive operational leverage. We expect total overheads across the business in the second half to be broadly in line with the first half result. Net interest expense was down, reflecting higher interest capitalization into projects in line with increased activation of the pipeline. Average net funds employed across commercial, MPC and LLC development was around $700 million higher in first half '26 compared with first half '25 and a greater proportion of it was in active production. FFO per security was up almost 30% on a pre- and post-tax basis to $0.135, and AFFO per security at $0.108 was comfortably above our distribution per security of $0.09. Moving on to capital management. We have maintained a strong balance sheet position. As expected, our gearing finished the period at 28.1%. We expect gearing to moderate back towards the midpoint of the target range by 30 June 2026. This reflects a weighting to the second half for both MPC and LLC settlement volumes and group operating cash flow. Our weighted average cost of debt for the period was 5.2% compared with 5.3% for FY '25, and we expect this to trend up slightly over the second half to average 5.3% for FY '26. Our fixed hedge ratio averaged 74% for the period, and we took advantage of a favorable point in the credit cycle during the half to extend our weighted average debt maturity to 4.8 years through the issuance of $400 million of 10-year medium-term notes. We finished the period with $2.1 billion of liquidity, comfortably covering approximately $1.25 billion of drawn debt maturing in calendar year 2026 as well as providing future funding flexibility. Consistent with our previous guidance, we expect the FY '26 distribution per security to be in line with FY '25. The distribution reinvestment plan was in operation for the period, and we continue to actively manage our capital settings to support growth. Now on to cash flows. Operating cash flow for the period was negative $315 million. This reflects an increase in development expenditure across our MPC, LLC and build-to-sell commercial development pipelines in line with increased pipeline activation and in advance of completions and settlements. Consistent with FY '25, we expect second half operating cash flow to be materially stronger than first half, driven by the weighting of settlements to the second half. Overall, we have delivered a strong result for the period and invested for future growth while maintaining a strong balance sheet and ample funding flexibility. I'll now hand over to Kylie to take us through the investment management result.

Thanks, Josh, and good morning. The first half of FY '26 has been another strong period for the Investment Management business, delivering consistent performance while also being positioned for further growth in future periods. The portfolio delivered comparable FFO growth of 3.7%, underpinned by solid performance across all sectors. We continue to achieve positive leasing spreads ranging from 3.3% in retail to 32% in Logistics. New development completions are supplementing our growth and fee income from partnerships continues to build. We delivered a solid financial result for the half while absorbing net operating income dilution from the strategic transfer of assets into partnerships in FY '25 and investing in capability and platform expansion to drive growth in future periods. We remain actively engaged with our existing capital partners to expand their exposure across new sectors and strategies, supported by the scale and diversity of our Development pipeline. The Logistics portfolio was again a standout, generating comparable FFO growth of 7%, driven by positive leasing spreads of 32% on leases and renewals negotiated during the period. The team is driving solid underlying income growth from the portfolio while also actively managing several assets that are being positioned for further development as either logistics or data center opportunities. The WALE at 3.3 years continues to provide us with access to positive reversions, with the portfolio 12% under rented. Over time, we expect this WALE to increase as new developments with longer leases come online and brownfield opportunities are converted. Moving to Town Centers. We've delivered comparable FFO growth of 3.2%, with positive leasing spreads of 3.3%. The portfolio continues to benefit from its high weighting to essentials-based categories, while discretionary categories such as leisure, homewares and jewelry continue to show improvement. Comparable specialty sales are in line with benchmark averages, while occupancy costs remain at a sustainable 15.1% and portfolio occupancy is high at 99%. In line with strategy, we delivered a new neighborhood town center within our Gables MPC community during the half. The center was delivered fully leased to Woolworths and 24 specialty stores with positive early trade performance. Turning now to our Workplace portfolio, the majority of which is being prepared for repositioning, including mixed-use opportunities. A small increase in FFO was primarily driven by the completion of the final 2 buildings at Stage 1 of MPark in New South Wales. A total of 8,000 square meters of leasing was completed across the precinct, bringing overall occupancy to 74%, with 11 Khartoum Road now at 87%. The Workplace team remained focused on ensuring the highest level of operating income and adding value via development opportunities across the portfolio. A growing component within the IM platform is our communities rental income, which is comprised of our established LLC assets and an emerging portfolio of childcare and medical centers located within our Masterplanned Communities. The assets deliver stable long-term earnings and an attractive Development pipeline, underpinning future growth. Sector income increased by 10%, with the uplift supported by the addition of completed LLC and CRE assets during the period. The portfolio delivered comparable FFO growth of 2.1%, reflecting the relatively small size of the comparable basket. The LLC operational portfolio now consists of more than 3,300 home sites under management, providing recurring rental and fee income with the majority of rental increases linked to CPI. Our significant pipeline comprising more than 7,500 homesites also provides future growth opportunities. Approximately 29% of the portfolio was independently revalued over the half, resulting in an increase of $81 million on the 30 June 2025 book value. This reflects positive revaluation movements for both Logistics and Town Centers, partly offset by some devaluation across assets held for repositioning in the workplace portfolio. Overall, the Investment Management business continues to deliver sustainable earnings from a diversified base of assets and new income streams with future growth opportunities supported by our high-quality Development pipeline and long-term partnerships. Thank you. I will now hand to Andrew.

Thanks, Kylie, and good morning, everyone. The Development segment delivered a strong first half result on the back of disciplined execution of our strategy. I'm particularly pleased by the increased activation we've driven across our MPC and LLC pipelines, a strong uplift in MPC settlement volumes and growing demand for our LLC product. This positions the business well to continue to perform through the cycle. Development FFO was $106 million compared to $36 million in first half '25, reflecting a significant lift in MPC settlements, disciplined project activation and higher fee income from our partnerships. Our deliberate decision to upweight to the strong Queensland market, expand our platform and accelerate activation of our pipeline are delivering results. MPC settlements are up 60% over the half. There were no commercial development profits this half. We expect this business to contribute to earnings in the second half with the completion of build-to-sell projects. We've also achieved strong leasing outcomes across our Logistics and Town Centers pipeline. In Masterplanned Communities, settlements were up strongly year-on-year. The Development operating profit margin was 18.1%, reflecting strong price growth in Queensland and Western Australia. Consistent with previous guidance, we expect full year margins in the low 20% range. We end the half with 5,458 contracts on hand at an average price slightly above first half '26 settlements, giving us good visibility for the full year. Our focus is now on building our contracts-on-hand position for FY '27. Net sales were up 87% on the prior corresponding period, reflecting higher project activation, the successful integration of the Land Lease portfolio and increased conversion. In January '26, we secured a further 418 net sales. This reflects the timing of releases to coincide with the launch of our summer marketing campaign from late January. Our recently acquired Kings Forest project in Northern New South Wales delivered first settlements during the half. We're seeing good demand for this product, which is selling into the heavily undersupplied Gold Coast market. We've continued to selectively restock on capital-efficient terms with our South Morang acquisition during the half, providing us with exposure to the infill Northeast Melbourne market, which continues to outperform the broader Victorian market. On to our market outlook for the year ahead. Overall, we remain constructive on the residential market over the medium term as Australia continues to face a growing structural undersupply, with population growth supporting demand. However, market momentum is correlated to interest rates. In New South Wales, tight supply is expected to continue to support prices despite affordability pressures. In Victoria, the recovery is forecast to gain traction, supported by normalizing listings with ongoing variability by corridor. In Queensland, strong demand and constrained supply are expected to underpin sales volumes with price growth to moderate due to emerging affordability constraints. In Western Australia, conditions are expected to remain robust, though lower investor sales point to a moderation in demand over time. These fundamentals support our confidence in meeting our FY '26 forecast. Our Land Lease community settlement volumes for the half were broadly in line with first half '25. We expect a significantly higher volume of settlements in the second half as several new communities deliver first settlements. We're also expecting a higher operating profit in second half '26, with first half margins reflecting the settlement mix and higher marketing costs associated with new launch communities. Contracts on hand increased to 637, up around 60% versus June at a higher average price. Our Land Lease sales were up 81% over the half. We're seeing strong underlying demand, particularly in the Queensland market. And our Victorian projects are now benefiting from the completion of community infrastructure, which is driving higher conversion rates. We're actively managing release timings to maintain our delivery time frames. We've also seen continued price growth across all markets. This has been partially offset by cost escalation in the Queensland and Western Australian markets. Across our commercial development pipeline, we now have $1.2 billion of high-quality investment product under construction. This includes $800 million of logistics developments, which is over 90% leased and 3 essentials-based town centers within our MPC communities, with a combined value of $400 million. The conversion of our commercial development pipeline into product generates attractive yields on cost, high-quality investment product for us and our partners and increased amenity for our residents. We're continuing to grow our powered data center pipeline with an additional 350 megawatts secured over the half at 2 of our logistics properties in Western Melbourne. So overall, from a Development perspective, the disciplined execution of our strategy over the half has driven strong FFO growth. We're on track to deliver a step change in residential settlements over the full year and progress across our commercial development pipeline provides growth levers for future periods. I'll now hand back to Tarun to conclude.

Thanks, Andrew. So to conclude, our first half '26 result demonstrates that the disciplined execution of our strategy is driving strong operational and financial outcomes. The macro environment, including interest rates remain uncertain. But we have a well-diversified, resilient, high-quality platform. And over the last few years, we have reweighted the business towards sectors, where we have deep capability in and that benefit from long-term structural tailwinds. We are on track to deliver a step change in settlement volumes in FY '26 for both MPC and LLC, along with the higher production volumes across our commercial development pipeline. We expect commercial development activity, including our Sydney Logistics pipeline, data centers and mixed-use opportunities to provide multiple drivers of returns in future periods. And while driving growth, we remain focused on risk management, capital efficiency and sustainability. We are reaffirming our guidance for FY '26 FFO per security of $0.36 to $0.37. Our FY '26 distribution per security is expected to be $0.252, in line with FY '25 and within Stockland's payout ratio range of 60% to 80% of FFO. We will now open the line for questions.

Thanks, Tarun. We will now start the Q&A session. [Operator Instructions] Our first question comes from Lauren Berry from Morgan Stanley.

I'm just interested in the settlement guidance range of 7,500 to 8,500 lots, like you kept it the same versus where we were 6 months ago. It looks like if you add up your settled lots this half and the contracts on hand, that's getting you to just below the lower end of the range. So just interested in how you think -- how you're thinking about the range and what's the actual potential for you to get to the upper end?

Yes. Thanks, Lauren. Yes, we start the second half with a strong contracts on hand position on the back of that second half sales result, which obviously gives us good coverage for the rest of this year and then starting to build the bin into '27, which is positive. The main factors with regards to where we land for the year now are really down to 2 elements: one, settlement rates as we move into sort of the May and June period; and then the second one is just the completion of production and production is well progressed. It's really getting through all of the back-ended authority approval requirements to get registrations and call for those settlements. So they're the elements, but we're obviously pleased with where we are, and it sets us up well to be within our guidance range.

As you know, we still have a material skew to the second half in terms of our lots and FFO. And as the months and weeks progress from here, it will then illustrate where in the range we land. But as Andrew said, right now, we're positioned very well.

Great. And then on how momentum is going post all the chat about rate hikes, you noted in the call that resi momentum is very correlated to the rate environment. Are you able to give us a little bit more color on how like inquiries or visits to your display suites have been going in the last, say, 3 or 4 weeks?

Yes, I'll get Andrew to comment just on that specific question. But we have a quality, well-diversified business. The interest rate increase was only recent. It's really very early to see any impacts as you would have seen in -- when rates go up and also when they were coming down last year, it's really the second or third interest rate rise where you start to see a shift in buyer behavior. And then the sales impact, whether positive or negative, is sort of follow 6 to 9 months later. So it's that sort of response you'd see. And we'll be reporting on that in due course. But as I said, in terms of our own strategy in our business, we -- as we look into '27 and beyond, clearly, we have a very high-quality residential business. Our scale is very different to before. Activation is 85% and the Land Lease business performing well. So that business is strong, but we've got many material drivers of growth that are now upon us, such as data center, Sydney Logistics and our apartments pipeline. So the business is well positioned to deliver sustainable performance. But this specific question on what we're seeing around the ground, Andrew?

Yes. Thanks, Lauren. On the sales office floors, we're not hearing any feedback from customers deferring the purchasing decision due to the rate increase or the outlook. So as Tarun mentioned, normally, there is a delay there, but we're not getting that feedback at the moment. In 3 of the 4 states, if we had more product to release at the moment, we would be making more sales. And you can see that in the national land survey data in the back of the deck, sales volumes, total market sales volumes in both Southeast Queensland and Western Australia have declined and a number of active projects have declined, and that is purely supply. That's not reflective of demand. And we're experiencing something very similar in our pipeline -- in our portfolio. And we do manage those delivery time frames, so we don't get out too far as well from sale to settlement.

The next question comes from Tom Bodor from Jarden.

I was just interested in your new Land Lease partnership. And is that effectively replacing an old capital partner that would like to be redeemed? Or is that an entirely new partnership?

Yes, Tom. So it's a new partnership into the Land Lease sector for us. As you know, we've got Invesco as our partner, and this will be a new partner joining us. They're one of our existing clients, and we'll share that there's a couple of conditions precedent to go. So we're just working through those. So it's pleasing one of our existing clients is looking at it. It's a different partnership. The one you're referring to, which is in SRRP, which is Mitsubishi, they are recycling their capital. They've had a great experience over the last 5 years. As they've said publicly, the portfolio has performed exceptionally well. But as they're doing across many of the investments here in Australia, they're looking to recycle, and we're supporting them on that. That may actually lead to some other investor interest, but that it's too early to say that process has just started. They're using an agent to run that, and we're supporting. So yes, this new partnership is discrete, another one that we're doing in the sector, which again shows the demand for our platform and the pipeline, the quality of pipeline we have going forward.

Okay. Great. And then that decision by Mitsubishi to potentially sort of exit and potential for a new buyer, are you reliant on that to generate future sell-down profits in that business? Or can you generate those with the Invesco partnership? Just I noted you didn't have any sell-down profits this period.

Yes. No, we've got this new partnership plus the Invesco one, plus the SRRP will have capacity depending on the new investor, but that portfolio is stabilized now. So it started with 6 assets, 5 have already stabilized. And the last one is in another couple of years of sales to go. So that's a much more core stabilized portfolio, and that will attract the relevant style of investor, whereas the 2 partnerships we have now with Invesco and this new investor are more developed to core style. So again, across the risk spectrum, we are populating that, but we've got enough demand coming through our partners. And also, we have our own requirement to access Land Lease earnings. As you know, we said around 10% of employed capital would be comfortable in Phase I of our strategy. We around that. So we, Stockland, also have a great need to continue to access those quality earnings. So the business is in a very strong setting going forward.

Great. And just a final one. I think in the outlook statement, you talked about an expectation for more commercial development profits going forward. Just interested if you could elaborate on sort of the timing of that uptick and how those profits might be realized? Is it developed to core? Or is it more developed to sell type?

No, as Andrew said, it's -- yes, it's developed to sell in our pipeline. So develop to sell CP pipeline, and it will be between 14th of February and 30th of June.

The next question comes from Cody Shield from UBS.

Just first question, a substantial amount of those settlements in the first half, they went through the JVs. So what will that volume look like in the second half? And how should we think about it from a revenue or development margin -- sorry, development management fee perspective?

Thanks, Cody. So for the full year, it's going to be tracking at about 25% through the JVs. Yes, when you think about -- the way to think about it would be looking at the overall revenue figure and the margin in the low 20s, that's sort of the building blocks.

Okay. Got it. And then maybe just turning to buyer type. So it looks like you didn't really see a big jump up in first home buyer activity in Q2, which is surprising with the policy change there. So what are you guys seeing from that segment of the market at the moment in terms of demand? I know you touched on the broader picture, but just on that segment would be great.

Yes. I think you're seeing that Commonwealth government scheme driving demand for first home buyers right across the market and recognizing that when people apply for that scheme, it is upon settlement. So a lot of the sales that we're making potentially aren't flowing through to that data right at the moment. But we have seen an uptick in first home buyer inquiry given the supply-constrained nature of 3 of the 4 markets where we trade, that is having an impact on the availability of land for first home buyers as well. So that is definitely supporting underlying demand of the broader market and over time, is a positive for getting first homebuyers into homeownership.

Yes. We saw -- I think we reported a 50% pickup first half to second half '25. And that recovery in demand was underway before the Commonwealth support scheme that came. As we've said, 90% of our -- over 90% of Stockland product is eligible for that scheme. And we've been pivoting as we have for the last couple of years because of affordability constraints to provide more affordably priced products. So the combination of our own lot offers plus some support is driving that demand, which is really pleasing to see because the first home buyers getting into housing is a key plank of what we try and support.

Great. That's clear. And then just the last one on cap interest. So you had a big step-up there in first half. Is that going to subside into the second half?

Yes. Thanks, Cody. I think the average development NFE for first half '26 was around $700 million higher than for '25. So that's obviously a key driver of that step-up. And that's before we take into account our share of the debt and development partnerships as well. And I think perhaps an additional point there is the increase in the activation of our projects also drives a greater proportion of development capital that is subject to interest capitalization. So I think as we look forward, you would expect as settlements come through and whatnot, those numbers will adjust. But yes, I think they're the key drivers of what's driving that capitalized interest uptick.

The next question comes from Richard Jones from JPMorgan.

Andrew, maybe a question for you. Just in terms of the MPC settlements, it looks as though it was perhaps less of a skew than you originally guiding. I think you're kind of saying it was going to be a similar skew to last year, which had less than 30% of settlements in the first half. Just wondering if you can call out why you might have had a better settlement level and perhaps lower SKU than originally expected.

Yes. Thanks, Richard. Yes, the number is slightly less than last year, which is positively. Obviously, the prior year, we had the impact of some pretty significant weather coming through in that period, which pushed settlements to the second half. Yes, the number being slightly better, both our ability to accelerate production. It is a supportive environment at the moment for getting more supply on the ground and into market. So working with all of the regulators has been positive through this half. And then completion rates, Richard, it's good to see the completion rates. And you can see that flowing through to both the cancellations and the default rate numbers over the half as well. So it's sort of a combination of those factors, which has moved us back to the more traditional 40-60 split. There always is a second half skew, but we want to get it more balanced.

Okay. And then just interested in your sort of high-level thoughts again, Andrew, just around migration demand. Obviously, we were in lockdown through late 2020 and 2021 and migration reopened in 2022, and we saw obviously a population surge. It seems to be around that 3- to 4-year lag that drives demand. So would you be expecting migration-led demand to be picking up across your estates?

Yes, Richard, your statue quote there are spot on. It is that 3- to 4-year delay that we've seen from new migrants entering the country, traditionally rent around Sydney and Melbourne, established that credit history and look to purchase real estate in that sort of time frame lag. So there is a thesis that we should see that increase that we saw post-COVID flowing through to demand over the next few years, particularly in the MPC space. And we are seeing good demand for that affordably priced product. And one of the benefits of our portfolio is we're able to remix our product in an agile manner. And we're planning over the next 12 months, how do we get more affordable product to market, how do we resequence, how do we remix to continue to lower that average price point because that's where we're seeing the greatest demand across all segments. That's first home buyers, downsizers and investors.

One more quick one. Just in terms of the data center opportunities, can you outline when you might expect the first project to kick off and how you're thinking about the funding structure?

Yes. We're now working -- obviously, firstly, very pleased we've got now 3 projects with power secured. As you know, power is the critical path on the strategy and in this sector. So that's pleasing. We're now working to get DAs, building approvals, that's sort of getting the sites ready, which will take a little while and then also executing final power purchase agreements in due course. So that's our focus. The Edge partnership is in final documentation. So we're talking to them about how we activate the near term, the short-term and medium-term opportunities. So all that work is underway. Timing-wise, we'll let you know in due course, unlikely we get anything started this financial year. But as we move into '27 and beyond, we'll provide updates once we start to get those conditions precedent on power, the planning approvals starting to come through, which the sites are zoned for. We're now applying for DAs and then clearly, customer contracts and customer interests on the critical path. So we'll share that in future periods with you. But again, as I said, pleased with securing power, which is clearly a special skill our business has given how much power activation we do right across our platform in the residential business.

The next question comes from Suraj Nebhani from Citigroup.

Just following on from Rich's last question about data centers firstly. Tarun, can you talk to the strategy there or any updated thoughts you have on that with respect to the realization of the upside?

Suraj, yes, the strategy is what we said in August. So I'll recap. We are looking to allocate over the next sort of 5 years over the plan period, about 5% to 10% of group capital into the DC opportunity. And that will come out of our Workplace and Logistics capital allocation, mainly downweighting the Workplace as we sell down our positions, which we've started to do, we'll fund majority of that 5% to 10% capital allocation. So that's the capital allocation part. In terms of our value-add strategy, it's really -- we're playing developer here. We've got very well-located land across Sydney and Melbourne. As you've seen, we've added value already to that land by securing power and the planning approvals that are coming through. And from here, we'll be working with Edge depending on their requirements for the sites to get customer contracts, et cetera, there. Funding-wise, you've got to think it's a 50-50 partnership with Edge. So our exposure is 50%, they'll be off balance sheet debt finance, say, 50% conservatively. And then our land goes in at 100% as our equity into the partnership at fair market value. So when you put the math together, you can see even with the power bank we've secured, we can quite easily fund it with that 5% to 10% capital allocation at the balance sheet level that I've called out. So we are still lining up the ducks. But in future periods, we will start to give visibility of timing of land profits and obviously, joint venture earnings as time progresses. So our first focus is get the power in place.