Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — H1 FY2017 Earnings Presentation
38 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, Nov 10, 2016
Slide 1: The Properties of Quality - Interim Result 2017
THE PROPERTIES OF QUALITY G O ODMAN P R O PERTY T R UST INTERIM RESULT 2017
Slide 2: Contents
CONTENTS 01 OVERVIEW 02 04 FINANCIAL DEVELOPMENT RESULT PORTFOLIO 03 05 INVESTMENT OUTLOOK PORTFOLIO Appendices
Slide 3: Overview
01 OVERVIEW Highbrook Business Park 03
Slide 4: Focus on Quality
01 FOCUS ON QUALITY 1. asset sales have strengthened balance sheet 2. portfolio focused on Auckland industrial sector 3. development programme is improving portfolio quality 4. closer alignment between cash earnings and distributions 5. greater resilience across the business 04
Slide 5: Financial Result
02 FINANCIAL RESULT Highbrook Business Park 05
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS $73.1m profit before tax $19.8m movement in fair value of investment property $59.9m 28.8% operating earnings look through loan before tax to value ratio % 1 122.4cpu 4.70cpu 3.325cpu net tangible operating earnings cash distribution asset backing before tax Highbrook Business P
Slide 7: Investment Income
02 INVESTMENT INCOME + income from new acquisitions and developments has more than offset the impact of asset disposals + modest rental growth in the underlying portfolio PROPERTY INCOME BRIDGE1 $ million GMT GMT share of JV 78.0 76.0 (0.0) +1.6 +0.5 (2.5) (0.0) 74.0 +2.0 6.5 72.0 +0.8 70.0 4.4 68.0
Slide 8: Cash Earnings
02 CASH EARNINGS + an internal measure of free cash flow that adjusts operating earnings after tax for interest costs capitalised to development land and maintenance related capital expenditure + GMT’s cash earnings are aligning with distributions, 3.36 cpu vs 3.325 cpu in first half equates to a pa
Slide 9: Movement in Fair Value
03 MOVEMENT IN FAIR VALUE + desktop review of the portfolio undertaken at 30 September, certain development projects and Christchurch office assets were independently valued + fair value gains of 10% recognised on developments, values declined on Show Place office and land assets + net gains on cont
Slide 10: Balance Sheet Strength
02 BALANCE SHEET STRENGTH ROBUST BALANCE SHEET at 30 September 2016 GMT had: + an interest cover ratio of 2.9 times + around $150 million of undrawn bank facilities + look through loan to value ratio of 28.8%1 + fully committed gearing of around 32% + Standard & Poor’s credit rating of BBB for GMT a
Slide 11: Balance Sheet Strength
02 BALANCE SHEET STRENGTH + 47% of drawn debt from non-bank sources + no unfunded expiries before FY201 + a WATE2 of 4.9 years + WACD of 5.3% 1 after accounting for contracted, but not yet settled sales 2 excludes GMT’s 51% share of WPH JV debt facility. As at 30 September 2016 WPH has a $112 millio
Slide 12: Investment Portfolio
02 INVESTMENT PORTFOLIO
Slide 13: 1 Including sales that are contracted but not yet settled.
1Including sales that are contracted but not yet settled.
Slide 14: Asset Recycling
ASSET RECYCLING I N T H E PA S T 4 . 5 Y E A R S GMT HAS INVESTED $482.5m $148.6m in new in acquisitions developments FUNDED BY $612.8m of asset sales Note: includes current developments and contracted sales and acquisitions.
Slide 15: Asset Sales Programme
03 ASSET SALES PROGRAMME DISPOSALS ANNOUNCED SINCE 31 MARCH 2016 Property Location Sale price ($m) Passing yield % Settlement date Millennium Office Estate, 600-604 Great South Rd Greenlane, Auckland 210.0 7.25 Feb 2017 15-23 Show Place & Southpark Industrial Estate Christchurch 47.1 7.70 Sep 2016 P
Slide 16: Rebalancing the Portfolio - Great South Road
03 REBALANCING THE PORTFOLIO 6 0 0 - 6 0 4 G R E AT S O U T H R O A D + sale price of $210 million, represents a passing yield of 7.25% + equity underwrite to Oyster Management Limited of up to $12 million + maximum period 2 years, expected 8% cash return 16
Slide 17: Reweighting the Portfolio
03 REWEIGHTING THE PORTFOLIO ASSET DIVERSITY1 Greenlane Office 8% Development Land Viaduct Office 9% 7% Christchurch 3% + increased investment in Auckland industrial real estate + GMT is a net seller in Christchurch Auckland Industrial & Business Park + increase in land weighting as a result 73% of
Slide 18: Portfolio Leasing
03 PORTFOLIO LEASING PORTFOLIO LEASING FY16 PORTFOLIO LEASING FY16 Estate Customer NLA1 sqm Term years 180,000 Westney Industry Park Fliway 16,883 9.7 160,000 140,000 159,003 VXV Precinct Auckland Transport 13,744 9.0 151,712 144,068 120,000 The Gate Industry Park Coda (Tappers) 5,272 7.0 100,000 We
Slide 19: Portfolio Occupancy
03 PORTFOLIO OCCUPANCY P O RTF O L I O O C C U PA NC Y Portfolio Income (%) LEASING PRIORITY 100% Estate NLA1 sqm 99% 98% Central Park Corporate Centre 6,122 97% 5,783 The Gate Industry Park 96% 97% 97% 96% 96% 96% 95% Highbrook Business Park 3,660 94% 3,300 M20 Business Park 93% 92% Show Place Offi
Slide 20: Portfolio Expiries
03 PORTFOLIO EXPIRIES LEASE EXPIRY PROFILE KEY EXPIRIES Portfolio Income (%) Estate NLA1 sqm Expiry Status 24% M20 Business Park 4,000 Oct-16 terms agreed 20% 23% M20 Business Park 5,800 Nov-16 negotiating terms 16% Westney Industry Park 7,800 Mar-17 terms agreed VXV Precinct 13,900 Apr-17 leased 12
Slide 21: The Concourse Recent Acquisition
03 04 THE CONCOURSE RECENT ACQUISITION ATHE C Q U I S ICONCOURSE TION + strategic acquisition in west Auckland for $18.9 million, subject to OIO + 16,120sqm of warehouse, 1,250sqm of office and 6,000sqm yard + 7% passing yield once fully leased + future redevelopment opportunity 21
Slide 22: Westgate
Westgate Shopping Centre Lincoln Rd to Westgate Lincoln Rd Interchange Waterview Connection (SH16) Waterview Connection (SH20) New Motorway Te Atatu Penisula Concourse Industry Park Ponsonby LINCOLNRD INTERCHANGE | Te Atatd Sout ONSon ; GT NORTHRD Henderson & > we i" Sree SH20 to Airport “a Kelston
Slide 23: Development
05 DEVELOPMENT 23
Slide 24: Development Programme
04 DEVELOPMENT PROGRAMME DEVELOPMENT PROJECTS $ million 160 140 148.7 120 100 108.8 98.2 80 82.6 60 40 20 44.2 0 FY13 FY14 FY15 FY16 FY17 + around $100 million of projects expected to commence this financial year + three new design build projects already announced, yielding 6.8% + includes subsequen
Slide 25: Coda Expansion
04 CODA EXPANSION Total project Completion Savill Link facility NLA1 sqm cost ($m) date Existing premises 8,051 Stage 1 – warehouse expansion, rail siding & canopy 11,450 19.30 Dec 2016 Stage 2 – new warehouse 7,410 13.95 Nov 2017 Total 26,911 33.25 1 net lettable area (net of canopies and yard) 25
Slide 26: Work in Progress
WORK IN PROGRESS 7,458 Big Chill ACCO Highbrook Highbrook sqm 6,400sqm Coda Stage 1&2 Building 5, The Point, The Hill, Savill Link Highbrook Highbrook Higbrook 18,860sqm 3,482sqm 2,820sqm 7,500sqm The Gate Warehouse, Steel & Tube EDL Fasteners, Scalzo Expansion, The Gate Glassworks Highbrook Highbro
Slide 27: Projects Completed
04 COMPLETED PROJECTS B U I LT T O L E A S E F A C I L I T Y M A I NS TR E A M E X PA NS I O N M20 Business Park Savill Link $7.7m 3,530 sqm $4.5m 2,940 sqm value NLA value NLA 27
Slide 28: Outlook
04 OUTLOOK Central Park Corporate Centre 28
Slide 29: Strategic Objectives
05 S T R AT E G I C OBJECTIVES + focus remains on improving the quality of the business + asset sales creating balance sheet capacity and greater resilience + active development programme is growing cash earnings and reducing land holdings + increased weighting toward the Auckland industrial market
Slide 30: Questions
QUESTIONS
Slide 31: www.goodman.com/nz
a WWW.GOODMAN.COM/NZ O@®@
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Slide 33: Profit or Loss
APPENDIX PROFIT OR LOSS 6 months 6 months $ million Note 30 Sep 16 30 Sep 15 Property income 11 82.8 83.2 Property expenses (15.3) (16.1) Net property income 67.5 67.1 Share of operating earnings before tax from joint venture 2.1 4.0 2.6 Interest Interest income 3.1 2.4 0.4 Interest cost 3.4 (12.3)
Slide 34: Balance Sheet
APPENDIX BALANCE SHEET $ million Note __30Sep16__31 Mar 16 Non-current assets Stabilised properties 1.4 1,804.4 1,998.2 Developments 1.4 97.0 63.8 Land 1.4 208.3 213.3 Construction loan receivable 17 - 21.5 Investment in joint venture 2.2 64.7 63.2 Derivative financial instruments 5.2 31.2 33.8 Defe
Slide 35: Loan to Value Ratio
APPENDIX L O A N T O V A L U E R AT I O 35
Slide 36: GMT Hedging Profile
APPENDIX GMT HEDGING PROFILE GMT: Swaps + Interest Rate Caps % hedged 100% 90% 80% 70% 61% 60% 50% 40% 30% 20% 10% 0% Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Period 36
Slide 37: Acquisitions Since March 2012
APPENDIX ACQUISITIONS SINCE MARCH 2012 Interest Contract Purchase Settlement Property Location Type acquired date price ($m) date conditional The Concourse Henderson, Auckland Industrial 100% Sep-16 $ 18.90 on OIO Tamaki Estate Glenn Innes, Auckland Industrial 100% Feb-16 $ 30.30 Mar-16 Datacom Buil
Slide 38: Disposals Since March 2012
APPENDIX DISPOSALS SINCE MARCH 2012 Interest Contract Sale price Settlement Property Location Type sold date ($m) date Palmerston Transport Hornby, Christchurch Industrial 100% Nov-16 7.72 May-17 Millennium Centre & Yellow HQ Greenlane, Auckland Suburban Office 100% Oct-16 210.00 Feb-17 Southpark &
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