Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — FY2021 Earnings Presentation
50 slides from Growthpoint Properties Australia's earnings presentation, Aug 25, 2021
Slide 1: Growthpoint Properties Australia FY21 results
Growthpoint Properties Australia FY21 results 25 August 2021 Space to thrive.
Slide 2: Agenda
Agenda. Overview | 3 Portfolio update | 7 Timothy Collyer Michael Green Managing Director Chief Investment Officer Financial Outlook and results | 15 summary | 19 Dion Andrews Timothy Collyer Chief Financial Officer Managing Director Supplementary information | 24 2 Growthpoint Properties Australia
Slide 3: Overview
Overview. Timothy Collyer Managing Director
Slide 4: FY21 highlights
FY21 highlights. ‒ Delivered FFO per security at upper Profit after tax WALE end of upgraded guidance ‒ Increased occupancy to 97% from $553.2m 6.2yrs FY20: $272.1m, +103.3% 30 June 2020: 6.2yrs 93% and maintained long WALE of 6.2 years due to substantial leasing FFO Property portfolio value success
Slide 5: Accelerating our sustainability initiatives
Growthpoint targets Published inaugural ESG net zero TCFD Statement Accelerating our 2025 Our net zero sustainability initiatives. pathway includes: Reduction in Meeting our High-quality our total energy needs carbon offsets Published inaugural Modern NABERS Employee engagement energy use with carbo
Slide 6: Long-term track record of delivering superior returns
Historic performance Long-term track record of delivering superior returns. Total securityholder return1 Return on equity to 30 June 2021 Growthpoint to 30 June 2021 (per annum) S&P/ASX 200 A-REIT 34.0% 33.2% Accumulation Index 19.7% 16.9% 15.6% 15.1% 15.5% 11.6% 11.8% 10.1% 7.7% 5.8% 1 year 3 years
Slide 7: Portfolio update
Portfolio update. Michael Green Chief Investment Officer
Slide 8: Portfolio snapshot
Portfolio snapshot Record valuation uplift reflects strength and quality of portfolio. Top tenants Total Portfolio assets occupancy Property portfolio value 55 97% 30 June 2020: 58 30 June 2020: 93% $4.5b 30 June 2020: Number of Weighted average $4.2b, +7.1% tenants lease expiry 145 6.2yrs Industria
Slide 9: Office market update
Office market update Healthy tenant demand sustained for high-quality metropolitan offices. Decline in key Sydney markets’ net High-profile tenants committing to metro locations during COVID-19 effective rents, 2Q21 vs 2Q20 Sydney Macquarie Sydney CBD Parramatta Olympic Park Park Sydney fringe 0% 1
Slide 10: Top valuations movements: office
Top valuations movements +19% 23.5 yr Office portfolio overview WALE Occupancy significantly increased 1 Charles Street, Parramatta, NSW due to substantial leasing success. $85m value increase as investor demand strengthened and return expectations lowered for long-WALE assets Portfolio Office Weigh
Slide 11: Industrial market update
Industrial market update Demand for well-located industrial ~$45 billion of capital chasing Australian space expected to stay elevated. industrial assets2 Online retail turnover as a % of total Industrial floorspace gross take-up across Australia2 In first half of Australian retail turnover1 (sqm) 2
Slide 12: Top valuations movements: industrial
Top valuations movements +21% 13.9 yr Industrial portfolio overview WALE Substantial rerating in industrial 599 Main North Road, Gepps Cross, SA sector drove strong valuation uplift. $39m increase due to further strengthening of investor demand for long-WALE institutional grade industrial assets Por
Slide 13: Leasing update
Leasing update FY21 leases Ave. Significant leasing activity in FY21 and completed - % lease term portfolio income 8.2yrs 12% negotiations for key FY22 expiries well advanced. FY20: 13.3yrs FY20: 19% Key FY22 expiries Portfolio lease expiry per financial year, by income, Woolworths 4.1% 29% 1 ANZ 2.
Slide 14: Portfolio rationalisation
Portfolio rationalisation Strategic divestments and acquisitions executed to maximise income and improve quality of portfolio. Olympic Park train station $50.2m 120 Northcorp Boulevard, Broadmeadows, VIC Non-income producing vacant asset $52.0m $66.1m 11 Murray Rose Avenue, Quad 2 & Quad 3, Sydney O
Slide 15: Financial results
Financial results. Dion Andrews Chief Financial Officer
Slide 16: FY21 financial results
Financial summary FY21 financial results. % Components of FFO FY21 FY20 change Decrease primarily due to no contribution from Broadmeadows asset in FY21 (FY20: $10.4 million), partially offset by increased NPI $m 235.6 242.1 (2.7) income from recently-expanded Woolworths’ distribution centre in Gepp
Slide 17: Financial performance exceeded expectations
Financial summary Financial performance exceeded expectations. FFO per security movement NTA per security movement (cents per security ) (cents per security) +0.4% since 30 June 2020 +14.2% since 30 June 2020 FY20 NPI1 Net Tax FY21 Capitalised Other FY21 NTA Office Industrial ADI Retained Other NTA
Slide 18: Group's gearing and payout ratio at record lows
Capital management Group’s gearing and payout Able to deploy ~$387m of undrawn debt at a rate of ~1.0% and remain below ratio at record lows. target gearing range Gearing1 as at 30 June Distribution payout ratio % of FFO Target 94.0% 65% 95% gearing range 94.0% 93.1% 35-45% 89.4% 88.8% 85.3% 55% 85%
Slide 19: Strategy and outlook
Strategy and outlook. Timothy Collyer Managing Director
Slide 20: Our strategy
Our strategy Our goal is to provide Securityholders with sustainably growing income returns and long-term capital appreciation. We are focused on four strategic pillars. Invest in high-quality Maximise Maintain high- Enter into funds 1 assets 2 value 3 occupancy 4 management We seek to invest in hig
Slide 21: Growthpoint well positioned to deliver growth, despite near-term uncertainty
Outlook Growthpoint well positioned to deliver growth, despite near-term uncertainty. Challenges in near-term Growthpoint's business model has operating environment demonstrated resilience throughout pandemic COVID-19 lockdowns likely to continue to occur until vaccine rate significantly higher in A
Slide 22: FY22 guidance
Outlook FY22 guidance. Forecast FY22 distribution yield1 distribution guidance 5.0% FY22 FFO guidance at least 20.6cps 26.3cps +3.0% on FY21 +2.3% on FY21 1. Distribution yield is the FY22 DPS guidance of $0.206 per security divided by the closing ASX price as at 23 August 2021 of $4.09. 22 Growthpo
Slide 23: Questions
Thank you for joining us. Questions.
Slide 24: Supplementary information
Supplementary information. Financial Property Key market Additional information portfolio metrics information – 25 – 36 – 44 – 47
Slide 25: Financial information
Financial information.
Slide 26: Summary financials
Financial information Summary financials. FY21 FY20 Change % Change NPI1 $m 235.6 242.1 (6.5) (2.7) Like-for-like NPI $m 228.1 228.0 0.1 0.0 Statutory accounting profit $m 553.2 272.1 281.1 103.3 Statutory accounting profit per security ¢ 71.7 35.3 36.4 103.1 FFO $m 198.3 197.2 1.1 0.6 Distributions
Slide 27: Reconciliation from statutory profit to FFO
Financial information Reconciliation from statutory profit to FFO. FY21 FY20 Change Change $m $m $m % Profit after tax 553.2 272.1 281.0 103.3 Less FFO items: - Straight line adjustment to property revenue (8.5) 1.0 (9.5) - Net loss in fair value on sale of investment properties 1.5 0.0 1.5 - Net (g
Slide 28: Financial position
Financial information Financial position. 30 Jun 2021 30 June 2020 $m $m Assets Cash and cash equivalents 33.5 42.7 Investment properties 4,619.6 4,325.7 Investment in securities 104.8 69.9 Other assets 19.9 62.4 Total assets 4,777.8 4,500.7 Liabilities Borrowings 1,327.1 1,446.0 Distributions payab
Slide 29: Additional financial information
Financial information Additional financial information. Reconciliation of operating cashflow to FFO Proportion of total billings collected1 FY21 FY21 $m Office 99% Operating cashflow 151.7 Industrial 100% Lease incentives and leasing costs 50.8 Total portfolio 99% Net (prepaid)/accrued operating act
Slide 30: Lease incentives
Financial information Lease incentives. Consolidated Statement of Profit and Loss FY21 $m FY20 $m Property revenue (excluding incentives) 315.6 308.1 Lease incentives includes fit out, rent free, rental Amortisation of tenant incentives (26.9) (20.8) abatement and cash payments. The tables on this p
Slide 31: Operating and capital expenses
Financial information Operating and capital expenses. Operating expenses FY21 FY20 Average Total operating expenses $m 15.7 14.4 0.38% Average gross assets value $m 4,425.3 4,170.8 FY16 – FY21 Operating expenses to average gross assets % 0.35 0.35 Capital expenditure Expected to average FY21 FY20 0.
Slide 32: Capital management
Financial information Capital management. Maturity date Time to maturity Fixed rate Principal Amount Interest rate swaps Jun-2023 2.0 years 1.15% $25m 3.17% Jun-2023 2.0 years 1.15% $75m Weighted average Dec-2023 2.5 years 0.22% $20m fixed debt rate Dec-2023 2.5 years 0.21% $15m 4.3 yrs Feb-2024 2.6
Slide 33: Key debt metrics and changes during FY21
Financial information Key debt metrics and changes during FY21. 30 Jun 2021 30 Jun 2020 Change Gross assets $m 4,777.8 4,500.7 277.1 Interest bearing liabilities $m 1,327.1 1,446.0 (118.9) Total debt facilities $m 1,720.0 1,813.0 (93.0) Undrawn debt $m 387.5 360.0 27.5 Gearing % 27.9 32.2 (4.3) Weig
Slide 34: Stress testing
Financial information Stress testing Capital management. covenants ICR >1.6x GOZ: 4.8x To breach this covenant, NPI Gearing movement LVR <60% would need to fall for the twelve months ended 30 June 2021 GOZ: 29.6% by 67%1 To breach this covenant, GOZ cap rate would need to Secured rise by 535 bps 1 p
Slide 35: Group debt maturity profile
Financial information Group debt maturity profile. As at 30 June 2021 ($ million) Bank debt Institutional term loan Undrawn bank debt USPP 450 400 138 350 300 50 315 40 50 250 200 200 133 232 150 250 100 150 100 50 62 0 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 35 Growthpoint Properties Australia
Slide 36: Property portfolio
Property portfolio. | =
Slide 37: Geographic diversity – by property value
84% of properties Property portfolio located on Eastern seaboard Geographic diversity 26% – by property value. Queensland $1,173.8 million Office metropolitan properties (21 assets) $4.5b Office Industrial $910.9m $262.9m Office CBD properties (3 assets) Property Industrial properties (31 assets) po
Slide 38: Portfolio summary
Property portfolio Sector diversity Geographic diversity Occupancy by value by value by income Portfolio Vacant 3% WA 8% summary. Industrial 33% NSW 25% SA 8% ACT 4% As at 30 June 2021 Office 67% VIC 29% QLD 26% Occupied 97% Tenant type Tenant use Annual rent review type by income by income by incom
Slide 39: Portfolio metrics
Property portfolio Portfolio metrics. Key metrics Like-for-like NPI growth (FY20 to FY21) Distributions 30 June 2021 30 June 2020 from equity Number of assets 55 58 Office Industrial investments Total Property portfolio value $4.5 billion $4.2 billion NPI growth -1.6% 3.3% 0.1% 0.0% Number of tenant
Slide 40: Top ten tenants – by income
Property portfolio Top ten tenants – by income. Total portfolio Office tenants Industrial tenants as at 30 June 2021 as at 30 June 2021 as at 30 June 2021 % portfolio WALE % portfolio WALE % portfolio WALE income (yrs) income (yrs) income (yrs) Woolworths 13 5.4 NSW Police Force 12 23.5 Woolworths 4
Slide 41: Leasing – office leases executed in FY21
Property portfolio Leasing – office leases executed in FY21. Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 333 Ann Street Brisbane QLD Brisbane Housing Corporation Q1, FY21 8.0 867 9 333 Ann Street Brisbane QLD Condor Energy Services Q1, FY21 5.7 295 - Building 3, 570 Swan Street R
Slide 42: Leasing – office leases executed in FY21 (cont.)
Property portfolio Leasing – office leases executed in FY21(cont.) Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) Building 3, 570 Swan Street Richmond VIC Mitsubishi Motors Australia Q1, FY22 5.0 332 6 Building 3, 570 Swan Street Richmond VIC Recruitment firm Q1, FY22 10.0 856 15 A4
Slide 43: Leasing – industrial leases executed in FY21
Property portfolio Leasing – industrial leases executed in FY21. Location Tenant Start date Term (yrs) NLA (sqm) 58 Tarlton Crescent Perth Airport WA Couriers Please Q1, FY21 3.0 3,638 13 Business Street Yatala QLD Volo Modular Q1, FY21 5.0 8,951 3 Millennium Court Knoxfield VIC Opal Packaging Austr
Slide 44: Key market metrics
Key marten metrics. 7
Slide 45: Office markets
Key market metrics 3% of Growthpoint Brisbane - CBD 17% of Growthpoint Brisbane - Fringe Portfolio Portfolio Office markets. Vacancy 15.9% Vacancy 17.2% Prime Secondary Prime Secondary R $764 gross $595 gross R $596 gross $476 gross I 41% 43% I 43% 43% Y 5.00-6.25% 5.75-7.00% Y 5.75-7.25% 6.00-7.75%
Slide 46: Industrial markets
Key market metrics Industrial markets. Brisbane 6% of Growthpoint Portfolio V: 612,732 sqm1 Prime Secondary R $116 net $89 net R – Average face rent per sqm per annum I 10-25% 10-20% I – Average incentives Y 4.50-5.50% 5.75-7.75% Y – Average core market yield V – Vacancy 6% of Sydney Growthpoint Bri
Slide 47: Additional information
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Slide 48: Glossary
Additional information Glossary. Term ABS Definition Australian Bureau of Statistics Term MER Definition Management expense ratio A-REIT Australian Real Estate Investment Trust NABERS National Australian Built Environment Rating System ASX Australian Securities Exchange NLA Net lettable area b Billi
Slide 49: Important information
Additional information Important information. This presentation has been prepared by Growthpoint Properties Australia Limited (ACN 124 093 901) in its personal capacity and as responsible entity of Growthpoint Properties Australia Trust (ARSN 120 121 002) about the activities of Growthpoint Properti
Slide 50: Contact us. 2021 calendar.
Contact us. Retail investors Computershare 1300 665 792 (within Australia) +61 (3) 9415 4366 (outside Australia) webqueries@computershare.com.au Institutional investors Virginia Spring Investor Relations and Communications Manager +61 (3) 8681 2933 investor.relations@growthpoint.com.au 2021 calendar
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