Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — FY2014 Earnings Presentation
40 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, May 13, 2014
Slide 1: Annual Result 2014 – Goodman Property Trust
Annual Result 2014 Goodman Property Trust building partnerships+
Slide 2: Contents
contents+ + 01 Overview + 02 Strategy and initiatives + 03 Financial overview + 04 Investment portfolio + 05 Investment activity + 06 Development portfolio + 07 Summary and outlook + Appendices The Plaza and The Light Horse Beer Table and Kitchen at The Crossing, Highbrook Business Park
Slide 3: Overview
01 overview+ + Strong financial result, a record profit and distributable earnings at the upper end of the guidance range + Operating environment is improving and the benefit of strategic land holdings increasingly important + Strategy is to grow organically with an accelerating development programm
Slide 4: Strategy and initiatives
02 strategy and initiatives+ Highbrook Business Park
Slide 5: Key strategic focus
02 key strategic focus+ + High quality investment portfolio with strategic land holdings situated in prime industrial and office park locations High quality portfolio + Accelerated development programme improving asset quality and growth profile of the Trust + Assets actively managed to maximise ear
Slide 6: New business initiatives
02 new business initiatives+ + Unitholder nomination and voting on the appointment of Independent Directors Improved + Greater alignment with NZX rules for listed companies governance + Complements existing practices with majority of Independent Directors and requirement for Annual Meeting + Fund ma
Slide 7: Financial overview
03 financial overview+ The Crossing, Highbrook Business Park
Slide 8: Financial summary
03 financial summary+ + Net property income increased by 14.3% to $133.8 million1 + $146.8 million before tax profit compared to $90.9 million in pcp2 Earnings and + $134.1 million after tax profit compared to $77.9 million in pcp2 profit + Distributable earnings3 pre tax of $101.1 million or 8.36 c
Slide 9: Financial overview
03 financial overview+ 2014 2013 Change Restated(1) % $ million $ million Net rental and related income 127.8 102.2 25.0 Net finance costs (22.5) (20.7) (8.7) Administrative expenses (9.6) (9.7) 1.0 Costs in respect of acquisition of HDL - (2.2) - Realised movement in fair value on disposal of prope
Slide 10: Revenue reconciliation
03 revenue reconciliation+ Look through net property income ($ million) FY13 to FY14 140.0 0.1 133.8 6.6 130.0 6.0 10.9 1.9 127.8 120.0 117.1 9.0 (1.2) (1.4) 110.0 5.9 100.0 102.2 90.0 80.0 FY13 Disposal of Asset Highbrook New Underlying FY14 Gateside repositioning acquisition developments portfolio
Slide 11: Financial position
03 financial position+ as at 2014 2013 Change Restated(1) $ million $ million % Total assets 2,118.3 2,019.2 4.9 Property investments 2,039.8 1,931.3 5.6 Net borrowings 734.2 672.3 (9.2) Total liabilities 852.7 833.3 (2.3) Equity 1,265.6 1,185.9 6.7 Net borrowings to property assets (%) 36.0 34.8 (3
Slide 12: Net tangible assets
03 net tangible assets+ Net tangible assets (cents per unit) FY13 to FY14 102.0 1.7 100.0 100.4 0.2 1.1 98.0 1.8 96.0 95.6 94.0 92.0 90.0 31 March 2013 Property Derivative Disposal of Retained 31 March 2014 revaluations revalutaions Gateside earnings As a result of the recognition of the value of eq
Slide 13: Capital management
03 capital management+ + Initiatives for FY14 included: - Disposal of Gateside Industry Park for $37.2 million - Post balance date sale of SMEC House for $26.2 million - $20.5 million raised through the Distribution Reinvestment Plan - $100.0 million senior secured, seven year, corporate bond - Refi
Slide 14: Capital management
03 capital management+ + Debt restructuring and refinancing at Bank facilities March 14 March 13 competitive margins $ million $ million + Weighted average cost of debt for GMT main facility 600.0 600.0 FY14 of around 6.8% Viaduct Corporate Centre (50%) 26.0 26.0 + Diversified debt book with 32% non
Slide 15: Capital management
03 capital management+ + GMT is currently 74.2% hedged with an average term of 3.5 years across its derivative book + Positioned towards the middle of the policy band + Effective interest rate in FY15 expected to be around 6.7% Hedging profile 100% 90% 80% 74.2% 70% 60% 50% 40% 30% 20% 10% 0% Y1 Y2
Slide 16: Earnings outlook
03 earnings outlook+ + Business confidence and continued economic growth will drive occupier demand + New initiatives will improve cash earnings + Distributable earnings before tax of around 9.1 cents per unit in FY151 + Expected effective tax rate of around 12% in FY15 + Distribution policy remains
Slide 17: Investment portfolio
04 investment portfolio+ The Ford Building, Bridgestone, Highbrook M20 Business Business Park Park
Slide 18: Portfolio leasing
04 portfolio leasing+ Space leased - NLA1 sqm Key leasing deals completed in FY14 170,000 Property Customer NLA1 Term sqm years 150,000 155,875 151,712 Enterprise Park PK Furniture 19,848 11 144,068 130,000 136,724 Kiwi Logistics 10,388 8 Highbrook Charta Packaging 10,047 16 110,000 114,326 Steel an
Slide 19: Portfolio occupancy
04 portfolio occupancy+ Portfolio occupancy – portfolio income (%) Vacant space 100% Property Tenancy NLA1 99% sqm 98% M20 Business Park Warehouse/office 22,523 97% Highbrook Business Park Warehouse/office/retail 3,218 97% 97% 96% Central Park Office 1,076 96% 96% 96% 95% Connect Business Park Offic
Slide 20: Portfolio expiries
04 portfolio expiries+ Lease expiry profile – portfolio income (%) Key expiries – FY15 + Weighted average lease term of 5.5 years at 31 March 2014 - WALT of 6.1 years across industrial assets - WALT of 4.3 years across office assets + 4.5% of income due to expire in FY15 20
Slide 21: Valuations
04 valuations+ + Valuation gain of $23.8m compared to a valuation gain of $4.2m in FY13 - Investment portfolio recorded an increase of $27.0m or 1.5% - Commenced developments recognised $5.2m of value uplift - $7.5m or 3.0% loss on carrying cost of development land - Portfolio capitalisation rate fi
Slide 22: Investment activity
05 investment activity+ Supply Chain Solutions, Westney Industry Park.
Slide 23: Asset rotation programme
05 asset rotation programme+ + Strong investment market with interest from local and offshore investors competing for quality assets + Over $60 million of asset recycling with sale of Gateside Industry Park & SMEC House + Further $100-$150 million of assets identified for sale in FY15 + Contracting
Slide 24: Development portfolio
06 development portfolio+ The Genesis Energy Building, Central Park Corporate Centre
Slide 25: Development strategy
06 development strategy+ + Accelerated development programme has reduced the Trust’s land weighting to around 10% of total property assets + Targeted land weighting of around 5% will enhance cash earnings + FY15 commitments expected to be around $100-$150 million + Development spend funded by recycl
Slide 26: Development programme
06 development programme+ + Strongest year for development activity since FY08 + 59,738 sqm of projects totalling $112 million in FY14 with a blended yield on cost of 8.3% + 28,430 sqm of industrial projects committed post balance date Development activity - NLA1 sqm 70,000 60,000 59,738 50,000 49,6
Slide 27: Development completions
06 development completions+ The Genesis Building The Crossing Central Park Corporate Highbrook Business Park Centre + Value $24.9m + Value $35.9m + NLA: 5,353 sqm + NLA: 8,693 sqm + Completed: + Completed: Sep 2013 Sep 2013 Bridgestone Trio M20 Business Park Highbrook Business Park + Value $5.1m + V
Slide 28: Current projects
06 current projects+ Steel and Tube DHL, MOVE, Savill Link and Highbrook Bridgestone Business Park Glassworks Industry Park + Cost: $29.6m + Cost: $30.8m + NLA: 18,280 sqm + NLA: 17,952 sqm + Completion: + Completion: Nov 2014 and Feb Jun - Jul 2014 2015 Metroglass One Central Park Highbrook Busines
Slide 29: Summary and outlook
07 summary and outlook+ Highbrook Business Park has over 40 hectares of landscaped parklands for the local businesses community and public to enjoy
Slide 30: Summary and outlook
07 summary and outlook+ + Investment in prime real estate through an accelerated development programme, $100-$150 million Active of projects anticipated in FY15 Property + Asset disposals in strong investment market to fund development and investment activity Strategy + Active management, refining t
Slide 31: Thank you
thank you+ Important Notice This presentation has been prepared by Goodman (NZ) Limited as the manager of Goodman Property Trust (“GMT”). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You s
Slide 32: Appendix – distributable earnings reconciliation
appendix The – distributable following tables are extracted fromearnings note 6 to thereconciliation+ consolidated financial statements $ million of 2014 2013 Restated (i) (i) Group comparatives have been restated to the extent required to reflect the Profit used in calculating distributable earning
Slide 33: Appendix – distributable earnings reconciliation
appendix The – distributable following tables are extracted fromearnings note 6 to thereconciliation+ consolidated financial statements of 000s 2014 2013 Weighted average number of units used in calculating basic 1,208,932 1,067,717 earnings per unit and distributable earnings per unit Weighted aver
Slide 34: Appendix – financial performance
appendix – financial performance+ 2014 2013 2012 2011 2010 Restated(1) $ million $ million $ million $ million $ million Net rental income 127.8 102.2 111.3 108.7 106.2 Administrative expenses (9.6) (11.9) (8.5) (7.6) (6.8) Distributable share of profit arising from joint ventures 4.0 10.4 Adjustmen
Slide 35: Appendix – financial performance continued
appendix – financial performance continued+ 2014 2013 2012 2011 2010 Restated(1) $ million $ million $ million $ million $ million Weighted average units on issue 1,208.9 1,067.7 961.1 887.4 851.2 Distributable earnings before tax per unit (c) 8.36 8.21 8.41 8.74 9.31 Distributable earnings after ta
Slide 36: Appendix – property investments
appendix – property investments+ Look through portfolio value ($ million) FY13 to FY14 2,200.0 2,150.0 29.8 97.9 23.8 2,117.9 2,100.0 0.9 78.1 (35.5) (7.0) 2,050.0 2,008.1 2,039.8 2,000.0 76.8 0.4 1,950.0 1,900.0 1,931.2 1,850.0 1,800.0 31 March 2013 Capital Capitalised Disposal Disposalsof GMT vent
Slide 37: Appendix – portfolio metrics
appendix – portfolio metrics+ as at March 14 March 13 March 12 March 11 March 10 1 NLA (sqm) 1,034,996 1,000,418 987,569 928,420 896,440 Weighted average capitalisation rate (%) 7.9 8.1 8.5 8.6 8.6 Portfolio occupancy (%) 97 96 96 97 96 2 WALT (years) 5.5 5.3 5.4 5.6 5.8 Customers 254 256 246 225 21
Slide 38: Appendix – investment portfolio
appendix – investment portfolio+ GMT NLA1 Valuation2 Market cap Occupancy WALT3 Property Key Customers ownership % sqm $M rate % % years PaperLinX, Datamail, Panasonic, DHL, Big Highbrook Business Park, East Tamaki 100 263,384 538.9 7.00-7.75 99 6.3 Chill, BMW, NZ Post M20 Business Park, Manukau 100
Slide 39: Appendix – development activity
appendix – development activity+ NLA1 Lease term Total Cost Customer/Development Status sqm years $m Trio, Highbrook Business Park 3,500 8 6.0 Complete Big Chill Expansion, Highbrook Business Park 840 13 2.2 Complete Warehouse 28, Highbrook Business Park 6,700 - 8.9 Commenced Contract Logistics Expa
Slide 40: Appendix – new fund fee structure
appendix - new fund fee structure+ + The new fund fee structure will result in an adjustment to distributable earnings to reflect the fee is now being paid in units + The example below shows the effect on FY14 had that year’s fund fee been paid in units FY14 FY14 adjusted $million $million FY14 Dist
Goodman Property Trust — FY2014 Earnings Presentation on 6ix