Gdi Property Group · ASX:GDI
Gdi Property — FY2023 Earnings Presentation
37 slides from Gdi Property's earnings presentation, Aug 21, 2023
Slide 1: Annual results
Annual results 21 August 2023
Slide 2: Table of contents
Table of contents Acknowledgement of Country 01 02 03 04 GDI acknowledges and pays respect to the past, present and future Traditional Custodians and Elders of this nation and the continuation of cultural, Strategic Financial Debt and The Perth spiritual and educational practices of turning point sn
Slide 3: Introduction
Introduction ˃ Strategic turning point underway ˃ Results for FY23 are underpinned by an improving Perth market and this trend is continuing ˃ GDI is positioned to capture improved property income through additional leasing ˃ Whilst some cap rate weakening is expected, increased rents and values per
Slide 4: Operational highlights
Operational highlights WS2 LEASING CO-LIVING JOINT VENTURE ˃ Leased, renewed or signed Heads of Agreement for nearly 30,000 sqm of office space in Perth representing approximately 30% of our Perth office portfolio1 ˃ Majority of this occurred in the last eight months of the financial year ˃ High lev
Slide 5: Financial snapshot
Financial snapshot NTA $1.25 ˃ No change from 31 December 2022, but down $0.02 from 30 June 2022 ˃ All wholly owned assets revalued during FY23 ˃ Devaluation of 197 St Georges Terrace and Westralia Square (from December valuation) partly offset by profit on WS2 ˃ Weighted average capitalisation rate
Slide 6: Contributors to FFO
Contributors to FFO PROPERTY DIVISION FFO HIGHER THAN PREVIOUS CORRESPONDING PERIOD: Corporate and administration expenses decreased due to some one-off ˃ FFO from Westralia Square of $18.1 million, up from $12.7 million items from the prior year ˃ Significant increases in incentives and leasing fee
Slide 7: Debt and interest rates
Debt and interest rates Principal Facility drawn to $305.1 million with undrawn debt Interest rate caps protect from rising rates of $40.8 million 31 December 2023 31 December 2024 30 June 2025 Gearing of 31%, LVR on the Principal Facility of 35% $100.0m at BBSY $50.0m at BBSY at $100.0m at BBSY (co
Slide 8: Perth market overview
Perth market overview WA Mineral Exploration Spend v New Capital Expenditure $20b $700m $18b $600m $16b $14b $500m $12b $400m $10b $8b $300m $6b $200m Economy is projected to be 25% Total population to increase by larger by 2031 13.0% to 3.1 million people $4b $100m through 2031 $2b $b $m Capital Ex
Slide 9: Perth market key trends
Perth market key trends ˃ Seven quarters of positive absorption ˃ Leasing levels higher than seen for many years ˃ Positive macro dynamics ˃ Strong lead indicators such as job ads ˃ High c.80% levels of back to work office usage ˃ Minimal supply ˃ Resources and government are the large drivers of de
Slide 10: Perth market overview
Perth market overview Gross State Product Growth Capital City Net Absorption Q3 2022 - Q2 2023 7% 40000 6% 5% 30000 4% 20000 3% 10000 2% 1% 0 0% Adelaide Brisbane Melbourne Perth Sydney -10000 -1% -20000 -2% NSW VIC QLD WA NSW VIC QLD WA -30000 During Shock 5-years Post Shock -40000 90s Recession Do
Slide 11: Focus on agility
Focus on agility Lease Under-writing Market Perth ˃ Tenants taking expansion space ˃ Resources and Government are the big space takers ˃ Very limited 10,000m2 NLA + opportunities (even fewer 20,000m2) ˃ GDI can spec small developments like WS2 but prefers specific tenant pre-commitments that allow f
Slide 12: ESG trends
ESG trends Primary ESG Themes – Perth ˃ Resources industry overtly focussing (offset dirty industry perception) ˃ Majors leading change through supply chain (a “must demonstrate” criteria) ˃ Carbon conservation is priority metric (embodied and operational) ˃ Offsetting/greenwashing disingenuity ˃ Gr
Slide 13: Property portfolio
Property portfolio Independent valuation Cap rate 30/6/23 30/6/22 Fair value % $m $m Date Details $m 141 St Georges Terrace, Perth (WS1) 30/6/23 371.0 6.25 371.0 376.9 143 St Georges Terrace, Perth (WS2) 30/6/23 90.0 6.50 90.01 41.6 197 St Georges Terrace, Perth 31/12/22 207.5 7.00 212.8 218.0 5 Mil
Slide 14: The portfolio
The portfolio WEIGHTED AVERAGE LEASE EXPIRY1 100% KEY STATISTICS Occupancy1 82.5% 80% WALE1 5.2 years Weighted average 60% capitalisation rate2 6.6% Average value psm3 $8,031 40% Total NLA (sqm)2 125,650 Near term opportunity 20% Low medium term risk 0% Vacant FY24 FY25 FY26 FY27 FY28+ 1. Excludes 1
Slide 15: The portfolio
The portfolio WESTRALIA SQUARE, WS2, 197 ST GEORGES TERRACE, 5 MILL STREET, PERTH PERTH PERTH PERTH Valuation date 30 June 2023 30 June 2023 31 December 2022 31 December 2022 Valuation $371.0 million $90.0 million $207.5 million $58.0 million Carrying value $371.0 million $90.0 million $212.8 millio
Slide 16: The portfolio
The portfolio Architectural drawings Architectural drawings 1 MILL STREET, 180 HAY STREET, MURRAY STREET, WELLINGTON STREET, PERTH PERTH PERTH PERTH Valuation date 31 December 2022 31 December 2022 31 December 2022 31 December 2022 Valuation $36.0 million $20.5 million $42.5 million $32.0 million Ca
Slide 17: The portfolio
The portfolio AUTOLEAGUE, STANLEY PLACE, WA TOWNSVILLE Valuation date 30 June 2022 31 December 2022 Valuation $136.5 million $51.0 million Carrying value $136.6 million $51.4 million NLA (sqm) n/a 12,820 Value/sqm - $3,978 Discount rate 7.00%3 8.00% Capitalisation rate 6.01%3 7.75% Occupancy1 (of NL
Slide 18: Funds business highlights
Funds business highlights IKEA GDI No. 43 Property Trust ˃ Ikea exercised the first of its three 5- year options. Renewing its lease to February 2028 Stanley Place, Townsville GDI No. 42 Office Trust ˃ Commonwealth Government (GBRMPA) leased 3,021 sqm at Stanley Place, Townsville taking occupancy to
Slide 19: Strategy
07 Strategy
Slide 20: GDI – What we looked like
GDI – What we looked like FROM A CRITICAL PERSPECTIVE ˃ Overweight Perth (basically two large assets in Perth) ˃ Holding properties for multiple capex cycles ˃ Too much vacancy ˃ Narrow funding source ˃ Culturally tired and needed a clear and executable strategy to embrace ˃ Slow moving syndicates ˃
Slide 21: Evidence that we are executing on strategy
Evidence that we are executing on strategy ˃ We were able to lease c. 30% of the Perth portfolio WS1 and WS2 are on track to be fully let (in 2024) 5 Mill Street is full bar movement on a few suites Targeted leasing plan on 197 St Georges Terrace is a key goal for 2024 ˃ Implementing managemen
Slide 22: Business model
Business model THE GDI VALUE PROPOSITION Core business Our objectives Result STRATEGY TO CREATE VALUE Ensure the GDI skills and capability DRIVEN BY INVESTMENT matches our ability to execute on our • Entering and exiting markets and ACHIEVE OPTIMAL SHORT TERM AND strategy. GDI must have an elite tea
Slide 23: The GDI difference
The GDI difference “Understanding the brown to green dynamics WESTRALIA SQUARE will lead to a competitive advantage” Learnings from WS2 ˃ Defining the real ESG/Carbon benefits (including embodied) ˃ Proving of timber technology (delivery/cost/design/risk/product) ˃ Recognising timber only works in a
Slide 24: GDI opportunities
GDI opportunities CONSTRUCTION READY PROJECTS Wellington Street ˃ DA submitted for 28,000m2 NLA commercial and 51 residential unit development ˃ Setup for government tenant (whole of building) ˃ Multiple government tenant EOI’s expected in 2023 07 Strategy GDI OPPORTUNITIES
Slide 25: GDI opportunities
GDI opportunities CONSTRUCTION READY PROJECTS 1 Mill Street ˃ Existing Building 6,000m2 ˃ Approved DA 35,000m2 NLA (circa 1,800m2 NLA floor plates) ˃ Opportunity to stage in smaller sub-buildings (and speculate) ˃ Whole of building tenant opportunity for sub-buildings (circa 10,000m2 NLA stages) 07
Slide 26: Opportunity to increase FFO
Opportunity to increase FFO Existing Portfolio levers for Fully let "As is" Historical Capex FFO growth net income net income FFO 2023 FFO 2022 FY2023 FY2024 Comments (FFO)1 (FFO 2024) Properties $m $m $m $m $m $m 1 Mill St, Perth 4.5 -0.6 Vacant with potential short-term letting / development 5 Mil
Slide 27: Appendix
SOON A 08 Appendix \\cp1
Slide 28: The portfolio – Weighted average lease expiry
The portfolio – Weighted average lease expiry WESTRALIA SQUARE WESTRALIA SQUARE 2 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Vacant FY24 FY25 FY26 FY27 FY28+ Vacant FY24 FY25 FY26 FY27 FY28+ 08 Appendix
Slide 29: The portfolio – Weighted average lease expiry
The portfolio – Weighted average lease expiry 197 ST GEORGES TERRACE 5 MILL STREET 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Vacant FY24 FY25 FY26 FY27 FY28+ Vacant FY24 FY25 FY26 FY27 FY28+ 08 Appendix
Slide 30: The portfolio – Weighted average lease expiry
The portfolio – Weighted average lease expiry 1 MILL STREET 180 HAY STREET 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Vacant FY24 FY25 FY26 FY27 FY28+ Vacant FY24 FY25 FY26 FY27 FY28+ 08 Appendix
Slide 31: The portfolio – Weighted average lease expiry
The portfolio – Weighted average lease expiry 235 STANLEY STREET AUTOLEAGUE 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Vacant FY24 FY25 FY26 FY27 FY28+ Vacant FY24 FY25 FY26 FY27 FY28+ 08 Appendix
Slide 32: Balance sheet
Balance sheet Jun-23 Jun-22 Pro forma for post balance sheet events $’000 $’000 Current assets Cash and cash equivalents 8,228 12,570 Non-current assets held for sale 30 1,240 Derivative financial instruments 730 528 ˃ GDI No. 42 Office Trust (Stanley Place) $51.40 Other assets 10,689 11,115 million
Slide 33: Profit or loss
Profit or loss GDI Trust Jun-23 Jun-22 Jun-23 Jun-22 $'000 $'000 $'000 $'000 Revenue from ordinary activities Property income 60,037 41,584 57,831 41,123 Funds management income 2,495 2,618 - - Interest revenue 437 126 806 123 Total revenue from ordinary activities 62,969 44,328 58,636 41,245 Share
Slide 34: Net profit after tax to FFO
Net profit after tax to FFO GDI Jun-23 Jun -22 $’000 $’000 Total comprehensive income for the period 20,228 68,301 Acquisition expenses 257 3,654 Contribution resulting from consolidated trusts (9,103) (9,724) Distributions / funds management fees received from consolidated trusts 4,315 4,174 Straig
Slide 35: Property information
Property information June 2023 June 2022 June 2023 Property Fully let net ‘As is’ FFO Capex Maintenance Incentives & FFO IFRS NPI3 FFO IFRS NPI1 income1 FY242 Spent capex spent lease costs $m $m $m $m $m $m $m $m $m 1 Mill Street 4.5 (0.6) - - - 5 Mill Street 4.6 3.8 - 0.4 1.5 197 St Georges Terrace
Slide 36: Disclaimer
Disclaimer This presentation has been prepared and issued by GDI Property Group Property Group does not represent or warrant that the information in this Limited (ACN 166 479 189) and GDI Funds Management Limited (ABN 34 presentation is free from errors or omissions, is complete or is suitable for 1
Slide 37: Tere)!
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