Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — FY2011 Earnings Presentation
38 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, May 2011
Slide 1: Full year results to 31 March 2011
Goodman Property Trust Full year results to 31 March 2011 May 2011
Slide 2: Contents
Contents + Section 01 Overview + Section 02 Financial performance + Section 03 Investment portfolio + Section 04 Market overview + Section 05 Development portfolio + Section 06 Outlook + Appendices 2
Slide 3: Overview
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Slide 4: Overview
Overview + Net property income up 2.4% to $108.7 million Earnings & + Distributable earnings after tax of $78.0 million or 8.79 cpu ($77.5 million or 9.10 cpu, pcp) Profit + $36.7 million after tax profit compared to $2.8 million for the restated pcp* + $487.0 million of refinancing completed + $45.
Slide 5: Financial performance
Section 02 Financial performance
Slide 6: Financial overview
Financial overview Period ended March 11 March 10 Change $ million $ million % (Restated) Distributable earnings before interest and tax 101.1 99.4 1.7 Distributable earnings before tax 77.5 79.1 (2.0) Distributable earnings after tax 78.0 77.5 0.6 Revaluation loss (24.8) (49.9) (50.3) Other non-cas
Slide 7: Earnings and tax
Earnings and tax $ million cents per unit Distributable earnings before tax 77.5 8.74 FY11 current tax payable (1.4) (0.16) Distributable earnings after current tax payable 76.1 8.58 Over provision for tax in respect of prior year 1.9 0.21 Distributable earnings after tax 78.0 8.79 + GMT’s distribut
Slide 8: Capital management – debt
Capital management – debt + Refinancing its existing debt facilities and diversifying its sources of funding were key objectives in the Trust’s capital management plan: - Bond programme now represents 33% of debt allocation - Weighted debt maturity profile extended to 3.4 years (from 2.2 years) + GM
Slide 9: Capital management – equity
Capital management – equity + Disciplined capital management has ensured GMT is at the lower end of its targeted LVR band of 35% to 40% + New investment and development opportunities have been matched to new equity: - $11.5 million of stock issued at NTA as part consideration for Show Place Office P
Slide 10: Earnings outlook
Earnings outlook + Distributable earnings are expected to range between 8.4 and 8.6 cpu before tax and between 7.7 and 7.9 cpu after tax + Capital management initiatives and increased interest margins are the main contributors to the decline from FY11 + A greater level of retention will have an addi
Slide 11: Investment portfolio
Section 03 Investment portfolio
Slide 12: Portfolio leasing
Portfolio leasing + Active management has secured over 135,000 sqm of space on new and revised terms + This new leasing equates to $20.8 million (16.5%) of portfolio income + Average portfolio occupancy of 96% over the last 12 months - 97% at 31 March 2011 + WALT of 5.6 years at 31 March 2011 + Port
Slide 13: Leasing performance
Leasing performance + Major stabilised portfolio leasing deals completed throughout year: Property Customer Commencement Net Term Net annual lettable years rental area1 $m sqm The Gate Industry Park Shears and Mac 4 August 2010 6,590 12 0.54 Central Park Corporate Centre Amourguard Security June 201
Slide 14: Portfolio metrics
Portfolio metrics Lease Expiry Profile Customer Industry Exposure + 7.0% of income due to expire in FY12 + Broad mix of customers providing exposure to a diverse range of industries 14
Slide 15: Valuations
Valuations + Annual devaluation of $24.8m compared to $49.9m in FY10 + The investment portfolio declined by 0.4% while the development portfolio declined by 9.5% + GMT’s Christchurch portfolio impacted by the Canterbury Earthquake – 63bps softening in market capitalisation rates Valuation Summary Ma
Slide 16: Christchurch investments
Christchurch investments + GMT has 10% of its portfolio in Christchurch + CBD and eastern side of city most impacted by earthquakes + Around 50% of total office stock destroyed or unable to be occupied + Location and quality of GMT’s assets helped avoid the worst impacts with only superficial damage
Slide 17: Insurance
Insurance + GMT’s portfolio has comprehensive insurance cover which includes - company, earthquake, terrorism and fire service components + All natural risks are covered along with material damage and business interruption + Business interruption cover provides up to 36 months of rental cover – refl
Slide 18: Market overview
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Slide 19: Global investment markets
Global investment markets Capital growth cycles for selected m arkets Average direct property cap rate & initial yield an n ual c apital return o n quarterly periods sample period: December 2004 - December 2010 30% 10% 20% 9% 10% 8% 0% 7% -10% 6% A US NZ -20% 5% JP N UK -30% 4% IR E NE TH 3% -40% AU
Slide 20: NZ investment market activity
NZ investment market activity + In the second half of 2010 there were 64 sales totalling over $1 billion. A significant improvement on the first half of 2010 when 40 sales totalling $661 million transacted + There was a small net inflow of foreign funds into New Zealand property in the second half o
Slide 21: Auckland investment market
Auckland investment market Auckland industrial yields + Prime industrial yields have strengthened from 2009 and now average 8.29%1 while secondary industrial yields remain stable at 10.13%1 Source: CBRE Research Auckland non-CBD office yields + Over the past 12 months office yields have remained rel
Slide 22: Auckland occupier market
Auckland occupier market Auckland industrial vacancy rate + The Auckland industrial vacancy rate has decreased from 5.0% in mid 2010 to 4.5% at December 2010. This represents the first decline in vacancy after seven consecutive six monthly increases + Grade A industrial has the lowest vacancy rate o
Slide 23: Development portfolio
Section 05 Development portfolio
Slide 24: GMT’s development estates
GMT’s development estates + Auckland has 2,406 hectares of business zoned land or 19 years of supply at current absorption levels + Auckland’s population is projected to grow 1.6% per annum reaching 2.1 million by 2040 + Corresponding employment growth will drive demand for industrial and business s
Slide 25: Development progress
Development progress + GMT is differentiated by its blend of investment and development activity + Substantial land holdings provide a growth pipeline of between 6-8 years + Supercity merger should create a consistent planning and regulatory environment that supports this growth + New developments w
Slide 26: Development completions – FY11
Development completions – FY11 Ingram Micro, M20 Business Park Kmart, M20 Business Park Customer Ingram Micro Customer Kmart Net lettable area1 10,374 sqm Net lettable area1 13,408 sqm Lease term 10 years Lease term 12 years Ownership % 100 Ownership % 100 Total project cost $m 12.7 Total project co
Slide 27: Recent development completions
Recent development completions* Downer, Glassworks Industry Park IBM, Highbrook Business Park Customer Downer Customer IBM Net lettable area1 2,016 sqm Net lettable area1 5,187 sqm Lease term 15 years Lease term 10 years Ownership % 100 Ownership % 50 Total project cost $m 5.1 Total project cost $m2
Slide 28: Development commitments – FY11
Development commitments – FY11 Customer Net lettable area1 Lease term Ownership Total Project Cost sqm years % $m Downer, Glassworks Industry Park 2,000 15 100 5.1 Bridgestone, M20 Business Park 4,900 8 100 6.8 PMP New Zealand, Enterprise Park 2,185 10 100 4.4 Plytech, Highbrook Business Park 2,400
Slide 29: Highbrook Business Park
Highbrook Business Park + Highbrook Business Park is more than 45% complete + The Crossing is the next stage in the development of the estate + It is a mixed use development that incorporates accommodation, convenience retail, hospitality and office + Pre-commitments from NZ Post, a Quest branded se
Slide 30: The Crossing in detail
The Crossing in detail The Crossing Stage 1 serviced apartments, Customer commitments1 NZ Post, Westpac Lettable area 9,800 sqm Ownership % 100 Expected yield on cost once fully leased and income producing 8.45% Forecast total project cost $m2 $43.5 Practical completion date 2012/2013 Status Partial
Slide 31: Outlook
Section 06 Outlook
Slide 32: Outlook and summary
Outlook and summary + Actively manage the portfolio maximising revenue streams and Unitholder returns Strategy + Advance the development programme and unlock the value in the Trust’s land holdings + Pursue strategic opportunities that enhance the portfolio + Competitive leasing environment may restr
Slide 33: 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 sh
Slide 34: Appendix - Financial performance
Appendix - Financial performance Period ended March 11 March 10 Change $ million $ million % (Restated) Net rental income 108.7 106.2 2.4 Administrative expenses (7.6) (6.8) 11.8 Distributable earnings before interest and tax 101.1 99.4 1.7 Interest (23.7) (20.2) 17.3 Distributable earnings before t
Slide 35: Appendix - Assets and liabilities
Appendix - Assets and liabilities Period ended March 11 March 10 Change $ million $ million % (Restated) Total assets 1,618.0 1,510.4 7.1 Property assets 1,576.1 1,474.1 6.9 Borrowings 578.4 544.7 6.2 Liabilities 725.9 656.3 10.6 Equity 892.1 854.1 4.4 Underlying net borrowings to property assets (%
Slide 36: Appendix - GMT debt facilities
Appendix - GMT debt facilities GMT Debt Expiry Profile Total Facility GMT Share Facility Remaining as at 31 March 2011 $ million $ million Expiry Term GMT Main Facility Tranche A 80.0 80.0 Oct-11 0.6 yrs GMT Main Facility Tranche B 100.0 100.0 Dec-15 4.8 yrs GMT Main Facility Tranche C 150.0 150.0 A
Slide 37: Appendix – GMT property portfolio
Appendix – GMT property portfolio Net GMT Market cap Property lettable Valuation Occupancy WALE 2 Key customers ownership rate area 1 % sqm $M % % years Highbrook Business Park + HDL Assets 50 147,606 269.3 7.25 - 8.38 100 8.3 PaperLinX, Contract Logistics, Shell, GEON, Intermech, OfficeMax, Datamai
Slide 38: Appendix - Portfolio Metrics
Appendix - Portfolio Metrics Top ten customers Asset diversity Geographic diversity 38
Goodman Property Trust — FY2011 Earnings Presentation on 6ix