Slide 1: GPT Interim Result 12 August 2014
For personal use only GPT INTERIM RESULT 12 August 2014
Slide 2: 2014 Interim Result Highlights
2014 INTERIM RESULT HIGHLIGHTS Delivering on strategy For personal use only 4.5% $1.1bn 5.0% Forecast average FORTRESS BALANCE SHEET DRIVEN BY TOTAL RETURN EPS growth(1) asset acquisitions cost of debt FUNDS MANAGEMENT 8.4% 18.3% 24.8% Total Return(2) growth in FUM(3) gearing 16.0% 9.7% US$175m Tota
Slide 3: Our Outlook
OUR OUTLOOK Targeting Total Return > 9% in 2014 For personal use only Improved GDP growth outlook and stable economic conditions ECONOMY Non-mining business sectors remain steady Business confidence and job ads data showing signs of recovery Portfolio positioned for long term performance and
Slide 4: 2014 Interim Result Summary
2014 INTERIM RESULT SUMMARY Financial summary 6 months to 30 June ($m) 2014 2013 Change For personal use only Net Profit After Tax 240.6 257.0 Valuation increases (30.8) (20.0) Financial instruments marked to market and FX 27.4 (8.3) movements Distribution on exchangeable securities (12.4) (12.4) Ot
Slide 5: Increasing profitability from Development and Funds Management
2014 INTERIM RESULT HIGHLIGHTS Increasing profitability from Development and Funds Management 6 months to 30 June ($m) 2014 2013 Change ($) For personal use only Retail NOI 123.6 139.6 16.0 Impact of 2013 asset sales Office NOI 67.8 73.1 5.3 MLC Centre vacancy Logistics NOI 43.1 37.1 6.0 Devel
Slide 6: Capital Management
CAPITAL MANAGEMENT Fortress balance sheet For personal use only 30 Jun 2014 31 Dec 2013 Change Net tangible assets per security $3.82 $3.79 0.8% Total borrowings $2,416m $2,310m 4.6% Gearing (net debt to total tangible assets) 24.8% 22.3% 250 bps Weighted average cost of debt 4.8% 5.1% 30 bp
Slide 7: Portfolio Performance
PORTFOLIO PERFORMANCE Solid operating fundamentals from a strong platform For personal use only All sectors experiencing market recovery Stability in key portfolio metrics Portfolio Diversity Occupancy 95.6% Logistics WALE 4.9 years 15% Structured reviews: 86% subject to fixed increases of
Slide 8: Asset Portfolio: Update on progress toward 2014 priorities
ASSET PORTFOLIO Update on progress toward 2014 priorities For personal use only RETAIL OFFICE LOGISTICS Enhance portfolio Enhance portfolio Continue to grow composition diversification platform 12% growth in 1H 2014 Maintain focus on dominant regionals Maintain focus on prime assets
Slide 9: Retail Portfolio
RETAIL PORTFOLIO 1H 2014 highlights – Retail conditions improving For personal use only Retail Markets 2.6% Retail sales growth above the long term average like for like income growth Retailer business sentiment improving Online sales growth moderating 99.5% occupancy Portfolio commentary Oc
Slide 10: Retail Development Pipeline
RETAIL DEVELOPMENT PIPELINE Future Growth – Organically develop when the time and market conditions are right $1.1 billion retail development pipeline to enhance existing portfolio For personal use only Wollongong Central, NSW – completion 2H 2014 Casuarina Square, NT – completion 1H 2015 Sunshine P
Slide 11: Office Portfolio Performance
OFFICE PORTFOLIO PERFORMANCE 1H 2014 highlights – de-risking future lease expiries For personal use only Office Markets (3.1%) Lead indicators continue to improve like for like income growth Improved enquiry levels in Sydney and Melbourne Brisbane and Perth remain challenging 91.7% occupancy P
Slide 12: Proactively repositioning the MLC Centre
OFFICE Proactively repositioning the MLC Centre For personal use only Façade Remediation Foodcourt and Plaza Tower Repositioning Retail Redevelopment Underway Upgrade Works/EOT Facility Underway In Planning 30% of north elevation Underway Full refurbishment of New King and now complete Refur
Slide 13: Logistics Portfolio Performance
LOGISTICS PORTFOLIO PERFORMANCE 1H 2014 highlights – expansion of portfolio providing future growth For personal use only Industrial Markets 0.6% Melbourne leasing market challenging like for like income growth Continued demand growth from transport and storage Increasing competition for on-ma
Slide 14: Logistics Development Pipeline
LOGISTICS DEVELOPMENT PIPELINE $650 million development pipeline of future product For personal use only Staged development over 46% of existing land bank Sydney Olympic Park, NSW Metroplex, Wacol, QLD Erskine Park, NSW 14
Slide 15: Funds Management
FUNDS MANAGEMENT Successful acquisitions drive 18% growth in Funds under Management For personal use only $1.1 billion in acquisitions completed GWSCF acquired 50% interest in Northland Shopping Centre, Melbourne for $496 million GWOF acquired three office assets for $548 million Acquisition
Slide 16: Property to Prosperity
For personal use only PROPERTY TO PROSPERITY Solid returns from working the portfolio hard Logistics development delivering meaningful contribution Continuing growth in Funds Management business Fortress balance sheet provides capacity On track to deliver EPS growth of at least 3% for 2014
Slide 17: Appendices
For personal use only GPT INTERIM RESULT Appendices 17 17
Slide 18: For personal use only
For personal use only 18 18
Slide 19: Retail: Key performance metrics have improved
RETAIL Key performance metrics have improved For personal use only Strong specialty sales productivity 6 months to 30 June 2014 2013 35 vacancies across the GPT and Specialty MAT sales psm(1) $9,613 $8,984 GWSCF portfolios Specialty Occupancy Cost(1) 18.0% 18.2% Critical retailer count stable
Slide 20: Retail: Specialty sales up 3.0% over the June half
RETAIL Specialty sales up 3.0% over the June half For personal use only Monthly Specialty Sales Growth Moving Annual Change in Retail Sales by Category 10.6% 5.9% 5.9% 4.9% 4.0% 4.0% 4.0% 3.7% 3.5% 3.1% 3.3% 3.3% 2.7% 2.5% 0.9% 0.7% 2.1% 0.5% 1.5% 1.4% 0.6% -1.0% -0.7% -2.5% -2.4%-2.4% -0.2% Special
Slide 21: GPT's regional centres are located in strong growth markets
RETAIL GPT’s regional centres are located in strong growth markets For personal use only 10 Year Trade Area Sales Growth Forecast 8% 6.6% Average annual growth 6% 4.8% 4.7% 4.7% 4.2% 4.0% 4% 3.5% 3.4% 2% 0% Melb. Central Sunshine Casuarina Dandenong Rouse Hill W. Penrith Highpoint Charlestown RPI Re
Slide 22: Retail development pipeline provides the opportunity to enhance returns
RETAIL Development pipeline provides the opportunity to enhance returns For personal use only Ownership Property GPT GWSCF 2014 2015 2016 2017 Beyond Wollongong Central 100% $210m Casuarina Square(1) 50% 50% $70m Highpoint Shopping Centre(2) 16.67% 50% $15m Macarthur Square 50% $85m Westfield Woden
Slide 23: Retail trade indicators improving
RETAIL Retail trade indicators improving Online Retail Sales Growth vs Retail Trade Growth For personal use only Growth in share market and housing 20% Online Sales Growth market has supported consumers Retail Trade Growth (Trend) ability to spend 15% Retail trade growth has returned to its 10%
Slide 24: For personal use only
For personal use only 24 24
Slide 25: Office: Portfolio has been stabilised
OFFICE Portfolio has been stabilised – positioning for strong future returns For personal use only Portfolio has undergone significant leasing activity over past four years Well positioned for future performance with low expiry profile Expiry risk has halved In 2011 Current GPT had 60% of its GP
Slide 26: Office: Proven active asset management approach
OFFICE Proven active asset management approach For personal use only 460,000 sqm leased across platform since 2011 180,000 Signed Leases Heads of Agreement 160,000 Key assets repositioned and performing well – 36,409 140,000 Eagle Street, Australia Square, Melbourne Central, 120,000 12,015 2 Par
Slide 27: Proactively managing major lease expiries
OFFICE Proactively managing major lease expiries For personal use only Area Asset Tenant (sqm) Expiry Progress Major 2014 expiries Melbourne Central CSA 5,870 May 14 Lease extension to May 2016 2 Park Street Citi 33,500 Jun 14 Renewed and re-leased 1 Farrer Place State Govt 20,400 Dec 14 9,500 sqm l
Slide 28: Leasing exposure in stronger markets of Sydney and Melbourne
OFFICE Leasing exposure in stronger markets of Sydney and Melbourne Years Supply Assessment (Short to Medium Term Market Outlook) For personal use only [Total Vacancy + Stock Under Construction / Forecast Annual Demand] Years to bring total supply/vacancy to equilibium vacancy rate Equilibrium Vacan
Slide 29: Demand improving in Sydney and Melbourne
OFFICE Demand improving in Sydney and Melbourne, Brisbane and Perth remain weak For personal use only Active Space Requirements Sublease Vacancy 90,000 July 2013 to July 2014 5% Q3 2012 to Q2 2014 (Quarterly Bars) Bris Melb Syd 80,000 70,000 4% 60,000 Avg. Sqm % of Total Stock 50,000 Avg. 45,607 sqm
Slide 30: For personal use only
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Slide 31: Logistics: Continued success of growth strategy
LOGISTICS Continued success of growth strategy $306m of product acquired For personal use only $330m of activated development Eastern Creek, Silverwater Yatala and acquisitions Toll NQX, Karawatha Yennora $54m Fund-through acquisitions $84m $88m Toll NQX Citiport completion acquisition 3 Figtree
Slide 32: Ensure buying/developing right assets in the right locations
LOGISTICS Ensure buying/developing right assets in the right locations Supply Chain Costs For personal use only 60% 50.3% Logistics typically can 50% account for 80% of the operating costs. Real 40% estate typically accounts 30% for less than 5% 21.8% Transportation 20% Inventory and 9.5% 7.8% costs
Slide 33: Actively managing the portfolio
LOGISTICS Actively managing the portfolio For personal use only Logistics requires an active approach to management as assets move through their lifecycle GPT’s portfolio allocated into ‘buckets’ in order to create and maximise value 1 2 3 Asset Lifecycle Value Assessment DEVELOP / ACQUIRE STRAT
Slide 34: Enhancing asset values with active management
LOGISTICS Enhancing asset values with active management For personal use only 15-19 Berry Street, 18-24 Abbott Road, Citiwest Industrial Estate, Granville, NSW Seven Hills, NSW Altona North, VIC Redevelopment/potential rezoning Rezoning to bulky goods Upgrading prime located estate Sydney Olympic Pa
Slide 35: Successfully delivering development product
LOGISTICS Successfully delivering development product For personal use only $272 million invested in logistics and business park developments in land and WIP $178 million in developments underway to deliver $332 million of completed product Future pipeline of $350 million $85m $332m $350m COMP
Slide 36: Sydney market more balanced fundamentals between demand and supply
LOGISTICS Sydney market more balanced fundamentals between demand and supply Container Trade vs. Industrial Supply Industrial Take-Up Activity For personal use only Accommodation pa ('000 sqm) 2500 6 800,000 Total TEU movements pa (mil) Total Supply of Industrial 700,000 2000 600,000 5 500,000 sqm 1
Slide 37: For personal use only
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Slide 38: Funds Management: A period of significant activity
FUNDS MANAGEMENT A period of significant activity For personal use only 9.7% total return from the Funds Management business Capital raisings for both Funds for approximately $650 million underway GPT Wholesale Office Fund highlights – Completion of $548 million of new acquisitions – 150 Colli
Slide 39: Disclaimer
DISCLAIMER The information provided in this presentation has been prepared by The GPT Group comprising GPT RE Limited For personal use only (ACN 107 426 504) AFSL (286511), as responsible entity of the General Property Trust, and GPT Management Holdings Limited (ACN 113 510 188). The information pro