Slide 1: GPT 2013 Annual Result
GPT 2013 ANNUAL RESULT 13 FEBRUARY 2014 Sieger” D
Slide 2: Our strategy is clear and straight forward
For personal use only Our strategy is clear and straight forward ‐ Driven by total return ‐ Grow active earnings ‐ Frugal approach and fortress balance sheet TR 8.5%, EPS 6.1% (ahead of guidance), $1.8bn transactions and developments. #1 performing funds, 7.5% growth, completed $569m capital r
Slide 3: Total return outcomes and drivers
For personal use only Our total return outcomes are driven by: ‐ Selective asset transactions and developments that preserve and enhance the performance of the portfolio; ‐ Leasing and other asset management strategies that optimise the performance of each asset. This will mean a focus on earnin
Slide 4: Our approach is very clear
For personal use only Our approach is very clear At least 90% of our earnings come from owning core Australian property ‐ This slide sets out the principles that underpin our long term performance o Total return outcomes drive our decisions – its how we are measured and rewarded o We are diversi
Slide 5: GPT is well positioned with opportunities to create value
For personal use only GPT is extremely well positioned with significant opportunities to create value. We will continue to build a high quality portfolio to deliver low volatility and secure, steady total returns. I believe this is more closely aligned with investors’ long term aspirations and b
Slide 6: Economic outlook and sector expectations for 2014
For personal use only GPT expects economic growth to remain below long term trend in 2014, however, there is evidence of renewed confidence in Australia’s future. Retail ‐ Consumer spending has improved supported by confidence in rising house prices, stable interest rates and job security ‐ Regi
Slide 7: Operating performance of the Group
For personal use only I’ll start with the operating performance of the Group for the 2013. Realised operating income per security, which reflects our underlying earnings, was up 6.1%. This is a strong result, ahead of guidance given at the commencement of the year, reflecting solid contributions
Slide 8: Segment composition of the result
For personal use only Focusing now on the segment composition of the result. Retail Income was lower, primarily as a result of the divestment of the Casuarina and Woden interests in 2012 and the impact of the divestment of Erina Fair and the Homemaker portfolio early in 2013. The retail portfoli
Slide 9: We continue to have a fortress balance sheet
For personal use only We continue to have a fortress balance sheet. Net tangible assets increased 6c to $3.79. Gearing as a proportion of total tangible assets is 22.3%. The Office Fund continues to have low gearing of 11.7% and the Shopping Centre Fund gearing has reduced to 10.7% following t
Slide 10: Focus on Total Return as primary goal
For personal use only At our strategy day in October we articulated our focus on Total Return as the Group’s primary goal. We calculate the Group Total Return as the change in NTA plus distributions divided by the opening NTA. We believe focus on this measure, which encompasses both earnings a
Slide 11: Key strategic drivers and portfolio performance
For personal use only In September, we outlined our view on the performance of the core sectors and the key principles which we will be adopting in ensuring we build a portfolio which delivers on the 9% group target return. Key strategic drivers for GPT include: ‐ A primary focus on driving value
Slide 12: Retail portfolio finished in a strong position
For personal use only The portfolio finished in a strong position with solid income growth and improving retail sales. General retail conditions improved with the latest ABS retail trade data showing 6 consecutive months of accelerating growth in line with improving household balance sheets and
Slide 13: Retail metrics
For personal use only Running through the metrics.. Comparable income growth was 2.5% for the year up from 1.5% in June, reflecting improved results at Casaurina, Penrith and Melbourne Central Speciality sales growth was up from 2012, with growth accelerating over the final half to close at 1.
Slide 14: Strengthening retail market
For personal use only In the past 12‐months we have seen a strengthening in the retail market. The top chart shows the accelerating rate of growth in ABS retail sales in the second half of 2013, a trend also seen in the GPT portfolio. The recovery in retail sales has been and will continue to be
Slide 15: Retail portfolio focus and 2014 priorities
For personal use only Over the last 12 months we have been down weighting assets which no longer fit our quality or return criteria. The bottom chart shows MAT and population growth, we are now holding a regional portfolio with assets located growing catchments placing us in a strong position to
Slide 16: Office portfolio total return and leasing
For personal use only The portfolio delivered a solid 8.8% total return despite 2013 being one of the most difficult years in office leasing. The team successfully executed on over 130,000 sqm of leases reducing future lease expiry in the portfolio from 40% to 24% over the period from 2014 to 20
Slide 17: Office comparable income and occupancy
For personal use only The office portfolio delivered comparable income growth of 0.7% which was down from 2012 numbers, reflecting lower surrender fees and reduced average occupancy in 2013. This reduction in surrender fees is a deliberate strategy to hold tenants in a market where vacancies and i
Slide 18: Office market fundamentals
For personal use only Office fundamentals deteriorated in 2013 with increased vacancy creating an environment of generally flat face rents, increasing incentives, and declining effective rents. We continue to believe that 2014 will be a stabilisation point in the market with leading economic ind
Slide 19: Office strategy focus areas
For personal use only For the past 2 years there are a number of areas where we have focussed our strategy. A key area has been the de‐risking of the expiry profile. Since 2011 we have significantly reduced this exposure with expiry averaging 8% pa to 2016, one of the lowest in the peer group.
Slide 20: Logistics growth strategy delivered
For personal use only We are extremely pleased to have delivered on our initial logistics growth strategy. As at December we have met our initial growth targets, we have built a strong logistics capability and delivered a strong total return. Since the start of 2012, the portfolio has grown from
Slide 21: Logistics total return and leasing
For personal use only The total return for the year was 8.6% reflecting acquisition costs associated with the Yennora and Yatala transactions. Excluding these costs, the total return would have been above 9%. Comparable income growth was 1.0% reflecting reduced average occupancy across the portf
Slide 22: East coast industrial markets
For personal use only The east coast Industrial markets remain mostly in balance with moderate levels of supply and average levels, although patchy, demand. Demand has been led by transport and storage occupiers with most activity in Western Sydney and Melbourne’s West. The slight reduction in
Slide 23: Logistics platform and development pipeline
For personal use only Over the last 2 years we have focused on establishing and growing a strong logistics platform. This was critical to performance and in line with our strategy to have appropriate end to end expertise in the sectors we operate in. We now have a fully integrated logistics deve
Slide 24: Growing funds under management
For personal use only We have made good progress on our objective of growing FUM by $10 billion. We acquired a seed asset for a Metropolitan office fund and continue to target the launch of this fund, and a logistics fund in 2014. We have two developments underway which will further grow our e
Slide 25: Quality portfolio with simplicity and transparency
For personal use only We believe that a quality portfolio with simplicity and transparency will deliver the best returns over time. We will continue to be opportunistic with our capital, and make sure our investment capacity is used in the right way. 25
Slide 26: Disclaimer
DISCLAIMER The information provided in this presentation has been prepared by The GPT Group comprising GPT RE Limited (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 provided in this presenta
Slide 27: 2013 Annual Result Appendices
GPT 2013 ANNUAL RESULT APPENDICES Sieger” D 27
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Slide 29: Retail vacancies across GPT and GWSCF portfolios
RETAIL 21 vacancies across the GPT and GWSCF portfolios Critical retailer count stable Leasing spreads of -5.2% representing $1.9m p.a. of income Holdovers represent 105 shops, consistent with June 2013 Significant upside potential from increase in tenant retention to more normalised levels 1. Exclu
Slide 30: Retail: key centres
RETAIL Melbourne Central 9.6% total return in 2013 = Valuation at $998.2 m (3.1% growth) ; © Strong positioning in market « CBD Location (office tower; train station; RMIT University) 2 > 44 million annual traffic Highpoint Shopping Centre = 10.6% total return in 2013 = Recent expansion delivered a
Slide 31: Casuarina Square staged development
RETAIL Casuarina Square — mixed use and a staged approach to development STAGE 1 STAGE 2 STAGE 3 Mixed use Leisure & Entertainment Myer Expansion Progress: Progress: Progress: = DA approved for student « DA approved » DA approved accommodation * Agreement for Lease with Myer = Development cost $35m
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Slide 33: Office: major leasing transactions 2013
OFFICE = 136,000 sqm leased or at HOA over 101 transactions = Continuing to de-risk portfolio - 24% expiring over 2014-16 - 16% reduction since Dec 11 = Maintaining strong lease covenants - Average fixed 4% increases Major leasing transactions completed in 2013 et Tenant Area (sqm) 2 Park Street Cit
Slide 34: Office: proven asset management
OFFICE Proven Asset Management 9.5% portfolio IRR over 10 years » Melbourne Central Tower: 10.4% total return in 2013 post internalisation of management Strong Leasing Capability Research led approach = Average 120,000 sqm pa leased over last 3 years Reduced 2014-2016 expiry profile f = Acquisitions
Slide 35: Office asset priorities
| Australia Square, Sydney = 11.5% total return in 2013 a = Renewal of three major tenants = Major tower capex completed * Focus on branding and site optimisation 2 Park Street, Sydney = Releasing of Citi hand back floors = Enhance value by maintaining premium services at competitive rental price po
Slide 36: Office vacancies and major expiries
OFFICE Asset Tenant Progress Australia Square Vacant 4,317 0.7% 3 whole floors, plus suites 2 Park Street Vacant 2,495 0.4% 5 part floors/suites MLC Centre Vacant 23,493 3.7% Levels 23-39, 63 plus suites 1 Farrer Place Vacant 5,924 0.5% GPT Levels 43-45, plus suites Melbourne Central Tower Vacant 7,
Slide 37: CBD office prime vacancy rate
OFFICE CBD Office: Prime Vacancy Rate = Key leading indicators point to a potential 14% 5 121% 042012 to Q4 2013 . + a 4 11.4% upturn in economic and employment activity 12% + P 10.2%10.6% 10.2% . 10% 8.1% 8.7% a0 . Increase in vacancy rate although sub-lease 3% 4 space availability reduced in Sydne
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Slide 39: Logistics portfolio growth
LOGISTICS 22%, $1.43bn 18% — $1.47bn al 49% $0.99bn A $0.83bn a || _ 72% growth since 2011 Aqusitions/Divestments = Land/Under Development = Completed Development Product = Investments* 2011 2012 2013 Post Developments? 1. Less acquisitions made during the period 2. Assumes no growth in existing ass
Slide 40: Logistics asset locations
LOGISTICS BRISBANE 3 assets » Adjacent to airport and Brisbane port = Major arterials and national M1 highway MELBOURNE 4 assets = Intermodal hub (train, road) * Proximity to city centre and ring road ' Investment properties [) Development/land [ 2013 acquisitions Note: Diagrams for illustrative pur
Slide 41: Logistics committed development pipeline
LOGISTICS = $377 million committed development pipeline to increase portfolio WALE to 8+ years Developments Development Average Target Completi Cost WALE Toll NQX, Karawatha, Qld $84.6m 15 years 7.6% 1H 2014 TNT, Esrkine Park, NSW $60.0m 15 years 7.7% 1H 2015 RAND, Esrkine Park, NSW $60.0m 20 years
Slide 42: Logistics development assets
LOGISTICS | Development asset oa Existing asset fi 7 Vacant land bank TNT 31,902 sqm logistics facility Development cost: $60m Completion: 1H 2015 GOODMAN FIELDER WALE: 15.5 years RRM 20,571 sqm cold storage facility Development cost: $94m Completion: 1H 2015 RAND 23,757 sqm cold storage facility De
Slide 43: Logistics Sydney Olympic Park assets
LOGISTICS Oo 3-7 Figtree Drive | 6-8 Herb Elliot Avenue || Quad Business Park 1 Murray Rose Avenue SOP TOWN CENTRE SITE 5.2 hectares Running yield: 8.5% FSR 3.2:1 Potential mixed use opportunity 4 MURRAY ROSE AVENUE 15,000 sqm campus office building Development cost: $85m In planning 3 MURRAY ROSE A
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Slide 45: Funds Management 2013 highlights
FUNDS MANAGEMENT 2013 Highlights $7.1 billion of funds under management GWOF and GWSCF the top performing wholesale core funds in their sector 7.5% growth in FUM delivered through a combination of acquisitions and developments Completion of $569 million capital raising for GWSCF ahead of target Inte
Slide 46: Funds Management: GWOF performance against peers
FUNDS MANAGEMENT = #1 performing wholesale core office fund over 1, 3 and 5 years = 10% total return delivered in 2013 = Acquisition of 8 Exhibition Street = Development at Liberty Place completed delivering significant valuation uplift = Low gearing of 11.7% supports fund growth 40.0940.3% GWOF Tot
Slide 47: Funds Management: GWSCF performance against peers
FUNDS MANAGEMENT = #1 performing wholesale core retail fund over 1 year delivering 9.6% Total Return = Development at Highpoint completed delivering significant valuation uplift = $569 million capital raising completed oversubscribed = Sale of Carlingford Court completed for $177 million = Low geari