Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — H1 2019 Earnings Presentation
29 slides from Goodman's earnings presentation, Nov 7, 2018
Slide 1: Interim Result 2019
Interim Result 2019 Goodman Property Trust
Slide 2: Contents
Contents Overview 3 Financial Summary 5 Presented by: John Dakin Portfolio Update 11 Chief Executive Officer Summary & Outlook 20 Andy Eakin Chief Financial Officer Appendix 23 James Spence Director – Investment Management Unless otherwise indicated, all numerical data provided in this presentation
Slide 3: Overview
Overview 3
Slide 4: Results overview
Continuation of development-led growth improving quality of portfolio and earnings ＋ Cash earnings for period of 3.61 cpu, up 2.3% on 1H18 with developments and underlying portfolio offsetting impact of sales ＋ $209.6 million of development underway across 63,313 sqm. Programme over 50%1 committed (
Slide 5: Financial Summary
Financial Summary 5
Slide 6: Financial highlights
Financial highlights $16.8 m Movement in fair value $66.4m Profit before tax 140.2cpu Net tangible asset backing of investment property 17.5 Pro-forma % 3.61cpu Cash earnings 3.325 cpu Cash distribution loan-to-value ratio 6
Slide 7: Cash earnings
＋ Cash earnings guidance of around 7.0 cpu1 reaffirmed for the full year ＋ First half distributions of 3.325 cpu equate to around 92% of cash earnings ＋ Cash earnings benefiting from development completions and rental growth, offset by disposals and deleveraging Cash Cash earnings earnings ($million
Slide 8: Capital growth
＋ Active management of portfolio through capital transactions and developments continues to grow GMT’s NTA ＋ Pro-forma NTA of 142.6 cpu (including expected gain on sale of WPH) ＋ Industrial property continues to perform strongly worldwide with investor demand at record levels Capital growth Net tang
Slide 9: Balance sheet strength
＋ Conservative gearing level: ▪ pro-forma LVR of 17.5% and committed LVR of 25.8% ▪ Trust Deed and debt covenants require LVR to be below 50% ＋ Significant capacity for development pipeline and other opportunities Balance ＋ Interest cover ratio of 3.6 times1 sheet Loan-to-value ratio strength (Look-
Slide 10: Debt facilities
＋ Proven capital management programme with continued focus on long-dated core debt ＋ Reduced reliance on bank funding with non-bank debt providing both tenor and, currently, pricing benefits ＋ Refinancing risk managed through appropriate sized tranches Debt ＋ Credit cost risk reduced by utilising mu
Slide 11: Portfolio Update
Portfolio Update 11
Slide 12: Portfolio highlights
Portfolio highlights $209.6m $2.3bn Projects under development Property portfolio 98.4 Occupancy % 99 % Auckland industrial weighting 22 hectares 5.5 years Remaining development land Weighted average lease term Statistics as at 30 September 2018, prior to new development package announcement 12
Slide 13: Portfolio returns & strategy
Re-positioned portfolio producing strong results ＋ 39,055 sqm of leasing completed over period (4.1% of portfolio) ＋ Limited expiry profile going forward with only 7% of portfolio due to expire prior to end of FY20 ＋ Demand for additional space driven by expansion requirements from new and existing
Slide 14: Portfolio addition: Roma Road
Roma Road ＋ Strategic acquisition complementary to existing portfolio ＋ Very strong distribution location: ▪ direct frontage to SH20 with easy access to CBD and Airport ▪ purchasing power of $21.3 billion1 rivals Penrose as strongest location for delivery to Portfolio consumer homes addition ＋ Area
Slide 15: Highbrook work in progress
TOTAL PROJECT COST $153.4m Highbrook NET LETTABLE AREA 40,763 sqm work in progress COMPLETION TERMS AGREED Nov 2018 – July 2019 74.3%1 MOVE Parade expansion units Quest Crossing Plytech expansion Building 6 carpark Gateway warehouses 1 Where terms agreed via Agreement to Lease, Lease or Heads of Agr
Slide 16: Savill Link work in progress
TOTAL PROJECT COST $54.3m Savill Link NET LETTABLE AREA 22,550 sqm work in progress COMPLETION COMMITTED Nov 2018 – June 2019 62.3% Savill Link warehouse NCI development 16
Slide 17: Leasing management
＋ Stabilised portfolio performing strongly with occupancy of 98.4% and limited expiries over next 24 months ＋ Current uncommitted1 development exposure equates to 2.1% of GMT portfolio ＋ Strong market, strength of portfolio and leasing of developments allows for continuation of programme, accelerati
Slide 18: New projects
＋ Six new projects across Highbrook and Savill Link totalling 28,000 sqm of industrial space ＋ Caters to variety of demand with smallest being 1,000 sqm and largest 10,000 sqm ＋ Exposure to speculative development remains low, equivalent to approximately 4%-5% of portfolio New ＋ Upon completion, Hig
Slide 19: Remaining land
＋ Remaining land supply 17 ha post announcement of further developments ＋ Supports 86,792 sqm of industrial and commercial development ＋ Yield on additional spend expected to range between 8% to 9% ＋ Highbrook represents 79% of remaining land supply Remaining ＋ Land weighting continues to fall, sitt
Slide 20: Summary & Outlook
Summary & Outlook 20
Slide 21: Summary and outlook
GMT well-positioned to capture upside from global trends impacting industrial real estate ＋ Supply chain pressures with faster and cheaper deliveries required, highlights the importance of locations close to the consumer ＋ GMT’s customer base performing strongly providing a number of opportunities f
Slide 22: Thank you
Thank you 22
Slide 23: Appendix
Appendix 23
Slide 24: Profit or loss
Appendix Profit or loss 6 mont 6 months $ million Note 30Sep 18 | _30Sep Property income Ww 78.5 79.7 Property expenses (14.5) (14.8) Net property income 64.0 64.9 Share of operating earnings before tax from joint venture 24 24 48 Interest Interest income 34 3.3 3.6 Interest cost 3.4 (12.2) (12.2) N
Slide 25: Balance sheet
Appendix Balance sheet $ million Non-current assets 18| 31 Mar18 Stabilised properties 1.4 2,046.7 2,043.5 Developments 14 152.5 67.5 Land 14 112.7 120.0 Investment in joint venture 2.2 - 114.3 Derivative financial instruments 52 19.4 89 Deferred tax assets 38 5.2 Total non-current assets 2,335.1 2,
Slide 26: Cash flows
Appendix Cash flows 6 mont 6 months $ milion 30Sep 18 | _30Sep Cash flows from operating activities Property income received 77.0 779 Property expenses paid (17.0) (19.9) Interest income received 29 9.2 Interest costs paid (11.9) @.2) Administrative expenses paid (1.3) (1.6) Manager's base fee paid
Slide 27: Adjusted operating earnings
Appendix Adjusted operating earnings 27
Slide 28: Portfolio metrics
Rent reviews by next review type CPI 21% Market Review 26% Appendix Portfolio Fixed 53% metrics Top ten customers split by subsidiary companies (% of portfolio income) New Zealand Post Group DHL Coda Fletcher Building Limited Fliway Transport Ltd Toll Group New Zealand CSR Building Products Officema
Slide 29: Projects underway
Total project cost Net lettable area Development Estate Completion date ($m) (sqm) Building 6 Highbrook Business Park 16.0 3,006 Nov-18 Parade units Highbrook Business Park 16.8 5,770 Dec-18 Plytech warehouse Highbrook Business Park 16.1 5,100 Nov-18 Savill Link warehouse Savill Link 16.1 8,500 Nov-
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