Slide 1: FY16 Results Presentation
Artist’s impression of Ashfield Mall residential development, Sydney NSW FY16 Results Presentation Abacus Property Group – FY16 Results Presentation 19 August 2016
Slide 2: Agenda
Agenda - FY16 highlights Frank Wolf - Financial results and capital management Rob Baulderstone - Office and Industrial Peter Strain - Retail Cameron Laird - Storage Phil Peterson - Property Ventures Frank Wolf Cameron Laird John L’Estrange - Funds Management Frank Wolf - Summary Frank Wolf Abacus P
Slide 3: FY16 highlights
FY16 highlights The Group’s consolidated AIFRS statutory profit increased 39.2% to Underlying profit ($m) $185.9 million Underlying Profit was $124.0 million and compares favourably to the 128.3 124.0 previous period which included the gain of $20.8 million on the sale of 101.3 83.8 Birkenhead Point
Slide 4: Financial results and capital management
SPICE residential development, Brisbane QLD Financial results and capital management Rob Baulderstone Abacus Property Group – FY16 Results Presentation 19 August 2016
Slide 5: Diversified business delivers results
Diversified business delivers results Key financial metrics Jun 16 Jun 15 Underlying Profit $124.0 million Consolidated Group1 – AIFRS statutory profit $185.9m $133.5m 39% Drivers of underlying profit in FY16: $32 million of finance income from loans to AIFRS (Abacus) statutory profit $169.7m $147
Slide 6: Conservative balance sheet
Conservative balance sheet Balance sheet remains conservative and gearing remains below Balance sheet metrics Jun 16 Jun 15 targeted level despite increased drawn debt NTA per security $2.66 $2.49 NTA per security less August NTA per security grew by 6.8% to $2.66 driven by cap rate compression and
Slide 7: Investment portfolio – Office and Industrial
Investment portfolio – Office and Industrial Peter Strain Abacus Property Group – FY16 Results Presentation 19 August 2016 World Trade Centre, Melbourne VIC
Slide 8: Investment portfolio of $1.6 billion
Investment portfolio of $1.6 billion Key portfolio metrics Jun 16 Jun 15 Investment portfolio remixing continues with increases across the storage, office and retail portfolios Investment portfolio value1 ($m) 1,568 1,318 Acquired 7 facilities for the Storage portfolio Added investments in Lutwy
Slide 9: Office and Industrial portfolio
Office and Industrial portfolio $492m 7.3% 33 Queen Street and 199 George Street, Brisbane QLD $23.8m Office portfolio value Office portfolio WACR1,3 Office: portfolio value uplift5 91.8% 4.1 yrs Office: portfolio occupancy1 2.5% Office portfolio Office: rental WALE1,4 growth2 Australis Drive, Derri
Slide 10: 14 Martin Place: development update
14 Martin Place: development update 14 Martin Place – Ground level 14 Martin Place, Sydney NSW Works completed to date include a restoration of sections of the façade Protecting the heritage nature of the property while maintaining A Grade status Finalising works remixing the retail tenancies Re
Slide 11: 201 Pacific Highway – St Leonards NSW
201 Pacific Highway – St Leonards NSW 201 Pacific Highway, St Leonards was acquired in August 2015 at a price Key metrics June 16 of $115.0 million Rate per square metre at acquisition $6,957 50/50 joint venture with Goldman Sachs Bought well with strong initial yield Cap rate 7.25% Exploit ov
Slide 12: Investment portfolio – Retail
Investment portfolio – Retail Cameron Laird Abacus Property Group – FY16 Results Presentation 19 August 2016 Liverpool Plaza, Liverpool, Sydney NSW
Slide 13: Retail portfolio overview
Retail portfolio overview $375m 6.7% Artist’s impression of Ashfield Mall entrance, Sydney NSW $21.0m Portfolio value Portfolio WACR1,3 Portfolio value uplift5 85.7% Portfolio occupancy1 7.6% 4.9 yrs Rental growth2 Portfolio WALE1,4 1. Excludes development assets Strong leasing results drive like fo
Slide 14: Retail portfolio updates
Retail portfolio updates Bacchus Marsh Village Bacchus Shopping Marsh Village Centre,Centre, Shopping Bacchus Marsh VIC Bacchus Retail Portfolio development pipeline robust with multiple projects Bacchus Marsh Coles Express service station is due for completion in August 2016 12 year lease @ $240,
Slide 15: Lutwyche City Shopping Centre – Brisbane QLD
Lutwyche City Shopping Centre – Brisbane QLD Lutwyche City was acquired in August 2015 for $65 million in a joint Key metrics June 16 venture that grew our third party capital platform Rate per square metre at acquisition $3,450 Abacus ownership 75% Cap rate 7.25% We have plans to reposition the c
Slide 16: Liverpool Plaza, Sydney NSW update
Liverpool Plaza, Sydney NSW update Macquarie and Moore Streets, Liverpool Plaza, Sydney NSW Development options have been assessed on a site that combines two small commercial properties adjoining our existing retail asset Liverpool Plaza Promoted as a mixed-use development site following proposed
Slide 17: Investment Portfolio – Self Storage
Investment Portfolio – Self Storage Phil Peterson Abacus Property Group – FY16 Results Presentation 19 August 2016 710 Collinsfacility, Blacktown Street, Sydney Melbourne NSWVIC
Slide 18: Storage: 14.2% growth in portfolio NLA
Storage: 14.2% growth in portfolio NLA Storage portfolio: $574 million Key metrics AUS NZ Jun 16 Jun 15 15.5% increase in underlying EBITDA to $32.7 million in FY16 driven Portfolio value ($m) 455.7 118.7 574.4 457.2 by strong trading and recent acquisitions No. of storage assets 501 12 62 54 12.4
Slide 19: Storage portfolio overview
Storage portfolio overview Kingston facility, Kingston QLD FY16 stabilised asset acquisition strategy focused on freehold facilities in metro markets with higher potential yields than the portfolio average FY16 transactions include two in Brisbane, one in Melbourne and one in Auckland increasing pla
Slide 20: Storage portfolio overview
Storage portfolio overview Over the last two years Portfolio value compound growth of 13.9% pa 63 Added 5 converted facilities with completed 575 Portfolio size ($m) Portfolio size (no. of assets) 61 stages, 14,000m2 of NLA 59 Averaging 69% occupancy during FY16 after 525 57 average of 18 months
Slide 21: Growth opportunities – case study
Growth opportunities – case study St Peters, Sydney (NSW) Property acquired for $3.975 million with GFA of 3,300m2 ($1,200psm) Located on Princes Highway in Sydney with excellent exposure to passing cars Facility in close proximity to neighbouring high density resi precincts e.g. Mascot, Wolli Creek
Slide 22: Growth opportunities – case study
Growth opportunities – case study South Oakleigh, Melbourne (VIC) Property acquired for $3.45 million with GFA 3,576m2 (rate $965pm2) and site 6,782m2. Tenant in place short term – generating cashflow while DA approval was obtained Good clearance in warehouse allows fit out of new mezzanine floor pl
Slide 23: Property ventures overview
Property ventures overview Cameron Laird & John L’Estrange Abacus Property Group – FY16 Results Presentation 19 August 2016 Artist’s impression of One A residential development, Erskineville, Sydney NSW
Slide 24: Property ventures
Property ventures $57.0 million underlying EBITDA contribution Key metrics Jun 16 Jun 15 1.1x increase due to an increase in interest and fee income Residential exposure 96.2% 99.4% from new and existing projects and profit realisations Loans $370.3m $263.0m Development projects heavily focused on
Slide 25: Residential pipeline – developments
Residential pipeline – developments Doncaster, Melbourne VIC $118 million of invested capital across 8 residential development projects currently under construction Sites well located in Sydney, Brisbane, Melbourne and Canberra Fundamentals remain solid across most major markets Committed projects
Slide 26: Residential pipeline – land approvals
Residential pipeline – land approvals Artist’s impression of 548-568 Canterbury Rd, Campsie NSW $290 million of invested capital across 11 residential land projects actively progressing through the local and state government approvals process Expanded our lending practices to take advantage of ban
Slide 27: Camellia update
Camellia update Project site is located at 181 James Ruse Drive Camellia, Parramatta NSW Key metrics Jun 15 6.8 hectares located 23km west of Sydney CBD Invested capital (RCL1) $150.2m State Government has recently announced that the light rail Units ~3,250 will travel past our site Master Pla
Slide 28: Funds management overview
Funds management overview Abacus Property Group – FY16 Results Presentation 19 August 2016 Westpac House, Adelaide SA 50% owned by ADIF II
Slide 29: Funds management
Funds management $10.7 million underlying EBITDA contribution for the twelve month period $146 million of fund investments Each fund independent despite accounting consolidation ADIF II continues to realise assets. During the year seven assets were sold for $39.1 million. Proceeds were used to r
Slide 30: Third party capital partnering program
Third party capital partnering program Business has evolved across changing market cycles with over $1.4 billion invested with our investment partners We have expanded our product offering to meet the requirements of our partners Expanding our revenue sources with fee based, capital light mandates
Slide 31: Summary and outlook
Summary and outlook Abacus Property Group – FY16 Results Presentation 19 August 2016 710 Collins Street, Melbourne VIC
Slide 32: Summary and outlook
Summary and outlook 35 Boundary Street, Brisbane QLD We are pleased to deliver another strong underlying profit result Securityholder distributions are secure and predictable 100% of distributions covered by recurring earnings Payout ratio of 76% of underlying profit The business outlook remai
Slide 33: Disclaimer
Disclaimer The information provided in this document is general, and may not be suitable for the specific purposes of any user of this document. It is not financial advice or a recommendation to acquire Abacus Property Group securities (ASX: ABP). Abacus Property Group believes that the information
Slide 34: FY16 Annual Results Appendices
Ashfield Mall residential development, Sydney NSW FY16 Annual Results Appendices Abacus Property Group – FY16 Results Presentation 19 August 2016
Slide 35: Appendix A Segment balance sheet
Appendix A Segment balance sheet Abacus balance sheet Property Storage Funds Property Ventures Corporate June 2016 June 2015 ($m) ($m) ($m) ($m) ($m) ($m) ($m) Investment properties 813.8 570.3 1,384.1 1,189.7 Inventory 64.8 64.8 107.9 Property, plant and equipment 0.6 4.1 4.7 7.0 Loans and interest
Slide 36: Appendix B Segment earnings (underlying profit)
Appendix B Segment earnings (underlying profit) Property Property Storage Funds FY16 Total FY15 Total Ventures Rental and Storage income 70.0 61.3 131.3 130.1 1 Finance income 46.3 46.3 26.2 Funds management income 12.5 12.5 10.3 2 3 4 Share of profit from equity accounted investments 13.3 0.4 5.7 1
Slide 37: Appendix C Net tangible asset reconciliation
Appendix C Net tangible asset reconciliation 30 June 2016 30 June 2015 Consolidated Group net assets 1,559.3 1,438.1 Less Total external non–controlling interest (43.3) (31.0) Total stapled security holders’ interest in equity 1,516.0 1,407.1 Less Intangible assets and goodwill (32.5) (33.3) Deferre
Slide 38: Appendix D Abacus cashflow analysis
Appendix D Abacus cashflow analysis1 #039;000 CASHFLOWS FROM OPERATING ACTIVITIES Income receipts 208,423 Interest received 459 Distributions received 432 Income tax paid (7,990) Borrowing costs paid (29,247) Operating payments (88,766) Payment for land acquisition (1,779) NET CASHFLOWS FROM OPERATING
Slide 39: Appendix E Debt facilities
Appendix E Debt facilities Capital management metrics June 2016 June 2015 Total debt facilities $873m $770m Total debt drawn $629m $388m Term to maturity 3.5 yrs 4.3 yrs % hedged 53% 88% Weighted average hedge maturity 2.7 yrs 2.9 yrs Average cost of debt – drawn 5.4% 6.1% Group gearing1 25.8% 18.2%
Slide 40: Appendix F Debt maturity profiles
Appendix F Debt maturity profiles Debt maturity profile as at 30 June 2016 ($’m) 23 400 Available bank facility Drawn bank debt 300 200 427 100 117 54 130 50 33 39 0 FY17 FY18 FY19 FY20 FY21 FY22 Fixed hedging maturity profile as at 30 June 2016 (#039;m) Fixed Interest Rate Swaps Weighted Average Fixed
Slide 41: Appendix G Portfolio revaluations
Appendix G Portfolio revaluations Revaluation process for Abacus resulted in a net increase in the investment properties values for FY16 of approximately 5.7% or $74.0 million $37.3 million across the wholly owned commercial properties $36.7 million across the storage portfolio Revaluation of
Slide 42: Appendix H Summary portfolio metrics
Appendix H Summary portfolio metrics Industrial and Key portfolio metrics Jun 16 Jun 15 Other 8% Office Investment portfolio value1 ($m) 1,568 1,318 31% Commercial portfolio1 ($m) 994 861 Retail Storage portfolio ($m) 574 457 24% WACR1,4 (%) 7.48 8.05 No. of commercial assets1 32 37 Storage 37% NLA
Slide 43: Appendix H Summary storage portfolio metrics
Appendix H Summary storage portfolio metrics State geographic diversity by NLA Regional geographic diversity by NLA Regional NZ Canberra ACT 6% 10% 10% VIC Auckland 28% 14% NZ Sydney 21% 21% Regional QLD 7% Regional VIC 4% QLD NSW Melbourne 21% Brisbane 20% 25% 13% Asset net lettable area (m2) split
Slide 44: Appendix H Summary portfolio metrics
Appendix H Summary portfolio metrics Portfolio metrics Office Retail Industrial Storage Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Jun 16 Jun 15 Portfolio ($m) 492 440 375 275 127 133 574 457 No. of assets 16 16 7 7 9 14 62 54 Lettable area (sqm)1 89,004 81,167 83,106 66,575 130,778 150,132 290,000 2
Slide 45: Appendix H Summary portfolio metrics – lease expiry profile
Appendix H Summary portfolio metrics – lease expiry profile 45.3% 15.3% 13.3% 10.4% 9.5% 6.2% Month to month FY17 FY18 FY19 FY20 FY21+ Abacus Property Group – FY16 Results Presentation 19 August 2016 12
Slide 46: Appendix I Property ventures
Appendix I Property ventures Projects Type Equity Loans Total Interest rate Security Returns RCL Portfolio, NSW JV/Loan $59.9m $90.3m $150.2m 1st Mortgagee 50% profit share Campsie, NSW Loan - $42.1m $42.1m 1st Mortgagee 50% profit share SPICE Apartments, QLD Loan - $37.1m $37.1m 2nd Mortgagee 41% p
Slide 47: Appendix I Residential pipeline – developments
Appendix I Residential pipeline – developments Schedule of major projects due for development Targeted profit on cost of c.20% Average interest rate on ABP loans c.10% Ave. Unit Project name Settlement Units/Sold Status ETR1 ABP Profit share Comments Price Quay Street, QLD FY17 78/74 Completed ~
Slide 48: Appendix I Residential pipeline – approvals
Appendix I Residential pipeline – approvals Schedule of major projects awaiting sale to third parties upon rezoning approval Average interest rate on ABP loans c.10% Est. Unit/Lot ABP Profit Project name Timeline Units Status Comments Price1 share Campsie, NSW FY17 Site 1: 270+83 Site 1+2: DA appr
Slide 49: Appendix I Residential pipeline – land sub-divisions
Appendix I Residential pipeline – land sub-divisions Schedule of land sub-divisions due for development Land Price Cost to Project name Timeline Status ABP share Comments lots/Sold per lot prepare lot French Road FY17 108/108 Sold Out $270k $100k 25% Settlements currently happening. Funds will repay
Slide 50: Appendix J Consolidated funds under management
Appendix J Consolidated funds under management Funds ADIF II AHF AWLF Assets 6 3 1 Assets Under Management $139.4m $140.8m $20.1m WAV cap rate 7.90% 7.83% N/A Occupancy 84% 77% N/A Bank debt $50m $50m N/A WAV bank debt maturity 1.0 yr. 0.8 yrs N/A Covenant gearing1 40% 41% N/A NAV per unit2 74c 55c
Slide 51: Disclaimer
Disclaimer The information provided in this document is general, and may not be suitable for the specific purposes of any user of this document. It is not financial advice or a recommendation to acquire Abacus Property Group securities (ASX: ABP). Abacus Property Group believes that the information