Gpt Group · ASX:GPT
Gpt — H1 2015 Earnings Presentation
41 slides from Gpt's earnings presentation, Aug 18, 2015
Slide 1: GPT Interim Result
GPT Interim Result 0 For personal use only 18 August 2015
Slide 2: 2015 Interim Result Highlights
2015 Interim Result Highlights Strategy, asset quality and management expertise delivering results 1 For personal use only Disciplined capital allocation Delivering results from core business and capital management 6.7% 11.3% 4.6 % 26.6% EPS1 growth Total Return Weighted average Gearing cost of debt
Slide 3: 2015 Interim Result Summary
2015 Interim Result Summary Financial summary 2 For personal use only 6 months to 30 June ($m) 2015 2014 Change (%) Net Profit After Tax 421.9 240.6 75.4 Less: Valuation increases1 146.0 30.8 Less: Distribution on exchangeable securities 1.7 12.4 Less: Treasury items marked to market 7.3 (27.4) Less
Slide 4: 2015 Interim Result Highlights
2015 Interim Result Highlights Segment result 3 6 months to 30 June ($m) 2015 2014 Change ($m) For personal use only Retail NOI 127.8 123.6 4.2 Comparable growth +3.2% Office NOI 76.6 67.8 8.8 Comparable growth +8.1% Logistics NOI 44.3 43.1 1.2 Comparable growth +0.8% GPT share of Fund FFO 50.7 38.7
Slide 5: Active Management
Active Management Positive contribution from all management divisions 4 For personal use only • Active earnings 11% of FFO 1H15 • Development capability creating significant value • Funds Management net fee income up 37% Logistics RMP Asset 30 June 2015 ($m) Funds Management Development Development
Slide 6: Capital Management
Capital Management Strong capital position 5 For personal use only 30 Jun 2015 31 Dec 2014 Change Net tangible assets per unit $4.03 $3.94 2.3% Total borrowings $2,842.1m $2,718.5m 4.5% Gearing (net debt to total tangible assets) 26.6% 26.3% 30 bps Look through gearing (net debt to total tangible as
Slide 7: Investment Portfolio Overview
Investment Portfolio Overview Quality result and positioned for growth 6 For personal use only Strong portfolio returns underpinned by income growth 10.3% 4.6% Total Portfolio Return Portfolio like for like (unlevered return) income growth High leasing activity delivers solid occupancy 166k sqm 95.4
Slide 8: Retail Portfolio
Retail Portfolio 1H 2015 highlights – High quality portfolio delivering strong results 7 For personal use only Retail Markets 3.2% like for like income growth • Higher level of discretionary spending • Growth driven by low interest rates and rising house prices 5.9% • NSW and Victoria outperforming
Slide 9: Retail: Specialty sales up 5.9% in the year to June 2015
Retail Specialty sales up 5.9% in the year to June 2015 8 For personal use only Monthly Specialty Sales Growth1,2 Moving Annual Change in Retail Sales by Category1 35.6% 6 monthly = 4.7% 6 monthly = 7.3% Quarterly = 8.0% 10% 9.2% 12.0% 7.8% 10.9% 8% 7.3% 6.9% 6.3% 6.0% 8.7% 5.8% 6% 4.8% 5.0% 5.2% 6.
Slide 10: Retail: Evolving retail mix as part of $1.3 billion development pipeline
Retail Evolving retail mix as part of $1.3 billion retail development pipeline 9 For personal use only Highpoint Casuarina Square • Leisure & • Leisure & entertainment entertainment • $20 million • $34 million • Opened July 2015 • To open Aug 2016 Melbourne Central Penrith • International remix • Re
Slide 11: Office Portfolio
Office Portfolio 1H 2015 highlights – Strong performance and positioned for growth 10 For personal use only Office Markets 8.1% like for like income growth • Sydney and Melbourne performing well with strong net absorption • Perth and Brisbane experiencing negative net effective rental growth 95.0% •
Slide 12: Office: Leasing success positioning the portfolio for growth
Office Leasing success positioning the portfolio for growth 11 For personal use only Leasing success continues Portfolio positioned for growth 500,000 sqm leased since Jan 2012 Low lease expiry profile and single tenant risk 190,000 25% 167,244 170,000 20% 150,000 135,646 Largest single-tenant expir
Slide 13: Office: Divergence in office markets continues
Office Divergence in office markets continues, however GPT is well positioned 12 For personal use only Demand Strong in Key Markets Showing Positive Growth GPT well placed to benefit Annual Total Net Absorption Prime Net Effective Rental Growth 30% 350,000 Syd & 20% 250,000 Melb Melbourne 10% Annual
Slide 14: Logistics Portfolio
Logistics Portfolio 1H 2015 highlights – Creating value across platform 13 For personal use only Industrial Markets 0.8% like for like income growth • Strong global and domestic investor demand driving yield compression • Tenant demand improving for new facilities to capture efficiency benefits • Su
Slide 15: Logistics: Strong portfolio return from active management
Logistics Strong portfolio return from active management 14 For personal use only NTA Uplift Property 1H15 Revaluations Quad 4, Sydney Olympic Park $5.3m 16.9% 15 year lease deal secured, to backfill Samsung departure Citiport Business Park $4.3m 6.9% Significant improvement in occupancy since Dec 2
Slide 16: Logistics Portfolio: 14.7% Total Return from executing on strategy
Logistics Portfolio 14.7% Total Return from executing on strategy, $73m value creation in 1H15 15 For personal use only Industrial Upper Prime Cap Rates Acquisitions • $307 million since 2012 9.0% • Total uplift $31 million 8.4% Acquire • 1H15 uplift $12 million 8.5% 8.2% Sydney 8.0% Developments 8.
Slide 17: Funds Management
Funds Management Strong Fund performance driving business growth 16 For personal use only GWOF performance versus benchmark GWSCF performance versus benchmark 14 12.2 12 11.410.8 11.6 10.0 10.1 11.0 9.5 9.3 9.1 9.4 12 9.5 9.4 9.5 10 8.4 8.2 8.6 8.7 8.3 8.8 8.3 8.1 8.2 Total Return (%) 9.1 Total Retu
Slide 18: Our Outlook
Our Outlook Strong performance in a subdued environment 17 For personal use only • Strong housing construction, investment and price growth, led by Sydney and Melbourne Economy • Private business investment is expected to continue • Lower AUD assisting in the transition from mining to non-mining led
Slide 19: Property to Prosperity
Property to Prosperity 18 For personal use only • Delivering consistent returns from the core portfolio • Funds Management outperformance • Development capability creating material value • Disciplined capital allocation and management • EPS growth guidance of 5-6% driven by core business
Slide 20: 2015 GPT Interim Result
2015 GPT Interim Result 19 For personal use only
Slide 21: Appendices
2015 GPT Interim Result 20 Appendices For personal use only
Slide 22: Retail: Key performance indicators continue to improve
Retail Key performance indicators continue to improve 21 For personal use only 6 months to 30 June 2015 2014 • Strong specialty sales productivity Specialty MAT sales psm1 $10,070 $9,496 • Specialty occupancy cost has improved Specialty occupancy cost1 17.8% 18.1% Leasing spreads (3.1%) (4.6%) • Lea
Slide 23: Retail: Strong specialty sales driving improving metrics
Retail Strong specialty sales driving improving metrics 22 Comparable Net Income Growth1 Specialty MAT Growth2 For personal use only 5% 7% 6% 5.9% 4% 4.1% 5% 4.2% 4.0% 3.9% 3% 4% 3.2% 3% 2% 2.6% 2% 1% 1.5% 1% 0% 0% Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 J
Slide 24: Retail: Investing in the right centres and catchments
Retail Investing in the right centres and catchments is driving stronger sales growth 23 For personal use only Contribution by asset to 5.9% Specialty MAT growth1 2.0% Contribution to portfolio specialty sales growth Charlestown 1.5% 1.6% Rouse Hill Melbourne Central 1.2% 1.0% Penrith 1.0% Highpoint
Slide 25: Retail: Food Catering, Mobile Phones and Retail Services driving growth
Retail Food Catering, Mobile Phones and Retail Services driving growth 24 For personal use only Contribution by commodity group to 5.9% Specialty MAT growth1 1.6% Contribution to portfolio specialty sales growth 1.4% Food Catering 1.2% 1.3% Mobile Phones 1.1% 1.0% Retail Services 0.9% 0.8% General R
Slide 26: Retail: Nature of growth favouring South Eastern seaboard centres
Retail Nature of growth favouring South Eastern seaboard shopping centres 25 For personal use only Retail Trade Growth, by State Retail sales growth led by NSW and Victoria 12% NSW VIC QLD WA Australia Annual growth (mom) 10% • ‘Retail Trade’ has grown at 4.0 to 5.0% for the 8% year to date, led by
Slide 27: Appendices
2015 GPT Interim Result 26 Appendices For personal use only
Slide 28: Office: Sydney and Melbourne outperformance expected to continue
Office Sydney and Melbourne outperformance expected to continue 27 For personal use only Solid recovery in IMT and F&I Sectors Demand Strongest in Sydney and Melbourne National Gross Value Add (GVA) - Key Office Industry Annual Total Net Absorption 15% Sectors F&I IMT Gov't P&BS 350,000 10% 10.1% 25
Slide 29: Office: Inspection levels continue to improve
Office Inspection levels continue to improve Monthly GPT Office Inspections (by number) 28 GPT 2015 Inspections by Industry Mix For personal use only Education Transport 2% 100 91 85 2% Accounting Other 5% 76 79 Mining 2% 80 72 Health & 3% Community Finance and 4% Insurance 60 55 49 Retail Trade 27%
Slide 30: Office: Focused leasing and disciplined capital allocation driving performance
Office Focused leasing and disciplined capital allocation driving performance 29 For personal use only Invested in the Resulting in strong Delivering excellent right markets portfolio metrics performance Capital Allocation Occupancy: 95.0% Total Return: 10.2% Sydney, Melbourne, Brisbane WALE: 6.0 ye
Slide 31: Office: Office trends across CBD markets
Office Office trends across CBD markets 30 For personal use only Eastern Seaboard CBD Exposure: Prime Office Asset Grade by % of Stock Premium Secondary AAGrade Grade Secondary Premium 1,200,000 SYD MEL BRIS 100% 1,000,000 75% 800,000 sqm 600,000 50% 400,000 25% 200,000 - 0% GPT Peer 1 Peer 2 Peer 3
Slide 32: Office: Investing in portfolio to enhance long term performance
Office Investing in portfolio to enhance long term performance 31 For personal use only ASSET UPGRADES ENHANCED TENANT FLEXIBLE SPACE Ensuring our assets maintain their EXPERIENCE Space&Co. now operational market leading position Digital strategy – Wi-Fi, for 18 months 11 assets with current / futur
Slide 33: Appendices
2015 GPT Interim Result 32 Appendices For personal use only
Slide 34: Logistics: Improved demand across Eastern Seaboard markets
Logistics Improved demand across Eastern Seaboard markets 33 National Industrial Take-up ('000 m2) For personal use only National Industrial Supply ('000 m2) 3,000 10 year 3,000 Under Construction 2,500 average 2,500 10 year average Completed 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 2007 2008
Slide 35: Logistics: Continue to create value in all parts of the cycle
Logistics Continue to create value in all parts of the cycle 34 For personal use only Total Return 14.7% and $73 million in NTA uplift DEVELOP / ACQUIRE STRATEGIC OPPORTUNITY ASSET RECYCLING Core Portfolio Enhance/Core+ Key Value Driver Assessment Maximise Exit Value Development Enhancing and re-lea
Slide 36: Logistics Portfolio: 1H 2015 highlights
Logistics Portfolio 1H 2015 highlights – portfolio well positioned 35 For personal use only 92.8% 84,000 8.2 years occupancy sqm leased WALE 2017 expiry is currently 20.4% − 10.0% under negotiation for early renewal − 1.1% attributed to assets currently held for sale − 3.1% attributed to future Leas
Slide 37: Logistics: Successfully delivering on developments and reinvesting
Logistics Successfully delivering on developments and reinvesting 36 For personal use only Development completions • $300 million development completions in 1H15 delivering $26.8 million in development profit Development Asset End Value WALE Margin Coles RRM, Erskine Park $135.0 million 20 years 23%
Slide 38: Logistics: Continued focus on creating value from portfolio and developments
Logistics Continued focus on creating value from portfolio and developments 37 For personal use only Logistics framework 2015 Focus Achievements Current focus • Complete infrastructure • Delivery of development • $300 million development Develop works at Metroplex and pipeline completions at 27% mar
Slide 39: Appendices
2015 GPT Interim Result 38 Appendices For personal use only
Slide 40: Funds Management: Performance of the funds confirms our leadership position
Funds Management Performance of the funds confirms our leadership position 39 For personal use only FUM Historical Growth • 13.4% total return from the FM business over 12 9.6 9.8 8.4 months on GPT’s co-investments of $1.6 billion 6.6 7.1 5.3 5.6 • All three externally managed funds are performing w
Slide 41: Disclaimer
Disclaimer 40 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