Gpt Group · ASX:GPT
Gpt — The GPT Group — FY2023 Earnings Presentation
36 slides from Gpt's earnings presentation, February 2024
Slide 1: 2023 Annual Result Market Briefing
Experience First 2023 Annual Result GPT – 2023 ANNUAL RESULT PRESENTATION Market Briefing 1
Slide 2: Agenda
Agenda 2023 Annual Result - Bob Johnston 4 Results and Capital management – Dean McGuire 7 Retail - Chris Barnett 12 Office - Martin Ritchie 19 Logistics - Chris Davis 26 Outlook and 2024 Guidance - Bob Johnston 33 GPT – 2023 ANNUAL RESULT PRESENTATION 2
Slide 3: Acknowledgement of Traditional Custodians
GPT acknowledges the Artwork: ‘Saltwater Spirit’ by Lowell Hunter (proud Traditional Custodians of the Nyul Nyul Saltwater man) lands on which our business and Bobbi Lockyer (proud Ngarluma, Kariyarra, Nyul operates. Nyul and Yawuru woman). We pay our respects to Elders past, present and emerging, a
Slide 4: 2023 Annual Result: Financial summary and investment portfolio
2023 Annual Result Financial summary Investment portfolio 31.37c Funds From Operations per security, down 3.2% 25.0c Distribution per security, unchanged 98.2% Portfolio Occupancy (Incl. HoA) 4.5yrs Weighted average lease expiry $5.61 Net Tangible Assets per $32.6b Assets under management 5.41% secu
Slide 5: Overview of operations
Overview of operations • Strong leasing results achieved in Retail portfolio $32.6b AUM − Occupancy 99.8%, with high sales productivity and sustainable occupancy cost − Melbourne Central occupancy 100% and Moving Annual Turnover (MAT) up 17.1% on 2022 GPT Portfolio2 • Office portfolio occupancy of 9
Slide 6: Portfolio valuation metrics
Portfolio valuation metrics Investment property valuation decline of $819.0m1 or 5.1% Retail Office Logistics 2023 Valuation movement 12 months to 31 December 2023 -$178.7m -$555.8m -$84.7m -3.1% -9.2% -1.9% Capitalisation Rate Movement since 31 December 2022 5.43% 5.49% 5.26% +40 bps +46 bps +86 bp
Slide 7: Results and Capital management
Experience First Results and Capital GPT – 2023 ANNUAL RESULT PRESENTATION management 7
Slide 8: Financial result
Financial result ($m) Dec 2023 Dec 2022 Change Net (loss)/profit after tax (240.0) 469.3 Valuation decrease 819.0 159.3 Treasury instruments marked 21.9 (8.0) to market and other items Funds from operations (FFO) 600.9 620.6 (3.2%) FFO per security (cents) 31.37 32.40 (3.2%) Adjusted FFO (AFFO) 488.
Slide 9: Segment result
Segment result ($m) 2023 2022 Change Comments Rent reviews, higher turnover rent and occupancy partially offset by divestments Retail 317.5 289.8 9.6% (+$32.2m), and lower GWSCF FFO (-$4.5m) primarily due to interest costs Lower average occupancy partially offset by rent reviews (-$6.6m), and lower
Slide 10: Interest rate hedge profile
Interest rate hedge profile 2024-2026 71% Hedge Profile 100% 96% 10.0% 90% 9.0% hedged over the next 3 years 80% at an average fixed base rate of 3.5% 8.0% 70% 65% 7.0% 60% 51% 6.0% 5.2% 50% 5.0% 40% 4.0% 30% 3.6% 3.7% 3.0% 20% 3.2% 10% 2.0% Full year 2024 forecast all-in-cost of debt 0% 1.0% 2024 2
Slide 11: Capital management
Capital management Key Statistics Dec 2023 Dec 2022 Comments Net Tangible Assets per security $5.61 $5.98 Driven by a valuation decrease of $819m Within stated range of 25%-35% and material headroom to 50% Net gearing 28.3% 28.5% covenant Liquidity $1.5b $1.1b Funds capital commitments and debt matu
Slide 12: Retail
Experience First GPT – 2023 ANNUAL RESULT PRESENTATION Retail 12
Slide 13: Retail overview
Retail overview $340.9m Segment contribution, up 12.3% 12.5% Comparable income growth 99.8% Portfolio occupancy 5.43% Weighted average capitalisation 7.4% Total Centre sales growth $12.8b Assets under management rate, up 40 bps GPT – 2023 ANNUAL RESULT PRESENTATION 13
Slide 14: Excellent leasing outcomes achieved
Excellent leasing outcomes achieved • High tenant demand for quality retail space • Positive leasing spreads across renewals and new leases • Average lease terms of 5.2 years all with fixed base rents and annual increases • Specialty occupancy costs of 16.1% (78 bps below long-term average) 12 month
Slide 15: Centre sales performance
Centre sales performance • Total Centre MAT up 7.4% on 2022 • Total Centre sales in the December 2023 quarter up 3.3% on prior year • Black Friday sales event continues to grow in customer popularity and bolstered sales in November, delivering a 5.6% uplift compared to the prior year • Specialty Pro
Slide 16: Melbourne Central achieves record MAT
Melbourne Central achieves record MAT Melbourne Central 2013 – 2023 Total Specialty Productivity (psm) $15,988 $14,431 $14,269 $14,002 $12,379 $11,512 $10,458 $9,403 $8,978 • Record Total Centre MAT of $612.3m (+17.1% growth on 2022) as customers return to Melbourne CBD • Market share and customer p
Slide 17: GPT Retail Platform
GPT Retail Platform GPT is a leading retail property and asset management platform in Australia 16 Assets owned 1.3m sqm $10.3b GLA Total MAT and/or managed New South Wales 4,000+ 207m Charlestown Square Dapto Mall Macarthur Square Macquarie Centre Marrickville Metro Retail tenancies Customer Visits
Slide 18: Retail outlook
Retail outlook • We expect retail sales growth to remain positive over 2024 • Retailers expected to maintain healthy levels of profitability and sustainable occupancy costs • The Group will continue leasing strategies to drive sales productivity and position our assets to attract first to market ret
Slide 19: Office
Experience First GPT – 2023 ANNUAL RESULT PRESENTATION Office 19
Slide 20: Office overview
Office overview $323.4m Segment contribution, down 3.4% -0.8% Comparable income growth 92.3% Portfolio occupancy (incl. HoA) 5.49% Weighted average capitalisation 4.7yrs Weighted average lease expiry $13.9b Assets under management rate, up 46 bps GPT – 2023 ANNUAL RESULT PRESENTATION 20
Slide 21: Office leasing market remains challenging
Office leasing market remains challenging • Vacancy rates in Sydney and Melbourne are elevated, with subdued demand and high incentives • Brisbane prime market outperformed with solid demand, vacancy trending lower and strong rental growth • Customers continue to prefer prime, high-quality workplace
Slide 22: Strong leasing results
Strong leasing results 133,800 sqm 5.1 years 35% 506 Leased across 167 deals (incl. HoA) Average lease term Average gross incentive Customers, up 13% GPT and GWOF NLA Leasing activity breakdown Key Leasing 2023 Customer Area (sqm) Term (years) Asset By NLA By number of deals Confidential (HoA) 12,30
Slide 23: Leasing remains a core focus
Leasing remains a core focus • Portfolio occupancy increased to 92.3% (including HoA) at December 2023 • 11% of the portfolio expiring in 2024 of which 6% occurs in the first half GPT Office vs Market Prime Grade Average Occupancy Lease expiry profile (incl. HoA)2 17% 14% 13% 92.3% 11% 8% 90.3% 8% 6
Slide 24: Portfolio well positioned for leasing in 2024
Portfolio well positioned for leasing in 2024 Three distinctive office products with a focused leasing strategy 100% Prime portfolio 100% Portfolio certified carbon neutral1 78% 5.1 stars GPT Space&Co Portfolio constructed or NABERS energy refurbished since 2012 portfolio rating2 73 4.6 stars GPT De
Slide 25: Office outlook
Office outlook • Market vacancy is expected to remain elevated however prime assets with appealing amenity will continue to be in demand • Leasing to stay competitive. GPT’s three distinctive office products designed to cater to all market segments • GPT’s high quality portfolio is well located, off
Slide 26: Logistics
Experience First GPT – 2023 ANNUAL RESULT PRESENTATION Logistics 26
Slide 27: Logistics overview
Logistics overview $198.5m Segment contribution, up 5.5% 5.5% Comparable income growth 99.5% Portfolio occupancy (Incl. HoA) 5.26% Weighted average capitalisation 5.4yrs Weighted average lease expiry $4.7b Assets under management rate, up 86bps GPT – 2023 ANNUAL RESULT PRESENTATION 27
Slide 28: Market conditions remain favourable
Market conditions remain favourable • 2023 gross take-up of 2.2 million sqm with Industrial & Logistics Market Sydney Melbourne Brisbane demand normalising to the 10-year average (2.4 million sqm)2 Vacancy1 0.5% 1.6% 1.4% • Transport/Postal users are the dominant occupier group, accounting for 41% o
Slide 29: Strong leasing outcomes achieved
Strong leasing outcomes achieved • Total leasing1 of 168,000sqm and leasing spreads of 39% • High occupancy1 maintained at 99.5% • Portfolio under-rented compared to market, 32% by income expiring in next three years with >15% average leasing spreads expected Key Leasing 2023 Customer Asset Area (sq
Slide 30: Development completions
Development completions • Five projects of $259.3m AUM delivered, adding 111,200sqm of prime logistics stock • Half of the Logistics portfolio has been created via the development pipeline 1 providing customers with high quality product and delivering enhanced returns 24A & 24B Niton Drive, Gateway
Slide 31: Developing high quality sustainable product
Developing high quality Mamre Road Precinct, Kemps Creek, NSW sustainable product • Progressing ~$2b AUM pipeline1 (52% Sydney, 36% Melbourne, 12% Brisbane) • Onsite works at Yiribana East Logistics Estate, Kemps Creek to commence this quarter – DA achieved for two of six facilities, targeting 1H 20
Slide 32: Logistics outlook
Logistics outlook • Market vacancy expected to remain low through 2024, supporting rent growth • Market supply expected to increase, however timing dependent on authority approvals, with delays particularly acute in Sydney • Executing leasing strategies to maximise income upside with 7% lease expiry
Slide 33: Outlook and 2024 Guidance
Experience First Outlook and GPT – 2023 ANNUAL RESULT PRESENTATION 2024 Guidance 33
Slide 34: Outlook and 2024 Guidance
Outlook and 2024 Guidance Outlook • Operating environment remains uncertain, however interest rates appear close to peak and inflation is trending lower. Transaction market remains subdued but is expected to improve as bond yields stabilise • Retail sales growth moderated in 2H 2023, however we expe
Slide 35: Thank you for joining us
Experience First Thank you for joining us Questions GPT – 2023 ANNUAL RESULT PRESENTATION 35
Slide 36: Disclaimer
Disclaimer This Presentation (Presentation) has been prepared by The GPT Group comprising GPT RE To the maximum extent permitted by law, The GPT Group, its related companies, officers, Limited (ACN 107 426 504; AFSL 286511), as responsible entity of the General Property Trust, and employees and agen