Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — FY2023 Earnings Presentation
40 slides from Goodman's earnings presentation, May 23, 2023
Slide 1: Every Step Counts - Annual Result 2023
GOODMAN PROPERTY TRUST EVERY ANNUAL RESULT 2023 STEP COUNTS
Slide 2: Contents
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 CONTENTS PRESENTED BY: James Spence Chief Executive Officer Andy Eakin Chief Financial Officer 03 06 16 OVERVIEW INVESTMENT PORTFOLIO FINANCIAL RESULT 23 27 32 Unless otherwise indicated, all numerical data provided in this presentation is stated as at 31
Slide 3: Overview
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 OVERVIEW 3
Slide 4: Building resilience
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | OVERVIEW Building resilience The desire to build supply chain resilience is driving customer demand for well-located urban logistics space + Demographic changes, customer sustainability targets, and the unique requirements of e-commerce have all driven t
Slide 5: Year in review
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | OVERVIEW YEAR IN REVIEW Portfolio + Portfolio occupancy of 99.5% and WALT of 6.4 years + 212,486 sqm of stabilised leasing during the period produced rental reversion of 23% + Potential rent reversion to market has increased to 25% + Underlying like-for-
Slide 6: Investment Portfolio
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 INVESTMENT PORTFOLIO 6
Slide 7: Highbrook completions
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Highbrook completions Tāwharau Lane NZ Blood Service Stanley Black & Decker Net lettable area Net lettable area Net lettable area 8,135 sqm 3,317 sqm 9,185 sqm Achieved Green Star Design rating1 Achieved Green Star Design rating1 Tar
Slide 8: Roma Road progress
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Leased 18,230 sqm Completing March 2024 Complete & Leased1 17,700 sqm 4,305 sqm Completing April 2024 Leased2 4,430 sqm Completing April 2024 ROMA ROAD PROGRESS Artist’s impression 1 Completed post FY23 balance date 2 Leased post FY2
Slide 9: Property portfolio
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO GMT’s urban logistics Property portfolio portfolio provides essential supply chain infrastructure, facilitating the efficient storage and distribution of goods and materials. PROPERTY PORTFOLIO $4.8bn NET LETTABLE AREA1 1.1m sqm OCCU
Slide 10: Stabilised portfolio leasing
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Stabilised portfolio leasing LEASED IN FY23 RENTAL REVERSION 212,486 sqm 23% CORE PORTFOLIO AVERAGE WAREHOUSE RATE1 CORE RETENTION2 $186 psm 78% AVERAGE LEASE UP PERIOD AVERAGE INCENTIVE 1.8 months 2.7% AVERAGE NEW LEASE TERM 5.5 yea
Slide 11: Rent reversion
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO FY24 STABILISED PORTFOLIO REVIEW PROFILE Rent reversion % of stabilised portfolio income 100% 9% Expiry + Potential rent reversion to market has increased to 25%1, which equates to under-renting of $48.4 million 12% No review + 9% of
Slide 12: Customer base
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Customer base INDUSTRY EXPOSURE1 % of portfolio income + 230+ customers across 163 buildings, with 77% focused on warehousing or distribution + Top 10 customers account for 39% of portfolio income TOP 10 CUSTOMERS1 total NLA (sqm) pe
Slide 13: Work in progress
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Work in progress TOTAL PROJECT COST NET LETTABLE AREA YIELD ON COST % $461.6m 111,742 sqm 5.0% WALT BROWNFIELD REDEVELOPMENT PROJECTS %1 YIELD ON ADDITIONAL COST % 13.1 years 92% 8.1% 1 Total project cost 13
Slide 14: Current development programme
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO Current development WORK IN PROGRESS SUMMARY programme Lettable Expected Estate area (sqm) completion date Leased Highbrook Business Park 7,865 Jun-23 100% Favona Road Estate 35,860 Jun-23 100% + Four developments have completed, pro
Slide 15: Realising value from within
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | INVESTMENT PORTFOLIO VALUE-ADD PORTFOLIO 10-YEAR LEASE EXPIRY PROFILE Realising value % of portfolio income from within 10% 8% 6% + 4% 14% of GMT portfolio is classed as value-add (“brownfield”)1, and is: 2% – 98% occupied, with a WALE of 3.9 years 0% FY
Slide 16: Financial Result
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 FINANCIAL RESULT 16
Slide 17: Financial highlights
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Financial highlights NET PROPERTY INCOME OPERATING EARNINGS AFTER TAX1 $177.0m 12.7% increase in rental revenue $111.1m 11.9% increase on prior year CASH EARNINGS2 DISTRIBUTIONS 7.10 cpu 6.6% growth in underlying earnings 5.90 cpu 7.3% i
Slide 18: Net property income
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Net property NET PROPERTY INCOME income $m 180 175 +2.6 177.0 +0.9 + Net property income increased by 170 +7.2 $19.9 million to $177.0 million, a 12.7% increase on FY22 165 + Income from acquisitions and +6.9 developments, in addition to
Slide 19: Operating earnings
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Operating OPERATING EARNINGS AFTER TAX earnings $m 125 120 + Strong operating performance reflected in 11.9% increase in operating 115 -9.8 earnings after tax 110 + Net property income increased 12.7%, +19.9 -1.7 +3.6 111.1 -0.2 while to
Slide 20: Cash earnings
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Cash earnings CASH EARNINGS CALCULATION $m FY23 FY22 % change + FY23 cash earnings of 7.10 cents per unit, Operating earnings before tax 126.5 118.3 6.9% a 6.6% increase on FY22 Income tax on operating earnings (15.4) (19.0) (18.9%) + Di
Slide 21: Portfolio valuation
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Portfolio VALUATION SUMMARY valuation $m Highbrook Business Park Valuation 2,226.3 Cap rate 5.1% Initial yield 4.3% WALT years 5.8 Occupancy 99% Net lettable area sqm 480,676 + $237.7 million, or 4.7%, reduction in portfolio value to $4,
Slide 22: Investment portfolio
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | FINANCIAL RESULT Investment INVESTMENT PROPERTY portfolio $m 5,500 + Future development pipeline enhanced: +38.8 5,000 – Acquisition of 4.0 hectare 4,773.2 +60.2 +167.7 -276.5 +27.8 4,791.2 Sleepyhead site in Otahuhu settled in May 2022 282.6 4,500 474.4
Slide 23: Capital Management
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 CAPITAL MANAGEMENT 23
Slide 24: Managing interest rate risk
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | CAPITAL MANAGEMENT Managing BORROWING METRICS interest rate 12 month forward hedging level 31-Mar-23 84% 31-Mar-22 70% risk Weighted average debt cost ICR covenant (>2.0x) 4.0% 3.6x 3.2% 5.3x + Additional hedging in place, now around 84% hedged for the n
Slide 25: Managing funding risk
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | CAPITAL MANAGEMENT Managing FUNDING METRICS funding risk Non-bank funding ( % of drawn debt) 31-Mar-23 74% 31-Mar-22 85% Available liquidity $739 million $523 million + Liquidity and diversity of funding Weighted average debt term (drawn)1 3.6 years 4.6
Slide 26: Gearing
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | CAPITAL MANAGEMENT Gearing LOAN TO VALUE RATIO Covenant maximum 50% + LVR of 25.9% with fully committed LVR of 29.1%, 40% significantly below covenant maximum of 50% + Committed developments complete over periods to FY25 30% Preferred through cycle range
Slide 27: Sustainability
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 SUSTAINABILITY 27
Slide 28: Embedding sustainability
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | SUSTAINABILITY Embedding sustainability Regulators EMISSIONS DISCLOSURE + 8 out of our top 10 customers have publicly committed to carbon reduction targets + Sustainable logistics properties will enable our customers to reduce their emissions and make pr
Slide 29: Sustainability highlights
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | SUSTAINABILITY Sustainability highlights CDP CLIMATE CHANGE SCORE TOITŪ CERTIFIED OPERATIONS1 A- rating for 2022 carbonzero since 2021 GREENHOUSE GAS EMISSIONS SUSTAINABLE FINANCE FRAMEWORK 38% reduction from FY20 base year $450 million of green retail b
Slide 30: Sustainable development
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | SUSTAINABILITY Sustainable development + Specifying lower carbon concrete and undertaking life cycle assessments for all developments. Measuring and reducing our embodied carbon + FY23 developments have 12% less embodied carbon compared to the NZ standar
Slide 31: Measure & reduce
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | SUSTAINABILITY Measure & reduce + Over 50% of customers have agreed to share utility (electricity, gas, water) and waste data to benchmark and monitor performance + Implementing electrical submetering and monitoring across our core portfolio, targeting c
Slide 32: Summary & Outlook
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 SUMMARY & OUTLOOK 32
Slide 33: Looking forward
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | SUMMARY & OUTLOOK LOOKING FORWARD Future focused Navigating the challenging economic environment + The near-term outlook is more uncertain with a variety of downside risks likely to constrain economic activity + While a slowing economy has created headwi
Slide 34: Questions
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 QUESTIONS 34
Slide 35: Thank you
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 THANK YOU The information and opinions in this presentation were prepared by Goodman (NZ) Limited on behalf of Goodman Property Trust or one of its subsidiaries (GMT). GMT makes no representation or warranty as to the accuracy or completeness of the inform
Slide 36: Appendix
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 APPENDIX 36
Slide 37: Profit or loss
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | APPENDIX Profit or loss 37
Slide 38: Balance sheet
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | APPENDIX Balance sheet 38
Slide 39: Cash flows
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | APPENDIX Cash flows 39
Slide 40: Development programme
GOODMAN PROPERTY TRUST | ANNUAL RESULT 2023 | APPENDIX Development programme Development Estate Lettable area (sqm) Completion date Leased Mainfreight Favona Road Estate 35,860 Jun-23 100% North Point Warehouses Highbrook Business Park 7,865 Jun-23 100% Cotton On Roma Road Estate 18,230 Mar-24 100%
Goodman Property Trust — FY2023 Earnings Presentation on 6ix