Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — FY2013 Earnings Presentation
42 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, May 15, 2013
Slide 1: Full year results to 31 March 2013
GMT+ Full year results to 31 March 2013
Slide 2: Contents
Contents + Section 01 Overview + Section 02 Financial overview + Section 03 Investment activity + Section 04 Investment portfolio + Section 05 Development portfolio + Section 06 Outlook + Appendices 2
Slide 3: Overview
Overview + $91.7 million before tax profit compared to $53.5 million in pcp + $77.9 million after tax profit compared to $40.5 million in pcp Earnings & + Distributable earnings before tax of $87.7 million or 8.21 cpu ($80.9 million or 8.41 cpu, pcp) Profit + Distributable earnings after tax of $84.
Slide 4: Financial overview
Financial overview+ The Crossing, Highbrook Business Park
Slide 5: Financial performance
Financial performance 12 months ended March 13 March 12 Change $ million $ million % Net rental and related income 117.1 111.3 5.2 Net finance costs (28.9) (26.9) (7.4) Other administrative expenses (9.7) (8.5) (14.1) Costs relating to Highbrook acquisitions (2.2) - - Gain on disposal of investment
Slide 6: Revenue reconciliation
Revenue reconciliation Portfolio income - $ million + Modest growth across investment portfolio on a like for like basis + Customer restructuring includes impact of Geon default + Highbrook acquisitions contribute from 14 December 2012 + Development contribution includes full year contribution from
Slide 7: Distributable profit
Distributable profit Distributable earnings - $ million + Includes beneficial ownership of Highbrook from 1 October 2012 to 13 December 2012 + Adjusted to be net of associated transaction costs 7
Slide 8: Tax on distributable earnings
Tax on distributable earnings + Effective tax rate of 4.1% on distributable earnings + Includes the benefit of the Highbrook acquisitions which has reduced the effective tax rate by 3.5% + Change in legislation from 1 April 2013, to spread all lease incentive deductions over term of lease, increases
Slide 9: Financial position
Financial position as at March 13 March 12 Change $ million $ million % Total assets 2,052.3 1,674.3 22.6 Property investments 2,008.1 1,629.5 23.2 Net borrowings 698.1 581.2 (20.1) Total liabilities 866.4 739.2 (17.2) Equity 1,185.9 935.1 26.8 Net borrowings to property assets (%) 34.8 35.7 n/a NTA
Slide 10: Property investments
Property investments Portfolio value - $ million 10
Slide 11: Net tangible assets
Net tangible assets Cents per unit NTA NTA at 31 March 2012 92.9 Increase in fair value of property investments 0.3 Increase in fair value of derivative financial instruments 0.3 Depreciation recovered on asset sales (0.4) Retained earnings 0.7 DRP 0.1 Highbrook acquisition (1) 1.1 NTA at 31 March 2
Slide 12: Capital management
Capital management + Equity initiatives included: - $60.0 million private placement to institutional investors - $30.0 million Unit Purchase Plan to eligible Unitholders - $20.5 raised through the Distribution Reinvestment Plan - $93.3 million issue of GMT units to Goodman Group and the estate of Si
Slide 13: Capital management
Capital management + Debt restructuring and refinancing Bank facilities March 13 March 12 $ million $ million activity at competitive new margins + Weighted term across all debt GMT main facility 600.0 330.0 facilities maintained at 3+ years Highbrook (50%) - 112.5 + Weighted average cost of debt fo
Slide 14: Capital management
Capital management + GMT is currently 65.5% hedged with an average term of 2.9 years across its swap book + Positioned towards the bottom of the policy band, taking advantage of lower floating rates + Effective interest rate in FY14 expected to be around 7.0% GMT Hedging profile – % hedged 14
Slide 15: Earnings outlook
Earnings outlook + Improving business confidence and strengthening economic growth will drive occupier demand + The Trust is well positioned to benefit from this lift and sustained earnings growth expected over the medium to longer term, but remains sensitive to: - rental growth - interest rate move
Slide 16: Investment activity
Investment activity+ Supercheap Auto at Savill Link, completed July 2012
Slide 17: Highbrook Business Park
Highbrook Business Park + Over 100 hectares of developable land strategically located in Auckland’s East Tamaki + Development started in 2005, with over 250,000 sqm of prime industrial and office assets now completed + Highbrook acquisitions - Purchase of remaining JV interests for $186.6 million -
Slide 18: Acquisition benefits
Acquisition benefits + Enhances an already high quality property portfolio + Increased exposure to prime industrial and business space assets + An expanded development capability at a point in the property cycle where development activity and property values are improving + A favourable consideratio
Slide 19: NZ investment market activity
NZ investment market activity Total Investment Sales Value - $5 million+ + Substantial increase in transaction activity during the second half of 2012 - 84 sales totalling $1.6 billion in 2H 2012 compared to 49 sales totalling $0.9 billion in 1H 2012. + Private investors and local and offshore insti
Slide 20: Sale of assets
Sale of assets + Strengthening investment market with interest from local and offshore investors competing for quality assets + Recycling of capital will ensure GMT can take advantage of more growth orientated investment and development opportunities + Asset sales programme realised $34.9 million wi
Slide 21: Investment portfolio
Investment portfolio+ The Ford Building, Highbrook Business Park
Slide 22: Portfolio leasing
Portfolio leasing Space leased - NLA1 sqm Key leasing deals completed in FY13 Property Customer NLA1 Term sqm years Westney Industry Park Linfox Logistics 29,870 5 Carter Holt Harvey Facility Carter Holt Harvey2 22,341 10 Central Park Various Customers 13,570 73 M20 Business Park Ford 9,112 3 Gatesi
Slide 23: Portfolio occupancy
Portfolio occupancy Portfolio occupancy – portfolio income (%) Key vacancies Property Tenancy NLA1 sqm Enterprise Park Warehouse 6,000 Westney Industry Park Warehouse/office 4,861 Highbrook Business Park Warehouse/office/retail 2,403 The Gate Industry Park Warehouse/office 1,903 Connect Business Est
Slide 24: Portfolio expiries
Portfolio expiries Lease expiry profile – portfolio income (%) Key customer expiries – FY14 Property Customer NLA1 Expiry sqm M20 Business Park Frucor 18,192 Apr 13 Highbrook Business Park GEON 10,047 July 13 Highbrook Business Park LG Electronics 2,560 May 13 Savill Link Toll 8,393 May 13 Westney I
Slide 25: Valuations
Valuations + Valuation gain of $4.2m compared to a devaluation of $19.5m in FY12 - Investment portfolio recorded an increase of $25.9m or 1.5% - Commenced developments recognised $3.8m of value uplift - Development land declined by $25.5m or 9.5% + Portfolio capitalisation rate firmed by 40bps to 8.
Slide 26: Capital Projects
Capital Projects + $2.1 million for planned refurbishment at the ex-Frucor facility, M20 Business Park, including a new roof, separation of services + $1.3 million for upgrade works to gym and childcare provision at Central Park Corporate Centre + $3.0 million for seismic works at Show Place Office
Slide 27: Development portfolio
Development portfolio+
Slide 28: Development strategy
Development strategy “Accelerating our development programme and realising the value in the Trust’s strategic land holdings is a key business focus” + Current land weighting of 11.6% of total property assets + Dominant developer in South Auckland industrial market and Greenlane office corridor + Imp
Slide 29: Development programme
Development programme + Significant increase in development activity since FY11 - 48,218 sqm of projects totalling $90.0 million in FY13 - 5,700 sqm of industrial projects committed post balance date + Average land take-up of 117,000 sqm over the last 9 years supporting around 59,000 sqm of new deve
Slide 30: Development activity – FY13
Development activity – FY13 Customer NLA1 Lease Total Cost Status sqm term $m years Frucor, M20 Business Park 17,150 12 22.3 Complete PlaceMakers, Glassworks Industry Park 2,745 9 5.0 Complete Big Chill expansion, Glassworks Industry Park 1,085 15 3.8 Complete Mainstream, Savill Link 10,620 12 12.5
Slide 31: Recent development completions
Recent development completions Highbrook Business Park M20 Business Park Customer Panasonic Customer Frucor NLA1 7,500 sqm NLA1 17,150 sqm Lease term 10 years Lease term 12 years Ownership % 100 Ownership % 100 Total project cost $m 12.8 Total project cost $m 22.3 Development timeframe Sep 2011 – Fe
Slide 32: Current projects
Current projects PlaceMakers The Crossing + NLA 2,745 sqm + NLA 9,800 sqm + Valuation $6.0m + Valuation $34.6m + Cap rate 7.00% + Cap rate 7.88% + PC April 2013 + PC July 2013 Mainstream 7 Central Park + NLA 10,620 sqm + NLA 5,340 sqm + Valuation $13.2m + Valuation $23.0m + Cap rate 7.33% + Cap rate
Slide 33: Outlook
Outlook+
Slide 34: Outlook and summary
Outlook and summary + Continuation of accelerated development programme + Existing funding capacity utilised, enhancing investment returns to Unitholders Strategy + Focus on maximising portfolio rental streams with targeted leasing campaign to offset pending expiries and lift occupancy + Asset dispo
Slide 35: Thank you
Thank you+ Important Notice This presentation has been prepared by Goodman (NZ) Limited as the manager of Goodman Property Trust (“GMT”). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You s
Slide 36: Appendix – Distributable Earnings Reconciliation
Appendix – Distributable Earnings Reconciliation The following tables are extracted from note 6 to the consolidated financial statements of Group Group Group Group $ million 31 Mar 13 31 Mar 12 000s 31 Mar 13 31 Mar 12 Profit used in calculating distributable earnings Weighted average number of unit
Slide 37: Appendix – GMT financial performance
Appendix – GMT financial performance Period ended March 13 March 12 March 11 March 10 March 09 $ million $ million $ million $ million $ million Net rental income 117.1 111.3 108.7 106.2 103.7 Administrative expenses (11.9) (8.5) (7.6) (6.8) (7.3) Adjustments to reflect Highbrook acquisitions(1) 4.6
Slide 38: Appendix – GMT financial performance continued
Appendix – GMT financial performance continued Period ended March 13 March 12 March 11 March 10 March 09 $ million $ million $ million $ million $ million Weighted average units on issue 1,067.7 961.1 887.4 851.2 838.8 Distributable earnings before tax per unit (c) 8.21 8.41 8.74 9.31 10.38 Distribu
Slide 39: Appendix – GMT assets and liabilities
Appendix – GMT assets and liabilities as at March 13 March 12 March 11 March 10 March 09 $ million $ million $ million $ million $ million Total assets 2,052.3 1,674.3 1,618.0 1,510.4 1,561.6 Property assets 2,008.1 1,629.5 1,576.0 1,474.1 1,512.7 (1) Net borrowings 698.1 581.2 578.4 544.7 546.0 Tot
Slide 40: Appendix – GMT portfolio metrics
Appendix – GMT portfolio metrics as at March 13 March 12 March 11 March 10 March 09 $ million $ million $ million $ million $ million 1 NLA (sqm) 1,000,418 987,569 928,420 896,440 880,016 Weighted average capitalisation rate (%) 8.1 8.5 8.6 8.6 8.7 Portfolio occupancy (%) 96 96 97 96 96 2 WALT (year
Slide 41: Appendix – GMT investment portfolio
Appendix – GMT investment portfolio GMT NLA1 Valuation2 Market cap Occupancy WALT3 Property ownership Key Customers sqm $M rate % % years % Highbrook Business Park + HDL Assets 100 167,916 323.4 7.00 - 7.88 100 6.4 PaperLinX, Datamail,NALCO, Scalzo,Panasonic + HBPL Assets 100 83,256 161.1 7.00 - 8.5
Slide 42: Appendix – GMT developments
Appendix – GMT developments Property Net Estimated Estimated Occupancy Lease Expected date lettable market capitalisation % term of completion area1 value2 rate years sqm $M % Highbrook Business Park + The Crossing Stage 1 9,800 34.6 7.88 59 6-12 July 2013 + Warehouse 28 6,700 10.4 7.50 - - 2014 Sav
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