Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — H1 2021 Earnings Presentation
46 slides from Growthpoint Properties Australia's earnings presentation, Feb 25, 2021
Slide 1: 1H21 half year results
Growthpoint Properties Australia 1H21 half year results 25 February 2021 Space to thrive.
Slide 2: Agenda
Agenda. Overview — 3 Portfolio update — 7 Financial results — 13 Timothy Collyer Michael Green Dion Andrews Managing Director Chief Investment Officer Chief Financial Officer Outlook and Supplementary summary—17 information — 22 Timothy Collyer Managing Director 2 Growthpoint Properties Australia ––
Slide 3: Overview
Overview. Timothy Collyer Managing Director
Slide 4: 1H21 highlights
1H21 highlights. ‒ Delivered robust financial results, against Profit after tax WALE challenging economic backdrop ‒ Strong valuation uplift, driven by leasing success $205.8m 6.2yrs 1H20: $202.0m, +1.9% 30 June 2020: 6.2yrs and yield compression on our long-WALE and industrial assets Property portf
Slide 5: Strong position maintained through COVID-19 and positive outlook supports provision of earnings guidance
Strong position maintained through COVID-19 and positive outlook supports provision of earnings guidance. Increased occupancy Strong rent collections1,2 FY21 FFO 95% >98% guidance provided FY21 distribution with no material tenant defaults maintained through pandemic guidance Conservative gearing re
Slide 6: Long-term track record of delivering out-performance
Long-term track Total securityholder return1 to 31 December 2020 Return on equity to 31 December 2020 record of delivering Growthpoint (per annum) 13.7% out-performance. S&P/ASX 200 A-REIT accumulation index 15.2% 11.1% 14.0% 14.1% 8.9% Growthpoint trading at 6.8% 7.0% 20% 5.4% 9.3% discount to NTA1
Slide 7: Portfolio update
Portfolio update. Michael Green Chief Investment Officer
Slide 8: Portfolio snapshot — secure income with strong tenant base
Portfolio snapshot — secure income with strong tenant base. Total assets Number of tenants Portfolio occupancy Weighted average lease expiry 97% of portfolio leased 57 163 95% 6.2yrs to government, listed or large 30 June 2020: 58 30 June 2020: 163 30 June 2020: 93% 30 June 2020: 6.2yrs organisation
Slide 9: Industrial overview — outperformance expected to continue
Industrial overview — outperformance expected to continue. Portfolio Weighted average Leased to government, Asset used for logistics occupancy lease expiry listed or large company or warehousing 95% 4.5yrs 98% 90% 30 June 2020: 96% 30 June 2020: 5.0yrs 30 June 2020: 100% 30 June 2020: 93% Industrial
Slide 10: Office overview — modern metro offices well placed to adapt to changing market
Office overview — modern metro offices well placed to adapt to changing market. Portfolio Weighted average Leased to government, Portfolio located in fringe occupancy lease expiry listed or large company or metropolitan markets 95% 6.9yrs 96% 89% 30 June 2020: 92% 30 June 2020: 6.7yrs 30 June 2020:
Slide 11: Leasing update — high-quality, modern portfolio continuing to appeal to preeminent tenants
Leasing update — high-quality, Significant leases modern portfolio continuing to signed in 1H21 appeal to preeminent tenants. Bunnings Term: 10 years, 7 months Portfolio lease expiry Woolworths 4.0% NLA: 13,886 sqm per financial year, by income, ANZ 2.9% 37% Collection House 1.8% as at 31 December 2
Slide 12: Botanicca 3 — Creating significant value through re-development
Botanicca 3 — Creating significant value through re-development. June 2018 June 2020 December 2020 June 2011 $23.0m $142.5m $162.0m $8.8m At development At completion Book value Purchase price commencement Book value Net valuation uplift1 IRR2 Bunnings commenced a 10 year and seven $162.0m $42.6m 18
Slide 13: Financial results
Financial results. Dion Andrews Chief Financial Officer
Slide 14: Financial summary — 1H21 financial results
Financial summary —1H21 financial results. Components of FFO 1H21 1H20 % change Decrease primarily driven by no contribution from Broadmeadows asset in 1H21 NPI $m 117.4 121.4 (3.3%) and lower rent received from NSW Police Force, under new lease agreement Add back amortisation of incentives $m 12.5
Slide 15: Financial summary — resilient performance during COVID-19 pandemic
Financial summary — resilient performance during COVID-19 pandemic. FFO per security movement NTA per security movement (cents per security ) (cents per security) +0.1 cents +17 cents since since 31 December 2019 30 June 2020 1H20 FFO FY20 Capitalised NPI1 Operating Reduced Tax 1H21 FFO NTA Office I
Slide 16: Capital management — robust balance sheet with significant headroom
Capital management — robust balance Stress testing covenants ICR >1.6x sheet with significant headroom. GOZ: 4.8x To breach this covenant, NPI Gearing movement Gearing target range LVR <60% would need to fall for the six months ended 31 December 2020 GOZ: 32.1% by 65%1 35% – 45% To breach this coven
Slide 17: Outlook and summary
Outlook and summary. Timothy Collyer Managing Director
Slide 18: Outlook — summary
Outlook — summary. Strong 1H21 Positioned to FY21 guidance performance capitalise on future opportunities Immaterial impact from Strong capital position with FFO guidance COVID-19 pandemic gearing well below target of 25.2 – 25.5 cps range Delivered FFO growth DPS guidance Experienced management of
Slide 19: Outlook — faster-pace economic recovery now expected in Australia
Outlook – faster-pace economic recovery now expected in Australia. Consumer RBA to hold sentiment now RBA forecasts for GDP Growth1 cash rate at RBA forecasts for unemployment rate1 14.2% 0.1% (average % rate in the quarter) above it’s 10% for three years2 12% pre-pandemic Forecast Forecast level3 8
Slide 20: Outlook — exploring opportunities for future growth
Outlook — exploring opportunities for future growth. Key investment Opportunities: considerations: Office or industrial Funds FFO accretive property management acquisition Ability to leverage Growthpoint expertise Risk/reward ratio Security M&A buy-back Long-term potential 20 Growthpoint Properties
Slide 21: Questions
Thank you for joining us. Questions.
Slide 22: Supplementary information
Supplementary information. Financial Property Key market Glossary information portfolio metrics – 23 – 33 – 40 – 43 22 Growthpoint Properties Australia –– 1H21 results
Slide 23: Financial information
Financial information. 23 Growthpoint Properties Australia –– 1H21 results
Slide 24: Summary financials
Summary financials 1H21 1H20 Change % Change NPI1 $m 117.4 121.4 (4.0) (3.3) Like-for-like NPI $m 115.5 117.5 (2.0) (1.7) Statutory accounting profit $m 205.8 202.0 3.8 1.9 Statutory accounting profit per security ¢ 26.7 26.2 0.5 1.9 FFO $m 98.4 96.8 1.6 1.7 Distributions $m 77.2 91.1 (13.9) (15.3)
Slide 25: Reconciliation from statutory profit to FFO
Reconciliation from statutory profit to FFO 1H21 1H20 Change Change $m $m $m % Profit after tax 205.8 202.0 3.8 1.9 Less FFO items: - Straight line adjustment to property revenue (5.7) 8.1 (13.8) - Net loss in fair value on sale of investment properties 0.3 0.0 0.3 - Net gain in fair value of invest
Slide 26: Financial position
Financial position 31 December 2020 30 June 2020 $m $m Assets Cash and cash equivalents 33.8 42.7 Investment properties 4,406.0 4,325.7 Investment in securities 90.3 69.9 Other assets 29.4 62.4 Total assets 4,559.5 4,500.7 Liabilities Borrowings 1,357.7 1,446.0 Distributions payable 77.2 77.2 Lease
Slide 27: Additional financial information
Additional financial information Impact of COVID-19 pandemic on FY21 results and balance sheet Reconciliation of operating cashflow to FFO FFO Cashflows Receivables 1HY21 $m $m $m $m Operating cashflow 82.0 Provided $0.4m rental abatements (0.4) (0.4) – Lease incentives and leasing costs 20.9 Provid
Slide 28: Lease incentives
Lease incentives Consolidated Statement of Profit and Loss 1H21 1H20 $m $m Property revenue (excluding incentives) 158.0 145.7 Amortisation of tenant incentives (12.5) (9.9) Property revenue 145.5 135.8 Lease incentives includes fit out, rent Net changes in value of investment properties (excluding
Slide 29: Operating and capital expenses
Operating and capital expenses Operating expenses CY20 CY19 Average Total operating expenses $m 13.7 15.7 0.37% Average gross assets value $m 4,219.2 4,101.6 CY16 – CY20 Operating expenses to average gross assets % 0.32 0.38 Capital expenditure Expected to average CY20 CY19 0.3%-0.5% Total portfolio
Slide 30: Capital management
Capital management Maturity date Time to maturity Fixed rate Face value of swap Interest rate swaps Jun-2023 2.5 years 1.15% $75m Jun-2023 Dec-2023 2.5 years 3.0 years 1.15% 0.22% $25m $20m 3.33% Weighted average Dec-2023 3.0 years 0.21% $15m fixed debt rate Jun-2024 3.5 years 1.21% $100m 4.7 yrs Ju
Slide 31: Key debt metrics and changes during 1H21
Key debt metrics and changes during 1H21 31 Dec 2020 30 Jun 2020 Change Gross assets $m 4,559.5 4,500.7 58.8 Interest bearing liabilities $m 1,357.7 1,446.0 (88.3) Total debt facilities $m 1,771.9 1,813.0 (41.1) Undrawn debt $m 407.5 360.0 47.5 Gearing % 29.9 32.2 (2.3) Weighted average cost of debt
Slide 32: Group debt maturity profile
Group debt maturity profile As at 31 December 2020 ($ million) Bank debt Institutional term loan Undrawn bank debt USPP 450 400 50 350 60 300 200 315 290 50 250 200 130 227 200 150 100 108 100 50 43 0 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 32 Growthpoint Properties Australia –– 1H21 results
Slide 33: Property portfolio
Property portfolio. 33 Growthpoint Properties Australia –– 1H21 results
Slide 34: Property portfolio – by property value $4.3b
85% of properties Property portfolio located on eastern seaboard – by property value $4.3b 27% Property Queensland portfolio value $1,167.9 million Office $904.0m Office metropolitan properties (23 assets) Industrial $263.9m Office CBD properties (3 assets) Industrial properties (31 assets) 26% 7 1
Slide 35: Portfolio summary
Sector diversity Geographic diversity Occupancy Portfolio by value by value by income summary WA 8% Vacant 5% Industrial 31% NSW 26% SA 7% As at 31 December 2020 ACT 4% VIC 28% QLD 27% Office 69% Occupied 95% Tenant type Tenant use Annual rent review type by income by income by income SME 3% Large p
Slide 36: Portfolio metrics
Portfolio metrics Key metrics Like-for-like NPI growth (1H20 to 1H21) Distributions 31 December 2020 30 June 2020 from equity Number of assets 57 58 Office Industrial investments Total Property portfolio value $4.3 billion $4.2 billion NPI growth -2.9% 0.8% -1.7% -1.7% Number of tenants 163 163 Port
Slide 37: Top ten tenants – by income
Top ten tenants – by income Total portfolio Office tenants Industrial tenants as at 31 December 2020 as at 31 December 2020 as at 31 December 2020 % portfolio WALE % portfolio WALE % portfolio WALE income (yrs) income (yrs) income (yrs) Woolworths 13 5.9 NSW Police Force 12 24.0 Woolworths 39 5.9 NS
Slide 38: Leasing – office leases executed in 1H21
Leasing – office leases executed in 1H21 Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 333 Ann Street Brisbane QLD Brisbane Housing Corporation Q1, FY21 8.0 867 9 333 Ann Street Brisbane QLD Condor Energy Services Q1, FY21 5.7 295 – 102 Bennelong Parkway Sydney Olympic Park NSW Kek
Slide 39: Leasing – industrial leases executed in 1H21
Leasing – industrial leases executed in 1H21 Location Tenant Start date Term (yrs) NLA (sqm) 13 Business Street Yatala QLD Volo Modular Q1, FY21 5.0 8,951 58 Tarlton Crescent Perth Airport WA Couriers Please Q1, FY21 3.0 3,638 Weighted average / total 4.4 12,589 39 Growthpoint Properties Australia –
Slide 40: Key market metrics
Key market metrics. ar Lamoe
Slide 41: Key metrics – office markets
3% of 18% of Key metrics Brisbane - CBD Brisbane - Fringe Growthpoint Growthpoint Portfolio Portfolio Vacancy 14.0% Vacancy 17.7% – office markets Prime Secondary Prime Secondary R $762 gross $596 gross R $585 gross $470 gross I 40% 42% I 43% 42% Y 5.00-6.25% 5.75-7.00% Y 5.75-7.50% 6.00-7.75% R – A
Slide 42: Key metrics – industrial markets
Key metrics – industrial markets Brisbane 6% of Growthpoint Portfolio V: 596,173 sqm1 Prime Secondary R $115 net $87 net R – Average face rent per sqm per annum I 10-25% 10-20% I – Average incentives Y 5.00-6.00% 6.50-8.00% Y – Average core market yield V – Vacancy 5% of Sydney Growthpoint Brisbane
Slide 43: Glossary
Glossary.
Slide 44: Glossary
Term Definition Term Definition Glossary 1H ABS First half of the financial year Australian Bureau of Statistics JLL The Australian arm of Jones Lang LaSalle, an international professional services and investment management firm LVR Loan to value ratio ACT Australian Capital Territory, Australia m M
Slide 45: Important information
Important information This presentation has been prepared by Growthpoint Properties Australia Limited (ACN 124 093 901) in its personal capacity and as responsible entity of Growthpoint Properties Australia Trust (ARSN 120 121 002) about the activities of Growthpoint Properties Australia (ASX: GOZ)
Slide 46: Contact us. 2021 calendar.
Contact us. Retail investors Computershare 1300 665 792 (within Australia) +61 (3) 9415 4366 (outside Australia) webqueries@computershare.com.au Institutional investors Virginia Spring Investor Relations Manager +61 (3) 8681 2933 investor.relations@growthpoint.com.au 2021 calendar. • 29 April – 3Q21
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