Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — FY2021 Earnings Presentation
49 slides from Goodman's earnings presentation, May 13, 2021
Slide 1: Annual Result 2021
Annual Result 2021 Goodman Property Trust 1
Slide 2: Contents
Goodman Property Trust Annual Result 2021 Contents Overview Sustainability 03 06 Financial Capital result management 10 16 Investment Development portfolio programme 22 31 Summary & Appendix outlook 39 35 Presented by: John Dakin Chief Executive Officer ◼︎ Andy Eakin Chief Financial Officer ◼︎ James
Slide 3: Overview
Goodman Property Trust Annual Result 2021 Overview 3
Slide 4: Global logistics trends
Goodman Property Trust Annual Result 2021 Global logistics trends ◼ The pandemic has brought its challenges, with its effect being felt across the globe. A consequence of the global pandemic has been structural changes to consumption trends resulting in increased demand for industrial real estate +
Slide 5: Results overview
Goodman Property Trust Annual Result 2021 Results overview Portfolio ◼ Portfolio occupancy of 98.0%, WALE of 5.5 years, with only 9%1 of income subject to lease expiry by the end of FY22 ◼ Underlying like for like NPI growth of 4.1% for the year ◼ $250.1m of development WIP including redevelopment o
Slide 6: Sustainability
Goodman Property Trust Annual Result 2021 Sustainability OfficeMax – Highbrook Business Park 6
Slide 7: Achievements
Goodman Property Trust Annual Result 2021 Achievements carbonzero Certified carbon neutral four years Reduction in GHG Climate score - Carbon Green Star target ahead of 2025 target emissions Disclosure Project new developments 39.8% B- 5-star Gateway warehouses – Highbrook Business Park 7
Slide 8: Environmentally responsible
Goodman Property Trust Annual Result 2021 Environmentally responsible Our commitment to reducing the impacts of our business on climate change ◼ Significant focus on reducing the carbon footprint of the business ◼ carbonzero certified by Toitū for FY21 ＋ FY20 audited base year; management plan with
Slide 9: Sustainable development
Goodman Property Trust Annual Result 2021 Sustainable development Commitment to developing with less impact on the environment ◼ Lifted our standard specification, enabling us to target 5-star Green Star rating on all new developments ◼ Offsetting all GHG emissions embodied in new developments ＋ Inn
Slide 10: Financial result
Goodman Property Trust Annual Result 2021 Financial result Metrobox – Savill Link 10
Slide 11: Financial highlights
Goodman Property Trust Annual Result 2021 Financialhighlights Financial highlights Profit before tax Portfolio revaluation Net tangible asset backing Loan-to-value ratio1 $648.9m $560.0m 212.5cpu 19.2% Total return2 Cash earnings3 FY21 distribution Weighted average debt term4 26.1% 6.40cpu 5.30cpu 5
Slide 12: Net property income
Goodman Property Trust Annual Result 2021 Net property income Net property income bridge $m 160.0 155.0 -1.0 +0.4 -1.8 ◼ Income from acquisitions and +3.3 developments, in addition to like-for-like 153.0 150.0 rental growth, has offset the impact of +4.6 asset disposals and deleveraging +3.5 145.0 -
Slide 13: Cash earnings
Goodman Property Trust Annual Result 2021 Cash earnings Cash earnings calculation $m FY21 FY20 % change ◼ Cash earnings of 6.40 cpu, around 3% higher than FY20 and initial FY21 guidance Operating earnings before tax1 114.9 109.7 4.7% ◼ Implementation of new, sustainable distribution policy paying ou
Slide 14: Capital growth
Goodman Property Trust Annual Result 2021 Capital growth Net tangible assets cents per unit 220.0 210.0 -0.9 +0.4 212.5 +1.7 ◼ NTA increased 39.8 cents per unit (23.0%) 200.0 for the year to 212.5 cents per unit +38.6 190.0 ◼ 17.3% increase in portfolio value main contributor 180.0 ◼ $23.5 million r
Slide 15: Investment property
Goodman Property Trust Annual Result 2021 Investment property Investment property $m 3,900 3,789.3 +2.3 73.3 +15.5 3,700 ◼ Total investment property increased by $715.3 million to $3.8 billion 3,500 +536.5 ◼ $560 million or 17.3% increase in 3,300 portfolio valuation +23.5 3,074.0 +84.1 +53.4 3,716.
Slide 16: Capital management
Goodman Property Trust Annual Result 2021 Capital management NCI – Savill Link 16
Slide 17: Managing funding risk
Goodman Property Trust Annual Result 2021 Managing funding risk Maturity profile $m ◼ Funding diversity extended through issuance of two wholesale bond tenors: 250 ＋ $50 million, 8 year, 2.262% fixed ＋ $150 million, 10 year, 2.559% fixed 200 ◼ FY22 bank maturity extended to FY25 with existing 100 10
Slide 18: Managing interest rate risk
Goodman Property Trust Annual Result 2021 Managing interest rate risk Hedging profile ◼ Hedging levels increased through issuance of 8 100% and 10 year wholesale bonds at underlying rates of ~41 bps and ~56 bps 90% ◼ Following wholesale bond issuance, hedge levels 80% managed through close-out of sh
Slide 19: Covenants
Goodman Property Trust Annual Result 2021 Covenants Loan to value ratio1 Interest cover ratio 35.0% 4.5x ◼ Balance sheet has been significantly deleveraged through: 4.0x 30.0% 4.1x ＋ Asset sales from portfolio repositioning 3.9x 29.3% 3.5x 3.6x ＋ Equity issuance in FY20, and 25.0% 25.6% ＋ Revaluatio
Slide 20: Gearing
Goodman Property Trust Annual Result 2021 Gearing Loan to value ratio1 24% 22% 22.5% +1.2% ◼ GMT continues to be conservatively leveraged +3.3% -3.2% within new preferred range 20% +2.2% +0.1% 19.2% ◼ LVR of 19.2% at 31 March 2021 with fully 18.9% 18% committed LVR of 22.5% ◼ Balance sheet strength
Slide 21: Credit metrics
Goodman Property Trust Annual Result 2021 Credit metrics Debt/EBITDA FFO/Debt 6.0x 18% 5.7x 16% 16.6% 5.4x 5.0x 5.0x 4.9x ◼ Corporate credit rating of BBB 14% 13.3% 13.4% ◼ Debt issue rating one notch higher at BBB+ 4.0x 12% 4.0x 12.2% 11.6% 10% ◼ Debt/EBITDA consistently low over recent 3.0x years
Slide 22: Investment portfolio
Goodman Property Trust Annual Result 2021 Investment portfolio Highbrook Crossing 22
Slide 23: Mt Wellington extension
Goodman Property Trust Annual Result 2021 Mt Wellington extension Land area 1.2ha Mt Wellington Estate – acquired September 2019 Acquisition properties – acquired April 2020 23
Slide 24: Savill Link extension
Goodman Property Trust Annual Result 2021 Savill Link extension Land area 13.3ha Savill Link Acquisition properties – acquired September 2020 Strategic investment in a proven logistics location 24
Slide 25: Completed developments
Goodman Property Trust Annual Result 2021 Completed developments Leasing outcomes ◼ 7 developments completed across 33,918 sqm of NLA ◼ 11,296 sqm developed on a pre-committed basis for customers OfficeMax and Ingram Micro ◼ 22,622 sqm developed on a build-to-lease basis and are 78% leased OfficeMax
Slide 26: GMT's property portfolio
Goodman Property Trust Annual Result 2021 GMT’s property portfolio Property portfolio Estates $3.8bn 11 Net lettable area 1.1m sqm Efficient and desirable distribution locations 26
Slide 27: Stabilised portfolio
Goodman Property Trust Annual Result 2021 Stabilised portfolio Occupancy Passing rental growth Average lease term 98.0% 5.3% on stabilised leasing deals 3.4 years on stabilised leasing deals Leased in FY21 Arrears (over 30 days) Average lease up period 146,587 sqm 13.4% of stabilised portfolio 0.3%
Slide 28: Capital expenditure
Goodman Property Trust Annual Result 2021 Capital expenditure ◼ Total capital expenditure on stabilised portfolio of $13.8m, or 42 bps of average property assets for the year ◼ Number of projects underway across portfolio which will allow for significant rental increases Exterior view prior to Estat
Slide 29: Property returns
Goodman Property Trust Annual Result 2021 Property returns ◼ $560.0 million revaluation contributing 17.3% to an Property returns1 ungeared property portfolio return of 22.1%1 ◼ Approximately 75% of annual revaluation driven by cap 4.7% 17.3% 22.1% rate compression of 70 bps from 5.4% to 4.7% Income
Slide 30: Expiry & reversion
Goodman Property Trust Annual Result 2021 Expiry & reversion ◼ 22% of the portfolio is due to expire in FY22 and FY231 Portfolio review profile % of portfolio income 90% ◼ 15% of portfolio is subject to market review or expiry1 prior to the end of FY22 80% 2% 9% 70% 5% 13% 10-year lease expiry profi
Slide 31: Development programme
Goodman Property Trust Annual Result 2021 Development programme M20 Business Park 31
Slide 32: Work in progress
Goodman Property Trust Annual Result 2021 Work in progress Total Project Cost $250.1m Lettable area 68,752 sqm Roma Road prior to redevelopment Riverside warehouses – Highbrook Business Park Artist’s impression NZ Post – Roma Road Artist’s impression 32
Slide 33: Current development programme
Goodman Property Trust Annual Result 2021 Current development programme Work-in-progress summary1 Expected completion ◼ Current development programme consists of Estate Lettable area sqm Leased date2 68,752 sqm with a total project cost of $250.1 Highbrook Business Park 8,109 Jun-22 11% million and
Slide 34: Development pipeline
Goodman Property Trust Annual Result 2021 Development pipeline Lettable area Redevelopment focus Value added 250,000 sqm development potential within existing portfolio 85% of development pipeline is $1bn + forecast completion value of brownfield redevelopment development pipeline M20 Business Park
Slide 35: Summary & outlook
Goodman Property Trust Annual Result 2021 Summary & outlook NCI - Savill Link 35
Slide 36: Summary & outlook
Goodman Property Trust Annual Result 2021 Summary & outlook ◼ The events of the past year have reinforced the important role that warehouse and logistics property plays in our national supply chain, facilitating the distribution of food and other essential items quickly and efficiently ◼ GMT’s portf
Slide 37: Questions
Goodman Goodman Property Property Trust Trust Annual Annual Result Result 2021 2021 Questions OfficeMax – Highbrook Business Park 37
Slide 38: Thank you
Goodman Property Trust Annual Result 2021 Thank you Disclaimer: The information and opinions in this presentation were prepared by Goodman (NZ) Limited on behalf of Goodman Property Trust and its subsidiaries (Goodman). Goodman makes no representation or warranty as to the accuracy or completeness o
Slide 39: Appendix
Goodman Property Trust Annual Result 2021 Appendix Cottonsoft – Highbrook Business Park 39
Slide 40: Portfolio valuation
Goodman Property Trust Annual Result 2021 Portfolio valuation Portfolio summary as at 31 March 2021 Valuation $m Cap rate Initial Yield WALE years Occupancy Net lettable area sqm Highbrook Business Park 1,917.0 4.5% 4.2% 6.3 99% 469,584 Savill Link 457.0 4.6% 4.4% 5.8 100% 134,960 M20 Business Park
Slide 41: Work-in-progress
Goodman Property Trust Annual Result 2021 Work-in-progress Work-in-progress summary as at 13 May 2021 Development Estate Lettable area sqm Completion date Leased Metroglass Yard Expansion Highbrook Business Park 2,120 Aug-21 100% M20 9,000 M20 Business Park 9,630 Sep-21 0% M20 Café M20 Business Park
Slide 42: Completed developments
Goodman Property Trust Annual Result 2021 Completed developments OfficeMax Expansion Estate Highbrook Business Park Completion September 2020 NLA 7,401 sqm Savill Drive Units Estate Savill Link Completion May 2020 NLA 5,493 sqm 42
Slide 43: Completed developments
Goodman Property Trust Annual Result 2021 Completed developments 68 Westney Road Estate Westney Industry Park Completion October 2020 NLA 3,421 sqm Waiouru Point Estate Highbrook Business Park Completion November 2020 NLA 4,416 sqm 43
Slide 44: Completed developments
Goodman Property Trust Annual Result 2021 Completed developments Westney 4,500 Estate Westney Industry Park Completion November 2020 NLA 4,978 sqm Ingram Micro Expansion Estate M20 Business Park Completion December 2020 NLA 3,895 sqm 44
Slide 45: Completed developments
Goodman Property Trust Annual Result 2021 Completed developments Highbrook Crossing Units Estate Highbrook Business Park Completion February 2021 NLA 4,306 sqm 45
Slide 46: Customer base
Goodman Property Trust Annual Result 2021 Customer base ◼ Top 10 customers accounting for 31%1 of portfolio income, generally Top ten customers focused on storage, logistics and distribution % of portfolio income, including subsidiary companies ◼ 2% of GMT’s portfolio weighted towards retail (cafes,
Slide 47: Profit or loss
Goodman Property Trust Annual Result 2021 Profit or loss 47
Slide 48: Balance sheet
Goodman Property Trust Annual Result 2021 Balance sheet 48
Slide 49: Cash flows
Goodman Property Trust Annual Result 2021 Cash flows 49
Goodman Property Trust — FY2021 Earnings Presentation on 6ix