Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — Merger or Acquisition (November 2007)
44 slides from Goodman's merger presentation, Nov 12, 2007
Slide 1: Investment in Highbrook Development Limited, $275 million equity raising and interim results
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Goodman Property Trust Investment in Highbrook Development Limited, $275 million equity raising and interim results 12 November 2007
Slide 2: Important notice and disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 2 Important notice and disclaimer This presentation has been prepared by Goodman (NZ) Limited (“GNZ”) as manager of Goodman Property Trust (“GMT”). The information in this presentation is general information only. It is not intended as investment
Slide 3: Important notice and disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3 Important notice and disclaimer UNITED KINGDOM GMT is characterised as an unregulated collective investment scheme for the purposes of the United Kingdom Financial Services and Markets Act 2000 (FSMA), so that the distribution of this document i
Slide 4: Executive summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4 Executive summary + Goodman Property Trust (GMT) has delivered a strong result to 30 September 2007 with a net operating Interim result surplus of $28.7 million7 (+42.7% pcp) + Acquisition of a 50% interest in Highbrook Development Limited (HDL)
Slide 5: Contents
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 5 Contents + Section 1 Investment Package 6 + Section 2 Key benefits 17 + Section 3 Capital raising details 22 + Section 4 Performance fee adjustment and approvals 27 + Section 5 Half year results and portfolio update 30 + Section 6 Recap of inves
Slide 6: Investment Package
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 1 Investment Package+
Slide 7: Investment Package
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 7 Investment Package + The Investment Package comprises the following two components: i. Acquisition of 50% interest in HDL, including: – Commenced developments and Stabilised Assets with a value on completion of $95.25 million; and – Development
Slide 8: Highbrook Business Park
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 8 Highbrook Business Park + Premier location – Centrally located in New Zealand’s largest city – Direct motorway access through new interchange – 12 minutes to Auckland International Airport – 15 minutes to Auckland CBD + World class Business Park
Slide 9: Highbrook Business Park - History
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 9 Highbrook Business Park - History + Land originally owned by the estate of well known industrialist, Sir Woolf Fisher, and operated as Ra Ora horse stud 1998 + Landscape design completed by world renowned landscape architect, Peter Walker 2001 +
Slide 10: Highbrook masterplan
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 10 Highbrook masterplan+ + HDL has committed 34% of the developable area to date + GMT target yield on cost of 8.0% to 8.5% + Compares favourably to expected valuation cap rate of between 7.25% and 7.50% Proposed land use allocation (sqm) HDL Acqu
Slide 11: Highbrook Acquisition
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 11 Highbrook Acquisition Current Cost To Completed Initial Effective ownership Lease term Asset Status value5 Complete1 value3 Yield4 acquired (years) Contract Logistics distribution facility Commenced $5.4m $0.3m $5.7m 7.7% 50% 9.0 The Crossing O
Slide 12: Highbrook Acquisition
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 12 Highbrook Acquisition + GMT proposes to acquire a 50% interest in HDL, the company that owns the balance of Highbrook Business Park, from Goodman Group + The 50% interest in HDL will be acquired for $97.3 million, comprising: Market value of St
Slide 13: Highbrook Business Park
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 13 Highbrook Business Park The Crossing Offices GEON distribution facility OfficeMax warehouse and distribution facility Datamail distribution facility Goodman Property Trust Transaction announcement and interim results
Slide 14: Trust Developments
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 14 Trust Developments + GMT will also fund existing development projects with an estimated Cost To Complete of $81.3 million – Located in the Greenlane office precinct and the Penrose industrial market + Targeting a weighted average Initial Yield
Slide 15: Trust Developments
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 15 Trust Developments + GMT is currently enjoying a market which has: – Competitive construction costs – Upward pressure on rents due to strong occupier demand – Limited land supply + Vacancy for A grade Greenlane office currently 2.8%, and prime
Slide 16: Trust Developments
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 16 Trust Developments Central Park Total site area 4,200 sqm NLA 8,735 sqm Completion date March 2009 Total project cost1 $34.8m Initial Yield1 8.2% Gateside Industry Park Total site area 21,700 sqm NLA 16,770 sqm Completion date May 2008 Total pr
Slide 17: Key benefits
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 2 Key benefits+
Slide 18: Expected financial benefits
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 18 Expected financial benefits 10.3 cpu 10.3 cpu + Projected increase of 2.0% to GMT’s FY09 cash DPU as a result of the Transaction, representing 5.1% growth from FY08 + Projected FY09 Equivalent Gross Yield, post 2.0% 4.2% introduction of PIE reg
Slide 19: Expected financial benefits
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 19 Expected financial benefits $1.31 $1.3 billion + Projected NTA per unit increase of 2.3% to $1.31 + Pro forma gearing reduced to 31.4% – $225 million of capacity1 to fund future investment and development opportunities 2.3% 28% increase increas
Slide 20: Portfolio benefits
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 20 Portfolio benefits + Development land weighting increases to 12.2% of GMT development pipeline gross assets Remaining Ownership developable NLA Timeframe (years) – Expected to revert to within target range of up to (sqm)1 10% over time Industri
Slide 21: Improved portfolio metrics
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 21 Improved portfolio metrics + Weighted average lease expiry increases Post Transaction asset diversity1 to 6.0 years Post Transaction from 5.7 years Development Warehouse / Distribution – Over 50% of leases expiring beyond five years Land 2% 12%
Slide 22: Capital raising details
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 3 Capital raising details+
Slide 23: Investment package funding
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 23 Investment package funding + Capital raising includes Placement, 1 for 8 non-renounceable Entitlement Offer, and Public Offer of new Units to raise a minimum of $275 million – Placement approximately $161 million and Entitlement Offer approxima
Slide 24: Offer details
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 24 Offer details Amount raised – a minimum of $275 million via a Placement, non-renounceable Entitlement Offer and Public Offer Summary Entitlement ratio – 1 for 8 Prior close $1.53 Adjusted prior close2 $1.52 Ranking – New Units will rank equally
Slide 25: Peer analysis
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 25 Peer analysis FY09 cash yield1,3 FY09 Equivalent Gross Yield1,3,4 8% 11% 10.9% 10.5% 7.3% 7.1% 7% 9.8% 6.6% 10% 6% 9% 5.6% 5.5% 8.3% 8.2% 5% 8% 4% 7% ING GMT² KIP APT PFI ING GMT² KIP APT PFI Market capitalisation1,3 Comparative WALE5 1,400 125
Slide 26: Timetable
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26 Timetable Summary Institutional Offer opens 1.00pm, 12 November 2007 Institutional Offer closes for domestic and Australian institutions 7.00pm, 13 November 2007 Institutional Offer closes for offshore institutions 9.00am, 14 November 2007 Appl
Slide 27: Performance fee adjustment and approvals
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 4 Performance fee adjustment and approvals+
Slide 28: Performance fee
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 28 Performance fee + Performance fees were introduced on 1 April 2005 but calculation mechanics aren’t operating as originally intended – Primarily a simple as opposed to compound average benchmark calculation and mismatch of GMT and benchmark mea
Slide 29: Transaction approvals
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 29 Transaction approvals + Transaction is conditional on Unitholder approval due to the related party nature of the acquisition and equity raising – Approval to be sought at EGM on 30 November 2007 + Resolution 1 - Approval of related party Highbr
Slide 30: Half year results and portfolio update
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 5 Half year results and portfolio update+
Slide 31: Overview
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 31 Overview + Strong half year results in line with GMT guidance + Robust underlying property income + Development programme has performed well with 6 pre-commitments for over 24,390 sqm + Net profit after tax increased by 42.7% on pcp to $28.7 mi
Slide 32: GMT development
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 32 GMT development Development pre-commitments for six months to 30 September 2007 Estate Customer Cost to develop NLA (sqm) Lease (yrs) Commence date 604 Great South Road Chevron $32.0m 2,400 9 Dec-08 Glassworks Industrial Estate Fisher & Paykel
Slide 33: Recap of investment case
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Section 6 Recap of investment case+
Slide 34: Recap of investment case
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 34 Recap of investment case + GMT has delivered a strong result to 30 September 2007 with a net operating surplus of $28.75 million (+42.7% pcp) + Opportunity to enhance investment portfolio and development pipeline via acquisition of 50% interest
Slide 35: Appendix A: Half year accounts
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Appendix A Half year accounts+
Slide 36: Half year to September 2007
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 36 Half year to 30 September 2007 Financial performance (unaudited) Six months ending Six months ending % Change 30 Sept 07 ($m)1 30 Sept 06 ($m) Net operating income 47.5 38.7 22.7% Operating expenses (3.1) (2.4) 29.2% EBIT 44.4 36.3 22.3% Intere
Slide 37: Appendix B: Prospective financial information
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Appendix B Prospective financial information+
Slide 38: Prospective financial performance
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 38 Prospective financial performance Financial performance (Transaction Case) Year ending Year ending FY08 to FY09 % 31 Mar 08 ($m) 31 Mar 09 ($m) change Net rental and related income 97.2 112.0 15.2% Profit on disposal of investment property 1.9
Slide 39: Prospective financial position
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 39 Prospective financial position Assets and liabilities (Transaction Case) As at As at FY08 to FY09 % 31 Mar 08 ($m) 31 Mar 09 ($m) change Total current assets 9.5 9.6 1.1% Property assets1 1,585.4 1,821.3 14.9% Total assets 1,616.7 1,850.1 14.4%
Slide 40: Appendix C: Broker consensus forecasts
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Appendix C Broker consensus forecasts+
Slide 41: Broker consensus forecasts
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 41 Broker consensus forecasts + GMT announcing accretion to broker consensus FY09 cash DPU of 4.2% GMT cash DPU FY08 cash DPU FY09 cash DPU Recommendation Date Macquarie Research Equities 9.80 10.10 Outperform 1-Nov-07 UBS 9.70 9.90 Buy 30-Oct-07
Slide 42: Glossary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Glossary+
Slide 43: Glossary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 43 Glossary Base Case means on the basis that the Transaction does not occur. Cost To Complete means the cost to complete a commenced development, or to complete services and infrastructure on development land, following the Settlement Date. Entit
Slide 44: Thank you
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES thank you+ Important Notice This presentation has been prepared by Goodman Property Services (NZ) Limited on behalf of Goodman Property Trust (“Goodman”). The information in this presentation is general information only. It is not intended as inve
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