Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — H1 FY16 Earnings Presentation
30 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, Nov 11, 2015
Slide 1: Interim Results
Goodman Property Trust + Interim Results building excellence+ A strong balance sheet that features high quality assets leased to the very best customers is the foundation of our business. It’s a business that is focused on building excellence. 1
Slide 2: Contents
contents 01+ overview 02+ financial result 03+ investment portfolio 04+ Viaduct acquisitions 05+ development portfolio 06+ outlook 07+ appendix
Slide 3: Overview
01+ overview + Refurbished Amenity Building | Central Park Corporate Centre, Greenlane
Slide 4: Overview
01 overview + strong financial performance over the last 6 months + continuation of a development led growth strategy + investor demand supporting asset recycling + new treasury initiatives enhancing GMT’s capital structure + stable economic outlook and operating environment “We are executing a stra
Slide 5: Financial result
02+ financial result + Panasonic Building | Highbrook Business Park, East Tamaki
Slide 6: H1 FY16 results summary
02 H1 FY16 results summary earnings and + net rental income $67.1 million compared to $66.2 million in pcp profit + distributable earnings before tax of $57.1 million or 4.64 cpu (4.53 cpu in pcp) + distributable earnings after tax of $48.8 million or 3.96 cpu (4.28 cpu in pcp) + $53.1 million befor
Slide 7: Financial performance
02 financial performance 30 Sep 2015 30 Sep 2014 Change 6 months ended $ million $ million % Net rental and related income 67.1 66.2 1.4 Net finance costs (11.1) (11.5) 3.5 Other administrative expenses (4.6) (4.6) - Gain on disposal of property investments - 4.3 - Movement in fair value of property
Slide 8: Financial position
02 financial position 30 Sep 2015 31 Mar 2015 Change as at $ million $ million % Total assets 2,283.7 2,177.6 4.9 Property assets 2,145.4 2,095.7 2.4 Net borrowings1 789.7 694.2 13.8 Total liabilities 894.8 800.9 11.7 Equity 1,388.9 1,376.7 0.9 Look through loan to value ratio2 (%) 36.1 34.2 5.6 GMT
Slide 9: Capital management
02 capital management + strong balance sheet position + 36.1%1 loan to value ratio at the lower end of the Board’s target band + interest cover ratio of 2.5 times at 30 September 2015 + asset recycling + funding new development projects + improving portfolio quality + FY16 initiatives include: + US
Slide 10: Asset recycling
02 asset recycling + 5 Christchurch assets marketed in late August + the amenity and IAG buildings at 12 & 14 Show Place now unconditional + sale price of $33.2 million, reflecting 7.8% yield + sold to a local investor + settlement expected 25 November 2015 + Junction Units, Move Logistics and DHL b
Slide 11: New debt initiatives
02 new debt initiatives + USPP secured US$120 million of debt funding + strong demand from US debt investors + competitive pricing with margins of 1.99%-2.20% over BKBM + tranches of US$40 million for terms of 10, 12, and 15 years + swapped into NZ$156 million + drawn 15 June 2015 + Goodman+Bond pro
Slide 12: Capital management
02 capital management + diverse capital structure + bank borrowings less than 50% of drawn debt + facilities have a weighted term to expiry of 5.2 years1 + 60% hedged over next 12 months, reducing to 40% in 5 years + fixed rate swaps average 4.6% over next 12 months, reducing to around 4.3% over the
Slide 13: Investment portfolio
03+ investment portfolio + Metro Performance Glass | Highbrook Business Park, East Tamaki
Slide 14: Investment income
03 investment income + customer demand remains sound + over 50,000 sqm of space secured on new or revised terms + modest rental growth offset by lower occupancy, comparatively * includes 100% of Air NZ House ** 51% of Air NZ House, and 1% of Vodafone, KPMG and Microsoft HP buildings 14
Slide 15: Portfolio occupancy
03 portfolio occupancy portfolio income (%) 100% 99% 98% 97% 97% 97% 96% 96% 96% 96% 96% 95% 94% 93% 92% 91% 90% Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Sep 15 + occupancy maintained at 96% + rental growth strongest in industrial assets + vacancy predominantly in suburban office assets 15
Slide 16: Portfolio expiries
03 portfolio expiries lease expiry profile - portfolio income2 (%) 18% 16% 14% 15.1% 15.5% 12% 12.2% 12.0% 10% 9.5% 9.9% 9.6% 8% 6% 7.0% 4% 4.5% 4.6% 3.9% 2% 0% Vacant FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 >FY24 + weighted average lease term of 5.2 years at 30 September 2015 + focus on Greenl
Slide 17: Key leasing deals
03 key leasing deals NLA1 term property customer sqm years Savill Link Furniture City 6,857 4.7 M20 Business Park Kmart 5,367 3.0 Penrose Industrial Estate Independent Traffic Control 2,869 6.0 Glassworks Industry Park Packaging House 2,230 5.0 Millennium Centre Phase Two Spotless Facility Services
Slide 18: Viaduct acquisitions
04+ Viaduct acquisitions + Fonterra Building under development | Fanshawe Street, Auckland
Slide 19: Fonterra building
04 Fonterra building + on programme to complete - February 2016 + fit out is progressing floor by floor Fonterra – November 2015 19
Slide 20: Datacom building
04 Datacom building + on programme to complete - April 2017 + excavation 40% complete + good levels of enquiry across remaining vacant office and retail space + GMT providing development financing to Fletcher Building Datacom – November 2015 artists impression 20
Slide 21: Development portfolio
05+ development portfolio + Orora Development | M20 Business Park, Wiri
Slide 22: Development progress YTD
05 development progress YTD + Commencement of 5 new projects totalling $72.6 million + encompassing over 34,000 sqm + forecast to generate $5.7 million of annual rental income + expected to deliver valuation gains between of 10 – 15% + two projects are for existing Highbrook customers, including a 7
Slide 23: Organic growth
05 organic growth + between $100 and $150 million of new projects expected to commence in FY16 + funded through asset sales its enhancing the portfolio while improving the quality and profile of GMT’s earnings + land weighting down to 9.7%1 at 30 September 2015 Development activity (total project co
Slide 24: Current workbook
05 current workbook Expected Net Lettable Total Project Development Projects Estate Classification Completion Area (sqm) Cost ($m) Date Uncommitted Warehouse Development Highbrook Business Park 3,400 Industrial 6.5 Mar-16 (600 Covered Carpark Development Central Park Corporate Centre Commercial 19.6
Slide 25: Work in progress
05 work in progress CSR Viridian expansion | Highbrook Business Park, East Tamaki Business Parade North | Highbrook Business Park, East Tamaki value Machineryhouse | Highbrook Business Park, East Tamaki Orora Packaging | M20 Business Park, Wiri 25
Slide 26: Building excellence - Metro Glass
05 building excellence - Metro Glass + 16,723 sqm of factory, office and showroom space at Highbrook Business Park + Highly automated production facility + Best in Industrial Category, PCNZ Awards 2015 + The award assesses the development across a range of criteria including investment returns, cust
Slide 27: Outlook
06+ outlook + Yellow HQ | Greenlane
Slide 28: Outlook
05 outlook operating + steady economic growth and historically low interest rates continue to provide a outlook stable operating environment for business + robust property fundamentals, with low vacancy and modest rental growth + investment demand expected to support positive valuation result at the
Slide 29: 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 sh
Slide 30: Appendix - Distributable Earnings Reconciliation
Appendix - Distributable Earnings Reconciliation The following tables are extracted from note 6 to the consolidated financial statements of Goodman Property Trust for the six months ended 30 September 2015. 6 months 6 months $ million 30 Sep 15 30 Sep 14 Profit used in calculating distributable earn
Goodman Property Trust — H1 FY16 Earnings Presentation on 6ix