GARDA Property Group · ASX:GDF
GARDA Property — Garda Diversified Property Fund — H1 FY2018 Earnings Presentation
43 slides from GARDA Property's earnings presentation, Feb 23, 2018
Slide 1: Half Year Results Presentation
For personal use only GARDA DIVERSIFIED PROPERTY FUND (ASX CODE: GDF) HALF YEAR RESULTS PRESENTATION 23 FEBRUARY 2018
Slide 2: GDF at a Glance
INSERT GDF AT TITLE A GLANCE HERE $295 MILLION AUM For personal use only COMMERCIAL AND INDUSTRIAL PORTFOLIO ~$160 MILLION MARKET CAPITALISATION 5.5 YEARS 97% $1.19 FY2017 DISTRIBUTION WALE 1 OCCUPANCY 1 NTA PER UNIT $0.09 /UNIT ALIGNED 7.11% 27.1% MANAGER H1FY2018 PAYOUT RATIO WEIGHTED AVERAGE CAP
Slide 3: Operational Highlights
OPERATIONAL HIGHLIGHTS For personal use only CAPITAL MANAGEMENT - EQUITY Completion of a $30.0 million fully underwritten entitlement offer with $15.05 million used to reduce debt in January 2018. TRANSACTION – BOTANICCA 9 ACQUISITION The Fund acquired a 3,621m² parcel of land in Richmond (Melbourne
Slide 4: Results - Overview
RESULTS - OVERVIEW For personal use only 31 December 31 December 2017 2016 Movement $ $ Statutory Net Profit 4,740,000 3,589,000 32.1% Adjustments: Fair value movement in investment properties 274,000 1,685,000 Net (gain)/loss of interest rate swaps marked to market 177,000 (540,000) Incentives and
Slide 5: Capital Management
INSERT TITLE HERE For personal use only CAPITAL MANAGEMENT 5 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 6: Capital Management – Equity
CAPITAL MANAGEMENT – EQUITY For personal use only • In December 2017, GDF completed a $30.0 million fully underwritten 1-for-4.3 entitlement offer (Offer). • The Offer was priced at $1.15 per security, a 5.0% discount to NTA of $1.21. • The proceeds of the Offer provide the Fund with further capital
Slide 7: Capital Management – Debt
CAPITAL MANAGEMENT – DEBT KEY DEBT METRICS AS AT 20 FEB 2018 • Following the entitlement offer, on 2 January 2018 GDF repaid For personal use only Facility Limit $83,599,500 $15.05 million of facilities with St. George Bank. Drawn Amount1 $57,350,000 • Following repayment, the Fund has $26.25 millio
Slide 8: Leasing
LEASING • GDF continues to address material year on year lease expiry with positive renewal outcomes for the Fund. For personal use only • A total of approximately 4,700m² has been leased across seven transactions during FY2018. CAIRNS • Cairns has seen significant improvement in its occupancy rate,
Slide 9: At Risk Income
AT RISK INCOME For personal use only 46% QLD Government (DTMR) 6% Botanicca 9 17% SERCO 3% Other 1% Other 3% 18% 14% Spotless 2% 12% 5% 3% 2% VACANT FY2018 H1 FY2019 H2 FY2019 FY2020 FY2021 FY2022+ *At risk income profile assumes that all acquisitions are fully let as at 1 January 2018 ** Includes c
Slide 10: Transactions - Acquisitions
For personal use only TRANSACTIONS ACQUISITIONS 10 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 11: Acquisition – Botanicca 9, Richmond, VIC
ACQUISITION – BOTANICCA 9, RICHMOND, VIC • GDF has actively sought immediate leasing opportunity in the tightly held Melbourne fringe office market, with For personal use only the building to be offered to the market for lease in 2018. • The Melbourne city fringe market has the lowest vacancy in any
Slide 12: Botanicca 9, Richmond, VIC
BOTANICCA 9, RICHMOND, VIC PROPERTY INFORMATION1 For personal use only Type Office Independent valuation $62.5 million (net of incentives) Capitalisation rate 5.75% Fully leased net income $3,966,019 Site area (m²) 3,621 Net lettable area (NLA) (m²) 7,254 PROPERTY OVERVIEW • The property will be a f
Slide 13: Botanicca 9, Richmond, VIC – Location
BOTANICCA 9, RICHMOND, VIC For personal use only 5km LOCATION • Only 4 kilometres from the Melbourne CBD in the highly sought after city fringe suburb of Richmond, the property forms part of the Botanicca Corporate Park. • GDF currently owns Botanicca 7 a 6,587m² A-Grade office building located in t
Slide 14: Melbourne City Fringe Market Overview
MELBOURNE CITY FRINGE MARKET OVERVIEW MARKET OVERVIEW – VACANCY AND SUPPLY For personal use only SUBURBAN MARKET COMPOSITION SUBURBAN PRECINCT COMPOSITION 177,026m2 Precinct NLA (m²) NLA City Fringe 907,000 29.2% Inner East 574,747 18.5% Outer East 897,945 28.9% 482,368m 2 270,549m 2 South East 459,
Slide 15: Market Overview – Vacancy Rates
MELBOURNE CITY FRINGE MARKET OVERVIEW MARKET OVERVIEW – VACANCY RATES For personal use only 14% 12.5% 12% 10% 9.3% 7.5% 8% 6% 5.3% 5.0% 4.6% 4.6% 4% 2.1% 2% 0% City Fringe Inner East Outer East South East North and Total Melbourne Sydney West Suburbs CBD CBD 15 | GARDA DIVERSIFIED PROPERTY FUND HALF
Slide 16: Market Overview – Future Supply and Pre-Commitment
MELBOURNE CITY FRINGE MARKET OVERVIEW MARKET OVERVIEW – FUTURE SUPPLY AND PRE-COMMITMENT • The graph below shows the most likely/definite developments which will reach practical completion over the next three years. For personal use only • 9-11 Cremorne Street has started construction with delivery
Slide 17: Leasing Activity and Trends
MELBOURNE CITY FRINGE MARKET OVERVIEW LEASING ACTIVITY AND TRENDS Recent leasing deals in the city fringe market, including in the GDF owned Botanicca 7, reinforce the increasing rents achieved. For personal use only BOTANICCA BUSINESS PARK LEASING BY GARDA CAPITAL Building LCD Tenant Net Rent ($/m²
Slide 18: Wacol Construction Update
WACOL CONSTRUCTION UPDATE • $35.25 million acquisition on a capitalisation rate of 6.25%. For personal use only • 10 year pre-committed lease to Volvo Group Australia. • Comprises two buildings including a 6,057m² service warehouse and a 3,937m² office and showroom. • Construction is well advanced w
Slide 19: Pinkenba Construction Update
PINKENBA CONSTRUCTION UPDATE • $19.0 million acquisition on a capitalisation rate of 7.37%. For personal use only • 15 year pre-committed lease to Byrne Group who operate a similar facility in Pinkenba. • The property will operate as a resource recovery facility for soil, rock, gravel and constructi
Slide 20: The Fund
For personal use only THE FUND 20 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 21: Capital Improvements Program
CAPITAL IMPROVEMENTS PROGRAM • The capital improvements program continued during the half year with approximately $2.3 million invested For personal use only including: • $1.87 million at Lake Street, Cairns; and • $0.24 million at Botanicca 7, Richmond. • The ongoing and continued investment into C
Slide 22: GDF vs S&P/ASX A-REIT Index
GDF vs S&P/ASX A-REIT 200 INDEX • 10.77% outperformance against the S&P/ASX A-REIT 200 index since IPO on 2 July 2015. For personal use only • 14.37% outperformance against the S&P/ASX A-REIT 200 index over the last 12 months. GDF XPJ Sources: Miraqle by Orient Capital as at 19 February 2018. 22 | G
Slide 23: GDF vs AREIT Peers
GDF vs AREIT PEERS FORECAST FY2018 DPU YIELD (%) WALE (YRS) For personal use only 7.9% 7.3 7.9% 7.8% 7.0% 6.8% 6.5% 5.6 5.5 4.9 4.5 4.3 CIP CMA GDF GOZ AOF IDR IDR GOZ GDF CIP AOF CMA PREMIUM / (DISCOUNT) TO NTA GEARING (%) 41% 36% 32% 33% 30% CMA GDF IDR AOF CIP GOZ 28% 2.5% (0.4%) (2.0%) (1.3%) (3
Slide 24: Strategy
STRATEGY For personal use only • The Fund’s objective is to provide sustainable and growing • The Fund will maintain a conservative capital structure including distributable income derived from investments in commercial a long-term target gearing range of 30% to 35% LVR although offices in city and
Slide 25: FY2018 Objectives
FY2018 OBJECTIVES The Fund’s key objectives for HY2018 include: For personal use only Address the small number of remaining lease expiries due in FY2018 and also the FY2019 expiries including Serco and QLD government. Reducing vacancy in the portfolio and associated lost income with a specific focus
Slide 26: FY2018 Distribution Guidance
FY2018 DISTRIBUTION GUIDANCE For personal use only • FY2018 distribution guidance reaffirmed • Full year payout ratio expected between • At current trading price of $1.15, reflects at $0.09 per unit. 100% to 105% which is anticipated to a distribution yield of 7.8%. normalise to the historic conserv
Slide 27: FY2018 Outlook
FY2018 OUTLOOK For personal use only GDF will continue to seek opportunities to grow AUM in lower incentivised markets. GDF is specifically seeking: • Industrial assets in Brisbane; • Commercial office assets in Melbourne; and • Individual asset values of $20 million - $50 million. The strongly perf
Slide 28: GDF Portfolio
INSERT TITLE HERE For personal use only GDF PORTFOLIO 28 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 29: Property Portfolio
PROPERTY PORTFOLIO INDEPENDENT CAP PORTFOLIO For personal use only PROPERTY PORTFOLIO TYPE NLA (m2) WALE5 OCCUPANCY5 NABERS VALUATION¹ ($m) RATE VALUE 572-576 Swan Street, Richmond Office 41.0 6.50% 6,587 5.9 100% 5.0 14% 436 Elgar Road, Box Hill Office 25.0 7.75% 5,725 3.2 100% 2.5 9% 7-19 Lake Str
Slide 30: $295M Portfolio Upon Completion
$295M PORTFOLIO UPON COMPLETION For personal use only PORTFOLIO VALUE (by sector) CAIRNS 7-19 Lake Street, Cairns ($48.0m) Industrial 31% Commercial 69% MACKAY 69-79 Diesel Drive, Mackay ($29.5m) BRISBANE GOLD COAST 747 Lytton Road, Murarrie ($14.1m) 142 Benjamin Place, Lytton ($8.8m) Lot 2001 Metro
Slide 31: WALE and Occupancy
WALE AND OCCUPANCY For personal use only WALE by income (Years) 15.0 11.0 10.0 5.5 5.9 2.7 3.2 2.4 1.9 1.1 CAIRNS MURARRIE VARSITY LAKES LYTTON BOX HILL BOTANICCA.7 MACKAY PINKENBA WACOL PORTFOLIO TOTAL OCCUPANCY by income 94% 95% 100% 100% 100% 100% 100% 100% 97% 90% CAIRNS MURARRIE VARSITY LAKES L
Slide 32: Appendix: Financial Information
INSERT TITLE HERE For personal use only APPENDIX 1 FINANCIAL INFORMATION 32 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 33: Income Statement
INCOME STATEMENT • Net profit attributable to unitholders of $4.7 million, a 32% increase 31 December 31 December For personal use only on the prior period. Income Statement 2017 2016 $000’s $000’s • The net profit increase is primarily as a result of the $1.6 million Property revenue 9,797 9,441 st
Slide 34: Funds From Operations (FFO)
FUNDS FROM OPERATIONS (FFO) • FFO increased by $0.3 million to $5.5 million, representing an 7% 31 December 31 December For personal use only increase on the prior reporting period FFO of $5.2 million. Funds from operations 2017 2016 $000’s $000’s • Conservative payout ratio of 91.6% which is expect
Slide 35: Balance Sheet
BALANCE SHEET • Cash temporarily increased to $30.5 million as a result of the 31 December 30 June For personal use only proceeds of the $30.0 million entitlement offer completed in Balance Sheet 2017 2017 $000’s December 2017. Proceeds have since been used to reduce debt $000’s ($15.05 million) and
Slide 36: Appendix: GDF Assets
For personal use only APPENDIX 2 GDF ASSETS 36 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION
Slide 37: Portfolio Summary – Property
PORTFOLIO SUMMARY – PROPERTY For personal use only METROPLEX WESTGATE, WACOL, QLD Cap 6.25% Valuation $35,250,000 Ownership interest 100% NLA 9,994m² Car spaces N/A Occupancy 100% WALE 10.0 years Tenants 1 NABERS Exempt 70-82 MAIN BEACH ROAD PINKENBA, QLD Cap Rate 7.4% Valuation $19,000,000 Ownershi
Slide 38: Portfolio Summary – Property
PORTFOLIO SUMMARY – PROPERTY For personal use only 572 - 576 SWAN STREET, RICHMOND, VIC Cap Rate 6.50% Valuation $41,000,000 Ownership interest 100% NLA 6,587m² Car spaces 178 Occupancy 100% WALE 5.9 years Tenants 3 NABERS 5 star 436 ELGAR ROAD, BOX HILL, VIC Cap Rate 7.75% Valuation $25,000,000 Own
Slide 39: Portfolio Summary – Property
PORTFOLIO SUMMARY – PROPERTY For personal use only 69-79 DIESEL DRIVE, MACKAY, QLD Cap 7.75% Valuation $29,500,000 Ownership interest 100% NLA 13,843m² Car spaces N/A Occupancy 100% WALE 11.0 years Tenants 1 NABERS Exempt 142 BENJAMIN PLACE, LYTTON, QLD Cap Rate 7.75% Valuation $8,800,000 Ownership
Slide 40: Portfolio Summary – Property
PORTFOLIO SUMMARY – PROPERTY For personal use only 747 LYTTON ROAD, MURARRIE, QLD Cap 8.12% Valuation $14,100,000 Ownership interest 100% NLA 3,617m² Car spaces 169 Occupancy 95% WALE 2.4 years Tenants 5 NABERS 5.0 star 154 VARSITY PDE, GOLD COAST, QLD Cap Rate 8.25% Valuation $12,800,000 Ownership
Slide 41: Portfolio Summary – Property
PORTFOLIO SUMMARY – PROPERTY 7-19 LAKE STREET, CAIRNS, QLD For personal use only Cap 8.50% Valuation $48,000,000 (inc. land at Grafton St) Ownership interest 100% NLA 14,757m² Car spaces 254 Occupancy 94% WALE 2.7 years Tenants 28 NABERS 4.0 star 41 | GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULT
Slide 42: Disclaimer
DISCLAIMER This presentation (Presentation) has been prepared on behalf of GARDA Capital Limited (ACN 095 039 366) (AFSL 246714) (GARDA) as responsible entity of the GARDA Diversified Property Fund ARSN 104 391 273 (GDF or the Fund). The information and statements in this Presentation were prepared
Slide 43: Financial Results
For personal use only 01 FINANCIAL RESULTS GARDA DIVERSIFIED PROPERTY FUND HALF YEAR RESULTS PRESENTATION | 23 February 2018
Garda Diversified Property Fund — H1 FY2018 Earnings Presentation on 6ix