Gpt Group · ASX:GPT
Gpt — The GPT Group — FY2020 Earnings Presentation
44 slides from Gpt's earnings presentation, Feb 15, 2021
Slide 1: Market Briefing
Market Briefing 15 February 2021
Slide 2: Acknowledgement of Traditional Custodians
The GPT Group acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing connection to land, waters and community. We pay our respects to First Nations Elders past, present and emerging. Artwork created by Molly Wallace
Slide 3: Agenda
2020 Year in Review | Bob Johnston 4 Finance and Treasury | Anastasia Clarke 10 Office and Logistics | Matthew Faddy 14 Retail | Chris Barnett 32 Funds Management | Nicholas Harris 40 Outlook for 2021 | Bob Johnston 42 Agenda
Slide 4: 2020 Year in Review
2020 Year in Review Portfolio Size and Geographic Exposure High quality diversified Remain focused Pipeline of portfolio, integrated on growing our attractive management platform logistics portfolio developments and optimal capital providing organic Office Retail $5.6b $5.5b structure positions us g
Slide 5: 2020 Annual Result Financial Summary
2020 Annual Result Financial Summary 28.48cents 22.50cents Funds From Operations Distribution per security per security $5.57 -2.4% Net Tangible Assets Total Return1 per security Investment portfolio 98.4% $24.4b Portfolio Assets under occupancy management 4.7yrs 4.95% Weighted average Weighted aver
Slide 6: 2020 Rent Collection and COVID-19 Waivers
2020 Rent Collection and COVID-19 Waivers » Supported our customers to ensure our assets are well positioned for the recovery » 94% of net billings collected in 2020 – Office 98%, Logistics 100%, Retail 88% » 86% of tenant deals agreed Tenant rent Provisions for Deals waivers receivables Total Secto
Slide 7: Investment Property Valuations
Investment Property Valuations » All assets independently revalued1 as at 31 December 2020 » Logistics portfolio valuation gains offset by further Retail portfolio valuation decline » Office portfolio valuation increased modestly in 2H 2020 supported by market transactions » Portfolio valuation move
Slide 8: Sustainability
Sustainability » GPT accelerated its target for all managed assets to be certified as operating carbon neutral by the end of 2024 » 100% of GWOF’s operational buildings certified carbon neutral in 2020 using the NABERS verification pathway of Climate Active for Buildings, in alignment with the Inter
Slide 9: Group Strategy
Group Strategy Our purpose is to create value for investors by providing high quality real estate spaces that enable people to excel and our customers and communities to prosper in a sustainable way Strategic Priorities Execution » Grow our high quality real estate portfolio through developments » L
Slide 10: Finance and Treasury
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Slide 11: Financial Summary
Financial Summary ($m) 2020 2019 Change Funds From Operations (FFO) 554.7 613.7 (9.6%) $554.7m Valuation (decreases)/increases (712.5) 342.2 Funds From Operations Treasury instruments marked to market (52.2) (82.7) Other items (3.1) 6.8 -$213.1m Net (Loss) / Profit After Tax (213.1) 880.0 Statutory
Slide 12: Segment Result
Segment Result ($m) 2020 2019 Change Comments Net property revenue reduced 28%; property cost savings 12.5%; Retail 225.7 326.0 (30.8%) COVID-19 rent impact of -$83.5m Contribution from acquisition of Darling Park, offset by dilution in GPT’s Office 281.9 276.3 2.0% co-ownership stake in GWOF; COVID
Slide 13: Capital Management
Domestic bank Capital Management debt 2% Sources of Drawn Debt CPI Bonds 2% Secured bank debt 3% As at 31 December 2020 » Modest gearing of 23.2% Commercial Paper » Liquidity of $1.8b which fully funds current commitments through to 2024 USPP 14% 41% Bank Debt » Issued $300m of 12 year domestic MTNs
Slide 14: Office and Logistics
rT The GPT Group Annual Result Office and Logistics | |
Slide 15: Office Overview
Office Overview Portfolio Size and Geographic Exposure 99,600sqm 5.1years 98% Signed Leases Office WALE Net billings (by income) collected Office Retail Summary $5.6b Sydney 54% $5.5b Melbourne 36% » Segment contribution of $281.9m up 2.0%, with fixed rent Brisbane 10% increases and portfolio compos
Slide 16: Office Valuations
Office Valuations » All assets independently valued as at 31 December 2020, with WACR of 4.89% » Second half valuations broadly flat on June 2020 – Uplift driven primarily by metro assets 32 Smith and 4 Murray Rose Avenue – Valuers have increased incentives, which were offset by a firming of discoun
Slide 17: Office Leasing
Office Leasing » Achieved 99,600sqm of signed leases with additional 26,500sqm at HoA across operational portfolio and developments » Office Occupancy of 94.9%1 and WALE of 5.1 years 2020 Heads of Agreements by Quarter » Technology users remain active with 13 deals including Salesforce, ELMO Softwar
Slide 18: Office Development Completion
70% Committed1 Office Development Completion 32 Smith, Parramatta » Achieved practical completion in January 2021 » Leasing well progressed with 70% now committed1 » Increased floor area achieved through approval of an additional mezzanine office floor, with a HoA in place » The 28-level tower featu
Slide 19: Office Development Pipeline
Office Development Pipeline » Queen & Collins, Melbourne is progressing with completion in 2Q 2021 » Progressing pipeline to take advantage of the next market cycle. Expected end value on completion in excess of $3.5b1 Project Ownership Lettable Area2 Queen & Collins 100% GWOF ~35,000sqm Office NLA
Slide 20: Future of Office | GPT View
Future of Office | GPT View Hybrid Model Anticipate large organisations continue to evolve to a hybrid model, with a portion of the working week at home Physical office to remain important Socialisation aspects and face-to-face interaction increasingly important Collaboration Innovation Learning Cul
Slide 21: Customer Insights | GPT Response
5 Space&Co. Venues Customer Insights | GPT Response » Proactively engaging with customers, responding to evolving flexibility requirements and focus on health, wellbeing and sustainability » Experienced team with track record in creating and managing space Flexibility Space&Co. Space&Co., 2 Southban
Slide 22: Office Market Outlook
Office Market Outlook » Over the long term, prime assets have outperformed secondary assets, with higher net absorption and lower vacancy1 » Prime assets expected to benefit as occupiers upgrade to assets that provide healthy, modern and technology enabled spaces » Expect to see divergence in perfor
Slide 23: GPT's Office Portfolio Resilience
GPT’s Office Portfolio Resilience » 100% prime grade portfolio1 across eastern seaboard in deepest office markets » Portfolio benefits from a diverse mix of high quality occupiers – Majority financial and insurance institutions, global technology and professional services – Collected 98% of net bill
Slide 24: Logistics Overview
Logistics Overview Portfolio Size and Geographic Exposure 15.2% 99.8% 6.7years Logistics Portfolio Logistics WALE FFO growth Occupancy (by income) Office Retail Summary $5.6b Sydney 63% $5.5b Melbourne 28% » Segment contribution of $139.4m, with 100% of net billings Brisbane 9% collected and compara
Slide 25: Logistics Leasing
Logistics Leasing » Achieved signed leases of 185,500sqm plus 11,100sqm at Heads of Agreement (HoA) across operational portfolio and developments » High occupancy of 99.8% and WALE of 6.7 years » Average fixed rent increases of 3.2% across 93% of portfolio income » Quality customer base, more than 7
Slide 26: Logistics Portfolio Growth
~45% of investment portfolio created through Logistics Portfolio Growth GPT development pipeline³ » Growth of $542.5m in 2020 to reach $3.0b » Acquired three assets for $202.2m » Delivered four developments with a value of $195.5m » Divested Yatala asset with net proceeds of $58.2m, achieving 12% pr
Slide 27: Logistics Development Completions
Logistics Development Completions » Five development completions – Four facilities delivered in 2020 totalling 90,000sqm – Additional 17,100sqm facility delivered in February 2021 » Introducing new high quality customers including Visy and DHL » GPT Logistics team have strong track record of deliver
Slide 28: Logistics Developments Underway
Logistics Developments Underway » Four developments are being progressed with an expected end value on completion of $158m1,2 » Three projects to be undertaken on a speculative basis with terms agreed for a new development in Melbourne Artist’s impression Wembley Business Park, Berrinba, QLD Artist’
Slide 29: Logistics Development Pipeline
Logistics Development Pipeline » Development pipeline of ~$1b1 » Added to land bank with two sites secured in Queensland and Victoria » Progressing estate in Kemps Creek (Yiribana Logistics Hub) in Western Sydney, with land rezoning achieved in June 2020 Metroplex Place, Wacol Artist’s impression Ex
Slide 30: Logistics Acquisitions
Logistics Acquisitions » Acquired investment assets for $202.2m in 2020 adding 75,100sqm to the portfolio » Foundation Estate acquired in December 2020 comprising three facilities plus adjoining development land, with a long WALE and quality tenants » 917 Boundary Road in Truganina acquired in Febru
Slide 31: Logistics Sector Outlook
Logistics Sector Outlook Market Outlook GPT Portfolio Growth » Continued strength in tenant demand with eastern seaboard take-up in 2020 » Unlocking value through product creation 32% above the 10 year average1 – Five facilities completed since January 2020 » Low vacancy with Sydney 3.6%, Melbourne
Slide 32: Retail
rT The GPT Group
Slide 33: Retail Overview
Retail Overview Portfolio Size and Geographic Exposure 98.0% 4.8% 95% Portfolio Nov and Dec 2020 Dec 2020 Customer occupancy Total Centre Sales Growth1 Visitations vs. pcp levels2 Office Retail Summary $5.6b VIC 44% $5.5b NSW 41% QLD 10% » Segment contribution of $225.7m impacted by lower property i
Slide 34: Retail Sales and Customer Insights
Retail Sales and Customer Insights Sales Recovery in November and December 2020 » Recovery evident across all states post easing of Government restrictions, Portfolio Sales and Traffic Growth (Jul – Dec 2020)3 particularly in the last two months of 2020 for Victoria » Customer visitations in Decembe
Slide 35: Retail Market Conditions
Retail Market Conditions Retail Sales Recovery » ABS Retail Trade Growth tracking above historical averages » Growth led by Household Goods and a resurgence in Apparel Consumer Confidence …. 10 Year High » Improved consumer confidence reaching 10 year high in December 2020 » Robust jobs growth, hous
Slide 36: Retail Market Share
Retail Market Share GPT Portfolio Online Insights » Recovery in portfolio sales driven by both market growth and market » Domestic omni-channel retailers, main beneficiaries of rapid growth share gains from online in online through the COVID-19 period » Growth of online market share reduced from pea
Slide 37: Retail Leasing Update
Retail Leasing Update Achieving Structured Leases with Fixed Increases » Despite challenging conditions, retailer demand remained solid, 404 deals completed » Leasing deals reflect strategy of securing tenants and reducing holdovers » New leasing deals continue to have base rents with average annual
Slide 38: Retail Valuations
Retail Valuations » All assets independently valued as at 31 December 2020 » Revaluation movement in 2H 2020 of -$204.5m (-3.6%), predominantly driven by Melbourne Central (-8.8%) » WACR at 5.06% (+17bps yoy), no movement in capitalisation rates on valuations completed in second half » Stabilisation
Slide 39: Retail Portfolio Strategy and Outlook
Retail Portfolio Strategy and Outlook Retail Themes » “Winning Retailers” are omni-channel with both online platforms and physical stores » Reduced customer demand for traditional anchors leading to re-purposing of space » Customer spending on technology, leisure, personal services, dining and exper
Slide 40: Funds Management
rT The GPT Group Annual Result 2020 Funds Management
Slide 41: Funds Management
Funds Under Management Funds Management GWSCF GWOF $12.9b $400m $339m $3.9b Office 70% $9.0b Retail 30% Assets under Logistics partnership New equity management secured raised in GWOF Capital Partnership Logistics Trust GPT Wholesale Funds – GWOF and GWSCF » GPT QuadReal Logistics Trust is a strateg
Slide 42: Outlook for 2021
Outlook for 2021 Priorities for 2021 » Continue to grow Logistics portfolio via acquisition and development capitalising on structural tailwinds » Further expand Funds Management platform, with initial focus on the QuadReal capital partnership » Strong customer engagement to secure and maximise inco
Slide 43: Thank you for joining us
Thank you for joining us Questions
Slide 44: Disclaimer
Disclaimer The information provided in this presentation has been prepared by The GPT Group comprising GPT RE Limited (ACN 107 426 504) AFSL (286511), as responsible entity of the General Property Trust, and GPT Management Holdings Limited (ACN 113 510 188). The information provided in this presenta