Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — Investor Presentation (June 2013)
35 slides from Growthpoint Properties Australia's investor presentation, Jun 13, 2013
Slide 1: Investor Presentation June 2013
GROWTHPOINT PROPERTIES AUSTRALIA (ASX CODE: GOZ) For personal use only Investor Presentation June 2013 Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409
Slide 2: Contents
Contents For personal use only Overview 3 Property portfolio 10 Active portfolio management 16 Financial results & capital management 23 Market update and outlook 27 Appendix 31 Timothy Collyer Aaron Hockly Managing Director Company Secretary & General Counsel Dion Andrews Michael Green Chief Financ
Slide 3: Overview
For personal use only OVERVIEW GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 3
Slide 4: Strategy
Strategy For personal use only Attractive risk adjusted • Provide defensive and sustainable income returns returns • Sustainable growth in earnings and distributions • High occupancy and long WALE Income security • Only 6% of leases (by income) expire over FY14 and 6% over FY15 • 85% of income lease
Slide 5: Historical performance
Historical performance For personal use only TOTAL RETURN COMPARISON 60% Growthpoint 40% 25% 25% S&P / ASX 300 A-REIT 21% Accumulation Index 18% 18% 20% 11% S&P / ASX 300 Accumulation 7% 7% Index 5% 0% 6mths 1 year 3 year1 • Focused on providing consistently growing and sustainable income returns to
Slide 6: Continued evolution of Growthpoint
Continued evolution of Growthpoint For personal use only Market cap: $250m August 2009: Establishment of Growthpoint Properties Australia via Total assets: $650m recapitalisation and internalisation of Orchard Industrial Property Fund Gearing: 50% Major transaction activity Total acquisitions: $66m
Slide 7: Key metrics
Key metrics KEY METRICS For personal use only FY14 EPS YIELD COMPARABLES1 ASX ticker GOZ Peer average: 6.6% 10% Market capitalisation1 $1.0bn 8.0% 8.0% 8.2% 8.3% 7.5% 7.5% 7.7% 8% Free float1 $0.3bn 6.1% 5.5% 6% Gearing2 46.9% 4% ICR2 2.5x 2% NTA2 $1.93 0% XPK BWP SCP IOF CQR CMW GOZ CPA CDI PORTFOL
Slide 8: GOZ is focused on income security
GOZ is focused on income security For personal use only • Simple business model provides future earnings visibility WALE PEER COMPARISON • Significant asset and tenant diversification 8.3 – 44 assets across every state and the ACT 7.0 7.2 6.4 6.7 5.7 – 88 tenants 4.7 4.8 4.6 • Strong and secure port
Slide 9: GOZ is focused on sustainable income growth
GOZ is focused on sustainable income growth For personal use only • Management focused on sustainable distribution growth and DISTRIBUTIONS PER SECURITY1 long-term capital appreciation • Track record of attractive distribution growth 19.0 18.3 17.1 17.6 – 2.9% growth recorded in FY12 – 4.0% forecast
Slide 10: Property portfolio
For personal use only PROPERTY PORTFOLIO GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 10
Slide 11: Property portfolio
Property portfolio For personal use only 1. Assumes completion of property under development at Erskine Park 2. Assumes CPI of 2.5% GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 11
Slide 12: Portfolio overview
Portfolio overview1 For personal use only 333 Ann Street, Brisbane, QLD 1. Excludes GOZ’s former property Goulburn (the sale of which completed on 31 January 2013) and includes the acquisition of three properties in Erskine Park, NSW which completed in late February 2013 GROWTHPOINT PROPERTIES AUSTR
Slide 13: Industrial portfolio
Industrial portfolio1 For personal use only TOP 10 INDUSTRIAL ASSETS HAVE AN AVERAGE VALUE OF $66M, WALE OF 9.5YRS AND REPRESENT 75% OF THE INDUSTRIAL PORTFOLIO REVIEW ASSET STATE BOOK VALUE CAP RATE OCCUPANCY WALE (YRS) MAJOR TENANT STRUCTURE 70 Distribution St, Larapinta QLD $162.0m 8.0% 100% 9.2
Slide 14: Office portfolio
Office portfolio1 For personal use only TOP 10 OFFICE ASSETS HAVE AN AVERAGE VALUE OF $71M, WALE OF 5.9YRS AND REPRESENT 90% OF THE OFFICE PORTFOLIO WALE REVIEW ASSET STATE BOOK VALUE CAP RATE OCCUPANCY MAJOR TENANT (YRS) STRUCTURE 333 Ann Street, Brisbane QLD $111.0m 8.3% 95.1% 3.0 Runge Limited 4.
Slide 15: Growthpoint property values
Growthpoint property values For personal use only Recent Australian interest rate movements INDUSTRIAL CAP RATE VS. 5YR BOND YIELD • Over the past 3 years: 12% – 3-year swap rate has compressed by 235bps 10% 8% GOZ – 5-year government bond yield has compressed by 225bps 6% (8.3%) • Cap rates over th
Slide 16: Active portfolio management
For personal use only ACTIVE PORTFOLIO MANAGEMENT GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 16
Slide 17: Portfolio management strategy
Portfolio management strategy For personal use only • Constant review of Australian property market for acquisition opportunities • Purchased 24 properties valued at approx $1.0bn, since December 2009 ACQUIRE • Have executed M&A, single asset and portfolio acquisitions as well as development fund th
Slide 18: Portfolio evolution
Portfolio evolution • Growthpoint has focused on upgrading its portfolio over the past 3 years For personal use only – Has acquired larger and higher quality industrial and office assets and sold smaller, lower quality industrial assets • Continue to seek investment property opportunities consistent
Slide 19: Leasing management
Leasing management For personal use only • Recent success at 7 Laffer Drive, Bedford Park where 2% of LEASE EXPIRY PROFILE FY14 expiry was successfully re-leased to Westpac1 as at 31 December 2012 • Tenant negotiations are well progressed on existing vacant 1.1% 3.0% 0.3% CB1, South CB1, South Macar
Slide 20: Case study – portfolio repositioning
Case study – portfolio repositioning RE-POSITIONING FROM REGIONALLY LOCATED GOULBURN ASSET TO PRIME SYDNEY SUBURBAN INDUSTRIAL PRECINCT For personal use only • In December 2012, Growthpoint sold its regionally based, Goulburn property and re-invested into a modern industrial portfolio in Erskine Par
Slide 21: Case study – leasing success
Case study – leasing success For personal use only • Growthpoint Management team negotiate leases directly with existing tenants, keeping control and saving costs – Management have KPIs based on holding regular tenant meetings – External leasing agents appointed by Growthpoint where properties becom
Slide 22: Case study – fund through structure
Case study – fund through structure For personal use only $86M FOX SPORTS BUILDING – ARTARMON, NSW • GOZ purchases land and funds the development WALE: 7.6 years (from practical completion) through to completion STRUCTURE • Properties are “pre-committed” to lease before the land is purchased • Exper
Slide 23: Financials & capital management
For personal use only FINANCIALS & CAPITAL MANAGEMENT GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 23
Slide 24: Financial results
Financial results For personal use only • Gearing target: 40-45% HY2013 • At least 75% interest hedged with an aim to STATUTORY ACCOUNTING PROFIT ($M) 34.0 match the duration of debt DISTRIBUTABLE INCOME ($M) 36.8 • Debt maturity of 3.1 years as at 31 December DISTRIBUTIONS PAID ($M) 35.1 2012 DISTR
Slide 25: Debt & capital management
Debt & capital management For personal use only Weighted average maturity of debt is 3.1 years as at 31 Dec 2012 A1, 32 Cordelia Street, Brisbane, QLD 1. ICR is not calculated for the BILAT until the Fox Sports, Gore Hill property reached practical completion. This did not occur until January 2013 G
Slide 26: Debt & capital management (cont.)
Debt & capital management (cont.) For personal use only As at 31 Dec 2012 • Amount of debt hedged 91% • Weighted average interest rate on hedged debt 4.61% per annum 1 • Weighted average duration of hedged debt 3.8 years 33-39 Richmond Road, Keswick, SA 1. Excluding line fees and margin GROWTHPOINT
Slide 27: Market update & outlook
For personal use only MARKET UPDATE & OUTLOOK GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 27
Slide 28: Market update
Market update For personal use only GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 28
Slide 29: Growthpoint investment case
Growthpoint investment case For personal use only • Excellent property portfolio fundamentals – quality tenants, diversified across office and industrial sectors, located in every Australian State and the ACT, 7 year WALE , negligible vacancies (2% vacancy) and limited lease expiry risk in the short
Slide 30: Glossary & disclaimer
Glossary & disclaimer A-IFRS Australian International Financial Reporting Standards For personal use only A-REIT Australian Real Estate Investment Trust Balance Sheet Gearing borrowings divided by total assets BILAT means the loan facility agreement with National Australia Bank dated 17 February 201
Slide 31: Appendix
For personal use only APPENDIX GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 31
Slide 32: Appendix I – distributable income
Appendix I – distributable income For personal use only 1. Includes coupon interest received on the developments of Energex, Nundah and Fox Sports GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 32
Slide 33: Appendix II – financial position
Appendix II – financial position For personal use only GROWTHPOINT PROPERTIES AUSTRALIA – INVESTOR PRESENTATION JUNE 2013 33
Slide 34: Appendix III – Growthpoint Properties Limited (GRT) – South Africa
Appendix III – Growthpoint Properties Limited (GRT) – South Africa GRT currently owns 65.8% of the securities of For personal use only • Key Facts GOZ and is its major securityholder Listing GRT is listed on the Johannesberg Stock Exchange (JSE) • GRT first invested in GOZ in September 2009 and has
Slide 35: Thank you
Thank you For personal use only For more information contact us at: Growthpoint Properties Australia Level 22, 357 Collins Street Melbourne VIC 3000 P: +61 3 8681 2900 F: +61 3 8681 2910 E: info@growthpoint.com.au Investor services line: 1800 260 453 www.growthpoint.com.au GROWTHPOINT PROPERTIES AUS
Growthpoint Properties Australia — Investor Presentation (June 2013) on 6ix