Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — FY2024 Earnings Presentation
55 slides from Growthpoint Properties Australia's earnings presentation, Aug 22, 2024
Slide 1: Growthpoint Properties Australia FY24 annual results
Direct portfolio:130 Sharps Road, Melbourne Airport, VIC Growthpoint Properties Australia FY24 annual results 22 August 2024 space to thrive.
Slide 2: Agenda
Direct portfolio: 599 Main North Road, Gepps Cross, SA Agenda Introduction Financial Direct performance portfolio 3 6 10 Funds Outlook Supplementary Management information 18 20 26 Acknowledgement of Country Growthpoint Properties Australia acknowledges the Traditional Custodians of Country througho
Slide 3: FY24 introduction
FY24 introduction Ross Lees Chief Executive Officer & Managing Director Direct portfolio: 10-12 Mort Street, Civic, ACT
Slide 4: Growthpoint snapshot
Growthpoint snapshot as at 30 June 2024 Growthpoint Properties Australia | AUM $6.0b | 66 assets Industrial & logistics Office Retail AUM $1.6b | 30 assets AUM $3.0b | 28 assets AUM $1.4b | 8 assets 40 Annandale Road, 70 Distribution Street, 100 Skyring Terrace, 1 Charles Street, 307 Queen Street, R
Slide 5: Strategic highlights in FY24
Strategic highlights in FY24 Direct property Financial and Funds Sustainability portfolio capital management management c.108,000 sqm of leasing Delivered FFO of 23.9 cps, Disciplined approach to On track to achieve Net completed across the direct above guidance, capital market transactions Zero Tar
Slide 6: Financial performance
Financial performance Dion Andrews Chief Financial Officer Direct portfolio: 51-65 Lenore Drive, Erskine Park, NSW
Slide 7: FY24 performance summary
Third-Party Funds: Central Park, Chippendale, NSW FY24 performance summary Financial Capital Operating performance management Performance (Direct) FFO Gearing Portfolio occupancy 23.9 cps 40.7% 95% above guidance Target 35-45% 30 June 2023: 93% Distribution Hedging WACR 19.3 cps 74.5% 6.3% in line w
Slide 8: FY24 financial results
FY24 financial results % • Like-for-like Property FFO up 2.3% excluding FY23 Components of FFO FY24 FY23 change and FY24 lease surrender payments NPI (includes investment distributions) $m 249.7 264.3 (5.5) • NPI decrease driven by: Add back amortisation of incentives $m 40.0 39.3 1.8 • the sale of
Slide 9: Capital management
Group debt maturity profile Capital Bank debt Undrawn bank debt Institutional term loan USPP management 50 $470 million of bank debt facilities extended in FY24, 151 c.20% of total bank 100 debt facilities 150 • Ample headroom in ICR and LVR covenants 100 193 • Gearing well managed and 50 665 remain
Slide 10: Direct portfolio
Direct portfolio Michael Green Chief Investment Officer Direct portfolio: 20 Colquhoun Road, Perth Airport, WA
Slide 11: Direct property portfolio – key metrics
Direct property portfolio – key metrics Total property portfolio Office Industrial 63% 37% Total portfolio value portfolio portfolio $4.4b Modern A-grade portfolio located predominantly across the Eastern Modern logistics and warehouse portfolio with c.70% of assets located on 30 June 2023: $4.8b se
Slide 12: Office leasing
92% occupancy (30 June 2024), Office leasing up from 90% (30 June 2023) Over 70% of leasing completed during FY24 was to Government and Key metrics Leasing highlights listed tenants 6.4 years Office leasing success average new lease term 33% increase in number of leases signed and 46% 3.6% increase
Slide 13: Strong demand in Growthpoint office markets
Growthpoint markets net absorption Strong demand consistently outperformed other markets over the last four years by c.800,000sqm in Growthpoint office markets Net absorption – Growthpoint markets vs other markets FY21-FY24 1 (sqm) Melbourne Fringe • Demand in Growthpoint markets has Brisbane Fringe
Slide 14: Brisbane fringe best performing office market in Australia
Brisbane fringe best performing 100 Skyring Terrace, Newstead Qld − c.50% of NLA leased in past 24 months − All leases to Government tenants office market in Australia − WALE at 30 June 2024: 4.0 years Brisbane Fringe market metrics1 Net absorption Effective rent growth Vacancy rate Growthpoint 12 m
Slide 15: Industrial leasing
FY24 re-leasing Average letting up period Industrial leasing spread of 31%1 for FY24 – c.1.5 weeks Key metrics Leasing highlights 6.0 years average new lease term 3.7% WARR2 60,794 sqm Lots 2, 3 & 4, of leasing completed 130 Sharps Road, 9-21 Kimpton Way, 10 Butler Boulevard, 34-44 Raglan Street, Me
Slide 16: Direct property portfolio – lease expiry
Direct property portfolio Weighted average lease expiry 39% of industrial leases expiring in FY25 - FY27, – lease expiry of 5.7 years 16% under rented Weighted average lease expiry by total portfolio income, as at 30 June 2024 17% Key expiries Office Industrial Industrial portfolio – Linfox 1.6% Key
Slide 17: Sustainability performance
Sustainability On track to achieve Net Zero Target by performance 1 July 2025 1 • Issued a further $500 million of Continuing improvement in Maintained high sustainability-linked loans, GRESB performance portfolio average bringing the total on issue to NABERS ratings $1,020 million, exceeding all 72
Slide 18: Funds Management
Funds Management. Ross Lees Chief Executive Officer & Managing Director
Slide 19: Funds Management
Funds $1.6 billion of third-party assets under management for wholesale syndicates and Management institutional investors • Completed the sale of Taylors House for Investor Asset type c.$87 million, achieving a levered IRR of 11% composition and location over the 7-year fund term (by value) Office •
Slide 20: Outlook
Outlook Ross Lees Chief Executive Officer & Managing Director Direct portfolio: 3 Maker Place, Truganina, VIC
Slide 21: Office supply in Growthpoint markets
Office supply Forecast office supply in Growthpoint markets is trending lower in Growthpoint markets Supply in Growthpoint markets 1 (completions, sqm) West Perth 350,000 Brisbane Fringe • High construction, labour and finance Melbourne S.E.S 300,000 Melbourne Fringe costs are deterring new supply,
Slide 22: Industrial markets remain strong
Industrial markets Industrial prime net face rent growth (12 months to 30 June 2024) remain strong NSW 16.0% VIC 18.2% • Demand is being supported by growth in QLD 17.4% the logistics and warehousing sectors, with SA 12.7% leasing activity in the Melbourne and Sydney markets remaining strong WA 1.1%
Slide 23: Initial observations
Third-party funds: Central Park Mall, Chippendale, NSW Initial observations Substantial high- Strong customer Solid platform for quality portfolio relationships growth & experienced team • Modern office • Landlord • Scalable presence portfolio, satisfaction score in office, industrial underpinned by
Slide 24: FY25 guidance
Direct portfolio: 5 Murray Rose Avenue, Sydney Olympic Park, NSW FY25 guidance FY25 FFO FY25 guidance distribution 22.3 – 23.1 cps guidance A key assumption to guidance is 18.2 cps in respect of interest rates, with the Group assuming an average FY25 floating rate of 4.35% 24 Growthpoint Properties
Slide 25: Questions
Thank you for joining us. Questions Direct portfolio: 836 Wellington Street, West Perth, WA
Slide 26: Supplementary information
Supplementary information Financial Property information information 27 38 Key market Additional metrics information 50 52 Direct portfolio: 81 Derby Street, Silverwater, NSW
Slide 27: Financial information
Direct portfolio: 130 Sharps Road, Melbourne Airport, VIC Financial information
Slide 28: Financial performance
Financial performance FFO per security movement NTA per security movement $4.00 0.8 26.8 $0.02 $3.75 -$0.24 -$0.02 -$0.01 -1.9 $0.03 $3.45 -$0.28 -$0.02 -$0.03 -1.5 0.2 23.9 -0.5 FY23 NPI1 Surrenders Net Divested Others FY24 NTA Office Industrial Retained Other NTA Office Industrial Retained Other N
Slide 29: Summary financials
Summary financials FY24 FY23 Change % Change FY24 FY23 Change % Change NPI1 $m 249.7 264.3 (14.6) (5.5) Office FFO $m 194.6 208.5 (13.9) (6.7) Like-for-like Property FFO $m 279.9 288.2 (8.3) (2.9) Industrial FFO $m 87.1 86.7 0.4 0.5 Fund management revenue $m 8.0 7.6 0.4 4.6 Distributions from secur
Slide 30: Reconciliation from statutory profit to FFO
Reconciliation from statutory profit to FFO FY24 FY23 Change Change $m $m $m % Loss after tax (298.2) (245.6) (52.6) 21.4 Adjustment for non-FFO items: - Straight line adjustment to property revenue (10.2) (12.6) 2.4 - Net loss in fair value of investment properties 424.3 388.4 35.9 - Net (gain) / l
Slide 31: Financial position
Financial position 30 June 2024 30 June 2023 $m $m Assets Cash and cash equivalents 42.2 49.4 Investment properties 4,503.7 4,917.2 Investment in securities 140.9 129.5 Intangible assets 7.2 38.2 Other assets 70.9 76.4 Total assets 4,764.9 5,210.8 Liabilities Borrowings 1,923.8 1,918.7 Distributions
Slide 32: Additional financial information
Additional financial information Reconciliation of operating cashflow to FFO FY24 FY23 Change $m $m $m Operating cashflow 133.9 176.0 (42.1) Incentives given 42.6 29.5 13.1 Net accrued operating activities 3.5 0.3 3.2 Net accrued capital expenditure 3.6 – 3.6 Provision for income tax (0.1) 2.1 (2.2)
Slide 33: Lease incentives
Lease incentives Consolidated Statement of Profit and Loss FY24 FY23 $m $m Property revenue (excluding incentives) 353.7 364.6 Lease incentives include fit out, rent free, Amortisation of tenant incentives (40.0) (39.3) rental abatement and cash payments. The Property revenue 313.7 325.3 tables on t
Slide 34: Capital expenses
Capital expenses Capital expenditure FY24 FY23 Portfolio maintenance capex $m 30.4 22.1 Expected to Average property asset value $m 4,779.1 5,227.4 average Capital expenditure to average property portfolio value % 0.64 0.42 0.3%-0.6% over medium-term based on current portfolio 34 Growthpoint Propert
Slide 35: Capital management
Capital management 3.4% 2.5 years 50%-100% Weighted average Weighted average Target fixed term fixed rate fixed debt 30-Jun-24 30-Jun-23 Carrying Carrying amount Fair value amount Fair value ($m) ($m) ($m) ($m) FY25 FY26 FY27 FY28 FY29 Total Current liabilities Cross currency interest rate swaps Loa
Slide 36: Key debt metrics and changes during FY24
Key debt metrics and changes during FY24 30 June 2024 30 June 2023 Change Hedge maturity profile Gross assets $m 4,765.0 5,210.8 (445.8) Fixed debt Interest bearing liabilities $m 1,923.8 1,918.7 5.1 Weighted average fixed rate Total debt facilities $m 2,223.3 2,226.3 (3.0) $1,600 6.0% Undrawn debt
Slide 37: Capital management
Capital management Stress testing covenants ICR >1.6x Gearing movement GOZ: 2.8 for the 12 months ended 30 June 2024 To breach this covenant, NPI 48% LVR <60% would need to fall GOZ: 42.6% by 42.9%1 46% To breach this 0.5% 3.3% 0.4% covenant, GOZ cap 44% rate would need to Secured rise by 259 bps1 p
Slide 38: Property information
Direct portfolio: 109 Burwood Road, Hawthorn, VIC Property information
Slide 39: Direct Portfolio summary
Direct Portfolio 85% Sector diversity by value Industrial summary located on Eastern seaboard 37% Key portfolio metrics $4.4b Office 63% as at 30 June 2024 total portfolio value No. office properties Tenant use No. industrial properties by income 21% Logistics / distribution Queensland Office 30% $9
Slide 40: Other portfolio metrics
Other portfolio metrics 30 June 2024 30 June 2023 Lease type Annual rent review type by income by income Number of assets 57 58 Gross 5% Property portfolio value $4.4 billion $4.8 billion Semi-gross Fixed over 4.00% 7% Net 82% Number of tenants 170 161 13% Fixed 2.00-2.99% 14% Portfolio occupancy 95
Slide 41: Office portfolio – top five assets (by value)
Office portfolio – top five assets (by value) 1 Charles Street, 75 Dorcas Street, 100 Skyring Terrace, Building 3, 570 Swan Street, 165-169 Thomas Street, Parramatta, New South Wales South Melbourne, Victoria Newstead, Queensland Richmond, Victoria Dandenong, Victoria Title Freehold Title Freehold T
Slide 42: Industrial portfolio – top five assets (by value)
Industrial portfolio – top five assets (by value) 70 Distribution Street, 20 Colquhoun Road, 599 Main North Road, 27-49 Lenore Drive, 6-7 John Morphett Place, Larapinta, Queensland Perth Airport, Western Australia Gepps Cross, South Australia Erskine Park, New South Wales Erskine Park, New South Wal
Slide 43: Long history of leasing success – office portfolio
Long history of leasing success – office portfolio FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed 41,159 sqm or 17,092 sqm or 7,203 sqm or 68,580 sqm or 47,422 sqm or 41,1
Slide 44: Long history of leasing success – Industrial portfolio
Long history of leasing success – Industrial portfolio FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed Leases completed 53,762 sqm or 115,341 sqm or 109,698 sqm or 82,021 sqm 113,559 sqm or
Slide 45: Top ten tenants – by income
Top ten tenants – by income Total portfolio % portfolio WALE Office tenants % portfolio WALE Industrial tenants % portfolio WALE as at 30 June 2024 income (yrs) as at 30 June 2024 income (yrs) as at 30 June 2024 income (yrs) Woolworths 12 5.7 Australian Commonwealth Woolworths 38 5.7 12 3.5 Governme
Slide 46: Leasing – office leases executed in FY24
FY24 leases Ave. Leasing – office leases executed in FY24 completed – % office portfolio income lease term 6.4 yrs 12.5% Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) Building B, 211 Wellington Road Mulgrave VIC M & F Pitts Jun-23 1.0 101 2 104 Melbourne Street South Brisbane QLD S
Slide 47: Leasing – office leases executed in FY24 (cont.)
Leasing – office leases executed in FY24 (cont.) Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 52 Merivale Street South Brisbane QLD EPEC Group Mar-24 7.2 1,239 14 Building B, 211 Wellington Road Mulgrave VIC The Meating House Mar-24 5.0 101 2 Building 3, 570 Swan Street Richmond V
Slide 48: Leasing – office leases executed in FY24 (cont.)
Leasing – office leases executed in FY24 (cont.) Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 4 Broadcast Way Artarmon NSW Gravity Media Jun-24 10.0 2,350 29 4 Broadcast Way Artarmon NSW Fox Sports Jul-24 6.5 490 4 33-39 Richmond Road Keswick SA SA Government Jul-24 10.0 4,771 70
Slide 49: Leasing – industrial leases executed in FY24
FY24 leases Ave. Leasing – industrial leases completed - % industrial portfolio income lease term 6.0 yrs executed in FY24 7.9% Location Tenant Start date Term (yrs) NLA (sqm) Lots 2, 3 & 4, 34-44 Raglan Street Preston VIC Chemist Warehouse May-24 3.0 6,236 9-21 Kimpton Way Altona VIC TSS Sensitive
Slide 50: Key market metrics
Direct portfolio: 40 Annandale Road, Melbourne Airport, VIC Key market metrics
Slide 51: Key market metrics
Key market metrics Prime Secondary % of GOZ Total Average face rent Average Average core Average face rent Average Average core Market portfolio vacancy per sqm / p.a. incentives market yield per sqm / p.a. incentives market yield Office markets Adelaide – CBD SA - 16.6% $612 gross 39% 6.75%-8.75% $
Slide 52: Additional information
Direct portfolio: 109 Burwood Road, Hawthorn, VIC Additional information
Slide 53: Glossary
Glossary Term Definition Term Definition Term Definition ABS Australian Bureau of Statistics gearing Interest bearing liabilities less cash divided by total NPI Net property income plus distributions from equity ACT Australian Capital Territory, Australia assets less finance lease assets less intang
Slide 54: Important information
Important information This presentation has been prepared by Growthpoint Properties Australia Limited (ACN assurance that actual outcomes for Growthpoint will not differ materially from 124 093 901) in its personal capacity and as responsible entity of Growthpoint statements made in this presentatio
Slide 55: Contact us
Contact us Retail investors Computershare 1300 665 792 (within Australia) +61 (3) 9415 4366 (outside Australia) webqueries@computershare.com.au Institutional investors Luke Maffei Investor Relations and Communications Manager +61 (3) 8681 2933 investor.relations@growthpoint.com.au 2024 calendar. • 2
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