Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — H1 FY2019 Earnings Presentation
39 slides from Growthpoint Properties Australia's earnings presentation, Feb 21, 2019
Slide 1: Half Year Results Presentation
2019 Half Year Results Presentation 21 February 2019 Growthpoint Properties Australia Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409 www.growthpoint.com.au
Slide 2: Agenda
Agenda. 1. HY19 Highlights and Conditions 2. Financial Management 3. Property, Strategy and Summary
Slide 3: HY19 Highlights and Conditions
HY19 Highlights and Conditions Timothy Collyer Managing Director 75 Dorcas Street, South Melbourne, VIC
Slide 4: Highlights for HY19
Highlights for HY19. Office and Industrial/Logistics 12.5cps 11.4cps remain favoured HY19 FFO HY19 DPS property sectors in No change +3.6% vs HY18 Australia on HY18 69% $3.36 35.0% Office NTA Gearing 31% +5.3% vs 30 June 2018 +110bps vs 30 June 2018 Industrial Growthpoint Properties Australia Half Y
Slide 5: CBD fringe acquisitions complement existing office portfolio
CBD fringe acquisitions compliment existing office portfolio. Newstead, QLD office Property details Inaugural office acquisition and successful investment in Perth, WA equity raising Property type Office Purchase price $250m1 tt Acquisition of modern, A-Grade tt Acquisition of modern, A-Grade office
Slide 6: Good progress on internal development and expansion opportunities
Good progress on internal development and expansion opportunities. Construction of new Expansion of 19,300 sqm office Woolworths building underway in Distribution Centre in Richmond, VIC Gepps Cross, SA tt Construction currently tt $57 million expansion, tracking ahead of schedule including an exten
Slide 7: Financial Management
Financial Management Dion Andrews Chief Financial Officer 836 Wellington Street, West Perth, WA
Slide 8: HY19 P&L analysis
HY19 P&L analysis. Contribution from new acquisitions (+$2.8m) offset by lost income from sold properties (-$2.4m), transition Components of Funds from Operations (FFO) HY19 HY18 Change to new lease with Country Road/ David Jones (-$1.4m) and loss of Net Property Income $’000 111,274 108,823 2.3% in
Slide 9: Movements in gearing
Movements in gearing. tt Gearing uplift from Items influencing gearing acquisitions over the half for the six months ended 31 December 2018 offset by equity raised via DRP and well-supported Rights Offer and positive +1.7% +0.1% +0.3% revaluations +2.3% tt Preference for gearing to +0.8% -2.2% 35.0%
Slide 10: Movements in NTA
Movements in NTA. Uplift driven by: Movements in NTA per stapled security ($) tt 21 bps fall in weighted +$0.02 $3.36 average capitalisation rate +$0.01 of property portfolio since +$0.14 30 June 2018 to 6.04% tt Improvement in market rents contributed to approximately a quarter of uplift in propert
Slide 11: Balance sheet in excellent shape
Balance sheet in excellent shape. Summary of debt facilities Change in gearing and cost of debt (%) Weighted Secured bank loans Limit Drawn Maturity average debt 55% Gearing 7.0% maturity $m $m 6.7 4.2yrs target range Syndicated Facility - Facility B 100 100 Mar-23 50% 35 - 45% 6.5% 46.8 - Facility
Slide 12: Summary
Summary. nnFFO guidance upgraded during the half to at least 24.8 cps nnPositioned for growth following accretive acquisitions and lowered debt costs nnEvidence of strong Securityholder support following recent equity raising nnBalance sheet in good shape with substantial headroom to debt covenants
Slide 13: Property, Strategy and Summary
Property, Strategy and Summary Timothy Collyer Managing Director Hugh Edwards Drive & Tarlton Crescent, Perth Airport, WA
Slide 14: Portfolio Summary
Portfolio Summary. Sector diversity (%) Geographic diversity (%) Occupancy (%) by property value, as at 31 December 2018 by property value, as at 31 December 2018 by income, as at 31 December 2018 NSW 24% WA 8% Office 69% Occupied 99% SA 6% ACT 4% TAS 1% Vacant 1% QLD 30% VIC 27% Industrial 31% Tena
Slide 15: High quality tenants and manageable near-term expiries
High quality tenants and manageable near-term expiries. Top ten tenants Portfolio lease expiry profile (%) by passing rent, as at 31 December 2018 per financial year, by income WALE % (yrs) Major lease expiries (>1% of portfolio income) Woolworths 14 4.0 Office NSW Police 8 5.4 Industrial Commonweal
Slide 16: Simple business model – strong track record of returns
Simple business model – strong track record of returns. Property Capital Management Returns nn Considering further debt capital markets issuance Total Securityholder to further diversify and extend funding profile return (%)1 nn Maintain prudent gearing settings 16.7 13.7 nn Continue to seek well-le
Slide 17: Summary
Summary. nnStrong operational result in HY19 driven by accretive acquisitions – FFO guidance increased during the half nnOversubscribed equity raising evidence of strong Securityholder support nnFavoured office and industrial sectors continue to display superior growth prospects nnBalance sheet stre
Slide 18: Appendices
Appendices 100 Skyring Terrace, Newstead, QLD
Slide 19: State of key office markets
State of key 3% of Growthpoint Portfolio Brisbane - CBD Brisbane - Fringe 20% of Growthpoint Portfolio office markets. Vacancy 13.2% Prime Secondary Vacancy 16.3% Prime Secondary R $729 gross $564 gross R $ 548 gross $443 gross R Average face rent per sqm per annum I 38% 40% I 38% 38% I Average ince
Slide 20: State of key industrial markets
State of key industrial markets. R Average face rent per sqm per annum I Average incentives Y Average core market yield 7% of Rents Rents Brisbane Growthpoint decreasing increasing Portfolio / incentives / incentives 466,082 sqm* increasing / decreasing / yields Stable yields Prime Secondary softeni
Slide 21: Geographic diversity
Geographic diversity. 86% of properties located on Eastern seaboard by property value, as at 31 December 2018 Number of assets: 30% Queensland Office properties ($2.7bn) $1,153.0m Industrial properties ($1.2bn) – Office $899.5m – Industrial $253.5m 24% New South Wales $950.9m 8 4 – Office $745.3m –
Slide 22: Top five office properties/property groups by value
Top five office properties/ property groups by value. SW1 Complex, 1 Charles St, Sydney Olympic Park, 100 Skyring Terrace, Bldgs 1, 2, & 3, 572-576 South Brisbane, QLD Parramatta, NSW NSW (4 properties) Newstead, QLD Swan St, Richmond, VIC 55% (5 properties) (4 properties, incl. car park) of office
Slide 23: Top five industrial properties/property groups by value
Top five industrial properties/ property groups by value. Woolworths Linfox properties, Melbourne Airport Knoxfield industrial Perth Airport industrial Distribution Centres Erskine Park, NSW industrial properties, properties, VIC properties, WA 79% (4 properties) (3 properties) VIC (6 properties) (3
Slide 24: Summary Financials
Summary Financials. HY19 HY18 Change % Change Net Property Income $'000 111,274 108,823 2,451 2.3 Like-for-like Net Property Income $'000 107,625 105,679 1,946 1.8 Statutory accounting profit $'000 188,757 207,291 (18,534) (8.9) Statutory accounting profit per security ¢ 27.3 31.3 (4.0) (12.8) Funds
Slide 25: Reconciliation from statutory profit to FFO
Reconciliation from statutory profit to FFO. HY19 HY18 Change Change $’000 $’000 $’000 % Profit after tax 188,757 207,291 (18,534) (8.9) Less non-FFO items: - Straight line adjustment to property revenue (2,937) (2,903) (34) - Net changes in fair value of investment property (101,407) (102,893) (1,4
Slide 26: Financial position
Financial position. as at 31 December 2018 as at 30 June 2018 $’000 $’000 Assets Cash and cash equivalents 40,955 31,463 Investment properties 3,815,575 3,291,800 Other assets 136,008 151,306 Total assets 3,992,538 3,474,569 Liabilities Borrowings 1,424,119 1,197,555 Distributions payable 82,963 75,
Slide 27: Lease incentives
Lease incentives. Lease incentives for leasing completed in HY19 averaged 10% (26% office Average lease incentives (%) and 7% industrial). This includes fit-out, rent free, rental abatement and cash HY18 HY19 payments. Financial impact of lease incentives and leasing costs¹ 26 26 25 The impact of le
Slide 28: Operating and capital expenses
Operating and capital expenses. Operating expenses CY18 CY17 Total operating expenses $'000 13,506 13,066 Average gross assets value $'000 3,526,881 3,295,858 Expected to remain around Operating expenses to average gross assets % 0.38 0.40 0.40% based on current portfolio Capital expenditure CY18 CY
Slide 29: Debt maturity profile
Debt maturity profile ($m) At 31 December 2018 Bank debt Institutional term loan USPP Bridge Facility Undrawn bank debt Bank debt / Weighted 500 non-bank debt1 average debt 33 maturity 400 61 217 61%/39% 4.2yrs 404 300 200 250 200 100 150 150 130 78 0 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY2
Slide 30: Target fixed/hedged debt 65% to 100%
Target fixed/hedged debt 65% to 100%. Weighted average fixed debt Time Fixed Face value Maturity date to maturity rate of Swap Weighted Interest Rate Swaps (IRS) average fixed debt (term) Jun-2020 1.5yrs 2.36% $25m Jun-2020 1.5yrs 2.36% $25m 5.0yrs Dec-2020 2.0yrs 2.42% $50m May-2021 2.4yrs 2.10% $5
Slide 31: Portfolio overview – Five year performance summary
Portfolio overview – Five year performance summary. As at 31 December 2018 2017 2016 2015 2014 Number of properties no. 59 56 59 57 51 Total value $m 3,860.8 3,285.0 3,194.7 2,611.5 2,233.6 Occupancy % 99 98 99 97 98 HY like-for-like value change $m / % of asset value 163.4 / 4.9 124.6 / 4.0 59.6 /
Slide 32: Leasing
Leasing. Leases completed in HY19 Term Annual rent NLA Car At 31 Dec 2018 Address Sector Tenant Start date (yrs) increases (sqm) Parks Building C, 211 Wellington Road Mulgrave VIC Office Huili Group P/L T/A The Taste Corner Q1, FY19 5.0 Fixed 3.25% 145 2 102 Bennelong Parkway Sydney Olympic Park NSW
Slide 33: Equity capital overview
Equity capital overview. Market capitalisation and free float ($m) Location of Growthpoint Growthpoint Securityholders* (%) Securityholders* (%) Market Capitalisation as at 31 December 2018 as at 31 December 2018 Free float 2,721.8 11 0.7 2,438.1 8.0 2,076.6 25.3 16 1,781.1 1,836.8 1,323.3 73 925.4
Slide 34: Growthpoint Properties Limited – South Africa
Growthpoint Properties Limited – South Africa.1 Growthpoint Properties Limited of South Africa (“GRT”) owns 66.0% of Key Facts (as at 30 June 2018)1 the securities of Growthpoint and is its major Security holder. Listing GRT is listed on the Johannesburg Stock Other information • Well capitalised an
Slide 35: Board of Directors
Board of Directors. 1. Geoffrey Tomlinson (71) 3. Maxine Brenner (56) 5. Grant Jackson (52) 7. Norbert Sasse (54) BEC BA, LLB Assoc. Dip. Valuations, FAPI BCom (Hons) (Acc), CA (SA) Independent Chairman (since Independent Director (since Independent Director (since Director4 (since 5 August 2009) 1
Slide 36: 2019 Securityholder calendar
2019 Securityholder calendar.* 21 February 2019 30 August 2019 • Results for the half year ended 31 December • Distribution paid for the half year ending 30 June 2018 announced to ASX 2019 • FY19 Annual Report sent to Securityholders 28 February 2019 • Distribution paid for the half year ending 31 3
Slide 37: Glossary of terms
Glossary of terms. A-REIT Australian Real Estate Investment Trust FY15, FY16, FY17 and FY18 the 12 months ended on 30 NTA net tangible assets June in the year listed i.e. “FY18” means the 12 months ended ASX Australian Securities Exchange m million 30 June 2018 bn billion MW megawatt FY19, FY20, FY2
Slide 38: Important information
Important information. Disclaimer as amended. These measures include Funds From Operations (FFO), FFO invested. Growthpoint does not guarantee any particular rate of return or the This presentation and its appendices (“Presentation”) is dated February per security, distributions per Security, Gearin
Slide 39: Contact details
Contact details: Retail Investors: Computershare Investor Services Pty Limited, GPO Box 2975, Melbourne VIC 3001 Australia Phone (within Australia): 1300 850 505 Phone (outside Australia): +61(0)3 9415 4000 Fax: +61(0)3 9473 2500 Email: webqueries@computershare.com.au Institutional Investors: Daniel
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