Gpt Group · ASX:GPT
Gpt — The GPT Group — H1 2023 Earnings Presentation
40 slides from Gpt's earnings presentation, 2023
Slide 1: 2023 Interim Result Market Briefing
Experience First 2023 Interim Result Market Briefing GPT – 2023 INTERIM RESULT PRESENTATION 1
Slide 2: Agenda
Agenda 2023 Half year in review - Bob Johnston 4 Results and Capital management - Anastasia Clarke 7 Retail - Chris Barnett 12 Office - Martin Ritchie 20 Logistics - Chris Davis 29 Outlook and 2023 Guidance - Bob Johnston 37 GPT – 2023 INTERIM RESULT PRESENTATION 2
Slide 3: Acknowledgement of Traditional Custodians
GPT acknowledges the Artwork: Aunty Denise Traditional Custodians of the lands on which our business operates. We pay our respects to Elders past, present and emerging; and to their knowledge, leadership and connections. We honour our responsibility for Country, culture and community in the places w
Slide 4: 2023 Interim Result financial summary
2023 Interim Result Financial summary Investment portfolio 16.53c Funds From Operations per security, down 3.0% 12.5c Distribution per security, down 1.6% 97.9% Portfolio Occupancy (Incl. HoA) 4.7yrs Weighted average lease expiry $5.85 Net Tangible Assets per $32.2b Assets under management 5.11% sec
Slide 5: Overview of operations
Overview of operations $32.2b Assets under management • Strong performance in Retail portfolio GPT Portfolio2 − Occupancy 99.5%, with high sales productivity and sustainable occupancy cost − Melbourne Central occupancy 99.7% and sales up 26.5% on 1H 2022 Logistics Office $4.6b • Strong leasing outco
Slide 6: Portfolio valuation metrics
Portfolio valuation metrics Investment property valuation movements of negative $341.3m1 Office Retail Logistics 2023 Valuation movement (6 months to 30 Jun 2023) -$241.8m -$103.7m +$3.2m -4.0% -1.8% +0.1% Capitalisation Rate 5.24% 5.23% 4.78% (+21 bps since Dec 2022) (+20 bps since Dec 2022) (+38 b
Slide 7: Results and Capital management
Experience First Results and Capital GPT – 2023 INTERIM RESULT PRESENTATION management 7
Slide 8: Financial result
Financial result ($m) June 2023 June 2022 Change ($1.1m) Net (loss)/profit after tax (1.1) 529.7 Valuation (decreases) / increases (341.3) 219.5 Treasury instruments marked 23.5 (16.3) Net Loss After Tax to market and other items Funds from operations (FFO) 316.7 326.5 (3.0%) $316.7m FFO per securit
Slide 9: Segment result
Segment result ($m) 1H2023 1H2022 Change Comments Rent reviews and higher turnover rent (+$15.5m), debtor collections (+$4.1m) Retail 158.8 145.0 9.5% and asset divestments (-$5.8m) Lower average occupancy offset by rent reviews (-$0.3m), and lower GWOF Office 143.7 148.9 (3.5%) FFO due to higher in
Slide 10: Interest rate hedge profile 2023-2026
Interest rate hedge profile 2023-2026 72% Hedge Profile 98% 89% hedged over the next 3.5 years at an average fixed rate of 3.5% 58% ~4.7% 44% 3.4% 3.6% 3.6% 3.3% Full year 2023 forecast all-in-cost of debt 2H 23 2024 2025 2026 % % Hedged Drawn debt hedged Hedge rate GPT – 2023 INTERIM RESULT PRESENT
Slide 11: Capital management
Capital management Key Statistics Jun 2023 Dec 2022 Comments Net Tangible Assets per security $5.85 $5.98 Driven by a valuation decrease of $341.3m Within stated range of 25%-35% and material headroom to 50% Net gearing 28.1% 28.5% covenant Liquidity $1.5b $1.1b Funds capital commitments and debt ma
Slide 12: Retail
Experience First GPT – 2023 INTERIM RESULT PRESENTATION Retail 12
Slide 13: Retail overview
Retail overview $171.5m Segment contribution, up 13.7% 6.4% Comparable income growth 99.5% Portfolio occupancy 5.23% Weighted average capitalisation $12.9b Assets under management, down 0.8% on Dec 2022 $12,716psm 11.8% Specialty sales productivity Total Centre sales growth rate, up 20bps on Dec 202
Slide 14: Retailer performance
Retailer performance Retailer profit margins since 2017 Retail sales moderating following 3 years of above average growth 7% 6Y avg EBIT 6% margin (5.7%) • FY2022 growth up 11.4% on 2021 and 1H 2023 up 5.5% on 2022 5% – Sales growth has been supported by a tight EBIT margin labour market, high house
Slide 15: Leasing demand and occupancy resilient
Leasing demand and occupancy resilient • Strong occupancy with high levels of deal activity and tenant retention • Positive leasing spreads achieved across renewals and new leases • Specialty occupancy cost of 15.7% • Average lease terms of 5.2 years all with fixed base rents and annual increases •
Slide 16: Centre sales performance
Centre sales performance • Total Centre sales continued above average growth of 11.8% on 1H 2022 • Total Centre sales up 16.9% on pre-pandemic 1H 2019 • Sales growth has eased in Q2 2023 to long term trend Sales half year growth by category 2023 vs 2022 Sales half year growth 2023 vs 2022 16.5% 15.4
Slide 17: Leading assets in strong growth markets
Leading assets in strong growth markets Melbourne Central Highpoint Shopping Centre • Total Centre MAT $578.5m exceeding • Top 3 retail asset in Australia with pre-pandemic levels with growth of Total Centre MAT of $1.2b and 26.5% on 1H 2022 growth of 11.4% on 1H 2022 • Total Specialty sales $15,200
Slide 18: GPT Retail platform
GPT Retail platform GPT is a leading retail property and asset management platform 4,000+ Retail tenants 1.3m sqm GLA $9.2b Total MAT in Australia 16 Assets owned +225 Retail Property 188m Customer Visits and/or managed Professionals Pacific Fair Shopping Centre, QLD New South Wales Victoria Charles
Slide 19: Retail outlook
Retail outlook • Our outlook for 2023 remains positive • Retailers have experienced high levels of profitability and low occupancy costs • Continue leasing strategies to drive sales productivity and position our assets to attract first to market retailers • Excess in household savings and population
Slide 20: Office
Experience First GPT – 2023 INTERIM RESULT PRESENTATION Office 20
Slide 21: Office overview
Office overview $163.9m Segment contribution, down 3.4% -3.4% Comparable income growth 88.5% Portfolio occupancy (incl. HoA) 5.24% Weighted average capitalisation 4.8yrs Weighted average lease expiry $14.4b Assets under management, rate, up 21 bps on Dec 2022 down 2.2% on Dec 2022 GPT – 2023 INTERIM
Slide 22: Highly competitive office leasing market
Highly competitive office leasing market • Vacancy remains elevated across major CBD markets • Preference for prime over secondary assets is evident, with high quality, amenity rich workplaces sought after to attract and retain talent • Strong demand continues for space under 1,000sqm, with increasi
Slide 23: Positive leasing result
Positive leasing result Leasing activity breakdown 77% 58% Currently targeting 20 portfolio occupancy 42% (including HoA) of ~90% by December 2023 66 23% 58,800 Across 86 deals (incl. HoA) sqm leased 4.9 years Average lease term Greater than 1,000sqm Less than 1,000sqm by NLA Greater than 1,000sqm L
Slide 24: Fitted out space continues to drive leasing activity
Fitted out space continues to drive leasing activity GPT DesignSuites provide ~9% high quality, fully fitted and technology enabled workplaces for customers to move straight into Face rent premium Compared to June 2023 independent valuation market rents for vacant whole floors Melbourne Central Towe
Slide 25: Flexible space enhances asset appeal
Flexible space enhances asset appeal Through GPT Space&Co. we provide our customers a ‘core & flex’ workplace solution Established in 2014 ~14,000sqm 8 assets 98 meeting rooms 530 Collins St, Melbourne 580 George St, Sydney 1,943 desks 25 months average tenure In the pipeline 3 assets ~5,000sqm Melb
Slide 26: High sustainability credentials are a necessity
High sustainability Sustainability in action: GPT DesignSuites credentials are a necessity Upfront embodied Leadership in ESG is core to GPT's strategy carbon neutral Target certification using Green Star 100% Upfront and Climate Active carbon neutral embodied carbon neutral >75% 20% Portfolio opera
Slide 27: Demand strongest for high quality new space
Demand strongest for high quality new space Melbourne Central Tower Refurbishment 78% of portfolio constructed or refurbished since 2012 Prime Amenity ~6 71 Net 4 Murray Rose 8 Exhibition St 530 Collins St portfolio rich minutes Promoter New construction Refurbishment Refurbishment in key eastern se
Slide 28: Office portfolio outlook
Office portfolio outlook Portfolio well positioned for successful 2H 2023 leasing • Market vacancy is expected to remain elevated however quality assets with appealing amenity will continue to be in demand • Significant investment made in the assets and workplace products, with ~18,000sqm of GPT Des
Slide 29: Logistics
Experience First GPT – 2023 INTERIM RESULT PRESENTATION Logistics 29
Slide 30: Logistics overview
Logistics overview $99.0m Segment contribution, up 7.4% 5.1% Comparable income growth 99.8% Portfolio occupancy (Incl. HoA) 4.78% Weighted average capitalisation 5.7yrs Weighted average $4.9b Assets under management, rate, up 38bps on Dec 2022 lease expiry up 4% on Dec 2022 GPT – 2023 INTERIM RESULT
Slide 31: Eastern seaboard occupier demand outpacing supply
Eastern seaboard occupier demand outpacing supply • Historic low market vacancy with occupiers unable to access space in current market, resulting in sustained rental growth of ~8% in 6 months1 • Supply / demand dynamics to result in continued low vacancy • Market leasing enquiry currently ~2.7 mill
Slide 32: Strong leasing outcomes achieved
Strong leasing outcomes achieved • High portfolio occupancy1 of 99.8% and WALE of 5.7 years +40% Portfolio • Total leasing1 of 109,100sqm including 31,700sqm in developments leasing spread Key Operational Leasing Seven Hills, NSW1 Berrinba, QLD Altona North, VIC1 Re-leased facility at market rents E
Slide 33: Rental upside through re-leasing
Rental upside GPT lease expiry profile by income through re-leasing 18% 12% • Portfolio under-rented compared to market with ~50% expiring to December 2027 10% 8% • Market rents have increased significantly in past 18 months, expect to see average rental spreads >15% for expiries over the next 3 yea
Slide 34: Development completions
Development • Three completions in 1H 2023 of ~$170m AUM and two projects completing in 2H 2023 of ~$110m AUM, delivering a forecast yield on cost of 6.4%1 completions • Future pipeline has an estimated end value on completion of ~$2b AUM (50% Sydney, 39% Melbourne, 11% Brisbane) • $2b target GPT Qu
Slide 35: Tenant demand for efficient and sustainable assets
Tenant demand for efficient and sustainable assets • Increased demand from tenants for assets with sustainability attributes, with ~53% of Australia’s top 100 industrial/logistics occupiers now having net zero targets 1 • GPT developments support sustainability outcomes and are future-proofed for in
Slide 36: Logistics outlook
Logistics outlook • Authority approval delays constraining market supply, particularly acute in Sydney • Demand for well located, efficient and sustainable assets to continue • Vacancy to remain low, with continuation of supply/demand imbalance with occupiers unable to access space • Opportunity to
Slide 37: Outlook and 2023 Guidance
Experience First Outlook and GPT – 2023 INTERIM RESULT PRESENTATION 2023 Guidance 37
Slide 38: Outlook and 2023 Guidance
Outlook and 2023 Guidance Outlook 2023 Guidance • Economic growth is expected to • GPT expects to deliver FFO of slow due to higher interest rates approximately 31.3 cents per and inflationary pressures security and a distribution of 25.0 cents per security for • Retail portfolio well positioned wit
Slide 39: Thank you for joining us
Experience First Thank you for joining us GPT – 2023 INTERIM RESULT PRESENTATION Questions 39
Slide 40: Disclaimer
Disclaimer This Presentation (Presentation) has been prepared by The GPT Group comprising GPT RE Limited (ACN 107 To the maximum extent permitted by law, The GPT Group, its related companies, officers, employees and 426 504; AFSL 286511), as responsible entity of the General Property Trust, and GPT