Gdi Property Group · ASX:GDI
Gdi Property — FY2015 Earnings Presentation
48 slides from Gdi Property's earnings presentation, Aug 24, 2015
Slide 1: GDI Property Group FY15 Annual Results presentation
For personal use only GDI PROPERTY GROUP FY15 Annual Results presentation 24 August 2015
Slide 2: Disclaimer
Disclaimer This presentation has been prepared and issued by GDI Property Group Limited (ACN 166 479 189) and GDI Funds Management Limited (ABN 34 107 354 003, AFSL Number 253 142) as responsible entity of GDI Property Trust (ARSN 166 598 161). Shares in GDI Property Group Limited are stapled to uni
Slide 3: Introduction
For personal use only INTRODUCTION LINKING EQUITY MILL GREEN, TO PERFORMANCE PERTH 2
Slide 4: We delivered in FY15
We delivered in FY15 FFO1 of $46.42 million versus guidance of $46.27 million For personal use only FFO of 8.22 cents per security2 versus guidance of 8.20 cents per security FFO per security growth of 13%3 Paid our distribution of 7.5 cents per stapled security Payout ratio of 90% of FFO
Slide 5: We delivered in FY15
We delivered in FY15 Acquired 66 Goulburn Street, Sydney for $136 million ($5,868/sqm), now valued at $157 million ($6,817/sqm) Acquired with approximately 5,700sqm vacant, now fully leased For personal use only Rates achieved were higher than budgeted with less incentive Conditionally sold
Slide 6: Well positioned for FY16
Well positioned for FY16 Property portfolio1 (Portfolio) well positioned Occupancy2 as at 30 June 2015 of 89% For personal use only WALE2 as at 30 June 2015 (by NLA) of 3.8 years Only 8% of the Portfolio’s NLA is subject to expiries in FY16 Substantial upside potential remains in the Portf
Slide 7: Well positioned for FY16 (continued)
Well positioned for FY16 (continued) Substantial upside potential remains in the Portfolio with limited downside risks (continued) For personal use only 66 Goulburn Street, Sydney is now 100% leased with no expiry in FY16 – Approximately $1.9 million of the guarantee will be available to support
Slide 8: Well positioned for FY16 (continued)
Well positioned for FY16 (continued) Contract for sale of 233 Castlereagh Street, Sydney now exchanged, settlement expected to occur on or around 30 September 2015 For personal use only Balance sheet in a strong position Pro forma gearing reduces to 25% on settlement of 233 Castlereagh Street,
Slide 9: Financial Results
For personal use only FINANCIAL RESULTS LINKING EQUITY TO PERFORMANCE 8
Slide 10: Profit and Loss
Profit and Loss Year ended AIFRS net property income for the year totalled $57.7 30 June 2015 million, a passing yield of 6.6% on the independent value For personal use only $'000 of GDI Property Group’s portfolio Revenue from ordinary activities – Cash received from the guarantees is not included
Slide 11: NPAT to AFFO
NPAT to AFFO Year ended GDI Property Group does not include any transactional 30 June 2015 profits in its FFO or FFO guidance For personal use only $’000 – 233 Castlereagh St, Sydney was revalued to its sale Total comprehensive income for the period 75,940 price with the revaluation reversed for F
Slide 12: Balance sheet in a strong position
Balance sheet in a strong position As at GDI Property Group’s balance sheet is in a sound 30 June 2015 position, with an LVR of 36% (bank covenant LVR 37%) For personal use only $'000 Total current assets 164,706 Investment properties 730,334 During the year GDI Property Group’s NTA/security1 Ot
Slide 13: Debt profile
Debt profile Drawn debt of $323 million, split between 5 year (Tranche A) and 3 year (Tranche B) maturities Credit approved terms for amended facility on settlement of 233 Castlereagh Street, Sydney For personal use only Flexibility to undertake further capital management initiatives Current f
Slide 14: Interest rate hedging
Interest rate hedging Board hedging policy of at least 50% of drawn debt hedged Currently 46% hedged given upcoming settlement of 233 Castlereagh Street, Sydney For personal use only All in cost of drawn debt for the period of 4.66% (inclusive of line fees on undrawn facilities, but excluding
Slide 15: The Property Portfolio
For personal use only THE PROPERTY PORTFOLIO LINKING 307 EQUITY QUEEN TO PERFORMANCE ST, BRISBANE 14
Slide 16: Portfolio overview
Portfolio overview For personal use only LINKING EQUITY TO PERFORMANCE 15
Slide 17: Portfolio overview
Portfolio overview Portfolio snapshot1 Total NLA of 108,374sqm For personal use only Portfolio occupancy2 of 89% WALE2 (by NLA) of 3.8 years Weighted average capitalisation rate (WACR) of 7.7% 30,578 sqm of leases executed, renewed, extended or subject to signed Heads of Agreement in FY15
Slide 18: Mill Green Complex
Mill Green Complex For personal use only LINKING EQUITY TO PERFORMANCE 17
Slide 19: Mill Green Complex
Mill Green Complex For personal use only LINKING EQUITY TO PERFORMANCE 18
Slide 20: Mill Green Complex
Mill Green Complex 197 St Georges Terrace near full occupancy Key metrics as at: Jun-15 Jun-14 A full floor tenant negotiated an early release, but the half For personal use only Independent valuation date 31 December 14 1 October 13 floor sub tenant remains in occupation Only marginally over-
Slide 21: Perth Market overview
Perth Market overview Current market vacancy rate of 16.6%, up from 14.8% in January 2015 Expect vacancy to peak at +/- 20% in late 2015, early 2016 as new supply completed For personal use only With little new supply post this cycle, expect vacancy to stabilise and during the second half of C
Slide 22: St Georges Terrace, Perth
197 St Georges Terrace, Perth For personal use only Actual view from Level 10 Refurbished foyer LINKING EQUITY TO PERFORMANCE 21
Slide 23: St Georges Terrace, Perth
197 St Georges Terrace, Perth 60.000% Key metrics as at: Jun-15 Jun-14 For personal use only Independent valuation date 31 December 14 1 October 13 50.000% Independent valuation ($M) 239.00 233.50 Independent valuation /NLA ($) 9,001 8,780 40.000% Carrying value ($M) 243.57 234.21 Capitalisation rat
Slide 24: Mill Street, Perth
5 Mill Street, Perth For personal use only Mill Green LINKING EQUITY TO PERFORMANCE 23
Slide 25: Mill Street, Perth
5 Mill Street, Perth 25% Key metrics as at: Jun-15 Jun-14 For personal use only Independent valuation date 31 December 14 1 October 13 20% Independent valuation ($M) 54.00 52.50 Independent valuation /NLA ($) 7,515 7,278 15% Carrying value ($M) 54.65 53.88 Capitalisation rate 8.25% 8.50% Discount ra
Slide 26: Mill Street, Perth
1 Mill Street, Perth Key metrics as at: Jun-15 Jun-14 For personal use only Independent valuation date 31 December 14 1 October 13 Independent valuation ($M) 41.00 46.00 Independent valuation /NLA ($) 6,167 6,919 Carrying value ($M) 41.51 46.04 Capitalisation rate 8.25% 8.50% Discount rate 8.75% 9.2
Slide 27: Mill Street Development
1 Mill Street Development A significant amount of resources spent preparing alternate use plans for 1 Mill Street, Perth For personal use only Comparable residential pricing remains supportive of a higher alternate use value than as an office building GDI Property Group unlikely to lodge a dev
Slide 28: Queen Street, Brisbane
307 Queen Street, Brisbane For personal use only Refurbished foyer Refurbished tenant lobby LINKING EQUITY TO PERFORMANCE 27
Slide 29: Queen Street, Brisbane
307 Queen Street, Brisbane For personal use only LINKING EQUITY TO PERFORMANCE 28
Slide 30: Queen Street, Brisbane
307 Queen Street, Brisbane Although the Brisbane CBD office market saw two positive quarters of net absorption, leasing conditions remain challenging For personal use only Significant amount of tenant enquiry, but: Incentives remain elevated Tenants have a lot of options and all tenants are
Slide 31: Queen Street, Brisbane
307 Queen Street, Brisbane 30.00% Key metrics as at: Jun-15 Jun-14 For personal use only Independent valuation date 30 June 15 30 June 14 25.00% Independent valuation ($M) 122.50 121.00 Independent valuation /NLA ($) 6,260 6,196 20.00% Carrying value ($M) 122.50 121.00 Capitalisation rate 7.50% 8.00
Slide 32: Grenfell Street, Adelaide
25 Grenfell Street, Adelaide For personal use only LINKING EQUITY TO PERFORMANCE 31
Slide 33: Grenfell Street, Adelaide
25 Grenfell Street, Adelaide For personal use only LINKING EQUITY TO PERFORMANCE 32
Slide 34: Grenfell Street, Adelaide
25 Grenfell Street, Adelaide New 8 year lease executed with PIRSA commencing February 2016 for 5,885 sqm (previously 5,408) Term reduced from 12 years in Heads of Agreement to 8 years, all other terms substantially the same For personal use only Department of Water lease extended for six month
Slide 35: Grenfell Street, Adelaide
25 Grenfell Street, Adelaide 60.00% Key metrics as at : Jun-15 Jun-14 For personal use only Independent valuation date 31 December 14 1 October 13 50.00% Independent valuation ($M) 109.00 109.00 Independent valuation /NLA ($) 4,294 4,299 40.00% Carrying value ($M) 111.14 110.23 Capitalisation rate 8
Slide 36: Goulburn Street, Sydney
66 Goulburn Street, Sydney For personal use only LINKING EQUITY TO PERFORMANCE 35
Slide 37: Goulburn Street, Sydney
66 Goulburn Street, Sydney For personal use only LINKING EQUITY TO PERFORMANCE 36
Slide 38: Goulburn Street, Sydney
66 Goulburn Street, Sydney Strong leasing activity over vacant space, in excess of management’s forecasts All vacant space now leased to 8 separate tenants, well ahead of management’s expectations For personal use only – Includes an additional 975sqm leased to an existing 1,500sqm tenant that ha
Slide 39: Goulburn Street, Sydney
66 Goulburn Street, Sydney 70.00% Key metrics as at : Jun-15 Jun-14 For personal use only Independent valuation date 30 June 15 26 April 14 60.00% Independent valuation ($M) 157.00 138.00 Independent valuation /NLA ($) 6,817 5,954 50.00% Carrying value ($M) 157.00 n/a 40.00% Capitalisation rate 7.00
Slide 40: Funds Business
For personal use only FUNDS BUSINESS LINKING 25 EQUITY GRENFELL ST,TO PERFORMANCE ADELAIDE 39
Slide 41: Funds Business overview
Funds Business overview GDI Property Group’s Funds Business is built on a 22 year track record of delivering average IRRs in excess of 20% over 18 funds that have been wound up For personal use only No single fund has delivered a negative return and only one fund a single digit IRR Over 1,000
Slide 42: Funds Business case studies
Funds Business case studies Settled a $66.5 million portfolio of 6 industrial and 1 office asset on a sale and leaseback basis from UGL Limited in June 2014 For personal use only Triple net leases, weighted average capitalisation rate of 9.34% Running yield of 9.75% in FY15, growing to 10.25%
Slide 43: Funds Business as at June 2015
Funds Business as at 30 June 2015 Date AUM No. of Sector / Expected termination For personal use only established $m properties Location date (year) Update Office / • Workout situation – aim to have both assets Canberra and in a position for sale in FY17 GDI No. 27 June 2007 14.0 2 Burnie CY16 • Unl
Slide 44: Guidance
For personal use only GUIDANCE LINKING 66 EQUITY GOULBURN TO ST, PERFORMANCE SYDNEY 43
Slide 45: FY16 guidance
FY16 guidance GDI Property Group expects FFO per security of not less than 8.2 cents per security, based on an “as is” basis GDI Property Group does not include profits on sale of assets in its calculation of FFO For personal use only GDI Property Group’s balance sheet will be noticeably small
Slide 46: Increasing the on-market buyback to 10%
Increasing the on-market buyback to 10% GDI Property Group today announces that its Board has approved an increase in the on-market securities buy- back to 10% (from 5%) For personal use only Should market conditions permit, GDI Property Group intends to undertake the buy-back of up to 10% of GD
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