Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — FY2023 Earnings Presentation
58 slides from Growthpoint Properties Australia's earnings presentation, Aug 17, 2023
Slide 1: FY23 annual results
120 Link Road, Melbourne Airport, VIC Growthpoint Properties Australia FY23 annual results. 17 August 2023 space to thrive.
Slide 2: Agenda
165-169 Thomas Street, Dandenong, VIC (GSO Dandenong) Agenda. Overview Portfolio & strategy update 3 12 Financial Outlook Supplementary results information 19 24 30 Acknowledgement of Country Growthpoint Properties Australia acknowledges the Traditional Custodians of Country throughout Australia and
Slide 3: FY23 overview & strategy
FY23 overview & strategy. Timothy Collyer Managing Director 1 Charles Street, Parramatta, NSW
Slide 4: Strategy execution in FY23
Strategy execution Our goal is to provide Securityholders with sustainable income returns and in FY23. capital appreciation over the long term Invest in high- Maximise Maintain high FUM Disciplined capital quality Australian value occupancy Growth management assets Divested 333 Ann Street, 156,142 s
Slide 5: Portfolio metrics over the long term
Portfolio metrics over the long term. Total portfolio value ($b) & WACR (%) Portfolio weighted average Portfolio occupancy (%) to 30 June 2023 lease expiry (years) to 30 June 2023 to 30 June 2023 Average Portfolio value WACR 97% 6.0 9.0% Average 8.0% 6.2yrs 5.0 7.0% 4.0 6.0% 5.0% 3.0 4.0% 2.0 3.0% 2
Slide 6: FY23 overview
100 Skyring Terrace, Newstead, QLD FY23 overview. Property Loss after tax Gearing portfolio value -$245.6m 37.2% $4.8b FY22: profit after tax $459.2m Target 35-45% 30 June 2022: $5.1b, -5.9% FFO Hedging Office portfolio $3.1b Industrial portfolio $1.7b 26.8cps 70.5% FY22: 27.7cps, -3.2% 30 June 2022
Slide 7: Metro office dynamics
100 Skyring Terrace, Newstead, QLD Metro office 80% of leasing deals move within their dynamics. existing markets 1 Metro and fringe CBD locations offer key advantages • Flight to quality without the price • Security: Metro office buildings are tag: Modern metro and fringe office attractive for Gove
Slide 8: Office portfolio well placed to navigate through the cycle
Office portfolio well placed to navigate through the cycle. Growthpoint office markets Vacancy in Growthpoint markets Growthpoint’s historic leasing performance remain resilient consistently lower than other markets exceeds upcoming expiries Net absorption (sqm) Office market vacancy Expiries (sqm,
Slide 9: Industrial portfolio underpinned by strong demand
Average vacancy rate (%) Industrial portfolio 10% Sydney Melbourne Brisbane Perth Adelaide underpinned by strong 8% 6% demand. 4% 2% • Strong demand from transport, postal and warehousing 0% sectors 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 • Continued rental growth along the eastern seaboard Source:
Slide 10: Funds management
Retail leasing highlights Funds 18,366 sqm management. of retail leasing completed across all funds Central Park Retail, Rundle Place, Home HQ, • Successful integration, operating as one business Sydney, NSW Adelaide, SA Artarmon, NSW • Total FUM $1.8b as at 30 June 2023, down from $1.9b on acquisit
Slide 11: Current market expectations
Current market expectations. Cash rate futures 5.0 8.0 RBA expects 7.0 indicate official 4.0 inflation returns 6.0 RBA cash rate is to near target 5.0 near the peak 3.0 range in 2025 4.0 3.0 RBA target 2.0-3.0% 2.0 2.0 RBA cash rate, Interbank CPI annual, RBA cash rate futures implied CPI inflation
Slide 12: Portfolio update
Portfolio update. Michael Green Chief Investment Officer 75 Dorcas Street, South Melbourne, VIC
Slide 13: Portfolio snapshot
FY23 acquisitions and divestments 95% of portfolio leased Portfolio to government, listed or snapshot. large private companies1 Office Industrial $165.0m 65% 35% Total Portfolio WALE 165-169 Thomas Street, assets occupancy Dandenong, VIC Property 58 93% 6.0yrs WALE: 9.4 years Major tenant: VIC portf
Slide 14: Portfolio key metrics
Portfolio key metrics. Office portfolio Industrial portfolio Portfolio Office WALE WACR Portfolio Industrial WALE WACR occupancy portfolio value occupancy portfolio value 90% $3.1b 6.3yrs 5.7% 100% $1.7b 5.4yrs 5.4% 30 June 2022: 95% 30 June 2022: $3.4b 30 June 2022: 6.7yrs 30 June 2022: 5.1% 30 Jun
Slide 15: High-quality tenants
High-quality tenants. Office portfolio tenants as at 30 June 2023 % of portfolio income WALE Government 39% 10.3 years • Secure, defensive income streams from high-quality tenants with long WALE Listed company 46% 5.1 years Large private company 9% 4.3 years • Portfolio tenancy well diversified acro
Slide 16: Portfolio leasing
Portfolio leasing. Total leasing completed in FY23 156,142 sqm or 11.2% of portfolio income Government Mondelez Australia 101 Warehousing Brown & Watson Intl Unipart Group Australia 8,007 sqm 4,567 sqm 31,109 sqm 18,221 sqm 10,310 sqm 100 Skyring Terrace, 75 Dorcas Street, 3 Maker Place, 1500 Ferntr
Slide 17: Strong WALE
Strong WALE. Portfolio lease expiry per financial year, by income, WALE as at 30 June 2023 6.0 years 30-Jun-22: 6.3 years 16% FY23 Office Industrial ANZ 2.2% BOQ 3.2% Australian FY22 Office Industrial Commonwealth Woolworths 3.9% Government 2.5% 8% Linfox 1.5% Samsung 2.2% Jacobs 1.6% 5 Murray Rose
Slide 18: Leading on sustainability
Leading on Average NABERS Energy rating sustainability. 5.2 stars Pathway to net zero 2025 ü Nearing completion on seven solar installations ü Announced target of ü Completed three solar (combined capacity: 458 kW, • Targeting one onsite solar net zero emissions installations (combined total portfol
Slide 19: Financial results
Financial results. Dion Andrews Chief Financial Officer 120-132 Atlantic Drive, Keysborough, VIC
Slide 20: FY23 financial results
FY23 financial results. % • NPI – increase driven by the acquisition of GSO Components of FFO FY23 FY22 change Dandenong in FY23, FY22 acquisitions, one-off early NPI (includes investment distributions) $m 264.3 247.6 6.7 surrender payment received at 5 Murray Rose Avenue and a bank guarantee drawn
Slide 21: Financial performance
Financial performance. FFO per security movement NTA per security movement (cents per security) (cents per security) 1.0 $4.56 -3.2% -12.3% 2.9 vs since FY22 30 June 2022 $0.05 -$0.26 -$0.01 -$0.06 $4.25 -$0.03 0.2 27.7 -3.9 -0.2 26.8 $0.01 $4.00 -0.9 -$0.23 -$0.02 -$0.01 FY22 NPI1 FUM Net Acquired
Slide 22: Gearing within target range
Gearing within target range. Gearing1 as at 30 June 2023 Distribution payout ratio % of FFO Target gearing range Target 50% 35-45% 100% payout ratio 95% 93.1% 94.0% 75-85% 45% of FFO 94.0% 41.2% 90% 40.3% 89.4% 88.8% 40% 38.5% 85% 85.3% 37.2% 84.3% 79.4% 34.3% 80% 35% 77.9% 36.3% 33.9% 31.6% 75% 32.
Slide 23: Capital management
Capital management. Metrics Hedge maturity profile Group debt maturity profile at 30 June 2023 at 30 June 2023 ($ million) WACD WACD - fixed Fixed debt Weighted average rate 4.6% 3.1% $1,400 5.0% 1,000 With WADM With WADM-fixed of 3.4 years of 2.9 years 50 900 $1,200 151 4.0% 800 Undrawn Fixed debt
Slide 24: Outlook
Outlook. Timothy Collyer Managing Director 6 Kingston Park Court, Knoxfield, VIC
Slide 25: Investment proposition
Investment Leading ASX-200 property group, led by established executive team with deep sector proposition. experience and a track record of performance and disciplined capital management Office Industrial Funds management Capital Management Largest ASX-listed owner Growth market with rising Experien
Slide 26: Security price discount to NTA
Security price discount to NTA. GOZ security price relative to NTA1 as at 30 June 2023 Property portfolio value • For GOZ NTA to fall by 30% as implied as at 30 June 2023 by the 30 June 2023 security price $4.8b discount to NTA (all else being equal), $4.00 c.30% $0.9b the weighted average capitalis
Slide 27: FY24 focus
FY24 focus. The rate of Inflation has been declining GOZ is well placed to navigate since the December 2022 quarter, whilst interest rate futures indicate that through the cycle the official cash rate is near the peak, • Portfolio of high-quality modern office assets with strong however A-REIT price
Slide 28: FY24 guidance
3 Maker Place, Truganina, VIC FY24 guidance. FY24 FFO FY24 guidance distribution 22.5 – 23.1 cps guidance A key assumption to guidance 19.3 cps is in respect of interest rates, with the Group assuming an average FY24 floating rate of Forecast 4.35% distribution yield1 7.3% 1. FY24 distribution guida
Slide 29: Questions
Thank you for joining us. Questions. CB1, 22 Cordelia Street, South Brisbane, QLD
Slide 30: Supplementary information
Supplementary information. Financial Property information portfolio 31 41 Key market Additional metrics information 53 55 3 Maker Place, Truganina, VIC
Slide 31: Financial information
33-39 Richmond Road, Keswick, SA Financial information.
Slide 32: Summary financials
Summary financials. FY23 FY22 Change % Change FY23 FY22 Change % Change NPI1 $m 264.3 247.6 16.7 6.7 Office NPI $m 178.8 161.3 17.5 10.8 Like-for-like NPI $m 237.1 233.9 3.2 1.4 Industrial NPI $m 77.1 78.6 (1.5) (1.9) Fund management revenue $m 7.6 – 7.6 Distributions from securities $m 8.4 7.7 0.7
Slide 33: Reconciliation from statutory profit to FFO
Reconciliation from statutory profit to FFO. FY23 FY22 Change Change $m $m $m % (Loss) / profit after tax (245.6) 459.2 (704.9) (153.5) Adjustment for non-FFO items: - Straight line adjustment to property revenue (12.6) (12.1) (0.5) - Net loss / (gain) in fair value of investment properties 388.4 (2
Slide 34: Financial position
Financial position. 30 June 2023 30 June 2022 $m $m Assets Cash and cash equivalents 49.4 49.2 Investment properties 4,917.2 5,233.1 Investment in securities 129.5 132.4 Intangible assets 38.2 – Other assets 76.4 85.1 Total assets 5,210.8 5,499.8 Liabilities Borrowings 1,918.7 1,740.0 Distributions
Slide 35: Additional financial information
Additional financial information. Reconciliation of operating cashflow to FFO FY23 FY22 Change $m $m Operating cashflow 176.0 183.4 (7.4) Lease incentives and leasing costs 29.5 35.2 (5.7) Net (prepaid)/accrued operating activities (0.7) (7.3) 6.6 COVID deferrals (net) 1.0 1.1 (0.1) Provision for in
Slide 36: Lease incentives
Consolidated Statement of Profit and Loss FY23 FY22 Lease incentives. $m $m Property revenue (excluding incentives) 364.6 336.7 Lease incentives include fit out, rent free, rental Amortisation of tenant incentives (39.3) (33.0) abatement and cash payments. The tables on this Property revenue 325.3 3
Slide 37: Capital expenses
Capital expenses. Capital expenditure FY23 FY22 Portfolio maintenance capex $m 22.1 20.7 Expected to Average property asset value $m 5,227.1 4,956.2 average Capital expenditure to average property portfolio value % 0.42 0.42 0.3%-0.5% over medium-term based on current portfolio 37 Growthpoint Proper
Slide 38: Capital management
Capital management. Interest rate swaps Fixed rate debt facilities Maturity date Time to maturity Fixed rate Principal Amount Maturity date Time to maturity Fixed rate Principal Amount Dec-2023 0.5yrs 0.22% $20m Mar-2025 1.8yrs 4.67% $200m Dec-2023 0.5yrs 0.21% $15m Dec-2026 3.5yrs 3.27% $100m Jun-2
Slide 39: Key debt metrics and changes during FY23
Key debt metrics and changes during FY23. 30 June 2023 30 June 2022 Change Gross assets $m 5,210.8 5,499.8 (289.0) Interest bearing liabilities $m 1,918.7 1,740.0 178.7 Total debt facilities $m 2,226.3 2,101.5 124.8 Undrawn debt $m 300.0 353.5 (53.5) Gearing % 37.2 31.6 5.6 Weighted average cost of
Slide 40: Capital management
Capital management. Stress testing covenants ICR >1.6x Gearing movement GOZ: 3.4x for the 12 months ended 30 June 2023 To breach this covenant, NPI 47% LVR <60% would need to fall GOZ: 38.7% by 53%1 To breach this 1.2% covenant, GOZ cap 42% Secured 2.5% rate would need to rise by 304 bps1 property p
Slide 41: Property portfolio
Building C, 219-247 Pacific Highway, Artarmon, NSW Property portfolio.
Slide 42: Portfolio summary
85% of properties Portfolio summary. located on Eastern seaboard As at 30 June 2023 20% Queensland $4.8b $976.0 million Office $684.8m Property Industrial $291.2m portfolio value 58 Office metropolitan properties (25 assets) Properties 24% Office CBD properties (2 assets) 7 4 New South Wales Industr
Slide 43: Portfolio summary
Portfolio Sector diversity Geographic diversity Occupancy by value by value by income summary. NSW WA 8% Vacant 7% Industrial 24% SA 7% As at 30 June 2023 35% ACT 5% Office QLD 20% 65% VIC 36% Occupied 93% Tenant type Tenant use Lease type Annual rent review type by income by income by income by inc
Slide 44: 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 45: Industrial portfolio – top five assets (by value)
Industrial portfolio – top five assets (by value) 70 Distribution Street, 599 Main North Road, 20 Colquhoun Road, 27-49 Lenore Drive, 6-7 John Morphett Place, Larapinta, Queensland Gepps Cross, South Australia Perth Airport, Western Australia Erskine Park, New South Wales Erskine Park, New South Wal
Slide 46: Long history of leasing success – office portfolio
Long history of leasing success – office portfolio FY17 FY18 FY19 FY20 FY21 FY22 FY23 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 2.2% 68,580 sqm or 47,422 sqm or 41,180 sqm or 31,994
Slide 47: Long history of leasing success – Industrial portfolio
Long history of leasing success – Industrial portfolio FY17 FY18 FY19 FY20 FY21 FY22 FY23 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 193,161 sqm or 124,14
Slide 48: Portfolio metrics
Portfolio metrics. Key metrics 30 June 2023 30 June 2022 Number of assets 58 58 Property portfolio value $4.8 billion $5.1 billion Number of tenants 161 170 Portfolio occupancy 93% 97% Tenant retention1 62% 86% WALE 6.0 years 6.3 years Weighted average property age2 13.9 years 13.0 years Weighted av
Slide 49: 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 2023 income (yrs) as at 30 June 2023 income (yrs) as at 30 June 2023 income (yrs) Woolworths 12 6.6 Australian Commonwealth Woolworths 38 6.6 Government 12
Slide 50: Leasing – office leases executed in FY23
FY23 leases completed – % Ave. office portfolio lease term income 3.9 yrs Leasing – office leases executed in FY23. 9.2% Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 333 Ann Street Brisbane QLD Australian Commonwealth Government Jul-22 2.0 1,369 – 15 Green Square Close Fortitude V
Slide 51: Leasing – office leases executed in FY23 (cont.)
Leasing – office leases executed in FY23 (cont.) Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 109 Burwood Road Hawthorn VIC Bayer Australia May-23 7.0 769 40 15 Green Square Close Fortitude Valley QLD John Holland May-23 2.0 488 4 Building 3, 570 Swan Street Richmond VIC Propel Gr
Slide 52: Leasing – industrial leases executed in FY23
FY23 leases completed - % Ave. industrial lease term portfolio income 4.8 yrs Leasing – industrial leases executed in FY23. 15.4% Location Tenant Start date Term (yrs) NLA (sqm) 6 Kingston Park Court Knoxfield VIC Automotive Imports Aug-22 5.0 7,677 3 Maker Place Truganina VIC 101 Warehousing Oct-22
Slide 53: Key market metrics
599 Main North Road, Gepps Cross, SA Key market metrics.
Slide 54: 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 – 16.0% $579 gross 39% 5.50% - 7.50
Slide 55: Additional information
15 Green Square Close, Fortitude Valley, QLD Additional information.
Slide 56: 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 intan
Slide 57: 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 presentati
Slide 58: 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 2023 calendar. •
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