Gpt Group · ASX:GPT
Gpt — The GPT Group — FY2022 Earnings Presentation
41 slides from Gpt's earnings presentation, Feb 20, 2023
Slide 1: Market Briefing Annual Result 2022
Agenda Market Briefing Annual Result 2022 20 February 2023
Slide 2: Acknowledgement of Country
Agenda GPT acknowledges the 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 Annual Result 2022 plac
Slide 3: Agenda
2022 Full year in review | Bob Johnston 4 Results and Capital management | Anastasia Clarke 8 Retail | Chris Barnett 13 Office | Martin Ritchie 22 Logistics | Chris Davis 30 Outlook and 2023 Guidance | Bob Johnston 38 Agenda Agenda Annual Result 2022
Slide 4: 2022 Annual Result: Financial summary
2022 Annual Result Financial summary 32.4cents 25.0cents Funds From Operations Distribution per security, up 12.4% per security, up 7.8% $5.98 3.9% Net Tangible Assets per 12 month security, down 1.8% Total Return1 Investment portfolio Portfolio occupancy 97.5% Assets under management $32.4b Weighte
Slide 5: Portfolio valuation metrics
Portfolio valuation metrics Overall portfolio revaluation loss of $159.3m Office Logistics Retail 2022 Valuation movement (12 months to 31 Dec 2022) -$316.0m +$63.4m +$93.3m -5.0% +1.4% +1.7% 2H 2022 (6 months to 31 Dec 2022) -$322.8m -$52.0m -$4.0m 1H 2022 (6 months to 30 Jun 2022) +$6.8m +$115.4m
Slide 6: 2022 highlights
2022 highlights 32.4b $ » Funds under management expanded to $19.1b, with assets under management of $32.4b Assets under management − $2.8b UniSuper direct real estate mandate − $2.7b Australian Core Retail Trust (ACRT) GPT Portfolio1 » Retail remixing and leasing enhancing customer experience and a
Slide 7: Leadership in ESG
Leadership in ESG Integrating climate response and nature positive objectives » Targeting to achieve Climate Active Carbon Neutral (for Buildings) certifications for all assets that GPT operationally controls and has an ownership interest in, by the end of 20241 » Partnering with Greenfleet for refo
Slide 8: Results and Capital management
Agenda Results and Capital management Annual Result 2022
Slide 9: Financial result
Financial result $469.3m $620.6m Statutory Net Profit After Tax Funds From Operations ($m) 2022 2021 Change 620.6 554.5 Valuation (decreases)/increases (159.3) 924.3 Treasury instruments marked to market and other items 8.0 (56.0) 469.3 1,422.8 32.40 28.82 12.4% 562.1 520.4 8.0% 499.0 467.5 6.7% 25.
Slide 10: Segment result
Segment result ($m) 2022 2021 Change Comments Movement in COVID allowances (2022: +$1.4m, 2021: -$62.9m) and rent Retail 289.8 233.9 23.9% reviews (+$8.6m), offset by sale of Casuarina and Wollongong (-$17.0m) Full year contribution from acquisitions and developments (+$13.3m), rent Office 293.0 269
Slide 11: Interest rate hedge profile 2023-2025
Interest rate hedge profile 2023-2025 61% hedged over the next 3 years at an average fixed rate of 2.9% 100% Hedge profile 90% 78% 80% % of Drawn debt 70% 62% 60% 50% 42% 40% 30% 3.5% 20% 3.1% 2.5% 10% 0% Agenda 2023 % Hedged 2024 Hedge rate 2025 8 Exhibition Street, Melbourne THE GPT GROUP | 2022 A
Slide 12: Capital management
Capital management Key Statistics 2022 2021 Comments Net Tangible Assets per security $5.98 $6.09 Driven by a valuation decrease of $159.3m Within stated range of 25%-35% and material headroom to 50% debt Net Gearing 28.5% 28.2% covenant. Modest level of development capital committed Liquidity $1.1b
Slide 13: Retail
Agenda Retail Annual Result 2022
Slide 14: Retail overview
Retail overview $303.5m 4.5% Segment contribution, Comparable up 23.5% income growth 99.4% 5.03% Portfolio occupancy, Weighted average up from 99.1% capitalisation rate $13.0b 9.4% Assets under Total Specialty management, up 56.7% sales growth vs 2019 $ 12,259psm Agenda Specialty sales productivity,
Slide 15: National retail sales growth above 20-year average
National retail sales growth above 20-year average Strong Total Retail sales growth in 2022 » Retail Sales growth up 11.4% on 2021 — Strong labour market, wage growth and household savings levels driving discretionary spending — Retail price inflation Store based sales have been particularly strong
Slide 16: Leasing momentum continues
Leasing momentum continues » Strong occupancy with high levels of deal activity and tenant retention » 103 retailers new to the portfolio » Average lease term of 4.7 years all with fixed base rents and annual increases » Leasing spreads improving » Tenants on holdover decreasing 12 months 12 months
Slide 17: Centre sales outperform 2019
Centre sales outperform 2019 » 2022 delivered strong sales growth with Total Centre sales up 6.8% and Total Specialty sales up 9.4% on 2019 — Strong performance delivered across most specialty retailer categories driven by Leisure (+18.8%), Fashion (+9.8%) and Dining (+9.7%) — Majority of centres ex
Slide 18: Melbourne Central recovery
Melbourne Central recovery » Retail sales continue to recover, with December monthly sales inline with 2019 (-0.1%) » Total Specialty MAT for the 12 months has improved to $14,210/sqm, down 1.5% on 2019 — Leisure (+21.4%), Food Retail (+13.7%) and Technology & Appliances (+11.5%) all trading up on 2
Slide 19: Highpoint leasing and development driving record MAT
Highpoint leasing and development driving record MAT » Successful delivery of new Coles supermarket precinct and tenant remixes bringing new brands and flagships to the market » Total Centre MAT reaching record high of $1.2b » Strong leasing demand driving occupancy up to 99.9% (December 2021 98.6%)
Slide 20: Growing Funds Management
Growing Funds Management GPT appointed as manager of UniSuper and Australian Core Retail Trust (ACRT) » UniSuper Portfolio − Karrinyup Shopping Centre, Western Australia − Marrickville Metro, New South Wales − Dapto Mall, New South Wales − Malvern Central, Victoria » ACRT Portfolio − Pacific Fair Sh
Slide 21: Retail outlook
Retail outlook » Quality of the portfolio well positioned to continue to grow sales and customer traffic » Household savings and low unemployment should soften the impact of interest rate increases » Retail sales growth expected to moderate from current high levels, but will remain positive for GPT
Slide 22: Office
Agenda Office Annual Result 2022
Slide 23: Office overview
Office overview $334.9m 3.4% Segment contribution, Comparable income up 9.6% growth 87.9% 5.03% Portfolio occupancy Weighted average (88.5% including HoA) capitalisation rate 4.9yrs $14.7b Weighted average Assets under management, lease expiry up 4.8% Agenda One One One Eagle Street, Brisbane THE TH
Slide 24: Challenging office market conditions
Challenging office market conditions » Vacancy rates remain elevated with occupier demand favouring prime office space » Continue to see demand for fitted space with at least 43% of market briefs in Sydney CBD and Melbourne CBD requesting fitted space1 » Occupiers >3,000sqm contracted by an average
Slide 25: Office portfolio leasing results
Office portfolio leasing results » 104,300sqm1 of leasing across 145 deals, for an average lease term of 4.9 years — 85% of leases by Net Lettable Area (NLA) commenced in 2022 or in 2023 Key leasing transactions 2 — 3.8% average gross face leasing spread Breakdown of leasing 7,500sqm 5,800sqm 52% 61
Slide 26: 2023 leasing outlook
2023 leasing outlook » Currently 12% portfolio vacancy, with another 9% expiring in 2023 1 » Focused leasing strategy targeting occupancy >90% by December 2023 GPT lease expiry profile1 GPT Office occupancy vs Eastern seaboard Prime grade average As at 31 December 2022 15% 100% 13% 12% 95% 9% 7% 7%
Slide 27: Innovative workplace products
Innovative workplace products » Our differentiated workplace products are designed to fulfil the changing needs of our customers — Offer speed to market, reduced downtime and rental premium while diversifying our customer base » Larger customers are attracted to our enhanced lobbies, end of trip fac
Slide 28: Strategy case study: William & Bourke Streets
Strategy case study: 181 William & 550 Bourke Streets » Improved occupancy from 54.8% to 84.7% in 18 months following the departure of three major tenants » Leasing success through building upgrades and the introduction of GPT’s workplace products and experiences » 80% of new customers1 sought out a
Slide 29: Office outlook
Office outlook Occupier Outlook GPT’s Response » Our workplace products target the most active part of the Leasing market to remain market challenging in 2023-2024 » Targeting >90% portfolio occupancy at December 2023 » Additional DesignSuites being delivered to drive leasing in Increased demand for
Slide 30: Logistics
Agenda Logistics Annual Result 2022
Slide 31: Logistics overview
Logistics overview $188.1m 3.0% Segment contribution, Comparable income up 21.6% growth 99.2% 4.40% Portfolio Weighted average occupancy capitalisation rate 6.2yrs $4.7b Weighted average Assets under management, lease expiry up 5% Agenda ADDRESS, 50 Old Wallgrove Road, Eastern Creek,STATE NSW Note:
Slide 32: Occupier demand and low vacancy driving market rental growth
Occupier demand and low vacancy driving market rental growth Demand driven by occupiers investing in the supply chain and a growing retail sector, underpinned by population growth » Real estate still makes up a proportionately small amount of total supply chain costs, with transportation cost the la
Slide 33: Strong leasing outcomes achieved
Strong leasing outcomes achieved » Total leasing1 of 278,900sqm (2021: 182,300sqm) including 130,400sqm in Key leasing transactions developments » High occupancy of 99.2% and WALE of 6.2 years 40,700sqm 38,100sqm » Strong rental outcomes being achieved 15% 9% 33,200sqm 15,200sqm Operational Speculat
Slide 34: Access to market rental growth
Access to market rental growth » Ability to capture upside through expiry profile and development » 25% of portfolio to capture market rent growth in next 3 years — 21% lease expiry 2023-2025 — 4% are lease deals from 2022 that commence in 2023 » Three developments totaling 60,700sqm to be completed
Slide 35: Enhancing returns through development and QuadReal Fund
Enhancing returns through development and QuadReal Fund » Delivered >30% development margin and average yield on cost of 5.7% across 4 GPT development completions » GPT QuadReal Logistics Trust (GQLT) well progressed with AUM of $0.5b and half of the $2b target committed including pipeline projects
Slide 36: Future proofing the portfolio for transition to a low carbon future
Future proofing the portfolio for transition to a low carbon future Driving sustainability outcomes Reuse & » Developing efficient buildings, designed to achieve minimum 5 Star Renewable Low Impact Sourcing Design Green Star ratings » Introducing onsite battery storage and preparing for electric veh
Slide 37: Logistics outlook
Logistics outlook GPT Logistics Strategy » Maximise income opportunities in our prime portfolio » Enhance returns through development and QuadReal partnership » Broaden relationships with our high-quality customer base » Deliver on ESG by developing efficient and sustainably focused assets Supportiv
Slide 38: Outlook and 2023 Guidance
Agenda Outlook and 2023 Guidance Annual Result 2022
Slide 39: Outlook and 2023 Guidance
Outlook and 2023 Guidance Outlook » Tighter monetary conditions are expected to moderate economic growth over the next 12 months » Volatility in bond yields creating uncertainty for valuation metrics » Higher cost of debt a headwind for 2023 FFO growth » Retail portfolio well positioned with strong
Slide 40: Thank you for joining us
Agenda Thank you for joining us Annual Result 2022 Questions
Slide 41: Disclaimer
Disclaimer This Presentation (Presentation) has been prepared by The GPT Group comprising GPT RE Limited (ACN 107 426 504; AFSL 286511), as responsible entity of the General Property Trust, and GPT Management Holdings Limited (ACN 113 510 188) (together, GPT). The information provided in this Presen