Gdi Property Group · ASX:GDI

Gdi Property — FY2014 Earnings Presentation

43 slides from Gdi Property's earnings presentation, Aug 25, 2014

  1. Slide 1: FY14 Annual Results Presentation

    For personal use only GDI PROPERTY GROUP FY14 Annual Results Presentation 25 August 2014

  2. 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

  3. Slide 3: Introduction

    For personal use only INTRODUCTION MILL GREEN, LINKING PERTH EQUITY TO PERFORMANCE 2

  4. Slide 4: We delivered in FY14

    We delivered in FY14  Exceeded FFO1 Offer Document2 forecasts For personal use only  $22.2 million v $21.9 million  Paid our forecast distribution of 3.5c per security  Payout ratio of 90% of FFO and 92% of AFFO  NTA3 per security up $0.02 to $0.93  Increase primarily due to increased valuatio

  5. Slide 5: Our challenge

    Our challenge  To gain the support and trust of the public markets by doing what we’ve been doing for over 20 years, For personal use only buying commercial property well, managing it well and selling it well  Our security price has underperformed since listing, meaning we still have work to do ge

  6. Slide 6: How do we improve the security price?

    How do we improve the security price?  Continue to deliver on strategy For personal use only  Sell 233 Castlereagh St, Sydney  Lease vacant space and renew expiring leases − The three vacant floors (2,509 sqm of NLA) in 197 St Georges Terrace are subject to signed Heads of Agreement  Complete re

  7. Slide 7: FY Financial Results

    For personal use only FY 14 FINANCIAL RESULTS 233 CASTLEREAGH LINKING EQUITY TO ST, SYDNEY PERFORMANCE 6

  8. Slide 8: Exceed Offer Document Forecast FFO

    Exceed Offer Document Forecast FFO  Statutory profit of $12.9 million  Includes $(15.5) million of IPO costs, $8.7 million of investment property revaluation gains and For personal use only $(2.2) million of mark to market losses on interest rate swaps  FFO of $22.2 million vs Offer Document fore

  9. Slide 9: Balance sheet in a strong position

    Balance sheet in a strong position  Property revaluations of $8.7 million, equivalent to 1.53 cents per security For personal use only  NTA increased to $0.93 per security as at 30 June 2014, or $0.92 post completion of the acquisition of 66 Goulburn St, Sydney on 15 July 2014  Deliberately manag

  10. Slide 10: Actual FFO versus Offer Document forecasts

    Actual FFO versus Offer Document forecasts  Variances in actual FFO to Offer Document forecast FFO were attributable to a lower contribution from For personal use only property, which was more than offset by higher funds management fees and lower operating and interest expenses Major variances Actu

  11. Slide 11: Funds management

    Funds management  Exceeded Offer Document forecasts for the Funds For personal use only Business1  Revenue of $3.4 million and FFO of $2.9 million vs $2.4 million forecast  $649,000 performance fees earned during FY14, but $449,000 not included in FFO as it remains unpaid (receivable)  Lower dis

  12. Slide 12: Funds management

    Funds management Expected For personal use only Date AUM No. of termination date established $m properties Sector (year) Complete asset refurbishments and GDI No. 27 June 2007 14.0 2 Office FY15 position both assets for sale in FY15 GDI No. 28 June 2007 14.0 1 Office FY17 Actively manage the leasing

  13. Slide 13: Debt profile

    Debt profile  Drawn debt of $170 million, split equally between 5 year (Tranche A) and 3 year (Tranche B) For personal use only maturities  No expiry until FY17  Post 30 June, extended Tranche B by $143 million to finance the acquisition of 66 Goulburn Street, Sydney - $139 million drawn  Increa

  14. Slide 14: Interest rate hedging

    Interest rate hedging  Board hedging policy of at least 50% of drawn debt hedged For personal use only  Stayed at the lower end of this range (59%) given view of continued environment of low interest rates  All in cost of drawn debt for the period of 4.89% (inclusive of line fees on undrawn facil

  15. Slide 15: Guidance and Strategy

    For personal use only GUIDANCE AND STRATEGY 66 GOULBURN LINKING ST, EQUITY TOSYDNEY PERFORMANCE 14

  16. Slide 16: Guidance and strategy

    Guidance and strategy  Confirm Offer Document forecasts for FY15 FFO of 8.2c per security and distribution of 7.5c per For personal use only security  Approximately 89% of FY15 Offer Document FFO from existing leases and fees from existing funds  Excluding 233 Castlereagh St, Sydney, only 3.6% by

  17. Slide 17: Guidance and strategy

    Guidance and strategy  Including the Guarantees1, increase occupancy to +100% at 307 Queen St, Brisbane by 30 June For personal use only 2015  Wind up (or be close to winding up) GDI No. 27, GDI No. 29 and GDI No. 36  The financial impact of some of these objectives had been included in the Offer

  18. Slide 18: Market commentary – Climbing the wall of worry

    Market commentary – “Climbing the wall of worry” The positives The negatives For personal use only • WA accounts for 46% of Australian exports and 16% of • Slow down in mining capex Australia’s GDP and growing • Short term pressure on rents and incentives • Diversifying away from engineering to a br

  19. Slide 19: The Property Portfolio

    For personal use only THE PROPERTY PORTFOLIO 307 QUEEN LINKING ST, BRISBANE EQUITY TO PERFORMANCE 18

  20. Slide 20: Portfolio overview

    For personal use only Portfolio overview LINKING EQUITY TO PERFORMANCE 19

  21. Slide 21: Portfolio overview

    Portfolio overview  Total NLA of 128,591 sqm For personal use only  Portfolio occupancy of 89%, including Guarantees  WALE of 3.3 years (by NLA)  Weighted average capitalisation rate (WACR) of 8.1%, 8.0% post the acquisition of 66 Goulburn St, Sydney  FY15 lease expiries of 8%, only 3% excludin

  22. Slide 22: St Georges Terrace, Perth

    197 St Georges Terrace, Perth Valuation details as at last valuation date For personal use only Independent valuation date 1 October 2013 Independent valuation $233.5 million Rate/sqm of NLA $8,780 Capitalisation rate 8.25% Discount rate 9.25% Key metrics as at 1 August 2014 Grade A Total NLA (sqm)

  23. Slide 23: St Georges Terrace, Perth

    197 St Georges Terrace, Perth 70%  Heads of Agreement now signed for For personal use only levels 25, 26 and 27 60%  2,509 sqm of NLA 50%  Subject to execution, leases to 40% commence in October and November 2014 for terms of 8 and 10 years 30%  Occupancy (including Heads of 20% Agreement) now a

  24. Slide 24: Mill Street, Perth

    5 Mill Street, Perth Valuation details as at last valuation date For personal use only Independent valuation date 1 October 2013 Independent valuation $52.5 million Rate/sqm of NLA $7,278 Capitalisation rate 8.50% Discount rate 9.25% Key metrics as at 1 August 2014 Grade B NLA Total (sqm) 7,214 NLA

  25. Slide 25: Mill Street, Perth

    5 Mill Street, Perth 35%  New six year lease to Environmental For personal use only Resources Management Australia Ltd 30%  Lease commences October 2014 25%  Vacancy reduced from 25% to 16%, 20% WALE increased to 3.6 years 15%  Strong levels of enquiry on vacant space 10% 5% 0% Vacancy FY15 FY16

  26. Slide 26: Mill Street, Perth

    1 Mill Street, Perth Valuation details as at last valuation date For personal use only Independent valuation date 1 October 2013 Independent valuation $46.0 million Rate/sqm of NLA $6,919 Capitalisation rate 8.50% Discount rate 9.25% Key metrics as at 1 August 2014 Grade A NLA Total (sqm) 6,648 NLA

  27. Slide 27: Castlereagh Street, Sydney

    233 Castlereagh Street, Sydney Valuation details as at last valuation date For personal use only Independent valuation date 30 June 2014 Independent valuation $129.0 million Rate/sqm of NLA $6,485 Capitalisation rate 7.125% Discount rate 8.50% Key metrics as at 1 August 2014 Grade B NLA Total 19,891

  28. Slide 28: Castlereagh Street, Sydney

    233 Castlereagh Street, Sydney 30%  Building’s expiry profile positions it well For personal use only for residential conversion 25%  Discussions commenced with longer term 20% tenants, including relocating to 66 Goulburn St, Sydney 15%  Demolition clauses being inserted into any new or renewed l

  29. Slide 29: Queen Street, Brisbane

    307 Queen Street, Brisbane Valuation details as at last valuation date For personal use only Independent valuation date 30 June 2014 Independent valuation $121.0 million Rate/sqm of NLA $6,137 Capitalisation rate 8.00% Discount rate 9.00% Key metrics as at 1 August 2014 Grade B NLA Total (sqm) 19,71

  30. Slide 30: Queen Street, Brisbane

    307 Queen Street, Brisbane 25%  Executed new five year lease with For personal use only Glencore Australia 20%  796 sqm (whole floor)  Lease commences October 2014 15%  High levels of tenant enquiry 10%  Asset well positioned to capture small and mid sized tenants, leading the tenant enquiry in

  31. Slide 31: Grenfell Street, Adelaide

    25 Grenfell Street, Adelaide Valuation details as at last valuation date For personal use only Independent valuation date 1 October 2013 Independent valuation $109.0 million Rate/sqm of NLA $4,300 Capitalisation rate 8.50% Discount rate 9.50% Key metrics as at 1 August 2014 Grade A Total NLA (sqm) 2

  32. Slide 32: Grenfell Street, Adelaide

    25 Grenfell Street, Adelaide 40%  In negotiations with SA Government For personal use only 35% (PIRSA and Department of Water) about renewing leases due to expire during 30% FY16 25%  Opportunities to lease vacant space to short term project users 20% 15% 10% 5% 0% Vacancy FY15 FY16 FY17 FY18 FY19

  33. Slide 33: Goulburn Street, Sydney

    For personal use only 66 Goulburn Street, Sydney Valuation details as at last valuation date Independent valuation date 26 May 2014 Independent valuation $138.0 million Rate/sqm of NLA $5,954 Capitalisation rate 7.50% Discount rate 9.00% Key metrics as at 1 August 2014 Grade A NLA Total (sqm) 23,176

  34. Slide 34: Goulburn Street, Sydney

    66 Goulburn Street, Sydney 70%  Guarantees cover approximately 25% of For personal use only NLA 60%  Guarantee can be drawn over five 50% years, but in the absence of any 40% leasing it is intended to be drawn down over 22.5 months 30%  Based on current levels of enquiry, 20% confident of achievi

  35. Slide 35: About GDI Property Group

    For personal use only ABOUT GDI PROPERTY GROUP 25 GRENFELL LINKING ST,TO EQUITY ADELAIDE PERFORMANCE 34

  36. Slide 36: Overview of GDI Property Group

    Overview of GDI Property Group Snapshot For personal use only  ASX: GDI  Listed: 17 December 2013  Market capitalisation: $516.5 million as at 21 August 2014  Vendors hold ~10% (escrowed until 30 June 2015) – open register  Average daily trading of $1 million and median trading of $325,000 for

  37. Slide 37: Structure

    Structure GDI Property Group Stapled Securityholders For personal use only GDI Property Stapling deed GDI Property Group Ltd Trust External AUM:$248.3 million AUM:$694.4 million External Syndicates Direct ownership 233 Mill Green 25 Grenfell St 307 Queen 66 Goulburn No. 27 No. 28 No. 29 No. 33 No. 3

  38. Slide 38: Management team

    Management team Mr Steven Gillard Managing Director Mr Gillard has had over 30 years’ experience in property related industries and is a Fellow Member of the Australian Property Institute (FAPI). Mr Gillard has spent over 11 years working for major agency firms in property management, subsequently s

  39. Slide 39: Executive Board

    Executive Board Mr Graham Kelly Chairman Mr Kelly is a professional non-executive director with over 40 years’ experience in academic life, government service, the diplomatic service, private legal practice, and business management. He has had extensive board experience with numerous listed entities

  40. Slide 40: Annexures

    For personal use only ANNEXURES 1 ADELAIDE LINKING TERRACE, EQUITY PERTH TO PERFORMANCE 39

  41. Slide 41: Consolidated Statement of Profit or Loss

    Consolidated Statement of Profit or Loss Group Trust 2014 2014 $'000 $'000 Revenue from ordinary activities For personal use only Property income 34,166 34,166 Funds management income 3,390 - Interest revenue 209 183 Other income 219 219 Total revenue from ordinary activities 37,985 34,568 Net fair

  42. Slide 42: Consolidated Statement of Financial Position

    Consolidated Statement of Financial Position Group Trust 2014 2014 $'000 $'000 Current assets For personal use only Cash and cash equivalents 14,718 13,914 Trade and other receivables 4,827 854 Other assets 7,381 7,369 Total current assets 26,926 22,137 Non-current assets Investment properties 694,3

  43. Slide 43: Segment performance

    Segment performance Reviewed but Property Funds management unallocated Total $'000 $'000 $'000 $'000 For personal use only Profit after tax from ordinary activities Property income 34,166 - - 34,166 Funds management income - 3,390 - 3,390 Interest income 183 27 - 209 Other income 219 - - 219 Total o

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