Gpt Group · ASX:GPT
Gpt — H1 2022 Earnings Presentation
42 slides from Gpt's earnings presentation, Aug 15, 2022
Slide 1: 2022 Interim Result Presentation
15 August 2022 2022 Interim Result Presentation The GPT Group (“GPT”) provides its 2022 Interim Result Presentation which is authorised for release by The GPT Group Board. -ENDS- For more information, please contact: INVESTORS AND MEDIA Penny Berger Head of Investor Relations and Corporate Affairs +
Slide 2: Agenda
Agenda Market Briefing Interim Result 2022 15 August 2022
Slide 3: Acknowledgement of Traditional Custodians
Agenda The GPT Group acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing connection to land, waters and community. We pay our respects to First Nations Elders past, present and emerging. Interim Result 2022
Slide 4: Agenda
2022 Half Year in Review | Bob Johnston 4 Finance and Treasury | Anastasia Clarke 7 Office | Martin Ritchie 12 Logistics | Chris Davis 21 Retail | Chris Barnett 29 Outlook and 2022 Guidance | Bob Johnston 38 Agenda Agenda Interim Result 2022
Slide 5: 2022 Interim Result: Financial summary
2022 Interim Result Financial summary 17.04cents 12.70cents Funds From Operations Distribution per security, up 9.0% per security, down 4.5% $6.26 10.8% Net Tangible Assets 12 month per security, up 2.8% Total Return1 Investment portfolio Portfolio occupancy 97.5% Assets under management $27.4 b Wei
Slide 6: Executing on strategic priorities
Executing on strategic priorities » Logistics portfolio expanded to $4.6b, representing 28% of the portfolio Expand and optimise the portfolio - $265m of completions in year to date1 - $1.9b development pipeline providing enhanced returns1 Grow Funds Management » Executing on Office developments whi
Slide 7: Our priorities – Carbon neutral and nature positive
Our priorities – Carbon neutral and nature positive Leadership in ESG What we deliver Our impact Carbon neutral Upfront embodied Climate 55% energy 2 operational resilient assets carbon1 neutral assets developments 82% emissions 2 Nature positive initiatives How we deliver delivered More carbon neut
Slide 8: Finance and Treasury
Finance and Treasury Interim Result 2022
Slide 9: Financial summary
Financial summary $529.7 m $326.5 m Statutory Net Profit After Tax Funds From Operations ($m) 1H 2022 1H 2021 Change Funds From Operations (FFO) 326.5 302.3 8.0% Valuation increases 219.5 471.7 Treasury instruments marked to market (16.8) 0.5 Other items 0.5 (14.0) Net Profit After Tax 529.7 760.5 F
Slide 10: Segment result
Segment result ($m) 1H 2022 1H 2021 Change Comments Lower COVID-19 allowances and land tax refunds ($9.8m) offset by Retail 145.0 140.8 3.0% divestment of Casuarina and Wollongong ($5.5m) Reduced vacancy ($5.6m), Ascot acquisition ($2.2m), fixed base rent Office 148.9 134.5 10.7% increases ($5.3m) a
Slide 11: Capital management
Capital management Key Statistics 30 Jun 2022 31 Dec 2021 Sources of Drawn Debt As at 30 June 2022 Net Tangible Assets per security $6.26 $6.09 Net Gearing 27.3% 28.2% Weighted average cost of debt 2.5% 2.4% Weighted average term to maturity 6.3 years 6.3 years Interest cover ratio 7.1x 7.5x Credit
Slide 12: Hedging profile
Hedging profile 71% hedged over the next 2.5 years at an average fixed rate of 2.8%1 (31 Dec 2021: 50% hedged, 1.5 years at 1.5%) Key Statistics1 30 Jun 2022 31 Dec 2021 Interest rate hedging 65% 69% Weighted average hedge term 2.5 years 1.5 years Average fixed hedge rate 2022 1.7% 1.4% Average fixe
Slide 13: Office
Agenda Office Interim Result 2022
Slide 14: Office overview
Office overview $169.6m 8.9% Segment contribution1 up 11.0%, comparable 12 month growth up 5.0% Total Return3 92.0% 4.77% Portfolio Weighted Average Occupancy Capitalisation Rate Weighted Average Lease Expiry 4.7yrs Development Pipeline4 $5.5b Total Leasing2 51,900sqm Total Leasing Transactions 79 (
Slide 15: Increased leasing enquiry
Increased leasing enquiry » Office enquiry is showing positive momentum, up on 1H 2021 » Smaller occupiers have been the most active during the period1 » Occupiers ‘flight to quality’ continues Office Enquiry (sqm)1 Prime Net Face and Effective Rent ($/sqm p.a.)2 400,000 $1,400 350,000 $1,200 300,00
Slide 16: Our leasing strategy
Our leasing strategy Space&Co. Customers » Our three space products allow us to access a deeper pool of customers from a diverse range of industries » Traditional Space appeals to larger occupiers seeking exceptional quality building amenity, high sustainability credentials and flexible lease terms
Slide 17: Our leasing results
Our leasing results » Continuing to achieve leasing results in a changing economic environment, with 51,900sqm of space transacted across 79 deals » Our occupancy has been consistently higher than the national prime grade average Deals GPT Office Occupancy vs National Prime Grade Average 1H 2022 Lea
Slide 18: Leasing volume expected to improve in 2H
Leasing volume expected to improve in 2H » While expiries remain elevated, leasing volume in 2H 2022 is expected to increase due to our high quality, well presented products and customer focus GPT Lease Expiry Profile1 As at 30 June 2022 13% 11% 8% 9% 6% (sqm by Ownership) Vacant Vacant 2022 2022 20
Slide 19: Positioning for growth
Positioning for growth » Pipeline opportunities for the next cycle grew 22% to $5.5b1, providing an opportunity for GPT and its funds to develop next generation assets and enhance returns » GWOF secured a North Sydney development site at 155 Walker Street » Commencement of developments customer led
Slide 20: Carbon neutral leadership
Carbon neutral leadership All new office developments upfront embodied carbon1 neutral » 51 Flinders Lane will be GPT’s first Office development to be upfront embodied carbon1 neutral and certified on completion through Green Star and Climate Active Upfront embodied carbon1 neutral development pathw
Slide 21: Office portfolio strategy and outlook
Office portfolio strategy and outlook Continuing to prioritise Sustainability » GPT’s commitment to sustainability provides a competitive advantage » High ratings of 5.8 star NABERS Energy1, GWOF is carbon neutral since 2020, GPT by 2024 » All new Office developments to be upfront embodied carbon2 n
Slide 22: Logistics
Logistics Interim Result 2022
Slide 23: Logistics overview
Logistics overview $92.2 m 14.0% Segment contribution1 up 22.4%, comparable 12 month growth of 2.4% Total Return3 98.7% 4.09% Portfolio Weighted Average Occupancy Capitalisation Rate Weighted Average Lease Expiry 6.2yrs GQLT 50% of $2b commited4 $1.0b Total Leasing2 228,000sqm Development Pipeline4,
Slide 24: Logistics portfolio of $4.6b, executing on growth strategy
Logistics portfolio of $4.6b, executing on growth strategy Development Development Completions1 $69m » Two development completions delivering a yield on cost of 5.6% and four developments underway1 » Replenishing land bank, GQLT secured 35.2 hectares in Epping in Melbourne’s north » Development pipe
Slide 25: Tailwinds driving occupier take-up
Tailwinds driving occupier take-up » Demand driven by Transport (35%) and Retail Trade (26%) user groups1 » Significant proportion of market leasing enquiry from expanding occupiers » Strong market rental growth with tightening vacancy rates nationwide Sydney Melbourne Brisbane Adelaide Perth Averag
Slide 26: Strong leasing and rent growth
Strong leasing and rent growth Key Leasing YTD 2022 » High occupancy of 98.7% and WALE of 6.2 years » Total leasing of 228,000sqm1 with 108,000sqm in developments (2021: 182,300sqm) 40,700sqm 29,900sqm Austrak Business Park Rosehill Business Park » 2022 speculative development leasing outpacing rent
Slide 27: Driving sustainability outcomes
Driving sustainability outcomes GPT leads the way with certified upfront embodied carbon1 neutral logistics development » 143 Foundation Road, Truganina is Australia’s first upfront embodied carbon1 neutral logistics development certified by the Green Building Council of Australia and Climate Active
Slide 28: Future growth through build-out of $1.9b pipeline
Future growth through build-out of $1.9b pipeline » Targeting an average yield on cost of >5.25% for developments, strong rental growth offsetting higher construction and funding costs » Two completions due 4Q 2022 with a further two speculative developments underway » Progressing planning milestone
Slide 29: Logistics portfolio strategy and outlook
Logistics portfolio strategy and outlook Grow through development and funds management » Build out development pipeline located in key growth corridors » Replenish landbank to provide future growth » Grow logistics partnership with QuadReal Operational excellence supporting customer success » Broade
Slide 30: Retail
Agenda Retail Interim Result 2022
Slide 31: Retail overview
Retail overview $150.8 m 5.9% Segment Contribution1 12 month up 2.9% Total Return2 99.3% 4.98% Portfolio Occupancy Weighted Average Capitalisation Rate Total Specialty Sales Growth on 1H 2021 11.6% Specialty Sales Productivity3 $9,593 psm Total Specialty Sales Growth on 1H 2019 6.5% Leasing Deals Co
Slide 32: UniSuper mandate
UniSuper mandate » Four Retail assets - Karrinyup Shopping Centre, WA - Marrickville Metro, NSW - Dapto Mall, NSW - Malvern Central, VIC » Direct benefits of scale with 40% increase to Gross Lettable Area under GPT management » Highly complementary to GPT’s portfolio of regional and super regional a
Slide 33: Leasing momentum continues
Leasing momentum continues » Strong occupancy with high levels of deal activity and tenant retention » 76 new brands introduced to the portfolio » Average lease term of 4.6 years all with fixed base rents and annual increases » Leasing tailwinds anticipated for remainder of 2022 6 months 12 months t
Slide 34: Centre sales growth
Centre sales growth Sales » Strong 1H 2022 trading despite Omicron disruptions (Monthly Growth) in early 2022 1H 2022 vs 1H 2021 34.2% 31.0% » Total Centre sales up 11.5% on 1H 2021 and up 2.9% on 1H 2019 13.5% 13.5% 10.9% 10.9% 10.9% 10.7% 11.5% 11.6% » Growth in Total Centre sales on 1H 2021 drive
Slide 35: Sales growth by category
Sales growth by category » Retailers across the portfolio performed well over most categories on the prior corresponding period » Melbourne Central (+36.9%), Highpoint (+21.4%) and Rouse Hill (+9.1%) were among the highest growth centres driving firm results » Cinemas and Travel Agents (Other Retail
Slide 36: Melbourne Central delivering new retail experiences
Melbourne Central delivering new retail experiences » Delivering customer experiences through new concepts such as Monopoly Dreams (opening late 2022) » Continued investment in flagship and CBD stores from new and on-trend brands - 1H 2022 openings include LEGO, rebel, Glue and Guess » New stores fr
Slide 37: Retail and mixed-use development focus
Retail and mixed-use development focus Rouse Hill Town Centre Highpoint Shopping Centre » Mixed-use expansion targeted to commence early 2023 » Master Plan includes 70,000sqm incremental retail, 148,000sqm office and 3,000 apartments - 10,800sqm incremental retail, with 41 specialties, four mini maj
Slide 38: Retail portfolio strategy and outlook
Retail portfolio strategy and outlook Leadership in ESG » Our priorities – carbon neutral and nature positive » Chirnside Park Smart Energy Hub Growing Funds Management » GPT Wholesale Shopping Centre Fund positioned to take advantage of future opportunities with low gearing of 13.2% » Management of
Slide 39: Outlook and 2022 Guidance
Agenda Outlook and 2022 Guidance Interim Result 2022
Slide 40: Outlook and 2022 Guidance
Outlook and 2022 Guidance Outlook » Economic conditions expected to moderate in next 12 months as interest rates rise to curb inflation » Higher interest rates present a headwind to earnings and may lead to a softening of valuation metrics » Retail portfolio well positioned with high occupancy, fixe
Slide 41: Thank you for joining us
Agenda Thank you for joining us Interim Result 2022 Questions
Slide 42: Disclaimer
Disclaimer The information provided in this 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). The information provided in this presenta