Gpt Group · ASX:GPT
Gpt — Merger or Acquisition (March 2005)
54 slides from Gpt's merger presentation, Mar 21, 2005
Slide 1: GPT Investor Presentation ASX Announcement
BABCOCK & BROWN Sydney Melbcnme Brishane San Francisco San New York Greenwich London Muaich Wublin Madrid Paris Milan Johannesburg Ho ag, Tokyo Kuala Lumpur Shanghai 21 March 2005 ASX Announcement GPT Investor Presentation Please see the attached presentation, which will be shortly delivered to Gene
Slide 2: Presentation: Overview of European Market and Joint Venture Opportunities
Slide 3: Agenda and presenters
1. Rationale for the Joint Venture ~ Strategy and Business Plan (Nic Lyons, Chief Executive Officer - GPT) 2. Overview of Babcock & Brown & Global Real Estate Activities (Michael Maxwell, Global Head of Real Estate - Babcock & Brown) 3. Review of European Market Characteristics (Martin Rey, Head of
Slide 4: Section 1: Rationale for the Joint Venture
Slide 5: 1. Rationale for Joint Venture
1. Rationale for Joi it Venture » GPT’s objectives in reviewing alternatives > An independent GPT (investor choice, retain control premium) » Contemporary structure (internally managed) > Immediate access to an earnings “growth engine” » JV with Babcock & Brown delivers two new “growth” asset classe
Slide 6: Global Real Estate
1. Rationale for Joi it Venture Global Real Estate » Why Global Real Estate? » More attractive opportunities in strong markets ~ Liquidity ~ Scale and availability ~ Higher risk adjusted return > Australian market is relatively mature GPT ; GEMBAL PROPERTY TRUST
Slide 7: Proforma Example: Australian vs European Retail Investment
1. Rationale for Joint Venture Proforma Example — Comparison of Australian Ret GPT & European Retail Investment by the JV |, Return Comparison _ Initial Yield Escalation (pa) Gearing Level Cost of Debt Tax on Equity Yield Average 5 Year Equity Yield © IRR Excluding Currency Hedging IRR Including Cur
Slide 8: Key Elements: JV Business Model
1. Rationale for Joi it Venture Key Elements — JV Business Model The overall strategy is to build a portfolio with a diverse range of standing assets with long term, secure cashflows and development projects. Look for the market with the best risk adjusted returns (targeting minimum 15% IRR) The Joi
Slide 9: Financial Impact and Benefits for GPT
1. Rationale for Joi it Venture Financial Impact and Benefits for GPT DPS stand alone (c) 22.0 ; 22.9.0" 23.6 DPS post internalisation/JV (c) nla : 24.4 27.5 % increase (vs standalone) n/a 6.5% 16.5% % growth (year.on year) 8.8% 10.9% 12.7% (1) Actual distribution, not annualised. Assumes proposal e
Slide 10: Section 2: Overview of Babcock & Brown & Global Real Estate Activities
Slide 11: Babcock & Brown overview
> >» > GPT GEMBAL PROPERTY TRUST Babcock & Brown is a listed company with a market cap of approximately A$2.5 billion Geographically business is spread approximately one third in each of >» Europe >» USA >» Australia/Asia/Japan Five business units » Real Estate >» Infrastructure » Corporate and Prin
Slide 12: 2. Overview of Babcock & Brown
2. Overview of Babeock & Brown : Zi m= Number of Real Estate Professionals (excluding funds management, asset and transaction Management) Babcock & Brown Offices » The Real Estate Team has access to and is supported by B&B’s global network of over 440 employees » From these locations and our offices
Slide 13: The Babcock & Brown Team
_ 2. Overview of Babeock & Brown The Babcock & Brown Team » Our Real Estate team is made up of personnel in each market who > > Originate transactions Have local knowledge, relationships at all levels of the market Are multi disciplined, skills greater than pure real estate (including accounting, ta
Slide 14: Approach to Property Transactions
Approach to Property Transactions » Risk-adjusted IRR is the chief investment criterion » Focus on the returns of the investment, rather than the appearance of the asset » Cashflows underpin base case performance of the asset with opportunity for upside » Exploit imperfections in the property market
Slide 15: Section 3: Review of European Market Characteristics
Slide 16: Attributes of European Markets
Attributes of European Markets » Size of the market » Political and legal framework, stable, secure (similarities to Australia) » Sophisticated financial markets » Central Eastern Europe (“CEE”) potential » Availability of property » Liquidity of property market >» Low Euro interest rates GPT 15 GEM
Slide 17: Global GDP Ranking Table
_ 3. Review of European Market Characte istics at Global GDP Ranking Table L GDP (usébn)”) Population (mj?) USA 4 10,881.6 291 Japan — : : 2 : 4,326. 127.6 China 7 Canada . . 7 9 _ 834.4 7 31.6 Mexico 10 626.1 102.7 Republic of Korea aa 14 605.3 - 47.9 India : 4 . 598.9 ~ 4,065 Australia 13 7 818.4
Slide 18: Principal Real Estate Markets
Principal Real Estate Markets » Size of European market combined with low level of listed real estate in Europe provides significant opportunity | World Underlying | UnderlyingReal | Listed Realestate | ,, .., dee 6 of Underlying Real | Realkstate% | EstateUssbn | USShnitotalagsets); = = ss|_=SCséRe
Slide 19: Investment Outlook: Positive Spread Overseas
_ 3. Review of European Market Characte istics Investment Outlook — “Positive Spread” Overseas Europe: Australia Ungeared Property Yields 6- 8% 6—8% (2) 3.2% 6% Five Year Swap Rate. (1) Institutional grade real estate {2) Five year swap rates ~ indicative at 21 March 2005 (excluding lending margins)
Slide 20: Section 4: Portfolio Overview & Discussion
Slide 21: 4. Portfolio Overview & Discussion
4. Portfolio Overview & Discussion El 4 € SWEDEN AU | ‘ ¢ a] REPUBLIC 4 OF IRELAND, a DENM Cae rr: : 5 ea UNIT ; is ee = Se < oe Pee cenmany % euxern| ited wy Ly nah AUSTRIA a —y HUNGARY. Residential Retail Mixed Use Office Prospective Pipeline Assets CORSICA go 3 crnonaf J J © European Union —3 Non
Slide 22: Residential Portfolio
_ 4. Portfolio Overview & Discussio : Residential Portfolio -@ Kiel C2) Saizgitter Reinbek (AMB Generali) oy) Pinneberg (AMB Generali) A WW Aachen (AMS Generali) -- lie @ oo cece 0 Cologne Osnabriick (AMB Generali) Freiburg (AMB Generali) as Ha VE Kiel (AMB Generali) a i Hii oe Maing) Buxtehude (AMB
Slide 23: Overview of German Residential
_ 4. Portfolio Overview & Discussion Overview of German Residential » Anestablished investment class » Institutional ownership (private equity funds, European open and closed end funds) » Established trading metrics » Availability of limited recourse debt » Continuing deal flow (corporates and state
Slide 24: Major German Residential Transactions in the Last Three Years
‘on Bi Major German Residential Transactions in the Last Three Years ae oo > Buyers are predominantly Investment Banks A : . oy00- and Private Equity Funds Bauverein zu Hamburg 6,000 Bavaria 3,500 » Cerberus >» Terra Firma GIG Heimbau AG . 40,000 Brebe 7,000 > Fortress » Goldman Sachs DAL Kiel* 6,00
Slide 25: Overview of German Residential
Overview of German Residential » Nation of predominantly renters, rather than home owners » The number of households is expected to grow over the next 15 years Rental Occupancy as a proportion of total dwellings Growth in households - Germany Number of households (millions) ES IE (T UK PT FI EU SE F
Slide 26: Overview of German Residential
_ 4. Portfolio Overview & Discussion Overview of German Residential » Babcock & Brown’s approach GPT GEMBAL PROPERTY TRUST Vv Focus on management improvements with a “tenant friendly” asset management model. This is vital. We have a proven team in place Structure acquisitions so portfolio can be hel
Slide 27: Overview of German Residential
4. Portfolio Overview & Discussio : Overview of German Residential AMB Generali - Kassel Kiel » Predominantly low rise buildings GPT 26 GEMBAL PROPERTY TRUST
Slide 28: Significant Upside Potential: Residential Portfolios
Significant Upside Potential — Residential Portfolios » Incremental capital expenditure can achieve an unleveraged return of circa 10% on occupied flats for bulk of initial portfolio » Reducing vacancy provides quantum uplift >» eg, Salzgitter target is to lease up 1,200 vacant apartments (approxima
Slide 29: German Residential: Kiel Case Study
German Residential — Kiel Case Study » 6,000 residential units (94% occupancy) » €175 million Portfolio (including acquisition costs) ® €165 million, 80% funded for 10 years at fixed interest rate funding (€132 million 18' mortgage, €33 million mezzanine) » 4,600 units have been sold for total consi
Slide 30: German Residential: Kiel Case Study
German Residential — Kiel Case Study » Strong demand by institutions meant it was possible to sell subportfolios — instead of individual units to tenants/small time investors (second alternative) » Base case financial model at acquisition, conservative, assuming no sales and no rental rises (beyond
Slide 31: Residential Portfolio: City of Salzgitter
Residential Portfolio City of Salzgitter a is a esc GPT 30 GEMBAL PROPERTY TRUST
Slide 32: Salzgitter Portfolio (initial portfolio)
_ 4. Portfolio Overview & Discussior Salzgitter Portfolio (initial portfolio) Location: Asset Type: Purchase Price*: initial Yield: Occupancy: Characteristics: Market Description: Investment Strategy: City of Salzgitter, North Western Germany Residential Apartments €290m Approx 8.4% pre-capex. 6.6%
Slide 33: Kiel Portfolio (initial portfolio)
_ 4. Portfolio Overview & Discussion Kiel Portfolio (initial portfolio) Location: Northern Germany (Eastern Kiel). Asset Type: Residential Apartments. Purchase Price *:. €40.0m plus a further €2m capex (total €42m). initial Yield: Approx 6.5% pre-capex. 6.01% on €42m (on leased premises only) after
Slide 34: AMB Generali Portfolio (initial portfolio)
4. Portfolio Overview & Discussio AMB Generali Portfolio (initial portfolio) Location: Asset Type: Purchase Price*: Initial Yield: Occupancy: Characteristics: Market Description: Investment Strategy: Western Germany Residential Apartments €130m Approx 6.5% pre-capex 6.1% (on leased premises only) af
Slide 35: Berlin Mixed Use I - Annenhöfe
_ 4. Portfolio Overview & Discussior Berlin Mixed Use I - Annenh6fe (under consideration) Location: Asset Type: Indicative Value: Occupancy: Characteristics: Market Description: Investment Strategy: GPT GEMBAL PROPERTY TRUST Berlin, Germany Approx 4 years old. Mixed Use Property (Residential, Commer
Slide 36: Berlin Portfolio II
_ 4. Portfolio Overview & Discussion Berlin Portfolio II (under consideration) eG Location: Berlin (multiple locations across the portfolio) Asset Type: : Residential Apartments + Retail + Office Indicative Value: €30m Occupancy: To be determined within due diligence. Characteristics: 250 renovated
Slide 37: Berlin Mixed Use III
_ 4. Portfolio Overview & Discussio : Berlin Mixed Use III (under consideration) Location: Asset Type: Indicative Value: Occupancy: ~ Characteristics: Market Description: Investment Strategy: GPT GEMBAL PROPERTY TRUST Berlin, Germany Mixed Use (Residential, Commercial, & associated Carparking) €42m
Slide 38: Overview of German Hypermarket/Retail
Overview of German Hypermarket/Retail > Focus on 7.5 — 9.0% yield retail assets that fulfil the following criteria » Long term leases (average 10 years, up to 15 years) to creditworthy tenants provide stable CF for 75% of income » Good retail fundamentals (catchment area/level of competition/ barrie
Slide 39: German Retail: Munich
German Retail — Munich (under consideration) Location: Asset Type: Indicative Value: Occupancy: Characteristics: Market Description: Investment Strategy: GPT GEMBAL PROPERTY TRUST City of Munich, Germany Retail and Logistics €80m Above 95% Partly new and modernised centre centrally located at a high
Slide 40: Munich catchment area map
GPT BAL PROPERTY TRUST ome t: ow. 159.04K) The map gives an overview about the catchment area to the do-it-yourself-store. The dark orange zone is directly located next to the city centre of Munich on a main road on the eastwest axis through Munich. The competitors to the “Baumarkt” are shown with b
Slide 41: German Retail: Rewe Russelsheim
4. Portfolio Overview & Discussior German Retail — Rewe Russelsheim (under consideration) Location: City of Russelsheim, West Central Germany Asset Type: Retail (“Hypermarket’) Indicative Value: €11.1m Occupancy: Fully let to REWE Group, a strong German ~ retailer. Characteristics: New 5,700m2 retai
Slide 42: German Retail: Straubing
_ 4. Portfolio Overview & Discussiox German Retail — Straubing (under consideration) Location: Straubing, city 140km northeast of Munich, ~ Germany Asset Type: Retail with some office Indicative Value: -~ €48m Occupancy: -- - Fully let Characteristics: | Completed in 1990 and extended in 1999. The t
Slide 43: German Retail/Commercial: Cologne
_ 4. Portfolio Overview & Discussion German Retail/Commercial — Cologne (under consideration) Location: Cologne, Germany Asset Type: Retail & Commercial Occupancy: 90% Characteristics: Total rental space of the retail complex (“A”) is approx. 25,000m’. The buildings are rented to a good tenant mix (
Slide 44: Galerie Butovice - Prague (initial portfolio)
Galerie Butovice - Prague (initial portfolio) » Brand new centre. » 95% precommitted, 10 minutes from Prague city. » Adjacent to office precinct and established residential areas. » Good transportation links. » Ahold — committed to 15 year lease (supermarket). Ahold occupy 70% office space on 10 yea
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Slide 46: Czech Retail: Galerie Butovice
_ 4. Portfolio Overview & Discussi Czech Retail — Galerie Butovice (initial portfolio) Location: 6km South West of Central Prague Asset Type: New retail and office/commercial Purchase Price: €106.8m Initial Yield: 8.0% Occupancy: Approx 95% income is precommitted. Characteristics: 37,475m* retail NL
Slide 47: German Technology Park - Cologne (initial portfolio)
German Technology Park - Cologne (initial portfolio) » Located in fully integrated office park with wide range of tenant services within the park » High quality tenants, long term leases » Contemporary design and efficient floorplates » Relatively low operating costs » Strong relationship with devel
Slide 48: German Technology Park - Cologne (initial portfolio)
Location: Asset Type: Purchase Price: Initial Yield: Occupancy: Characteristics: Market Description: Investment Strategy: GPT GEMBAL PROPERTY TRUST _ 4. Portfolio Overview & Discussio German Technology Park - Cologne (initial portfolio) 5 km west of City Centre of Cologne, Germany's 6" largest econo
Slide 49: French Business Park: Velizy
_ 4. Portfolio Overview & Discussio : French Business Park — Velizy (under consideration) Location: Asset Type: Occupancy: Characteristics: Market Description: Investment Strategy: GPT GEMBAL PROPERTY TRUST South Paris, France Development, Office Business Park Development site with 50% precommitment
Slide 50: West Paris commercial business park
Location: Asset Type: Occupancy: Characteristics: Market Description: GPT GEMBAL PROPERTY TRUST West Paris, France Commercial Business Park Development site. 50% interest with a developer to acquire and develop this land in a prime location. Site area: 242,000m Project Value: €425m Situated close to
Slide 51: Disclaimer
This presentation has been prepared by GPT Management Limited (ABN 94 000 335 473) (as the responsible entity of General Property Trust) (ARSN 090 110 357) and Babcock & Brown Limited (ABN 53 108 614 955). The details in this presentation provide general information only. It is not intended as inves
Slide 52: Appendix A: Selected Biographies
Slide 53: Appendix A: Selected Biographies
Appendix A: Selected Biographi Michael Maxwell manages the Australian and European Real Estate teams and coordinates the Group's real estate activities worldwide. He joined Babcock & Brown in 1992. Prior to joining Babcock & Brown, Michael was an executive director of Morgan Grenfell Australia Limit
Slide 54: Appendix A: Selected Biographies: Europe
Appendix A: Selected Biographi Europe Martin Rey is an Executive Director of Babcock & Brown and has geographic responsibility for continental Europe and co-ordinates a variety of European business activities. He joined Babcock & Brown in 2003. Prior to joining Babcock & Brown, Martin held a variety