Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — H1 2018 Earnings Presentation
32 slides from Goodman's earnings presentation, Nov 9, 2017
Slide 1: Goodman Property Trust Interim Results
aonre cul t GOODMAN PROPERTY TRUST INTERIM RESULTS RBS = — oo
Slide 2: Presenters and agenda
Presented by: John Dakin Overview 3 Chief Executive Officer Financial Summary 5 Andy Eakin Chief Financial Officer Investment Portfolio 11 James Spence Development Update 15 Director – Investment Management Summary & Outlook 22 Appendices 25 Unless otherwise noted, all numerical data provided in thi
Slide 3: Highbrook Business Park
Highbrook Business Par THE MARK OF QUALITY 08
Slide 4: Sustainable growth, quality assets, prudent capital management
sustainable growth ＋ more than $600 million of sales since 2012 have repositioned the portfolio and provided balance sheet capacity to fund the development programme ＋ two further sales were contracted following 30 September 2017: ▪ the conditional sale of Central Park Corporate Centre, Auckland, fo
Slide 5: Coda — Savill Link
Coda — Savill Link THE MARK OF QUALITY
Slide 6: Financial summary key metrics
ke =p =i M5 30 324s ING EARNINGS PROFIT BEFORE TAX LOOK THROUGH LOAN 10 E TAK iccrrer RE VALUE RATIO os, - : + : + 3. JotPl G:0ULPY 1 30.2cr1 OPERATING EARNINGS CASH EARNINGS £ CASH DISTRIBUTION NET TANGIBLE ASSET BACKING BEFORE TAX. + + + Highbrook Business Park ear ae =f ™
Slide 7: Net property income movements
85.0 ＋ new acquisitions and -0.4 - 0.4 developments, together +2.7 -0.1 with strong growth in 80.0 +3.7 the underlying portfolio - 8.9 of 3.8% has offset the +2.1 75.0 73.9 impact of asset 6.5 +0.4 73.4 73.8 8.5 disposals 71.5 70.0 67.9 67.4 67.4 65.0 64.9 64.9 60.0 55.0 50.0 FY17 YTD Acquisitions D
Slide 8: Cash earnings and distributions
＋ cash earnings of around $million 30 Sep 17 30 Sep 16 7.0 cents per unit are forecast for the year Operating earnings after tax 51.4 51.0 ＋ distribution of around 94% Capitalised borrowing costs - land (4.7) (6.4) of cash earnings Maintenance capex (1.3) (2.0) ＋ lower land holdings plus increasing
Slide 9: Look through loan to value ratio
＋ look through loan to value ratio of 32.4% strong financial metrics ＋ allowing for contracted sales, pro-forma 30 September gearing of 25.8% ＋ debt currently 64% hedged to reduce interest rate volatility ＋ interest cover ratio expected to be around 3.0x in 2018, well above the covenant minimum of 2
Slide 10: Well-diversified debt sources
well-diversified ＋ weighted average debt term to expiry of 4.3 years debt sources ＋ around 57% of drawn debt from non-bank sources ＋ GMT had $260 million of headroom in its bank facility as at 30 September 2017 ＋ bank funding retained for operational flexibility $m debt expiry profile 300 250 200 10
Slide 11: Big Chill – Highbrook Business Park
Big Chill – Highbrook Business Park
Slide 12: Portfolio statistics
(1) (1) (1) (1) Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017. Coda, Savill Link, Otahuhu
Slide 13: Central Park sale
[—j CENTRAL PARK SALE 18 REDUCTION IN LAND REDUCTION IN OFFICE WEIGHTING T0 < 5.0% WEIGHTING TO APPROX. 10% ae a
Slide 14: Portfolio occupancy and lease expiry profile
portfolio occupancy 100% ＋ strong leasing with over 70,000 sqm of space secured 98% 98% 98% on new or extended terms 97% 96% 97% 97% during period 96% 94% ＋ occupancy of 97% as at 30 September 2017 92% ＋ 99% occupancy and >70% 90% retention within industrial Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 portfo
Slide 15: ACCO — Highbrook Business Park
ACCO — Highbrook Business Park
Slide 16: Development projects
development projects $ (total project cost including land value) 160 ＋ continued focus to activate 148.7 140 148.7 remaining land with 120 development starts reaching 98.2 108.8 100 97.0 record levels in 1H18 80 ＋ a greater volume of 60 development activity has 40 included a successful industrial 20
Slide 17: Completed developments
The Gate Warehouse, The Gate The Hill, Highbrook Business Park ACCO, Highbrook Business Park COMPLETION VALUE NLA COMPLETION VALUE NLA COMPLETION VALUE NLA May 2017 $11.0m 4,937 sqm June 2017 $17.8m 7,503 sqm Aug 2017 $16.9m 6,402 sqm
Slide 18: Developments completing November 2017
Coda Stage 2, Savill Link AB Equipment, Highbrook Business Park Showroom Units, Highbrook Business Park COMPLETION NLA COMPLETION NLA COMPLETION NLA Nov 2017 7,410 sqm Nov 2017 2,929 sqm Nov 2017 1,730 sqm
Slide 19: Developments completing 2018-2019
Building 6 Quest Expansion Crossing Carpark Highbrook Business Park Highbrook Business Park Highbrook Business Park COMPLETION NLA COMPLETION ROOMS COMPLETION CARPARKS Aug 2018 3,006 sqm Nov 2018 60 Feb 2019 343
Slide 20: Development starts year to date
Additional Capital Development Location NLA Completion Date ($m) ＋ six developments announced Spicers Highbrook Business Park $13.4m 9,800 sqm Apr-18 YTD, $148.7 million total project cost Fliway expansion Westney Industry Park $2.7m 1,895 sqm Feb-18 Gateway units Highbrook Business Park $46.1m 21,4
Slide 21: Highbrook Business Park
＋ 98% occupancy, 5.9 year average lease term and six year average building age ＋ park continues to experience strong retention of around 80% ＋ More than 80% complete with over 420,000 sqm of rentable area (46,290 sqm currently under construction) ＋ $184 million of additional capital has been investe
Slide 22: Highbrook Crossing — Highbrook Business Park
Highbrook Crossing — Highbrook Business Park
Slide 23: Summary and outlook
high quality business ＋ development activity, selective sales and targeted acquisitions are refining the business and positioning GMT for sustainable growth ＋ quality of the portfolio and location of its assets is unrivalled ＋ strong balance sheet with over $500 million of available liquidity post c
Slide 24: VXV Plaza — VXV Precinct
SUUUenanny i. aaa EP" SEEDER: b od A VXV Plaza — VXV Precinct THE MARK 24 OF QUALITY
Slide 25: Big Chill — Highbrook Business Park
Big Chill — Highbrook Business Park
Slide 26: Appendix: Profit or loss
APPENDIX PROFIT OR LOSS 26 profit or loss months months $ million Note 30Sen17 30 Sen 16 Property income 7 797 328 Property expenses (148) (15.3) ‘Net property income es ors ‘Share of operating earnings before tax from joint venture: 24 48 40 Interest Interest income 4 36 24 Interest cost 4 (12.2) (
Slide 27: Appendix: Balance sheet
APPENDIX BALANGE SHEET 2] balance sheet As at 30 September 2017 $ million Note 30Sep 1731 Mar 17 Non-current assets ‘Stabilsed properties 14 2085.7 20257 Developments 14 94.5 489 Land 14 133.7 1747 lavestment in joint venture 22 745 707 Derivative financial instruments 52 185 189 Other investments 1
Slide 28: Appendix: Loan to value ratio
APPENDIX LOAN 10 VALUE RATIO 28 ‘The loan to value ratio (’LVR’) is a non-GAAP metric used to measure the strength of GMT’s Balance Sheet. The LVR calculation is set out in the table below. The GMT look through LVR incorporates GM's 51% share of WPHL and is the measure ullised by management when con
Slide 29: Hedging level
% hedged Hedging Level 100% 90% 80% 70% 64% 60% 50% 40% 30% 20% 10% 0% Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Period
Slide 30: Leasing transactions by customer
NLA Term Property Customer (sqm) (years) Highbrook Business Park Cottonsoft 16,973 10 The Gate Industry Park Iron Mountain (Recall) 4,931 5 Show Place Office Park Westpac 2,553 7 The Gate Industry Park Confidential 4,936 6 The Gate Industry Park Dulux (Yates) 4,114 4 The Gate Industry Park Easy2C 4,
Slide 31: Top ten customers split by subsidiary companies
Top ten customers split by subsidiary companies (% of portfolio income) New Zealand Post Group DHL Fletcher Building Fonterra Toll Spicers Air New Zealand Datacom Big Chill Distribution Officemax 0% 1% 2% 3% 4% 5%
Slide 32: Rent reviews and industry exposure
Rent reviews CPI by next review type 23% Market Review 30% Fixed 47% Industry exposure Food and agriculture, portfolio income (%) 7.9% Utilities, 0.2% Other, 2.4% Transportation and warehousing, 32.3% Consumer services and supplies, 15.7% Commercial services and supplies, 16.5% Manufacturing, 25.1%
Goodman Property Trust — H1 2018 Earnings Presentation on 6ix