Goodman Group · ASX:GMG
Goodman — Goodman Property Trust — Shareholder Meeting (July 2016)
42 slides from Goodman's shareholder meeting presentation, Jul 27, 2016
Slide 1: The Properties of Quality – Annual Meeting 2016
THE PROPERTIES OF QUALITY GOODMAN PROPERTY TRUST ANNUAL MEETING 2016
Slide 2: Meeting Objectives
01 MEETING OBJECTIVES + Review the performance and strategy of the Trust + Consider and vote on two ordinary resolutions − re-appointment of Keith Smith as an Independent Director − re-appointment of Peter Simmonds as an Independent Director 02
Slide 3: Trustee and Advisors
01 TRUSTEE AND ADVISORS + Trustee, Covenant Trustee Services Limited + Solicitors, Russell McVeagh + Auditors, PricewaterhouseCoopers + Tax advisors, KPMG 03
Slide 4: Meeting Formalities
01 MEETING FORMALITIES + Notice of meeting properly given + Quorum confirmed + Voting process outlined 04
Slide 5: Overview
02 OVERVIEW
Slide 6: Focus on Quality
02 FOCUS ON QUALITY + Record profit results over the last three years + Continuation of development led growth + Asset recycling is funding new development activity + Improvement in underlying cash earnings + Similar outlook for FY17 06
Slide 7: Corporate Governance
02 CORPORATE GOVERNANCE + With a cornerstone investment of 20.7% Goodman Group is a highly aligned and supportive Manager + Trust Deed amendments have facilitated streamlined financial reporting and wider use of electronic communication 07
Slide 8: Senior Appointment
02 SENIOR APPOINTMENT + New position in senior Management Team + James Spence appointed to Director Investment Management role + Fund management focus 08
Slide 9: Financial Performance
03 FINANCIAL PERFORMANCE
Slide 10: Record profit and portfolio value
BS 2479m | 145.8 record profit portfolio hefore tax revaluation 1204cqu | 16.7% net tangible total return FY16 asset backing
Slide 11: Capital Management
03 CAPITAL MANAGEMENT + Focus on sustainable growth + $300+ million of asset sales over the last 3 years + Loan to value ratio of just 33.9% + Further sales enhancing an already strong balance sheet 11
Slide 12: Treasury Initiatives
03 TREASURY INITIATIVES + A retail bond and a US Private Placement have improved the diversity and extended the term of GMT’s debt facilities + Enhanced capital structure + Investment grade credit rating of BBB maintained 12
Slide 13: Earnings & Distribution Guidance FY17
03 EARNINGS & DISTRIBUTION GUIDANCE FY17 + Operating earnings of 9.5 cents per unit, before tax + Cash distributions of at least 6.65 cents per unit 13
Slide 14: First Quarter Distribution
03 FIRST QUARTER DISTRIBUTION + Cash distribution 1.6625 cents per unit + Imputation of 0.3416 cents per unit + Payment date 22 September 2016 14
Slide 15: Cash Earnings
03 CASH EARNINGS + Development activity has reduced interest capitalised to land + Improved quality of earnings 15
Slide 16: Operating Performance
04 OPERATING PERFORMANCE 16
Slide 17: Business Strategy
04 BUSINESS STRATEGY + Invest in modern, high quality assets + Strategic land holdings + Proven development capability + More active operational approach 17
Slide 18: Property portfolio and annual rental revenue
NDEPATIONAL / hz 7 pa property portfolio © annual rental revenue
Slide 19: Development Programme
04 DEVELOPMENT PROGRAMME + FY16 projects provide almost 75,000sqm of net lettable area + Expected to provide development margin of 10-15% + Combination of pre-committed and uncommitted projects to meet demand 19
Slide 20: Completed Projects
04 COMPLETED PROJECTS MACHINERY HOUSE S Y N N E X & G WA C A R O M A Highbrook Highbrook $ $ 10.4 m 4,607 sqm 23.9m 10,415 sqm value NLA value NLA COMPLETION DECEMBER 2015 COMPLETION MARCH 2016 20
Slide 21: Reweighting the Portfolio
04 REWEIGHTING THE PORTFOLIO + Increased investment in prime Auckland industrial real estate + Sale of Christchurch assets totaling $121 million over two years 21
Slide 22: Industrial Property Characteristics
04 INDUSTRIAL PROPERTY CHARACTERISTICS + Quick to build and inexpensive to maintain + Assets are typically smaller and more saleable + Depth of market avoids supply imbalances + Customer demand is responsive to economic growth + Growth in underlying land values 22
Slide 23: Highbrook Business Park
HIGHBROOK BUSINESS PARK 23
Slide 24: Panasonic – Highbrook Business Park
PANASONIC HIGHBROOK BUSINESS PARK 24
Slide 25: Pelikan Artline – Highbrook Business Park
PELIKAN ARTLINE HIGHBROOK BUSINESS PARK 24
Slide 26: Focus on Auckland
FOCUS ON AUCKLAND
Slide 27: Property Returns – Gateway Cities
04 PROPERTY RETURNS GATEWAY CITIES ● EXCEPTIONAL 15%+ ● STRONG 10-14% ● MODERATE 5-9% ● WEAK 0-4% ● DECLINING <0% Source: MSCI + Auckland property recorded one of the strongest total returns in FY15 + Of the office, retail and industrial sectors, industrial had the greatest return at over 15% 27
Slide 28: Auckland – Gateway Cities
04 GATEWAY CITIES AUCKLAND + Greatest population and commercial heart of the country + Economy is growing faster than other main centres + Demographic forecasts show differential growth over the next 30 years Auckland New Zealand Population Labour force Households Population Labour force Households
Slide 29: Auckland portfolio map
ral Park Corporate Centre 8 nnect Business Estate sz e - ie Sahin < ‘ - amapsiamammiserns | giao The Gate Industry Park = m " ‘ " Highbrook Business Park HN 2, e Ell Aucktand CBD _ “>« Ei) Greenlane Tamaki , BjyPenrose By Otahuhu ~ ‘y East Tamaki. “i Mangere “2. By win: 29) *y
Slide 30: Highbrook Business Park
HIGHEROOK 8 \ “BUSINESS PARK Pukekiwiriki Place Big Chill Supersite OP ire 4 The Hill Development eee The Point Development 6 active developments 31,440 sim of net lettable area utilising 7.7ha of developement tant total project cost of $84.1 million 7.2% weighted yield on cost
Slide 31: Tamaki Estate
TAMAKI = ESTATE 5.8 hectares 6% yield after leasing activity Zoned mixed use under proposed Auckland Unitary Plan
Slide 32: Prime quality office space
rh Tat +H l mur \ > Prime 16,052 > quality office Sqm of space 32 we \ wed
Slide 33: VXV Precinct – Fonterra Centre
VXV PRECINCT FONTERRA CENTRE 33
Slide 34: Fonterra Centre – VXV Precinct
FONTERRA VXV PRECINCT CENTRE 34
Slide 35: VXV Precinct Joint Venture
04 JOINT VENTURE VXV PRECINCT + Heads of agreement signed with Auckland Transport at VXV20 + Datacom acquisition to complete in mid 2017 VXV20 KPMG Datacom VXV Precinct 35
Slide 36: Strategic Objectives
04 STRATEGIC OBJECTIVES + Increased weighting toward Auckland industrial property + Accelerated development programme improving portfolio quality + Asset recycling to fund new development and investment activity + Alignment between operating earnings and cash distributions + Maintain balance sheet s
Slide 37: Questions
05 QUESTIONS 37
Slide 38: Formal Business
06 FORMAL BUSINESS 38
Slide 39: Board Recommendation
06 BOARD RECOMMENDATION The Board considers both Keith and Peter to be Independent Directors and unanimously recommend that Unitholders vote in favour of their re-appointment. 39
Slide 40: Formal Business – Resolutions
06 FORMAL BUSINESS Resolution 1 As an ordinary resolution, that, Unitholders approve the re-appointment of Keith Smith as an Independent Director of the Manager. Resolution 2 As an ordinary resolution, that, Unitholders approve the re-appointment of Peter Simmonds as an Independent Director of the M
Slide 41: Voting & Close
06 FORMAL BUSINESS VOTING & CLOSE + We will now proceed to a poll and formally conclude the meeting + The result will be announced to the NZX 41
Slide 42: www.goodman.com/nz
WWW.GOODMAN.COM/NZ ®O@O@
Goodman Property Trust — Shareholder Meeting (July 2016) on 6ix