Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — H1 FY2017 Earnings Presentation
46 slides from Growthpoint Properties Australia's earnings presentation, Feb 21, 2017
Slide 1: Half Year Results Presentation
Growthpoint Properties Australia (ASX Code: GOZ) Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409 www.growthpoint.com.au For personal use only Half Year Results Presentation For the six months ended 31 December 2016 21 Fe
Slide 2: Important information
Important information Disclaimer pro forma historical financial information included in this Presentation Forward-looking statements including projections, indications or For personal use only This presentation and its appendices (“Presentation”) is dated does not purport to be in compliance with Ar
Slide 3: Contents
Contents Executive For personal use only Overview 4 Property Portfolio 26 Highlights of HY17 5 Portfolio overview Management Team Sale of $152.3m industrial property 8 – Geographic and sector diversity 27 Top five office properties / property – Key metrics 28 groups by value 9 – Five year performanc
Slide 4: Overview
Overview For personal use only WW16.8% increase in distributable income per security HY16 to HY17 WW4.2% increase in NTA per security over HY17 WWReweighting of property portfolio into office (66%) and NSW (26%) WWGMF takeover complete; assets fully integrated WWSale of $152.3m of industrial propert
Slide 5: Highlights of HY17
Highlights of HY17 For personal use only Total Securityholder Return on NTA per security ($) returns1 (%) equity (%) Returns NTA increased continue to 13.5 due to: 2.72 grow 14.9 – property 2.613 7.5 revaluation gains 13.2% 8.3 4.2% Sector return2 – raising equity increase 30 Jun 16 31 Dec 16 above
Slide 6: Highlights of HY17 (continued)
Highlights of HY17 (continued) For personal use only Property portfolio enhanced Leases extended and portfolio by value and sector occupancy increased to 99% SOLD LEASED 55,126sqm GMF takeover Five industrial completed, adding properties sold for $440.3m $152.3m leasing completed during HY17 and six
Slide 7: Highlights of HY17 (continued)
Highlights of HY17 (continued) For personal use only Increased exposure to NSW and office sector; lowered VIC industrial exposure NSW exposure Office sector Victoria industrial increased to exposure increased to exposure reduced to 26% 66% 13% from 20% from 56% from 20% at 30 June 2016 at 30 June 20
Slide 8: Sale of $152.3m of industrial property
Sale of $152.3m of industrial property For personal use only 1 2 3 4 5 Key metrics of properties sold Market Increase in Passing Sale Yield Yield Original Book value value from Yield (Passing (Market IRR (per Date of purchase at 30 June Date of Sale Settlement purchase to (Passing rent/sale rent/sal
Slide 9: Top five office properties/property groups by value
Top five office properties/ 56% $1,175.2m 7.0yrs 3.6% property groups by value of office portfolio total value of top five properties / property groups weighted average lease expiry weighted average rent review3 For personal use only 1 2 3 4 5 SW1 Complex, 1 Charles St, Parramatta, Sydney Olympic Pa
Slide 10: Top five industrial properties/property groups by value
Top five industrial properties/ 82% $897.9m 5.5yrs 2.6% property groups by value of industrial portfolio total value of top five properties / property weighted average lease expiry weighted average rent review1 For personal use only groups 1 2 3 4 5 Woolworths Distribution Linfox properties, Erskine
Slide 11: Financial Management
Financial Management For personal use only WWDistributable income of 12.5 cps, an increase of 16.8% on HY16 WWNTA per security of $2.72 at 31 December 2016 (up 4.2% since 30 June 2016) WWBalance sheet gearing at 42.5% (within target range of 35% to 45%) WW$1.38 billion drawn debt WWOperating costs r
Slide 12: Financial results
Financial results For personal use only HY17 HY16 Change % Change Statutory accounting profit $'000 113,005 124,7361 (11,731) (9.4) Statutory accounting profit per security ¢ 17.6 21.9 1 (4.3) (19.6) Distributable income $'000 80,105 61,024 19,081 31.3 Distributable income per security ¢ 12.5 10.7 1
Slide 13: Revised accounting treatment of tenant incentives
Revised accounting treatment of tenant incentives1 For personal use only Growthpoint has determined, as part of its Historical Restated HY17 accounting review process, to revise value value Change % Change the accounting treatment of tenant incentives. This follows changed advice that tenant As at 3
Slide 14: Analysis of distributable income per security (DIPS)
Analysis of distributable income per security (DIPS) For personal use only • HY17 DIPS increased by Impact on Impact on 16.8% to 12.5 cents per DIPS from prior DIPS from prior security primarily due to HY17 6 months 2H17 6 months acquisitions in CY16 $726 million Assets not owned for the Assets owne
Slide 15: Movements in net tangible assets
Movements in net tangible assets For personal use only Movements in net tangible assets per stapled security $2.75 $2.70 $2.65 $2.60 $2.55 $2.50 30 Jun 16 Property Swap Equity raising 31 Dec 16 revaluations revaluations & retained earnings $2.611 +4.1¢ +1.2¢ +5.7¢ $2.72 • 4.2% increase in NTA per se
Slide 16: Debt Management: Gearing
Debt Management: Gearing For personal use only Weighted average Balance sheet All-in cost Balance sheet Summary of debt facilities debt term of gearing of of debt of gearing Secured Limit Drawn 3.5yrs 42.5% 4.1% target range 35%-45% bank loans ($’000) ($’000) Maturity Syndicated Facility Change in g
Slide 17: Debt Management: Interest rate hedging and fixed interest
Debt Management: Interest rate hedging and fixed interest For personal use only • The weighted average hedging Weighted average fixed debt as at 31 December 2016 Targeting maturity of interest rate swaps at fixed/hedged Interest Rate Swaps (IRS) 31 December 2016 was 3.5 years Time to Fixed 75%-100%
Slide 18: Operating and capital expenses
Operating and capital expenses For personal use only Operating expenses CY16 CY15 Total operating expenses $’000 11,198 9,672 Average gross asset value $’000 2,881,697 2,363,7641 Expected to remain around Operating expenses to average gross assets % 0.39 0.41 0.4% based on current portfolio Capital
Slide 19: Strategy and performance
Strategy and performance For personal use only –– $592.6 million of acquisitions and disposals completed during HY17 –– 4.9% growth in distributions forecast FY16 to FY17 –– $182 million of new equity capital raised –– Market capitalisation above $2.1 billion, free float over $750 million –– $68 mil
Slide 20: Adding value for Securityholders
Adding HY17: $182m new equity capital 1 and $300m new debt capital value for HY17: Distributions of $68m paid to Securityholders, 10.6cps Raise Capital: raised (HY16: $40.1m and For personal use only $250m). (HY16: $58.1m, 10.2cps). Securityholders Payout ratio of 84.9% (HY16: 95.2%). Raise equity c
Slide 21: Sustainability
Sustainability 5 Murray Rose For personal use only Avenue is the third office building in Australia to have been issued with a 6 star NABERS rating Average NABERS Average NABERS energy rating1 of water rating2 of 4.4 stars 4.9 stars up from 4.2 stars at up from 4.5 stars at 30 June 2016 30 June 2016
Slide 22: Equity Capital
Equity Capital For personal use only Market capitalisation and free float ($m) Growthpoint Location of Growthpoint Securityholders1 Securityholders1 Market capitalisation As at 31 December 2016 As at 31 December 2016 2,103.9 Free float 1,836.8 1,781.1 1,323.3 966.8 796.9 750.9 623.9 633.7 GRT 64.3%
Slide 23: Total Securityholder returns
Total Securityholder returns 1 For personal use only Total Securityholder Total Securityholder return (%) return comparison (%) per annum per annum over 5 years to Total Securityholder 31 December 20161 return for CY16 36.4 13.5% 19.6 18.5 23.6 21.6 11.6 Total Securityholder 13.5 return for HY17 7.5
Slide 24: Distributions and security price
Distributions and security price For personal use only Distributions (¢) Security price ($) per stapled security as at 31 December 21.5 20.5 19.7 19.0 +4.9% 18.3 +4.1% 17.6 +3.7% 3.28 +3.8% growth +4.0% 3.08 +6.5% 2.75 +12.0% 2.47 +11.3% 2.21 +11.7% FY12 FY13 FY14 FY15 FY16 FY17* 2012 2013 2014 2015
Slide 25: Relative income yields and trading premium
Relative income yields and trading premium For personal use only Relative income yields Security price premium (discount) to NTA6 45% GOZ forecast distribution yield1 6.5% 40% A-REIT forecast distribution yield2 5.8% 35% Australian Shares forecast distribution yield3 5.0% 30% 25% Commonwealth Govern
Slide 26: Property Portfolio
Property Portfolio For personal use only –– $2.1 billion office portfolio acquired since 2010, 95% of which is located on Australia’s Eastern Seaboard –– $1.1 billion industrial portfolio continues to perform well with 76% located on Australia’s Eastern Seaboard –– 29.8% increase in NPI HY16 to HY17
Slide 27: Portfolio overview: Geographic and sector diversity
Portfolio overview: Geographic diversity by property value as at 31 December 2016 Geographic and sector diversity1 For personal use only VIC 29% 88% QLD 28% located on NSW 26% Australia’s SA 6% Eastern Seaboard ACT 5% Office properties WA 5% Industrial properties Brisbane, QLD TAS 1% Sector diversit
Slide 28: Portfolio overview: Key metrics
Portfolio overview: Key metrics For personal use only Top ten tenants Annual rent review type (%)* Net property income per State Portfolio lease expiry profile (%) by passing rent as at 31 December 2016 as at 31 December 2016 / Territory for HY17 ($m) per financial year, by income 52 WALE % (yrs) Wo
Slide 29: Portfolio overview: Five year performance summary
Portfolio overview: Five year performance summary For personal use only As at 31 December 2016 2015 2014 2013 2012 Number of properties no. 59 57 51 49 44 Total value $m 3,194.7 2,611.5 2,233.6 1,800.8 1,674.0 Occupancy % 99 97 98 98 98 HY like-for-like value change $m / % of asset value 59.6 / 2.2
Slide 30: Leasing
Leasing For personal use only Leases completed since 30 June 2016 Term Annual rent NLA Car Address Sector Tenant Start date (yrs) increases (%) (sqm) Parks Industrial portfolio 333 Ann Street, Brisbane, QLD Office St Hilliers Property Q2, FY17 5.0 Fixed 3.75% 503 - 15 Green Square Close, Fortitude V
Slide 31: Development and capital expenditure
Development and capital expenditure For personal use only The proposed Growthpoint has an in-house capital projects capital improvement and development team to enhance its existing programme is investments. expected to result in increased Growthpoint has a potential pipeline of approximately rental
Slide 32: Market Outlook and Conclusion
For personal use only Market Outlook and Conclusion 10-12 Mort Street, Canberra, ACT
Slide 33: State of key office markets
State of key office markets 3% of 14% of Growthpoint Brisbane - CBD Brisbane - Fringe Growthpoint Portfolio Portfolio Vacancy 15.3% Vacancy 12.6% Prime Secondary Prime Secondary For personal use only R $700 gross $555 gross R $545 gross $440 gross R Average rent per sqm per annum I 37% 40% I 36% 38%
Slide 34: State of key industrial markets
State of key industrial markets For personal use only R Average rent per sqm per annum I Indicative incentives Y Average core market yield 8% of Brisbane Growthpoint Rents Rents Portfolio decreasing increasing Vacancy 8.9% / incentives / incentives increasing Stable decreasing Prime Secondary R $104
Slide 35: Focus for the year ahead
Focus for the year ahead For personal use only Property portfolio Financial management Strategy and performance • Seek further office investment • Consider reducing gearing towards middle • Consider M&A opportunities opportunities in Melbourne and Sydney; of target gearing range of 35%-45% • Seek to
Slide 36: Appendices
For personal use only Appendices 255 London Circuit, Canberra, ACT
Slide 37: Appendix 1: Growthpoint Properties Limited - South Africa (GRT)
Appendix 1: Growthpoint Properties Limited - South Africa (GRT) For personal use only Growthpoint Properties Limited of South Africa (“GRT”) owns 64.3% Key Facts 30 June 2016 of the securities of Growthpoint (at 31 December 2016) and is its major Listing GRT is listed on the Securityholder. Johannes
Slide 38: Appendix 2: Sydney Olympic Park, NSW
Appendix 2: Sydney Olympic Park, NSW For personal use only Sydney Olympic Park Growthpoint’s Sydney Olympic highlights Park assets, key statistics (as at 31 December 2016) • Located 16 kilometres west of Sydney’s CBD, Sydney Olympic Park was —— $242.9 million total property value redeveloped for the
Slide 39: Appendix 3: Securityholder calendar
Appendix 3: Securityholder calendar* For personal use only 21 February 21 August • Results for the half year ended 31 December • Results for the year ended 30 June 2017 2016 announced to ASX announced to ASX 28 February 31 August • Distribution paid for the half year ended • Distribution paid for th
Slide 40: Appendix 4: Lease incentives
Appendix 4: Lease incentives For personal use only Lease incentives for leasing completed in HY17 averaged 24% (26% office and 9% industrial). This includes fit-out, rent free, rental abatement and cash payments. Financial impact of incentives and leasing costs1 The impact of tenant incentives on Gr
Slide 41: Appendix 5: Reconciliation from statutory profit to distributable income
Appendix 5: Reconciliation from statutory profit to distributable income For personal use only HY17 HY16 Change Change $’000 $’000 $’000 % Profit after tax 113,005 124,7361 (11,731) (9.4) Less non-distributable items: - Straight line adjustment to property revenue 1,072 (2,140) 3,212 - Net changes i
Slide 42: Appendix 6: Components of distributable income
Appendix 6: Components of distributable income For personal use only HY17 HY16 Change Change $’000 $’000 $’000 % Property income 131,517 100,422 31,095 31.0 Property expenses (18,041) (13,029) (5,012) 38.5 Net property income 113,476 87,393 26,083 29.8 Interest income 252 315 (63) (20.0) Total opera
Slide 43: Appendix 7: Financial position
Appendix 7: Financial position For personal use only as at 31 Dec 2016 as at 30 Jun 20161 $’000 $’000 Assets Cash and cash equivalents 37,795 70,661 Investment properties 3,184,420 2,651,145 Other assets 16,781 157,799 Total assets 3,184,420 2,879,605 Liabilities Borrowings 1,377,247 1,242,226 Distr
Slide 44: Appendix 8: Board of Directors
Appendix 8: Board of Directors For personal use only 1 2 1 Geoffrey Tomlinson (69) 5 Grant Jackson (50) Independent Chairman (since 1 July 2014) Independent Director (since 5 August 2009) and Director (since 1 September 2013) Assoc. Dip. Valuations, FAPI BEC Over 30 years’ experience in the property
Slide 45: Glossary
Glossary For personal use only 2HY17 the six months ending 30 June 2017 Growthpoint SA Growthpoint Properties Limited of South Africa (Growthpoint’s A-REIT Australian Real Estate Investment Trust or GRT majority Securityholder) which trades on the JSE under the code “GRT” ASX Australian Securities E
Slide 46: Contact details
Contact details: For personal use only Retail Investors: Computershare Investor Services Pty Limited, GPO Box 2975, Melbourne VIC 3001 Australia Phone (within Australia): 1300 850 505 Phone (outside Australia): +61(0)3 9415 4000 Fax: +61(0)3 9473 2500 Email: webqueries@computershare.com.au Instituti
Growthpoint Properties Australia — H1 FY2017 Earnings Presentation on 6ix