Slide 1: Capital Raising Presentation
For personal use only Capital Raising Presentation 23 October 2008 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 2: Important Notice
IMPORTANT NOTICE This Presentation is issued by GPT RE Limited as responsible entity for General Property Trust and GPT Management Holdings Limited (together, the GPT Group). For personal use only This Presentation and its contents have been distributed in confidence and may not be reproduced or dis
Slide 3: Agenda
GPT - Capital Raising Presentation For personal use only Executive Summary GPT - High Quality Australian Portfolio Financial Analysis Capital Management Offer Details Appendices: A. GIC Real Estate Ownership B. Sensitivity Analysis C. Australian Investment Assets as at 30 June 2008 3 NOT FOR DISTRIB
Slide 4: Executive Summary
For personal use only Executive Summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 5: Executive Summary
Executive Summary For personal use only GPT proposes to undertake a capital raising of a minimum of $1.6 billion to significantly reduce gearing and increase covenant headroom GPT has negotiated an increase in its look through gearing covenant from 50% to 55% with its European syndicated bank facili
Slide 6: Rationale: Why Are We Here?
Rationale: Why Are We Here? For personal use only GPT needs to de-lever in the current environment The AUD has devalued dramatically since 30 June 2008 – 16% fall in the AUD / Euro rate – 27% fall in the AUD / USD rate This has materially impacted GPT’s headroom in relation to its covenant levels, b
Slide 7: Rationale for the Raising
Rationale for the Raising For personal use only GPT controls a high quality, diversified portfolio of institutional class property assets in Australia The equity market is currently placing very significant focus on debt and refinancing risk The capital raising is intended to address this concern Ba
Slide 8: Offer Overview
Offer Overview For personal use only GPT currently has 2.2 billion securities on issue The Offer comprises – A 1 for 1 non-renounceable entitlement offer to all Securityholders, with a bookbuild range of $0.60–$0.75 (35%–48% discount to closing price at 21 October 2008) – A placement to GIC RE of $2
Slide 9: Enhanced Relationship with GIC RE
Enhanced Relationship with GIC RE For personal use only GIC RE is recognised as one of the world’s pre-eminent global real estate investors with a long term value focus GPT has a longstanding relationship with GIC RE – GIC RE is currently an existing investor in GPT’s ordinary securities – GIC RE cu
Slide 10: Board and Management Transition
Board and Management Transition For personal use only Nic Lyons will discontinue as Managing Director and Chief Executive Officer of GPT effective immediately Michael O’Brien to act as CEO in a stand-in capacity whilst a search is completed to identify a suitable replacement Peter Joseph (Chairman)
Slide 11: Strategy Update
Strategy Update For personal use only At the half year results, GPT announced an intention to exit US Seniors and stabilise the European Funds Management business No intention to commit further investment capital offshore Focus will return to core Australian portfolio Babcock & Brown European Funds
Slide 12: Distribution Policy
Distribution Policy For personal use only GPT proposes to pay a distribution equal to 90 – 100% of underlying realised earnings post financing costs and exchangeable security distribution, excluding development profits and income from the Babcock & Brown Joint Venture Retained earnings will be used
Slide 13: GPT - High Quality Australian Portfolio
For personal use only GPT - High Quality Australian Portfolio NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 14: Overview of GPT
Overview of GPT For personal use only Hotel/ tourism The majority of our assets remain 6% core, top quality Australian assets Overseas/ non-core 21% There has been significant focus by the market on GPT’s overseas exposures - The JV, US Seniors and European Core warehoused assets will be exited over
Slide 15: GPT's Core Australian Investment Portfolio
GPT’s Core Australian Investment Portfolio High Quality Assets For personal use only Australian core investment assets represent 73% of the Group’s investment portfolio by value, including its interests in the wholesale office and shopping centre funds (managed by GPT) The portfolio is diversified b
Slide 16: Retail Assets
Retail Assets 56% of the Core Australian Portfolio For personal use only GPT’s Australian retail portfolio comprises 11 shopping centre assets and 7 Homemaker centres in addition to GWSCF One of the largest portfolios in Australia, including regional, sub-regional and community centres Includes 10 o
Slide 17: Retail Assets: Consistent Sales and Income Growth
Retail Assets Consistent Sales and Income Growth For personal use only GPT’s retail assets have produced consistent growth in comparable sales and income over time The portfolio has consistently maintained occupancy above 99% The portfolio’s specialty tenants generally have annual reviews fixed at 4
Slide 18: Office Assets
Office Assets 35% of the Core Australian Portfolio For personal use only One of the largest and highest quality office portfolios in Australia, comprising assets held on balance sheet and through investment in the GPT Wholesale Office Fund (GWOF) 98% of the portfolio by value is classified as Premiu
Slide 19: Office Assets: Long Lease Tail Secures Income
Office Assets Long Lease Tail Secures Income For personal use only A weighted average remaining lease term of 5.6 years, providing a secure, long term income stream At June 2008, the portfolio was approximately 6.3% under-rented1 A number of in-place leases have stepped rental increases averaging 4-
Slide 20: Industrial/Business Park Portfolio
Industrial/Business Park Portfolio 9% of the Core Australian Portfolio For personal use only This portfolio consists of quality investment assets and over 530,000m2 of land for future development Long weighted average lease term of 7.3 years providing a secure income stream At June 2008, the portfol
Slide 21: Financial Analysis
For personal use only Financial Analysis NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 22: Financial Analysis Scenarios
Financial Analysis Scenarios For personal use only The following 3 slides present hypothetical NTA and gearing scenarios assuming a range of potential asset value changes The slides are for illustrative purposes only GPT board and management have no verifiable basis on which to amend asset values or
Slide 23: NTA Scenarios
Financial Analysis NTA Scenarios For personal use only Assuming Jumbo offer clears at $0.60 $4.00 Premium/ $3.50 (discount) to NTA4 Westfield 23.7% $3.00 Commonwealth Office (10.2%) CFS Retail (0.1%) $2.50 $2.00 $3.68 $1.56 $1.37 $1.50 $1.21 71% $1.07 62% $1.00 $2.09 56% 50% 44% $0.50 $0.60 $0.60 $0
Slide 24: Balance Sheet Gearing Scenarios
Financial Analysis Balance Sheet Gearing Scenarios For personal use only 50% 45% 43% LVR covenant = 40% 40% 40% 37% 35% 14% 35% 11% 8% 6% 30% 25% 20% 37% 15% 29% 29% 29% 29% 29% 10% 5% 0% 30-Jun-08 Pro forma¹ BNB JV exited for zero … and 50bps cap rate … and 100bps cap rate … and 150bps cap rate 1 v
Slide 25: Look Through Gearing Scenarios
Financial Analysis Look Through Gearing Scenarios For personal use only 70% 65% 60% LVR covenant = 55% 55% 47% 50% 44% 45% 42% 8% 5% 40% 3% 35% 30% 25% 47% 20% 42% 39% 39% 39% 39% 15% 10% 5% 0% 30-Jun-08 Pro forma¹ BNB JV exited for zero … and 50bps cap rate … and 100bps cap rate … and 150bps cap ra
Slide 26: Profit and Loss
Financial Analysis Profit and Loss For personal use only Year ending 31 Dec 08 Year ending 31 Dec 09 Forecast $m Forecast $m Retail, office, industrial and funds management Australia1 536 543 Hotel/tourism 57 60 Financing costs (248) (220) Corporate costs2 (16) (33) Domestic realised operating incom
Slide 27: 2009 Distribution Yield
Financial Analysis 2009 Distribution Yield For personal use only On the basis of Australian distributable earnings only - JV offers upside potential 14% GPT distribution yield at $0.60 issue price 12% 12.1% 10% 8% 6% 6.3% 6.1% 5.4% 4% 2% 0% Distribution yield¹ Commonwealth Office Westfield CFS Retai
Slide 28: Balance Sheet
Financial Analysis Balance Sheet1 For personal use only 30 June 2008 30 June 2008 $ million Actual Adjustments Pro forma post offer ASSETS Cash 426 (375) 51 Real estate related assets 13,087 621 13,708 Other assets 299 (44) 255 Intangible assets 58 – 58 Total assets 13,870 202 14,072 LIABILITIES Cur
Slide 29: Capital Management
For personal use only Capital Management NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 30: Indicative Use of Proceeds
Indicative Use of Proceeds For personal use only Proceeds will be used to retire debt Outstanding at 30 Facility Currency June 2008 (A$m)1 Maturity MTN AUD 100 Aug-08 MTN AUD 700 Mar-09 Hamburg Bridge facility USD 94 Dec-08 Bank Loan AUD 200 Jun-11 Multi-option syndicate EUR 1,519 Oct-10 Multi-optio
Slide 31: Liquidity Position Post Capital Raising
Liquidity Position Post Capital Raising For personal use only From the capital raising alone, GPT could cover all debt maturing prior to October 2010 On this basis, the debt maturity profile post the capital raising would be as follows Weighted average debt expiry matched to capital proceeds1,2 2,50
Slide 32: Offer Details
For personal use only Offer Details NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 33: Key Dates
Key Dates For personal use only Institutional offer opens 23 October 2008 Institutional offer closes 12.30pm (Sydney time) 24 October 2008 Prospectus lodged with ASIC and ASX 24 October 2008 Institutional allocations advised 24 October 2008 Record date to determine right to participate in the entitl
Slide 34: Risks
Risks For personal use only Some of the key risks that may have an adverse impact on The GPT Group include: Breach of debt covenants due to falling asset values, further depreciation in the Australian dollar, failure to complete non-core asset sales or other unforeseen circumstances Inability to rai
Slide 35: Appendix A: GIC Real Estate Ownership
For personal use only Appendix A GIC Real Estate Ownership NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 36: GIC RE Ownership
GIC RE Ownership For personal use only Minimum Maximum Securities % Securities % (millions) (millions) Existing pre entitlement offer 41.2 41.2 Take up under entitlement offer1 41.2 41.2 Take up under sub-underwriting of retail 0.0 503.8 entitlement offer Top up securities2 250.0 0.0 Total security
Slide 37: Exchangeable Security
Exchangeable Security For personal use only Summary terms Issuer GPT RE Limited in its capacity as responsible entity of GPT Holder An affiliate of GIC Real Estate Pte Ltd Description Perpetual, unsecured, subordinated securities exchangeable into ordinary stapled securities of GPT Issue size $250 m
Slide 38: Appendix B: Sensitivity Analysis
For personal use only Appendix B Sensitivity Analysis NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 39: General Sensitivity Analysis
General Sensitivity Analysis For personal use only Sensitivity table—realised operating income 20091,2 Change in interest rates by 1.0% +/- 0.4¢ Change in $/US$ and $/EUR by 5% +/- 0.2¢ Investment property income falls by 10% - 1.5¢ Issue of an additional 250 million securities at $0.60 - 0.1¢ Notes
Slide 40: Sensitivity Analysis: Balance Sheet Gearing Scenarios
Sensitivity Analysis Balance Sheet Gearing Scenarios For personal use only 50% 45% LVR covenant = 40% 40% 37% 34% 35% 31% 8% 5% 30% 3% 25% 20% 37% 15% 29% 29% 29% 29% 10% 5% 0% 30-Jun-08 1 Pro forma¹ 50bps cap rate expansion² 100bps cap rate expansion² 150bps cap rate expansion² Notes: 1. Gearing as
Slide 41: Sensitivity Analysis: Look Through Gearing Scenarios
Sensitivity Analysis Look Through Gearing Scenarios For personal use only 70% 65% 60% LVR covenant = 55% 55% 50% 47% 50% 44% 45% 8% 6% 3% 40% 35% 30% 25% 47% 20% 42% 42% 42% 42% 15% 10% 5% 0% 30-Jun-08 Pro forma¹ 50bps cap rate expansion² 100bps cap rate expansion² 150bps cap rate expansion² Notes:
Slide 42: Appendix C: Australian Investment Assets as at June 2008
For personal use only Appendix C Australian Investment Assets as at 30 June 2008 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 43: Australian Investment Assets: GPT Retail
Australian Investment Assets GPT Retail1 For personal use only GPT Centre Current Book ownership GLA sales/m2 Latest cap rate value Property Description (%) (m2) ($) valuation (%) ($m) Casuarina Square, NT Major subregional 100% 53,000 7,075 Mar 2006 6.25% 419 Charlestown Square, NSW Regional 100% 5
Slide 44: Australian Investment Assets: GPT Retail - Homemaker
Australian Investment Assets GPT Retail - Homemaker1 For personal use only GPT Current Book ownership GLA Latest cap rate value Property Description (%) (m2) valuation (%) ($m) Homemaker City, Aspley, QLD Homemaker 100% 24,600 Mar 2008 7.25% 70 Homemaker City, Bankstown, Homemaker 100% 18,600 Sept 2
Slide 45: Australian Investment Assets: GPT Office
Australian Investment Assets GPT Office1 For personal use only GPT Current Book Premium/A ownership NLA Occupancy Latest cap rate value Property grade (%) (m2) (%) valuation (%) ($m) Australia Square, Sydney, NSW A grade 50% 51,134 98.7% Mar 2008 6.00% 313 Citigroup Centre, Sydney, NSW Premium 50% 7
Slide 46: Australian Investment Assets: GPT Industrial
Australian Investment Assets GPT Industrial1 For personal use only GPT Current Book ownership GLA Occupancy Latest cap rate value Property (%) (m2) (%) valuation (%) ($m) 18-24 Abbott Road, Seven 100% 19,400 100% n/a 8.25% 15.5 Hills, NSW 15 Berry St, Granville, NSW 100% 10,000 100% Sept 2006 7.25%
Slide 47: Australian Investment Assets: GPT Industrial
Australian Investment Assets GPT Industrial1 For personal use only GPT Current Book Property ownership GLA Occupancy Latest cap rate value (%) (m2) (%) valuation (%) ($m) 372-374 Victoria Street, 100% 20,500 100% n/a 7.50% 21.5 Wetherill Park, NSW Citi-West Industrial Estate, 100% 99,300 100% Mar 20