Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — HY2018 Earnings Presentation
40 slides from Growthpoint Properties Australia's earnings presentation, Feb 20, 2018
Slide 1: 2018 Half Year Results Presentation
For personal use only 2018 Half Year Results Presentation For the six months ended 31 December 2017 20 February 2018 Growthpoint Properties Australia Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409 www.growthpoint.com.au
Slide 2: Agenda
Agenda Executive For personal use only Management Team 1. HY18 Highlights 2. Market Conditions 3. Financial Management Timothy Collyer Michael Green Managing Director Head of Property 4. Property Portfolio 5. Strategy and FY18 Objectives Aaron Hockly Dion Andrews Chief Operating Officer Chief Financ
Slide 3: HY18 Highlights and Market Conditions
For personal use only HY18 Highlights and Market Conditions 1 Charles Street, Parramatta, NSW
Slide 4: Highlights for HY18
Highlights for HY18 For personal use only Securityholder returns Property • 12.5 cents in FFO per security • $3.3 billion property portfolio • 11.0 cents in distributions per security • Like-for-like valuation uplift of $124.6 million, or • 21.3% CY17 return on equity (CY17: 12.7%) 4% over HY18 • 17
Slide 5: Highlights for HY18 (continued)
Highlights for HY18 (continued) For personal use only Guidance New Leases upgraded during • Westpac: 7 Laffer period to: Drive, Bedford Park, SA – 6,343 sqm office At least lease, 7 year term, annual rent increases of 3.00% 24.3cps FY18 FFO • Toll: 10 Butler Perth industrial IDR interest Woolworths,
Slide 6: Domestic economy and property market remain supportive
Domestic economy and property market remain supportive For personal use only Unemployment (%) NAB Business Survey (net balance) Population growth (%) 30 2.3 6.4 20 6.2 1.6 1.6 1.7 1.6 6.0 10 Forecast 0 5.8 5.6 -10 5.4 -20 5.2 -30 Business Confidence Business Conditions NSW VIC QLD ACT Australia 5.0
Slide 7: Financial Management
For personal use only Financial Management 2 and 10 Hugh Edwards Drive, Perth Airport, WA
Slide 8: HY18 Highlights
HY18 Highlights For personal use only Statutory profit Funds From Operations Distributions Payout ratio to FFO $207.3m 12.5cps 11.0cps 88.3% 83% increase on prior corresponding period NTA per share Gearing reduced to Average cost of debt increased 6.9% to $3.08 35.8% 1 4.4% From 38.5%1 at 31 Decembe
Slide 9: Areas of interest: Gearing further reduced over HY18
Areas of interest: Gearing further reduced over HY18 For personal use only • Proceeds from above- book value sale of 522-550 Key items influencing gearing (%) Wellington Road, Mulgrave used to pay down debt at 41% end of CY17 40.7%1 • Book value of property 40% 270bps portfolio increased reduction s
Slide 10: Areas of interest: Movements in NTA
Areas of interest: Movements in NTA For personal use only Uplift to NTA driven by: Movements in NTA per stapled security ($) • 17 bps fall in weighted average capitalisation rate 3.10 to 6.36% +$0.04 +$0.01 $3.08 3.05 +$0.16 • Sale of assets at significant -$0.01 premium to book value 3.00 • Improve
Slide 11: Areas of interest: Upcoming debt maturities
Areas of interest: Upcoming debt maturities For personal use only • $200 million of bank debt Debt maturity profile ($m) maturing in FY19, and $315 million maturing in FY20 Bank debt Institutional term loan USPP Undrawn bank debt • Considering further debt capital markets issuance 400 • Well diversi
Slide 12: Summary
Summary For personal use only nnContinued growth in distributions to Securityholders - Targeting 3-4% growth per annum nnBalance sheet flexibility - gearing 35.8%1 nnConsider further debt capital markets issuance nnWell placed to support business in future transactions 1. Gearing calculation changed
Slide 13: Property Portfolio, Strategy and FY18 Objectives
For personal use only Property Portfolio, Strategy and FY18 Objectives 120-132 Atlantic Drive, Keysborough, VIC
Slide 14: Benefits of recent portfolio repositioning
Benefits of recent portfolio repositioning For personal use only Divestments since December 2015 Acquisitions since December 2015 Office -$106.3m QLD ACT QLD NSW VIC +$727.3m Industrial -$258.5m VIC +$46.0m 31 Dec 15 31 Dec 17 NSW exposure 21% 27% QLD WA Office exposure 53% 66% 0 FFO DPS NTA Gearing
Slide 15: Well diversified portfolio
Well diversified portfolio For personal use only Sector diversity (%) Geographic diversity (%) Tenant type (%) by property value as at 31 December 2017 by property value as at 31 December 2017 by income as at 31 December 2017 34% 5 1 6 19 Industrial 6 29 66% Office 26 57 24 27 Listed company VIC NSW
Slide 16: High quality tenants and low near-term expiries
High quality tenants and low near-term expiries For personal use only Top ten tenants Portfolio lease expiry profile (%) Annual rent review type (%)2 by passing rent as at 31 December 2017 per financial year, by income as at 31 December 2017 % WALE (yrs) 48 Woolworths 15 5.0 WARR 7 1 NSW Police 9 6.
Slide 17: Strategy and FY18 objectives
Strategy and FY18 objectives For personal use only Primary objective: Increase distributions for Securityholders –– Achieve upgraded FY18 FFO and distribution guidance: Returns Disciplined Financial Growth –– FFO: at least 24.3 cps –– Distributions: 22.2 cps –– Continue to evaluate investment opport
Slide 18: Summary
Summary For personal use only nnDomestic economic conditions remain favourable for commercial property nnContinue to evaluate opportunities to sell assets at premium to book values based on change in use nnContinue reviewing listed market investment opportunities which may offer superior returns tha
Slide 19: Appendices
For personal use only Appendices 3 Murray Rose Avenue, Sydney Olympic Park, NSW
Slide 20: State of key office markets
Appendix 1: 4% of 15% of Growthpoint Growthpoint Portfolio Brisbane - CBD Brisbane - Fringe Portfolio state of key office markets Vacancy 15.0% Vacancy 17.1% For personal use only Prime Secondary Prime Secondary R $714 gross $559 gross R $543 gross $433 gross R Average face rent per sqm per annum I
Slide 21: State of key industrial markets
Appendix 2: state of key industrial markets For personal use only R Average face rent per sqm per annum I Indicative incentives Y Average core market yield 7% of Brisbane Growthpoint Rents Rents Portfolio decreasing increasing 479,388 sqm* / incentives / incentives decreasing Prime Secondary increas
Slide 22: Geographic diversity
Appendix 3: Geographic diversity1 26% Queensland $858.3m For personal use only – Office $617.1m – Industrial $241.2m Office properties Industrial properties 87% Properties 27% New South Wales located on $882.3m Eastern – Office $692.8m Seaboard – Industrial $189.5m 5% Australian Capital Territory $1
Slide 23: Summary Financials
Appendix 4: Summary Financials For personal use only HY18 HY17 Change % Change Net property income and distributions from securities $'000 108,823 113,476 (4,653) (4.1%) Statutory accounting profit $'000 207,291 113,005 94,286 83.4% Statutory accounting profit per security ¢ 31.3 17.6 13.7 77.8% Fun
Slide 24: Reconciliation from statutory profit to Funds From Operations (FFO)
Appendix 5: Reconciliation from statutory profit to Funds From Operations (FFO) For personal use only HY18 HY17 Change Change $’000 $’000 $’000 % Profit after tax 207,291 113,005 94,286 83.4% Less: - Straight line adjustment to property revenue (2,903) 1,072 (3,975) - Net changes in fair value of in
Slide 25: Financial position
Appendix 6: Financial position For personal use only as at 31 December 2017 as at 30 June 2017 $’000 $’000 Assets Cash and cash equivalents 31,521 31,459 Investment properties 3,285,000 3,180,275 Other assets 83,432 116,638 Total assets 3,399,953 3,328,372 Liabilities Borrowings 1,237,186 1,299,380
Slide 26: Lease incentives
Appendix 7: Lease incentives For personal use only Lease incentives for leasing completed in HY18 averaged 25% (26% office and 23% industrial). This includes fit-out, rent free, rental abatement and cash payments. Average lease incentives (%) Financial impact of lease incentives and leasing costs¹ T
Slide 27: Operating and capital expenses
Appendix 8: Operating and capital expenses For personal use only Operating expenses CY17 CY16 Total operating expenses $'000 13,066 11,198 Average gross assets value $'000 3,295,858 2,915,574 Expected to remain around Operating expenses to average gross assets % 0.40 0.38 0.40% based on current port
Slide 28: Target fixed/hedged debt 65% to 100%
Appendix 9: Target fixed/hedged debt 65% to 100% For personal use only Weighted average fixed debt Weighted average fixed debt (term) Time Fixed Face value 6.0yrs Maturity date to maturity rate of Swap Interest Rate Swaps (IRS) Jun-2020 2.5yrs 2.36% $25m (30 June 2017: 6.4 years) Jun-2020 2.5yrs 2.3
Slide 29: Portfolio overview – Five year performance summary
Appendix 10: Portfolio overview – Five year performance summary For personal use only As at 31 December 2017 2016 2015 2014 2013 Number of properties no. 56 59 57 51 49 Total value $m 3,285.0 3,194.7 2,611.5 2,233.6 1,800.8 Occupancy % 98 99 97 98 98 HY like-for-like value change $m / % of asset val
Slide 30: Leasing
Appendix 11: Leasing At 31 Dec 2017 Leases completed in HY18 For personal use only Term Annual rent NLA Car Address Sector Tenant Start date (yrs) increases (%) (sqm) Parks Industrial portfolio A1, 32 Cordelia Street South Brisbane QLD Office Jacobs Group (Australia) Q4, FY17 1.0 n/a 1,311 11 6 Park
Slide 31: Top five office properties/property groups by value
Appendix 12: Top five office properties/property groups by value For personal use only 59% of office portfolio $1,270.8m total value of top five properties / property groups 6.4yrs SW1 Complex, 1 Charles St, Sydney Olympic Park, 75 Dorcas St, Bldgs 1, 2, & 3, 572-576 weighted average South Brisbane,
Slide 32: Top five industrial properties/property groups by value
Appendix 13: Top five industrial properties/property groups by value For personal use only 79% of industrial portfolio $893.6m total value of top five properties / property groups 5.2yrs Woolworths Linfox properties, Melbourne Airport Knoxfield industrial Perth Airport industrial weighted average Di
Slide 33: Equity capital overview
Appendix 14: Equity capital overview For personal use only Market capitalisation and free float ($m) Location of Growthpoint Securityholders1 (%) Growthpoint Securityholders1 (%) as at 31 December 2017 as at 31 December 2017 Market Capitalisation Free float 2,256.5 12 8.0 0.7 2,076.6 1,781.1 1,836.8
Slide 34: Growthpoint Properties Limited - South Africa (GRT)
Appendix 15: Growthpoint Properties Limited - South Africa (GRT) For personal use only Growthpoint Properties Limited of South Africa (“GRT”) owns 65.1% of Key Facts (as at 31 December 2017)1 the securities of Growthpoint (at 31 December 2017) and is its major Securityholder. Listing GRT is listed o
Slide 35: Above-sector historical returns and strong forecast distribution yield
Appendix 16: Above-sector historical returns and strong forecast distribution yield For personal use only Total Securityholder return comparison Relative income yields (%) over 1, 3 and 5 years (%)1 17.0 14.5 7.1 13.4 6.0 11.3 10.8 4.2 6.4 2.9 2.3 1.9 1 year 3 years 5 years GOZ A-REIT Australian Com
Slide 36: Board of Directors
Appendix 17: Board of Directors For personal use only Geoffrey Tomlinson (70) Timothy Collyer (49) Maxine Brenner (55) Estienne de Klerk (48) Independent Chairman (since Managing Director (since 12 Independent Director (since Director (since 5 August 2009) 1 July 2014) and Director July 2010) 19 Mar
Slide 37: 2018 Securityholder calendar
Appendix 18: 2018 Securityholder calendar* For personal use only 20 February 2018 31 August 2018 • Results for the half year ended 31 December • Distribution paid for the half year ending 30 June 2017 announced to ASX 2018 • FY18 Annual Report sent to Securityholders 28 February 2018 • Distribution
Slide 38: Glossary
Glossary For personal use only A-REIT Australian Real Estate Investment Trust FY13, FY14, FY15, FY16 and FY17 the 12 months ended NTA net tangible assets on 30 June in the year listed i.e. “FY17” means the 12 months ASX Australian Securities Exchange m million ended 30 June 2017 b billion MER manage
Slide 39: 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 40: 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
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