Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — H1 2020 Earnings Presentation
46 slides from Growthpoint Properties Australia's earnings presentation, Feb 25, 2020
Slide 1: 1H20 results
Growthpoint Properties Australia Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL316409 www.growthpoint.com.au Space to thrive. 1H20 results. 25 February 2020
Slide 2: Agenda and executive management team
Executive Agenda management team 1. Overview 2. Property portfolio update 3. Financial results 4. Outlook Timothy Collyer Michael Green Managing Director Chief Investment Officer 5. Supplementary information Dion Andrews Jacquee Jovanovski Chief Financial Officer Chief Operating Officer 2 Growthpoin
Slide 3: Overview
CB1, 22 Cordelia Street, South Brisbane, QLD Overview. Timothy Collyer Managing Director
Slide 4: 1H20 highlights
3 Murray Rose Avenue, Sydney Olympic Park, NSW 1H20 highlights 6.4yrs 11.8cps $4.2b WALE Distribution Property portfolio value 30 June 2019: 5.0yrs, +1.4yrs 1H19: 11.4cps, +3.5% 30 June 2019: $4.0b, +5.0% Strong valuation uplift across portfolio Leased 111,000 sqm, representing 15% of total portfoli
Slide 5: Strong track record of delivering value for Securityholders
Strong track record of delivering value for Securityholders Total Securityholder return1 Return on equity to 31 December 2019 to 31 December 2019 19.4% 18.0% 18.0% 17.4% 17.2% 14.9% 15.5% 15.3% 13.7% 10.9% 11.5% 9.1% 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years Growthpoint S&P/ASX
Slide 6: Property portfolio update
333 Ann Street, Brisbane, QLD Property portfolio update. Michael Green Chief Investment Officer
Slide 7: Metro office market update
Metro office market update Accessibility and desirability of metro markets continued to be 29% 28% 32% of office of office of office enhanced by new portfolio NSW portfolio VIC portfolio QLD infrastructure and Vacancy rates remained low and Vacancy rates remained Strong positive net population growt
Slide 8: Industrial market update
Industrial market update Transformation of the industrial sector 17% of 31% of 20% of continued as industrial portfolio NSW industrial portfolio VIC industrial portfolio QLD demand Land availability in core markets Land values continued to grow, Face rents within the prime strengthens is limited in
Slide 9: Property portfolio highlights
Property portfolio highlights 98% 5.7% 6.4 years 3.3% 1 Significant valuation Portfolio occupancy Weighted average WALE WARR 30 June 2019: 98% cap rate 30 June 2019: 5.0 years, 30 June 2019: 3.3%2 uplift, driven by 30 June 2019: 5.9%, +1.4 years -20bps leasing success and development Sector diversit
Slide 10: Leasing update
Leasing update Leases completed Leases completed Continued focus on 111,000sqm 15% 95% tenant satisfaction, Total volume Proportion of portfolio income Tenant retention 1H19: 5,198sqm 1H19: 85% leading to higher levels 1H19: 1% of retention Woolworths 5.7% Samsung 2.5% 27 new leases/renewals signed,
Slide 11: Signed longest lease agreement to date with single largest tenant
Case study: creating value Signed longest lease agreement to date with single largest tenant Curtis Cheng Centre, 1 Charles Street, Parramatta, NSW IRR Tenant NSW Police Force Lettable area 32,356sqm, 444 car parks 16.5% 2014 2015 2016 2017 2018 2019 2020 per annum Lease term 25 years Annual rent $2
Slide 12: Sustainability
100 Skyring Terrace, Newstead, QLD Sustainability Investing in initiatives across 4.9 our business to deliver better Portfolio NABERS outcomes to all stakeholders Energy rating 100 Skyring Terrace, Newstead, QLD 30 June 2019: 4.8 stars Achieved highest NABERS Energy rating (6-star) at 100 Skyring Te
Slide 13: Development projects expected to deliver attractive returns
Botanicca 3, Expected Richmond, VIC Development completion Development projects 3Q20 expected to deliver FY19 attractive returns Expected yield on development FY20 Woolworths cost compared to market yield distribution centre, Gepps Cross, SA 7.5% - 8.5% 6.75% FY21 5.75% vacant1 1Q21 5.25% 5.25%1 ful
Slide 14: Botanicca 3 practical completion achieved
Development $149m Value upon completion1 Botanicca 3 practical completion achieved $113m ahead of schedule Building exterior and solar installation complete Development cost2 $36m Perforated sunshades A-grade office building includes hotel style end-of-trip facilities and dedicated fitness studio De
Slide 15: Opportunity to significantly increase value at Broadmeadows
Development 120,000sqm Potential lettable area Opportunity to significantly increase 250,000sqm Total site size value at Broadmeadows Progressed master plan for $150m Broadmeadows redevelopment Estimated end value1 Expect to complete and lease new warehouses progressively from FY22 Lodged town plann
Slide 16: Financial results
75 Dorcas Street, South Melbourne, VIC Financial results. Dion Andrews Chief Financial Officer
Slide 17: Strong 1H20 results
Financial summary Strong 1H20 results Increased contribution from recently-acquired assets and annual rent increases more than offset lost income from sold properties. 1H20 P&L analysis Significant saving due to lower Components of FFO 1H20 1H19 borrowings and reduced cost of NPI $m 121.4 111.3 9.2%
Slide 18: Maintained strong balance sheet and healthy leverage ratios
Capital management Gearing movement for the six months ended 31 December 2019 Maintained strong balance sheet and 0.7% 0.7% 2.1% healthy leverage ratios 34.3% -4.2% Raised $173.6 million of -1.2% 31.4% -1.0% equity in 1H20 -291bps Gearing reduced by Reduction since 30 June 2019 291bps to 31.4%, belo
Slide 19: Reduced borrowing costs and extended debt facilities
Capital management Reduced 31.4% 3.7% 4.7 yrs 69% Gearing Weighted average Weighted average Fixed debt borrowing costs interest rate debt maturity and extended debt facilities Debt maturity profile as at 31 December 2019, $m Refinanced $250 million of debt during 1H20 500 450 Reduced weighted 400 14
Slide 20: Outlook
15 Green Square Close, Fortitude Valley, QLD Outlook. Timothy Collyer Managing Director
Slide 21: Well positioned in attractive markets to deliver sustainable growth
Outlook Well positioned in Market outlook Group outlook Australian economic growth remains Fundamentals of Growthpoint’s attractive markets to below trend property portfolio remain strong deliver sustainable Low business and consumer confidence may lead to an easing of Development pipeline expected
Slide 22: Supplementary information
Tarlton Crescent, Perth Airport, WA Supplementary information. 1. Detailed financial information. 2. Property portfolio. 3. Market outlook. 4. Growthpoint Properties South Africa. 5. Glossary.
Slide 23: Detailed financial information
Detailed financial information.
Slide 24: Summary financials
Summary financials 1H20 1H19 Change % Change NPI $m 121.4 111.3 10.1 9.1 Like-for-like NPI $m 110.0 107.1 2.9 2.7 Statutory accounting profit $m 202.0 188.8 13.2 7.0 Statutory accounting profit per security ¢ 26.2 27.3 (1.1) (4.0) FFO $m 96.8 86.6 10.2 11.8 Distributions $m 91.1 83.0 8.1 9.8 Payout
Slide 25: Reconciliation from statutory profit to FFO
Reconciliation from statutory profit to FFO 1H20 1H19 Change Change $m $m $m % Profit after tax 202.0 188.8 13.2 7.0 Less non-FFO items: – Straight line adjustment to property revenue 8.1 (2.9) 11.0 – Finance lease adjustments to expenses (0.3) – (0.3) – Finance cost associated with leases 2.0 – 2.0
Slide 26: Financial position
Financial 31 December 2019 $m 30 June 2019 $m position Assets Cash and cash equivalents 38.6 30.2 Investment properties 4,323.0 3,983.8 Investment in securities 86.2 85.6 Other assets 26.2 18.3 Total assets 4,474.0 4,117.9 Liabilities Borrowings 1,399.6 1,433.3 Distributions payable 91.1 84.4 Financ
Slide 27: Lease incentives
Lease incentives Consolidated Statement of Profit and Loss 1H20 $m 1H19 $m Lease incentives includes fit out, rent free, rental Property revenue (excluding incentives) 135.4 124.2 abatement and cash payments. The tables on this Amortisation of tenant incentives (9.9) (9.2) page show the financial im
Slide 28: Operating and capital expenses
Operating and capital expenses Operating expenses CY19 CY18 Total operating expenses $m 15.7 13.5 Expected to Average gross assets value $m 4,101.6 3,523.0 remain around Operating expenses to average % 0.38 0.38 0.40% based on current portfolio Capital expenditure CY19 CY18 Expected to Total portfol
Slide 29: Capital management
Face value Maturity date Time to maturity Fixed rate of swap Capital Interest rate swaps management Jun-2024 Jun-2025 4.5 yrs 5.5 yrs 1.21% 1.29% $100m $100m Jun-2023 3.5 yrs 1.15% $75m Jun-2023 3.5 yrs 1.15% $25m Weighted average interest rate swaps 4.5 yrs 1.21% $300m 3.57% 65%-100% Fixed rate deb
Slide 30: Key debt metrics and changes during 1H20
Key debt metrics and changes during 1H20 31 Dec 2019 30 Jun 2019 Change % change Gross assets $m 4,474.0 4,117.9 356.1 8.6 Interest bearing liabilities $m 1,399.6 1,433.3 (33.7) (2.4) Total debt facilities $m 1,703.7 1,684.5 19.2 1.1 Undrawn debt $m 298.0 245.7 52.3 21.3 Gearing % 31.4 34.3 2.9 Weig
Slide 31: Property portfolio
Property portfolio.
Slide 32: Property portfolio
86% of properties located on eastern Property portfolio seaboard by property value $4.2b 28% Property portfolio Queensland value $1,190.6 million Office $931.8m Office metropolitan properties (23 assets) Industrial $258.8m Office CBD properties (3 assets) Industrial properties (32 assets) 25% 7 1 4
Slide 33: Portfolio summary
Sector diversity Geographic diversity Occupancy Portfolio by property value, as at 31 December 2019 by property value, as at 31 December 2019 by income, as at 31 December 2019 summary WA 8% Vacant 2% Industrial 31% NSW 25% SA 6% ACT 4% VIC 29% QLD 28% Office 69% Occupied 98% Tenant type Tenant use A
Slide 34: Portfolio metrics
Portfolio metrics Key metrics Like-for-like NPI growth (1H19 to 1H20) Distributions 31 December 2019 30 June 2019 from equity Number of assets 58 57 Office Industrial investments Total Property portfolio value $4.2 billion $4.0 billion NPI growth 3.9% 0.8% 2.9% 2.7% Number of tenants 161 155 Portfol
Slide 35: Largest tenants by passing rent
Largest tenants by passing rent Top ten tenants, total portfolio Top ten office tenants Top ten industrial tenants as at 31 December 2019 as at 31 December 2019 as at 31 December 2019 % WALE (yrs) % WALE (yrs) % WALE (yrs) Woolworths 14 4.8 NSW Police Force 11 25.0 Woolworths 44 4.8 NSW Police Force
Slide 36: Leasing: office leases executed in 1H20
Leasing Office leases executed in 1H20 Location Tenant Start date Term (yrs) NLA (sqm) Car parks (No.) 1 Charles Street, Parramatta, NSW NSW Police Force 3Q20 25.0 32,356 444 75 Dorcas Street, South Melbourne, VIC ANZ Banking Group 3Q20 6.0 13,744 120 15 Green Square Close, Fortitude Valley, QLD Opt
Slide 37: Leasing: industrial leases executed in 1H20
Leasing Industrial leases executed in 1H20 Location Tenant Start date Term (yrs) NLA (sqm) Lots 2, 3 & 4, 34-44 Raglan Street, Preston, VIC Paper Australia 1Q20 5.0 14,110 75 Annandale Road, Melbourne Airport, VIC Unipart Group Australia 2Q20 3.0 10,280 Lots 2, 3 & 4, 34-44 Raglan Street, Preston, V
Slide 38: Market outlook
Market outlook.
Slide 39: Key metrics for office markets
3% of 19% of Growthpoint Brisbane - CBD Growthpoint Brisbane - Fringe Key metrics for Portfolio Portfolio Vacancy 11.7% Vacancy 13.7% Prime Secondary Prime Secondary R $744 gross $583 gross R $576 gross $463 gross office markets I 38% Y 5.00-6.25% 5.75-7.00% 40% I 39% Y 5.75-7.25% 6.00-7.75% 39% R –
Slide 40: Key metrics for industrial markets
Key metrics for 6% of industrial markets Brisbane Growthpoint Portfolio 1 V: 481,549 sqm Prime Secondary R $114 net $85 net R – Average face rent per sqm per annum I 5-20% 8-15% I – Average incentives Y 5.75-6.25% 7.00-8.50% Y – Average core market yield V – Vacancy 5% of Sydney Growthpoint Brisbane
Slide 41: Growthpoint Properties South Africa
Growthpoint Properties South Africa.
Slide 42: Growthpoint Properties South Africa
Growthpoint Properties South Africa The largest South African primary listed REIT, Growthpoint Properties South Africa (JSE: GRT), continues to support GOZ as its major Securityholder Key facts (as at 30 June 2019) GOZ’s contribution to GRT’s FY19 results JSE Largest primary listed South African REI
Slide 43: Glossary
Glossary.
Slide 44: Glossary
Term Definition Term Definition 1H First half of the financial year JLL The Australian arm of Jones Lang LaSalle, an international professional services and investment management firm Glossary ABS Australian Bureau of Statistics JSE Johannesburg Stock Exchange ACT Australian Capital Territory, Austr
Slide 45: Important information
Important information. This presentation has been prepared by Growthpoint Properties Australia Limited (ACN 124 093 901) in its personal capacity and as responsibility entity of Growthpoint Properties Australia Trust (ARSN 120 121 002) about the activities of Growthpoint Properties Australia (ASX: G
Slide 46: Contact us
Contact us. Retail investors Computershare 1300 665 792 (within Australia) +61 (3) 9415 4366 (outside Australia) webqueries@computershare.com.au Institutional investors Virginia Spring Investor Relations Manager +61 (3) 8681 2933 investor.relations@growthpoint.com.au 2020 calendar. 28 April – 3Q20 I
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