Goodman New Zealand Limited & Goodman Property Services Limited Units · NZX:GNZ
Goodman New Zealand Limited & Goodman Property Services Limited Units — Goodman Property Trust — FY2012 Earnings Presentation
39 slides from Goodman New Zealand Limited & Goodman Property Services Limited Units's earnings presentation, May 2012
Slide 1: Full year results to 31 March 2012
Full year results+ to 31 March 2012
Slide 2: Contents
Contents + Section 01 Overview + Section 02 Financial overview + Section 03 Investment portfolio + Section 04 Investment activity + Section 05 Development portfolio + Section 06 Outlook + Appendices 2
Slide 3: Overview
Overview + $53.5 million before tax profit compared to $43.0 million in pcp + $40.5 million after tax profit compared to $36.7 million in pcp Earnings & + Distributable earnings before tax of $80.9 million or 8.41 cpu ($77.5 million or 8.74 cpu, pcp) Profit + Distributable earnings after tax of $74.
Slide 4: Financial overview
Financial overview+ Super Cheap Auto Distribution Centre, Savill Link
Slide 5: Financial performance
Financial performance 12 months ended March 12 March 11 Change $ million $ million % Distributable earnings before interest and tax 102.8 101.1 1.7 Interest (21.9) (23.7) 7.6 Distributable earnings before tax 80.9 77.5 4.4 Tax on distributable earnings (6.1) 0.5 1,320.0 Distributable earnings after
Slide 6: Financial position
Financial position as at March 12 March 11 Change $ million $ million % Total assets 1,674.3 1,618.0 3.5 Property assets 1,629.5 1,576.0 3.4 Net borrowings 581.2 578.4 0.5 Liabilities 739.2 725.9 1.8 Equity 935.1 892.1 4.8 Net borrowings to property assets (%) 35.7 36.7 n/a NTA per unit (cpu) 92.9 9
Slide 7: Revenue reconciliation
Revenue reconciliation Portfolio income - $ million 7
Slide 8: Net tangible assets
Net tangible assets Cents per unit NTA NTA at 31 March 2011 94.8 Retained earnings 1.1 DRP 0.2 Devaluation (2.0) Mark to market swaps (0.2) Deferred tax (1.0) NTA at 31 March 2012 92.9 Derivative financial liability (net of tax) 2.5 Adjusted NTA at 31 March 2012 95.4 8
Slide 9: Capital management
Capital management + Prudent management - Loan to value ratio of 35.7% remains at the lower end of the Board’s targeted 35% to 40% band - Interest cover ratio of 2.5 times1 + Trust deleveraged by 1% over the year (on an LVR basis) with the quantum of debt static around $580 million + New development
Slide 10: Capital management
Capital management + GMT is currently 72% hedged with an average term of 2.7 years across its swap book + Positioned towards the bottom of the policy band, taking advantage of lower floating rates + Effective interest rate in FY12 was 7.75% GMT Hedging profile – % hedged 10
Slide 11: Capital management
Capital management + Further refinancing completed in FY12 - $80.0 million tranche of the Trust’s main bank facility renewed for a further five years - $52.0 million amalgamation and extension for 5 years across GMT’s Viaduct Corporate Centre joint venture ($26.0 million GMT proportionate share) + W
Slide 12: Earnings outlook
Earnings outlook + The current business environment is likely to persist in the short term with only modest economic growth anticipated over the next 12 months. + The Trust is expected to deliver similar results under these conditions maintaining a cash distribution at 6.25 cpu, around 80% of distri
Slide 13: Investment portfolio
Investment portfolio+ OfficeMax, Highbrook Business Park
Slide 14: Portfolio leasing
Portfolio leasing Space leased - NLA1 sqm Key leasing deals completed in FY12 Property Customer NLA1 Comm. Term sqm Date years Highbrook Business DHL Supply 31,630 Sept 2011 5 Park Chain NZ Highbrook Business McPhersons 7,516 Sept 2015 3 Park Consumer Products Westney Industry Park Cotton On 8,412 M
Slide 15: Portfolio occupancy
Portfolio occupancy Portfolio occupancy – portfolio income (%) Key vacancies Property Tenancy NLA1 Date sqm became vacant M20 Business Park Warehouse/office 5,803 Sept 2011 The Gate Industry Park Warehouse/office 1,903 Nov 2009 The Gate Industry Park Warehouse/office 1,750 Aug 2010 Connect Business
Slide 16: Portfolio expiries
Portfolio expiries Lease expiry profile – portfolio income (%) Key customer expiries – FY13 Property Customer NLA1 Expiry sqm Connect Business Estate Fletcher Building 1,609 June 12 Gateside Industry Park Toll 8,031 Sept 12 M20 Business Park Ford 9,112 Oct 12 Savill Link Toll 8,051 Jan 12 Central Pa
Slide 17: Valuations
Valuations + Annual devaluation of $19.5m compared to $24.8m in FY11 - The investment portfolio recorded its first gain since 2008 with an increase of $3.8m or 0.3% - The development portfolio declined by $23.2m or 11.6% + Portfolio capitalisation rate firmed by 10bps to 8.5% + Remains 2.6% over-ren
Slide 18: Operating costs
Operating costs + Goodman is pro-active in managing the operating expenses of its buildings + Any increase impacts on the total occupancy costs of its customers Insurance + Portfolio insurance is sourced locally utilising Goodman Group’s global purchasing power + The cost of insuring the Auckland po
Slide 19: Investment activity
Investment activity+ Development site, M20 Business Park
Slide 20: NZ investment market activity
NZ investment market activity Total Investment Sales Value - $5 million+ + Improved transaction volumes in the second half of 2011 - 58 sales totalling $818 million in 2H 2011 compared to 39 sales totalling $478 million in 1H 2011. + More interest from both vendors and purchasers + Investment activi
Slide 21: Sale of non-core assets
Sale of non-core assets + Strengthening investment market with interest from local & offshore investors + GMT portfolio has received unsolicited offers with $35 million of assets under conditional contract + Recycling of capital will ensure GMT can take advantage of investment and development opport
Slide 22: Development portfolio
Development portfolio+ Kmart Distribution Centre, M20 Business Park
Slide 23: Development update
Development update + Significant increase in development activity over the last 15 months - 49,615 sqm of commitments totalling $64.2 million versus 11,485 sqm or $18.3 million in FY11 + Visible signs of improved economic conditions with increased levels of enquiry - 17,150 sqm of development alread
Slide 24: Development activity – FY12
Development activity – FY12 Customer NLA1 Lease term Ownership Total Cost2 completion sqm years % $m date The Crossing Stage One, Highbrook Business Park 9,800 6 - 10 50 21.83 June 2013 Super Cheap Auto (New Zealand) Pty Limited, Savill Link 20,530 10 100 24.0 Complete Scalzo Food Industries Limited
Slide 25: Recent development completions
Recent development completions Savill Link Highbrook Business Park Customer Super Cheap Auto Customer Scalzo Food Industries NLA1 20,560 sqm NLA1 4,950 sqm Lease term 10 years Lease term 10 years Ownership % 100 Ownership % 100 Total project cost $m 24.0 Total project cost $m2 6.9 Development timefr
Slide 26: Highbrook update
Highbrook update The Crossing - Stage One Leasing progress NLA1 Term Customer sqm years Quest branded serviced apartment 3,000 10 New Zealand Post 250 9 Westpac 345 6 Hollywood Bakery 345 8 Wynyard Wood 635 9 Vacant 5,225 - Total 9,800 1 Net lettable area (net of canopies and yard) + Construction we
Slide 27: Frucor beverages
Frucor beverages M20 Business Park + Post balance date commitment + More than 50,000 sqm of development undertaken at M20 + Estate now 84% complete NLA1 17,150 sqm Lease term 10 years Total project cost $m 22.3 Expected Completion March 2013 1 Net lettable area (net of canopies and yard) 27
Slide 28: Development estates
development estates+ Auckland Christchurch
Slide 29: Development strategy
Development strategy + Development activity over the last 2 years has been more than 90% pre-committed + Prudent strategy in that environment + Improving economic conditions are expected to drive a strengthening development business into the future Strategy going forward + Accelerate development pro
Slide 30: Construction pricing
Construction pricing + Construction pricing remains extremely competitive, tenders are regularly 8- 10% below quantity surveyor estimates + Recent tender at Highbook was almost 20% below expectations, with the top 3 bids within a tight $50,000 range on a $5.1 million contract + Suppliers and contrac
Slide 31: Outlook
Outlook+ BNZ Business Centre, Ford Building, Highbook Business Park
Slide 32: Outlook and summary
Outlook and summary + Continuing focus on customer relationships and maximising the rental streams from the portfolio Strategy + Accelerating the development programme to take advantage of current conditions + Equity fund new investment and development opportunities + Low growth economic environment
Slide 33: Thank you
Thank you+ Important Notice This presentation has been prepared by Goodman (NZ) Limited as the manager of Goodman Property Trust (“GMT”). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You s
Slide 34: Appendix – GMT financial performance
Appendix – GMT financial performance Period ended March 12 March 11 March 10 March 09 March 08 $ million $ million $ million $ million $ million Net rental income 111.3 108.7 106.2 103.7 95.8 Administrative expenses (8.5) (7.6) (6.8) (7.3) (6.3) Distributable earnings before interest and tax 102.8 1
Slide 35: Appendix – GMT assets and liabilities
Appendix – GMT assets and liabilities as at March 12 March 11 March 10 March 09 March 08 $ million $ million $ million $ million $ million Total assets 1,674.3 1,618.0 1,510.4 1,561.6 1,600.2 Property assets 1,629.5 1,576.0 1,474.1 1,512.7 1,550.8 1 Net borrowings 581.2 578.4 544.7 546.0 418.9 Total
Slide 36: Appendix - GMT debt facilities
Appendix - GMT debt facilities GMT Debt Expiry Profile Total Facility GMT Share Facility Remaining Term as at 31 March 2012 $ million $ million Expiry years GMT Main Facility Tranche A 80.0 80.0 Oct-16 4.6 GMT Main Facility Tranche B 100.0 100.0 Dec-15 3.8 GMT Main Facility Tranche C 150.0 150.0 Apr
Slide 37: Appendix – GMT portfolio metrics
Appendix – GMT portfolio metrics as at March 12 March 11 March 10 March 09 March 08 $ million $ million $ million $ million $ million 1 NLA (sqm) 987,569 928,420 896,440 880,016 839,438 Weighted average capitalisation rate (%) 8.5 8.6 8.6 8.7 8.0 Portfolio occupancy (%) 96 97 96 96 97 2 WALT (years)
Slide 38: Appendix – GMT investment portfolio
Appendix – GMT investment portfolio GMT NLA1 Valuation2 Market cap Occupancy WALT3 Property ownership Key Customers sqm $M rate % % years % Highbrook Business Park + HDL Assets 50 157,266 292.8 7.00 - 8.50 100 7.8 PaperLinX, Datamail, GEON, NALCO, Scalzo + HBPL Assets 75 83,219 153.0 7.50 - 8.63 98
Slide 39: Appendix – GMT current active developments
Appendix – GMT current active developments Expected market GMT Adopted Lease NLA1 value on Occupancy Property ownership cap rate term Expected date of completion sqm completion2,3 % % % years $M Highbrook Business Park + The Crossing Stage 1 50 9,800 35.1 8.50 40 6-10 June 2013 + Panasonic 50 7,500
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