50 slides from Growthpoint Properties Australia's earnings presentation, Aug 22, 2016
Slide 1: Annual Results Presentation for the year ended 30 June 2016
a window into our For personal use only operations, strategy & performance Annual Results Presentation For the year ended 30 June 2016 22 August 2016 Growthpoint Properties Australia Growthpoint Properties Australia Trust ARSN 120 121 002 Growthpoint Properties Australia Limited ABN 33 124 093 901 A
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 22 August does not purport to be in complian
Slide 3: Contents
Contents Executive For personal use only FY16 Overview Financial Management 30 Management Team Overview of Growthpoint 5 Financial results 31 Key results for FY16 Movements in net tangible assets 32 – Strategy and Performance 6 Debt Management – Property Portfolio 7 – Gearing 33 – Financial Manageme
Slide 4: FY16 Overview
For personal use only FY16 Overview 75 Dorcas Street, South Melbourne, VIC
Slide 5: Overview of Growthpoint
Overview of Growthpoint Our “pure landlord” investment philosophy For personal use only What is Growthpoint? Growthpoint’s history 1 100% investment Growthpoint is an ASX-listed landlord Growthpoint commenced in its current in Australia with a mandate to invest in Australian form in 2009 with $650 m
Slide 6: Key results for FY16: Strategy and Performance
Key results for FY16: Strategy and Performance For personal use only Securityholder returns 19.6% p.a. 7.4% Total Securityholder return FY16 total Securityholder for 5 years to 30 June 20161 return1 At least 21.9cps 22.2cps FY16 distributable income FY17 distribution income guidance2 above guidance
Slide 7: Key results for FY16: Property Portfolio
Key results for FY16: Property Portfolio For personal use only Over Property portfolio valued at 59,000 sqm $2.8B as at 30 June 20161. of new and extended leasing during FY16, and over 16.2% above 30 June 2015 1 39,000 sqm 6.9yrs leased since 30 June 2016 WALE2 Out of a 1,109,545 sqm portfolio $328.
Slide 8: Key results for FY16: Financial Management
Key results for FY16: Financial Management For personal use only FY16 distribution guidance of 20.5cps 21.3cps achieved FY17 distribution guidance 55.5% tax deferred, 0.9% tax free. 3.9% above FY16 Gearing increased to 4.2yrs 42.6% from 37.0% at 30 June 2015. Weighted average debt term at 30 June 20
Slide 9: Strategy and Performance
For personal use only Strategy and Performance Building B, 211 Wellington Road, Mulgrave, VIC
Slide 10: Transparent business model
Adding FY16: $40.1m new equity capital 1 & $250m new debt capital (FY15: value for FY16: Distributions of $118.1m paid to Securityholders, 20.5cps Raise Capital: $73.7m and $200m). For personal use only (FY15: $110.7m, 19.7cps). Securityholders Payout ratio of 93.7% (FY15: 93.1%). Raise equity capit
Slide 11: GMF Takeover
GMF Takeover For personal use only • $321 million takeover for GPT Metro Office Fund (GMF) announced on 1 July 2016 • As of 20 August 2016, Growthpoint owned 12.98% of the GMF units and had received 33.99%1 acceptances of its offer • GMF comprises six A-grade office properties with a 5.5 year WALE •
Slide 12: GMF Takeover (cont.)
GMF Takeover1 (cont.) For personal use only 1 2 3 4 5 6 GMF key statistics GMF property portfolio statistics (as at 30 June 2016) Book Cap Lettable Site value rate WALE area area Major tenant —— $440.3 million total property $m % years sqm sqm value 1 15 Green Square Close, Fortitude Valley, QLD 127
Slide 13: Equity Capital
Equity Capital For personal use only Market capitalisation and free float Growthpoint Location of Growthpoint as at 30 June Securityholders1 Securityholders1 As at 30 June 2016 As at 30 June 2016 $1,836.8m $633.7m 2016 $1,781.1m $623.9m 2015 $1,323.3m $409.2m 2014 GRT 65.5% South Africa 74.0%2 $966.
Slide 14: Distributions and security price
Distributions and security price For personal use only Security Price Distributions as at 30 June per stapled security Growth 2016 $3.15 FY17* 21.3¢ +3.9% 2015 $3.13 FY16 20.5¢ +4.1% 2014 $2.45 FY15 19.7¢ +3.7% 2013 $2.40 FY14 19.0¢ +3.8% 2012 $2.21 FY13 18.3¢ +4.0% 2011 $1.93 FY12 17.6¢ +2.9% * Dis
Slide 15: Total Securityholder returns
Total Securityholder returns 1 For personal use only Total Securityholder return comparison Total Securityholder per annum, over 5 years to 30 June 2016 returns FY16 7.4% GOZ 19.6% A-REIT2 18.0% Shares3 7.2% Total Securityholder return per annum FY16 7.4% FY15 36.4% FY14 10.8% FY13 23.6% FY12 21.6%
Slide 16: Relative income yields and trading premium
Relative income yields and trading premium For personal use only Relative income yields Security price premium (discount) to NTA 6.8% GOZ forecast distribution yield1 45% 5.8% A-REIT forecast distribution yield2 40% 5.0% Australian Shares forecast distribution yield3 35% 1.98% Commonwealth Governmen
Slide 17: Strategy and performance: Summary
Strategy and performance: Summary For personal use only Milestones achieved • 7.4% total Securityholder return for year to 30 June 20161 • 19.6% p.a. total Securityholder return for five years to 30 June 20161 • Significant increase in engagement with current and potential investors • Relatively low
Slide 18: Property Portfolio
For personal use only Property Portfolio 255 London Circuit, Canberra, ACT
Slide 19: Portfolio overview
Portfolio overview For personal use only Key metrics for the five years ended 30 June 2016 FY161 FY154 FY14 FY13 FY12 Number of properties no. 58 53 51 44 42 Total value $m 2,832.6 2,372.5 2,093.7 1,694.5 1,634.8 Occupancy % 99 97 98 98 99 Like-for-like value change $m / % of asset value 130.2 / 5.5
Slide 20: Portfolio overview (cont.)
Portfolio overview (cont.) For personal use only Top ten tenants Annual rent review type* Portfolio lease expiry profile2 by passing rent as at 30 June 2016 as at 30 June 2016 per financial year WALE 21.6% Fixed 2.00-2.99% 1% Vacant % (yrs) 63.0% Fixed 3.00-3.99% 3% FY17 Woolworths 21 6.1 7.2% Fixed
Slide 21: Portfolio overview (cont.)
Portfolio overview (cont.) For personal use only Geographic diversity Tenants use by property value as at 30 June 2016 by gross income as at 30 June 2016 VIC 35% Office 52% QLD 27% Logistics / Distribution 40% NSW 20% Manufacturing 4% SA 7% Retail 2% ACT 5% Car Parking 1% WA 5% Other 1% TAS 1% Tenan
Slide 22: Leasing
Leasing Leases completed in FY16 For personal use only Term Annual rent NLA Car Address Sector Tenant Start date (yrs) increases (%) (sqm) Parks A1, 32 Cordelia St South Brisbane QLD Office Jacobs Group (Australia) Q4, FY15 11.4 Fixed 3.75 6,896 50 A1, 32 Cordelia St South Brisbane QLD Office Jacobs
Slide 23: Leasing (cont.)
Leasing (cont.) Leases completed since 30 June 2016 For personal use only Term Annual rent NLA Address Sector Tenant Start date (yrs) increases (%) (sqm) Car Parks Part Level 9, 333 Ann Street Brisbane CBD QLD Office St Hilliers Property Q2, FY17 5.0 Fixed 3.75% 480 – Building 1, 572-576 Swan Street
Slide 24: Office Portfolio key metrics
Office Portfolio key metrics For personal use only Office portfolio Five year performance summary - office Tenants by Industry key statistics by gross income, as at 30 June 2016 (as at 30 June 2016) As at 30 June FY163 FY154 FY14 FY13 FY12 —— $1,596.2 million total value Portfolio value $m 1,596.2 1
Slide 25: $287.8 million of office acquisitions in FY16
$287.8 million of office acquisitions in FY16 For personal use only Office portfolio value as at 30 June FY16 $1,596.2m FY15 $1,206.6m FY14 $1,049.8m FY13 $797.3m FY12 $800.6m 75 Dorcas Street, 255 London Circuit, Building C, 211 Wellington South Melbourne, VIC Canberra, ACT Road, Mulgrave, VIC Numb
Slide 26: Industrial Portfolio key metrics
Industrial Portfolio key metrics For personal use only Industrial portfolio Five year performance summary - industrial Geographic diversity key statistics by property value as at 30 June 2016 (as at 30 June 2016) As at 30 June FY16 FY15 FY14 FY13 FY12 VIC 45% QLD 20% —— $1,236.3 million total value
Slide 27: $42.1 million of industrial acquisitions in FY16
$42.1 million of industrial acquisitions in FY16 For personal use only Industrial Portfolio value at 30 June FY16 $1,236.3m FY15 $1,165.9m FY14 $1,043.9m FY13 $897.2m FY12 $834.2m 1-3 Pope Court, 34 Reddalls Road, Beverley, SA Kembla Grange, NSW Number of properties Major Tenant: Aluminium Major Ten
Slide 28: Valuations
Valuations For personal use only Key changes to valuations Valuation changes for 6 months to 30 June 20161,2: included: Investment Property Portfolio Industrial Office Total • $10.0 million increase at 333 Ann $m $m $m Street, Brisbane, Queensland, due to strong leasing success and tightening 31 Dec
Slide 29: Property Portfolio: Summary
Property Portfolio: Summary For personal use only Milestones achieved • Acquisition of five quality properties for $328.0 million1 with a WALE of 7.2 years • 100% occupancy maintained for the industrial portfolio. Office portfolio occupancy increased from 94% to 98% • Major leases to Country Road/Da
Slide 30: Financial Management
For personal use only Financial Management 120 Northcorp Boulevard, Broadmeadows, VIC
Slide 31: Financial results
Financial results For personal use only FY16 FY15 Change % Change Statutory accounting profit #039;000 224,269 283,004 (58,735) -20.8% Statutory accounting profit per security c 38.9 50.4 (11.5) -22.8% Distributable income #039;000 126,049 118,910 7,139 6.0% Distributable income per security c 21.9 21.2 0
Slide 32: Movements in net tangible assets
Movements in tangible assets For personal use only Movements in NTA per stapled security $2.48 30 June 15 +16.6¢ Property revaluations / profit on property sale -1.0¢ Interest rate swap revaluations +3.4¢ Equity raising & retained earnings $2.67 30 June 16 120 Northcorp Boulevard, Broadmeadows, VIC
Slide 33: Debt Management: Gearing
Debt Management: Gearing For personal use only Summary of debt facilities Gearing & cost of debt Secured Limit Drawn as at 30 June bank loans ($m) ($m) Maturity 65% 8.0% Balance Sheet Gearing All-in cost of debt 60% 7.5% Syndicated Facility 55% 7.0% - Facility A 255,000 255,000 Dec-17 50% 6.5% - Fac
Slide 34: Debt Management: Interest rate hedging
Debt Management: Interest rate hedging For personal use only Interest rate hedging Maturity Time to Fixed date maturity Rate Jul 18 2.0yrs 3.20% $50m • Including $450 million of fixed debt, total fixed debt maturity increases to 5.7 years Feb 19 2.6yrs 3.57% $50m and the weighted average cost reduce
Slide 35: Operating expenses and capital expenditure
Operating expenses and capital expenditure For personal use only Operating expenses FY16 FY15 FY14 Total operating expenses $’000 10,407 9,123 8,4981 Average gross asset value $’000 2,588,089 2,211,504 1,810,053 Operating expenses to average gross assets % 0.40 0.41 0.47 1. This figure excludes $392
Slide 36: Five year performance summary
Five year performance summary For the five years ended 30 June 2016 For personal use only Years ended 30 June FY16 FY15 FY14 FY13 FY12 Financial performance Investment income $m 307.0 361.5 198.5 171.5 115.8 Profit for the period $m 224.3 283.0 117.3 94.0 49.5 Financial position Total assets (at 30
Slide 37: Financial Management: Summary
Financial Management: Summary For personal use only Milestones achieved • 21.9 cps distributable income (up 3.3% from FY15)1 • $2.67 NTA per security (up 7.7% from 30 June 2015) • Moody’s rating of Baa2 maintained • Additional debt capital markets issuance: $250 million fixed debt issued for seven y
Slide 38: Conclusion
For personal use only Conclusion 599 Main Road North, Gepps Cross, VIC
Slide 39: Focus for the year ahead
Focus for the year ahead For personal use only Increase distributions to Complete takeover of GMF Borrow prudently Securityholders • Maintain gearing within 35%-45% range • Distributions growing each distribution Existing property assets (noting that post a GMF takeover gearing period. enhanced may
Slide 40: Appendices
For personal use only Appendices 45-55 South Centre Road, Melbourne Airport, VIC
Slide 41: Appendix 1: Growthpoint Properties Limited (GRT) - South Africa
Appendix 1: Growthpoint Properties Limited (GRT) - South Africa For personal use only Growthpoint Properties Limited of South Africa (”GRT”) owns 65.5% Key Facts of the securities of Growthpoint (at 30 June 2016) and is its major Listing GRT is listed on the Securityholder. Johannesburg Stock Exchan
Slide 42: Appendix 2: Securityholder calendar
Appendix 2: Securityholder calendar* For personal use only 22 August • Results for the year ended 30 June 2016 announced to ASX 31 August • Distribution paid for the half year ended 30 June 2016 • Annual Tax Statement for year ended 30 June 2016 mailed • FY16 Annual Report sent to Securityholders 24
Slide 43: Appendix 3: Distributable income
Appendix 3: Distributable income For personal use only Reconciliation from statutory profit to distributable income FY16 FY15 Change Change $’000 $’000 $’000 % Profit after tax 224,269 283,004 (58,735) (20.8) Less non-distributable items: - Straight line adjustment to property revenue (7,426) (6,569
Slide 44: Appendix 3: Distributable income (cont.)
Appendix 3: Distributable income (cont.) For personal use only Components of distributable income FY16 FY15 Change Change $’000 $’000 $’000 % Property income 208,626 197,240 11,386 5.8 Property expenses (27,457) (25,441) (2,016) 7.9 Net property income 181,169 171,799 9,370 5.5 Interest income 559 7
Slide 45: Appendix 4: Financial position
Appendix 4: Financial position For personal use only 30 June 2016 30 June 2015 $’000 $’000 Assets Cash and cash equivalents 70,661 26,858 Investment properties 2,651,145 2,343,840 Other assets 192,228 36,449 Total assets 2,914,034 2,407,147 Liabilities Borrowings 1,242,226 890,445 Distributions paya
Slide 46: Appendix 5: Top five office properties / property groups by value
Appendix 5: Top five office properties / property groups by value For personal use only SW1 Complex, 1 Charles Street, 75 Dorcas Street, Buildings 1, 2, & 3, Building C, South Brisbane, QLD Parramatta, NSW South Melbourne, VIC 572-576 Swan Street, 219-247 Pacific Highway, Richmond, VIC Artarmon, NSW
Slide 47: Appendix 6: Top five industrial properties / property groups by value
Appendix 6: Top five industrial properties / property groups by value For personal use only 70 Distribution Street, 20 Colquhoun Road, Linfox Properties, 120 Northcorp Boulevard, 599 Main North Road, Larapinta, QLD Perth Airport, WA Erskine Park, NSW Broadmeadows, VIC Gepps Cross, SA Distribution Ce
Slide 48: Appendix 7: Board of Directors
Appendix 7: Board of Directors For personal use only Geoffrey Tomlinson (68) Timothy Collyer (48) Maxine Brenner (54) Estienne de Klerk (47) Grant Jackson (50) Independent Chairman & Director Managing Director Independent Director Director2 Independent Director BEC B.Bus (Prop), Grad Dip Fin & Inv,
Slide 49: Glossary
Glossary For personal use only $ or dollar refers to Australian currency unless otherwise indicated MER management expense ratio comprising all the Group’s costs other AFSL Australian Financial Services Licence than interest divided by the average gross assets for the year A-REIT Australian Real Est
Slide 50: For more information contact us
For more information contact us at: Email: info@growthpoint.com.au Investor services line: 1800 260 453 For personal use only www.growthpoint.com.au Growthpoint Properties Australia Level 22, 357 Collins Street Melbourne VIC 3000 Thank you A1, 32 Cordelia Street, South Brisbane, VIC