Gpt Group · ASX:GPT
Gpt — The GPT Group — FY2017 Earnings Presentation
34 slides from Gpt's earnings presentation, Feb 13, 2018
Slide 1: 2017 Annual Result
2017 ANNUAL RESULT 13 February 2018
Slide 2: Agenda
SECTION SPEAKER SLIDE AGENDA 2017 Annual Result Highlights Bob Johnston 3 Financial Summary & Capital Management Anastasia Clarke 5 Retail Vanessa Orth 9 Office & Logistics Matthew Faddy 18 Funds Management Nicholas Harris 30 Summary & Outlook Bob Johnston 33 Annual Result 2017
Slide 3: 2017 Annual Result Highlights
2017 Annual Result Highlights Key Outcomes in 2017 3.0% 5.1% 15.2% $5.04 24.4% Growth in Growth in Total Net Tangible Assets Net gearing Funds From Operations Distribution Return per security per security per security Group highlights in 2017 • Group Assets Under Management increased 12% to $21.5 bi
Slide 4: Progressing strategic priorities
Progressing strategic priorities Business Outcomes 4.4% $718M 96.8% 5.2YRS 5.27% $12.0B Portfolio like for Valuation Total portfolio Weighted Average Weighted Average Funds Under like income uplift occupancy Lease Expiry Cap Rate Management growth INVESTMENT PORTFOLIO & OPERATIONS DEVELOPMENT • Offi
Slide 5: Finance & Treasury
FINANCE & TREASURY Annual Result 2017
Slide 6: Financial Summary
Financial Summary 12 MONTHS TO 31 DECEMBER 2017 2016 CHANGE ($ MILLION) Funds From Operations (FFO) 554.2 537.0 3.2% Valuation increases 717.7 611.6 Treasury items marked to market (2.9) (23.0) Other items 0.1 27.1 Net Profit After Tax (NPAT) 1,269.1 1,152.7 10.1% Funds From Operations per stapled s
Slide 7: Segment Result
Segment Result 12 MONTHS TO 31 DECEMBER 2017 2016 CHANGE ($ MILLION) Retail 318.4 294.1 Office 248.9 225.0 Logistics 94.0 95.4 Funds Management 37.0 61.0 Net Income 698.3 675.5 3.4% Net interest expense (102.4) (100.0) Corporate overheads (30.6) (29.8) Tax expense (11.1) (14.0) Corporate (144.1) (14
Slide 8: Capital Management
Capital Management • Raised A$400 million in a US Private Placement (USPP) debt issue • Moody’s upgraded GPT’s long term credit rating to A2 • Half of all financing now sourced from debt capital markets, enhancing term to maturity KEY STATISTICS DEC 2017 DEC 2016 Sources of Financing Facilities Net
Slide 9: Retail
RETAIL The GPT Group Annual Result 2017
Slide 10: Retail Highlights
Retail Highlights Key Portfolio Statistics 3.8% 2.2% $11,185 99.6% $281.4M 5.10% Portfolio like for Comparable Specialty sales Total portfolio Valuation Weighted Average like income specialty sales productivity occupancy uplift Cap Rate growth growth per sqm per sqm • Total Portfolio Return of 11.1%
Slide 11: Retail Portfolio
Retail Portfolio GPT’s portfolio has delivered average like-for-like NOI growth of 3.0% over the five years to December 2016 GPT Average 3.0% MELBOURNE HIGHPOINT CHARLESTOWN Peer Average CENTRAL 2.8% • 2017 Total Return 12.3% • 2017 Total Return 20.9% • 2017 Total Return 9.2% • 100% occupancy • Over
Slide 12: Retail Sales
Retail Sales PORTFOLIO MAT GROWTH BY CATEGORY $11,185 Specialty Sales 1.7% per sqm 12.3% 10.6%10.7% Total Centre MAT Growth 2.2% 5.9% 5.0% Comparable Specialty per sqm 3.1% 3.1% Growth 1.7% 0.9% 0.3% -0.7% -0.9% -1.0% 12.3% -5.4% -2.7% -3.1% Mini Major 3.1% MAT Growth Total centre Leisure General Re
Slide 13: Retail Leasing
Retail Leasing • High quality portfolio proving to be resilient in a more challenging leasing market • Portfolio occupancy remains high at 99.6% and holdovers have reduced to 6.6% of specialty expiry rent • Continue to transition into retail growth categories, focussing on first to market, unique re
Slide 14: Evolving the Retail Mix to meet changes in consumption
Evolving the Retail Mix to meet changes in consumption HOUSEHOLD CONSUMPTION (ABS) GPT PORTFOLIO RETAIL SHIFT (5 YEAR CAGR) COMBINED SPECIALTIES & MINI MAJORS Portfolio performance remains 5 Year CAGR Sales 12.0% 5 Year CAGR Rent sustainable given the 10.0% active remixing towards growth 8.0% catego
Slide 15: Sharing Data Insights to Drive Market Share and Performance
Sharing Data Insights to Drive Market Share and Performance DRIVING MARKET SHARE SHARING DATA INSIGHTS PARTNERSHIPS FOCUSED ON UTILISING MULTIPLE DIGITAL PLATFORMS PARTNERING WITH RETAILERS - COTTON ON • Long term strategic partnership with the Cotton On Group • Sharing our data; Cotton On SKU data,
Slide 16: Retail Development
Retail Development SUNSHINE PLAZA • $420m retail expansion (100% interest) • Q4 2018 completion • Specialty leasing program 35% complete • Flagship International and National brands secured • Forecasting incremental stabilised yield greater than 6% DEVELOPMENT ACTIVITY TOTAL COST Current Development
Slide 17: Retail Market Outlook
Retail Market Outlook AUSTRALIAN RETAIL SALES GPT PORTFOLIO MEDIUM TERM OUTLOOK PORTFOLIO IS WELL POSITIONED ONLINE SALES GROWTH TO CONTINUE though physical stores forecast to HIGHLY PRODUCTIVE PORTFOLIO represent ~90% of retail sales over the medium term CONTINUE TO REMIX CENTRES EMPLOYMENT GROWTH
Slide 18: Office
OFFICE Annual Result 2017
Slide 19: Office Highlights
Office Highlights Key Portfolio Statistics 5.0% $374.1M 95.2% 189,500M2 5.18% 5.6YRS Portfolio like for Valuation Total portfolio Leases Weighted Office like income uplift occupancy signed Average Cap WALE growth Rate • Total Portfolio Return of 14.5% OFFICE • Like for like income growth of 5.0% dri
Slide 20: Office Portfolio Performance
Office Portfolio Performance MLC Centre, Sydney 2 Park Street, Sydney Australia Square, One Farrer Place, Sydney Sydney 580 George Street, NSW 56% MLC 2 PARK AUSTRALIA Sydney VIC 32% Darling Park 1, CENTRE STREET SQUARE 2 & 3, Sydney CBW, Melbourne QLD 12% Liberty Place, Sydney • 2017 Total Return 2
Slide 21: Office Leasing
Office Leasing • 189,500sqm signed leases in 2017 with a further 36,200sqm terms agreed • Continuing demand from technology sector, contributing over 20% of 2017 leasing volume • Strategic leasing a key focus with 44% of 2017 signed leases across expiries 2019+ • Benefiting from strong Sydney and Me
Slide 22: Flexible Workspace Offering Space&Co.
Flexible Workspace Offering Space&Co. • Momentum for flexible space continues with significant growth over the past 5 years • Space&Co. provides a variety of workspace and co-working environments for use on demand • Powerful differentiator for assets, providing enhanced returns GPT customers 83% occ
Slide 23: Office Development
Office Development 4 MURRAY ROSE, SYDNEY OLYMPIC PARK 32 SMITH STREET, PARRAMATTA • Construction well progressed with • Development approval expected in H1 following completion expected October 2018 achievement of design excellence • 60% pre-committed with active enquiry • Strong engagement with blu
Slide 24: Market Outlook
Market Outlook CURRENT MARKET GPT MARKET FORECAST SYDNEY CBD MELBOURNE CBD BRISBANE CBD • Vacancy contraction and • Continued vacancy • Ongoing demand rent growth forecast for tightening and rent recovery has stabilised medium term growth next two years vacancy, with rental growth to turn positive M
Slide 25: Logistics
LOGISTICS Annual Result 2017
Slide 26: Logistics Highlights
Logistics Highlights Key Portfolio Statistics 4.0% $62.1M 96.1% 188,200M2 6.31% 7.6YRS Portfolio like for Valuation Total portfolio Leases Weighted Logistics like income uplift occupancy signed average cap rate WALE growth • Total Portfolio Return of 11.2% LOGISTICS • Like for like income growth up
Slide 27: Logistics Leasing & Acquisitions
Logistics Leasing & Acquisitions LEASING | INVESTMENT AND DEVELOPMENT ACQUISITION • Strong leasing activity with 188,200sqm of signed leases and SUNSHINE BUSINESS ESTATE, MELBOURNE 52,400sqm terms agreed • Portfolio WALE of 7.6 years¹ • Leases secured with national occupiers including Super Retail G
Slide 28: Logistics Development
Logistics Development • Strong leasing outcomes achieved with the four developments completed in the year 100% leased 2017 COMPLETIONS 70,200M2 GLA • Yield on cost of 7% for completions in 2017 • Huntingwood Stage 1, Sydney • Three projects under construction across Sydney and • Metroplex Wacol (Los
Slide 29: Logistics Market Outlook
Logistics Market Outlook SYDNEY MELBOURNE BRISBANE • Development completions and future • Population growth and infrastructure • Strengthening state economy will opportunities capitalising on strong projects supporting demand underpin demand recovery leasing environment • Cheaper land prices and low
Slide 30: Funds Management
FUNDS MANAGEMENT Annual Result 2017
Slide 31: Funds Management Highlights
Funds Management Highlights • Total assets under management increased by 15.4% to $12.0 billion FUND TOTAL FUND RETURN GPT ASSETS (1YR) INVESTMENT • Funds Management business delivered a strong Total Return of 15.1% for the full year GWOF $7.1bn 13.4% $1.4bn • GPT Wholesale Shopping Centre Fund the
Slide 32: Fund Update
Fund Update GPT WHOLESALE OFFICE FUND GPT WHOLESALE SHOPPING CENTRE FUND • Sale of 545 Queen Street, Brisbane for $70.5 million completed • New Fund terms unanimously approved by Investors • Portfolio WALE increased from 5.9 years to 7.0 years • Liquidity review successfully concluded with all secur
Slide 33: Summary & Outlook
Summary & Outlook BALANCE SHEET SECTOR OUTLOOK GROUP OUTLOOK • S&P/Moody’s Ratings at A/A2 • Retail sales growth likely to remain below • Investment Portfolio expected to deliver • Cost of debt expected to be trend in the near term solid growth approximately 4.25% in 2018 • Favourable Office Sector
Slide 34: Disclaimer
Disclaimer The information provided in this presentation has been prepared by The GPT Group comprising GPT RE Limited (ACN 107 426 504) AFSL (286511), as responsible entity of the General Property Trust, and GPT Management Holdings Limited (ACN 113 510 188). The information provided in this presenta