Gpt Group · ASX:GPT
Gpt — H1 2020 Earnings Presentation
42 slides from Gpt's earnings presentation, Aug 10, 2020
Slide 1: 2020 Interim Result Presentation
10 August 2020 2020 Interim Result Presentation GPT provides its 2020 Interim Result Presentation which is authorised for release by the GPT Group Board. -ENDS- For more information, please contact: INVESTORS MEDIA Brett Ward Grant Taylor Head of Investor Relations & Corporate Communications Manager
Slide 2: 2020 Interim Result Market Briefing
2020 Interim Result Market Briefing 10 August 2020
Slide 3: Acknowledgement of Traditional Custodians
The GPT Group acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing connection to land, waters and community. We pay our respects to First Nations Elders past, present and emerging. Artwork created by Molly Wallace
Slide 4: Agenda
Agenda Half Year Review | Bob Johnston 4 Financial Summary & Capital Management | Anastasia Clarke 9 Office & Logistics | Matthew Faddy 13 Retail | Chris Barnett 30 Funds Management, Sustainability & Outlook | Bob Johnston 36 Interim Result 2020
Slide 5: Well Placed to Manage Through the Pandemic
Well January & February 2020 GPT maintained the strong momentum from 2019 Placed + Guidance for FFO per security (FFOps) & Distribution per security (DPS) growth of 3.5% to manage + High quality diversified portfolio with capital allocation focused on growing our logistics portfolio and development
Slide 6: 2020 Interim Result Financial Summary
2020 Interim Result Financial Summary 12.55CPS 9.30CPS $5.52 (0.1)% FFO DISTRIBUTION NTA TOTAL PER SECURITY PER SECURITY PER SECURITY RETURN1 Investment Portfolio Portfolio 98.1% Assets Under $24.5B occupancy Management Weighted Average Weighted Average Lease Expiry 4.9 YRS Capitalisation Rate 5.00%
Slide 7: Reviewing the Half Year
Reviewing the Half Year Office Logistics Retail 1 January + Positive fundamentals with low vacancy + Occupancy at 98.6% and 38,500sqm of + Positive retail sales momentum with Total rates and manageable supply outlook leasing completed Centre sales growth of 3.0% and to + Occupancy at 97.5% and 27,60
Slide 8: COVID-19 Tenant Negotiations
COVID-19 Tenant Negotiations + Commercial tenancies Code of Conduct was legislated in each state and territory requiring landlords to provide rent relief to qualifying tenants impacted by COVID-19 for a period of up to six months + Relief has also been provided to certain tenants not eligible for as
Slide 9: Valuations & COVID-19 Impact
Valuations & COVID-19 Impact Office Logistics Retail Valuation change -1.7%1 +2.3% -10.5%1 Cap rates + Unchanged at 4.85% + Firmed by 11 basis points to 5.29% + Softened by 15 basis points to 5.04% Discount rates + Firmed by 9 basis points to 6.32% + Firmed by 22 basis points to 6.39% + Firmed by 27
Slide 10: Finance & Treasury
Finance & Treasury Interim Result 2020
Slide 11: Financial Summary
Financial Summary 6 Months to 30 June ($ million) 2020 2019 Change Funds From Operations (FFO) 244.5 295.9 (17.4%) Valuation (decreases)/increases (711.3) 130.8 $519.1M STATUTORY NET LOSS AFTER TAX Treasury instruments marked to market (51.5) (82.3) Other items (0.8) 8.2 Net (Loss) / Profit After Ta
Slide 12: Segment Result & Free Cash Flow
Segment Result & Free Cash Flow 6 Months to 30 June 2020 2019 Change Comments ($ million) Income & fees reduced 37%; property cost savings 13%; COVID rent impact Retail 79.2 157.3 (49.7%) of $75.5m Contribution from acquisition of Darling Park; offset by dilution in GPT’s co- Office 139.9 138.7 0.9%
Slide 13: Capital Management
Capital Management Domestic CPI bank Bonds debt Foreign + Modest gearing of 25.1% Sources of 2% 2% bank debt + Liquidity in excess of $1.2 billion which fully funds all Drawn 17% current commitments until 2023 Secured bank debt + In February, issued $300 million 12-year debt in the Debt USPP 41% Ban
Slide 14: Office & Logistics
Office & Logistics Interim Result 2020
Slide 15: Office Highlights
Office Highlights Portfolio Size & Geographic Exposure 1.2% OPERATIONS 97% RENT COLLECTED 5.2years OFFICE WALE NET INCOME 1H 2020 (BY INCOME) GROWTH Office Retail $5.7bn $6.1bn Key Highlights Sydney 59% Melbourne 32% Brisbane 9% + Operations Net Income of $139.4 million, with fixed rent increases an
Slide 16: Office Return to Workplace
Office Return to Workplace + Office assets remained open throughout the period, with some shared facilities within our assets closed in accordance with government directives + A range of measures have been employed across the COMMON AREA CLEANING LIFT MONITORING & MANAGEMENT ENTRY/EXIT MANAGEMENT HA
Slide 17: Office Leasing & Market Update
Office Leasing & Market Update Office Leasing Market Update 1H 2020 Leasing: + Increased vacancy with softer demand and new supply + Signed leases totalling 37,800sqm concluded with an additional 19,600sqm of resulted in back-fill vacancy and increased levels of sublease Heads of Agreement (HoA) spa
Slide 18: Office Customer Update
Office Customer Update + Diverse and high quality tenant base proving resilient, with strong rent collection rate of 97% for 1H 2020 + Well managed, prime grade assets are best placed to support the safety, health and wellbeing of occupants with adaptable technology, building management and monitori
Slide 19: Evolution of Office
Evolution of Office + High quality, adaptive workplaces will remain a relevant and important part of high performing businesses + Culture and collaboration are best fostered face-to-face in communal spaces + Office space design and agile working practices are likely to evolve with the need for physi
Slide 20: Sydney Metropolitan Office Update
Sydney Metropolitan Office Update + Greater Western Sydney has the third largest economy in Australia and is forecast to grow to 3 million people by 2036 1 + Sydney Metropolitan Office markets are expected to benefit from occupiers considering hub/spoke model post COVID-19 + Office portfolio is ~10%
Slide 21: Office Development Pipeline
Office Development Pipeline + 32 Smith Street is progressing well and is due for completion in January Artists impression 2021 + Pipeline of development opportunities within the existing portfolio, progressing planning and approval processes + Expected end value of pipeline projects in excess of $3.
Slide 22: Office Portfolio Resilience
Office Portfolio Resilience 5.2years 100% OFFICE WALE PRIME ASSETS¹ (BY INCOME) + GPT’s portfolio is made up of prime assets attractive to high-quality customers + Prime grade assets have benefited from lower vacancy and higher rates of net absorption over the long term + Office WALE >5 years, with
Slide 23: Logistics Highlights
Logistics Highlights Portfolio Size & Geographic Exposure 99.8% $55.7m 39,800sqm PORTFOLIO VALUATION DEVELOPMENT Office Retail OCCUPANCY UPLIFT COMPLETIONS $6.1bn $5.7bn Sydney 64% Key Highlights Melbourne 25% Brisbane 11% + Operations Net Income of $64.7 million, up 13.7% on comparable period + Hig
Slide 24: Logistics Customer & Leasing
Logistics Customer & Leasing + Occupancy increased Transport, Postal & Trade (Retail & 99.8% PORTFOLIO with let up of vacancies together with addition of fully let development Warehousing Toll Wholesale) Coles completions and OCCUPANCY acquisitions Rand Transport Australian + Completed 118,300sqm TN
Slide 25: Evolution of Logistics
Evolution of Logistics + Acceleration in e-commerce and parcel delivery volumes, with potential for increased inventory to be held locally to provide resilience + Pipeline of infrastructure projects and government stimulus expected to drive economic recovery post COVID-19 + Lower population growth i
Slide 26: Logistics Portfolio Growth
Logistics Portfolio Growth $ 42.2M $ 2.6B PORTFOLIO VALUE 8.4% 1H 2020 PORTFOLIO GROWTH PURCHASE PRICE 23,800sqm GLA + Acquired two facilities totalling $75 million and completed three 9.9years developments totalling $89 million WALE BY INCOME + Valuation uplift of 2.3% with WACR firming by 11 basis
Slide 27: Logistics Development Completions
Logistics Development Completions 39,800sqm 1H 2020 COMPLETIONS (GLA) $89.1m 1H 2020 COMPLETIONS - VALUE 2 Ironbark Close, Berrinba, QLD 30 Ironbark Close, Berrinba, QLD 38A Pine Road, Yennora, NSW $48.5m 5.25% $27.6m 5.63% $13.0m 5.00% FAIR VALUE (30 JUNE 2020) CAP RATE (30 JUNE 2020) FAIR VALUE (3
Slide 28: Logistics Developments Underway
Logistics Developments Underway $85m 67,200sqm UNDERWAY PROJECTS - GLA FORECAST END VALUE 50,100sqm GLA 2H 2020 $129m UNDERWAY PROJECTS – EXPECTED 128 Andrews Road, Penrith, NSW FORECAST COMPLETION END VALUE ON COMPLETION Artists impression $44m FORECAST END VALUE + Two projects underway in Western
Slide 29: Logistics Development Pipeline | Kemps Creek Update
Logistics Development Pipeline | Kemps Creek Update + The Mamre Road precinct achieved rezoning in June 2020 33.4ha ~$445m - Designated a warehousing industrial hub providing ~17,000 new jobs in Western Sydney SITE AREA EXPECTED END VALUE ON COMPLETION - The precinct is located within the Western Sy
Slide 30: Logistics Development Pipeline
Logistics Development Pipeline ~$1.0b PIPELINE EXPECTED END VALUE¹ >500,000sqm PIPELINE CAPACITY¹ Estimated Estimated Estimated State Comment Area GLA¹ End Value Delivery Wembley Business Park, Berrinba QLD 38,200sqm $75m 2021-2022 Stage 1 & 2 delivered in 1H 2020 with 2 stages remaining Gateway Log
Slide 31: Retail
Interim Result 2020 The GPT Group
Slide 32: Retail Highlights
Retail Highlights Portfolio Size & Geographic Exposure 98% 91% $ 9,910 PORTFOLIO STORES OPEN SPECIALTY SALES OCCUPANCY AT 30 JUNE PRODUCTIVITY PER SQUARE Office METRE $6.1bn Retail $5.7bn Key Overview NSW 40% VIC 45% QLD 10% + Retail Segment FFO contribution of $79.2 million for 6 months to June 202
Slide 33: COVID-19 Update
COVID-19 Update Portfolio Traffic and Stores Open Retailer Assistance Marketing and Communications Update Outside of retail assets in Victoria, + Across managed portfolio, + Focused on signage and messaging to managed portfolio demonstrating signs completed 26% of expected deals encourage shopper ad
Slide 34: Portfolio Performance
Portfolio Performance 10% Retail Sales and Traffic 0% -10% + Heavily impacted from mid March through to May with government -20% -30% restrictions introduced -40% + Recovery evident from May in line with relaxation of restrictions -50% -60% MAT at 30 June 2020: -70% + Centre Sales down 10% and Total
Slide 35: Portfolio Performance: Retail Leasing and Valuations
Portfolio Performance Retail Leasing Retail Valuations + Whilst leasing deals have slowed over last 3 months, 173 deals + 100% of retail portfolio independently valued as at 30 June 2020 have been completed for the 6 months to June + GPT retail portfolio outcomes in line with market update in May 20
Slide 36: Portfolio Strategy
Portfolio Strategy Responding to Changing Customer Preferences GPT Portfolio Quality + Customers now demand convenience and during COVID have Portfolio of Leading Retail Assets increased consumption of home delivery and online services + Melbourne Central ranked #1 with highest centre sales + GPT’s
Slide 37: Funds Management
Funds Management Interim Result 2020
Slide 38: Funds Management
Funds Management Funds Management Financial Summary ($M) $ 12.8B 6.6% ASSETS UNDER EARNINGS $ 289M NEW EQUITY Segment 2020 2019 CHANGE MANAGEMENT GROWTH RAISED IN GWOF Result 24.2 22.7 6.6% GPT Wholesale Office Fund GPT Wholesale Shopping Centre Fund + Well positioned with a high quality portfolio a
Slide 39: Sustainability
Sustainability + GPT is bringing forward its Carbon Neutral portfolio commitment to 2024 (previously 2030) - GWOF remains on-track to achieve its carbon neutral target by the end of 2020 + The Group’s target covers all GPT managed assets + Launched our inaugural Climate Disclosure Statement in Febru
Slide 40: Responding near-term | Long-term growth
Responding near-term | Long-term growth Well positioned for forecast economic conditions + Near-term economic and community conditions present challenges + Strong balance sheet with low gearing and high level of liquidity + High quality diversified portfolio with a focus on growing our Logistics exp
Slide 41: Thank you
Thank you for joining us Questions
Slide 42: 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