Growthpoint Properties Australia · ASX:GOZ
Growthpoint Properties Australia — FY2022 Earnings Presentation
53 slides from Growthpoint Properties Australia's earnings presentation, Aug 16, 2022
Slide 1: Growthpoint Properties Australia FY22 annual results
Growthpoint Properties Australia FY22 annual results. 16 August 2022 space to thrive.
Slide 2: Agenda
Agenda. Performance Portfolio Financial Outlook Supplementary overview & strategy update results information 3 11 19 24 27 Timothy Collyer Michael Green Dion Andrews Managing Director Chief Investment Officer Chief Financial Officer 599 Main North Road, Gepps Cross, SA 2 Growthpoint Properties Austr
Slide 3: Performance overview & strategy
Performance overview & strategy. Building 3, 570 Swan Street, Richmond, VIC (Botanicca 3)
Slide 4: FY22 overview
FY22 overview. 1 Profit after tax Gearing WALE • Delivered strong performance and FFO growth for Securityholders $459.2m 31.6% 6.3yrs FY21: $553.2m, -17.0% Target 35-45% 30 June 2021: 6.2yrs • Invested in strategic, accretive acquisitions to support Group’s growth ambitions, including high- FFO Hedg
Slide 5: Delivering on our strategy in FY22
Our strategy Delivering on our Our goal is to provide Securityholders with sustainable income returns and strategy in FY22. capital appreciation over the long term. Opportunities Invest in high- Maximise Maintain high- for growth: quality assets value occupancy Long track record of delivery Achieved
Slide 6: Strategic growth opportunity
Agreement to acquire Fortius Funds Management1 Strategic growth opportunity. 2 Growthpoint has entered into an agreement under which it will Growthpoint post transaction. acquire 100% of the shares in Fortius Funds Management Pty Ltd (Fortius) (the ‘Transaction’) Growthpoint Properties Australia $7.
Slide 7: Continued progress on sustainability
ESG strategy Gender diversity Continued progress 77% Employee engagement (all employees)2 score placing Group in top decile of benchmark group on sustainability. 48.7% 51.3% FY21: 77%, top quartile of benchmark group 61% Employee alignment score placing Group in top quartile • Moved forward on our t
Slide 8: Out-performance over the long term
Out-performance Growthpoint trading at over the long term. 18% discount to NTA2 Total securityholder return1 Return on equity to 30 June 2022 to 30 June 2022 (per annum) 16.7% Growthpoint S&P/ASX 200 A-REIT Accumulation Index 16.0% 14.3% 14.7% 11.9% 9.2% 7.6% 4.4% -0.9% -2.8% -11.7% -12.3% 1 year 3
Slide 9: Changing macro environment
Changing macro environment. Rising inflation Rising interest rates Unemployment Rate (%) Rate (%) Rate (%) 8.0 4.0 8.0 7.0 3.5 7.0 6.0 6.0 3.0 5.0 2.5 5.0 4.0 2.0 4.0 3.0 RBA target 2.0-3.0% 1.5 3.0 2.0 2.0 1.0 1.0 1.0 0.0 0.5 0.0 -1.0 0.0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-
Slide 10: Changing environment, well positioned portfolio
Changing environment, well positioned portfolio. Office Industrial Investment market National office vacancy Industrial floorspace gross take-up across Australia (sqm) Commercial real estate investment volume (AU$) Rate (%) Millions Millions Office Industrial 4.5 20,000 12.0% 10-yr 4.0 average 18,00
Slide 11: Portfolio update
Portfolio update. 141 Camberwell Road, Hawthorn East, VIC
Slide 12: Strategic property acquisitions
$426.6 million in property acquisitions Strategic property acquisitions. since 30 June 2021 with blended WALE of 8.1 years and yield of 5.1%2 $52.0m1 $84.6m1 $125.0m1 $165.0m1 Aug 2021 Dec 2021 Feb 2022 Jul 2022 11 Murray Rose Avenue, 2-6 Bowes Street, 141 Camberwell Road, GSO Dandenong, 165-169 Syd
Slide 13: Portfolio snapshot
599 Main North Road, Gepps Cross, SA Portfolio snapshot. 1 Total assets Portfolio occupancy Weighted average lease expiry Weighted average cap rate 96% of portfolio leased 58 97% 6.3yrs 5.0% to government, listed or large 30 June 2021: 55 30 June 2021: 97% 30 June 2021: 6.2yrs 30 June 2021: 5.2% org
Slide 14: Portfolio key metrics
Portfolio key metrics. Office portfolio1 Industrial portfolio Portfolio Office Weighted ave. Weighted ave. Portfolio Industrial Weighted ave. Weighted ave. occupancy portfolio value lease expiry cap rate occupancy portfolio value lease expiry cap rate 95% $3.4b 6.7yrs 5.1% 100% $1.7b 5.3yrs 4.7% 30
Slide 15: WALE maintained on leasing success and strategic acquisitions
Portfolio leasing update WALE maintained on leasing success and strategic acquisitions. BOQ 3.2% Portfolio lease expiry Federal Govt. 2.4% per financial year, by income, ANZ 2.2% Samsung 2.2% Jacobs 1.6% 8% as at 30 June 2022 FY22 Office Industrial FY21 Office Industrial Woolworths Woolworths 4.0% 4
Slide 16: Significant portfolio leasing activity
Portfolio leasing update Total leasing completed in FY22 ~234,000 sqm or Significant portfolio leasing activity. 17% of portfolio income Total leasing completed in FY22 Total leasing completed in FY22 ~41,000 sqm ~193,000 sqm or 11% of portfolio income or 30% of portfolio income Office Industrial le
Slide 17: Returning confidence and positive trends in metro markets
Office market update Returning confidence and positive trends in metro markets. Office net absorption CBD and metro (sqm)1 Net absorption (sqm) FY22 FY21 CBD markets Metro Markets % total market (sqm) FY22 FY21 120,000 15% FY22 CBD FY22 Metro 80,000 10% net absorption net absorption 40,000 5% 143,55
Slide 18: Strong rental growth
Industrial market update 0.8% market vacancy rate across five capital cities at June Strong rental growth. 2022, at historic national low and lowest worldwide2 Net face rent growth1 (%) Industrial vacancy rates2 (%) Prime net face rent growth FY20 FY21 FY22 Sydney Melbourne Brisbane Perth Adelaide 2
Slide 19: Financial results
Financial results. 27-49 Lenore Drive, Erskine Park, NSW
Slide 20: FY22 financial results
Financial summary FY22 financial results. % Increase primarily driven by new acquisitions and Components of FFO FY22 FY21 change increased occupancy at Building 3, 570 Swan Street, Richmond, VIC (Botanicca 3), offset by the NPI $m 247.6 235.6 5.1 sale of 102 Bennelong Parkway and 6 Parkview Drive in
Slide 21: Strong financial performance
Financial summary Strong financial performance. FFO per security movement NTA per security movement (cents per security) (cents per security) +7.8% +9.4% since since 30 June 2021 30 June 2021 FY21 NPI1 Net Acquired Divested Other FY22 NTA Office Industrial DXI Retained Other NTA Office Industrial DX
Slide 22: Gearing to remain below target range
Capital management Proforma gearing at 34.3% post settlement of GSO Dandenong1 Gearing to remain below target range. and Fortius acquisition anticipated in 1Q FY232 Gearing1 as at 30 June Distribution payout ratio % of FFO Target 94.0% 65% 95% gearing range 94.0% 93.1% 35-45% 89.4% 88.8% 85.3% 55% 8
Slide 23: Position going into FY23
Capital management 61% Position going into FY23. fixed debt at 30 June 2022 Metrics Hedge maturity profile Group debt maturity profile at 30 June 2022 at 30 June 2022 at 30 June 2022 ($ million) Fixed debt Weighted average rate Bank debt Undrawn bank debt Institutional term loan USPP WACD WACD - fix
Slide 24: Outlook
Outlook. 2-6 Bowes Street, Phillip, ACT
Slide 25: FY23 guidance
11 Murray Rose Avenue, Sydney Olympic Park, NSW Outlook FY23 guidance FY23 FFO FY23 guidance distribution guidance 25.0 - 26.0 cps A key assumption to guidance 21.4 cps is in respect of rising interest rates, with the Group assuming an average FY23 floating cash Forecast rate of 2.8% distribution yi
Slide 26: Questions
Thank you for joining us. Questions. 141 Camberwell Road, Hawthorn East, VIC
Slide 27: Supplementary information
Supplementary information. Financial Property Key market Additional information portfolio metrics information 28 39 47 50 15 Green Square Close, Fortitude Valley, QLD
Slide 28: Financial information
572-576 Swan Street, Richmond, VIC Financial information.
Slide 29: Summary financials
Financial information Summary financials. FY22 FY21 Change % Change NPI1 $m 247.6 235.6 12.0 5.1 Like-for-like NPI $m 238.6 233.3 5.3 2.3 Statutory accounting profit $m 459.2 553.2 (94.0) (17.0) Statutory accounting profit per security ¢ 59.5 71.7 (12.2) (17.0) FFO $m 214.0 198.3 15.7 7.9 Distributi
Slide 30: Reconciliation from statutory profit to FFO
Financial information Reconciliation from statutory profit to FFO. FY22 FY21 Change Change $m $m $m % Profit after tax 459.2 553.2 (94.0) (17.0) Less FFO items: - Straight line adjustment to property revenue (12.1) (8.5) (3.6) - Net (gain) in fair value of investment properties (285.1) (356.5) 71.4
Slide 31: Financial position
Financial information Financial position. 30 June 2022 30 June 2021 $m $m Assets Cash and cash equivalents 49.2 33.5 Investment properties 5,233.1 4,619.6 Investment in securities 132.4 104.8 Other assets 85.1 19.9 Total assets 5,499.8 4,777.8 Liabilities Borrowings 1,740.0 1,327.1 Distributions pay
Slide 32: Additional financial information
Financial information Additional financial information. Reconciliation of operating cashflow to FFO FY22 $m Operating cashflow 183.4 Lease incentives and leasing costs 35.2 Net (prepaid)/accrued operating activities (7.3) COVID deferrals (net) 1.1 Provision for income tax 0.7 Lease liability repayme
Slide 33: Lease incentives
Financial information Lease incentives. Consolidated Statement of Profit and Loss FY22 FY21 $m $m Property revenue (excluding incentives) 336.7 315.6 Lease incentives includes fit out, rent free, rental Amortisation of tenant incentives (33.0) (26.9) abatement and cash payments. The tables on this p
Slide 34: Operating and capital expenses
Financial information Operating and capital expenses. Operating expenses FY22 FY21 Average Total operating expenses $m 19.8 15.7 0.37% Average gross assets value $m 4,911.3 4,425.3 FY17 – FY22 Operating expenses to average gross assets % 0.40 0.35 Capital expenditure Expected to average FY22 FY21 0.
Slide 35: Capital management
Financial information Capital management Maturity date Time to maturity Fixed rate Principal Amount Interest rate swaps Dec-2023 1.5yrs 0.22% $20m Dec-2023 1.5yrs 0.21% $15m 2.99% Feb-2024 1.6yrs 0.22% $25m Weighted average Sep-2024 2.2yrs 0.50% $75m fixed debt rate Sep-2024 Jun-2025 2.2yrs 3.0yrs 0
Slide 36: Key debt metrics and changes during FY22
Financial information Key debt metrics and changes during FY22. 30 June 2022 30 June 2021 Change Gross assets $m 5,499.8 4,777.8 722.0 Interest bearing liabilities $m 1,740.0 1,327.1 412.9 Total debt facilities $m 2,101.5 1,720.0 381.5 Undrawn debt $m 353.5 387.5 (34.0) Gearing % 31.6 27.9 3.7 Weigh
Slide 37: Capital management
Financial information Capital management. Stress testing covenants ICR >1.6x Gearing movement GOZ: 5.2 for the 12 months ended 30 June 2022 To breach this covenant, NPI LVR <60% would need to fall GOZ: 33.6% by 68%1 To breach this covenant, GOZ cap rate would need to Secured rise by 429 bps 1 proper
Slide 38: Group debt maturity profile
Sources of debt Financial information at 30 June 2022 ($ million) Group debt maturity profile. $1,255m AU floating rate Bank debt $150m 67% As at 30 June 2022 ($ million) Foreign bank floating Debt capital $300m Bank debt Undrawn bank debt Institutional term loan USPP1 markets Foreign non-bank fixed
Slide 39: Property portfolio
333 Ann Street, Brisbane, QLD Property portfolio.
Slide 40: Geographic diversity – by property value
84% of properties Property portfolio located on Eastern seaboard Geographic diversity 23% – by property value Queensland $1,191.7 million As at 30 June 2022 $5.1b Office Industrial $900.7m $291.0m Property Office metropolitan properties (24 assets) portfolio value 25% Office CBD properties (3 assets
Slide 41: Portfolio summary
Property portfolio Sector diversity Geographic diversity Occupancy Portfolio by value by value by income Vacant 3% summary. WA 8% NSW Industrial 34% 25% SA 8% ACT 5% As at 30 June 2022 Office 66% VIC QLD 23% 31% Occupied 97% Tenant type Tenant use Lease type Annual rent review type by income by inco
Slide 42: Portfolio metrics
Property portfolio Portfolio metrics. 1 Key metrics Like-for-like NPI growth (FY21 to FY22) Distributions 30 June 2022 30 June 2021 from equity Number of assets 58 55 Office Industrial investments Total Property portfolio value $5.1 billion $4.5 billion NPI growth 2.8% 1.4% 1.7% 2.3% Number of tenan
Slide 43: Top ten tenants – by income
Property portfolio Top ten tenants – by income. Total portfolio Office tenants Industrial tenants as at 30 June 2022 as at 30 June 2022 as at 30 June 2022 % portfolio WALE % portfolio WALE % portfolio WALE income (yrs) income (yrs) income (yrs) Woolworths 12 6.6 NSW Police Force 11 22.5 Woolworths 3
Slide 44: Leasing – office leases executed in FY22
FY22 leases completed – % Ave. Property portfolio office portfolio lease term 6.0 yrs Leasing – office leases executed in FY22. income 11.2% Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 15 Green Square Close Fortitude Valley QLD Stella Rossa Leasing (1) Jul-20 7.0 88 - Building B,
Slide 45: Leasing – office leases executed in FY22 (cont.)
Property portfolio Leasing – office leases executed in FY22 (cont.) Location Tenant Start date Term (yrs) NLA (sqm) Car parks (no.) 15 Green Square Close Fortitude Valley QLD Tech Mahindra Jun-22 5.0 1,482 - 15 Green Square Close Fortitude Valley QLD Ampol Australia Petroleum Jun-22 5.0 605 8 141 Ca
Slide 46: Leasing – industrial leases executed in FY22
FY22 leases completed - % Ave. Property portfolio industrial lease term 4.5 yrs Leasing – industrial leases executed in FY22. portfolio income 30.3% Location Tenant Start date Term (yrs) NLA (sqm) 5 Viola Place Brisbane Airport QLD Eagers Automotive Dec-21 11.2 14,726 10 Butler Boulevard Adelaide Ai
Slide 47: Key market metrics
13 Business Street, Yatala, QLD Key market metrics.
Slide 48: Office markets
3% of 15% of Key market metrics Growthpoint Brisbane - CBD Growthpoint Brisbane - Fringe Portfolio Portfolio Office markets. Vacancy 15.4% Vacancy 18.5% Prime Secondary Prime Secondary R $796 gross $625 gross R $613 gross $478 gross I 43% 45% I 43% 43% Y 5.00-6.25% 5.75-7.00% Y 5.50-7.25% 6.00-7.75%
Slide 49: Industrial markets
Key market metrics Industrial markets. Brisbane 6% of Growthpoint Portfolio Vacancy 1.4% Prime Secondary R $119-137 $98-111 R – Average face rent per sqm per annum I 5-12% 5-12% I – Average incentives Y 4.00-5.00% 5.25-6.75% Y – Average core market yield 6% of Sydney Growthpoint Brisbane Portfolio V
Slide 50: Additional information
3&5 Murray Rose Avenue, Sydney Olympic Park, NSW Additional information.
Slide 51: Glossary
Additional information Glossary. Term Definition Term Definition Term Definition ABS Australian Bureau of Statistics GOZ Growthpoint or Growthpoint’s ASX trading code or Payout ratio Distributions ($million) divided by FFO ($million) ACT Australian Capital Territory, Australia ticker PV Photovoltaic
Slide 52: Important information
Additional information Important information. This presentation has been prepared by Growthpoint Properties Australia Limited (ACN assurance that actual outcomes for Growthpoint will not differ materially from 124 093 901) in its personal capacity and as responsible entity of Growthpoint statements
Slide 53: Contact us
Contact us. Retail investors Computershare 1300 665 792 (within Australia) +61 (3) 9415 4366 (outside Australia) webqueries@computershare.com.au Institutional investors Kirsty Collins Investor Relations and Communications Manager +61 (3) 8681 2933 investor.relations@growthpoint.com.au 2022/23 calend
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