Gpt Group · ASX:GPT
Gpt — The GPT Group — H1 2016 Earnings Presentation
27 slides from Gpt's earnings presentation, Aug 15, 2016
Slide 1: 2016 Interim Result
0 2016 INTERIM RESULT 15 August 2016
Slide 2: Agenda
Agenda 1 Section Speaker Page 2016 Interim Result Highlights Bob Johnston 3 Financial Summary & Capital Management Anastasia Clarke 5 Retail Vanessa Orth 9 Office & Logistics Matthew Faddy 14 Funds Management Nicholas Harris 23 Summary & Outlook Bob Johnston 26
Slide 3: 2016 Interim Result Highlights
2016 Interim Result Highlights 2 Delivering results from core business Investment Portfolio Performance 6.1% FFO1 per security 14.3% Total Return 3.8% Portfolio like for like $ 380m Portfolio valuation growth income growth uplift Distribution Capital Management Portfolio leasing and occupancy 11.5¢
Slide 4: Progress on Group Strategy
Progress on Group Strategy 3 • Retail, Office & Logistics portfolios all delivering strong returns Investment • Full year Group Total Return expected to be greater than 11.5% Portfolio • 86% of the investment portfolio is in the Sydney and Melbourne markets • GWOF terms renewed, with an increase in
Slide 5: Financial Summary
Financial Summary 4 6 months to 30 June ($ million) 2016 2015 Change Net Profit After Tax 586.4 421.9 39.0% Deduct: Valuation increases 379.9 146.0 Deduct: Distribution on exchangeable securities - 1.7 Add back: Treasury items marked to market 65.7 (7.3) Deduct: Other items 2.4 17.9 Funds From Opera
Slide 6: Segment Result
Segment Result 5 6 months to 30 June ($m) 2016 2015 Retail 148.6 149.7 Comparable income growth of 3% offset by asset sales including Dandenong Office 107.1 107.3 Comparable income growth of 6% offset by lower GWOF income due to 1H performance fee and Fund accrual for a final performance fee Logisti
Slide 7: GWOF Performance Fee
GWOF Performance Fee 6 • GPT earned a performance fee from GWOF in 1H16 • GWOF terms renewal included a final performance fee to GPT for accrued outperformance − GWOF has accrued for the final performance fee expense − Payable to GPT in 2H16 and does not form part of GPT’s 1H16 FFO Reconciliation GP
Slide 8: Capital Management
Capital Management 7 • Upgrade of GPT’s long term rating with Standard and Poor’s to A • Reduced weighted average cost of debt by 30 basis points to 4.3% • Further diversified the Group’s funding sources and increased the weighted average debt term to 5.9 years • Net gearing decreased to 24.4% at 30
Slide 9: Retail | Highlights
Retail | Highlights 8 Key Portfolio Statistics Retail Financial Highlights 2016 2015 Change Property Net Income 120.9 127.8 (5.4%) 3.0% $ 43.2m Income from GWSCF 17.8 18.2 (2.2%) Portfolio like for like Valuation uplift income growth Portfolio commentary and market conditions • Solid like for like g
Slide 10: Retail | Specialty Sales
Retail | Specialty Sales 9 Portfolio Insights Moving Annual Change in Retail Sales by Category1 • Specialty sales growth has 16.4% moderated to 4.2% in June from 6.5% in Dec 15 Specialty breakdown • Improved performance in 10.7% 9.8% Department Stores and Mini Majors 6.2% • General Retail performing
Slide 11: Retail | Leasing
Retail | Leasing 10 Leasing Highlights • Strong specialty sales growth and productivity is translating into an improvement in leasing spreads and low levels of vacancy • Actively shifting the retail mix into growth categories such as food catering and down weighting in certain areas of apparel, tran
Slide 12: Retail | Development
Retail | Development 11 Casuarina Square Charlestown Square Entertainment & Lifestyle precinct – $34m International Mini-Major remix – $44m • Creation of a new entertainment & lifestyle precinct, • Re-vitalised an existing precinct to strengthen asset “The Quarter”, to enhance the assets dominant po
Slide 13: Retail | Sunshine Plaza Development
Retail | Sunshine Plaza Development 12 • Dominant asset in a growth market • High productivity of $11,800 per sqm • Trade area will continue to benefit from population growth, new infrastructure and tourism • $400m expansion includes 105 new specialties, David Jones, Big W, International Mini-Majors
Slide 14: Office | Highlights
Office | Highlights 13 Key Portfolio Statistics Office Financial Highlights 2016 2015 Change Property Net Income 83.2 76.6 8.6% 6.0% $ 287.3m Income from GWOF 25.1 31.1 (19.3%) Portfolio like for like Valuation uplift income growth Portfolio commentary and market conditions • Portfolio has delivered
Slide 15: Office | Valuations
Office | Valuations 14 • All assets independently valued at 30 June 2016 • Valuation gains a function of income growth and cap rate firming Valuation Uplift Weighted Average Valuation Uplift 1H16 Sydney Melbourne Brisbane Property $m % +10.8% +4.2% +0.3% Australia Square $50.9 14.9% Composition of 1
Slide 16: Office | Leasing
Office | Leasing 15 • Significant leasing achieved over the last four years, increasing occupancy to 97.3% • Leasing results driven by the technology sector and continued demand from the smaller tenant market • 41,100 sqm of signed leases and 43,000 sqm of deals at heads of agreement • Average incen
Slide 17: Office | Sydney Leasing Activity
Office | Sydney Leasing Activity 16 • Sydney market represents 57% of GPT’s portfolio weighting • Strong leasing results achieved in 1H 2016 − 25,500 sqm of signed leases and an additional 28,100 sqm of heads of agreement • Portfolio of ten assets well positioned in the market Total Return (12 month
Slide 18: Office | Lease Expiry
Office | Lease Expiry 17 • Low expiry profile with opportunities to capture stronger market conditions • Portfolio weighted 89% to the strong markets of Sydney and Melbourne Lease Expiry by Income 17.2% 17.5% Expiry as at Dec-15 Expiry as at Jun-16 9.9% 10.0% 8.3% 8.0% 8.3% 7.9% 4.9% 3.8% 2016 2017
Slide 19: Office | Asset Enhancement & Development
Office | Asset Enhancement & Development 18 Asset Upgrades Darling Park – Development Opportunity • 580 George $25m lobby and retail upgrade. • 50% owned by GWOF Advancing stage 2 retail podium scheme • Development application anticipated to be lodged • Planning continues on MLC Centre stage 2 retai
Slide 20: Logistics | Highlights
Logistics | Highlights 19 Key Portfolio Statistics Logistics Financial Highlights 2016 2015 Change Property NOI 46.0 44.3 3.8% 0.1% $ 42.3m Income from GMF 1.4 1.4 - Portfolio like for like Valuation uplift Portfolio commentary and market conditions income growth • Portfolio has delivered a strong T
Slide 21: Logistics | Lease Expiry
Logistics | Lease Expiry 20 • Active lease negotiations progressing for current vacancy and key 2017 expiries • Following the sale of Kings Park in July 2016 the 2017 expiry has reduced to 12.9% Lease Expiry Profile by Income Expiry as at Dec-15 18.2% Expiry as at Jun-16 12.9% 10.2% 10.9% 11.3% 8.8%
Slide 22: Logistics | Development & Land Bank
Logistics | Development & Land Bank 21 Development • Commenced two speculative developments (44,600sqm GLA) at Abbott Rd, Seven Hills and Eastern Creek Drive, Eastern Creek • Secured three transactions at Metroplex, Wacol Land bank providing potential for approximately $450m of investment product •
Slide 23: Funds Management | Highlights
Funds Management | Highlights 22 • Funds Management division has GPT Total Return for 12 months ended 30 June 2016 generated a Total Return of 17.6% 4.0% 17.6% • GPT Metro Office Fund (GMF) 8.0% − Takeover offer from Growthpoint recommended by the GMF Board 5.6% − Offer price delivers a Total Unitho
Slide 24: Funds Management | GWSCF & GWOF
Funds Management | GWSCF & GWOF 23 GPT Wholesale Shopping Centre Fund (GWSCF) • $240 million expansion of Macarthur Square progressing well • Introducing H&M and new format David Jones to Wollongong Central • Highpoint Shopping Centre continues to perform strongly, with expansion plans under conside
Slide 25: Funds Management | GWOF Fund Terms
Funds Management | GWOF Fund Terms 24 Item New terms • 50 bps up to $6 billion GAV (from 45 bps) Base management fee • 45 bps thereafter • Effective 1 July 2016 • Removal of performance fee structure Performance fee structure • Effective 1 July 2016 • Payment of a final performance fee in 2H16 • GPT
Slide 26: Summary & Outlook
Summary & Outlook 25 • Economic conditions in NSW and Victoria continue to be favourable for Retail, Office and Logistics sectors • Good progress being made on development led investment opportunities • Balance sheet is in a very strong position • GWOF terms and liquidity review concluded. No furthe
Slide 27: Disclaimer
Disclaimer 26 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 prese