Goodman Property Trust. 30 & 31 October 2018 NAB First Look USPP Conference, Sydney

Transcription

1 Goodman Property Trust 30 & 31 October 2018 NAB First Look USPP Conference, Sydney

2 Contents Presented by: Andy Eakin Chief Financial Officer James Spence Director Investment Management GMT overview 3 Auckland focus 5 GMT portfolio 10 Development programme 16 Financial & capital management 19 Unless otherwise indicated, all numerical data provided in this presentation is stated as at 31 March All dollar values are NZD unless otherwise stated. All figures are rounded. 2

3 GMT overview 6.1years WALT 1 $2.7bn Property portfolio % Weighted average capitalisation rate 1 1m sqm Net lettable area % Look-through loan to value ratio % 260+ Portfolio occupancy 1 Customers 1 $2.0bn Market capitalisation 3 1 Including contracted sales, as at 31 March Adjusted for all sales contracted as at 31 March As at 23 October

4 Strategic overview Strategy + High quality portfolio situated in key industrial locations close to consumers positioned to capitalise on growth in e-commerce and technological change + Strategic holdings provide development pipeline and urban regeneration opportunities number of estates held significantly below replacement cost + Development programme improving asset quality and growth profile of GMT + Balance sheet capacity expected to support build out of remaining land holdings Targeting + Increased growth in rental cashflows and cash earnings + Creation of a lower capex portfolio + Resilient portfolio with the balance sheet capacity to be opportunistic should markets turn 4

5 Auckland focus Motorway access to Highbrook Business Park 5

6 Auckland context Australia Auckland Sydney Melbourne Brisbane Economic Population Million % of country population % Urban area 1 sqkm 607 2,037 2,543 1,972 GDP growth 2 % Unemployment % Property 3 Prime industrial stock sqm (million) Industrial land supply Hectares 1,111 2,815 6,669 3,173 Prime warehouse rental $/sqm Prime capitalisation rates % Prime vacancy % New Zealand All statistics refer to greater city region unless stated. 1 Refers to urban area only, as defined by nation s statistical areas 2 Average annual change to June Statistics for greater city regions above reflect Goodman s estimates and various agency reports 6

7 Port of Auckland Key logistics infrastructure Land constrained city driven by geographic challenges (harbours, topography) Metroport Experiencing increased pressure on existing infrastructure given significant net migration (circa 110,000 people last 4 years) Major infrastructure projects underway Key State Highway 1 Other State Highway Rail Auckland Airport Wiri Inland Port 7

8 Industrial re-zoning influence Existing NCI warehouse Large quantity of industrial stock re-zoned to other uses within Auckland unitary plan process Example 13,000m2 GMT development at Savill link for NCI who relocated from Mt Wellington industrial building re-zoned to mixed use Goodman NCI development 8

9 + e-commerce is a significant and growing part of global trade and has an estimated value of $3.8 trillion twice the size of what it was five years ago + New Zealanders spent a total of $3.6 billion online in 2017 ($746 per capita) + Online shopping now delivers 8.1% of all retail spend in New Zealand e-commerce in NZ + The greater Auckland region accounted for 37% of online spend in NZ Post delivered 38.9 million parcels in the month of December 2017 (9% increase on December 2016) e-commerce sales by country % of total retail sales in 2017 GMT top ten customers split by subsidiary companies 1 % of portfolio income 25% 23.1% New Zealand Post DHL 20% 19.1% Fletcher Building 16.0% Coda 15% 10% 5% 12.6% 10.0% 9.0% 8.1% 7.9% 7.9% 6.6% 3.2% 2.2% Fliway Transport Toll Spicers CSR Building Products Officemax 0% Big Chill 0% 1% 2% 3% 4% 5% 6% 7% 8% Source: New Zealand Post 1 As at 31 March 2018, excluding contracted for sale properties 9

10 GMT portfolio Highbrook Business Park 10

11 VXV Precinct (conditionally sold) Portfolio statistics 1 Value ($m) 2,746.7 Auckland locations 2 Land area (ha) NLA (sqm) 1,111,244 $psm land 1,133 Central Park (sold) + GMT assets situated in key logistics locations, well suited to assist in the creation of fast and efficient supply chains 1 Including contracted sales, as at 31 March 2018 (excludes Roma Rd) 2 Acquired October

12 Highbrook Business Park Metrics 1 NLA Land area 434,107sqm 107.0ha Site coverage 41% Value Value (psm land area) WALE Average age $1,192m $1,114/sqm 6.0 years 6.4 years % complete 82% Cap rate 5.8% 1 As at 31 March

13 Savill Link M20 Business Park Other core estates Metrics 1 NLA 426,015sqm Land area 96.7ha Site coverage 44% Value $800m Value (psm land area) $834/sqm WALE 6.2 years Average age 12.4 years % complete 96% Cap rate 6.5% The Gate Industry Park Westney Industry Park 1 As at 31 March

14 Penrose Industrial Estate Connect Industrial Estate Value-add estates Metrics 1 NLA 92,426sqm Land area 23.1ha Site coverage 40% Value $148.6m Value (psm land area) $642.4/sqm WALE 2.8 years Average age 37.9 years % complete 100% Cap rate 6.2% Tamaki Estate Concourse Industry Park 1 As at 31 March

15 CBD Acquisition: Roma Road + Recently purchased for $93 million + Site located in centre of Auckland Urban area and surrounded by lowmedium intensity residential + Area earmarked for intensification Waterview tunnel Proposed light rail + Access and direct frontage to SH20 SH20 + Expected to benefit from light rail network running between Auckland CBD and the airport in the medium/long term Roma Road 15

16 Development programme Gateway Warehouses, Highbrook Business Park 16

17 + $672 million of development starts over the last five years, providing average yield on additional spend of 9.4% and development gains of $81 million 1 + $165 million of new developments announced in FY18, with a further $54 million YTD Capital deployment + 80% of remaining portfolio has been developed by Goodman, providing for high quality, well-designed long-term investments Development commencements 2 (total project cost including land) Assets developed by Goodman 2 (total value of stabilised assets by estate) ,200 1, % $ m FY14 FY15 FY16 FY17 FY18 FY19 Q $ m 52% 100% 72% 100% 65% Highbrook Savill M20 Westney The Gate Other Other Highbrook Developed by Goodman Other 1 Revaluation gains recorded on developments completed during the period 2 As as 31 March 2018, including FY19 Q1 announcements 17

18 + 66,000 sqm of space currently under construction within GMT portfolio + Remaining land supply 22 ha 1 + Supports a further 116,000 sqm of industrial and commercial development + Yield on additional spend expected to range between 8-9% Development pipeline + Estimated additional spend of approximately $290 million + Highbrook represents 82% of remaining land supply + New land opportunities tightly held and difficult to secure Gateway Warehouses development (artists impression), Highbrook Business Park 1 As at 31 March 2018, including FY19 Q1 announcements 18

19 Financial & capital management Courier Post, Highbrook Business Park 19

20 GMT 31 March 2018 financials 25 $2.7bn % Total assets Loan to value ratio (look-through) $194mn Profit after tax $119mn Operating earnings before tax $824mn Total borrowings 4.5years Weighted average debt term 3.2times Interest cover ratio 68 % Non-bank funding (drawn basis) 20

21 Developed Asset recycling 5 year programme Bought Gateway Warehouses development (artists impression), Highbrook Business Park Sold DISPOSALS $1.2 billion ACQUISITIONS $267 million 1 DEVELOPMENTS $672 million 2 Roma Road Estate, Mt Roskill, Auckland VXV Precinct, Auckland CBD 1 Includes Roma Rd acquisition 2 Development starts (TPC including land) 21

22 + GMT has strong liquidity as a result of recent divestments + Increased ability to further invest in Auckland industrial through development pipeline and acquisitions GMT capacity + Build out of full development pipeline including projects underway (circa $450 million 1 ) would result in gearing of less than 35% Pro-forma gearing bridge 2 35% 30% 31% <35% 25% 20% 15% 10% 5% Contracted sales 25.0% WPH disposal 14.1% $160m Committed developments 19.9% $93m Roma Road 22.9% $290m Development pipeline 1 0% Balance Sheet Reported LVR Pro Forma LVR Committed LVR March 2018 Post acquisitions Approximate built out LVR 1 At current construction costs 2 As at 31 March 2018, including Roma Rd acquisition 22

23 + Proven capital management programme + Most diversified funding in NZ listed property sector 68% non-bank funding (drawn basis, 19% USPP, 49% domestic bonds) Debt maturity profile Bank facility provides operational flexibility + Refinancing risk minimised with appropriate sized tranches + Credit cost risk minimised by utilising multiple sources Debt maturity profile (31 March 2018) USPP notes 100 Domestic bonds Bank facility Bank debt drawn FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 Excludes GMT s 51% share of the WPH debt facility 23

24 THANK YOU Thank you 24

25 Appendicies 25

26 Presenters Andy Eakin Chief Financial Officer Andy's role as Chief Financial Officer involves managing the finance and associated activities of Goodman Property Trust and Goodman's New Zealand operations. Andy has over 25 years' experience in finance roles and has worked in Ireland, Scotland and New Zealand. Before joining Goodman in March 2011, Andy was Group Reporting Manager at Fonterra and prior to Fonterra he worked at Landco Limited and PricewaterhouseCoopers. James Spence Director Investment Management (GMT) James is the Director of Investment Management for GMT, responsible for overseeing the investment decisions of GMT and heading up the property team. He joined the Group in 2006 and held various roles within the New Zealand business before moving to Europe with Goodman in During his time in Europe, James was responsible for managing Goodman wholesale funds and leading its capital transaction programme. James has 13 years of experience in the property industry and holds a degree in Property from the University of Auckland as well as a Graduate Diploma in Applied Finance from Kaplan Education in Australia. 26

27 Auckland industrial rentals $/m Auckland industrial yields 12% % 8% Auckland industrial market F Prime Secondary 6% 4% 2% 0% F Prime Secondary + Economic growth fuelling occupier demand + Historically low vacancy and rising market rents a feature of most suburbs + Industrial land values now being driven by offshore demand and residential conversion factors Auckland industrial vacancy 6% 5% 4% 3% 2% 1% South Auckland Industrial land values $/m % F Prime Secondary Source: CBRE 27