Interim Result 2022 Goodman Property Trust - Amazon AWS
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Interim
Result
2022
Goodman Property Trust
1
Goodman Property Trust Interim Result 2022
Contents
Overview Capital management
03 26
Investment Summary &
portfolio outlook
06 30
Sustainability Appendix
17 34
Financial result
21
Presented by:
◼ John Dakin Chief Executive Officer ◼ James Spence Director - Investment Management ◼ Andy Eakin Chief Financial Officer
Unless otherwise indicated, all numerical data provided in this presentation is stated as at 30 September 2021. All dollar values are NZD unless otherwise stated. All figures are rounded. Non-GAAP financial measures may not be consistent with their calculation by other similar entities. 2
Goodman Property Trust Interim Result 2022
Overview
3
Goodman Property Trust Interim Result 2022
Structural trends
Growth of e-commerce and the digital economy: E-commerce % of total retail sales
New Zealand
◼ The growth in e-commerce has accelerated with the pandemic. Consumers are
increasingly opting for the safety and convenience of online shopping and contactless 16%
delivery
◼ NZ customer expectations are rapidly changing, with 58%1 choosing to buy from one
retailer over another because they offered same day delivery
11%
◼ Businesses are having to adapt to the growing online marketplace, with many
incorporating e-commerce fulfillment functions into existing warehouse operations
6%
Well-located Industrial real estate is recognised as essential infrastructure for the
digital economy, making it a highly sought after asset class:
◼ Disruption in global supply chains is also forcing local businesses to maintain higher
inventory levels, creating requirements for additional warehouse space
◼ Increased customer demand has resulted in an acceleration of development,
2015 2020 2025
particularly in infill locations
84%
◼ Customer demand for warehouse and logistics space is now exceeding supply in E-commerce sales
Auckland, with Grade A vacancy falling below 1%2 as at June 2021
growth 2020-2025
All stats from Euromonitor unless otherwise disclosed
1 NZ Post Q2 update released 30 July 2021
2 CBRE Auckland industrial half year vacancy update (released 10 Aug 2021)
4
Goodman Property Trust Interim Result 2022
Results overview
An investment strategy focused on urban logistics has positioned GMT to benefit from the growing digital economy, structural
changes and significant customer demand.
Portfolio
◼ Portfolio occupancy of 99.5%, WALE of 5.8 years1, following 169,122 sqm of leasing in the first half
◼ Underlying like-for-like net rental growth of 5.1% for the period
◼ $354.2 million of development work in progress2 with average yield on cost of 5.5%
◼ Acquisition of 34 ha industrial land adjoining Villa Maria Winery in Māngere3, further adding to GMT’s development pipeline
Capital management
◼ Gearing of 17.5%, with committed gearing of 22.6%
◼ $310 million in available liquidity, providing significant investment capacity
FY22 interim result
◼ $504.7 million interim revaluation and profit before tax of $570.0 million
◼ 37.1 cent per unit increase in NTA from 212.5 cents per unit to 249.6 cents per unit
◼ Cash earnings of $46.0 million, or 3.29 cents per unit, up 8.2% from 3.04 cents per unit4
◼ Distributions of 2.75 cpu, reflecting a payout ratio of 83.6%
1 Includes leased developments
2 As at 11 November 2021
3 Acquisition remains conditional
4 1H21 cash earnings of 3.11 cents per unit restated to 3.04 cents per unit under amended cash earnings calculation method which removes straight line rent adjustments as disclosed in 2021 Annual Result presentation on 13 May 2021
5
Goodman Property Trust Interim Result 2022 Investment portfolio Gateway warehouses – Highbrook Business Park 6
Goodman Property Trust Interim Result 2022
Land acquisition
Land area Purchase price
34ha $75m
Acquisition properties
Acquisition remains conditional 7
Goodman Property Trust Interim Result 2022
New developments
Total Project Cost
$97.3m
Lettable area
Stanley Black & Decker – Highbrook Business Park Artist’s impression
16,373 sqm
Yield on total cost
5.1%
NZ Blood – Highbrook Business Park Artist’s impression
8
Goodman Property Trust Interim Result 2022
Work in progress
Projects underway Total project cost Total lettable area
10 $354.2m 87,803 sqm
Mainfreight – Favona Artist’s impression
As at 11 November 2021, including newly announced developments. 9
Goodman Property Trust Interim Result 2022
Work-in-progress
Work-in-progress summary1
◼ Current development programme of 87,803 sqm has a total project
Lettable area Expected
cost of $354.2 million, a yield on cost of 5.5%, and is currently 79%
Estate
sqm completion date2 leased
M20 Business Park 9,773 Feb-22
Roma Road Estate 17,700 Mar-23 ◼ Significant development activity at Highbrook:
Favona Estate 35,860 Apr-23 ＋ 9,174 sqm design build for Stanley Black & Decker enables the
Highbrook Business Park 24,470 Aug-23 recommencement of the previously paused El Kobar facility
Subtotal 87,803
＋ 3,290 sqm design build for New Zealand Blood and Organ
Service for a 20-year term
Development leasing exposure ＋ Completion of the Highbrook Town Centre with the
commencement of a 3,909 sqm build-to-lease office building
Lettable area
% of total portfolio and carpark building
sqm
Leased 77,511 8.1% ◼ Favona Estate is now 100% leased with Mainfreight committing to
Terms agreed3 6,383 0.6% the remaining 10,710 sqm warehouse
Remaining build-to-lease4 3,909 0.4%
◼ M20 9,000 sqm build-to-lease development is now 100% leased to
Total work-in-progress 87,803 8.1%
an IT distribution company on a 10 year term
Total GMT portfolio 1,089,706
◼ GMT continuously manages exposure to build-to-lease
1 Work in progress as at 11 November 2021 development, which equates to just 0.4% of total portfolio
2 Last completion date of current work-in-progress
3 Signed Heads of Agreement
4 Build-to-lease developments that do not have terms agreed with a customer
10Goodman Property Trust Interim Result 2022
Development pipeline
Regeneration of existing brownfield sites is
providing more sustainable development
opportunities, closer to consumers.
We expect this activity to continue to be a
major source of development into the future.
Development land
87 ha
across greenfield and brownfield redevelopment sites
Redevelopment focus
70%
of development pipeline is brownfield redevelopment
Lettable area
400,000 sqm
approximate development potential within existing portfolio
Roma Road Artist’s impression
11Goodman Property Trust Interim Result 2022
GMT’s property portfolio Efficient and desirable distribution locations
Property portfolio Net lettable area
$4.3bn 1.1m sqm
Occupancy WALE1
99.5 % 5.8 years
1 Includes leased developments
Portfolio metrics do not include the acquisition of land adjoining Villa Maria Winery, which remains conditional
12Goodman Property Trust Interim Result 2022
Leasing
Leased in FY22 Average lease up period Passing rental growth
169,122 sqm
15.5% of portfolio
3 months
from vacancy or PC date to lease
9.7%
on stabilised leasing deals
commencement date
Core portfolio average
warehouse rate Average lease term Average incentive
$136 psm
on stabilised and development
6.3 years
on stabilised and development
3.1%
on stabilised and development
leasing deals leasing deals leasing deals
Includes all leasing across stabilised portfolio and developments for the 6 months to 30 September 2021
Highbrook Business Park 13Goodman Property Trust Interim Result 2022
Portfolio valuation
Portfolio summary as at 30 September 2021
Value Cap rate Initial yield WALE Occupancy Net lettable area Capital value
$m years sqm psm
Highbrook Business Park 2,175.3 4.1% 3.9% 6.1 100% 469,588 4,632
Savill Link 550.9 4.0% 3.9% 6.6 100% 135,112 4,077
M20 Business Park 393.7 4.4% 4.3% 3.6 98% 112,392 3,503
The Gate Industry Park1 338.3 4.3% 4.1% 3.2 100% 85,439 3,956
Westney Industry Park1 218.3 4.7% 8.7% 5.4 99% 113,631 1,342
Value-add estates 419.0 4.7% 3.9% 3.0 99% 101,878 3,205
Total stabilised properties 4,095.4 4.2% 4.1% 5.3 99.5% 1,018,040 3,868
Developments fair valued 33.7 3.9% 0.1% 0.3 4% 9,738 4,241
Developments at cost 156.6 - - 13.0 78% 61,928 -
Land 42.1 - - - - - -
Total investment portfolio 4,327.8 4.2% 4.1% 5.8 99.5% 1,089,706
Portfolio revaluation $m
Total
Stabilised 489.8
Investment property under development 14.9
Total investment portfolio 504.7
1 Includes right of use assets in respect of ground leases of $65.9 million in total.
14Goodman Property Trust Interim Result 2022
Rental profile
◼ Underlying like-for-like rental growth for 1H22 of 5.1%
◼ Portfolio assessed to be ~9% under-rented ($16.3m)1 Portfolio review profile % of portfolio income
80%
◼ 20% of portfolio is subject to market review or expiry prior to the end
of FY23 70%
11%
12%
60% 3%
5%
10-year lease expiry profile 11%
50%
30% 14%
25% 40%
20% 4%
30% 1%
8% 48%
15%
20% 40%
10%
10% 21%
5%
0% 0%
Vacant FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 >FY30 FY22 2 FY23 FY24
Value Add Core Leased since March 21 Fixed CPI Market Expiry
1 Assessed by management on a face rent basis, passing rent to market rent
2 For the 6 months remaining to 31 March 2022
15Goodman Property Trust Interim Result 2022
Customer base
◼ Top 10 customers accounting for 35% of portfolio income, generally Top ten customers
focused on storage, logistics and distribution % of portfolio income, including subsidiary companies
◼ 2% of GMT’s portfolio weighted towards retail (cafes, restaurants, NZ Post
gyms, etc)
Mainfreight
◼ GMT continues to focus COVID-19 rent relief on vulnerable
customers within the portfolio Fliway
DHL
Industry exposure % of portfolio income
OfficeMax
Coda
Fletcher Building
Freightways1
Toll
T&G Global
0% 2% 4% 6% 8% 10%
1 Leased to Big Chill Limited, a subsidiary of Freightways
16Goodman Property Trust Interim Result 2022 Sustainability Native revegetation, Pukekiwiriki Crater, Highbrook 17
Goodman Property Trust Interim Result 2022
Core sustainability initiatives
◼ Targeting 5 star Green Star design-build rating on all new developments
◼ Committed to reducing and offsetting embodied carbon in all new developments
◼ Increased development on existing infill locations, with over 70% of future pipeline expected to be on brownfield sites
Typical Green Star Features
18Goodman Property Trust Interim Result 2022
Environmental sustainability
◼ Solar PV arrays totalling 1.1MWp either complete or in progress, expected to
produce 1,450MWh per annum and offset around 160 t-CO2-e per annum
◼ 400,000 litres of rainwater harvesting for non-potable use in toilets, building
washes and irrigation
Solar panels, Riverside Warehouses Artist’s impression
◼ 90% of core portfolio to have LED lighting by 2025 (currently 58%)
- upgrades expected to save customers around 4,200MWh per annum
◼ Accelerated replacement of R22 refrigerant HVAC systems across core
portfolio
◼ Undertaking native revegetation across estates, improving biodiversity
◼ 1H22 operational GHG emissions 56% lower than 2020 base year1
◼ Partnering with EECA to install public 150kW DC fast chargers at Highbrook
and M20
◼ Goodman2 vehicle fleet 100% EV by December 2021
1 Operational emissions are those for both GMT and its Manager’s operations
2 Goodman vehicles are operated by the Manager, not GMT LED lighting, Riverside Warehouses Artist’s impression
19Goodman Property Trust Interim Result 2022
Measuring sustainable performance
◼ Electrical sub-metering at all new developments to
measure energy intensity
◼ Ongoing Green Star Performance pilot for five
industrial properties at Highbrook
◼ Undertaking NABERSNZ assessment for office
properties at the Highbrook Crossing
◼ Targeting 5 star Green Star fitout for new shared
workspace at Highbrook Crossing town centre
◼ Reducing, measuring and offsetting the
development programme’s embodied carbon
20Goodman Property Trust Interim Result 2022 Financial result Metrobox – Savill Link 21
Goodman Property Trust Interim Result 2022
Financialhighlights
Financial highlights
Profit before tax Operating earnings before tax1 Net tangible asset backing Loan-to-value ratio2
$570.0m $60.2m 249.6cpu 17.5%
Net property income growth3 Cash earnings4 1H22 distribution Weighted average debt term5
5.7% 3.29cpu 2.75cpu 4.7 years
1 Operating earnings is a non-GAAP financial measure included to provide an assessment of the performance of GMT’s principal operating activities. The calculation is set out in GMT’s Profit or Loss statement
2 LVR is a non-GAAP financial measure used to assess the strength of GMT’s balance sheet, refer to note 2.6 of GMT’s financial statements for its calculation
3 1H22 total net property income compared to 1H21 total net property income
4 Cash earnings is a non-GAAP financial measure that assesses underlying cash flows, on a per unit basis, after adjusting for borrowing costs and Manager’s base fee capitalised to land and expenditure related to building maintenance. Refer to slide 24 for its calculation
5 Weighted average debt term is calculated on drawn debt assuming bank debt is drawn from the longest dated facility available
Highbrook Business Park 22Goodman Property Trust Interim Result 2022
Net property income
Net property income bridge $m
80.0
79.0
-0.1
78.5 ◼ Net property income has increased by
78.0
$4.2 million (5.7%) for the period
+2.6
77.0
◼ Underlying rental growth and income
76.0 from acquisitions and completed
developments have more than offset the
75.0
+2.7 impact of value-add assets being taken
74.0 74.3 off-line for redevelopment
-2.0
73.0 ◼ Underlying like-for-like rental growth of
+1.0
72.0
5.1% for the period2
71.0
70.0
1H21 Redevelopments Acquisitions Developments Underlying Other 1 1H22
portfolio
1 Includes vacancy, additional income, COVID-19 impact, straight line rents and fitout rents
2 Net rental income on underlying portfolio, adjusted to remove straight line rent adjustments and fitout rents
23Goodman Property Trust Interim Result 2022
Cash earnings
Cash earnings calculation $m
1H22 1H21 % change ◼ 1H22 cash earnings of 3.29 cents per unit, a 8.2%
Operating earnings before tax1 60.2 56.0 7.5%
increase on 1H21
Tax on operating earnings (11.0) (9.6) 14.6% ◼ Distributions of 2.75 cents per unit for the period
Operating earnings after tax 49.2 46.4 6.0% represent 83.6% of cash earnings
Straight line rent adjustments (0.2) (0.9) (77.8%) ◼ $7.0 million of total capex spent on stabilised
Capitalised borrowing costs – land (0.8) (1.2) (33.3%) portfolio in 1H22, of which $2.1 million is
maintenance capex
Capitalised management fees – land (0.1) (0.1) -
Maintenance capex (2.1) (1.9) 10.5% ◼ Cash earnings covers distributions paid and all
stabilised capex, leaving a $3.5 million cash surplus
Cash earnings2,3 46.0 42.3 8.7%
◼ FY22 cash earnings expected to be at least 6.5
Cash earnings per unit2,3 3.29 cpu 3.04 cpu 8.2%
cents per unit with distributions of 5.5 cents per unit
Distribution % of cash earnings 83.6% 87.2%
1 Operating earnings is a non-GAAP financial measure included to provide an assessment of the performance of GMT’s principal operating activities. Calculation of operating earnings are set out in GMT’s Profit or Loss statement
2 Cash earnings in previous period restated to 3.04 cents per unit (from 3.11) under amended calculation methodology which removes straight line rent adjustments
3 Cash earnings is a non-GAAP financial measure that assesses underlying cashflows after adjusting for certain items
24Goodman Property Trust Interim Result 2022
Capital growth
Net tangible assets cents per unit
270.0
250.0
+1.1 +0.9 249.6 ◼ NTA increased 37.1 cents per unit (17.5%)
to 249.6 cents per unit
230.0 +35.1
◼ 13.2% increase in portfolio value main
contributor
210.0
212.5
◼ $14.9 million revaluation gain for investment
190.0 property under development
170.0
150.0
31-Mar-21 Revaluation - stabilised Revaluation - Other 30-Sep-21
investment property
under development
25Goodman Property Trust Interim Result 2022 Capital management NCI – Savill Link 26
Goodman Property Trust Interim Result 2022
Gearing
Loan to value ratio
24%
◼ GMT continues to be conservatively leveraged
within preferred range of 20%-30%
22% 22.6%
+3.8% ◼ LVR of 17.5% at 30 September 2021 with fully
20%
+0.4%
committed LVR of 22.6%
19.2% -2.2%
18% +1.3%
◼ Committed developments complete over
+0.1% 17.5% periods to FY24
16%
14%
12%
10%
31-Mar-21 Developments Stabilised Other 30-Sep-21 Committed Committed Committed LVR
incl. revaluation revaluation acquisitions developments
Loan to value ratio (LVR) is a non-GAAP metric used to measure the strength of GMT’s Balance Sheet. Refer to note 2.6 of GMT’s financial statements for further information regarding the LVR calculation
27Goodman Property Trust Interim Result 2022
Managing funding risk
Maturity profile $m ◼ $310 million of available liquidity
300 ◼ First maturity, GMB030 in June 2022
◼ Balance sheet strength and available liquidity
250 provides:
＋ Capacity for acquisitions
＋ Capacity for investment in development pipeline,
200 100 and
100
＋ Resilience in the event of a decline in asset
150
56 values
150 30-Sep-21 31-Mar-21
100 Non-bank funding (drawn) 88% 92%
140
130 Available liquidity $310m $339m
130
50 100
Weighted average debt term (drawn)1 4.7 yrs 5.2 yrs
52 50 52
LVR covenant (Goodman Property Trust Interim Result 2022
Managing interest rate risk
Hedging profile ◼ High level of hedging provides protection in a rising
100% interest rate environment
90%
◼ Weighted average debt cost reduced to 3.2%
80%
◼ Normalised interest cover ratio (ICR), excluding
70%
one-off cash cost of swap close-outs in prior period,
60% increased to 5.6x from 5.3x at 31 March 2021.
50%
40%
30-Sep-21 31-Mar-21
30%
12 month forward hedging level 81% 85%
20%
Weighted average debt cost 3.2% 3.7%
10%
ICR covenant (>2.0x) 5.6x 4.1x1
0%
Y1 Y2 Y3 Y4 Y5
1 ICR for year to 31 March 2021 includes swap close out costs
29Goodman Property Trust Interim Result 2022 Summary & outlook NCI - Savill Link 30
Goodman Property Trust Interim Result 2022
Summary & outlook
Looking ahead
◼ The results of the deliberate repositioning of GMT’s portfolio are now being realised. Customer demand for high-quality space close
to consumers continues to be strong
◼ Significant new leasing, high occupancy levels, sustained rental growth, further development progress and strategic acquisitions
have all contributed to the Trust’s strong operating performance
◼ Warehouse and logistics real estate is increasingly being viewed as essential infrastructure
◼ By supporting its people, its customers, suppliers, and other stakeholders the business has responded to the challenging
environment and has continued to deliver strong operating results
◼ While the economic outlook is still uncertain, the Trust remains well positioned for sustainable long-term growth. A high-quality
portfolio focused on urban logistics should ensure the Trust continues to benefit from the structural trends that are driving demand in
our sector
FY22 guidance
◼ FY22 cash earnings expected to be at least 6.5 cpu1, up 4% on FY21
◼ Distributions of 5.5 cpu, a 4% increase on FY21, providing for a payout ratio of 84%
1 Under amended cash earnings calculation method which removes straight line rent adjustments as disclosed in 2021 Annual Result presentation on 13 May 2021
31Goodman Property Trust Interim Result 2022 Questions Highbrook Business Park 32
Goodman Property Trust Interim Result 2022
Thank
you
Disclaimer: The information and opinions in this presentation were
prepared by Goodman (NZ) Limited on behalf of Goodman Property
Trust and its subsidiaries (Goodman). Goodman makes no
representation or warranty as to the accuracy or completeness of the
information in this presentation. Opinions including estimates and
projections in this presentation constitute the current judgment of
Goodman as at the date of this presentation. They are subject to
change without notice. Such opinions are not guarantees or
predictions of future performance, and involve known and unknown
risks, uncertainties and other factors, many of which are beyond
Goodman’s control, and which may cause actual results to differ
materially from those expressed in this presentation. Goodman
undertakes no obligation to update any information or opinions
whether as a result of new information, future events or otherwise.
This presentation is provided for information purposes only.
No contract or other legal obligations shall arise between Goodman
and any recipient of this presentation. Neither Goodman, nor any of
its Board members, officers, employees, advisers or other
representatives will be liable (in contract or tort, including negligence,
or otherwise) for any direct or indirect damage, loss or cost (including
legal costs) incurred or suffered by any recipient of this presentation
or other person in connection with this presentation.
M20 Business Park 33Goodman Property Trust Interim Result 2022 Appendix Cottonsoft – Highbrook Business Park 34
Goodman Property Trust Interim Result 2022
Work-in-progress
Work-in-progress summary as at 11 November 2021
Development Estate Lettable area sqm Completion date Leased
Existing developments
M20 9,000 M20 Business Park 9,665 Nov-21 100%
Metroglass Yard Expansion Highbrook Business Park 2,120 Dec-21 100%
M20 Café M20 Business Park 108 Feb-22 100%
Riverside Warehouses Highbrook Business Park 8,097 Nov-22 23%
NZ Post Roma Road Estate 17,700 Mar-23 100%
Mainfreight Favona Estate 35,860 Apr-23 100%
New developments
NZ Blood Highbrook Business Park 3,290 Jul-22 100%
Stanley Black & Decker Highbrook Business Park 9,174 Oct-22 100%
Crossing Carpark Stage 2 Highbrook Business Park 372 carparks Apr-23 0%
Building 7 Highbrook Business Park 3,909 Aug-23 0%
Total work-in-progress 87,803 79%
35Goodman Property Trust Interim Result 2022
Profit or loss
For the six months ended 30 September 2021
36Goodman Property Trust Interim Result 2022
Balance sheet
As at 30 September 2021
37Goodman Property Trust Interim Result 2022
Cash flows
For the six months ended 30 September 2021
38You can also read
