Goodman Group · ASX:GMG
Goodman — Macquarie Goodman Property Trust — H1 2007 Earnings Presentation
50 slides from Goodman's earnings presentation, Nov 8, 2006
Slide 1: Macquarie Goodman Property Trust
Macquarie Goodman Property Trust Half year results to 30 September 2006, portfolio update & $96.2 million private placement 8 November 2006 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Contents
Contents 1. Overview 2. Half year results 3. Portfolio update 4. New acquisitions and portfolio impact 5. Capital management and private placement Appendix Summary of pre-committed acquisitions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1
Slide 3: Overview
1 Overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 4: Overview of half year results
Overview of half year results Strong half year result in line with March 2006 projections Robust underlying portfolio performance Net profit after tax increased 68% to $23.2 million EPU of 5.04 cpu up 5.7% Half year DPU of 5.10 cpu up 3.4% results summary Results in line with March 2006 projections
Slide 5: Overview of portfolio and capital management
Overview of portfolio and capital management Continued active management and repositioning of the portfolio in line with strategy: Re-weighting to industrial and business park assets Consolidation within established office park precincts Continued focus on large multi-user estates Acquisition of cor
Slide 6: Half year results
2 Half year results NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 7: Summary for half year to 30 September 2006
Summary for half year to 30 September 2006 Summary income statement1 Six months ending 30 Six months ending 30 Change % Sep 06 ($m) Sep 05 ($m) Gross operating income 39.0 25.3 54.2 Operating expenses 2.4 2.8 (14.5) EBIT 36.6 22.5 62.8 Interest and finance charges 9.8 5.5 78.6 Net operating surplus
Slide 8: Summary for half year to 30 September 2006
Summary for half year to 30 September 2006 Summary balance sheet1 As at 30 Sep 06 ($m) As at 30 Sep 05 ($m) Change % Total current assets 68.5 34.2 100.5 Investment properties 871.8 525.3 66.0 Development properties 62.8 79.5 (21.0) Investment in associate 44.8 - - Total assets 1,047.9 638.9 64.0 To
Slide 9: MGP total returns
MGP total returns Strong and consistent total return to MGP unitholders Total returns since 31 March 2006 3 year annualised total returns 1.15 22.0% 20.6% 1.10 20.0% Indexed Total Returns 18.1% 18.0% 1.05 16.0% 1.00 14.0% 0.95 0.90 0.0% Apr-06 May-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 MGP NZ
Slide 10: Portfolio update
3 Portfolio update NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 11: Portfolio performance
Portfolio performance Property portfolio has performed strongly during the half year MGP has had a very active 6 months Highlights include: Occupancy rate and weighted average lease expiry (WALE) maintained at 98% and 5.6 years respectively 19 rent reviews completed during the period with annualised
Slide 12: Portfolio performance
Portfolio performance Space under MGQ rental guarantee leased ahead of schedule Premises acquired in 2005 now fully leased Of the 2006 acquisitions now completed, 51% of space subject to the two year MGQ rental underwrite has been leased Total underwritten space leased of 16,246 sqm and an average l
Slide 13: Development activity update
Development activity update Completion of industrial developments amounting to 68,400 sqm with a blended yield of 9.21% Further pre-commitments by Toll, Daniel Silva and Supply Chain Solutions since 31 March 2006 Savill Link and Westney Industry Park now 31% and 42% committed respectively Total of 1
Slide 14: Development activity update
Development activity update Estate Property/Customer Lease (yrs) Share (%) Completion Date Completed Developments Developments completed during half year Savill Link Multi-units 10.01 100 Apr 06 Westney Industry Park Multi-units 6.02 100 May 06 Westney Industry Park Linfox Stage 3 7.4 100 Jun 06 Wes
Slide 15: Acquisitions and disposals
Acquisitions and disposals Four industrial properties acquired during the period totalling $57.9 million, including: Gateside Industry Park, 345 Neilson Street, Penrose – $27.3 million UPS Facility, 120 Pavilion Drive, Airport Oaks – $9.6 million APN Facility, 587 Great South Road, Manukau and APN F
Slide 16: Fletchers complex
Fletchers complex MGP first purchased a 50% interest in the Fletcher Head Office (comprising Penrose East and Penrose West) for $36 million in June 2004. The remaining 50% was acquired in March 2005 for $36 million. Divested Property - Penrose East Retained Property - Penrose West NOT FOR DISTRIBUT
Slide 17: Fletchers transaction overview
Fletchers transaction overview Fletchers hold a head lease over the entire site which was due to expire in March 2009, and also had development rights and an option to acquire the site on expiry MGP has undertaken a restructure and partial divestment: Sold Penrose East (predominately office) to Flet
Slide 18: New acquisitions and portfolio impact
4 New acquisitions and portfolio impact NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 19: New acquisitions
New acquisitions MGP has entered into contracts to acquire 11 industrial properties for $107.2 million Ownership Acquisition summary Purchase price ($m) (Post Acquisitions) Redevelopment opportunities 71.11 100% Highbrook developments (75% owned by MGQ2) 25.9 75%2 Co-owned properties (owned with MGQ
Slide 20: New acquisitions summary
New acquisitions summary The development pre-commitments provide an initial yield of 8.07% and WALE of 9.7 years The blended yield across the development pre-commitments and stabilised component of the redevelopment opportunities is 8.42% Initial Yield WALE Acquisition Property Location Settlement (
Slide 21: M20 Business Park, 70 - 100 Plunket Ave
M20 Business Park, 70 - 100 Plunket Ave The location is expected to benefit from the construction of State Highway 20 (works commencing November 2006) State Highway 20 links State Highway 1 with the airport and western suburbs Close proximity to Manukau City Centre, rail links and the Ports of Auckl
Slide 22: Plunket Ave - proven track record
Plunket Ave - proven track record The successful repositioning of 86 Plunket Ave was achieved via: Linfox relocating to a design build facility at Westney Industry Park MGP securing Frucor Beverages as a new customer Securing a fixed price construction contract with Haydn & Rollet for refurbishment
Slide 23: M20 Business Park - Masterplan
M20 Business Park - Masterplan NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 22
Slide 24: M20 Business Park, 70 - 100 Plunket Ave
M20 Business Park, 70 - 100 Plunket Ave 70 Plunket Ave Total Site Area: 6.33 hectares Completion date: 3-6 years Purchase price: $25.75 m (100% interest) Initial Yield: 8.47% (stabilised) Occupancy: 100% (stabilised) Lease Term: 5 years1 Ford Motor Company New Customer: Zealand Limited 1 Break optio
Slide 25: Christchurch - Glassworks Industry Park
Christchurch - Glassworks Industry Park MGP has acquired two adjacent sites, providing a 15.16 ha brownfields redevelopment opportunity Located 8km from Christchurch airport Close proximity to SH1, Christchurch CBD and rail links NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 24
Slide 26: Christchurch - Glassworks Industry Park
Christchurch - Glassworks Industry Park MGP has entered the Christchurch market after consulting existing MGP customers to gauge interest and likely future requirements MGP intends to reposition a portion (4.76 ha) of the estate in the short term as it is currently under-rented, with the long-term s
Slide 27: Glassworks Industry Park - Masterplan
Glassworks Industry Park - Masterplan NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26
Slide 28: Glassworks Industry Park
Glassworks Industry Park 55 Shands Road Total Site Area: 8.43 hectares Completion date: 3-6 years Purchase price: $10.35 m (100% interest) Initial Yield: N/A Occupancy: N/A Lease Term: N/A Customer: N/A 652 Halswell Junction Total Site Area: 6.73 hectares 652 Halswell 55 Shands Completion date: 4-6
Slide 29: MGP development pipeline
MGP development pipeline MGP’s development pipeline extended to 64.7 hectares of development land area Primarily industrial estates focused in key Auckland and Christchurch markets Development land MGP ownership of Site area Committed Remaining Time development land (ha) site area developable area f
Slide 30: Portfolio metrics
Portfolio metrics Substantial re-weighting of the portfolio Upweighting to industrial estates Development capacity increased Reduction in office exposure from 49.3% to 40.5% As at 31 March 20061 Post new acquisitions and disposals1 Warehouse / Warehouse / Development Distribution Development Distrib
Slide 31: Portfolio metrics
Portfolio metrics WALE increases to 5.9 years post acquisitions and disposals Lease expiry profile Comparative WALE (years) 60% 10.8 50% % of Portfolio Income 40% 5.9 5.7 5.6 5.4 30% 4.8 20% 10% 0% <1 1-2 2-3 3-4 4-5 >5 CHP MGP APT PFI KIP ING Years to Expiry Source: MGP following acquisitions and d
Slide 32: Portfolio metrics
Portfolio metrics Reduced customer risk with Fletcher Building Greater diversity of portfolio income with contribution from top 10 customers reduced from 36.5% to 33.0% Top 10 Customers (% of portfolio income) Air New Zealand Linfox Logistics Fletcher Building Toll Exel Turners Auctions New Zealand
Slide 33: Capital management and private placement
5 Capital management and private placement NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 34: Acquisition funding
Acquisition funding Private placement of 76.9 million new units at $1.25 to raise $96.2 million Fully underwritten by Macquarie Securities (New Zealand) Limited and UBS New Zealand Limited1 Macquarie Goodman Group has committed to subscribe for its pro-rata share however, it may receive a smaller al
Slide 35: Pro forma balance sheet
Pro forma balance sheet Net impact of Funding of pre 30 transactions As at 30 Sep September 06 Adjusted as at Pro forma ($m) announced 06 ($m) commitments 30 Sep 06 ($m) post balance ($m) date ($m) Total current assets 68.5 (23.3)1 45.2 (26.0)4 19.2 Investment properties 871.7 36.12 907.9 79.75 987.
Slide 36: Key benefits
Key benefits Underpins distribution growth in FY08 FY07 DPU of 10.2 cpu confirmed Underpins 3.5% + DPU growth target into FY08 Increased liquidity and scale EPU growth - 13.3% over 3 yrs Total market capitalisation increases from $710 million to circa $806 million post placement 10.2 NZX50 position
Slide 37: Peer analysis
Peer analysis MGP represents an attractive investment proposition relative to its peers Attractive FY07 forecast DPU yield of 8.2% on issue price represents a 90 bps margin to the NZ LPT average Superior long term growth prospects through quality assets and measured exposure to development MGP is th
Slide 38: Private placement details
Private placement details Summary Amount raised - $96,168,601 via a placement to issue 76,934,881 units at Closing price $1.31 $1.25 per unit 5 day VWAP $1.30 Ranking – new units will rank pari passu Issue price $1.25 with existing units and will be entitled to Discount to close / 5 day VWAP 4.6% /
Slide 39: Timetable
Timetable Action item Date1 Offer opens 12.30pm Wed 8 November Offer closes for domestic and Australian investors 7:00pm Wed 8 November2 Offer closes for offshore investors 7.00am Thurs 9 November2 Settlement and allotment of new units Tues 14 November Trading on NZX of new units Wed 15 November 1 A
Slide 40: Summary
Summary Strong half year result in line with March 2006 projections Robust underlying portfolio performance Continued active management and repositioning of the portfolio in line with long term targets Recycling of capital to maximise risk-adjusted returns Acquisition of $107.2 million of property a
Slide 41: Appendix
Appendix Summary of pre-committed acquisitions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 42: Highbrook Business Park
Highbrook Business Park Exel Stage 3 BMW Big Chill Cottonsoft Highbrook Acquisitions1 Big Chill BMW Cottonsoft Exel Stage 3 (75% Interest)1 1 Each of Big Chill, BMW and Cottonsoft have a right to call for the development of expansion premises on land adjoining their premises. If an expansion option
Slide 43: Highbrook Acquisitions
Highbrook Acquisitions Big Chill Net Lettable Area: 1,914sqm Completion date: Feb 2007 Purchase price: $4.31m (75% interest) Building Use: Coldstore Distribution Facility Occupancy: 100% Lease Term: 15 years Customer: Big Chill Distribution Limited BMW Net Lettable Area: 4,906sqm Completion date: Ap
Slide 44: Highbrook Acquisitions
Highbrook Acquisitions Cottonsoft Net Lettable Area: 6,230sqm Completion date: March 2007 Purchase price: $6.34m (75% interest) Manufacturing and Building Use: Distribution Facility Occupancy: 100% Lease Term: 12 years Customer: Cottonsoft Limited Exel Stage 3 Net Lettable Area: 7,760sqm Completion
Slide 45: Westney Industry Park - Masterplan
Westney Industry Park - Masterplan Supply Chain Solutions1 Daniel Silva1 1 Each of Supply Chain Solutions and Daniel Silva have a right to call for the development of expansion premises on land adjoining their premises. If an expansion option is exercised by a tenant, MGP will acquire MGQ’s 50% inte
Slide 46: Westney Industry Park Acquisitions
Westney Industry Park Acquisitions Daniel Silva Net Lettable Area: 4,759sqm Completion date: Feb 2007 Purchase price: $2.63m (50% interest) Warehouse and Distribution Building Use: Facility Occupancy: 100% Lease Term: 8 years Customer: Daniel Silva Limited Supply Chain Solutions Net Lettable Area: 4
Slide 47: Savill Link - Masterplan
Savill Link - Masterplan Toll Logistics Stage 2 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 46
Slide 48: Savill Link Acquisition
Savill Link Acquisition Toll Logistics – Stage 2 Net Lettable Area: 8,350sqm Completion date: December 2006 Purchase price: $5.18m (50% interest) Warehouse and Distribution Building Use: Facility Occupancy: 100% Lease Term: 6 years Customer: Toll Logistics (CL) Limited NOT FOR DISTRIBUTION OR RELEAS
Slide 49: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Macquarie Goodman (NZ) Limited as manager of Macquarie Goodman Property Trust. The information in this presentation is general information only. It is not intended as investment or financial advice and must not be relied upon as
Slide 50: Important notice and disclaimer
Important notice and disclaimer UNITED KINGDOM MGP is characterised as an unregulated collective investment scheme for the purposes of the United Kingdom Financial Services and Markets Act 2000 (FSMA), so that the distribution of this document is restricted by sections 21, 238 and 240 of the FSMA, a
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