Gpt Group · ASX:GPT
Gpt — Q1 2013 Earnings Presentation
26 slides from Gpt's earnings presentation, March 2013
Slide 1: March quarter update welcome
Good morning everyone and thank you for joining us for the March quarter update. 1
Slide 2: Positive start to 2013
GPT has had a positive start to 2013. Occupancy remains high at 98.3% with good leasing outcomes across the portfolio. The balance sheet is in a strong position, with low gearing and an extended debt maturity assisted by our inaugural USPP. It was a busy March quarter for GPT for development
Slide 3: Active asset management and key achievements
Over the quarter we have continued our focus across the portfolio on active asset management utilising the broader skills of the group to unlock value for shareholders. Despite subdued market conditions the team has remained on strategy with key achievements including: - The completion of Highpo
Slide 4: Retail portfolio results
Turning to the retail portfolio results. Overall specialty sales were up 0.7% and centre sales up 0.3% for the three months to 31 March. On an annual basis, speciality sales were up 1.3% over the 12 months compared to 1.5% in December. Through the quarter the month to month remained patchy w
Slide 5: Retail sales by category
This chart shows retail sales by category for the 12 months to March. Experienced based categories continue to perform well. Growth in mobile phones, retail services, food catering and other retail which includes travel and cinemas, recorded a solid result for the year. Apparel, which accounts
Slide 6: Key drivers of retail sales
This slide reflects a number of the key drivers of retail sales. Overall GPT’s view is that the short term outlook will remain subdued however the key growth drivers are improving. Looking at the left hand side of the slide. In recent months the impact of low interest rates has begun to wash
Slide 7: Highpoint expansion opening and Wollongong project
On 14 March the second stage of the $300 million Highpoint expansion opened on schedule fully leased placing it as one of the largest shopping centre’s in Australia. Whilst it is still early days the initial trading performance is very positive. Of the 40% of stores which have supplied sales to
Slide 8: Office portfolio remains solid
The office portfolio remains in a solid position. Gross activity in the portfolio has been steady with 37,400sqm of leasing recorded including signed HOA. This activity was a combination of forward solving expires in outer years and existing vacancy in the portfolio. As a result of this activity
Slide 9: Office leasing activity
The office portfolio had a good first quarter with 23,000sqm of leases executed, including 18,500sqm to Citi which was flagged at December results. Heads of agreement were reached on a further 14,000sqm including the government for 3,000sqm at Melbourne Central and Brisbane Council for 4,200sqm
Slide 10: Office market view
Our view on office markets remains unchanged from December results. The weakness in demand which was experienced over the final quarter of 2012 has continued. This has been reflected in the net absorption numbers which were negative across all markets. A key theme was the increase in sublease
Slide 11: Development on track
Development remains on track with the GWOF portfolio having $571m under development. 161 Castlereagh Street, Sydney now renamed ANZ Tower, reached PC in March with the rest of the building due for completion mid year. The building is 96% leased and is on track to deliver a 6.7% yield on cost. Th
Slide 12: Logistics portfolio position
The logistics portfolio remains in a solid position with occupancy levels high at 98.5%. The portfolio WALE is strong at 5.6 years and will increase on completion of the Toll NQX deal in February 2014. We continue to grow our portfolio with the acquisition of 3 Figtree Drive, Sydney Olympic Pa
Slide 13: Logistics sector fundamentals
Fundamentals in the logistics sector remain in balance with little change in dynamics since December results. Tenant demand for existing stock is solid evidenced by generally low vacancy and downtime across the market. Demand for core logistics product continues to be robust with downward pres
Slide 14: Wholesale funds performance
Both of our wholesale funds continue to perform well. The office fund has consistently outperformed its office fund peers over 1, 3 and 5 years. The shopping centre fund has experienced strong short term performance post writing off costs relating to the acquisitions of Westfield Woden and Cas
Slide 15: Funds under management
Over the quarter, our funds under management increased from $6.6 billion to $6.8 billion. It is worth noting that that this was before the settlement of 8 Exhibition St in early April. Including this new acquisition, funds under management are now $7.0 billion. Today, the office fund has 15 as
Slide 16: Balance sheet in great shape
The balance sheet remains in great shape. Borrowings have increased slightly over the quarter and gearing as a proportion of total tangible assets remains low at 21.7%. The cost of debt is stable at 5.08% and the forecast average cost of debt for 2013 remains at 5.5%. Pleasingly the weighted
Slide 17: Debt diversification and tenor
Two of our key Capital Management objectives for 2013 were to further diversify our sources of debt and lengthen tenor. We have made significant progress in this regard. In January we issued HK$800m worth of 15 year bonds (swapped back to A$100m). In March we went on to issue US$250m in the
Slide 18: Optimise and grow strategy
As outlined at the Annual Result in February, for 2013 our strategy continues to be focused around the themes of optimise and grow. We will continue to optimise GPT and equip our employees for high performance. At the same time, we will enhance the core business, and continue to build robust g
Slide 19: Guidance on track
I am pleased to advise we are on track to achieve our guidance of at least 5% EPS growth for 2013. We will continue to have a payout ratio of 80%. 19
Slide 20: Appendices
APPENDICES<<<<<<<<
Slide 21: Capital management
CAPITAL MANAGEMENT 3,500 o 4.22% 3,000 4.02% 418% 4.08% 4.05% 4.04% 4.046% 3.99% 3.96% 3.95% 3.94% ° 2,500 2,000 1,500 1,000 500 0 2 2 S 2 2 © 2 2 = > 2 § Ey § 3 5 e 5 S 5 $ 5 2 8 = 3 2 8 = 8 3 8 2 Forecast Debt mm Interest rate swaps mm Fixed rate debt —- WA fixed rate The GPI'Group 21
Slide 22: Retail monthly sales growth
RETAIL 8% 6% 4.1% 4% 3.6% — -0.3% oy, 2% -1.5% -2.9% -4% ab -3.6% -6% a a a a ~ ~ a a a a 2 2 2 a Z BE OE S eo & x % e 2 a 5 $ a 3 3 3 5 = & $ 3 & 3 €§ & $ § & B F Note: Includes GPT and GWSCF assots and excludes development impacted centres. Represents the growth for the month compared to the corre
Slide 23: Retail centre sales and occupancy costs
RETAIL Moving Annual Turnover Occupancy Costs (%) Comparable Comparable : Centre Name en Centre MAT Cee Specialty MAT | Centre (%) Growth (%] Growth (%] Carlingford Court GWSCF 6,672 0.9% 8,761 0.7% B.7% 16.9% Casuarina Square” GWSCF/GPT 8.372 2.7% 10,797 3.3% 9.5% 15.1% Charlestown Square!” GPT 6,0
Slide 24: Retail valuations
RETAIL As at 31 March 2013 As at 31 Dec 2012 Interest | Valuer | Valuation Cap Rate GWSCF Portfolio Forestway 100% CBRE $83.6m 7.50% $81.5m 7.50% Macarthur Square 50% CBRE $401.3m 6.25% $394.2m 6.25% The GPI'Group 24
Slide 25: Office valuations
OFFICE As at 31 March 2013 As at 31 Dec 2012 Interest | Valuer | Valuation Fair Value | Cap Rate GPT Portfolio One One One Eagle St 33% $220.0m 6.50% $208.6m 6.63% GWOF Portfolio One One One Eagle St 33% $220.0m 6.50% $208.0m 5.63% Darling Park 1 & 2 50% $595.0m 6.50% $587.9m 6.75% - 6.75% - 7.38% D
Slide 26: Disclaimer
DISCLAIMER The information provided in this presentation has been prepared by The GPT Group comprising GPT RE Limited [ACN 107 426 504) AFSL (2865111, as responsible entity of the General Property Trust, and GPT Management Holdings Limited (ACN 113 510 188) The information provided in this presentat