Goodman Property Trust Interim Result 2020 Contents 03 Overview - PowerPoint PPT Presentation

Goodman Property Trust Interim Result 2020

Contents 03 Overview 05 Financial result 11 Capital management 14 Investment portfolio 25 Summary and outlook 28 Appendix Presented by: John Dakin Chief Executive Officer Andy Eakin Chief Financial Officer James Spence Director - Investment Management Unless otherwise indicated, all numerical data provided in this presentation is stated as at 30 September 2019. All dollar values are NZD unless otherwise stated. All figures are rounded.

3 Gateway warehouse – Highbrook Business Park

Overview Interim Result 2020 Overview Auckland industrial focus is driving strong operating results: Occupancy of 99.5%, retention rate of 74% 1 , WALE of 5.5 years ＋ 128,581 sqm of new leasing and market reviews completed with 7.3% 2 rental growth. Portfolio assessed to be 7.6% under-rented ＋ Development workbook remains strong; 15 build-to-lease warehouses completed over last 12 months are fully leased ＋ Interim revaluation of $172.4 million driven by a combination of cap rate compression (28 bps) and underlying market rental growth 3 ＋ $227.1 million of strategic investment: Acquisitions of Mt Wellington, Pilkington Road and Favona Road properties, all prime infill locations, settled for $103.9 million ＋ Development commitments: $123.2 million 4 – nine new projects including two new customer expansions announced today ＋ Strengthened financial metrics: $175 million of new equity raised 5 ＋ Gearing of 17.9% (20.6% on a fully committed basis) provides significant financial flexibility to continue accretive investment programme ＋ Refinancing of GMT’s bank facility completed in November 2019 ＋ Increase in NTA by 15.8 cpu (10%) to 172.8 cpu ＋ FY20 earnings guidance reaffirmed; cash earnings to be materially consistent with FY19 ＋ Distribution guidance maintained at 6.65 cpu ＋ 1 Retention rate measured over a 24 month period 2 Increase in passing rental on leasing and market reviews completed on stabilised portfolio in the period 3 2.7% increase in market rental across GMT’s underlying portfolio for the 6 months to September 2019 as assessed by GMT’s independent valuers 4 4 Total project cost including land, finance costs and all fees 5 $150 million Placement completed in the period with $25 million from a Retail Unit Offer completed in October 2019

5 Premium Apparel – Highbrook Business Park

Interim Result 2020 Financial result Financial highlights $ 236.4 m 30.3 % Total Unitholder Return 1 6 months to 30 September 2019 Profit before tax $ 172.4 m 3.15 cpu Portfolio revaluation Cash earnings 172.8 cpu 3.325 cpu Net tangible asset backing Cash distributions 4.5 years 17.9 % Weighted average debt term 2 Loan-to-value ratio 6 1 GMT’s stock market performance including unit price appreciation and distributions paid 2 Calculated on drawn debt

Cash earnings Interim Result 2020 Financial result Cash earnings summary ($m) 1H20 cash earnings materially consistent with restated 1H19 2 ＋ 1H20 1H19 Adjusted operating earnings after tax 44.7 51.7 Arrangement by which base fee was required to be used to subscribe ＋ for new units expired on 31 March 2019 Manager’s base fee 1 - (4.7) Adjusted operating earnings after tax 2 44.7 47.0 Distribution of 3.325 cpu equates to approximately 106% of cash ＋ earnings for the period Capitalised borrowing costs – land (2.1) (3.4) Capitalised management fees – land (0.1) (0.3) Income from acquisitions and developments in addition to like-for-like ＋ Maintenance capex (1.4) (1.6) rental growth has mitigated much of the impact of asset disposals and de-leveraging Cash earnings 41.1 41.7 FY20 cash earnings guidance reaffirmed, expected to be materially ＋ consistent with FY19 (6.24 cpu after allowing for base fee) Cash earnings per unit (cpu) 3.15 3.22 Distribution per unit (cpu) 3.325 3.325 Distribution % of cash earnings 105.6% 103.3% 1 Includes base fee paid on GMT’s interests in Wynyard Precinct Holdings Limited joint venture 7 2 1H19 restated to treat base fee as if settled in cash

Capital growth Interim Result 2020 Financial result Net tangible assets (cents per unit) NTA increased 15.8 cpu (10%) for the year to date to 172.8 cpu ＋ 175.0 +0.7 6.5% increase in underlying portfolio valuation main contributor ＋ +0.9 172.8 170.0 $150 million 1 of equity raised at 23% premium to NTA 2 ＋ +11.6 165.0 $12.4 million revaluation gains on developments reflects an average ＋ margin of 16% 160.0 +2.6 157.0 155.0 150.0 145.0 140.0 31-Mar-19 Equity Stabilised Development Other 30-Sep-19 placement revaluation revaluation 1 A further $25 million of equity was raised through a Retail Unit Offer in October 2019 8 2 NTA as at 30 September 2019 excluding impact from equity placement

Interim portfolio valuation Interim Result 2020 Financial result Portfolio valuation summary % attributable to cap rate Valuation ($m) Cap rate Change ($m) Change (%) compression Highbrook Business Park 1,430.4 5.2% 102.8 7.7% 54% Savill Link 307.4 5.6% 15.4 5.3% 80% M20 Business Park 272.6 5.7% 23.7 9.5% 66% The Gate Industry Park 242.4 5.4% 8.1 3.5% 73% Westney Industry Park 125.0 7.0% 2.6 2.1% 100% Value-add estates 257.1 5.5% 7.3 2.9% 57% Underlying stabilised portfolio 2,634.9 5.4% 159.9 6.5% 65% Completed developments 1 75.0 5.2% 10.4 n/a n/a Acquisitions 2 105.4 4.7% 3 - - n/a Right-of-use assets in respect of ground leases 62.2 n/a - - n/a Total stabilised properties 2,877.5 5.3% 170.3 6.3% n/a Partially completed developments 4 97.0 5.3% 2.0 n/a n/a Land 48.6 n/a 0.1 0.2% n/a Total investment portfolio 3,023.1 5.3% 172.4 6.0% n/a Investment property contracted for sale 8.8 n/a - - n/a Total portfolio 3,031.9 5.3% 172.4 6.0% n/a 1 In addition, $4.1 million was recognised in March 2019 2 Pilkington Road, Favona Road and Monahan Road properties, including costs capitalised since acquisition 3 Passing yield on acquisition price 9 4 Partially complete developments include developments held at cost (i.e. not sufficiently complete to be valued)

Balance sheet strength Interim Result 2020 Financial result Loan-to-value ratio GMT continues to be conservatively leveraged ＋ 26% LVR of 17.9% at 30 September with fully ＋ 24% -0.4% committed LVR at 20.6% +1.2% -1.3% 22% ICR of 3.9x on a normalised basis 1 (covenant: ＋ +3.0% not less than 2.0x) 20.6% 20% -5.0% Significant capacity for investment in 19.7% ＋ +3.5% development pipeline and other opportunities 18% +0.6% -0.8% 17.9% 16% 14% 12% 10% 31-Mar-19 Acquisitions Developments Disposals Stabilised Equity Other 30-Sep-19 Retail offer Committed Committed incl. revaluation placement developments LVR revaluation Refer to note 2.5 of GMT’s Interim Financial Statements for further detail regarding calculation of LVR 10 1 ICR covenant calculation benefits from realised gain on disposal of interests in the Wynyard Precinct Holdings Limited joint venture resulting in a 5.0x measure as at 30 September 2019. Normalised ICR excludes this one-off gain.

11 NCI Packaging – Savill Link

Managing funding risk Interim Result 2020 Capital management Bank funding maturity profile Refinancing of GMT’s bank facility completed in ＋ 140 November 2019 120 Increased facility size by $100m to $400m, with ＋ 100 Bank facility - old funding from BNZ, CBA, HSBC and Westpac 80 150 150 135 135 130 Bank facility - new 60 Significant headroom provides capacity for further ＋ 40 development and investment 20 0 Committed to continued accessing of non-bank ＋ FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 funding Maintained Standard & Poor’s corporate rating of ＋ BBB (stable), BBB+ debt issue rating Non-bank funding maturity profile 140 120 Metrics 30-Sep-19 31-Mar-19 100 Non-bank funding (drawn debt) 100% 98% 80 USPP notes 60 Headroom within bank facility $400m 1 $288m Domestic bonds 100 100 100 100 40 52 52 52 Weighted average debt term (drawn debt) 4.5y 5.0y 20 0 Gearing covenant (<50%) 20.5% 22.4% FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 1 Post bank facility refinancing 12

Managing interest rate risk Interim Result 2020 Capital management Hedging profile Debt repayment has resulted in elevated hedging ＋ 100% levels over the next 12 months 90% Greater exposure to floating rates from late CY20 ＋ 80% Cross currency swaps USD:NZD movement on ＋ USPP notes (ITM $34.8 million) 70% Interest rate swaps net ITM $3.4 million ＋ 60% WACD for FY20 expected to be around 4.9% ＋ 50% 40% 30% 20% Metrics 30-Sep-19 31-Mar-19 12m forward hedging level 77% 76% 10% Weighted average debt cost 5.0% 4.9% 0% ICR covenant 1 (>2.0x) 3.9x 3.6x Y1 Y2 Y3 Y4 Y5 1 ICR covenant calculations benefit from realised gain on disposal of interests in the Wynyard Precinct Holdings Limited joint venture resulting in a 5.0x measure as at 30 September 2019. Normalised ICR excludes this one-off gain. 13

14 Premium Apparel – Highbrook Business Park

Interim Result 2020 Investment portfolio Portfolio highlights 99.5 % Occupancy 100 % Auckland industrial weighting 5.5 years Weighted average lease term 3.4 % Underlying net property income growth $ 123.2 m Development commencements 15 Gateway warehouse – Highbrook Business Park