Joint Lead Managers Co-Managers This presentation contains the key - - PowerPoint PPT Presentation

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Joint Lead Managers Co-Managers This presentation contains the key - - PowerPoint PPT Presentation

Joint Lead Managers Co-Managers This presentation contains the key terms of an offer of fixed rate secured debt securities by GMT Bond Issuer Limited ( Issuer ), a wholly owned subsidiary of Goodman Property Trust. The offer of Goodman+Bonds is


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Joint Lead Managers Co-Managers

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This presentation contains the key terms of an offer of fixed rate secured debt securities by GMT Bond Issuer Limited (Issuer), a wholly owned subsidiary of Goodman Property Trust. The offer of Goodman+Bonds is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). The Goodman+Bonds have identical rights, privileges, limitations and conditions (except for the interest rate and maturity date) as the Issuer’s $100,000,000 fixed rate secured bonds which are currently quoted on the NZX Debt Market under the ticker code GMB020 (GMB020 Bonds) and the Issuer’s $100,000,000 fixed rate secured bonds which are currently quoted on the NZX Debt Market under the ticker code GMB030 (GMB030 Bonds). The Goodman+Bonds are of the same class as the GMB020 Bonds and GMB030 for the purposes of the FMCA and the Financial Markets Conduct Regulations 2014. The Issuer is subject to a disclosure obligation that requires it to notify certain material information to NZX Limited (NZX) for the purpose of that information being made available to participants in the market and that information can be found by visiting www.nzx.com/companies/GMB. The GMB020 Bonds (which have a fixed interest rate of 6.20% p.a. and a maturity date of 16 December 2020) and the GMB030 Bonds (which have a fixed interest rate of 5.00% p.a. and a maturity date of 23 June 2022) are the

  • nly debt securities of the Issuer that are in the same class as the Goodman+Bonds that are currently quoted.

Investors should look to the market price of the GMB020 Bonds and GMB030 Bonds to find out how the market assesses the returns and risk premium for those bonds. This document does not constitute a recommendation by the Issuer, Goodman (NZ) Limited (Manager), Goodman Property Trust, Westpac Banking Corporation or Bank of New Zealand (together the Joint Lead Managers), Deutsche Craigs Limited, Forsyth Barr Limited or First NZ Capital Securities Limited, together the (Co-Managers), Public Trust (Bond Trustee), nor any of their respective directors, officers, employees or agents to subscribe for,

  • r purchase, any of the Goodman+Bonds. To the extent permitted by law, the Manager, the Joint Lead Managers,

the Co-Managers, the Bond Trustee and any of their respective directors, officers, employees or agents accept no liability whatsoever for any loss arising from this document or its contents, or otherwise in connection with the offer

  • r any person’s investment in the Goodman+Bonds.

A terms sheet (Terms Sheet) has been prepared by the Issuer in respect of the offer of Goodman+Bonds, which sets out how Goodman+Bonds may be applied for. The distribution of this presentation, and the offer or sale of the Goodman+Bonds, may be restricted by law in certain jurisdictions. Persons who receive this presentation outside New Zealand must inform themselves about and observe all such restrictions. Nothing in this presentation is to be construed as authorising its distribution, or the offer or sale of the Goodman+Bonds, in any jurisdiction other than New Zealand and the Issuer accepts no liability in that regard. The Goodman+Bonds may not be offered or sold directly or indirectly, and neither this presentation nor any other offering material may be distributed or published, in any jurisdiction except with the prior consent of the Issuer and in conformity with all applicable laws and regulations of that country or jurisdiction. Application has been made to NZX for permission to quote the Goodman+Bonds on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of the Terms Sheet have been duly complied with. However, NZX accepts no responsibility for any statement in this document. NZX is a licensed market operator and the NZX Debt Market is a licensed market under the FMCA. Unless otherwise indicated, all numerical data provided in this presentation is stated as at 31 March 2017. All figures are in New Zealand dollars.

Goodman+Bonds

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Goodman+Bonds

BBB+

expected issue credit rating investment grade

7 years

term

$75m

size

security

+ first ranking security over a portfolio of premium property assets + security shared equally, and on a pro rata basis with existing bondholders, USPP noteholders and lenders under GMT’s bank facility

proven business model

+ listed property trust investing in high quality industrial and business space real estate predominantly in Auckland + premium property portfolio with a current book value of $2.4 billion1, a weighted average lease term of 5.8 years and an

  • ccupancy rate of 98%

+ stable income stream supported by a high quality customer base + strong balance sheet with a conservative level of debt

1 total property portfolio includes GMT’s proportionate share in the properties owned by its Viaduct joint venture.

Coda – Savill Link

up to $75m with up to $25m of over subscriptions

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SLIDE 4

Presented by: Keith Smith

Chairman & Independent Director

Attending Auckland & Christchurch

James Spence

Director - Investment Management Andy Eakin

Chief Financial Officer

Goodman+Bonds

Business focus 5 Investment portfolio 9 Development programme 14 Financial overview 19 Capital management 22 Business outlook 25 Goodman+Bonds 27

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Goodman+Bonds

Coda — Savill Link

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+ GMT is a listed unit trust that invests in high quality industrial and business space property, predominantly in Auckland + externally managed by ASX-listed Goodman Group + Board of the Manager has a majority of independent directors, elected by GMT investors + Goodman Group is GMT’s largest unitholder, currently holding 20.9% of the units in GMT + total property portfolio of $2.4 billion1 + GMT has a BBB (stable) corporate credit rating + GMB020 Bonds and GMB030 Bonds have a BBB+ (stable) credit rating

Goodman+Bonds

Auckland $2.4bn1 (98%) Christchurch $0.1bn (2%)

$2.4bn1

total property portfolio

98%

property

  • ccupancy

5.8

years WALT

$1.5bn

market capitalisation

30.6%2

Loan to value ratio (look through basis)

240

customers

1m sqm

net lettable area

6.5%

weighted average capitalisation rate

Assets by region

1 total property portfolio includes GMT’s proportionate share in the properties owned by its Viaduct joint venture. 2 on a proportionately consolidated basis including GMT’s interests in the Viaduct joint venture. Holders of Goodman+Bonds will

receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31

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SLIDE 7

+ Goodman Group, a long term partner committed to the New Zealand market and current business structure + Manager’s relationships provide access to international customers, investors and global capital markets

Goodman+Bonds

+ high quality investment portfolio with strategic land holdings situated in prime industrial locations + development programme improving asset quality and growth profile of GMT + assets actively managed to maximise earnings, value and balance sheet strength + gearing currently within 30% to 35% range, with strong liquidity profile + sustainable growth with asset recycling funding development and investment activity + diversity of capital sources high quality portfolio prudent capital management strongly aligned manager

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Goodman+Bonds

+ operating conditions supporting an organic growth strategy with new development and investment activity funded through asset disposals + continued focus on realising the value in GMT land holdings with around $100 million of new development projects targeted per annum + active portfolio management, maximising rental income and asset values + positive economic outlook, particularly in Auckland + property markets reflecting increased customer demand with high

  • ccupancy levels and improved rental growth

+ investor demand expected to support ongoing asset recycling programme

  • perating outlook

active strategy + focused on cash earnings to maximise unitholder value + sustainable level of distributions to support investment activity strong financial focus

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Goodman+Bonds

Big Chill – Highbrook Business Park

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11

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Goodman+Bonds

portfolio occupancy + a positive economic environment and strong property fundamentals are supporting greater levels of customer demand + top ten customers represent 27%

  • f total income

+ cash rental growth through fixed increases (46%), CPI based (26%) and market (28%) + average occupancy of 96% in FY17, 98% as at 31 March 2017 + 100% industrial occupancy top ten customers by subsidiary companies

portfolio statistics presented are on a portfolio income basis and include the Viaduct joint venture

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Goodman+Bonds

+ WALT of 5.8 years at 31 March 2017 + 7.1% of income due to expire in FY18 asset diversity1 lease expiry profile2

1 asset diversity is presented on a value basis on

completion of current developments and contracted sales.

2 lease expiry profile is presented on a portfolio income

basis

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Goodman+Bonds 2017

Highbrook Drive Showrooms — Highbrook Business Park (artists impression)

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+ more than 70% of the portfolio developed over the last 10 years + intensification of the development programme with a combination

  • f pre-committed and uncommitted projects to meet demand

Goodman+Bonds

development spend

(total project cost including land value)

improved portfolio quality improved cash earnings + $97 million of projects in FY17 providing almost 31,000sqm of net lettable area + expect around $100 million of development spend per annum

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Goodman+Bonds

COMPLETION

December 2016

VALUE

$22.6m

NLA

4,980sqm

COMPLETION

November 2016

VALUE

$38.4m

NLA

7,866sqm

Big Chill, Highbrook Business Park Coda, Savill Link

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SLIDE 17

COMPLETION

May 2016

COMPLETION

January 2017

Goodman+Bonds

VALUE

$25.2m

VALUE

$12.5m

NLA

4,664sqm

NLA

11,288sqm

Orora, M20 Business Park EDL Fasteners, Highbrook Business Park

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COMPLETION

November 2016

COMPLETION

March 2017

Goodman+Bonds

VALUE

$16.4m

VALUE

$8.1m

NLA

2,796sqm

NLA

3,467sqm

Building 5, Highbrook Business Park Exeed, Highbrook Business Park

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Goodman+Bonds

Coda — Savill Link

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stable profit & earnings

Goodman+Bonds

+ gearing levels lowered further with the look through loan to value ratio of 30.6%1 + repayment of bank debt resulted in non-bank funding reaching 58%2 + $134 million net property income ($134 million in FY16) + $221 million before tax profit ($248 million in FY16) + $214 million after tax profit ($233 million in FY16) + cash earnings of $91 million, represents an increase of $15 million + continued value uplift with a revaluation gain of $115 million ($146 million in FY16) + four asset sales completed totalling over $270 million + property level rental growth through fixed, CPI and market increases positive property performance capital management

1 on a proportionately consolidated basis including GMT’s interests in the Viaduct joint venture. Holders of Goodman+Bonds will

receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31

2 funding diversity is on a drawn basis and excludes GMT’s interests in the Viaduct joint venture
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SLIDE 21

Goodman+Bonds

as at 31 March 2017 $ million 2016 $ million Change %

Net property income 134.2 133.8 0.3 Profit after tax 213.8 233.1 (8.3) Investment Property assets 2,249.3 2,275.3 (0.8) Total assets 2,460.7 2,475.5 (0.6) Total liabilities 785.8 939.3 16.3 Equity 1,674.9 1,536.2 9.0 Borrowings for LVR calculation1 761.6 832.4 (8.5) Assets for LVR calculation1 2,491.7 2,458.5 1.4 Look through loan to value ratio1 (%) 30.6 33.9 (3.2) NTA per unit (cpu) 130.4 120.4 8.3

1 on a proportionately consolidated basis including GMT’s interests in the Viaduct joint venture. Holders of Goodman+Bonds will

receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31

+ stable performance as a result of balancing divestment and development activity + lower net borrowings facilitated through a reduction in bank debt + de-geared balance sheet while improving quality of earnings

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Goodman+Bonds

Business Parade North — Highbrook Business Park

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Goodman+Bonds

+ 58% of drawn debt from non-bank funding + weighted average debt term to expiry of 4.5 years1 + most diversified funding in NZ listed property sector

1 excludes GMT’s interests in the Viaduct joint venture

conservative financial gearing + gearing currently within 30% to 35% range + GMT’s look through loan to value ratio is 30.6% + bond debt covenant loan to value ratio of 31.3% + bond, bank, USPP and Trust Deed loan to value covenants aligned at 50% + FY18 interest cover ratio expected to be greater than 3.0 times which provides significant headroom against GMT’s banking covenant of no less than 2.0 times strong balance sheet + proven track record of divesting assets to fund development expenditure + balance sheet strength is supported by contracted rental cashflows from high quality customers + GMT debt currently 60% hedged to reduce interest rate volatility + USPP USD swapped to NZD; no exchange rate risk industry leading diversity

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+ amounts of $150 million or less are well suited to sourcing funding in multiple markets + post issuance, GMT will have around $300 million of headroom within its bank facility

Goodman+Bonds

+ weighted average debt term to expiry of 5.4 years (from 4.5 years) + around 72% of drawn debt from non-bank funding (from 58%) + bank funding retained for operational flexibility maturity profile well-suited to multiple funding sources Debt maturity profile1 stronger funding metrics

1 excludes GMT’s 51% share of the Viaduct joint venture debt facility. As at 31 March 2017 GMT’s Viaduct joint venture has a $45

million debt facility maturing April 2017 (now repaid) and $127 million debt facility maturing September 2019

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Goodman+Bonds

Highbrook Crossing — Highbrook Business Park

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+ focus on portfolio quality with greater investment in the Auckland industrial market + intensification of development programme to utilise GMT’s land bank + sustainable growth with asset recycling funding new investments + greater balance sheet capacity and improved financial metrics + alignment between operating earnings and cash distributions

Goodman+Bonds

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Goodman+Bonds

Big Chill — Highbrook Business Park

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Goodman+Bonds

+ Issuer GMT Bond Issuer Limited (Issuer) + Guarantee Guaranteed by Goodman Property Trust (GMT)1 + Instrument Fixed rate senior secured retail bonds (Goodman+Bonds), ranking equally with debt owed to GMT’s main banking syndicate, GMT’s United States private placement noteholders and the existing holders of bonds issued by the Issuer and by GMT Wholesale Bond Issuer Limited The Goodman+Bonds are supported by security granted by the wholly-owned subsidiaries of GMT, which hold GMT’s property assets2 + Tenor and Maturity Date 7 years, maturing 31 May 2024 + Corporate credit rating GMT is rated BBB by S&P + Issue credit rating Goodman+Bonds are expected to be rated BBB+ by S&P + Issue Amount Up to $75,000,000 with the ability to accept oversubscriptions of up to $25,000,000 at the discretion of the Issuer + Interest rate Will be set on the Rate Set Date (26 May 2017) equal to the seven year swap rate on that date plus the margin + Indicative Issue Margin 1.55 – 1.70% p.a. + Use of proceeds The Issuer will loan the proceeds to GMT, which will use those funds (net of issue costs) for general corporate purposes and to repay indebtedness under GMT’s bank facility + Bond Trustee Public Trust + Registrar Computershare Investor Services Limited + Brokerage Nil + Application Amounts $1.00 per Goodman+Bond. Minimum $5,000 with multiples of $1,000 thereafter + Listing3 It is expected the Bonds will be quoted under the ticker code GMB040 on the NZX Debt Market

1 GMT’s obligations under the guarantee are limited to its assets. GMT’s obligations under the guarantee are in turn guaranteed by its

wholly-owned subsidiaries and the guarantees given by those entities are not limited.

2 security pool assets do not include any shares in the Viaduct joint venture vehicle (Wynyard Precinct Holdings Limited) or any of the joint

venture vehicle’s assets

3 application has been made to NZX for permission to quote the Goodman+Bonds on the NZX Debt Market. NZX accepts no responsibility

for any statement in this presentation.

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SLIDE 29

+ a wholly-owned subsidiary of GMT + sole purpose of the Issuer is to issue bonds for the benefit of the wholly-

  • wned subsidiaries of GMT (GMT Group)

+ funds received from the offer will be loaned to GMT + the Issuer will receive interest from GMT to enable it to pay interest to holders of the Goodman+Bonds + this is the fourth issue of senior secured bonds by the Issuer + the Issuer has the same board as GMT’s Manager, Goodman (NZ) Limited, providing consistency and appropriate oversight for holders of bonds

Goodman+Bonds

GMT Bond Issuer Limited

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+ Goodman+Bonds are guaranteed by GMT + secured over certain property and other assets (Security Pool Assets) of the GMT Group + assessed security value (ASV) of $2,259 million + finance debt of $695 million + bond debt covenant loan to value ratio (LVR) of 31.4% + security over the Security Pool Assets is held by the Security Trustee (NZGT (GMT) Security Trustee Limited) for the benefit of existing bondholders, USPP noteholders and lenders under GMT’s bank facility, pro rata based on the outstanding indebtedness owing to them at that time + Security Pool Assets include: + real estate properties wholly owned by the GMT Group or in which the GMT Group hold a freehold interest or a leasehold interest + certain real estate assets co-owned on a 50:50 basis with Goodman Group + Security Pool Assets do not include; + the incremental spend on developments in progress, or + any shares in the Viaduct joint venture vehicle (Wynyard Precinct Holdings Limited) or the joint venture vehicle’s assets, or + any related rights arising from GMT’s shares in the joint venture

Goodman+Bonds

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SLIDE 31

+ LVR covenant restricts total borrowings of GMT and GMT Group to 50%

  • f the Assessed Security Value of the Security Pool Assets

+ breach of LVR covenant is an event of review requiring + 6 months to formulate plan + 20 business day notice period + further 6 months to remedy before event of default occurs + other events of default include + non-payment of interest or principal + insolvency + cross-acceleration from bank debt or USPP notes

Goodman+Bonds

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Goodman+Bonds

+ NZX notice announced 18 May + offer opens 18 May + firm bids due 10:30am, 26 May + rate set date 26 May + offer closes 26 May + issue date 31 May + expected date of initial quotation

  • n the NZX debt market

1 June + interest payment dates 30 November and 31 May each year including the maturity date + first interest payment date 30 November 2017 + maturity date 31 May 2024

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Goodman+Bonds

Highbrook Business Park