Full year results+ - Goodman

Full year results+to 31 March 2012

Contents+ Section 01 Overview+ Section 02 Financial overview+ Section 03 Investment portfolio+ Section 04 Investment activity+ Section 05 Development portfolio+ Section 06 Outlook+ Appendices

2

Overview

3

Portfolio

+ Portfolio occupancy of 96% and a weighted average lease term of 5.4 years achieved at 31 March 2012

+ Over 155,000 sqm of space leased across GMT’s investment portfolio

+ Devaluation of $19.5 million or 1.2% and a portfolio capitalisation rate of 8.5%

Earnings & Profit

+ $53.5 million before tax profit compared to $43.0 million in pcp

+ $40.5 million after tax profit compared to $36.7 million in pcp

+ Distributable earnings before tax of $80.9 million or 8.41 cpu ($77.5 million or 8.74 cpu, pcp)

+ Distributable earnings after tax of $74.8 million or 7.78 cpu ($78.0 million or 8.79 cpu, pcp)

+ Net property income increased by 2.4% to $111.3 million

+ Development commitments totalling $64.2 million across 49,615 sqm of space in FY12

+ Seven development completions encompassing 39,250 sqm achieved in FY12

+ Further development commitment to Frucor Beverages Limited post balance date

Development

+ Loan to value ratio of 35.7% and interest cover ratio of 2.5 times

+ Weighted remaining term across all debt facilities now 3.1 years

+ $132.0 million of refinancing completed ($106.0 million GMT proportionate share)

+ $63.4 million of equity raised through operation of DRP

+ Asset sales to provide additional flexibility

Capital Management

Super Cheap Auto Distribution Centre, Savill Link

Financialoverview+

Financial performance

5

12 months ended March 12$ million

March 11 $ million

Change %

Distributable earnings before interest and tax 102.8 101.1 1.7

Interest (21.9) (23.7) 7.6

Distributable earnings before tax 80.9 77.5 4.4

Tax on distributable earnings (6.1) 0.5 1,320.0

Distributable earnings after tax 74.8 78.0 (4.1)

Revaluation Loss (19.5) (24.8) 21.4

Other non-cash items (14.8) (16.5) 10.3

Profit after tax 40.5 36.7 10.4

Note: Values in table above may not appear to sum accurately due to rounding.

Financial position

6

as at March 12$ million

March 11 $ million

Change %

Total assets 1,674.3 1,618.0 3.5

Property assets 1,629.5 1,576.0 3.4

Net borrowings 581.2 578.4 0.5

Liabilities 739.2 725.9 1.8

Equity 935.1 892.1 4.8

Net borrowings to property assets (%) 35.7 36.7 n/a

NTA per unit (cpu) 92.9 94.8 (2.0)

Adjusted NTA per unit (cpu)1 95.4 97.3 (2.0)


1 Adjusted for derivative financial instruments (net of tax)

Revenue reconciliation

7

Portfolio income - $ million

Net tangible assets

8

Cents per unit NTA

NTA at 31 March 2011 94.8

Retained earnings 1.1

DRP 0.2

Devaluation (2.0)

Mark to market swaps (0.2)

Deferred tax (1.0)

NTA at 31 March 2012 92.9

Derivative financial liability (net of tax) 2.5

Adjusted NTA at 31 March 2012 95.4

Capital management+ Prudent management

- Loan to value ratio of 35.7% remains at the lower end of the Board’s targeted 35% to 40% band

- Interest cover ratio of 2.5 times1

+ Trust deleveraged by 1% over the year (on an LVR basis) with the quantum of debt static around $580 million

+ New development opportunities continue to be matched to new equity- Distribution Reinvestment Plan raised $63.4 million at premium to NTA

+ Future asset sales will provide additional flexibility

91 Main GMT facility

Capital management+ GMT is currently 72% hedged with an average term of 2.7 years across its

swap book+ Positioned towards the bottom of the policy band, taking advantage of

lower floating rates+ Effective interest rate in FY12 was 7.75%

10

GMT Hedging profile – % hedged

Capital management+ Further refinancing completed in FY12

- $80.0 million tranche of the Trust’s main bank facility renewed for a further five years - $52.0 million amalgamation and extension for 5 years across GMT’s Viaduct

Corporate Centre joint venture ($26.0 million GMT proportionate share)+ Weighted term across all debt facilities at 31 March 2012 is 3.1 years

11

GMT debt facilities maturity profile - $millions

Earnings outlook+ The current business environment is likely to persist in the short term with only

modest economic growth anticipated over the next 12 months. + The Trust is expected to deliver similar results under these conditions maintaining

a cash distribution at 6.25 cpu, around 80% of distributable earnings after tax+ Future earnings growth dependent on strength and timing of economic recovery,

but remains sensitive to: - Rental growth - Interest rate movements- Investment and development activity- Capital management initiatives

12

OfficeMax, Highbrook Business Park

Investmentportfolio+

Portfolio leasing

+ Over 155,000 sqm of space leased on new and revised terms in FY12- This new leasing equates to $18.3 million of portfolio income or 15.8% of portfolio

NLA + On average, 138,000 sqm of space has been secured per annum across the stabilised

portfolio over the last 6 years as a result of active management 14

Space leased - NLA1 sqm Key leasing deals completed in FY12

Property Customer NLA1

sqmComm.

DateTermyears

Highbrook Business Park

DHL Supply Chain NZ

31,630 Sept 2011 5


McPhersons Consumer Products

7,516 Sept 2015 3

Westney Industry Park Cotton On Clothing NZ

8,412 May 2012 10


National Aluminum

3,467 Mar 2012 10

The Gate Industry Park FEL Group 3,986 Jan 2012 12

M20 Business Park Kuehne+Nagel 2,306 Apr 2012 2

Total 57,317 6.0

1 Net lettable area (net of canopies and yard)

Portfolio occupancy

+ Portfolio occupancy of 96% at 31 March 2012+ Portfolio rental growth remains flat+ Focus on leasing up vacant space

15

Property Tenancy NLA1

sqmDate

became vacant

M20 Business Park Warehouse/office 5,803 Sept 2011

The Gate Industry Park Warehouse/office 1,903 Nov 2009

The Gate Industry Park Warehouse/office 1,750 Aug 2010

Connect Business Estate Office 1,878 Jan 2012

Central Park Corporate Centre Office 662 May 2009

Central Park Corporate Centre Office 663 Sept 2011

Other Various 25,762

Total 38,421


Portfolio occupancy – portfolio income (%) Key vacancies

Portfolio expiries

16

Lease expiry profile – portfolio income (%)

Property Customer NLA1

sqmExpiry

Connect Business Estate Fletcher Building 1,609 June 12

Gateside Industry Park Toll 8,031 Sept 12

M20 Business Park Ford 9,112 Oct 12

Savill Link Toll 8,051 Jan 12

Central Park Wood & Partners 1,034 Feb 13

Connect Business Estate Fletcher Building 5,084 Mar 13

Total 32,921

Key customer expiries – FY13

+ Weighted average lease term of 5.4 years at 31 March 2012 - WALT of 5.8 years across GMT’s industrial assets- WALT of 4.7 years across GMT’s office assets

+ 8.4% of income due to expire in FY13


Valuations+ Annual devaluation of $19.5m compared to $24.8m in FY11

- The investment portfolio recorded its first gain since 2008 with an increase of $3.8m or 0.3%

- The development portfolio declined by $23.2m or 11.6%+ Portfolio capitalisation rate firmed by 10bps to 8.5%+ Remains 2.6% over-rented

17

Valuation Summary March 2012$m

Valuation gain/loss

Annual change %

Weighted cap rate

%

Cap rate shift %

Office portfolio 527.1 (1.1) (0.2) 8.75 0.03

Industrial portfolio 925.9 4.9 0.5 8.35 (0.21)

Development portfolio 176.4 (23.2) (11.6) - -

Total 1,629.5 (19.5) (1.5) 8.5 0.10


18

Operating costs

+ Goodman is pro-active in managing the operating expenses of its buildings+ Any increase impacts on the total occupancy costs of its customersInsurance+ Portfolio insurance is sourced locally utilising Goodman Group’s global purchasing

power + The cost of insuring the Auckland portfolio has fallen from $3.04m to $2.90m while

the sum insured has risen from $1.53bn to $1.63bn+ For Christchurch the premium has increased from $0.34m to $0.56m while the sum

insured has increased by 32%+ The portfolio premium represents 0.19% of the sum insured compared to 0.21% last

year.Rates+ Supercity merger has created significant rating increases for certain types of

property in particular locations+ The GMT portfolio has been less impacted than retail or CBD office portfolio’s+ Submissions have been made to the to Supercity on the level of rates and

development contributions being proposed in the long term plan

Development site, M20 Business Park

Investmentactivity+

20

NZ investment market activity

+ Improved transaction volumes in the second half of 2011- 58 sales totalling $818 million in 2H 2011 compared to 39 sales totalling

$478 million in 1H 2011.+ More interest from both vendors and purchasers + Investment activity maintained into 2012 with institutions active

Source: CBRE Research

Total Investment Sales Value - $5 million+

21

Sale of non-core assets

+ Strengthening investment market with interest from local & offshore investors+ GMT portfolio has received unsolicited offers with $35 million of assets under

conditional contract + Recycling of capital will ensure GMT can take advantage of investment and

development opportunities as the economy recovers

Kmart Distribution Centre, M20 Business Park

Developmentportfolio+

Development update

+ Significant increase in development activity over the last 15 months - 49,615 sqm of commitments totalling $64.2 million versus 11,485 sqm or $18.3

million in FY11+ Visible signs of improved economic conditions with increased levels of enquiry

- 17,150 sqm of development already committed in 1H 2013

23

GMT development activity – NLA1 sqm

1 Net lettable area (net of canopies and yard)2 Reflects FY13 YTD development commitment to Frucor Beverages Limited

Development activity – FY12

Customer NLA1

sqmLease term

years Ownership

% Total Cost2

$mcompletion

date

The Crossing Stage One,Highbrook Business Park 9,800 6 - 10 50 21.83 June 2013

Super Cheap Auto (New Zealand) Pty Limited,Savill Link 20,530 10 100 24.0 Complete

Scalzo Food Industries Limited, Highbrook Business Park 4,950 10 50 3.5 Complete

Panasonic New Zealand Limited,Highbrook Business Park 7,500 10 50 6.4 February 2013

National Aluminium Limited (extension),Highbrook Business Park 2,250 10 50 2.2 Complete

Stanley Black & Decker NZ Limited,Highbrook Business Park

3,500 8 50 2.9 August 2012

Big Chill Distribution (extension), Glassworks Industry Park

1,085 15 100 3.5 October 2012

Total 49,615 64.2

24

Note: Values in table above may not appear to sum accurately due to rounding1 Net lettable area (net of canopies and yard)2 Reflects GMT’s interest 3 Includes $4.2 million (GMT’s 50% interest) of works attributable to future stages

Recent development completions

25

Customer Super Cheap Auto

NLA1 20,560 sqm

Lease term 10 years

Ownership % 100

Total project cost $m 24.0

Development timeframe June 2011 – March 2012

Customer Scalzo Food Industries

NLA1 4,950 sqm

Lease term 10 years

Ownership % 100

Total project cost $m2 6.9

Development timeframe June 2011 – March 2012

Savill Link Highbrook Business Park

1 Net lettable area (net of canopies and yard)2 GMT’s interest is $3.45 million

26

Highbrook update

+ Construction well underway- Driven and bored piles completed - First stages of basement slab pour complete - Precast panels to basement structure being stood onsite

+ Good levels of enquiry from retail and amenity customers

Customer NLA1

sqmTerm years

Quest branded serviced apartment 3,000 10

New Zealand Post 250 9

Westpac 345 6

Hollywood Bakery 345 8

Wynyard Wood 635 9

Vacant 5,225 -

Total 9,800

Leasing progressThe Crossing - Stage One


Frucor beverages

27

NLA1 17,150 sqm

Lease term 10 years

Total project cost $m 22.3

Expected Completion March 2013

M20 Business Park


+ Post balance date commitment + More than 50,000 sqm of

development undertaken at M20+ Estate now 84% complete

developmentestates+

Auckland

Christchurch

29

Development strategy

+ Development activity over the last 2 years has been more than 90% pre-committed+ Prudent strategy in that environment+ Improving economic conditions are expected to drive a strengthening development

business into the future

Strategy going forward+ Accelerate development programme+ Key influencing factors

- Cyclical low in building costs- Improving occupancy in key markets

+ Continue design-build activity+ Produce uncommitted product at certain estates

30

Construction pricing+ Construction pricing remains extremely competitive, tenders are regularly 8-

10% below quantity surveyor estimates+ Recent tender at Highbook was almost 20% below expectations, with the top

3 bids within a tight $50,000 range on a $5.1 million contract + Suppliers and contractors absorbing price increases and cutting margins, as

forward work books are extremely light+ Pricing of concrete, labour and steel has plateaued+ Christchurch rebuild has been delayed and Wellington seismic work is low

intensity- Potential to escalate pricing as greater volume of work commences

BNZ Business Centre, Ford Building, Highbook Business Park

Outlook+

32

Outlook and summary

Capital management

+ Weighted average debt term of 3.1 years with next expiry in FY14

+ Equity, bank debt and bond markets are all future funding options

+ Asset disposals underway, DRP proven way of raising equity - cost effective and timely

Strategy

+ Continuing focus on customer relationships and maximising the rental streams from the portfolio

+ Accelerating the development programme to take advantage of current conditions

+ Equity fund new investment and development opportunities

Summary

+ Property markets are strengthening but it remains a highly competitive operating environment

+ Consistent operating results are expected to continue

+ FY13 cash distribution maintained at 6.25 cpu, around 80% of distributable earnings after tax

Outlook

+ Low growth economic environment expected to continue through FY13

+ Competitive leasing market also restricting rental growth

+ Medium to longer term growth prospects more positive

+ Investment returns strengthening as investors covet prime defensive assets

+ Higher levels of development activity dependent on business confidence being maintained

Important Notice This presentation has been prepared by Goodman (NZ) Limited as the manager of Goodman Property Trust (“GMT”). The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision relating to your investment or financial needs. This presentation is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in New Zealand currency unless otherwise stated. May 2012.

Goodman NZ Limited, Queen Street office

Thank you+

Appendix – GMT financial performance

34

Period ended March 12$ million

March 11$ million

March 10$ million

March 09$ million

March 08$ million

Net rental income 111.3 108.7 106.2 103.7 95.8

Administrative expenses (8.5) (7.6) (6.8) (7.3) (6.3)

Distributable earnings before interest and tax 102.8 101.1 99.4 96.4 89.5

Interest (21.9) (23.7) (20.2) (9.4) (16.1)

Distributable earnings before tax 80.9 77.5 79.2 87.0 73.4

Tax on distributable earnings (6.1) 0.5 (1.7) (3.2) (4.7)

Distributable earnings after tax 74.8 78.0 77.5 83.8 68.7

Gain/(loss) on disposal of property - 0.2 (2.1) (0.2) 1.6

(Loss)/gain on interest rate derivatives (2.9) (5.4) 13.2 2.3 -

Revaluation movement (19.5) (24.8) (49.9) (172.8) 28.9

Deferred tax (6.9) (6.9) (8.0) 12.8 0.1

Performance fee - - (3.5) - -

Changes in cash flow hedge reserve (3.8) (4.2) (24.4) - -

Interest in deferred settlements (1.2) (0.9) - - -

Net gain resulting from business combination - 0.6 - - -

Profit after tax 40.5 36.7 2.8 (74.1) 99.3

Weighted average units on issue 961.1 887.4 851.2 838.8 693.8

Distributable earnings before tax per unit (c) 8.41 8.74 9.31 10.38 10.59

Distributable earnings after tax per unit (c) 7.78 8.79 9.10 10.00 9.90

Less retained earnings per unit (c) 1.53 1.05 0.60 - -

Cash distributable earnings per unit (c) 6.25 7.74 8.50 10.00 9.90

Note: Values in table above may not appear to sum accurately due to rounding.The 2010 year result has been restated following a change in the Trust’s accounting policies. GMT is an early adopter of the amendment to NZ IAS 12 Income Taxes.

Appendix – GMT assets and liabilities

35


March 11$ million

March 10$ million

March 09$ million

March 08$ million

Total assets 1,674.3 1,618.0 1,510.4 1,561.6 1,600.2

Property assets 1,629.5 1,576.0 1,474.1 1,512.7 1,550.8

Net borrowings1

581.2 578.4 544.7 546.0 418.9

Total Liabilities 739.2 725.9 656.3 659.4 514.4

Equity 935.1 892.1 854.1 902.2 1,085.8

Underlying net borrowings to property assets (%) 35.7 36.7 36.9 35.3 27.2

NTA per unit (cpu) 92.9 94.8 98.3 105.6 129.0

Adjusted NTA per unit (cpu)2

95.4 97.3 100.4 106.0 129.3

Unit price (cents) 103.5 93.0 100.0 133.0 160.0

Note: Values in table may not appear to sum accurately due to rounding.The 2010 year result has been restated following a change in the Trust’s accounting policies. GMT is an early adopter of the amendment to NZ IAS 12 Income Taxes.

1Total borrowings net of cash

2Adjusted for derivative financial instruments (net of tax)

Appendix - GMT debt facilities

36

GMT Debt Expiry Profile Total Facility GMT Share Facility Remaining Term

as at 31 March 2012 $ million $ million Expiry years

GMT Main Facility Tranche A 80.0 80.0 Oct-16 4.6

GMT Main Facility Tranche B 100.0 100.0 Dec-15 3.8

GMT Main Facility Tranche C 150.0 150.0 Apr-13 1.1

Highbrook Development Tranche A 75.0 37.5 Oct-13 1.5

Highbrook Development Tranche B 150.0 75.0 Oct-15 3.5

Viaduct Corporate Centre 52.0 26.0 Dec-16 4.7

Show Place Facility 31.0 31.0 Sep-13 1.5

Bank Facilities 638.0 499.5 2.8

GMT Retail Bond 150.0 150.0 Jun-15 3.2

GMT Wholesale Bond 45.0 45.0 Sep-17 5.5

Total Bond Issuance 195.0 195.0 3.7

Total Debt Facilities 833.0 694.5 3.1

Appendix – GMT portfolio metrics

37

1 Net lettable area (net of canopies and yard)2 Weighted average lease term as at 31 March 2012

Top ten customers - portfolio income (%) Customer industry exposure - portfolio income (%) Asset diversity – property value (%)

The charts above represent the portfolio as at 31 March 2012 upon completion of commenced developments


March 11$ million

March 10$ million

March 09$ million

March 08$ million

NLA1

(sqm) 987,569 928,420 896,440 880,016 839,438

Weighted average capitalisation rate (%) 8.5 8.6 8.6 8.7 8.0

Portfolio occupancy (%) 96 97 96 96 97

WALT2 (years) 5.4 5.6 5.8 5.9 6.0

Customers 246 225 217 236 242

Appendix – GMT investment portfolio

381 Net lettable area (net of canopies and yard)2 Valuations have not been adjusted to reflects GMT’s interest 3 Weighted average lease term at 31 March 2012

Property GMT

ownership %

NLA1

sqmValuation2

$M Market cap

rate %Occupancy

%WALT3

yearsKey Customers


+ HDL Assets 50 157,266 292.8 7.00 - 8.50 100 7.8 PaperLinX, Datamail, GEON, NALCO, Scalzo

+ HBPL Assets 75 83,219 153.0 7.50 - 8.63 98 7.1 DHL, McPherson's, Big Chill, BMW, NZ Post

M20 Business Park 100 82,957 110.6 7.38 - 8.49 92 5.8 Frucor, Ford, ACC, Kmart, Bridgestone

Connect Business Estate 100 31,204 47.5 9.25 94 3.1 Fletcher Building, Synovate

The Gate Industry Park 100 79,760 127.0 8.00 95 6.9 FEL Group, Tapper Transport, Recall, SCA

Westney Industry Park 100 102,572 105.4 9.00 - 9.25 100 4.2 Linfox, SCS, Toll, Cotton On, Pacnet

Savill Link 100 76,817 98.0 7.75 - 8.75 100 4.5 Toll, USG, Holden, Super Cheap

Enterprise Park 100 61,289 47.0 9.25 77 4.1 PMP, Mainstream, Bikes International

Penrose Industrial Estate 100 30,945 37.0 8.75 87 4.2 Turners Auctions, Vehicle Safety Systems

Gateside Industry Park 100 17,861 26.0 8.25 100 4.5 TNL, Toll, Metropack and Port of Tauranga

120 Pavilion Drive 100 6,762 7.8 9.00 93 0.2 UPS

Viaduct Corporate Centre 50 31,198 151.0 8.38 - 8.63 98 5.0 Vodafone, KPMG, Microsoft. HP

Central Park Corporate Centre 100 33,307 112.2 9.25 91 3.7 Armourguard Security, SIMPL Group, Fairfax

Millennium Centre Phase Two 100 19,814 66.5 8.75 97 3.3 Spotless Services, MWH, Pharmacy Brands

Air New Zealand House 100 15,587 61.2 8.75 100 7.3 Air New Zealand

Millennium Centre 100 15,526 55.6 9.00 100 4.6 Mighty River Power, Genesis Energy, Bridgestone

Yellow HQ 100 8,177 32.2 8.25 94 7.5 Chevron, Yellow Pages, Hollywood Bakery

OnGas House 100 4,774 18.9 8.5 80 3.8 Vector, BTI, SMEC New Zealand Limited

Vector Centre 100 4,821 19.7 8.13 100 8.6 Vector

Southpark Industrial Estate 100 21,921 21.0 9.75 100 2.4 Bullet Freight, Halls Refrigerated Transport

Glassworks Industry Park 100 30,729 25.2 8.75 99 5.9 Fisher & Paykel, NZ Safety, Big Chill , Downer

Show Place Office Park 100 22,395 85.3 8.75 100 4.6 IAG NZ, Solid Energy, Transpower, Holcim

Carter Holt Harvey 100 20,381 12.2 10.75 100 4.4 Carter Holt Harvey

Total 959,283 1,713.1 8.5 96 5.4

Appendix – GMT current active developments

39

1 Net lettable area (net of canopies and yard)2 Valuations have not been adjusted to reflects GMT’s interest 3 Not all developments were sufficiently progressed to be independently valued at 31 March 20124 Announced post balance date

Property GMT

ownership %

NLA1

sqm

Expected market value on

completion2,3

$M

Adopted cap rate

%

Occupancy%

Lease term

yearsExpected date of completion


+ The Crossing Stage 1 50 9,800 35.1 8.50 40 6-10 June 2013

+ Panasonic 50 7,500 13.4 7.50 100 10 February 2013

+ Stanley Black & Decker 50 3,500 6.1 7.25 100 8 August 2012

Glassworks Industry Park

+ Big Chill extension 100 1,085 3.9 8.00 100 15 October 2012

Total 21,885 58.5

M20 Business Park

+ Frucor Beverages 4 100 17,150 24.6 7.75 100 10 March 2013

Full year results+ - Goodman

Documents

Transcript of Full year results+ - Goodman