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Contents 03 Executive summary 04 Portfolio update 11 New investments 16 Equity raise 25 Appendix Highbrook Business Park NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Equity raising to fund growth opportunities Equity Raise 2019 Executive summary Portfolio repositioning complete and strong underlying performance: Occupancy of 99.4% ＋ 93,667sqm of new leasing and market reviews completed with 6.8% 1 rental growth ＋ Development workbook remains strong; 15 build-to-lease warehouses completed over last 12 months are 100% leased ＋ Interim revaluation expected to be around $170 million 2 ＋ $169 million of new investments in line with strategy: Mt Wellington - $65 million, prime infill location with two year leaseback to Turners & Growers, expected to settle in September 2019 ＋ Favona Road - $29 million settlement to take place late September 2019 ＋ Development package - $75 million 3 – five new projects on existing GMT estates totalling 26,601sqm with a yield on additional cost of 7.4% 4 ＋ Raising $165 million of equity, providing capacity for further acquisitions and developments, while remaining at lower end of target gearing range: $150 million underwritten 5 Placement and $15 million Retail Offer, with the ability to accept up to $10 million of oversubscriptions at the Manager’s so le discretion ＋ Proceeds will initially repay bank debt and reduce pro-forma committed gearing to approximately 21% 6 ＋ New Units to be offered under the Placement at a fixed price of $2.10 per unit ＋ Retail Offer will also be at $2.10 per unit ＋ Goodman Group, GMT’s largest unitholder (21.59%), has committed to participate in the Placement at the fixed price of $2.10 o n an effective pro-rata basis ＋ GMT retaining strong financial metrics: FY20 earnings guidance, post impact of equity issuance, reaffirmed; cash earnings to be materially consistent with FY19 ＋ Distribution guidance maintained at 6.65 cpu, with NTA forecast to increase by approximately 15 cpu, primarily as a result of the expected September revaluation ＋ Pro-forma gearing level of 21% 6 on a fully committed basis provides significant financial flexibility to continue accretive investment programme ＋ 1 Average increase in contracted face rental levels across leasing and market reviews completed in period 1 April 2019 to 31 August 2019 5 Excluding 21.59% of units held by entities associated with Goodman Group who have already committed to take up their 2 Forecast revaluation including changes in value of leasehold right of use asset net of lease liability at Westney Industry Park pro-rata share of the Placement 3 Total project cost including land, construction, leasing and marketing costs and all management and professional fees 6 Pro-forma committed gearing post expected September revaluations and equity raise. Excludes impact of any proceeds 3 4 Yield on total project cost excluding land. Yield on total project cost including land is 6.1% raised from the UPP which at $15 million would further reduce committed gearing to 20.7% NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Premium Apparel – Highbrook Business Park NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Auckland industrial market Equity Raise 2019 Portfolio update Auckland industrial market near capacity with 1.9% vacancy rate 1 ＋ Auckland warehouse rents ($psm) 150 Prime industrial rental growth of 5.6% in year to June 2019 1 ＋ Prime locations, close to consumers, expected to deliver best ＋ 140 returns 130 Industrial market showing strongest investment performance and ＋ investor confidence of all property sectors 120 Sector performance reflected in expected GMT interim revaluation ＋ 110 of around $170 million (+6.4%) GMT portfolio cap rate expected to firm around 30 bps to 5.4% in ＋ 100 September 90 80 70 2014 2015 2016 2017 2018 2019 Prime Industrial Secondary Industrial Source: JLL (June 19) 1 JLL 2Q19 5 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
GMT’s portfolio is positioned for growth, with assets located in efficient and desirable distribution locations $ 3.1 bn 1 Committed property portfolio 1.1 m sqm 2 Net lettable area 1 March 2019 portfolio adjusted for forecast September 2019 revaluation, announced developments and contracted acquisitions 2 March 2019 portfolio adjusted for announced developments and contracted acquisitions 6 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Portfolio transformation driving results Equity Raise 2019 Portfolio update GMT is now 100% focused on the Auckland industrial market ＋ following $1.2 billion of asset sales over five years Transformation is positively impacting performance of underlying ＋ portfolio with occupancy of 99.4% 93,667 sqm of leasing and market reviews completed on existing ＋ portfolio so far in FY20: — average rental growth of 6.8% 1 with retention rate of 73% 2 — average face rent on prime 3 warehouse space of $133 psm with 6.0% average incentive Portfolio metrics FY14 FY19 31 Aug 2019 Industrial weighting 71% 100% 100% Occupancy 97.3% 98.2% 99.4% WALT 5.5 years 5.2 years 5.6 years Portfolio value $2.1bn $2.6bn $3.1bn 4 Land weighting 10.8% 2.2% 1.7% 4 1 Average increase in contracted face rental levels across leasing and market reviews completed in FY20 to 31 August 2019 2 Retention rate calculated over 24 month period to 31 August 2019 3 Excludes value-add estates 7 4 March 2019 adjusted for new development package, contracted acquisitions and expected revaluation Gateway Warehouses – Highbrook Business Park NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Current development programme Equity Raise 2019 Portfolio update 15 warehouses completed by GMT on a build-to-lease basis in FY19 are 100% leased ＋ Current development programme 1 of 44,000 sqm is leasing well with 50% committed and average time to completion of six months 2 ＋ — average warehouse face rent achieved on current workbook of $136 psm and incentives of 4.6% Recent leasing examples Gateway Warehouses Underwood 2,600 El Kobar Units Warehouse area 6,109 sqm 2,630 sqm 1,340 sqm Warehouse rent $140 psm $145 psm $155 psm Incentive 5.0% 3.0% 4.2% Review structure Fixed 2.75% Fixed 3.0% Fixed 3.0% Market review 5 years 6 years 5 years 1 Prior to developments announced today 2 Weighted by total project cost 8 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Recent acquisitions Equity Raise 2019 Portfolio update Recent acquisitions of Roma Road, Mt Roskill and Favona Road, ＋ Mangere are in line with GMT’s strategy to acquire infill sites, close to distribution networks and consumer base Sites provide a holding yield with potential for redevelopment in the ＋ medium to long term Including recent acquisitions, value add (redevelopment) sites ＋ represent approximately 12% of GMT portfolio value and yield 5.0% 1 Roma Road (approximate boundary) Medium term repositioning strategy underway with both assets ＋ Purchase metrics Purchase price $122m Land area (sqm) 201,081 sqm Average lease term 2.1 years 2 Initial yield 4.6% 1 Includes the acquisitions of Favona Road and Mt Wellington, reflects expected September 2019 revaluation Favona Road (approximate boundary) 2 Excludes Turners & Growers break option at Favona Road 9 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
GMT’s portfolio of greenfield and value add sites provides the opportunity for more than $500 million of additional development spend 200,000 sqm + of prime industrial space 1 $ 500 m + Tamaki Estate Penrose & Connect 2 additional spend Mt Wellington GMT’s future development sites by NLA Greenfield 18% Favona Road Roma Road Value add 82% 1 Net lettable area 2 Total project cost excluding land 10 10 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
New investments SH1 Sylvia Park Mt Wellington Highway SH1 T&G - Mt Wellington (approximate boundary) 11 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
Mt Wellington acquisition Equity Raise 2019 New investments Strategy Purchase price $ 65 m Prime location with direct access to ＋ SH1 and Mt Wellington Hwy Land area Significant infill location with access ＋ 57,579 sqm to population of 830,000 within 20 minutes Lettable area 17,989 sqm Existing improvements provide the ＋ ability to drive medium term cashflows Customer T&G 31% site cover allows ability ＋ for additional NLA to be added over Lease term time 2 years Opportunity to enhance ＋ + 2x1 year ROR relationship with key customer T&G Initial yield 5.1% 12 T&G - Mt Wellington (approximate boundary) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
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