Propertylink Group. Goldman Sachs Small & Mid Cap Conference 27 April 2017 Presented by Stuart Dawes Managing Director & CEO

Transcription

1 Propertylink Group Goldman Sachs Small & Mid Cap Conference 27 April 2017 Presented by Stuart Dawes Managing Director & CEO

2 Contents Propertylink Overview Value Drivers Outlook Appendices 2

3 Propertylink Overview 163 Viking Drive Wacol 3

4 Propertylink today Propertylink is a leading ASX-listed property owner and manager, specialising in Australian industrial and commercial office investments with assets under management of $1.7 billion Assets under management $1.7b Balance sheet $687m 31 Industrial Assets Mandates & Funds $1b 9 Funds Propertylink targets assets the in core, core-plus and value-add sectors with a bias to Australia s east coast. The key focus is to generate stable and recurring rental income and capital growth potential from a quality portfolio of assets. 16 Industrial Assets 13 Office Assets 4

5 Our operating segments Property Portfolio Co-investments Investment Management Optimise portfolio, actively manage, improve returns Alignment with investors 9 external Funds, 29 assets, global investors c.$687m (1), 31 assets c.$40 invested in funds c.$1.0b AUM c.77% Group revenue (2) c.5% Group revenue (2) c.18% Group revenue (2) (1) Excludes $6.5m interest directly held in 73 Miller Street, North Sydney included in co-investments (2) FY2017 forecast revenue as per Product Disclosure Statement 5

6 A diverse portfolio of industrial assets Heavily exposed to east coast strong infill locations with limited land supply and strong demand A number of assets are also exposed to upside through medium/long term alternate use Asset type Asset quality Asset geography Logistics 31% Development 8% Prime 71% QLD 14% WA 4% NSW 48% Industrial 25% Business Park 18% Multi-Let Unit Estate 18% Active 7% Secondary 22% VIC 34% Statistics at 31 December 2016 adjusted for divested assets settled during 2H17 Diverse asset composition providing stable cash flow Predominantly prime asset base combined with assets that have good repositioning / capital recycling capacity 82% of assets are located in the strong Sydney and Melbourne markets 6

7 Strong tenant diversification across the portfolio 164 tenants in the property portfolio with no single tenant contributing more than 5% of total annual rental income Manufacturing 9% Tenant breakdown by industry Warehouse / Logistics 16% Retail 10% Other 3% Automotive 8% Health/Pharmaceutical/IT 20% Construction 15% Consumer Staple 21% Top ten tenants (by income) Walkinshaw Automotive Waco Kwikform Limited Virgin Active Australia Pty Ltd VIP Plastic Packaging Pty Ltd Pacific Brands Clothing Pty Ltd Cotton On Clothing Pty Ltd Unicharm Australasia P/L The Trust Company Sheldon & Hammond Pty Ltd (1) Tigers International Solutions 0% 1% 2% 3% 4% 5% Rent review composition 1% 20% 12% 37% 30% CPI 2.5-3% 3-3.5% 3.5-4% >4% Statistics at 31 December 2016 adjusted for divested assets settled during 2H17 Portfolio well diversified by industry group with largest group being 21% of the portfolio The top 10 tenants constitute 35% of the portfolio annual rental income with a WALE of 6.0 years 88% of all rent reviews in the next 12 months are fixed increases of 2.5% or more (1) Waco Kwikform Limited is at tenant at Pike Street, Rydalmere for which a contract for sale has been exchanged with settlement expected in June

8 Propertylink Group funds under management c.$1.0bn AUM 9 external funds 29 assets 7.3% average co-investment Industrial / logistics Commercial office Diversified c.$371m AUM 4 funds and mandates 15 assets c.$484m AUM 4 funds 6 assets c.$148m AUM 1 fund 8 assets 55 Sky Rd, Tullamarine VIC 73 Miller St, North Sydney NSW Queen St, Campbelltown NSW 71% of asset in funds and mandates are in the strong Sydney market 8

9 Strong global capital partners 9

10 Value Drivers 15 Talavera Road Macquarie Park 10

11 Propertylink value drivers Strong active management capability providing unique opportunities to drive value from real estate investment Active Asset Management Enhancing portfolio through active asset management delivered via a vertically integrated model by a strong and experienced inhouse team including acquisition, leasing, asset repositioning, targeted capital expenditure, development and divestment Focus on key strategic themes to drive medium to long term value Last mile logistics Urbanisation Aging population Focused on in-fill locations with easy access to CBD and key residential areas to facilitate final stage of e-commerce supply chain Long-term view to reposition existing commercial or industrial sites for alternate use, based on urbanisation trends and requirements Ongoing demand for medical-related facilities & services, occupying office & industrial space, providing treatment and care for increased aging population 11

12 Active asset management delivering value Acquisitions Leasing Fairfield Road Yennora Acquired for PAIP II for $46.2m acquisition, 7.4% yield, 6.6 year WALE Artist impression of upgraded warehouse, Whiteside Road Clayton 15 year lease starting 1 September % of portfolio leasing completed since IPO with 81% tenant retention Development Asset Realisations Artist impression of new warehouse, 122 Newton Road Wetherill Park Construction of new facility (8,646 sqm) and refurbishment of existing facility (9,376 sqm) where a new 10 year lease has been secured Potential sale of 320 Pitt Street Sydney due to strong capital interest and the ability to deliver superior returns to institutional partners 12

13 $b Last mile logistics Propertylink has an established footprint in logistics real estate in infill locations We maintain a competitive advantage for continued opportunities given the requirements of e-commerce tenants for in-fill, last mile locations Total value of e-commerce in Australia Amazon s warehouse leasing mix in USA $30 First Mile & Regional Warehouses Last Mile Warehouses $25 $20 $15 100% 80% 60% $10 40% $5 20% $ Source: NAB Online Sales Index 0% Pre Source: Morgan Stanley Research Strong growth in the Australian e-commerce market is expected to continue Growing demand for last mile warehousing fuelled by the consumer s need for expedited delivery Amazon s entrance to the Australian market is expected to have a significant impact on logistics real estate in infill locations 13

14 Millions Urbanisation Significant population growth forecast across Australia s major capital cities driving urban renewal strategies to bring housing closer to jobs, public transport and social infrastructure Medium to long term alternative use opportunities for industrial real estate Australian population projection (by State) NSW VIC QLD SA WA TAS NT ACT Source: ABS East coast bias in population growth NSW, Victoria and Queensland growing faster than other States For example in NSW the population mix is forecast to change from 59% in cities in 2012 to 65% in

15 Age range Aging population Aging population driving a trend towards higher spending on healthcare as demands for medical services increases Strategic location of assets in proximity to developing and future medical infrastructure leveraging tenant demand for associated logistics services OECD global population pyramid % of total global population Over 65 yrs yrs yrs yrs 12%11%10%9%8%7%6%5%4%3%2%1%0%1%2%3%4%5%6%7%8%9%10%11%12% 10% 10% Male Female % 16% 25% 14% 20% 22% continues Under 20 yrs 37% 24% to shrink 21% 19% 21% 20% 18% 18% 17% largest age group 10% 5% 0% 5% 10% 10% 5% 0% 5% 10% Source: United Nations, Grosvenor

16 Propertylink value proposition One of the largest Australian-focussed, internally managed industrial & commercial real estate groups with integrated investment, asset and property management platforms Diversified, quality industrial & logistics balance sheet portfolio with opportunity to add further value through active asset management Established and rapidly growing investment and asset management platform with a track record of performance backed by leading global investors Attractive FY17 pro forma forecast distribution yield of 8.4% (1) with a conservative capital structure and strong growth prospects 5 Highly experienced management team and majority independent Board Propertylink aims to provide superior risk-adjusted returns through active asset management and by growing its investment and asset management business (1) FY17 pro forma forecast distribution yield has been calculated based on a payout ratio of 95% of pro forma forecast FY17 distributable earnings, excluding one-off items such as property revaluations and performance fees ($43.4m) and the PLG share price at 24 April 2017 ($0.815) 16

17 Outlook 9-10 John Morphett Place Erskine Park 17

18 Outlook The business is positioned well to continue strong property portfolio and investment management performance which is expected to deliver further value upside Enhance property portfolio Strong leasing results expected to continue driving further asset value growth New development at Wetherill Park provides both new core stock and value upside Further non-core assets sales once value optimised providing capital to continue investment into new assets for improvement in portfolio quality Grow investment management Strong pipeline of additional assets in due diligence for the continued growth in AUM Well positioned to add new investors to the investment management business Opportunity to deliver outsized returns and performance fees through asset sales Deliver financial targets FY17 guidance: Distributable Earnings per Security of 6.67 cents (1) Distribution per Security of 6.32 cents (1,2) Opportunity to further improve balance sheet position over the remainder of FY17 through active asset management driving asset values and above book value disposals (1) Pro-rata from the completion of the offer until 30 June 2017 (2) Includes the 2.7 cents interim distribution 18

19 Contact us Stuart Dawes Managing Director & CEO Carrie Barrack Investor Relations Manager T E sdawes@propertylink.com.au T E cbarrack@propertylink.com.au 19

20 Appendices 20

21 Property portfolio: direct property valuation movements (1) No. Property Address Value ($m) Value ($m) Cap Rate (%) Cap Rate (%) Movement (%) 30-Jun Dec Jun Dec-16 Area (sqm) Occupancy (%) 1 15 Talavera Road, Macquarie Park NSW (2) % 7.25% 6.75% 12, % Gundah Road, Mount Kuring-Gai NSW (2) % 7.25% 7.00% 32, % Rodborough Road, Frenchs Forest, NSW % 7.00% 7.00% 8, % Airds Road, Minto NSW % 8.00% 8.00% 23, % Newton Road, Wetherill Park NSW % 7.00% 7.00% 9, % Pike Street, Rydalmere NSW % 8.50% 8.50% 20, % Mandarin Street, Villawood, NSW (2) % 9.75% 8.50% 20, % McCredie Road, Smithfield NSW % 8.50% 8.25% 19, % Newton Road, Wetherill Park NSW % 7.50% 7.25% 11, % Brunker Road, Chullora NSW % 7.25% 7.25% 6, % Boundary Road, Northmead NSW % 7.00% 7.00% 5, % Rodborough Road, Frenchs Forest, NSW % 7.50% 7.50% 4, % Sylvania Way, Lisarow NSW (2) % 10.00% 9.25% 9, % Orielton Road, Smeaton Grange NSW % 7.50% 7.50% 7, % Viking Drive, Wacol QLD % 6.50% 6.50% 25, % Balham Road, Archerfield QLD % 8.50% 8.50% 24,335 68% Boundary Road, Richlands QLD % 8.25% 8.25% 9,818 60% Eurora Street, Kingston QLD % 8.00% 8.00% 6, % Melbourne Markets, 315 Cooper Street Epping (2) % 7.50% 7.25% 74, % Whiteside Road & Main Road, Clayton, VIC (2) % 8.50% 6.25% 28, % National Boulevard, Campbellfield VIC % 6.50% 6.50% 16, % Ricketts Road, Mount Waverley VIC % 7.45% 7.50% 8, % Lake Drive, Dingley VIC % 7.50% 7.50% 17, % Cherry Lane, Laverton North, VIC % 10.00% 10.50% 25, % Taryn Drive, Epping VIC % 7.00% 7.00% 10, % Strezlecki Avenue, Sunshine West VIC % 7.50% 7.50% 10, % Woodlands Drive, Braeside VIC % 6.50% 6.50% 7, % Mount Derrimut Road, Derrimut VIC % 7.25% 7.25% 8, % Modal Crescent, Canning Vale WA (2) % 8.00% 8.00% 15,251 14% McDowell Street, Welshpool WA (2) % 8.00% 7.75% 6, % Leadership Way, Wangara WA (2) % 8.25% 8.25% 5, % 3.08 WALE (yrs by income) Total % 7.65% 7.38%(1) 495, % 4.38 (1) Data at 31 December 2016 adjusted for divested assets settled during 2H17 (2) Excludes 122 Newton Road, Wetherill Park development project (3) Externally valued 21

22 Propertylink Group funds under management Investment Management c.$1.0bn AUM 9 External Funds 29 assets 7.3% average co-investment Industrial $371m AUM 11 assets PAIP II AUM: $215m 4.0% co-investment Investors: Townsend Group, Norinchukin Bank Ongoing fundraising SEDCO Mandate 1 asset AUM: $29m 7.5% co-investment Investor: SEDCO Capital Open ended mandate Confidential Mandate 1 asset AUM: $43m 10.0% co-investment Investor: Australian based alternative investment manager M&G Mandate 2 assets AUM: $85m Management only mandate Propertylink Enhanced Partnership (PEP) 8 assets AUM: $148m Investor: Goldman Sachs Investor Commercial and Industrial assets POP I POP II POP III The Gantry Investment Trust Commercial Office $484m AUM 1 asset Gross assets: $130m 5.0% co-investment Investor: Fosun 1 asset Gross assets: $245m 5.0% co-investment Investors: Goldman Sachs, Grosvenor 3 assets Gross assets: $95m 11.0% co-investment Investor: Grosvenor Ongoing fundraising 1 asset AUM: $14m Investors: Small wholesale investors 22

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