Terms Sheet dated 19 February 2018 5.5 year secured retail bonds due 1 September 2023 19 February 2018 This terms sheet (Terms Sheet) sets out the key terms of the offer by GMT Bond Issuer Limited (Issuer) of up to $75,000,000 (with the ability to accept oversubscriptions of up to a further $25,000,000 at the Issuer's discretion) of fixed rate secured bonds maturing on 1 September 2023 () under its bond master trust deed dated 6 November 2009 (as amended from time to time) as modified and supplemented by the bond supplemental trust deed dated 19 February 2018 entered into between the Issuer and Public Trust (Bond Trustee) (together, Bond Trust Documents). Important notice The offer of debt securities by the Issuer is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). The offer contained in this Terms Sheet is an offer of bonds that 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 maturing on 16 December 2020 (which have an interest rate of 6.20% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB020 (GMB020 Bonds); $100,000,000 fixed rate secured bonds maturing on 23 June 2022 (which have an interest rate of 5.00% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB030 (GMB030 Bonds); and $100,000,000 fixed rate secured bonds maturing on 31 May 2024 (which have an interest rate of 4.54% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB040 (GMB040 Bonds), (the GMB020 Bonds, the GMB030 Bonds and the GMB040 Bonds, together the Existing Bonds). The are of the same class as the Existing Bonds for the purposes of the FMCA and the Financial Markets Conduct Regulations 2014 (FMC Regulations). 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 Existing Bonds are the only debt securities of the Issuer that are in the same class as the and are currently quoted. Investors should look to the market price of the GMB020 Bonds, GMB030 Bonds and GMB040 Bonds referred to above to find out how the market assesses the returns and risk premium for those bonds. Issuer Manager Description Purpose Amount GMT Bond Issuer Limited, a wholly owned subsidiary of Goodman Property Trust (GMT). Goodman (NZ) Limited, as manager of GMT. The are fixed rate, senior secured bonds of the Issuer, and are guaranteed by GMT. The Issuer will on-lend the proceeds of the offer to GMT by way of an interest bearing loan. GMT will use the funds, after paying the costs of the issue, for general corporate purposes and to repay borrowings under GMT s bank facility. GMT will pay interest to the Issuer to enable the Issuer to pay interest on the to holders of the (Bondholders). Up to $75,000,000 with the ability to accept oversubscriptions of up to a further $25,000,000 at the Issuer's discretion. Opening Date 19 February 2018
Closing Date 23 February 2018 Rate Set Date 23 February 2018 Issue / Allotment Date 1 March 2018 Maturity Date 1 September 2023 Security Each GMT Group Company (as defined below), including the Issuer, has granted security in favour of NZGT (GMT) Security Trustee Limited (Security Trustee), including mortgages over real property and assets held by those companies. The benefit of that security is held by the Security Trustee for all beneficiaries (including the banking syndicate, existing bondholders and the US private placement note holders) on an equal ranking basis. The GMT Group Companies are the wholly-owned subsidiaries of GMT being Goodman Property Aggregated Limited, Goodman Nominee (NZ) Limited, Goodman (Highbrook) Limited, Highbrook Development Limited, Highbrook Business Park Limited, Henshaw Goodman Limited, Henshaw Holdings Limited, the Issuer and GMT Wholesale Bond Issuer Limited. Wynyard Precinct Holdings Limited (GMT s joint venture company with GIC, Singapore s sovereign wealth fund) and its subsidiaries do not provide security in favour of the Security Trustee and the shares that Goodman Nominee (NZ) Limited holds in Wynyard Precinct Holdings Limited are excluded from the security granted in support of the. Guarantee The are guaranteed by GMT. GMT s obligations are in turn guaranteed by each GMT Group Company. LVR Covenant Further Indebtedness The Bond Trust Documents include a loan-to-value ratio covenant (LVR Covenant) that requires the Issuer to ensure that, while any are outstanding, the ratio (LVR) of: (a) consolidated Finance Debt of the Group (which includes the Hedged Value of any Hedged Foreign Currency Borrowings); to (b) the value of the properties comprising the Security Pool, is at all times less than 50% (as those terms are defined in the Bond Trust Documents). A breach of the LVR Covenant would be an Event of Review under the Bond Trust Documents. GMT, the Issuer and other members of the GMT Group may incur Finance Debt (including bank debt or debt in respect of new bonds or new US private placement notes), without Bondholders consent, while the are outstanding. Credit Ratings GMT Credit Rating Expected Issue Credit Rating Standard & Poor s (S&P) BBB (stable) BBB+ S&P has issued a BBB (stable) credit rating for GMT and is expected to issue a BBB+ credit rating for the. A rating is not a recommendation by any rating organisation to buy, sell or hold. The above ratings are current as at the date of this Terms Sheet and may be subject to suspension, revision or withdrawal at any time by S&P. Early Repayment Interest Rate Indicative Issue Margin Bondholders have no rights to require the Issuer to redeem the early except through the Bond Trustee in the case of an Event of Default (as defined in the Bond Trust Documents). The Issuer does not have the right to redeem the early. The sum of the Base Rate plus the Issue Margin which may be above or below the Indicative Issue Margin, subject to a minimum Interest Rate of 4.00 percent per annum. The Interest Rate will be announced by the Issuer via NZX on or about the Rate Set Date. The indicative margin range is 1.20 to 1.30 percent per annum for the. The actual margin for the (which may be above or
below the indicative margin range mentioned above), will be set by the Issuer (in consultation with the Joint Lead Managers) on the Rate Set Date following a bookbuild conducted by the Joint Lead Managers. The actual margin will be announced by the Issuer via NZX on the Rate Set Date. Base Rate Issue Price Interest Payments Interest Payment Dates Record Date Business Days Minimum Application Amount and Minimum Holding ISIN Registrar and Paying Agent NZX Debt Market Quotation NZX Debt Market Ticker Code Expected Date of Initial Quotation and Trading on NZX Debt Market Bond Trustee / Supervisor Security Trustee Governing Law NZX Approval The semi-annual mid-market rate for an interest rate swap of a term matching the period from the Issue Date to the Maturity Date as calculated by the Joint Lead Managers in consultation with the Issuer, according to market convention, with reference to Reuters page ICAPKIWISWAP1 on the Rate Set Date (rounded to 2 decimal places, if necessary, with 0.005 being rounded up). $1.00 per Goodman+Bond. Semi-annually in arrear in equal payments. 1 March and 1 September each year up to and including the Maturity Date. If any Interest Payment Date falls on a day that is not a Business Day, the due date for the payment to be made on that date will be the following Business Day. The first Interest Payment Date will be 1 September 2018 but as that date is a Saturday, the actual payment will be made on 3 September 2018. 5.00pm on the tenth calendar day before the Interest Payment Date. Should the Record Date fall on a day that is not a Business Day, the Record Date will be the next Business Day. A day (other than a Saturday or Sunday) on which registered banks are generally open for business in Auckland and Wellington. Minimum application of $5,000 with multiples of $1,000 thereafter. NZGMBDT005C1. Computershare Investor Services Limited. The will be accepted for settlement within the NZClear system. Application has been made to NZX for permission to quote the on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of this Terms Sheet have been duly complied with. However, NZX accepts no responsibility for any statement in this Terms Sheet. NZX is a licensed market operator, and the NZX Debt Market is a licensed market under the FMCA. GMB050 2 March 2018 Public Trust. NZGT (GMT) Security Trustee Limited. New Zealand. NZX has granted approval under NZX Listing Rule 11.1.5 to enable the Issuer to include transfer restrictions in the Bond Trust Documents permitting the Issuer to refuse a transfer of the if the transfer is not in multiples of $1,000 and/or results in the transferor holding an aggregate principal amount of less than the minimum holding of $5,000 (other than zero). Who May Apply & How to Apply All of the including oversubscriptions will be reserved for clients of the Joint Lead Managers, institutional investors and other primary market participants invited to participate in the bookbuild. There will be no public pool for the.
Retail investors should contact any Joint Lead Manager, their financial adviser or any Primary Market Participant for details on how they may acquire. You can find a Primary Market Participant by visiting www.nzx.com/investing/find_a_participant Each investor s financial adviser will be able to advise them as to what arrangements will need to be put in place for the investors to trade the including obtaining a common shareholder number (CSN), an authorisation code (FIN) and opening an account with a primary market participant, as well as the costs and timeframes for putting such arrangements in place. Arranger and Organising Participant Joint Lead Managers Selling Restrictions Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch) (Westpac). Deutsche Craigs Limited, First NZ Capital Securities Limited, Westpac. Part A - Initial Selling Restrictions If sold in New Zealand, the may only be offered in New Zealand in conformity with all applicable laws and regulations in New Zealand. In respect of the initial offer of by the Issuer under this Terms Sheet (Initial Offer), no may be offered in any other country or jurisdiction except in conformity with all applicable laws and regulations of that country or jurisdiction and the selling restrictions set out below in this Part A. This Terms Sheet may not be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations in that country or jurisdiction and the selling restrictions set out below in this Part A. For the avoidance of doubt, the selling restrictions set out below in this Part A apply only in respect of the Initial Offer. United States of America The have not been and will not be registered under the Securities Act of 1933, as amended (Securities Act) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act (Regulation S)). None of the Issuer, the Joint Lead Managers, nor any person acting on its or their behalf has engaged or will engage in any directed selling efforts (as defined in Regulation S) in relation to the, and each of the Issuer and the Joint Lead Managers have complied and will comply with the offering restrictions in Regulation S. The will not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time, or (ii) otherwise until 40 days after the completion of the distribution of all, as determined and certified by the Joint Lead Managers. Any sold to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the distribution compliance period require a confirmation or notice to the purchaser at or prior to the confirmation of the sale to substantially the following effect: The covered hereby have not been registered under the United States Securities Act of 1933, as amended (the Securities Act) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold within the United States, or to or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the and the closing date. Terms used above have the meaning given to them by Regulation S. Relevant Member States of the European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) no have been offered and no will be offered that are the subject of the offering contemplated by this Terms Sheet in relation
thereto to the public in that Relevant Member State except that an offer of to the public in the Relevant Member State may be made with effect from the Relevant Implementation Date: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Joint Lead Manager and/or Joint Lead Managers nominated by the Issuer for any such offer; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of the shall require the Issuer, each Joint Lead Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this provision, the expression an offer of the to the public in relation to any in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the to be offered so as to enable an investor to decide to purchase or subscribe for the, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression Prospectus Directive means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) and includes any relevant implementing measure in each Relevant Member State. United Kingdom No communication, invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (FSMA)) has been or may be made or caused to be made or will be made in connection with the issue or sale of the in circumstances in which section 21(1) of the FSMA applies to the Issuer. All applicable provisions of the FSMA with respect to anything done in relation to the in, from or otherwise involving the United Kingdom must be complied with. Japan The have not been and will not be registered in Japan pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the FIEA) in reliance upon the exemption from the registration requirements since the offering constitutes the small number private placement as provided for in ha of Article 2, Paragraph 3, Item 2 of the FIEA. A Japanese Person who transfers the shall not transfer or resell the except where the transferor transfers or resells all the en bloc to one transferee. For the purposes of this paragraph, Japanese Person shall mean any person resident in Japan, including any corporation or other entity organised under the laws of Japan. Singapore This Terms Sheet has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the have not been offered or sold or be made the subject of an invitation for subscription or purchase and will not be offered or sold or be made the subject of an invitation for subscription or purchase. This Terms Sheet or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the has not been circulated or distributed, nor will it be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289 of Singapore) (SFA)) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of
the SFA. Where the are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the pursuant to an offer made under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; (4) as specified in Section 276(7) of the SFA; or (5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore. Hong Kong No have been offered or sold or will be or may be offered or sold in Hong Kong, by means of any document other than (a) to professional investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the SFO) and any rules made under the SFO; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the C(WUMP)O) or which do not constitute an offer to the public within the meaning of the C(WUMP)O. No advertisement, invitation or document relating to the may be issued or in the possession of any person or will be issued or be in the possession of any person in each case for the purpose of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the SFO and any rules made under the SFO. Australia No prospectus or other disclosure document (as defined in the Corporations Act 2001 of Australia (Corporations Act)) in relation to the has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission (ASIC) or any other regulatory authority in Australia. No person may: unless: (i) (a) make or invite (directly or indirectly) an offer of the for issue, sale or purchase in, to or from Australia (including an offer or invitation which is received by a person in Australia); and (b) distribute or publish, any Terms Sheet, information memorandum, prospectus or any other offering material or advertisement relating to the in Australia, the aggregate consideration payable by each offeree or invitee is at least A$500,000 (or its equivalent in an alternative currency and, in either case, disregarding moneys lent by the offeror or its associates) or the offer or invitation otherwise does not require disclosure to investors in accordance with Part 6D.2 or Part 7.9 of the Corporations Act;
(ii) the offer or invitation is not made to a person who is a retail client within the meaning of section 761G of the Corporations Act; (iii) such action complies with all applicable laws, regulations and directives; and (iv) such action does not require any document to be lodged with ASIC or any other regulatory authority in Australia. By applying for the under this Terms Sheet, each person to whom the are issued (an Investor): (a) will be deemed by the Issuer and each Joint Lead Manager to have acknowledged that if any Investor on-sells the within 12 months from their issue, the Investor will be required to lodge a prospectus or other disclosure document (as defined in the Corporations Act) with ASIC unless either: (i) (ii) that sale is to an investor within one of the categories set out in sections 708(8) or 708(11) of the Corporations Act to whom it is lawful to offer the in Australia without a prospectus or other disclosure document lodged with ASIC; or the sale offer is received outside Australia; and (b) will be deemed by the Issuer and each Joint Lead Manager to have undertaken not to sell those in any circumstances other than those described in paragraphs (a)(i) and (a)(ii) above for 12 months after the date of issue of such. This Terms Sheet is not, and under no circumstances is to be construed as, an advertisement or public offering of any in Australia. Part B - General Selling Restrictions The may only be offered for sale or sold in New Zealand. The Issuer has not and will not take any action which would permit a public offering of the, or possession or distribution of any offering material, in any country or jurisdiction where action for that purpose is required (other than New Zealand). may only be offered for sale or sold in compliance with all applicable laws and regulations in any jurisdiction in which they are offered, sold or delivered. Any information memorandum, terms sheet, circular, advertisement or other offering material in respect of the may only be published, delivered or distributed in or from any country or jurisdiction under circumstances which will result in compliance with all applicable laws and regulations. By subscribing for, you indemnify the Issuer, the Joint Lead Managers, the Organising Participant and the Bond Trustee in respect of any loss incurred as a result of you breaching the above selling restrictions.
The dates set out in this Terms Sheet are indicative only and the Issuer, in conjunction with the Joint Lead Managers, may change the dates set out in this Terms Sheet. The Issuer has the right in its absolute discretion and without notice to close the offer early, to extend the Closing Date, or to choose not to proceed with the offer. If the Closing Date is changed, other dates (such as the Issue Date, the Maturity Date and the Interest Payment Dates) may be changed accordingly. Any internet site addresses provided in this Terms Sheet are for reference only and, except as expressly stated otherwise, the content of any such internet site is not incorporated by reference into, and does not form part of, this Terms Sheet. Copies of the Bond Trust Documents will be made available by the Issuer for inspection during usual business hours by any investor at the Issuer s registered office listed below (or such office as the Issuer may notify from time to time). Investors should seek qualified, independent financial and taxation advice before deciding to invest. Investors will be personally responsible for all tax return filing obligations in respect of their investment in the, compliance with the financial arrangements rules (if applicable) and payment of provisional or terminal tax (if required) on interest derived. For further information regarding the Issuer, visit www.nzx.com/companies/gmb. For further information regarding GMT, visit www.nzx.com/companies/gmt. ADDRESS DETAILS Issuer GMT Bond Issuer Limited Level 2 18 Viaduct Harbour Avenue Auckland Manager Goodman (NZ) Limited (as Manager of Goodman Property Trust) Level 2 18 Viaduct Harbour Avenue Auckland Bond Trustee Public Trust Level 9 34 Shortland Street Auckland 1010 Security Trustee NZGT (GMT) Security Trustee Limited Level 15 191 Queen Street Auckland 1010 Arranger and Organising Participant Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch) Westpac on Takutai Square Level 8, 16 Takutai Square Auckland 1010 0800 942 822 Joint Lead Managers Deutsche Craigs Limited Level 36, Vero Centre 48 Shortland Street Auckland 1010 0800 226 263 First NZ Capital Securities Limited ANZ Centre, Level 14 171 Featherston Street Wellington 6011 0800 005 678 Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch) Westpac on Takutai Square Level 8, 16 Takutai Square Auckland 1010 0800 942 822 Registrar Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna Auckland 0622 Toll Free 0800 35 9 999 Telephone: 09 488 8777 Email: enquiry@computershare.co.nz
GOODMAN BONDS FEBRUARY 2018 Arranger and Joint Lead Manager Joint Lead 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 is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). The have identical rights, privileges, limitations and conditions (except for the interest rate and maturity date) as the Issuer s: IMPORTANT NOTICE AND DISCLAIMER + + + $100,000,000 fixed rate secured bonds maturing on 16 December 2020 (which have an interest rate of 6.20% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB020 (GMB020 Bonds); $100,000,000 fixed rate secured bonds maturing on 23 June 2022 (which have an interest rate of 5.00% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB030 (GMB030 Bonds); and $100,000,000 fixed rate secured bonds maturing on 31 May 2024 (which have an interest rate of 4.54% p.a.) which are currently quoted on the NZX Debt Market under the ticker code GMB040 (GMB040 Bonds), (the GMB020 Bonds, the GMB030 Bonds and the GMB040 Bonds, together the Existing Bonds). The are of the same class as the Existing Bonds 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 Existing Bonds are the only debt securities of the Issuer that are in the same class as the that are currently quoted. Investors should look to the market price of the Existing 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 (ABN 33 007 457 141) (acting through its New Zealand branch), (Westpac and the Arranger) Deutsche Craigs Limited or First NZ Capital Securities Limited (together with Westpac, the Joint Lead Managers), Public Trust (Bond Trustee and the supervisor), nor any of their respective directors, officers, employees or agents to subscribe for, or purchase, any of the. To the extent permitted by law, the Manager, the Arranger, the Joint Lead 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 or any person s investment in the. A terms sheet (Terms Sheet) has been prepared by the Issuer in respect of the offer of, which sets out how may be applied for. The distribution of this presentation, and the offer or sale of the, 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, in any jurisdiction other than New Zealand and the Issuer accepts no liability in that regard. The 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. 0 2 Application has been made to NZX for permission to quote the 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 30 September 2017 and all property statistics are as at 31 December 2017. All figures are rounded. All figures are in New Zealand dollars.
INVESTMENT HIGHLIGHTS security + first ranking security over a portfolio of prime property assets + security shared equally on a pro rata basis with existing bondholders, USPP noteholders and lenders under GMT s bank facility investment grade BBB+ expected issue credit rating proven business model + listed property trust investing in prime industrial and business space real estate predominantly in Auckland + high quality property portfolio with a book value of $2.6 billion 1, a weighted average lease term (WALT) of 6.1 years and an occupancy rate of 97.6% + stable income stream supported by a high quality customer base + strong balance sheet with a conservative level of debt term 5½ years size $75m Up to $75m with up to $25m of over subscriptions The Crossing Highbrook Business Park 0 3 1 total property portfolio includes GMT s proportionate share in the properties owned by its Viaduct joint venture.
CONTENTS Presented by: Keith Smith Chairman & Independent Director Attending Auckland only Andy Eakin Chief Financial Officer +64 21 305 316 James Spence Director - Investment Management +64 21 538 934 Business focus 05 Investment portfolio 09 Development programme 14 Financial overview 20 Capital management 23 Business outlook 26 28 Questions & thank you 34 Selected abbreviations 0 4 Square metres Net lettable area Year to date sqm NLA YTD
BUSINESS FOCUS ACCO Highbrook Business Park 0 5
GOODMAN PROPERTY TRUST Assets by region + + + GMT is a listed unit trust that invests in prime 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 Auckland ~99% $2.6bn 1 total property portfolio 1m sqm net lettable area 97.6% property occupancy $1.7bn 2 market capitalisation + Goodman Group is GMT s largest unitholder, currently holding 21% of the units in GMT + total property portfolio of $2.6 billion 1 + + GMT has a BBB (stable) corporate credit rating GMB020 Bonds, GMB030 Bonds and GMB040 Bonds have a BBB+ (stable) credit rating Christchurch ~1% 6.1 years WALT 6.5% weighted average capitalisation rate 200+ customers 32.4% 3 Loan to value ratio (look through basis) 1 total property portfolio includes GMT s proportionate share in the properties owned by its Viaduct joint venture. 06 2 market capitalisation of Goodman Property Trust Ordinary Units as at 31 January 2018. 3 on a proportionately consolidated basis including GMT s interests in its Viaduct joint venture. Holders of will receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31.
REINFORCING STRATEGIC GOALS prime portfolio + prime investment portfolio with strategic land holdings situated in key industrial locations + focused on Auckland, New Zealand s gateway city + development programme improving asset quality and growth profile of GMT + assets actively managed to maximise earnings, value and balance sheet strength prudent capital management + 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 + asset sales enabling de-gearing and funding of development pipeline strongly aligned manager + 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 07
BUILDING EXCELLENCE operating outlook + positive economic outlook continues, particularly in Auckland + property markets reflecting increased customer demand with high occupancy levels and improved rental growth active strategy + 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 strong financial focus + focused on cash earnings to maximise unitholder value + sustainable level of distributions to support investment activity 08
INVESTMENT PORTFOLIO Ford Highbrook Business Park 09
AUCKLAND ESTATES Viaduct joint venture Concourse Industry Park Connect Industrial Estate Tamaki Estate Penrose Industrial Estate The Gate Industry Park Highbrook Business Park Savill Link Westney Industry Park M20 Business Park
HIGHBROOK BUSINESS PARK Quest Expansion Highbrook Crossing KERWYN AVE BUSINESS PARADE STH Parade Units 8 Business Parade Sth UNDERWOOD ST PUKEKIWIRIKI PL EL KOBAR DR BUSINESS PARADE NTH Plytech Warehouse Office Building 6 Highbrook Crossing HIGHBROOK DRIVE BUSINESS PARADE STH SIR WOOLF FISHER DR WAIOURU RD Multi-storey Car Park Highbrook Drive Sir Woolf Fisher Dr Warehouses 38 Sir Woolf Fisher Drive TO SH1 Spicers (NZ) Limited Waiouru Road Showroom Warehouses 80 Highbrook Drive Gateway Warehouses 102 162 Highbrook Dr Map contains artist impressions to show planned developments
QUALITY-+-INCOME top ten customers (percentage of revenue) + a positive economic environment and strong property fundamentals are supporting greater levels of customer demand + top ten customers represent 27.5% of total income + + cash rental growth through fixed increases (47%), market based review (31%) and CPI based reviews (23%) average occupancy of 97% in YTD FY18, 97.6% as at 31 December 2017 New Zealand Post Group DHL Fletcher Building Limited Fonterra Coda Toll Group New Zealand Spicers (NZ) Limited Air New Zealand Datacom Officemax Limited portfolio occupancy 0% 1% 2% 3% 4% 5% the colours in the chart above represent the contribution from different subsidiary companies. + 97.7% industrial occupancy 100% 98% 96% 94% 96% 97% 96% 97% 98% 98% 92% 12 90% Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Dec-17 portfolio statistics presented are on a portfolio income basis and include the Viaduct joint venture.
QUALITY-+-CERTAINTY + WALT of 6.1 years at 31 December 2017 asset diversity 1 Development Land Office Park 10.6% + 10.1% of income due to expire in FY19 Industrial 84.5% lease expiry profile 2 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. 35% 30% 25% 20% 15% 10% 5% 0% 13 Vacant Expiring Income
DEVELOPMENT PROGRAMME CSR, The Gate 393 Church Street, Penrose 14
DEVELOPMENT ACTIVITY commenced development projects $m (total project cost including land) + continued focus to activate remaining land with development starts reaching record levels YTD + a greater volume of development activity has included a successful industrial build-to-lease programme underway since 2012 with around 90% leased within six months of completion commenced development projects sqm (NLA) 15
COMPLETED PROJECTS CSR, The Gate The Hill, Highbrook Business Park ACCO, Highbrook Business Park COMPLETION May 2017 VALUE $11.0m NLA 4,937 sqm COMPLETION June 2017 VALUE $17.8m NLA 7,503 sqm COMPLETION Aug 2017 VALUE $16.9m NLA 6,402 sqm 16
COMPLETED PROJECTS Coda Stage 2, Savill Link AB Equipment, Highbrook Business Park Showroom Units, Highbrook Business Park COMPLETION Nov 2017 NLA 7,410 sqm COMPLETION Dec 2017 NLA 2,929 sqm COMPLETION Dec 2017 NLA 1,730 sqm 17
WORK IN PROGRESS Building 6 Highbrook Business Park Quest Expansion Highbrook Business Park Crossing Carpark Highbrook Business Park COMPLETION Sep 2018 NLA 3,006 sqm COMPLETION Nov 2018 ROOMS 60 COMPLETION May 2019 CARPARKS 343 18
NEW DEVELOPMENTS + seven developments announced YTD, $164.8 million total project cost + $118.4 million of additional spend, yielding 8.3% + 131,000 sqm of development land utilised + 63,468 sqm of additional NLA + build-to-lease units receiving strong enquiry with three units leased prior to construction commencement Development Location Additional Capital ($m) NLA Completion Date Spicers Highbrook Business Park $13.4m 9,800 sqm Mar-18 Fliway expansion Westney Industry Park $2.7m 1,895 sqm Feb-18 Gateway units Highbrook Business Park $46.1m 21,470 sqm Dec-18 Parade units Highbrook Business Park $11.0m 5,770 sqm Jul-18 Selwood units The Concourse $22.2m 10,933 sqm Dec-18 Savill Link Warehouse Savill Link $11.7m 8,500 sqm Nov-18 Plytech Highbrook Business Park $11.4m 5,100 sqm Nov-18 Total YTD $118.4m 63,468 sqm 19 Parade units Artist Impression Gateway units Artist Impression
FINANCIAL OVERVIEW Courier Post Highbrook Business Park 20
1H18 FINANCIAL HIGHLIGHTS stable operating earnings + $64.9 million net property income ($67.5 million in 1H17) + $59.8 million operating earnings before tax ($59.9 million in 1H17) + $45.3 million before tax profit ($73.1 million in 1H17) + $39.5 million after tax profit ($67.6 million in 1H17) positive property performance + property level rental growth through fixed, CPI and market increases + developments contributing $10.1 million of value uplift in 1H18 capital management + low gearing levels with a look through loan to value ratio of 32.4% 1 + sector leading diversity of debt funding sources + $209 million sale of Central Park 2 21 1 on a proportionately consolidated basis including GMT s interests in its Viaduct joint venture. Holders of will receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31. 2 subject to Overseas Investment Office approval.
FINANCIAL SUMMARY + stable performance as a result of balancing divestment and development activity + quality of earnings improved through new developments and asset recycling + look through loan to value ratio remains low 30 September 2017 6 months 30 September 2016 6 months 31 March 2017 12 months 31 March 2016 12 months Net property income ($m) 64.9 67.5 134.2 133.8 Operating earnings before tax ($m) 59.8 59.9 121.7 117.0 Profit after tax ($m) 39.5 67.6 213.8 233.1 Investment Property assets ($m) 2,313.9 2,109.7 2,249.3 2,275.3 Total assets ($m) 2,561.4 2,543.5 2,460.7 2,475.5 Total liabilities ($m) 884.7 977.2 785.8 939.3 Equity ($m) 1,676.7 1,566.3 1,674.9 1,536.2 Borrowings for LVR calculation 1 ($m) 835.5 664.5 761.6 832.4 Assets for LVR calculation 1 ($m) 2,575.0 2,310.1 2,491.7 2,458.5 Look through loan to value ratio 1 (%) 32.4 28.8 30.6 33.9 NTA per unit (cpu) 130.2 122.4 130.4 120.4 22 1 on a proportionately consolidated basis including GMT s interests in its Viaduct joint venture. Holders of will receive the benefit of a separate loan to value covenant which is described in more detail on slides 30 and 31.
CAPITAL MANAGEMENT Highbrook Business Park 23
CAPITAL MANAGEMENT conservative financial gearing + GMT s look through loan to value ratio is 32.4% + bond debt covenant loan to value ratio of 35.9% + 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 providing significant headroom against GMT s banking covenant of no less than 2.0 times strong balance sheet + over $750 million of sales in the last 4 years 1 + strong contracted rental cashflows from high quality customers + GMT debt currently around 60% 2 hedged to reduce interest rate volatility + USPP USD issuance swapped to NZD; no exchange rate risk industry leading diversity + 56% of drawn debt from non-bank funding 2 + weighted average debt term to expiry of 4.2 years 2 + most diversified funding in NZ listed property sector 24 1 incudes the contracted sale of Central Park 2 as at 31 December 2017, excludes GMT s interests in its Viaduct joint venture.
ISSUANCE+BENEFITS stronger funding metrics + weighted average debt term to expiry of 4.6 years (from 4.2 years) 1 + around 68% of drawn debt from non-bank funding (from 56%) 1 + bank funding retained for operational flexibility maturity profile well-suited to multiple funding sources + amounts of $150 million or less are well suited to sourcing funding in multiple markets + post issuance, GMT will have around $350 million of headroom within its bank facility Debt maturity profile 2 25 1 based on 31 December 2017 debt levels 2 excludes GMT s 51% share of its Viaduct joint venture debt facility. GMT s Viaduct joint venture has a $112 million debt facility maturing September 2019.
BUSINESS OUTLOOK Big Chill Highbrook Business Park 26
STRATEGIC OBJECTIVES + focus on asset and customer quality + targeted investment to 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 cash earnings and cash distributions 27
GOODMAN+ BONDS The Crossing Highbrook Business Park 28
THE ISSUER GMT Bond Issuer Limited + a wholly-owned subsidiary of GMT + sole purpose of the Issuer is to issue bonds for the benefit of the wholly-owned 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 + this is the fifth 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 29
SECURITY + are guaranteed by GMT + secured over certain property and other assets (Security Pool Assets) of the GMT Group + assessed security value (ASV) of $2,220 million + finance debt of $797 million + bond debt covenant loan to value ratio (LVR) of 35.9% + 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 (Wynyard Precinct Holdings Limited) or the joint venture s assets, or + any related rights arising from GMT s shares in the joint venture 30
COVENANT & DEFAULT + LVR covenant restricts total borrowings of GMT and the GMT Group to 50% of 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 31
KEY TERMS OF THE OFFER + Issuer GMT Bond Issuer Limited (Issuer) + Guarantee Guaranteed by Goodman Property Trust (GMT) 1 + Instrument Fixed rate senior secured retail bonds (), ranking equally with debt owed to GMT s main banking syndicate, GMT s United States private placement noteholders and the existing holders of the bonds issued by the Issuer The are supported by security granted by the wholly-owned subsidiaries of GMT, which hold GMT s property assets 2 + Tenor and Maturity Date 5½ years, maturing 1 September 2023 + Corporate credit rating GMT is rated BBB by S&P + Issue credit rating 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 23 February 2018 (Rate Set Date) + 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 / Supervisor Public Trust + Registrar Computershare Investor Services Limited + Application Amounts $1.00 per Goodman+Bond. Minimum $5,000 with multiples of $1,000 thereafter + Listing 3 It is expected the Bonds will be quoted under the ticker code GMB050 on the NZX Debt Market 32 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, among other things, any shares in its Viaduct joint venture vehicle (Wynyard Precinct Holdings Limited) or any of the joint venture s assets. 3 application has been made to NZX for permission to quote the on the NZX Debt Market. NZX accepts no responsibility for any statement in this presentation.
KEY DATES OF THE OFFER + NZX notice announced 19 February + offer opens 19 February + firm bids due 10:30am, 23 February + rate set date 23 February + offer closes 23 February + issue date 1 March + expected date of initial quotation on the NZX debt market 2 March + interest payment dates 1 September and 1 March each year including the maturity date + first interest payment date Monday, 3 September 2018 1 + maturity date 1 September 2023 1 payment will be made on Monday 3 September 2018 as 1 September 2018 is a Saturday 33
QUESTIONS & THANK YOU Highbrook Business Park 34