Page 13 - GMT and GMT Bond Issuer Annual Report 2017

CAPITAL MANAGEMENT
A sustainable growth strategy has enabled GMT to advance its development programme without new equity funding.
At 31 March 2017 GMT’s look through loan to value ratio was just 30.6%, a reduction from 33.9% last year and signi cantly below the 50% threshold permitted under its debt and Trust Deed covenants.
The Trust has improved an already strong balance sheet position by selling assets and paying down debt. With signi cant balance sheet capacity and available debt facilities, GMT has the necessary liquidity to fund all its current development objectives.
The Trust has a very diverse and long dated debt book with less than half of its drawn borrowings provided by its banking syndicate. The issue of retail bonds and USPP notes in recent years have made the business more
resilient. It’s a prudent approach that recognises credit markets can become volatile and bank lending more restrictive.
An extension to the Goodman+Bond programme was launched on 18 May 2017 with a $75 million, seven year, retail bond. The new initiative, which has the ability to accept up to $25 million of oversubscriptions, will further improve the capital structure of GMT.
One of the key features that has underpinned the success of previous bond issues is the quality of GMT’s property portfolio. The excellent security it provides is re ected in the investment grade rating from Standard & Poor’s.
The rating agency recently re-af rmed its BBB rating for the Trust and BBB+ for the Trust's secured debt. An assessment that has remained stable since it was rst assigned in 2009.
LOOKING AHEAD
The Goodman brand is widely recognised as the high quality benchmark for industrial and business space property. An investment strategy focused on the Auckland industrial market has created a modern portfolio that provides essential business infrastructure for the 240 companies that lease space from GMT.
Continuing development and leasing success, together with ongoing transactional activity is enhancing the portfolio, and helping to create a more resilient business. It’s a sustainable approach to growth that is realising the value in the Trust’s land holdings and improving the quality of its earnings.
Taking advantage of the positive operating environment that exists and intensifying the build-out of Highbrook over the next three years remains an important focus. It will further
reduce the Trust’s land weighting and continue to improve cash earnings, both key longer-term objectives.
John Dakin — Chief Executive Of cer
Andy Eakin — Chief Financial Of cer
GOODMAN PROPERTY TRUST ANNUAL REPORT 2017 GMT BOND ISSUER LIMITED ANNUAL REPORT 2017
11 MANAGEMENT REPORT
ACTIVE MARKET — ACTIVE MANAGEMENT