Page 11 - GMT and GMT Bond Issuer Annual Report 2017 v2

Asustainable investment strategy, focused on building a high quality and resilient business, is differentiating GMT as a premium property provider.
The Trust is investing in proven locations throughout Auckland and pursuing an active development programme that is delivering award winning properties.
It’s a successful strategy that is creating thriving business communities like Highbrook Business Park. With a current value of over $1.1 billion, this estate is a signi cant driver of the Trust’s nancial performance and the main contributor to this year’s $114.7 million portfolio revaluation.
FINANCIAL PERFORMANCE
The bene ts of a high quality property portfolio and an investment strategy focused on the Auckland industrial market are being re ected in GMT’s nancial results. Highlights include:
+ $220.5 million pro t before tax (including revaluations of $114.7 million), compared to $247.9 million (including revaluations of $145.8 million) previously.
+ Operating earnings of $121.7 million before tax or 9.51 cents per unit, consistent with earlier guidance and 1.1% higher than the previous period.
+ A 15.9% increase in cash earnings to 7.08 cents per unit and full year cash distributions of 6.65 cents per unit.
A comprehensive summary of this year’s nancial performance is provided on page 16.
GOODMAN PROPERTY TRUST ANNUAL REPORT 2017 GMT BOND ISSUER LIMITED ANNUAL REPORT 2017
PROPERTY PORTFOLIO
The advantages of a modern and well located property portfolio are evident in the positive leasing results being achieved by GMT. Over 154,000 sqm of new customer commitments, representing almost 16% of the total area, were secured in the last 12 months.
This leasing success meant that at 31 March 2017, the occupancy rate across the portfolio had increased to 98% and the weighted average lease term extended to 5.8 years.
The sustained customer demand is also facilitating an active development programme. Eight new projects, with a combined total cost of $97.0 million, were announced during the year. These projects utilise over ve hectares of development land and provide:
+ over 31,000 sqm of high quality space, around 60% pre-committed to customers on long-term leases;
+ annual revenue of $6.7 million once fully leased and income producing; and
+ yield on additional spend of 8.7%.
GMT has accelerated its development programme in recent years, taking advantage of strong property market conditions. With more than 75% of the portfolio developed since 2004, it is a key business activity that is transforming the Trust.
Following the completion of current projects, GMT’s investment in the preferred Auckland industrial and business park sectors will have increased to over 77% of total property assets, while its land weighting will have reduced to
just 7%.
09 MANAGEMENT REPORT
ACTIVE MARKET — ACTIVE MANAGEMENT
The increasing capital allocation to Auckland is a deliberate strategy that re ects the strong growth pro le of the city and the positive investment characteristics of industrial property. It also positions GMT to bene t from the increasing demand for logistics space as a result of e-commerce.
Online shopping is increasing the requirement for distribution warehousing in many global markets. It’s an emerging trend that is also adding to the attractiveness of industrial property as an investment class.
The benefits of a high quality property portfolio and an investment strategy focused on the Auckland industrial market are being reflected in GMT’s financial results.
$97.0m NEW
Scalzo warehouse extension, Highbrook Business Park, East Tamaki
DEVELOPMENT PROJECTS