GMT Advances Repositioning Strategy
Goodman Property Trust
Unaudited interim results for announcement to the market
Reporting period 6 months to 30 September 2017
Previous reporting period 6 months to 30 September 2016
Amount Percentage Change
Revenue from ordinary activities $79.7 million (3.7%)
Profit from ordinary activities after tax attributable to
unit holders $39.5 million (41.6%)
Net profit attributable to unit holders
$39.5 million (41.6%)
Interim distribution Amount per unit Imputed amount
per unit
Interim $0.016625 $0.003360
Record date - 30 November 2017
Payment date - 14 December 2017
Other financial information 30 September 2017
cents per unit
30 September 2016
cents per unit
Net tangible assets per unit 130.2 122.4
Basic earnings per unit 3.07 5.30
Operating earnings before tax per unit 4.65 4.70
Operating earnings after tax per unit 4.00 4.01
Notes
1. This announcement is extracted from the unaudited interim financial statements of Goodman
Property Trust. A copy of the interim financial statements together with the independent review
report on the interim financial statements is attached to this announcement.
2. All amounts are in New Zealand dollars.
---
GOODMAN PROPERTY TRUST
INTERIM REPORT 2018
GMT BOND ISSUER LIMITED
INTERIM REPORT 2018
INTERIM REPORT
2018
A PORTFOLIO OF THE VERY
BEST INDUSTRIAL AND
COMMERCIAL PROPERTIES
Highbrook Business Park
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
This document comprises the interim reports of
Goodman Property Trust and GMT Bond Issuer Limited
for the six month period ended 30 September 2017.
+ The Units in Goodman Property Trust are listed on
the NZX with the code of GMT.
+ Bonds issued by GMT Bond Issuer Limited, a wholly-owned
subsidiary of Goodman Property Trust, are listed on the
NZDX with the code of GMB020, GMB030 and GMB040.
CONTENTS
OPERATIONAL HIGHLIGHTS
02
RESULTS OVERVIEW
03
CHAIRMAN’S AND
CHIEF EXECUTIVE OFFICER’S
REPORT 04
–
08
FINANCIAL STATEMENTS
GMT
09
–
32
FINANCIAL STATEMENTS
GMT BOND ISSUER LIMITED
33
–
39
OTHER INFORMATION
40–44
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
1
$
229.4m
CONTRACTED SALES
YEAR TO DATE
$
148.7m
NEW DEVELOPMENT
PROJECTS
$
2.6bn
PROPERTY
PORTFOLIO
5.8yrs
(1)
WEIGHTED AVERAGE
LEASE TERM
97
%
(1)
PORTFOLIO OCCUPANCY
70,000sqm
(1)
LEASED ON NEW
OR REVISED TERMS
OVER
OPERATIONAL
HIGHLIGHTS
Coda, Savill Link, Otahuhu
(1)
Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
2
RESULTS
OVERVIEW
30 Sep 1730 Sep 16
%
change
Operating earnings before tax ($m)59.859.9(0.2)
Operating earnings after tax ($m)51.451.00.8
Movement in fair value of investment property ($m)(8.4)19.8(142.4)
Profit before tax ($m)45.373.1(38.0)
Profit after tax ($m)39.567.6(41.6)
Operating earnings per unit before tax (cpu)4.654.70(1.1)
Operating earnings per unit after tax (cpu)4.004.01(0.2)
Cash distribution per unit (cpu)3.3253.325-
Total assets for loan to value calculation ($m)
(1)
2,575.02,310.111.5
Borrowings for loan to value calculation ($m)
(1)
835.5664.525.7
Look through loan to value ratio (%)
(1)
32.428.812.5
Goodman+Bonds – Standard & Poor’s credit ratingBBB+BBB+-
(1)
Refer to note 3.5 of the GMT interim financial statements for further information.
OPERATING EARNINGS
Operating earnings are a non-GAAP financial measure included to provide an
assessment of the performance of GMT’s principal operating activities. Calculation of
operating earnings are as set out in GMT’s Profit or Loss statement.
Datacom, VXV Precinct
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
3
CHAIRMAN’S AND
CHIEF EXECUTIVE
OFFICER’S REPORT
IMPROVING
THE BUSINESS
A development led growth strategy is repositioning the
portfolio and focusing investment in the rapidly growing
and supply constrained Auckland industrial sector.
VXV Plaza, VXV PrecinctHighbrook Business Park
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
4
The Board and Management Team are extremely
pleased with the results being achieved and the continual
improvements being made to the composition and quality
of the Trust’s $2.6 billion property portfolio.
Development and transactional activity are rebalancing
the asset base, which is more than 80% invested in the
Auckland industrial sector. It’s the continuation of an
investment strategy that is focused on owning the very
best industrial and business space properties.
Economic growth, demographic changes,
technological advances and the development of online
retailing are all contributing to the strong demand for
logistics and warehouse space in Auckland. GMT’s
position as the largest owner and developer of industrial
property in the region means it is uniquely placed to
benefit from these trends.
Keith Smith, Chairman and Independent Director — John Dakin, Chief Executive Officer and Executive Director
FINANCIAL PERFORMANCE – consistent operating result
Operating earnings for the six months to 30 September
2017 were $59.8 million before tax, consistent with the
previous corresponding period. The additional revenue
from new acquisitions and developments, together with
a reduction in administrative expenses and net interest
costs, has largely offset lower net property income
resulting from asset sales.
A lower effective tax rate of 14.0% leads to operating
earnings after tax of $51.4 million, 0.8% higher than that
recorded previously. On a weighted average unit basis,
operating earnings were 4.65 cents per unit before tax and
4.00 cents per unit after tax.
Profit before tax was $45.3 million compared to
$73.1 million in the previous corresponding period.
Fair value losses of $8.4 million on certain investment
properties, compared to gains of $19.8 million previously,
were the main variance.
Net tangible asset backing was largely unchanged at
130.2 cents per unit, compared to 130.4 cents per unit at
31 March 2017.
Positive leasing results, continued
development momentum and further asset
sales have been the operational highlights
of the year to date.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
5
Development and transactional activity are rebalancing the
portfolio which is over 80% invested in the Auckland industrial sector.
It’s the continuation of an investment strategy that is focused on
owning the very best industrial and business space properties.
FOCUSED INVESTMENT
lower gearing after
portfolio repositioning
Asset disposals are repositioning the portfolio and
providing balance sheet capacity to fund the Trust’s
development programme. It’s a successful strategy with
over $600 million of sales completed since 2012.
Two further sales were contracted following the interim
balance date, they are;
+ the recently completed Steel & Tube development
in Hornby, Christchurch for $20.4 million. The
unconditional sale is due to settle in April 2018.
+ the conditional sale of Central Park Corporate Centre
for $209 million
(1)
.
The sale of Central Park is a significant transaction for
the Trust. It is the last of the planned major asset disposals
and its successful conclusion would complete a substantial
rebalancing of the portfolio, focusing investment in the
Auckland industrial sector.
Asset sales are also providing the Trust with greater
financial flexibility.
At 30 September 2017 GMT’s look through loan to
value ratio was 32.4%. The low level of gearing provides
the Trust with considerable headroom against the 50%
maximum allowed under its debt and Trust Deed covenants.
The completion of the $100 million Goodman+Bond
offer in May 2017 has also improved GMT’s liquidity and
debt diversity position. At 30 September 2017, the Trust
had undrawn bank facilities of $260 million.
Following the settlement of both conditional and
unconditional sales the Trust’s gearing would reduce to
just 25.8% and its undrawn bank facilities would increase
to over $500 million, on a proforma 30 September 2017
basis.
(1)
The transaction remains conditional on certain factors including Overseas Investment Office approval.
Highbrook Business Park
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
6
PROPERTY PORTFOLIO
development and transaction activity raises quality
The deliberate rebalancing of the business over the last three years has lifted the quality of the portfolio and focused its
investment in the Auckland industrial sector.
Key portfolio metrics are shown in the table below:
Rentable area
(sqm)
Average age
(years)
Customers
(number)
Occupancy
(%)
Weighted average
lease term (years)
Industrial portfolio929,3929.916298.65.6
Office portfolio143,12012.910791.87.3
Total investment portfolio1,072,512 10.526996.8 5.8
Note: Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017.
Development activity, Highbrook Business Park
(1)
Total project cost including land allocation, all construction costs, management and other professional fees.
With an average age of 10.5 years, an occupancy
level of around 97% and an average lease term of almost
six years, GMT owns a portfolio of exceptional quality.
It provides around 930,000 sqm of industrial space,
which represents around 20% of the city’s prime industrial
stock. With strong customer demand, low vacancy levels
and positive rental growth it’s a very buoyant market.
These positive operating conditions are reflected in
GMT’s leasing results with over 70,000 sqm of space
secured on new or extended terms since 31 March 2017.
To meet current and forecast demand, the Trust is also
undertaking a greater level of development activity.
Six substantial new industrial projects totalling
$148.7 million
(1)
were announced in August 2017. The
package, which includes a combination of build-to-lease
and pre-committed facilities, utilises over 10 hectares of
development land and will provide almost 60,000 sqm of
rentable area on completion.
Almost $100 million of the new projects are being
undertaken at Highbrook Business Park, GMT’s largest
asset. It continues the recent momentum at this key
estate which is expected to be over 90% complete within
three years.
The leasing of the uncommitted warehouse
development at 12 Pukekiwiriki Place before its
completion, to AB Equipment, and the commitment from
RSM for the top floor of Building 5 at The Crossing mean
Highbrook is now 98% occupied.
The portfolio of campus style office properties in the
VXV Precinct of central Auckland, which GMT owns jointly
with GIC, has been extended to seven buildings following
the settlement of the Bayleys House and Datacom
acquisitions during the period. The modern portfolio,
which includes three Green Star Design rated buildings
also includes Auckland Transport, Fonterra and KPMG as
key customers.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
7
BUSINESS OUTLOOK
positioned for long term growth
The Trust has continued to take advantage of the positive
business environment and delivered a half-year financial
result that is consistent with earlier guidance.
The progression of the development programme,
selective asset sales and targeted acquisitions are
all having a positive impact, refining the portfolio and
positioning GMT for sustainable growth.
These activities are also improving the financial
metrics of the business, de-leveraging the balance sheet
and providing substantial funding capacity for the future.
Demographic and technological change are also
influencing the investment strategy, which is now more
heavily focused on Auckland industrial property. This
emphasis reflects the positive return characteristics of
industrial property and the stronger economic drivers of
New Zealand’s largest city.
With a stable business outlook, the Trust is expected
to deliver full year operating earnings of around 9.1 cents
per unit before tax.
Cash earnings of around 7.0 cents per unit are
forecast for the year, with cash distributions totalling
6.65 cents per unit expected to be paid.
ACCO, Highbrook Business Park
John Dakin
Chief Executive Officer
and Executive Director
Keith Smith
Chairman and Independent Director
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
8
GOODMAN PROPERTY TRUST
CONTENTS
PROFIT OR LOSS 10
BALANCE SHEET 11
CASH FLOWS 12
CHANGES IN EQUITY 13
GENERAL INFORMATION 14
NOTES TO THE FINANCIAL STATEMENTS
1. INVESTMENT PROPERTY 15
2. INVESTMENT IN JOINT VENTURE 18
3. BORROWINGS 21
4. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONS 24
5. DERIVATIVE FINANCIAL INSTRUMENTS 25
6. ADMINISTRATIVE EXPENSES 26
7. TAX 27
8. RELATED PARTY DISCLOSURES 28
9. COMMITMENTS AND CONTINGENCIES 30
10. OTHER INVESTMENTS 30
11. FINANCIAL RISK MANAGEMENT 31
12. OPERATING SEGMENTS 31
INDEPENDENT REVIEW REPORT 32
For the six months ended 30 September 2017
INTERIM FINANCIAL
STATEMENTS
The Board of Goodman (NZ) Limited, the Manager of Goodman Property Trust, authorised these financial
statements for issue on 8 November 2017. For and on behalf of the Board:
The Gate Industry Park, Penrose
Peter Simmonds
Chairman, Audit Committee
Keith Smith
Chairman
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
9
PROFIT OR LOSS
For the six months ended 30 September 2017
$ millionNote
6 months
30 Sep 17
6 months
30 Sep 16
Property income1.179.782.8
Property expenses(14.8)(15.3)
Net property income64.967.5
Share of operating earnings before tax from joint venture2.14.84.0
Interest
Interest income3 .13.62.4
Interest cost3 .1(12.2)(12.3)
Net interest cost(8.6)(9.9)
Administrative expenses6 .1(1.3)(1.7)
Operating earnings before other income / (expenses) and tax59.859.9
Other income / (expenses)
Movement in fair value of investment property1.6(8.4)19.8
Loss on disposal of investment property-(2.1)
Share of other (expenses) / income and tax from joint venture2.1(1.0)(1.3)
Movement in fair value of financial instruments5 .1(1.2)0.6
Manager’s base fee expected to be reinvested in units6.2(3.9)(3.8)
Profit before tax45.373.1
Ta x
Income tax on operating earnings7.1(8.5)(8.4)
Income tax on non-operating earnings7.1-1.7
Deferred tax7.12.71.2
Total tax(5.8)(5.5)
Profit after tax attributable to unitholders39.567.6
There are no items of other comprehensive income, therefore profit after tax attributable to unitholders equals total comprehensive income attributable to unitholders.
CentsNote
6 months
30 Sep 17
6 months
30 Sep 16
Basic earnings per unit after tax4.23.075.30
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
10
BALANCE SHEET
As at 30 September 2017
$ millionNote30 Sep 1731 Mar 17
Non-current assets
Stabilised properties1.42,085.72,025.7
Developments1.494.548.9
Land1.4133.7174.7
Investment in joint venture2.274.570.7
Derivative financial instruments5.215.518.9
Other investments1012.012.0
Deferred tax assets4.03.7
Total non-current assets2,419.92,354.6
Current assets
Investment property contracted for sale1.510.47.7
Construction loan receivable1.7-65.1
Advances to joint venture8.2120.218.4
Debtors and other assets7.413.4
Cash3.50.9
Derivative financial instruments5.2-0.6
Total current assets141.5106.1
Total assets2,561.42,460.7
Non-current liabilities
Borrowings3.2802.2659.8
Derivative financial instruments5.220.118.2
Deferred tax liabilities30.032.4
Total non-current liabilities852.3710.4
Current liabilities
Borrowings3.2-45.0
Creditors and other liabilities30.127.6
Current tax payable2.32.8
Total current liabilities32.475.4
Total liabilities884.7785.8
Net assets1,676.71,674.9
Equity
Units4.11,403.71,398.7
Unit based payments reserve5.05.0
Retained earnings268.0271.2
Total equity1,676.71,674.9
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
11
CASH FLOWS
For the six months ended 30 September 2017
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Cash flows from operating activities
Property income received77.987.8
Property expenses paid(19.9)(20.3)
Interest income received9.20.9
Interest costs paid(9.2)(12.2)
Administrative expenses paid(1.6)(1.1)
Manager’s base fee paid(3.9)(3.8)
Net GST received/(paid)0.3(0.8)
Ta x pa id(9.0)(10.8)
Net cash flows from operating activities43.839.7
Cash flows from investing activities
Acquisition of investment properties(17.0)(1.9)
Proceeds from the sale of investment properties-48.4
Capital expenditure payments for investment properties(44.6)(63.3)
Holding costs capitalised to investment properties(7.2)(10.6)
Construction loan repayment/(advances)65.1(16.7)
Advances to joint venture(101.8)-
Dividends received from joint venture-1.2
Net cash flows from investing activities(105.5)(42.9)
Cash flows from financing activities
Proceeds from borrowings328.0153.0
Repayments of borrowings(226.0)(103.0)
Proceeds from the issue of units5.04.3
Distributions paid to unitholders(42.7)(42.4)
Settlement of derivative financial instruments-(6.9)
Net cash flows from financing activities64.35.0
Net movement in cash2.61.8
Cash at the beginning of the period0.91.1
Cash at the end of the period3.52.9
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
12
CHANGES IN EQUITY
For the six months ended 30 September 2017
$ millionUnits
Unit based
payments
reserve
Retained
earningsTotal
As at 1 April 20161,389.54.3142.41,536.2
Profit after tax--213.8213.8
Distributions paid to unitholders--(85.0)(85.0)
Manager’s base fee-9.9-9.9
Issue of units9.2(9.2)--
As at 31 March 20171,398.75.0271.21,674.9
Profit after tax--39.539.5
Distributions paid to unitholders--(42.7)(42.7)
Manager’s base fee-5.0-5.0
Issue of units5.0(5.0)--
As at 30 September 20171,403.75.0268.01,676.7
There are no items of other comprehensive income to include within changes in equity, therefore profit after tax equals total comprehensive income.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
13
GENERAL INFORMATION
For the six months ended 30 September 2017
REPORTING ENTITY
Goodman Property Trust (“GMT” or the “Trust”) is a unit trust established on 23 April 1999 under the Unit Trusts Act 1960. GMT is domiciled in New Zealand. The Manager of the
Trust is Goodman (NZ) Limited (“GNZ”) and the address of its registered office is Level 2, 18 Viaduct Harbour Avenue, Auckland.
The interim financial statements presented are consolidated financial statements for Goodman Property Trust and its subsidiaries (the “Group”). GMT’s investment in Wynyard
Precinct Holdings Limited is accounted for as a joint venture using the equity method of accounting.
GMT is listed on the New Zealand Stock Exchange (“NZX”) and is a FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013 and the Financial Reporting
Act 2013.
The Group’s principal activity is to invest in real estate in New Zealand.
The interim financial statements for the six months ended 30 September 2017 are unaudited. Comparative balances for 30 September 2016 are unaudited, whilst the comparative
balances for the year ended 31 March 2017 are audited.
BASIS OF PREPARATION AND MEASUREMENT
The interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with International
Accounting Standard 34 ‘Interim Financial Reporting’ and New Zealand equivalent to International Accounting Standard 34 ‘Interim Financial Reporting’.
The interim financial statements of the Group have been prepared in accordance with the requirements of section the NZX Main Board Listing Rules.
The interim financial statements do not include all notes included in the annual financial statements. Accordingly, these notes should be read in conjunction with the annual financial
statements for the year ended 31 March 2017, prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and International
Financial Reporting Standards (“IFRS”).
The accounting policies and methods of computation used in the preparation of these interim financial statements are consistent with those used in the financial statements for the
year ended 31 March 2017.
The interim financial statements have been prepared on the historic cost basis except for assets and liabilities stated at fair value as disclosed.
The interim financial statements are in New Zealand dollars, the Group’s functional currency, unless otherwise stated.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
14
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 30 September 2017
1. INVESTMENT PROPERTY
Property income is earned from investment property leased to customers.
1.1 Property income
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Gross lease receipts72.277.0
Service charge income10.59.6
Straight line rental adjustments0.70.5
Amortisation of capitalised lease incentives(3.7)(4.3)
Property income79.782.8
1.2 Future contracted gross lease receipts
Gross lease receipts that the Trust has contracted to receive in future years is set out below. These leases cannot be cancelled by the customer.
$ million30 Sep 1731 Mar 17
Ye ar 1134.5132.7
Ye ar 2123.4115.9
Ye ar 3107.7106.1
Ye ar 490.681.9
Ye ar 570.866.5
Year 6 and later94.292.4
Total future contracted gross lease receipts621.2595.5
1.3 Weighted average lease term
The weighted average lease term (“WALT”) represents the average lease term for leases existing at balance date, which are weighted by the value of the gross lease receipts.
Years30 Sep 1731 Mar 17
Weighted average lease term5.85.8
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
15
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
1. INVESTMENT PROPERTY (continued)
1.4 Total investment property
This table details the total investment property value.
30 Sep 1731 Mar 17
$ million
Stabilised
properties
DevelopmentsLandTotal
Stabilised
propertiesDevelopmentsLandTotal
Business park
Highbrook Business Park, East Tamaki993.150.6107.31,151.0957.129.8132.01,118.9
M20 Business Park, Wiri220.0-6.5226.5218.3-6.3224.6
Industrial estate
Savill Link, Otahuhu216.516.511.6244.6216.04.713.4234.1
The Gate Industry Park, Penrose176.2-0.4176.6164.28.30.4172.9
Westney Industry Park, Mangere115.81.1-116.9114.9--114.9
Penrose Industrial Estate, Penrose59.8--59.859.7--59.7
The Tamaki Estate, Panmure35.0--35.034.9--34.9
Connect Industrial Estate, Penrose31.1--31.130.9--30.9
Concourse Industry Park, Henderson12.78.7-21.4----
Glassworks Industry Park, Christchurch-17.6-17.6-6.12.68.7
Office park
Greenlane Office, Auckland & Show Place, Christchurch225.5-7.9233.4229.7-20.0249.7
Total investment property2,085.794.5133.72,313.92,025.748.9174.72,249.3
SIGNIFICANT TRANSACTIONS
In July 2017, GMT settled the acquisition of two adjoining industrial properties in Henderson, Auckland for $18.9 million.
During the period three developments were completed and were independently valued at a total of $45.7 million.
SUBSEQUENT EVENT
In October 2017, GMT unconditionally contracted the sale of a property at Glassworks Industry Park for $20.4 million, with settlement expected to occur in April 2018.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
16
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
1. INVESTMENT PROPERTY (continued)
1.4 Total investment property (continued)
KEY JUDGEMENT
Stabilised properties are recorded at the 31 March 2017 independent valuation, adjusted for movements in the book value since this date, with the exception of Show Place
Office Park, which was independently valued at 30 September 2016, and Central Park Corporate Centre, for which the conditionally contracted sale price has been used
as the best indicator of fair value.
Developments completed in the period, or adequately progressed to allow fair value to be reliably determined, have been independently valued at 30 September 2017
with the exception of the Glassworks Industry Park property for which the unconditionally contracted sale price has been used as the best indicator of fair value. All other
developments are held at cost and tested for impairment.
Land is recorded at the 31 March 2017 independent valuation, adjusted for movements in the book value since this date, with the exception of Central Park land, for which
the conditionally contracted sale price has been used as the best indicator of fair value.
1.5 Investment property contracted for sale
$ million30 Sep 1731 Mar 17
Glassworks Industry Park, Christchurch10.47.7
Total investment property contracted for sale10.47.7
1.6 Movement in fair value of investment property
Movement in fair value of investment property for the period is summarised below.
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Stabilised properties(5.4)(3.9)
Developments10.110.8
Land(12.7)(0.4)
Investment property contracted for sale(0.4)13.3
Total movement in fair value of investment property(8.4)19.8
The movement in fair value of investment property contracted for sale represents the difference between contracted sale price and expected book value at the date of
settlement, less sale related costs.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
17
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
1. INVESTMENT PROPERTY (continued)
1.7 Construction loan
A construction loan was provided by GMT to The Fletcher Construction Company (Fanshawe Street) Limited, whose ultimate parent is Fletcher Building Limited. The advances
made were used to fund the development of the Datacom building acquired by a subsidiary of the Trust’s joint venture, Wynyard Precinct Holdings Limited. Acquisition
occurred on completion in May 2017, at which time the loan was repaid. The loan incurred a market rate of interest for a loan of its type and was guaranteed by Fletcher
Building Limited.
SIGNIFICANT TRANSACTIONS
On 12 May 2017, the construction loan was repaid by The Fletcher Construction Company (Fanshawe Street) Limited.
2. INVESTMENT IN JOINT VENTURE
GMT owns 51% of Wynyard Precinct Holdings Limited (“WPHL” or the “joint venture”), with the remaining 49% owned by GIC, Singapore’s sovereign wealth fund. The
shareholders’ agreement of WPHL ensures that joint control is maintained via equal board representation, with GMT unable to unilaterally direct the joint venture. Properties
owned by WPHL are managed by Goodman Property Services (NZ) Limited (“GPSNZ”) on a similar basis to how GPSNZ manages GMT’s wholly owned properties.
2 .1 WPHL Profit or Loss
$ million
WPHLGMT share at 51%
6 months
30 Sep 17
6 months
30 Sep 16
6 months
30 Sep 17
6 months
30 Sep 16
Net property income16.612.7
Net interest costs(7.1)(4.7)
Administrative expenses(0.1)(0.1)
Operating earnings before other income / (expenses) and tax9.47.94.84.0
Other income / (expenses) and tax
Movement in fair value of derivative financial instruments(0.6)(1.2)
Manager’s base fee(0.7)(0.5)
Income tax on operating earnings0.2(1.0)
Deferred tax(0.8)0.1
Other income / (expenses) and tax(1.9)(2.6)(1.0)(1.3)
Profit after tax 7.55.33.82.7
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
18
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
2. INVESTMENT IN JOINT VENTURE (continued)
2.2 WPHL Balance Sheet
$ million
WPHLGMT share at 51%
30 Sep 1731 Mar 1730 Sep 1731 Mar 17
Non-current assets
Stabilised properties488.4324.1
Other assets0.42.7
Current assets5.72.0
Total assets494.5328.8
Non-current liabilities
Borrowings111.9111.8
Other liabilities7.05.5
Current liabilities
Borrowings-45.0
Advances from shareholders235.636.0
Other liabilities7.55.5
Total liabilities362.0203.8
Net assets132.5125.0
Share capital34.734.7
Retained earnings97.890.3
Total equity132.5125.067.663.8
Goodwill6.96.9
Investment in joint venture74.570.7
SIGNIFICANT TRANSACTIONS
During the period WPHL repaid $45.0 million of maturing bank borrowings, and settled the acquisitions of the Datacom building for $86.2 million and Bayleys House for
$62.3 million.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
19
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
2. INVESTMENT IN JOINT VENTURE (continued)
2.3 WPHL Cash flows
$ million
WPHL
6 months
30 Sep 17
6 months
30 Sep 16
Cash flows from operating activities
Property income received22.018.3
Property expenses paid(8.4)(5.2)
Net interest costs paid(4.3)(4.7)
Other operating cash flows(1.2)(2.4)
Net cash flows from operating activities8.16.0
Cash flows from investing activities
Acquisition of investment properties(148.3)-
Capital expenditure payments for investment properties(9.2)(0.5)
Capital expenditure payments for other non-current assets-(0.1)
Net cash flows from investing activities(157.5)(0.6)
Cash flows from financing activities
Repayment of borrowings(45.0)(3.4)
Advances from shareholders194.4-
Distributions paid to shareholders-(2.5)
Net cash flows from financing activities149.4(5.9)
Net movement in cash -(0.5)
Cash at the beginning of the period0.40.8
Cash at the end of the period0.40.3
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
20
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
3. BORROWINGS
3 .1 Interest
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Interest income
Interest income3.62.4
Total interest income3.62.4
Interest costs
Interest expense(16.7)(20.0)
Amortisation of borrowing costs(2.1)(2.1)
Borrowing costs capitalised
(1)
6.69.8
Total interest costs(12.2)(12.3)
Net interest cost(8.6)(9.9)
(1)
Borrowing costs of $4.7 million were capitalised to land (30 September 2016: $6.4 million).
3.2 Borrowings
$ million30 Sep 17 31 Mar 17
Current
Wholesale bonds-45.0
Total current borrowings-45.0
Non-current
Syndicated bank facility340.0293.0
Retail bonds300.0200.0
US Private Placement notes - New Zealand dollar amount on inception
(1)
156.8156.8
Total non-current796.8649.8
US Private Placement notes - foreign exchange translation impact
(1)
9.714.4
Unamortised borrowings establishment costs(4.3)(4.4)
Total non-current borrowings802.2659.8
Total borrowings802.2704.8
(1)
US Private Placement notes comprise $156.8 million for funds received at the borrowing date and $9.7 million for the foreign exchange translation impact (31 March 2017: $14.4 million). These
borrowings are fully hedged and GMT take no currency risk on interest and principal payments.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
21
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
3. BORROWINGS (continued)
3.3 Composition of borrowings
30 Sep 17Date issuedExpiry
$ million
Weighted average
remaining term (years)
Interest
rate
Facility
drawn /
Amount
Undrawn
facility
Syndicated bank facilities-Oct 18 - Oct 212.5Floating340.0260.0
Retail bonds - GMB020Dec 13Dec 203.26.20%100.0-
Retail bonds - GMB030Jun 15Jun 224.75.00%100.0-
Retail bonds - GMB040M ay 17May 246.74.54%100.0-
US Private Placement notesJun 15Jun 257.73.46%US$40.0-
US Private Placement notesJun 15Jun 279.73.56%US$40.0-
US Private Placement notesJun 15Jun 3012.73.71%US$40.0-
31 Mar 17Date issuedExpiry
$ million
Weighted average
remaining term (years)
Interest
rate
Facility
drawn /
Amount
Undrawn
facility
Syndicated bank facilities-Oct 18 - Oct 213.0Floating293.0307.0
Retail bonds - GMB020Dec 13Dec 203.76.20%100.0-
Retail bonds - GMB030Jun 15Jun 225.25.00%100.0-
Wholesale bondsSep 10S e p 170.47.58%45.0-
US Private Placement notesJun 15Jun 258.23.46%US$40.0-
US Private Placement notesJun 15Jun 2710.23.56%US$40.0-
US Private Placement notesJun 15Jun 3013.23.71%US$40.0-
As at 30 September 2017 and 31 March 2017 a $600.0 million syndicated bank facility was provided to the Trust by ANZ Bank New Zealand Limited, Bank of New Zealand,
Commonwealth Bank of Australia, Westpac New Zealand Limited (each providing $135 million) and The Hongkong and Shanghai Banking Corporation Limited (providing
$60 million).
As at 30 September 2017, GMT’s borrowing facilities had a weighted average remaining term of 4.3 years (31 March 2017: 4.4 years), with 57% being drawn from non-bank
sources (31 March 2017: 58%).
SIGNIFICANT TRANSACTIONS
In May 2017, GMT issued a new $100 million retail bond with a 7 year term expiring May 2024, paying an interest rate of 4.54%.
In September 2017, GMT repaid the $45 million wholesale bonds.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
22
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
3. BORROWINGS (continued)
3.4 Security and covenants
All borrowing facilities are secured on an equal ranking basis over the assets of the wholly-owned subsidiaries of Goodman Property Trust. A loan to value ratio covenant
restricts total borrowings incurred by the Group to 50% of the value of the secured property portfolio.
The Group has given a negative pledge to not create or permit any security interest over its assets. The principal financial ratios which must be met are the ratio of earnings
before interest, tax, depreciation and amortisation to interest expense, and the ratio of financial indebtedness to the value of the property portfolio. Further negative and
positive undertakings have been given as to the nature of the Group’s business.
3.5 Loan to value ratio calculation
The loan to value ratio (“LVR”) is a non-GAAP metric used to measure the strength of GMT’s Balance Sheet. The LVR calculation is set out in the table below. The GMT look
through LVR incorporates GMT’s 51% share of WPHL and is the measure utilised by management when considering the Trust’s LVR.
$ million
30 Sep 1731 Mar 17
GMT
WPHL
@ 51%
GMT look
throughGMT
WPHL
@ 51%
GMT look
through
Total borrowings802.257.1859.3704.880.0784.8
US Private Placement notes - foreign exchange translation impact(9.7)-(9.7)(14.4)-(14.4)
Cash(3.5)(0.2)(3.7)(0.9)(0.2)(1.1)
Investment property contracted for sale(10.4)-(10.4)(7.7)-(7.7)
Borrowings for LVR calculation778.656.9835.5681.879.8761.6
Investment property2,313.9249.12,563.02,249.3165.32,414.6
Other investments12.0-12.012.0-12.0
Construction loan receivable---65.1-65.1
Assets for LVR calculation2,325.9249.12,575.02,326.4165.32,491.7
Loan to value ratio %33.5%22.8%32.4%29.3%48.3%30.6%
3.6 Weighted average cost of borrowings
The weighted average cost of borrowings is a non-GAAP measure that represents the weighted average interest rate paid on borrowings after all costs, taking account of the
effect of interest rate hedging.
30 Sep 1731 Mar 17
Weighted average cost of borrowings5.1%5.0%
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
23
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
4. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONS
Issued units represent capital contributed to GMT by unit holders. Distributions are paid to GMT unit holders when approved by the Board of the Manager.
4.1 Issued units
Issued units
(million)
Value
($ million)
30 Sep 1731 Mar 1730 Sep 1731 Mar 17
Balance at the beginning of the period1,280.21,273.11,398.71,389.5
Manager’s base fee reinvested3.97.15.09.2
Balance at the end of the period1,284.11,280.21,403.71,398.7
4.2 Earnings per unit
Earnings per unit is calculated as profit after tax divided by the weighted number of issued units for the period. Operating earnings is a non-GAAP financial measure included
to provide an assessment of the performance of GMT’s principal operating activities. The calculation of operating earnings before other income / (expenses) and tax is set out
in Profit or Loss, with a reconciliation of operating earnings after tax as follows:
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Operating earnings before other income / (expenses) and tax59.859.9
Income tax on operating earnings(8.5)(8.4)
Income tax on operating earnings of joint venture0.1(0.5)
Operating earnings after tax51.451.0
Weighted units for the Manager’s base fee reinvested are included as the services are rendered. There are no other weighted units.
million
Weighted units
30 Sep 1730 Sep 16
Balance at the beginning of the period1,280.21,273.1
Manager’s base fee5.92.2
Weighted units1,286.11,275.3
cents per unit
6 months
30 Sep 17
6 months
30 Sep 16
Operating earnings per unit before tax4.654.70
Operating earnings per unit after tax4.004.00
Basic earnings per unit after tax3.075.30
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
24
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
4. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONS (continued)
4.3 Net tangible assets
Diluted units, comprising issued units plus deferred units not yet issued, are used to calculate net tangible assets per unit.
million
Diluted units
30 Sep 1731 Mar 17
Issued units1,284.11,280.2
Deferred units for Manager’s base fee expected to be reinvested3.94.1
Diluted units1,288.01,284.3
30 Sep 1731 Mar 17
Net tangible assets ($ million)1,676.71,674.9
Net tangible assets per unit (cents)130.2130.4
SUBSEQUENT EVENT
On 8 November 2017 a cash distribution of 1.6625 cents per unit with 0.3360 cents per unit of imputation credits attached was declared. The record date for the distribution
is 30 November 2017 and payment will be made on 14 December 2017.
5. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are used to manage exposure to interest rate risks and foreign exchange risks arising from GMT’s borrowings.
5 .1 Movement in fair value of financial instruments
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Interest rate derivatives(2.3)(4.8)
Cross currency interest rate derivatives relating to US Private Placement notes(3.6)(3.6)
Total movement in fair value of derivative financial instruments(5.9)(8.4)
Foreign exchange rate movement on US Private Placement notes4.79.0
Total movement in fair value of financial instruments(1.2)0.6
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
25
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
5. DERIVATIVE FINANCIAL INSTRUMENTS (continued)
5.2 Derivative financial instruments
$ million30 Sep 1731 Mar 17
Cross currency interest rate derivatives
Non-current assets6.19.7
Interest rate derivatives
Current assets-0.6
Non-current assets9.49.2
Current liabilities--
Non-current liabilities(20.1)(18.2)
Net derivative financial instruments(4.6)1.3
6. ADMINISTRATIVE EXPENSES
Administrative expenses are incurred to manage the operational activity of GMT. Excluded from administrative expenses categorised within operating earnings is the
Manager’s base fee, which is expected to be used to reinvest in GMT units when payment of the fee occurs.
6.1 Administrative expenses incurred to derive operating earnings
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Valuation fees(0.3)(0.3)
Auditor’s fees(0.1)(0.1)
Trustee fees(0.2)(0.2)
Other costs(0.7)(1.1)
Total administrative expenses incurred to derive operating earnings(1.3)(1.7)
6.2 Administrative expenses incurred but not included in operating earnings
These expenses, while excluded from GMT’s non-GAAP operating earnings measure, are included in other income / (expenses) within Profit or Loss.
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Manager’s base fee expected to be reinvested in units(3.9)(3.8)
Total administrative expenses incurred but not included in operating earnings(3.9)(3.8)
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
26
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
7. TAX
7.1 Tax expense
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Profit before tax45.373.1
Tax at 28%(12.7)(20.5)
Depreciation of investment property2.72.6
Movement in fair value of investment property(2.4)5.6
Disposal of investment property-(0.4)
Deductible net expenditure for investment property3.13.7
Share of joint venture net profit less dividends received1.10.9
Derivative financial instruments(0.3)(0.2)
Other-(0.1)
Current tax on operating earnings(8.5)(8.4)
Depreciation recovery income for property sold and settled-(0.3)
Settlement of derivative financial instruments-2.0
Current tax on non-operating earnings-1.7
Current tax(8.5)(6.7)
Depreciation of investment property(0.3)(0.5)
Reduction of liability in respect of depreciation recovery income3.32.9
Deferred expenses(0.7)(0.2)
Derivative financial instruments0.3(1.1)
Borrowing issue costs0.10.1
Deferred tax2.71.2
Total tax(5.8)(5.5)
Current tax on operating earnings is a non-GAAP measure included to provide an assessment of current tax for GMT’s principal operating activities.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
27
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
8. RELATED PARTY DISCLOSURES
As a Unit Trust, GMT does not have any employees. Consequently services that the Group requires are provided for under arrangements governed by GMT’s Trust Deed, or by
contractual arrangements. The Trust has related party relationships with the following parties.
EntityNature of relationship
Goodman (NZ) LimitedGNZManager of the Trust
Goodman Property Services (NZ) LimitedGPSNZProvider of property management, development management and related services to the Trust and to its joint venture
Goodman (Wynyard Precinct) LimitedGWPDeveloper of Bayleys House, acquired by the WPHL joint venture
Goodman Investment Holdings (NZ) LimitedGIHUnitholder in GMT
Goodman LimitedGLParent entity of GNZ, GPSNZ, GIH and GWP
Goodman Industrial TrustGITProperty co-owner with GMT
Wynyard Precinct Holdings LimitedWPHLJoint venture between GMT and GIC, Singapore’s sovereign wealth fund
8 .1 Transactions with related parties other than WPHL
$ millionRelated party
Recorded Capitalised Outstanding
6 months
30 Sep 17
6 months
30 Sep 16
6 months
30 Sep 17
6 months
30 Sep 1630 Sep 1730 Sep 16
Manager’s base feeGNZ(4.5)(4.6)0.60.9(5.0)(4.6)
Manager’s performance feeGNZ------
Property management fees
(1)
GPSNZ(1.7)(1.7)--(0.3)(0.3)
Leasing feesGPSNZ(1.1)(0.6)---(0.5)
Acquisition and disposal feesGPSNZ(0.3)(1.2)---(1.2)
Minor project feesGPSNZ(0.7)(0.8)0.70.8-(0.4)
Development management feesGPSNZ(1.8)(3.1)1.83.1-(1.0)
Tot al fees(10.1)(12.0)3.14.8(5.3)(8.0)
Reimbursement of expenses for services providedGPSNZ(0.7)(0.9)---(0.1)
Total reimbursements(0.7)(0.9)---(0.1)
Land acquisition - Savill LinkGIT(2.3)---(2.3)(3.0)
Total capital transactions(2.3)---(2.3)(3.0)
(1)
Of the property management fees charged by GPSNZ, $1.6 million was paid by customers and was not a cost borne by GMT (30 September 2016: $1.5 million).
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
28
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
8. RELATED PARTY DISCLOSURES (continued)
8.2 Transactions with WPHL
$ millionRelated party
Recorded Capitalised Outstanding
6 months
30 Sep 17
6 months
30 Sep 16
6 months
30 Sep 17
6 months
30 Sep 1630 Sep 1730 Sep 16
Advances to joint ventureWPHL101.8---120.223.5
Interest income received from joint ventureWPHL2.50.9----
Funding fee received from joint ventureWPHL0.10.5---0.5
Dividends received from joint ventureWPHL-1.3----
Advances to WPHL are unsecured and subordinated to WPHL’s bank debt. They are repayable on demand and incur a market rate of interest for advances of this type.
SIGNIFICANT TRANSACTIONS
Advances to the joint venture were provided in the period to enable WPHL to repay $45.0 million of maturing bank borrowings, settle the acquisition of the Datacom building
for $86.2 million, settle the acquisition of Bayleys House for $62.3 million and fund other capital expenditure as required. Bayleys House was acquired by a subsidiary of
WPHL from Goodman (Wynyard Precinct) Limited.
8.3 Other related party transactions
Capital transactions
Capital transactions that occur with related parties can only be approved by the independent directors of GNZ, with non-independent directors excluded from the approval
process.
No properties were acquired pursuant to the Co-ownership Agreement between GMT and Goodman Industrial Trust (30 September 2016: none). This agreement was
approved by unitholders at a general meeting held on 23 March 2004.
GMT purchased land at Savill Link for $2.3 million (30 September 2016: none) that was co-owned via the Co-ownership Agreement between GMT and Goodman Industrial
Trust. This amount was outstanding at 30 September 2017 (30 September 2016: $3.0 million outstanding for land purchased at Savill Link in March 2016).
Key management personnel
Key management personnel are those people with the responsibility and authority for planning, directing and controlling the activities of an entity. As the Trust does not have
any employees or Directors, key management personnel is considered to be the Manager. All compensation paid to the Manager is disclosed within this note.
At 30 September 2017, Goodman Group, GNZ’s ultimate parent, through its subsidiary Goodman Investment Holdings (NZ) Limited, held 269,569,477 units in GMT out of a
total 1,284,102,670 units on issue. At 31 March 2017 Goodman Group held 268,169,407 units in GMT out of a total 1,280,222,885 units on issue.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
29
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
8. RELATED PARTY DISCLOSURES (continued)
8.4 Other related party capital commitments
$ millionRelated party30 Sep 1731 Mar 17
Development management fees for developments in progressGPSNZ1.51.4
Funding for WPHL to acquire the Datacom buildingWPHL-44.0
Total other related party capital commitments1.545.4
9. COMMITMENTS AND CONTINGENCIES
9.1 Non-related party capital commitments
These commitments are amounts payable for contractually agreed services for capital expenditure. For related party capital commitments refer to note 8.4.
$ million30 Sep 1731 Mar 17
Completion of developments32.532.0
Construction loan funding to be provided to The Fletcher Construction Company (Fanshawe Street) Limited
(1)
-1.9
Total non-related party capital commitments32.533.9
(1)
This loan was repaid in full in May 2017 on settlement of the acquisition of the Datacom building by a subsidiary of WPHL. Repayment of the loan provided the Trust with funds to meet its commitment
to the joint venture for the purchase of the Datacom building.
9.2 Contingent liabilities
GMT has no material contingent liabilities.
10. OTHER INVESTMENTS
GMT holds a $12.0 million investment in units in the Millennium Centre Proportional Ownership scheme (“MCPO”) managed by Oyster Management Limited (“Oyster”),
a wholly owned subsidiary of Oyster Property Group Limited. This investment was made as part of the agreement by GMT to sell the Millennium Centre to MCPO, with
settlement of the sale of properties and GMT’s investment in MCPO taking place on 15 March 2017.
The units owned by GMT rank equally with all other units in the syndicate and earn GMT a minimum pre-tax cash return of 8% per annum. GMT has agreed that it will not
dispose of any units for a maximum period of 12 months from settlement date (this period may be shorter if certain conditions are met), however Oyster has the ability to
repurchase the units from GMT at their original issue price during this time. In the event that Oyster has not repurchased GMT’s units in MCPO, GMT has the right to put the
units back to Oyster two years after settlement date, at the original subscription price. Oyster’s obligation is guaranteed by Oyster Property Group Limited. On 1 November
2017, $1.5 million of units were repurchased by Oyster.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
30
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
11. FINANCIAL RISK MANAGEMENT
11.1 Fair value of financial instruments
Except for the retail bonds, wholesale bonds and US Private Placement notes, the carrying values of all balance sheet financial instruments approximate their estimated fair
value. The estimated fair values of retail bonds, wholesale bonds and US Private Placement notes are as follows:
$ millionFair value hierarchy30 Sep 1731 Mar 17
Retail bondsLevel 1314.9211.6
Wholesale bondsLevel 2-45.5
US Private Placement NotesLevel 2US$112.1US$118.5
12. OPERATING SEGMENTS
The Trust’s activities are reported to the Board of the Manager as a single operating segment. Therefore these financial statements are presented in a consistent manner to
that reporting.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
31
INDEPENDENT REVIEW REPORT
To the unitholders of Goodman Property Trust
REPORT ON THE INTERIM FINANCIAL STATEMENTS
We have reviewed the accompanying financial statements of Goodman Property Trust
(the Trust) and its controlled entities (together, the Group) on pages 9 to 31, which
comprise the balance sheet as at 30 September 2017, and the statement of profit
or loss, the statement of changes in equity and the statement of cash flows for the
period ended on that date, and selected explanatory notes.
MANAGER’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The directors of Goodman (NZ) Limited (the Manager) are responsible on behalf of the
Trust for the preparation and presentation of these financial statements in accordance
with New Zealand Equivalent to International Accounting Standard 34 Interim
Financial Reporting (NZ IAS 34) and International Accounting Standard 34 Interim
Financial Reporting (IAS 34) and for such internal control as the Manager determines
is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
OUR RESPONSIBILITY
Our responsibility is to express a conclusion on the accompanying financial
statements based on our review. We conducted our review in accordance with the
New Zealand Standard on Review Engagements 2410 Review of Financial Statements
Performed by the Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410
requires us to conclude whether anything has come to our attention that causes us to
believe that the financial statements, taken as a whole, are not prepared in all material
respects, in accordance with NZ IAS 34 and IAS 34. As the auditor of the Trust, NZ
SRE 2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial statements.
A review of financial statements in accordance with NZ SRE 2410 is a limited
assurance engagement. The auditor performs procedures, primarily consisting
of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. The procedures
performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand)
and International Standards on Auditing. Accordingly, we do not express an audit
opinion on these financial statements.
We are independent of the Group. Other than in our capacity as the auditor and
provider of other related assurance services, we have no relationship with, or interests
in, the Group.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that
these financial statements of the Group are not prepared, in all material respects, in
accordance with NZ IAS 34 and IAS 34.
WHO WE REPORT TO
This report is made solely to the Trust’s unitholders, as a body. Our review work has
been undertaken so that we might state to the Trust’s unitholders those matters
which we are required to state to them in our review report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Trust’s unitholders, as a body, for our review procedures, for
this report, or for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
8 November 2017
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GOODMAN PROPERTY TRUST
32
GMT BOND ISSUER LIMITED
For the six months ended 30 September 2017
INTERIM FINANCIAL
STATEMENTS
The Board of GMT Bond Issuer Limited, authorised these interim financial statements for issue on 8 November
2017. For and on behalf of the Board:
Big Chill Supersite, Highbrook Business Park
CONTENTS
PROFIT OR LOSS 34
BALANCE SHEET 34
CASH FLOWS 35
CHANGES IN EQUITY 35
GENERAL INFORMATION 36
NOTES TO THE FINANCIAL STATEMENTS
1. BORROWINGS 37
2. ADVANCES TO RELATED PARTIES 37
3. COMMITMENTS AND CONTINGENCIES 37
4. FINANCIAL RISK MANAGEMENT 38
5. EQUITY 38
INDEPENDENT REVIEW REPORT 39
Peter Simmonds
Chairman, Audit Committee
Keith Smith
Chairman
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
33
PROFIT OR LOSS
For the six months ended 30 September 2017
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Interest income7.15.6
Interest cost(7.1)(5.6)
Profit before tax--
Ta x--
Profit after tax attributable to shareholder--
There are no items of other comprehensive income, therefore profit after tax attributable to shareholder equals total comprehensive income attributable to shareholder.
BALANCE SHEET
As at 30 September 2017
$ millionNote30 Sep 1731 Mar 17
Non-current assets
Advances to related parties 2300.0200.0
Current assets
Interest receivable from related parties24.73.2
Total assets304.7203.2
Non-current liabilities
Borrowings1300.0200.0
Current liabilities
Interest payable on retail bonds4.73.2
Total liabilities304.7203.2
Net assets--
Equity
Contributed equity5--
Retained earnings --
Total equity--
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
34
CASH FLOWS
For the six months ended 30 September 2017
$ million
6 months
30 Sep 17
6 months
30 Sep 16
Cash flows from operating activities
Interest income received5.65.6
Interest costs paid(5.6)(5.6)
Net cash flows from operating activities--
Cash flows from investing activities
Repayment of related party advance--
Related party advance made(100.0)-
Net cash flows from investing activities(100.0)-
Cash flows from financing activities
Proceeds received from retail bonds100.0-
Repayment of retail bonds--
Net cash flows from financing activities100.0-
Net movement in cash--
Cash at the beginning of the period--
Cash at the end of the period--
There are no reconciling items between profit after tax and net cash flows from operating activities.
CHANGES IN EQUITY
For the six months ended 30 September 2017
$ million
Contributed
equity
Retained
earningsTotal
As at 1 April 2016---
Profit after tax---
As at 31 March 2017---
Profit after tax---
As at 30 September 2017---
There are no items of other comprehensive income to include within changes in equity, therefore profit after tax equals total comprehensive income.
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
35
GENERAL INFORMATION
For the six months ended 30 September 2017
REPORTING ENTITY
GMT Bond Issuer Limited (“the Company”) was incorporated on 5 November 2009. The address of its registered office is Level 2, 18 Viaduct Harbour Avenue, Auckland.
GMT Bond Issuer Limited is an issuer for the purposes of the Financial Reporting Act 2013 as its issued debt securities are listed on the New Zealand Debt Exchange (“NZDX”).
GMT Bond Issuer Limited is a registered company under the Companies Act 1993.
GMT Bond Issuer Limited is a profit-oriented company incorporated and domiciled in New Zealand. The Company was incorporated to undertake issues of debt securities with the
purpose of on lending the proceeds to Goodman Property Trust (“GMT”) by way of interest bearing advances.
The interim financial statements were authorised for issue by the Board of Directors on 8 November 2017. The Board does not have the power to amend these interim financial
statements once issued.
The interim financial statements for the six months ended 30 September 2017 are unaudited. Comparative balances for 30 September 2016 are unaudited, whilst the comparative
balances for the year ended 31 March 2017 are audited.
BASIS OF PREPARATION AND MEASUREMENT
The interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with International
Accounting Standard 34 ‘Interim Financial Reporting’ and New Zealand equivalent to International Accounting Standard 34 ‘Interim Financial Reporting’.
The interim financial statements do not include all notes included in the annual financial statements. Accordingly these notes should be read in conjunction with the annual financial
statements for the year ended 31 March 2017, prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and International
Financial Reporting Standards (“IFRS”).
The accounting policies and methods of computation used in the preparation of these interim financial statements are consistent with those used in the financial statements for the
year ended 31 March 2017.
The interim financial statements have been prepared on the historic cost basis.
The interim financial statements are in New Zealand dollars, the Company’s functional currency.
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
36
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 30 September 2017
1. BORROWINGS
Security and covenants
All borrowing facilities are secured on an equal ranking basis over the assets of the wholly-owned subsidiaries of the Company’s parent entity, Goodman Property Trust. A loan
to value covenant restricts total borrowings incurred by the Goodman Property Trust Group to 50% of the value of the secured property portfolio.
The Goodman Property Trust Group has given a negative pledge which provides that it will not create or permit any security interest over its assets. The principal financial ratio
which must be met is the ratio of financial indebtedness to the value of the property portfolio. Further negative and positive undertakings have been given as to the nature of
the Goodman Property Trust Group’s business.
SIGNIFICANT TRANSACTIONS
In May 2017, the Company issued a 7 year $100.0 million retail bond paying 4.54% interest per annum, maturing in May 2024. Proceeds from the issue were received by
Computershare Investor Services Limited as registrar for, and on behalf of, GMT Bond Issuer Limited.
2. ADVANCES TO RELATED PARTIES
All advances are to Goodman Property Trust. GMT Bond Issuer Limited is a wholly-owned subsidiary of Goodman Property Trust. All members of the Goodman Property Trust
Group are considered to be related parties of the Company.
Covenant Trustee Services Limited (as Trustee for Goodman Property Trust) has entered into a guarantee under which Goodman Property Trust unconditionally and
irrevocably guarantees all of the obligations of GMT Bond Issuer Limited under the Bond Trust Documents.
3. COMMITMENTS AND CONTINGENCIES
3.1 Capital commitments payable
GMT Bond Issuer Limited has no capital commitments.
3.2 Contingent liabilities
GMT Bond Issuer Limited has no material contingent liabilities.
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
37
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the six months ended 30 September 2017
4. FINANCIAL RISK MANAGEMENT
4.1 Fair value of financial instruments
The fair value of financial instruments has been estimated as follows:
$ million
Fair value
hierarchy30 Sep 1731 Mar 17
Related party advancesLevel 2314.9211.6
Retail bondsLevel 1(314.9)(211.6)
For instruments where there is no active market, the Company may use internally developed models which are usually based on valuation methods and techniques generally
recognised as standard within the industry.
5. EQUITY
As at 30 September 2017, 100 ordinary shares had been issued for nil consideration (31 March 2017: 100 ordinary shares for nil consideration). All shares rank equally with one
vote attached to each share.
The Company does not have any tangible assets, and its net assets are nil, being an advance to a related party offset by a liability for retail bonds. Consequently, the net
tangible assets per bond at 30 September 2017 was nil (31 March 2017: nil).
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
38
INDEPENDENT REVIEW REPORT
To the shareholder of GMT Bond Issuer Limited
REPORT ON THE INTERIM FINANCIAL STATEMENTS
We have reviewed the accompanying financial statements of GMT Bond Issuer
Limited (the Company) on pages 33 to 38, which comprise the balance sheet as at
30 September 2017, and the statement of profit or loss, the statement of changes
in equity and the statement of cash flows for the period ended on that date, and
selected explanatory notes.
DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The directors are responsible on behalf of the Company for the preparation and
presentation of these financial statements in accordance with New Zealand Equivalent
to International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34)
and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
OUR RESPONSIBILITY
Our responsibility is to express a conclusion on the accompanying financial
statements based on our review. We conducted our review in accordance with the
New Zealand Standard on Review Engagements 2410 Review of Financial Statements
Performed by the Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410
requires us to conclude whether anything has come to our attention that causes us to
believe that the financial statements, taken as a whole, are not prepared in all material
respects, in accordance with NZ IAS 34. As the auditor of the Company, NZ SRE
2410 requires that we comply with the ethical requirements relevant to the audit of the
annual financial statements.
A review of financial statements in accordance with NZ SRE 2410 is a limited
assurance engagement. The auditor performs procedures, primarily consisting
of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. The procedures
performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand)
and International Standards on Auditing. Accordingly, we do not express an audit
opinion on these financial statements.
We are independent of the Company. Other than in our capacity as the auditor
and provider of other related assurance services, we have no relationship with,
or interests in, the Company.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that
these financial statements of the Company are not prepared, in all material respects,
in accordance with NZ IAS 34.
WHO WE REPORT TO
This report is made solely to the Company’s shareholder. Our review work has been
undertaken so that we might state to the Company’s shareholder those matters which
we are required to state to them in our review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company’s shareholder, for our review procedures, for this report, or
for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
8 November 2017
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
INTERIM FINANCIAL STATEMENTS OF GMT BOND ISSUER LIMITED
39
12 Pukekiwiriki Place, under construction, Highbrook Business ParkBig Chill Supersite, Highbrook Business Park
OTHER
INFORMATION
CONTENTS
OTHER STATUTORY AND
LISTING RULE DISCLOSURES 41
INVESTOR RELATIONS 42
GLOSSARY 43
CORPORATE DIRECTORY 44
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
40
OTHER STATUTORY AND
LISTING RULE DISCLOSURES
NZX WAIVERS
NZX has granted waivers to GMT and GMT Bond Issuer
at various times, some of which have been relied upon by
GMT during the six months ended 30 September 2017.
FEES
Under paragraph 39(d) of the waivers that were granted
to GMT by NZX on 12 November 2012, GMT is required
to disclose in its interim financial statements the fees that
were paid to GPSNZ under the property management
and development management agreements between
HDL and GPSNZ, and between HBPL and GPSNZ
during the period they were in force.
Included within property management fees and
development management fees paid is $0.2 million paid
pursuant to the property management and development
management agreements between HBPL and GPSNZ
for the six months to 30 September 2017.
Included within property management fees and
development management fees paid is $2.3 million paid
pursuant to the property management and development
management agreements between HDL and GPSNZ for
the six months ended 30 September 2017.
GMT BOND ISSUER LIMITED
On 18 May 2017, NZX granted GMB a waiver from NZX
Listing Rule 5.2.3 in relation to the Goodman+Bonds
issued on 31 May 2017 (“GMB040 Bonds”) to enable
GMB to apply for quotation on the NZX Debt Market even
though the GMB040 Bonds may not initially be held by at
least 500 members of the public holding at least 25% of
the GMB040 Bonds issued (as required by NZX Listing
Rule 5.2.3). The waiver has been granted for a period
of six months from the quotation date of the GMB040
Bonds (being 1 June 2017).
The effect of the waiver from NZX Listing Rule 5.2.3
is that initially the GMB040 Bonds may not be widely
held and there may be reduced liquidity in the GMB040
Bonds. To the extent that the GMB040 Bonds meet the
spread requirements of NZX Listing Rule 5.2.3, GMB will
notify NZX accordingly. GMB has agreed to notify NZX as
soon as practicable if there is a material reduction to the
total number of members of the public holding GMB040
Bonds, and/or the percentage of GMB040 Bonds held
by members of the public holding at least a minimum
holding. GMB has also agreed to clearly and prominently
disclose this waiver, its conditions and their implications
in each offer document relating to the GMB040 Bonds
and in its half-year report and its annual report for the
period the waiver is relied on.
A complete copy of the waivers provided by NZX can be
found at www.nzx.com under the GMT code.
BASE FEE UNITS
As described in the Notice of Meeting provided to
Unitholders and the NZX on 15 July 2014, and as approved
by Unitholders on 5 August 2014, certain amendments
were made to the Trust Deed to require GNZ (or its
nominee), as manager of GMT, to use its base management
fee to subscribe for new Units for a five year period from
1 April 2014. Under paragraph 11(b) of the waivers that were
granted to GMT by NZX on 15 July 2014, GMT is required to
disclose in its interim financial statements the number and
price of the base management fee units that were issued to
GNZ during the relevant period.
During the six months to 30 September 2017 GNZ was
issued 3,879,785 units at 127.61 cents per unit.
SUMMARY OF RECENT TRUST DEED
AMENDMENTS
There have been no amendments to the Trust Deed
during the period from 1 April 2017 to 30 September
2017. A copy of the Trust Deed is available on the
Corporate Governance section of the Goodman Property
Trust Website at www.goodman.com/nz.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
41
INVESTOR RELATIONS
BONDHOLDER INTEREST PAYMENTS
Interest is paid semi-annually in June and December,
each year, until redemption for GMB020 and GMB030
Bondholders. For GMB040 Bondholders it is May and
November.
No dividends or distributions have been paid by GMT
Bond Issuer Limited.
REGISTRAR
Computershare Investor Services Limited is the registrar
with responsibility for administering and maintaining the
Trust’s Unit and Bond Registers.
If you have a question about the administration of your
investment, Computershare can be contacted directly:
+ by phone, on its toll free number 0800 359 999
(+64 9 488 8777 outside New Zealand);
+ by email, to enquiry@computershare.co.nz; or
+ by mail, to Computershare Investor Services Limited,
Private Bag 92119, Auckland 1142.
COMPLAINTS
Complaints may be made to the Manager or Supervisor.
As a financial service provider registered under the
Financial Service Providers (Registration and Dispute
Resolution) Act 2008, the Manager is a member of an
approved dispute resolution scheme (registration number
FSP36542).
Financial Dispute Resolution
Freepost 231075
PO Box 2272
Wellington 6140
Toll Free: 0508 337 337 (within New Zealand)
Telephone: +64 4 910 9952 (outside New Zealand)
Email: enquiries@fdr.org.nz
There will be no fee charged to any complainant in
connection with investigation.
UNITHOLDER DISTRIBUTIONS
The Trust typically pays its distributions quarterly in the third month that follows each quarter. For example the
distribution for the June 2017 quarter was paid in September 2017. The table below shows the composition and timing
of distributions per unit that have been paid, or declared, since the beginning of this financial period.
Distribution for quarter ended
Cash
distribution
Imputation
credits
Total
distributionPayment date
31 March 2017$ 0.016625$ 0.002315$ 0.01894022 June 2017
30 June 2017$ 0.016625$ 0.0 03418$0.02004321 September 2017
30 September 2017$ 0.016625$0.003360$ 0.01998514 December 2017*
* Distribution announced but not yet paid at the date of this report.
INTRODUCTION
Ensuring Unitholders and Bondholders are well informed
and easily able to manage their investment is a key
priority of the Manager’s investor relations team. Regular
meetings and communications, its website and a
dedicated toll free contact number provide investors with
the means to make informed decisions.
ANNUAL MEETING
GMT’s Trust Deed requires at least one meeting of
Unitholders each financial year. The most recent Annual
Meeting was held on 2 August 2017. The address and
presentation are available on GMT’s website.
PUBLICATIONS
For Unitholders and Bondholders who opt to receive
printed copies, the Interim and Annual Reports are typically
mailed in December and June of each year respectively.
Goodresults newsletters detailing the performance and
operational activities of the Trust over the intervening
periods are mailed to Unitholders in March and September.
INVESTOR CENTRE
The Trust’s website, www.goodman.com/nz, enables
Unitholders and Bondholders to view information about
their investment, download investor forms, check current
prices and view publications and announcements.
HELPLINE
The Manager has a dedicated toll free number,
0800 000 656 (+64 9 375 6073 outside New Zealand),
which will connect Unitholders and Bondholders directly
with the investor relations team who will assist with any
queries.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
42
GLOSSARY
$ and cents
New Zealand currency.
Balance Date
31 March 2017.
Board
the Board of Directors of the Manager and
GMT Bond Issuer Limited.
Bondholder
a person whose name is recorded in the
register as a holder of a Goodman+Bond.
CEO
the Chief Executive Officer of the Manager.
Chairman
the Chairman of the Board of the Manager.
Co-ownership Agreement
the agreement of that name between the
Manager, Goodman Property Aggregated
Limited, the Trustee, Goodman Funds
Management Limited as responsible
entity of GIT, Tallina Pty Limited as trustee
of Penrose Trust, and Trust Company
Limited as custodian of Tallina Pty Limited,
dated 1 April 2004 as amended by the
Restructuring Agreement between the same
parties dated 7 March 2005, relating to the
buying, selling and holding of property by the
Trust and Goodman Group in 50/50 shares.
CPU or cpu
cents per unit.
Director
a director of the Manager and GMT Bond
Issuer Limited.
GIC
the sovereign wealth fund of Singapore.
GIT
Goodman Industrial Trust and its controlled
entities, as the context requires.
GL
Goodman Limited and its controlled entities,
as the context requires.
GMB
GMT Bond Issuer Limited, a wholly owned
subsidiary of Goodman Property Trust.
Goodman
means Goodman (NZ) Limited as the
Manager of the Trust.
Goodman Group or GMG
means GL, GIT and Goodman Logistics
(HK) Limited, operating together as a
stapled group. Where either GL, GIT or and
Goodman Logistics (HK) Limited is party to
a contract or agreement or responsible for
an obligation or liability, without the other, all
references to Goodman Group as concerns
that contract, agreement or responsibility
shall be to that party alone.
Goodman+Bond or Bond
a bond issued by GMB.
GPSNZ
Goodman Property Services (NZ) Limited.
Independent Director
has the meaning given to that term in the
Listing Rules which, for the Manager are
those persons listed on the following page.
Listing Rules
the Listing Rules of NZX from time to time
and ‘LR’ is a reference to any of those rules.
Management
the senior executives of the Manager.
Manager or GNZ
the manager of the Trust, Goodman (NZ)
Limited.
NTA
net tangible assets.
NZ IAS
New Zealand equivalents to International
Accounting Standards.
NZ IFRS
New Zealand equivalents to International
Financial Reporting Standards.
NZDX
the New Zealand debt market operated by
NZX.
NZX
means NZX Limited.
Operating Earnings
Operating earnings are a non-GAAP financial
measure included to provide an assessment
of the performance of GMT’s principal
operating activities. Calculation of operating
earnings are as set out in GMT’s Profit or
Loss statement.
Registrar
the unit registrar for GMT and
Goodman+Bond registrar for GMB which,
at the date of this Annual Report, is
Computershare Investor Services Limited.
sqm
square metres.
Trust Deed
the GMT trust deed dated 23 April 1999,
as amended from time to time.
Trust or GMT
Goodman Property Trust and its controlled
entities, including GMB, as the context
requires.
Trustee
the trustee of the Trust, Covenant Trustee
Services Limited.
Unitholder or unitholder
any holder of a Unit whose name is recorded
in the register.
Unit or unit
a unit in GMT.
WPHL or Wynyard Precinct
Wynyard Precinct Holdings Limited, the joint
venture between GMT and GIC, in which
GMT owns 51%.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
43
CORPORATE DIRECTORY
MANAGER OF GOODMAN
PROPERTY TRUST
Goodman (NZ) Limited
Level 2, 18 Viaduct Harbour Avenue
Auckland 1010
PO Box 90940
Victoria Street West
Auckland 1142
Toll free: 0800 000 656
(within New Zealand)
Telephone: +64 9 375 6060
(outside New Zealand)
Email: info-nz@goodman.com
Website: www.goodman.com/nz
ISSUER OF GOODMAN+BONDS
GMT Bond Issuer Limited
Level 2, 18 Viaduct Harbour Avenue
Auckland 1010
PO Box 90940
Victoria Street West
Auckland 1142
Toll free: 0800 000 656
(within New Zealand)
Telephone: +64 9 375 6060
(outside New Zealand)
Email: info-nz@goodman.com
Website: www.goodman.com/nz
Directors of Goodman (NZ) Limited
and GMT Bond Issuer Limited
Chairman and Independent Director
Keith Smith
Independent Directors
Leonie Freeman
Susan Paterson ONZM
Peter Simmonds
Executive Director
John Dakin
Non-executive Directors
Gregory Goodman
Phillip Pryke
Management Team of Goodman (NZ)
Limited and GMT Bond Issuer Limited
Chief Executive Officer
John Dakin
Chief Financial Officer
Andy Eakin
General Counsel and Company
Secretary
Anton Shead
General Manager Development
Michael Gimblett
Director Investment Management
James Spence
Director Investment Management
and Capital Transactions
Kimberley Richards
Head of Corporate Affairs
Jonathan Simpson
Marketing Director
Mandy Waldin
AUDITOR
PricewaterhouseCoopers
PwC Tower
188 Quay Street
Private Bag 92162
Auckland 1142
Telephone: +64 9 355 8000
Facsimile: +64 9 355 8001
REGISTRAR
Computershare Investor
Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Private Bag 92119
Auckland 1142
Toll free: 0800 359 999
(within New Zealand)
Telephone: +64 9 488 8777
(outside New Zealand)
Facsimile: +64 9 488 8787
Email: enquiry@computershare.co.nz
LEGAL ADVISORS
Russell McVeagh
Level 30, Vero Centre
48 Shortland Street
PO Box 8
Auckland 1140
Telephone: +64 9 367 8000
Facsimile: +64 9 367 8163
TRUSTEE AND SUPERVISOR
FOR GOODMAN PROPERTY TRUST
Covenant Trustee Services Limited
Level 6, Crombie Lockwood Building
191 Queen Street
PO Box 4243
Auckland 1140
Telephone: +64 9 302 0638
BOND TRUSTEE
Public Trust
Level 9
34 Shortland Street
PO Box 1598
Shortland Street
Auckland 1140
Toll free: 0800 371 471
(within New Zealand)
Telephone: +64 9 985 5300
(outside New Zealand)
Facsimile: 0800 371 001
This Interim Report for the six month period ended
30 September 2017 has been prepared by Goodman ( NZ)
Limited as the Manager of GMT and by GMT Bond Issuer
Limited. The information in this Interim Report is general
information only. It is not intended as investment or financial
advice and must not be relied upon as such. You should obtain
independent professional advice prior to making any decision
relating to your investment or financial needs. This Interim
Report is not an offer or invitation for subscription or purchase
of securities or other financial products. Past performance is
no indication of future performance. All values are expressed in
New Zealand currency unless otherwise stated. November 2017.
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
44
Goodman’s 24/7 Service Desk
CourierPost, Highbrook Business ParkFord, Highbrook Business Park
BNZ, Highbrook Business Park
GOODMAN PROPERTY TRUST INTERIM REPORT 2018
GMT BOND ISSUER LIMITED INTERIM REPORT 2018
45
THE MARK OF QUALITY
www.goodman.com/nz
---
Level 2, 18 Viaduct Harbour Avenue, Auckland | PO Box 90940, Victoria Street West, Auckland 1142
Tel +64 9 375 6060 | www.goodman.com/nz
nzx release+
GMT Advances Repositioning Strategy
Date
9 November 2017
Release
Immediate
Goodman (NZ) Limited, the manager of Goodman Property Trust (“GMT” or
“Trust”) is pleased to announce the Trust’s interim result for the six months
ended 30 September 2017.
The Trust has continued to take advantage of the positive business environment and
has delivered a half-year result consistent with earlier guidance.
Financial and operational highlights include:
Operating earnings
1
after tax of $51.4 million or 4.0 cents per unit on a
weighted average unit basis, compared to $51.0 million in the previous
corresponding period.
Cash distributions of 3.325 cents per unit, relating to the first six months,
representing around 94% of cash earnings
2
.
Profit after tax of $39.5 million compared to $67.6 million previously. The main
variance is driven by the recognition of $8.4 million of fair value losses on
certain investment properties in this period, compared to gains of $19.8
million last year.
Strong leasing with over 70,000 sqm of space secured on new or extended
terms. Portfolio occupancy of 97% and an average lease term of 5.8 years.
The commencement of six new development projects with a total project cost
of $148.7 million
3
and yield on additional spend of 8.3%.
Further sales success with $229.4 million of assets contracted for sale
following the Trust’s interim balance date.
Improving the business
Keith Smith, Chairman of Goodman (NZ) Limited said, “The Board is extremely
pleased with the results achieved and the improvements being made to the
composition and quality of the Trust’s $2.6 billion property portfolio.”
The progression of the development programme, selective asset sales and targeted
acquisitions are all having a positive impact, refining the portfolio and positioning
GMT for sustainable growth.
1
Operating earnings are a non-GAAP financial measure included to provide an assessment of the performance of GMT’s
principal operating activities. Calculation of operating earnings are as set out in GMT’s Profit or Loss statement.
2
Cash earnings are a non-GAAP financial measure that assesses free cash flow, on a per unit basis, after adjusting for
certain items. Calculation of GMT’s cash earnings is set out in the accompanying result presentation.
3
Total project cost including land allocation, all construction costs, management and other professional fees.
Level 2, 18 Viaduct Harbour Avenue, Auckland | PO Box 90940, Victoria Street West, Auckland 1142
Tel +64 9 375 6060 | www.goodman.com/nz
John Dakin, Chief Executive Officer of Goodman (NZ) Limited said, “Development
and transactional activity are rebalancing and repositioning the portfolio which is now
over 80% invested in the rapidly growing and supply constrained Auckland industrial
sector.”
“This investment focus reflects the positive return characteristics of industrial property
and the stronger economic drivers of New Zealand’s largest city.”
Further information on the financial result is provided in the Trust’s interim report. The
report was released today and is available from a link on the Trust’s website at:
www.goodman.com/nz.
Development and transaction activity raising asset quality
John Dakin said, “Economic growth, demographic changes, technological advances
and the development of online retailing, are all contributing to the strong demand for
logistics and warehouse space in Auckland.”
The buoyant operating conditions are reflected in GMT’s leasing results with over
70,000 sqm of space secured on new or extended terms since 31 March 2017.
John Dakin said, “To meet current and forecast demand the Trust is also undertaking
a greater level of development activity. Six substantial new industrial projects, with a
total project cost of almost $150 million, have been announced already this financial
year. This volume of new starts is the highest it’s been since 2008.”
Asset sales are facilitating the current investment strategy, providing balance sheet
capacity to fund the intensification of the Trust’s development programme.
Two further sales were secured following the interim balance date, they include;
the conditional sale of Central Park Corporate Centre for $209 million
4
.
the recently completed Steel & Tube development in Hornby, Christchurch for
$20.4 million. The unconditional sale is due to settle in April 2018.
John Dakin, said, “The sale of Central Park is a significant transaction for the Trust. It
is the last of the planned major asset disposals and its successful conclusion would
complete a substantial rebalancing of the portfolio, focusing investment in the
Auckland industrial sector.”
Lower gearing after portfolio repositioning
Asset sales are also providing the Trust with greater financial flexibility.
At 30 September 2017 GMT’s look through loan to value ratio was 32.4%. The low
level of gearing provides the Trust with considerable headroom against the 50%
maximum allowed under its debt and Trust Deed covenants.
The completion of the $100 million Goodman+Bond offer in May 2017 has also
improved GMT’s liquidity and debt diversity position. At 30 September 2017, the
Trust had undrawn bank facilities of $260 million.
Following the settlement of both conditional and unconditional sales the Trust’s
gearing would reduce to 25.8% and its undrawn bank facilities would increase to over
$500 million, on a proforma 30 September 2017 basis.
Sustainable long term growth
Strong leasing results, development progress and further asset sales have been the
operational highlights of the first six months of this financial year.
4
The transaction remains conditional on certain factors including Overseas Investment Office approval.
Level 2, 18 Viaduct Harbour Avenue, Auckland | PO Box 90940, Victoria Street West, Auckland 1142
Tel +64 9 375 6060 | www.goodman.com/nz
These activities are also improving the financial metrics of the business, de-
leveraging the balance sheet and providing substantial funding capacity for the
future.
With a stable business outlook, the Trust is expected to deliver full year operating
earnings of around 9.1 cents per unit before tax.
Cash earnings of around 7.0 cents per unit are forecast for the year, with cash
distributions totalling 6.65 cents per unit expected to be paid.
For further information please contact:
John Dakin Andy Eakin
Chief Executive Officer Chief Financial Officer
Goodman (NZ) Limited Goodman (NZ) Limited
(09) 375 6063 (09) 375 6077
(021) 321 541 (021) 305 316
James Spence Keith Smith
Director Investment Management Chairman
Goodman (NZ) Limited Goodman (NZ) Limited
(09) 903 3269 (021) 920 659
(021) 538 934
Attachments provided to NZX:
1. Investor Presentation
2. GMT and GMT Bond Issuer Limited Interim Report 2018
3. NZX Appendix 1
About Goodman Property Trust:
GMT is an externally managed unit trust, listed on the NZX. It has a market capitalisation of around $1.7 billion,
ranking it in the top 20 of all listed investment vehicles. The Manager of the Trust is a subsidiary of the ASX listed
Goodman Group, Goodman Group is also the Trust’s largest investor with a cornerstone unitholding of 21%.
GMT is New Zealand’s leading industrial and business space provider. It has a substantial property portfolio, with a
value of $2.6 billion, which accommodates around 270 customers. The Trust holds an investment grade credit rating
of BBB from Standard & Poor’s.
---
1
Presented by:
John Dakin
Chief Executive Officer
Andy Eakin
Chief Financial Officer
James Spence
Director
–Investment Management
Unlessotherwisenoted,allnumericaldataprovidedinthispresentationisstatedasat30September2017.
Unlessotherwisenoted,calculationofnon-GAAPfinancialmeasuresisassetoutinthe2018interimfinancialstatements.
EverythingNZDunlessotherwisestated.Allfiguresarerounded.
Overview
3
Financial Summary
5
Investment Portfolio
11
Development Update
15
Summary & Outlook
22
Appendices
25
Highbrook Business Park
＋more than $600 million of sales since 2012 have repositioned the portfolio and provided
balance sheet capacity to fund the development programme
＋two further sales were contracted following 30 September 2017:
▪the conditional sale of Central Park Corporate Centre, Auckland, for $209.0 million
▪Steel & Tube development in Christchurch, for $20.4 million
＋high quality industrial assets driving increased occupancy and rental growth, with the
underlying portfolio recording a 3.8% increase in net property income from the previous
corresponding period
＋over 70,000 sqm of space secured on new or extended terms since March
＋activating land is a continuing focus, with a record volume of development starts in 1H FY18
＋look through gearing in the middle of the 30-35% preferred range
＋strong and diverse debt sources and liquidity profile
sustainable growth
quality assets
prudent capital
management
Coda—Savill Link
Highbrook Business Park
67.467.4
67.9
71.5
73.8
64.964.9
6.5
8.5
+0.4
+3.7
+2.7
+2.1
-0.1
-0.4
-8.9
50.0
55.0
60.0
65.0
70.0
75.0
80.0
85.0
FY17 YTDAcquisitionsDevelopmentsUnderlying portfolioAdditional incomeDisposalsFY18 YTD
GMTWPH
-0.4
＋new acquisitions and
developments, together
with strong growth in
the underlying portfolio
of 3.8% has offset the
impact of asset
disposals
73.9
73.4
＋cash earnings of around
7.0 cents per unit are
forecast for the year
＋distribution of around 94%
of cash earnings
＋lower land holdings plus
increasing industrial
weighting continues to
improve cash earnings
$million30 Sep1730 Sep 16
Operating earnings after tax51.451.0
Capitalised borrowing costs -land(4.7)(6.4)
Maintenance capex(1.3)(2.0)
Cash earnings45.4 42.6
Cash earnings per unit3.53 3.34
Distributions per unit3.33 3.33
Distributions % of cash earnings94.2%99.6%
IfbasefeewasnotreinvestedinGMTunits,distributionswouldhaverepresented103.6%ofcashearnings(HY2017:110.1%)
strong financial metrics
＋look through loan to value ratio of 32.4%
＋allowing for contracted sales, pro-forma 30 September gearing of 25.8%
＋debt currently 64% hedged to reduce interest rate volatility
＋interest cover ratio expected to be around 3.0x in 2018, well above the covenant minimum of
2.0x
look through loan
to value ratio
35.9%
34.2%
33.9%
30.6%
32.4%
27%
28%
29%
30%
31%
32%
33%
34%
35%
36%
37%
FY14FY15FY16FY171H18
150150150150
100
100100
525252
50
100
150
200
250
300
FY18FY19FY20FY21FY22FY23FY24FY25FY26FY27FY28FY29FY30FY31
$m
Bank facilitiesRetail bondsUSPP notesDrawn bank debt
well-diversified
debt sources
＋weighted average debt term to expiry of 4.3 years
＋around 57% of drawn debt from non-bank sources
＋GMT had $260 million of headroom in its bank facility as at 30 September 2017
＋bank funding retained for operational flexibility
Excludes GMT’s 51% share of the Wynyard Precinct Holdings Ltd joint venture debt facility. As at 30 September 2017 the joint venture had a $112 million debt facility
maturing September 2019
debt expiry profile
Big Chill –Highbrook Business Park
(1)
(1)
(1)
Coda, SavillLink, Otahuhu
(1)
Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017.
97%
96%
97%
98%
98%
90%
92%
94%
96%
98%
100%
Mar-14Mar-15Mar-16Mar-17Sep-17
0%
5%
10%
15%
20%
25%
30%
35%
VacantFY18FY19FY20FY21FY22FY23FY24FY25FY26>FY26
VacantExpiring Income
＋strong leasing with over
70,000 sqm of space secured
on new or extended terms
during period
＋occupancy of 97% as at 30
September 2017
＋99% occupancy and >70%
retention within industrial
portfolio
＋WALT of 5.8 years
＋7.9% of income due to expire
in FY18
＋strong rental reversion
occurring throughout industrial
portfolio, with market reviews
and new leases producing
average uplift of around 4.8%
portfolio statistics presented are on a portfolio income basis and include the Viaduct joint venture
portfolio occupancy
lease expiry profile
Portfolio occupancy and lease expiry profile is presented on a portfolio income basis
97%
96%
97%
98%
97%
90%
92%
94%
96%
98%
100%
Mar-14Mar-15Mar-16Mar-17Sep-17
ACCO —Highbrook Business Park
59,738
50,683
65,040
32,660
58,368
10,000
20,000
30,000
40,000
50,000
60,000
70,000
FY14FY15FY16FY171H18
sqm 0
OtherHighbrook
98.2
108.8
148.7
97.0
148.7
0
20
40
60
80
100
120
140
160
FY14FY15FY16FY171H18
$ m
OtherHighbrook
＋continued focus to activate
remaining land with
development starts reaching
record levels in 1H18
＋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
development projects $ (total project cost including land value)
development projects sqm (net lettable area)
The Hill, Highbrook Business ParkThe Gate Warehouse, The Gate
COMPLETION
May 2017
VALUE
$11.0m
NLA
4,937 sqm
ACCO, Highbrook Business Park
COMPLETION
June 2017
VALUE
$17.8m
NLA
7,503 sqm
COMPLETION
Aug 2017
VALUE
$16.9m
NLA
6,402 sqm
Coda Stage 2, Savill LinkAB Equipment, HighbrookBusiness Park
Showroom Units, HighbrookBusiness Park
NLA
7,410 sqm
COMPLETION
Nov 2017
NLA
2,929 sqm
COMPLETION
Nov 2017
NLA
1,730 sqm
COMPLETION
Nov 2017
Building 6
HighbrookBusiness Park
Quest Expansion
Highbrook Business Park
NLA
3,006 sqm
COMPLETION
Aug 2018
ROOMS
60
COMPLETION
Nov 2018
Crossing Carpark
HighbrookBusiness Park
CARPARKS
343
COMPLETION
Feb 2019
＋six developments announced
YTD, $148.7 million total
project cost
＋$107.0 million of additional
spend, yielding 8.3%
＋121,000 sqm of development
land utilised
＋58,368 sqm of additional NLA
＋build-to-lease units receiving
strong enquiry with three
Heads of Agreement signed
prior to construction
commencement
DevelopmentLocation
Additional Capital
($m)
NLACompletion Date
Spicers Highbrook Business Park$13.4m9,800 sqmApr-18
FliwayexpansionWestney Industry Park$2.7m1,895 sqmFeb-18
Gateway unitsHighbrook Business Park$46.1m21,470 sqmDec-18
Parade unitsHighbrook Business Park$11.0m5,770 sqmJul-18
Selwood unitsThe Concourse$22.2m10,933 sqmDec-18
SavillLink Warehouse SavillLink$11.7m8,500 sqmJul-18
Total YTD$107.0m58,368 sqm
Gateway units –Artist ImpressionParade units–Artist Impression
＋98% occupancy, 5.9 year
average lease term and six
year average building age
＋park continues to experience
strong retention of around 80%
＋More than 80% complete with
over 420,000 sqm of rentable
area (46,290 sqm currently
under construction)
＋$184 million of additional
capital has been invested at
Highbrook over the last three
years, c.61% of the total
development volume
＋37,040 sqm announced YTD
providing yield on additional
spend of 8.2%
Highbrook Crossing —Highbrook Business Park
＋development activity, selective sales and targeted acquisitions are refining the business and
positioning GMT for sustainable growth
＋quality of the portfolio and location of its assets is unrivalled
＋strong balance sheet with over $500 million of available liquidity post contracted sales
＋Auckland industrial sector benefitting from positive economic and demographic drivers.
Growth in ecommerce an emerging trend
＋positive business environment and stable outlook supports continuation of current
investment strategy
＋guidance reaffirmed:
＋full year operating earnings of around 9.1 cents per unit before tax
＋cash earnings of around 7.0 cents per unit
＋cash distributions totalling 6.65 cpuexpected to be paid
high quality business
outlook
VXV Plaza —VXV Precinct
Big Chill —Highbrook Business Park
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10
% hedged
Period
Hedging Level
PropertyCustomer
NLA
(sqm)
Term
(years)
HighbrookBusiness ParkCottonsoft16,97310
The Gate Industry ParkIron Mountain (Recall)4,9315
Show Place Office ParkWestpac2,5537
The Gate Industry ParkConfidential4,9366
The Gate Industry ParkDulux (Yates)4,1144
The Gate Industry ParkEasy2C4,9585
M20 Business ParkNew Zealand Post3,9731
42,4386.8
Other27,5985.4
Total Portfolio70,0366.2
0%1%2%3%4%5%
New Zealand Post Group
DHL
Fletcher Building
Fonterra
Toll
Spicers
Air New Zealand
Datacom
Big Chill Distribution
Officemax
Top ten customers split by subsidiary companies
(% of portfolio income)
Rent reviews
by next review type
Industry exposure
portfolio income (%)
Market
Review
30%
Fixed
47%
CPI
23%
Transportation and
warehousing, 32.3%
Manufacturing, 25.1%
Commercial services and
supplies, 16.5%
Consumer services
and supplies, 15.7%
Other, 2.4%
Food and agriculture,
7.9%
Utilities, 0.2%
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.