Ann: MEETING: GMT: GMT Annual Meeting of Unithold

• Release Date: 06/08/13 14:41
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GMT
06/08/2013 12:41
MEETING

REL: 1241 HRS Goodman Property Trust

MEETING: GMT: GMT Annual Meeting of Unitholders

WELCOME
Good afternoon ladies and gentlemen and welcome to this Annual Meeting of
Unitholders. I'm Keith Smith, Independent Director and Chairman of Goodman
(NZ) Limited, the manager of Goodman Property Trust.

My fellow directors and I are extremely pleased to be here today and we look
forward to reviewing the recent performance of the Trust with you this
afternoon.

The meeting will also consider the current economic outlook and how our
investment and development strategy is focused on building a high quality and
sustainable business.

With no resolutions being voted on, today's meeting provides a great
opportunity for you to communicate directly with those responsible for
managing your investment. I encourage you to participate by asking questions
and to stay for the refreshments that follow the meeting.

Directors and staff will also be in attendance to answer any further
questions you may have.

ATTENDENCE AND APOLOGIES
I would now like to introduce the other members of the Board, together with
the executives of the Manager, who are present today.

For the record I'd like it noted that there is an apology from Non-executive
Director Phil Pryke. Unfortunately illness prevents him from travelling from
Sydney to attend today's meeting.

From my far right - Peter Simmonds, Independent Director; Leonie Freeman,
Independent Director; Greg Goodman, Non-executive Director; Susan Paterson,
Independent Director; Andy Eakin, Chief Financial Officer; and John Dakin,
Chief Executive Officer and Executive Director.

The Board is unchanged since we last met in December and a majority of
Independent Directors is maintained.

REPRESENTATIVE OF TRUSTEE; EXECUTIVES AND ADVISORS PRESENT
In addition to the Board, there are executives of the Manager,
representatives of our Trustee, Corporate Trust Limited and representatives
from the Trust's advisors also present today. These advisors include -
- our solicitors, Russell McVeagh;
- our auditors, PricewaterhouseCoopers; and
- our tax advisors, KPMG.
I'd now like to proceed through some of the more formal aspects of the
meeting before we begin the presentation.

MEETING FORMALITIES
- I'd like it noted that in accordance with the Trust Deed, I have been
nominated by the Trustee, Corporate Trust Limited, to act as chairman of this
meeting and I have now tabled this nomination.
- I also confirm that the meeting has been properly convened and notice has
been properly given to Unitholders.

GMT's Trust Deed requires at least five persons holding, or representing by
proxy, or as representative or attorney, at least ten per cent of the number
of Units on issue at the date of the meeting carrying the right to vote at
the meeting for a quorum to be achieved.

I confirm that these requirements have been met; and that a quorum is
present.

OTHER ITEMS
Before we proceed I would also like to point out that the emergency exits for
the building are accessed through the rear doors of this meeting room. In the
unlikely event of an emergency you will be required to evacuate and assemble
outside in a designated area, if this occurs please follow the directions of
the Crowne Plaza hotel staff.

To simplify proceedings, I will refer to Goodman Property Trust throughout
the meeting as the "Trust" or "GMT", and Goodman (NZ) Limited - the manager
of that Trust - as the "Manager".

Now the formalities are dealt with we can proceed.

INTRODUCTION
The last financial year has been a defining 12 months for GMT with new
investment and equity initiatives enhancing and extending the Trust, while
also positioning it for future growth.

Unitholders gave their overwhelming support for the acquisition of the
remaining interests in the award winning Highbrook Business Park back in
December and I'd like to thank you all for your support of that transaction.

The acquisition and the associated equity raising initiatives have provided
the Trust with an expanded property portfolio and a strengthened balance
sheet that is capable of supporting an accelerated development programme.

It has also contributed to the strongest financial result in over five years,
with a 71.4 percent increase in profitability being recorded. Our Chief
Financial Officer, Andy Eakin, will identify the key components of our $91.7
million pre-tax profit, and talk further about our financial performance,
later in the presentation.

GMT has benefitted from these strategic initiatives and is an even more
substantial property business as a result.

With a property portfolio valued at more than $2.0 billion and a market
capitalisation of $1.3 billion it is now the largest of all its property
peers. It also ranks in the top 15 of all NZX listed stocks.

Building a property portfolio of real scale has been an important strategic
objective that has ensured GMT has the facilities to attract and retain a
broad customer base.

A development capability has been an important component of this strategy.

There is significant value in GMT's land investments and converting these
strategic land holdings into high quality, income producing, industrial and
office park assets remains a key focus.

The recent Highbrook acquisition and associated equity raising provide the
opportunity and funding capacity to significantly grow the Trust's business.

With improving business confidence and strengthening occupier demand, the
Board believes it is an appropriate time to accelerate the Trust's
development programme.

The focus compliments an existing strategy that has delivered stable
operating results over the last five years despite the more challenging
operating environment. The consistency of these results reinforces the
importance of investing in quality assets and also reflects the efforts of a
hardworking management team.

BUSINESS STRUCTURE
It is a capable and experienced team that is supported by the considerable
resources and expertise of the ASX listed, Goodman Group.

Founded and led by Greg Goodman, the Group is a global property investment
and fund management business with over 1,000 staff and almost $25 billion of
assets under management.

Goodman Group is also the ultimate owner of GMT's Manager and the largest
investor in the Trust, with a cornerstone Unitholding of 17.5 percent. The
alignment of interests between the Manager and Unitholders means that we all
benefit from this management structure.

ELECTRONIC COMMUNICATION
A strong corporate governance framework, that includes a majority of
Independent Directors, ensures that the interests of GMT's investors are
always at the forefront of the Board's decision making process.

We have led the listed property sector in recent years with our
sustainability initiatives and disclosures around director and officer
remuneration, going beyond what is required from a Trust and aligning our
reporting more closely with that of a listed company.

I would emphasise that while we disclose the remuneration costs these
expenses are met by the Manager, they are not paid by the Trust.

With an increased emphasis on electronic delivery we have also improved the
way we communicate with Unitholders.

Many of you would have chosen not to receive a printed annual report this
year and instead have opted to view the online report which includes a video
overview from our Chief Executive Officer.

The new electronic interface is shown on screen now.

Instantly available and with greater functionality, this type of initiative
allows us to connect with you in a more timely and cost effective manner.

Digital delivery is likely to become an increasing part of our corporate
communications programme and I encourage you to adopt these new technologies
to ensure you remain well informed.

I would now like to pass over to Andy Eakin and John Dakin, who will give a
more detailed overview of the Trust's financial and operational performance.

ANDY EAKIN'S ADDRESS
Thank you Mr Chairman and good afternoon ladies and gentlemen. It's great to
be presenting to you today.

It has been a very active year and the management team is extremely pleased
with the result that has been achieved.  We've secured full control of
Highbrook Business Park and recorded the strongest financial performance in
over five years, with a pre-tax profit of $91.7 million.

The 71.4 percent increase in profitability on the previous year reflects the
impact of a stronger valuation result, strategic acquisitions and the
positive contribution from recent development completions.

While new investment and equity initiatives have expanded the property
portfolio and strengthened the balance sheet, it has been the consistent
performance of the investment portfolio that has continued to underpin the
Trust's operational performance.

Active management and an ongoing focus on customer relationships have
contributed to strong leasing results. The additional income generated from
completed development projects and the benefit of the Highbrook acquisitions
have also helped ensure that rental cashflows were maximised and revenue
targets were achieved.

EARNINGS & DISTRIBUTIONS
I am pleased to report that distributable earnings before tax, the measure we
use to assess underlying operating performance, has increased to $87.7
million. This equates to 8.21 cents per unit on a weighted average issued
unit basis, which is consistent with the guidance provided in November 2012.

The tax paid, cash distributions that Unitholders received for the year
totalled 6.25 cents per unit, representing around 80 percent of after tax
distributable earnings.

As most of you will be aware, we retain around 20 percent of earnings to help
fund the Trust's value-adding investment and development activity. It is a
policy that recognises there is a cost associated with maintaining our
strategic land holdings.

LOOKING FORWARD
While the current environment remains competitive, the quality of our
portfolio, recent capital management initiatives and a proven development
capability mean the Trust is well positioned to take advantage of the
continuing improvement in market conditions.

Given the current environment, our expectation for the current financial year
is that distributable earnings will be between 8.2 and 8.4 cents per unit,
before tax.

While it is pleasing to be forecasting an expected increase in earnings we
will pay a higher level of tax this year, partly as a result of a legislative
amendment that changes how deductions for lease incentive payments are
treated.

It's a timing effect that doesn't alter the total amount of tax paid over the
term of the lease and the majority of Unitholders will continue to benefit
from the Trust's relatively low effective tax rate and beneficial Portfolio
Investment Entity status.

NEXT DISTRIBUTION
For the 2014 financial year we expect to pay a full year cash distribution,
after tax and retentions, of at least 6.25 cents per unit, consistent with
the distribution paid in the previous year.

For an individual New Zealand resident taxpayer, with a marginal tax rate of
30 percent, the cash distribution of 6.25 cents per unit equates to a pre-tax
yield of 8.7 percent at the current unit trading price. This continues to
represent a very attractive yield in the current low interest rate
environment.

Payment of the first quarter distribution for the period ended 30 June 2013,
is to be made on 26 September 2013. It will include a cash component of
1.5625 cents per unit and there will be imputation credits attached.

CAPITAL MANAGEMENT
The Distribution Reinvestment Plan remains in operation. It continues to
provide a cost effective and timely source of equity funding which has helped
finance the Trust's value adding development activity.

Over $235 million of new equity was issued last year with additional capital
also recycled through a successful asset sales programme.

The largest of all the capital management initiatives was the private
placement and unit purchase plan undertaken to partly fund the $186.6 million
Highbrook Business Park acquisition.

The purchase of the remaining joint venture interests gives GMT one hundred
percent ownership of one of New Zealand's most desirable and successful real
estate developments. The strategic purchase, which included the issue of
stock and a deferred consideration structure, provides both immediate and
longer term benefits to the Trust.

One of the operational benefits has been a simplified ownership structure.
The greater flexibility this provided allowed us to restructure and refinance
all the Trust's bank facilities on market leading terms and at competitive
new margins, providing significant ongoing interest savings.

Prudent capital management through these debt and equity initiatives has
ensured the Trust has maintained a strong balance sheet.

At 31 March 2013, GMT's net borrowings represented just 34.8 percent of its
property assets. This level of debt is below the targeted band of 35 to 40
percent that the Board believes is optimal for the Trust, and significantly
lower than the 50 percent level permitted under its bank and Trust Deed
covenants.

The success of our business model and the quality of the portfolio are
recognised in the investment grade credit rating assigned by Standard &
Poor's. The agency has recently reaffirmed its triple B rating for the Trust
and its triple B plus rating for the bonds that have been issued.

We expect that current balance sheet capacity, together with the continuation
of the Distribution Reinvestment Plan and further asset sales, will provide
GMT with the funding capacity to pursue investment and development
strategies.

Just before I hand over to John, who will provide the operational update, I'd
like to reiterate a few of the key points I've made today.
- GMT is a robust business with a strong balance sheet.
- Prudent capital management strategies will help fund greater levels of
development activity.
- The Trust is positioned for growth and we expect to record even stronger
financial results as occupier and investor demand increases.

Thank you.

JOHN DAKIN'S ADDRESS
Thanks Andy and good afternoon ladies and gentlemen, it's great to have you
here.

There is real momentum in our business at present and we're encouraged by the
Trust's recent financial performance and today's improving economic outlook.

We've continued to build our property portfolio over the last twelve months
with strategic acquisitions and ongoing development success extending and
enhancing an already high quality asset base.

I'd like to talk more about these initiatives this afternoon and explain in
detail how our investment and development strategy is growing revenue streams
and creating value for Unitholders.

It's a proven approach which is supported by an active management style that
allows us to build lasting relationships with our customers.

BUSINESS STRATEGY
The acquisition of the remaining interests in Highbrook Business Park was the
most noteworthy of all the operational achievements last year. Many of you
are already familiar with this flagship asset and will appreciate the special
qualities that make it one of the country's most desirable and successful
real estate developments.

The following images demonstrate many of these unique features.

Occupying the Waioruru peninsula in East Tamaki and situated in an
exceptional natural landscape this award winning estate is rapidly becoming a
thriving business community.

Today the estate is over 50 percent developed with prime industrial and
commercial facilities occupied by leading corporate customers. These
businesses, and the more than 4,000 staff they employ, occupy high quality
premises that are designed to meet the changing requirements of the modern
workplace.

With a current value in excess of $650 million, Highbrook Business Park is a
significant driver of GMT's operational and financial performance.

With additional development potential the estate provides the Trust with a
superior growth profile at a time when business confidence and occupier
demand are increasing.

DEVELOPMENT PROGRESS
Strategic land holdings and an active development programme have added over
500,000 sqm of new space to the Trust's portfolio since 2004.

A large proportion of this activity has been at Highbrook where occupier
enquiry remains high. We've commenced more than $38 million of new projects
over the last 15 months and have completed new facilities for Panasonic and
Stanley Black and Decker.

Some of the most recent demand has come from existing customers who located
to Highbrook in the earliest stages of its development and are now initiating
expansion options to increase the size of their facilities. These customers
include Big Chill, Contract Logistics and Viridian.

We have also made great progress with the mixed use development at The
Crossing.

Scheduled to complete in just a few weeks' time, the Crossing is expected to
become a focal point for the estate, providing amenity and support services
for the surrounding business users.

The first stage which includes three buildings linked by an open air plaza
and generous public spaces will provide almost 10,000 sqm of commercial and
retail space.

Originally undertaken on a partially committed basis, leasing progress has
been excellent with more than 85 percent of the space committed or under
final negotiation. These customers include a legal firm, corporate head
office, training organisation, food and beverage operators, a conference
centre and serviced apartment accommodation.

With an accelerating development programme, we are continuing to pre-lease
the majority of our projects. To complement this design-build activity we are
also undertaking a limited amount of uncommitted development to ensure we
have the facilities to meet future customer requirements.

It has been a successful approach at The Crossing and also at Central Park
Corporate Centre in Greenlane where the new, $21.4 million, low rise office
project has been fully leased ahead of its completion.

Leasing commitments from Genesis Energy and Restaurant Brands have ensured
this high quality and environmentally efficient building will be 100 percent
occupied when it is completed later this month.

These were existing customers in the portfolio who had a requirement for
modern, efficient floor space that offered greater flexibility than existing
office buildings in that location.

Our strategic land holdings and development capability meant we were able to
deliver a property solution that has enhanced our asset base while
facilitating the retention of two key customers.

With low levels of vacancy in prime stock throughout the southern corridor
there are very few options for businesses seeking high quality office
accommodation. As a result of this supply shortage we are contemplating
further development and upgrade work at Central Park Corporate Centre.

Our other Auckland development estates are also attracting strong levels of
customer enquiry and continue to support substantial new projects.

At M20 Business Park, the former Ford assembly works in Wiri, a new 17,150
sqm distribution centre has been completed for Frucor beverages.

The Trust has also secured a further commitment from Bridgestone since its
March balance date. The new 2,200 sqm manufacturing and storage facility will
adjoin the existing 4,900 sqm distribution warehouse completed for the tyre
distributor in 2011.

At its Savill Link estate in Otahuhu the Trust has recently completed a new
facility for logistics customer, Mainstream. The facility is located on a
site that was formerly occupied by the Otahuhu Railway Workshops and the new
10,620 sqm warehouse incorporates a canopied rail siding that allows for all
weather operation.

The images on screen contrast some of the original manufacturing facilities
with the regeneration work that has occurred on this brownfield industrial
site under GMT ownership.

With a variety of development estates, strategically located throughout
Auckland and Christchurch, we are able to accommodate a range of business
requirements. These can be as varied as a refrigerated warehouse, light
manufacturing or trade retail, like the new facility built for Placemakers at
Glassworks Industry Park in Christchurch.

A feature of our development programme is that most new buildings are of a
generic size and design that ensures they remain highly marketable throughout
their economic life. Where more specific requirements are incorporated this
cost is generally reflected in higher rental levels and longer lease
agreements.

Our development estates have continued to attract new business and I'm
pleased to announce today a new $9.7 million warehouse for MOVE Logistics.
This new customer is also locating to Glassworks Industry Park.

The 5,805 sqm purpose built facility means we have committed over 30,000 sqm
of new development projects (with a total cost of almost $45.0 million) in
the four months since March.

It's very pleasing progress which is also demonstrated in the land absorption
across the development portfolio. Since November the Trust's land weighting
has reduced, from between 12 and 13 percent of total assets, to around 11
percent.

The successful delivery of this development programme is expected to have
considerable influence on the future performance of the Trust. It's a value
adding activity that increases rental revenue while enhancing the overall
quality and value of the property portfolio.

INVESTMENT PORTFOLIO PERFORMANCE
The heightened level of customer enquiry that is driving development demand
is also contributing to strong leasing results across the investment
portfolio with 144,000 sqm of space, around 14 percent of the total area,
secured on new or revised terms during the year.

This leasing activity has helped maintain occupancy at 96 percent. It has
also ensured that the consistent rental streams generated by the portfolio
are contracted well into the future, with the Trust maintaining a weighted
average lease term of more than 5 years.

These rental streams are provided by a wide customer base that includes
substantial companies such as Air New Zealand, DHL, Fletcher Building, Linfox
Logistics, New Zealand Post, Toll and Vodafone.

A continuing focus on customer service and innovative marketing campaigns
that include the use of radio, online media and traditional communication
channels are effective ways of promoting our business.

You may have heard or seen our recent big footprint marketing campaign which
features some of the larger leasing opportunities in the Auckland industrial
portfolio.

The primary purpose of this campaign is to backfill some of the space vacated
by customers we are relocating into newly developed premises.

It is a targeted campaign, to owners, managers, and industrial agents that
utilises an integrated marketing strategy. Some of the promotional elements
from this campaign are shown on screen now.

SUMMARY OUTLOOK
With a proven development capability and substantial land holdings in
Auckland and Christchurch, GMT has established itself as one of the country's
leading industrial and business space providers.

Our valuable land holdings have contributed to our development success,
helping us build a portfolio of unrivalled scale and quality.

We invest in modern, well-located, high quality properties and work hard to
maximise returns for our investors.

While we remain in a low growth and competitive operating environment we are
more confident about the future, encouraged by increasing occupier demand and
recent development activity.

 There is a new momentum in our business and we're accelerating our
development programme to take advantage of it.

We are positioned for growth and look forward to the year ahead where we hope
to deliver an even stronger financial and operational result.

Thank you all

GENERAL BUSINESS
Thank you, John and Andy. I will now move on to general business, and open
the floor for questions or comments from Unitholders or their appointed
representatives.

I ask that in addressing the Chair with questions, you please use one of the
microphones and identify yourself by name; and that, if you are a proxy for a
Unitholder, that you please name the Unitholder on whose behalf you hold that
that proxy; and, if you represent a corporate or similar Unitholder, please
do likewise.

CLOSURE
Ladies and gentlemen, that concludes the business of the meeting. I thank you
for your attendance and participation and invite you to join us for
refreshments.

- Ends -

For further information please contact:
Keith Smith
Chairman
Goodman (NZ) Limited
(021) 920 659

John Dakin
Chief Executive Officer
Goodman (NZ) Limited
(09) 375 6063
(021) 321 541

Andy Eakin
Chief Financial Officer
Goodman (NZ) Limited
(09) 375 6077
(021) 305 316
End CA:00239336 For:GMT    Type:MEETING    Time:2013-08-06 12:41:33