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Edited Transcript of GOZ.AX earnings conference call or presentation 22-Aug-19 6:00am GMT

Full Year 2019 Growthpoint Properties Australia Ltd Earnings Call

MELBOURNE Aug 26, 2019 (Thomson StreetEvents) -- Edited Transcript of Growthpoint Properties Australia Ltd earnings conference call or presentation Thursday, August 22, 2019 at 6:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Dion Andrews

Growthpoint Properties Australia - CFO & Company Secretary

* Michael Green

Growthpoint Properties Australia - CIO

* Timothy James Collyer

Growthpoint Properties Australia - MD & Director

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Conference Call Participants

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* Benjamin J. Brayshaw

JP Morgan Chase & Co, Research Division - Analyst

* Darren Leung

Macquarie Research - Analyst

* Edward Day

Moelis Australia Securities Pty Ltd, Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by and welcome to the Full Year Results Announcement 2019. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Mr. Timothy Collyer. Thank you. Please go ahead.

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [2]

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Thank you, everyone, for joining this conference call for the presentation of the Growthpoint Properties Australia annual results of the year ended 30th of June 2019. My name is Tim Collyer, the Managing Director of Growthpoint. With me today are Michael Green, Chief Investment Officer; and Dion Andrews, our Chief Financial Officer.

On 7th of August 2019, Growthpoint reached its 10th year of operations in Australia, a very proud achievement for the group. In this time, the group has delivered strong total returns to securityholders and has built a quality property portfolio and business platform overseen by a dedicated, stable and energetic Board and management team. The financial year '19 results were a continuation of this performance with the group very well positioned for future growth.

I'll now move to Slide 4. Our business strategy is clear and centers around what it is to own property to provide securityholders or the owners of the property with sustainable income returns and long-term capital appreciation from properties we own, develop and manage. We seek to invest in the best quality commercial real estate we can, given our cost of capital and goal to enhance earnings. When we look to maximizing value, we do this by maximizing income, one follows the other. We ask the question, how will the strategy to lease, refurbish, expand, develop, retain or divest the property increase property income or that of the group long term? Property rental income is our source of revenue, and we have a long track record of high portfolio occupancy. Our offering is quality accommodation, modern buildings with high green credentials that suit government and corporate tenants. We work diligently to develop a long-term relationship and to understand their business needs.

I'll turn to Slide 5 and the key highlights for financial year '19. We have ended financial year '19 in a better position than when we started. Two high-quality office properties at West Perth in WA and Newstead in Queensland have been acquired. We also took the opportunity to divest 2 noncore assets. We are well down the track of realizing the $350 million development pipeline with 2 projects under development and 1 industrial project under review. Our properties are performing well, and there has been 10% like-for-like valuation growth.

The $4 billion property portfolio has maintained high occupancy and a long WALE and is benefiting from growth in the office and industrial markets. We raised equity of $309 million in 2 issuances, which were oversubscribed, demonstrating strong demand from existing and new securityholders. Our gearing has been reduced to 30.1%, that's below the group's target range, placing the balance sheet in a good position for future growth. FFO was above guidance at $0.251 per security and the NTA growth has been strong at 10.3%.

I'll now hand over to Michael Green to take us through significant transactions and also to highlight where value is being created.

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Michael Green, Growthpoint Properties Australia - CIO [3]

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Thank you, Tim. Turning to Slide 6. An active 12 months of transactions paved the way for the group's strong share price growth of 14% and a total securityholder return for the year of 21%. After a considered period of reviewing the Perth office market, we made our first acquisition in October of a modern 100% government leased office building in West Perth. In December, we purchased the Bank of Queensland's headquarters building in Newstead, which is Growthpoint's largest single asset acquisition to date at a value of $250 million. Both targeted acquisitions exhibit the hallmark characteristics of Growthpoint's modern, highly green credentialed, well-leased office portfolio. The 2 modern office buildings were acquired at a collective value of $341 million and at an average acquisition yield of 6.4% and with an average weighted average lease expiry of 7.6 years.

In April, we divested $45 million of noncore real estate. Significantly, we also raised $309 million of oversubscribed equity, and we commenced funding over $200 million of development which will continue to promote the group's growth into the future.

Turning to Slide 7. Growthpoint's portfolio has had yet another year of leasing valuation growth with 10% like-for-like growth over the last 12 months. This has been primarily driven by market rent growth, 33 basis points of yield compression and development expenditure at Richmond's and Gepps Cross. The yield compression and market rental growth can be principally linked to our conscious decision to invest in the preferred sectors of office and industrial logistics, which both continued to outperform the retail sector over the last 12 months.-

Over the last 10 years, we have spent a lot of time reviewing various potential acquisitions, and typically, like with 75 Dorcas Street, South Melbourne, first consideration is the quality of the income and whether we believe that the property improvements, tenants and location can sustain and grow that income into the future. We've long held the belief that if you manage the income and grow it over time, the valuation growth will follow. Having recently extended the major tenant ANZ Bank's lease at 75 Dorcas Street for 6 years, we have seen the value appreciate. The valuation has increased $20 million over the last 6 months and 28% since acquiring the property 3 years ago.

Turning now to Slide 8. Other than making targeted acquisitions, another major focus of the group is to enhance the value of the asset that it already owns. Slide 8 provides 3 examples of assets which we are at very various stages of adding value. Botanicca 3, a former on grade car park and small office warehouse, is being developed into a state-of-the-art A-Grade 5 star Green Star office building, which is garnering strong interest from a number of major corporate tenants for their occupation requirements. The building is progressing well and is on track for completion in early 2020. Once complete and leased, the development will provide a yield on costs in excess of 7.5%, which is more attractive and accretive than if the property was acquired on the open market today.

The $54 million expansion of the new -- a new lease at Gepps Cross with Growthpoint's largest tenant, Woolworths, is also proceeding well and is on track for completion in July next year. Woolworths will commence the new 15-year lease across the whole facility from completion of the works, which are being rentalized at a yield of 6.75% and the valuation yield on completion is 5.25%. The expansion and lease reset provides strong benefit for both the group's profit and loss statement and the balance sheet.

We're also reviewing the potential redevelopment of our 25-hectare Broadmeadows Distribution Center, which Woolworths will vacate in February 2020. We are progressing our strategy for the start which can potentially house up to 120,000 square meters of logistics space, which would be approximately double the amount of space that currently exists on the site today. This redevelopment will be subject to both Growthpoint's Board and council approvals.

Valuation creation on behalf of our investors is something we've always focused on over the last 10 years at Growthpoint, and this has been translated into the group's ASX performance of 18.4% per annum total return for the last decade.

I'll now hand over to the Growthpoint's Chief Financial Officer, Dion Andrews, to provide an overview of the financial year '19 financial performance.

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [4]

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Thanks, Michael. First off, I would just like to say how pleased I am to be able to talk to you about another year of success at Growthpoint. Total securityholder returns have again outperformed and investors continue to favor our strategy as evidenced by the 2 well-supported equity raisings executed over the year. I'll start by providing some high-level detail of the FY '19 financial results and then review areas of interest regarding our capital management and the potential impact on the results of the group moving forwards.

Starting with the high-level overview on Slide 10. Net property income was $230 million, a 5.4% increase from the prior year. New acquisitions helped increase NPI growth along with a good contribution from like-for-like rent increases in the existing portfolio. Smaller increases in finance and operating costs help drive total funds from operation growth of 6.5%. This equated to FFO per security increasing to $0.251, a 0.4% increase from last year as there were more securities on issue due to the raising -- equity raisings conducted. FFO per security was also reduced somewhat due to an increase in income tax expense. Taxes elevated for the year as Growthpoint is acting as development manager at the Botanicca 3 property and earning profits in the company as a result. These profits will be distributed in future by a fully franked dividend. The development will complete in FY '20 and a similar level of tax is expected to be paid in that year. However, tax expense should then reduce and will not impact FY '21 and beyond unless Growthpoint acts -- elects to act as development manager on future projects.

These results allow Growthpoint to deliver distributions per security of $0.23, up 3.6% on last year and in line with our long-term target of growing distributions by 3% to 4% per annum.

Turning now to Slide 11. We see gearing reduce by 380 basis points once the $174 million was repaid from the equity raising launched in June 2019. This leaves gearing at 30.1%, below the target range of 35% to 45%. Our FY '20 forecast for FFO per security of at least $0.254 is not predicated on deploying any further funds. However, after allowing for the developments on foot that Michael spoke about, the group deployed circa $210 million of debt capacity at an additional cost of approximately 1.75% before a gearing of 35% would be reached. Deploying funds at this cost should make any acquisition that the group can execute on accretive to the FY '20 position.

The equity raising launched in June comprised a fully underwritten $150 million institutional placement and a securities purchase plan. Our major securityholder Growthpoint Properties of South Africa did not participate in this raising. This resulted in increasing the free float of the stock to approximately $1.3 billion and is expected to aid in liquidity and index waiving going forward. It was heartening to see both components that are raising so well supported. With the placement, we welcomed many new investors on to the register as well as receiving strong support from existing investors.

With the securities purchase plan, we increase the size from the original $15 million sought, so that all investors who applied could receive their maximum entitlement. These transactions have put the Growthpoint balance sheet in a healthy position as we move into FY '20.

On Slide 12, we show the growth in NTA per security was again robust with a 10.3% increase from 30 June 2018. The main component of the NTA increase was again property revaluation with the group's investment in the sought-after segments of office and industrial continuing to bear fruit. Cap rate compression, market rent growth and development investment all played their part in driving valuations higher. NTA growth per security is now up 62% over the last 5 years, and this, along with distributions provided over that period, has led to a 5-year return on equity of 112%.

Slide 13 provides some further detail on where our debt book sits. In May 2019, the group settled its second issuance into the USPP market raising AUD 161 million. These proceeds were used to repay the $150 million bridge loan we executed when acquiring the property in Newstead, Queensland. The impact of this transaction was to increase the weighted average debt maturity out to 4.6 years at 30 June up from 4.2 years at 31 December 2018. The 76% of debt that is hedged or fixed has a longer weighted average maturity of 5.6 years. The book is well balanced with approximately half the facilities being shorter-term bank debt with the 4 Aussie majors and the other half being longer-term long bank debt. The group continues to have access to new facilities in either segment should they be required to support the group's future growth.

Growthpoint also completed the reset of its interest rate swap book in June 2019 to take advantage of historically low interest rates. The impact of this was the lower all-in debt cost to circa 3.6% on a fully drawn basis for FY '20. Lower debt cost in FY '20 will help support our forecast distribution growth of 3.5% and the deployment of available headroom will help drive growth in FFO per security.

I'll now hand back to Tim to wrap up the presentation.

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [5]

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Thank you, Dion. To Slide 14, a summary of the strategy and outlook. Growthpoint is well positioned in respect of its balance sheet and financial position, but also being invested in the growth sectors of office and industrial logistics. The portfolio is in good shape at $4 billion, it's fully diversified. We have 98% occupancy and a 5-year WALE and quality tenants. So we are very well positioned in respect of the portfolio.

With the development pipeline, quality assets will be created for the group that will provide long-term income, whilst we have capacity to further build the portfolio and deploy capital into accretive acquisition. Our focus is still on tenants and occupancy and a sustainable income.

Our guidance for the financial year '20 is reaffirmed at FFO per security of at least $0.254 and a distribution of $0.238 per security, representing 3.5% growth over financial year '19.

Finally, on behalf of the Board and all our employees, I would like to thank our key stakeholders and those who have worked with and supported Growthpoint over the last 10 years. In particular, thank you to all GOZ securityholders and debt providers who have provided their capital to enable our business to grow.

We'd be now pleased to take your questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have a question from the line of Darren Leung from Macquarie.

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Darren Leung, Macquarie Research - Analyst [2]

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Just a few quick ones from me. One around your guidance of $0.254 a share. At the equity raising, there was an asset identified for approximately $50 million. Can you please give an update in relation to that acquisition?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [3]

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Yes. At the time -- thank you, Darren. Tim here. At the time of the equity raising, we were in exclusive due diligence in regard to that asset, and we identified that it was a suburban Sydney office building of value of about $50 million, that we concluded our negotiations and the vendor wasn't able to proceed with that transaction at this time. They have indicated, however, that it may be possible to complete that transaction later in the year. And so therefore, that forecast of $0.254 does not include that acquisition, but there may be potential for that acquisition later in this calendar year.

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Darren Leung, Macquarie Research - Analyst [4]

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What was the vendor's reason for not proceeding?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [5]

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They want to match more closely their cash flow and the proceeds -- reinvestment proceeds of the sale.

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Darren Leung, Macquarie Research - Analyst [6]

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Understand. But from your perspective or rather move theirs, were they happy with the pricing that you have offered them?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [7]

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Yes. The price is in agreement in terms of the sale agreement.

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Darren Leung, Macquarie Research - Analyst [8]

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Okay. And obviously, the market is subject to change, but what was passing yield on the $50 million for that asset?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [9]

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I prefer to announce that if the sale occurs, Darren.

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Darren Leung, Macquarie Research - Analyst [10]

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Understand. And my second question, in relation to the ADI stake a few months ago, there was an announcement from you guys which indicated that you had received inbound inquiry and explore the divestment of the stake. Can you please provide a bit more color around the background of that? How did it occur and what pricing and things like that?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [11]

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There was some inbound inquiry and we -- from parties and we put that to the test through a process and there were several parties asked to express interest on the basis -- there was a couple of parties expressing interest, so we had a wider audience. And no sale eventuated and therefore, we cleansed the market in respect of what happened there.

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Darren Leung, Macquarie Research - Analyst [12]

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Can you indicate what sort of parties they were? Are they listed equity investors or they...

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [13]

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No. I can't, Darren. Sorry.

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Darren Leung, Macquarie Research - Analyst [14]

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Okay. And then perhaps as a final question on Woolworths, Broadmeadows and I appreciate they're in different industrial markets, but one of your competitors recently re-signed long-term leases with a 35% to 40% rent-free incentive. What do you think the passing rents on an estate it it's build out here is versus the current Woolworths' rent pricing?

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Michael Green, Growthpoint Properties Australia - CIO [15]

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They're paying at the moment -- it's Michael here, Darren. They're paying around $100 a square meter for their current improvements. We're likely to modify those improvements for tenants coming forward, and we're also likely to build out the estate if it does proceed. And I'd suggest that rents for new pre-leases in the North are around $80 a square meter and for the retrofitted space, it's probably going to be a little bit lower than that. However, the retrofitted space you wouldn't expect to spend larger incentives on, that'd be more short-term combination.

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Darren Leung, Macquarie Research - Analyst [16]

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Understand. What's the average incentive on a 10-year deal in the northern market at the moment?

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Michael Green, Growthpoint Properties Australia - CIO [17]

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It's actually not that high because there hasn't been that much activity. It's more like 20%. So that activity is starting to build now with a number of other developers moving into the space. So (inaudible) recently started to develop some land up in Epping and a couple of other tracks are happening at the moment. So the incentives are a bit lower than the North -- a bit lower than the West, sorry, and also the competition is lower than the West, but the inquiry is starting to move to the North.

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Operator [18]

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The next question comes from the line of Ben Brayshaw from JPMorgan.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [19]

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Just had a couple of follow-up questions. Firstly, on Broadmeadows, could you perhaps just shed some more light on the budgeted costs that you would anticipate to reposition that asset? I can see on the presentation that you have an expectation that the end value could be in the order of $150 million. So I'm interested in how you think about the CapEx, including potential incentives, in order to reposition the asset and realize that valuation?

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Michael Green, Growthpoint Properties Australia - CIO [20]

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Ben, we're just -- Michael here. We're just in the process of evaluating that all at the moment. So we've got several consultants engaged, and we're examining the building costs, we're examining the design, et cetera. So that's something that we will be taking to our Board in the next few months. So we're not -- I can't really give you more color at this point, but I will be able to in probably 3 months’ time.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [21]

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Okay. Do you have an estimate in mind at the moment as to how much of the existing improvements are able to be re-purposed versus potentially those that may be demolished and obviously, would make way for new improvements on the site?

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Michael Green, Growthpoint Properties Australia - CIO [22]

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Yes. So the majority of what is in situ at the moment can be re-purposed, it will be reconfigured into smaller units. That's our thought at this time. Yet, with the sort of 20 -- a bit over 23% site coverage at the moment, there's still an excessive amount of land. And if you looked at where the building sits on the land, there's actually quite a lot of available land along the West and South-facing areas of the building. So that's what we're examining as to how we would stage the construction, what size of buildings would go along that site. And some of that will be pre-commitment led, and we are talking to a few parties at the moment for the balance of the land. So we'll see how those progress over the next couple of months, and then we will also look at what the preferred outcome is for the site, if they don't progress.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [23]

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Okay. And I think you mentioned earlier that Woolworths will vacate in Feb 2020. Will there be a termination payment or a bullet payment booked in FY '20 over and above the circa $100 a square meter in base rent which was agreed as part of the, I suppose, Woolworths lease modification that occurred over the last 12 months?

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [24]

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Yes. Ben, it's Dion here. Yes, we will be getting surrender payments. So when they leave in Feb, they will pay us 1 year's rent in outgoing and that will all be recognized in FY '20. Part of that was a deal to parlay into the Gepps Cross expansion where obviously we're not paying an incentive, we're spending $54 million and getting a 15-year reset. So that was the quid pro quo, if you like.

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Michael Green, Growthpoint Properties Australia - CIO [25]

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So essentially, the Broadmeadows income will come off and the new expanded Gepps Cross income will come on in 2021.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [26]

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Okay. So in other words, around $10 million from Broadmeadows will be the net income booked in 2020?

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [27]

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Slightly less. But...

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [28]

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You mean third-party with a surrender payment alone or all the income that will be received by the property in FY '20?

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [29]

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No. Total income?

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [30]

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Total income. So the surrender payment plus the...

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [31]

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We'll come back to you on that figure.

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [32]

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Exactly, yes, yes. And I don't know what the amount is. Sorry.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [33]

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No. It's all right. And just last question on Richmond. Are you able to talk about the level of inquiry and the demand you're seeing? And what's your sense of metropolitan office demand in Melbourne at the moment? Has it changed? Are you seeing much of a sign of, I suppose, any slowing in demand from tenants over the last few months, obviously, as the economy would seem to have slowed?

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Michael Green, Growthpoint Properties Australia - CIO [34]

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No. I think as the development progresses and we come closer and build forms, see a few images throughout the documentation that we are quite close to completing, the increasing inquiry has been quite pronounced. Through numerous inspections each week, we are putting out a number of proposals. So inquiry levels are quite healthy at the moment. Clearly, we'd like to convert those into an agreement for leases, which is what we're busily working on. I'd say a more broad statement on leasing inquiry across the country is that it's probably slightly diminished from what it was 6 months ago in response to the slowing down of the economy. And you are seeing a higher proportion of tenants re-sign where they are. So we've obviously been the beneficiary of that at a number of our sites. But specifically on Botanicca 3, we're actually quite happy with the level of inquiry we've got at the moment, just want to convert a few of them so that we can start announcing.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [35]

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Okay. And when you look at the, I suppose, the expiry profile or the take-up profile of those prospective tenants, what are your current expectations around the percentage income producing for that asset as you ramp up to achieve full stabilization? Could you talk about the next couple of years, please?

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Michael Green, Growthpoint Properties Australia - CIO [36]

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So within the next -- within this forecast period, so $0.254 guidance, FFO guidance, we don't have a lot forecast to be leased in that period. So we've got about 4,000 square meters of leasing to be undertaken in that period of time, which is not material from a completion date in February. From that point, we anticipate that by the end of FY '21, we will have the building filled up and I'll end with the inquiry we've got on the (inaudible).

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Operator [37]

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Any other further questions on the line? (Operator Instructions) And we have a question from the line of Edward Day from Moelis.

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Edward Day, Moelis Australia Securities Pty Ltd, Research Division - Research Analyst [38]

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Just wondering if you can perhaps breakout the like-for-like growth in FY '19 for office and industrial and just how that compared to your weighted average rent review?

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Michael Green, Growthpoint Properties Australia - CIO [39]

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Sure. So our like-for-like growth includes one-off income at the moment. So that was slightly inflated with the prior period, so it probably looks a little bit diminished. But the office like-for-like growth was 1.9% and the industrial was 1.4%. And if you exclude the one-off income in that period, the office would have been 2.7% and the industrial would have been 3.1%. Weighted average rent review across the portfolio is 3.3% and memory, in the industrial sector, it's 2.8% and office is 3.6%.

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Edward Day, Moelis Australia Securities Pty Ltd, Research Division - Research Analyst [40]

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Yes. So the one-off makes most of that difference there. What are you assuming in your FY '20 guidance?

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Michael Green, Growthpoint Properties Australia - CIO [41]

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We're assuming a similar level going forward.

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [42]

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Like-for-like.

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Michael Green, Growthpoint Properties Australia - CIO [43]

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Like-for-like, yes.

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Dion Andrews, Growthpoint Properties Australia - CFO & Company Secretary [44]

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Yes.

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Edward Day, Moelis Australia Securities Pty Ltd, Research Division - Research Analyst [45]

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Sort of that 3% level?

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Michael Green, Growthpoint Properties Australia - CIO [46]

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Yes, correct.

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Operator [47]

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(Operator Instructions) We have another question from Ben Brayshaw from JPMorgan.

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Benjamin J. Brayshaw, JP Morgan Chase & Co, Research Division - Analyst [48]

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Just further to your comments on Growthpoint South Africa choosing not to participate in the recent capital raise, your slide in the presentation shows considerable increase in free float over the last 12 months. Are you able to talk about -- or do you have any, I suppose, expectations around whether Growthpoint South Africa may choose to again not participate if the group is to look to tap the market at some point again in the future? Just interested in your thoughts on that position.

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Timothy James Collyer, Growthpoint Properties Australia - MD & Director [49]

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Okay. I mean certainly, I can't personally speak for Growthpoint Properties of South Africa. I can observe a couple of things though. So the decision to undertake a placement and not a rights offer in June was a Board decision, Growthpoint Properties Australia Board decision. And obviously, we have 3 South African directors. So it wasn't a case of, is Growthpoint going to participate in capital raising? The Board itself made the decision to do the placement. And the Board saw that there was benefits in bringing new investors into the group and obviously, increasing the market free float and so that was the decision taken.

If we go back 6 months before Growthpoint of South Africa participated in the rights offer and they took up their pro rata entitlement in that. So that was a significant component of the rights offer. So I think it'd be fair to say that the Board as a whole is cognizant that it's a good thing to improve liquidity where we can. And from time to time, Growthpoint itself, obviously, would like to participate. So it's probably a bit of a balance. They have said for a long time and publicly as well that they're happy with their level of ownership and that if we were to undertake a significant transaction or a transformational transaction, they would choose to go as low as 50.1% and have ultimate ownership and legal control.

So I think as a balance, there's various ownership between 50.1% and where they are now at 62%, but the decision to undertake the placement was really the Growthpoint Properties Australia Board decision and that decision -- that was a good one because the placement went very well and there was very strong demand from the institutional market.

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Operator [50]

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(Operator Instructions) There are no further questions at this time. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating, you may all disconnect.