GPT 2010 Annual Review
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GPT ANNUAL REVIEW 2010 we create and sustain environments that enrich people’s lives. “GPT owns and actively manages a diversified portfolio of quality Australian property assets. It is our purpose to deliver long term benefits to our Securityholders by creating and sustaining environments that will enrich people’s lives.” 2010 GPT ANNUAL REVIEW About this report GPT’s Annual Review includes financial GPT has engaged Ernst & Young to Global Reporting Initiative’s (GRI) G3 summaries derived from the 2010 undertake limited assurance procedures sustainability reporting guidelines. Annual Financial Report and 2010 Annual over a number of non-financial key Ernst & Young’s assurance statement is Results announcement. GPT’s 2010 performance indicators that the company expected to be available on GPT’s website Annual Financial Report is available on deems material to its operations. In in early April together with GPT’s full GPT’s website www.gpt.com.au or on addition, Ernst & Young will be carrying sustainability disclosures. request from the GPT Securityholder out a third party verification of GPT’s Centre on freecall 1800 025 095. application level against the AGM info The last couple of years have been YEAR OF REINVIGORATION of the balance sheet also removed the GPT’sdisappointing Annual Generalfor investors, Meeting however will 2011 Calendar Group’s covenant and refinancing risks. On 6 August 2009, I presented the vision bewe heldhave at made The Westinsignificant in Sydney, progress New in MONTH ACTIVITY GPT now has no material refinancing Southstabilising Wales GPT on inWednesday 2009. We ended 11 May the 2011 for a reinvigorated GPT firmly focused on needs until late 2012 and has gearing 11 May Annual General Meeting commencingyear with a business at 2pm. which is clean, a future in Australia. The refined strategy, of approximately 23.5% at December, transparent and in good shape for the basedEnd May on active ownership of AustralianMarch Quarter amongst Distribution the lowest Payment in the sector. future.We encourage Building Securityholders on the progress to achieved attend retail, office and industrial/business August 2011 InterimThe Results Group Announcement has now exited the majority bythe the Annual GPT teamGeneral early Meeting. in 2009, The our AGM park real estate, is aimed at increasing of non–core portfolios and offshore prioritywill be webcast since my via appointment GPT’s website in May (www. has returnsEnd September to Securityholders, capitalising June Quarter Distribution Payment positions. beengpt.com.au) the restoration for those of Securityholders confidence and onEnd the November Group’s competitive advantages September of Quarter Distribution Payment trustwho are in GPT. unable to attend in person. scale, quality, diversity and culture, and Asset sales announced in 2009 total Additionally, the Chairman’s address is improving the security price over the next $1.1 billion and include: immediatelyOver the course announced of the year, to the GPT ASX. has five years. made progress on a number of key The resort assets, excluding Ayers initiatives that have materially enhanced GPT’s strategy includes the divestment of Rock Resort; its offshore and the Group’s position and outlook. It has The Group’s 80% interest in the been a year of reinvigoration, returning non–core investments. The strategy Hamburg Trust business; builds on the Group’s strong track record, the Group to what it does best: owning, Homemaker City Windsor, Cannon Hill whilst leveraging GPT’s demonstrated managing and developing high quality & Mt Gravatt; Australian ability to diversify its capital sources Floreat Forum Shopping Centre; real estate. through its successful wholesale funds management business. The strategy European warehoused assets; The team is proud of its scorecard, reasserts the principles of innovation, Four Points by Sheraton Hotel in achieving the following excellence and governance established by Sydney; and in 2009: the late Dick Dusseldorp, the founder of The GPT Halverton business. GPT almost 40 years ago. In August, GPT finalised its exit from SIGNIFICANT PROGRESS the European component of its Joint ON STRATEGY Venture with Babcock & Brown by way of a Dividend In Specie of shares in In June 2009, GPT raised $1.7 billion BGP Holdings, to GPT Securityholders. through a 1:1 entitlement offer to The European Joint Venture comprised institutional and retail Securityholders GPT’s ordinary equity and preferred and an institutional placement. The equity interests in BGP Investment proceeds were used to reduce GPT’s debt, Sàrl, a Luxembourg based company significantly strengthen the balance sheet that indirectly owns the Joint Venture’s and improve liquidity. The recapitalisation European investments. The disposal of In 2010 GPT completed a $470 million expansion of Charlestown Square NSW which increased the size of the centre to 88,000 sqm. 4 2010 Highlights 5 GPT’s Business 5 Strategy 6 Chairman’s Report 7 CEO Report 11 GPT’s People 12 Investment Portfolio 19 Funds Management 21 Non Core Portfolio 22 Development 25 Sustainability 27 Board and Executives 29 Remuneration Report 31 Financial Summary 33 Shareholder Information 34 Corporate Directory 2010 GPT ANNUAL REVIEW AUSTRALIA SQUARE, NSW 2010 Highlights 2010 Highlights Realised operating income Average debt cost reduced by 0.8% c.$800 million raised in wholesale $410 million (up 9%) compared with 2010 guidance, funds including GPT selldown Comparable income growth 3.2% credit rating increased to Sale of Ayers Rock Resort and A- (S&P) and A3 (Moody’s) Charlestown Square expansion US Seniors Housing Portfolio completed $2 billion new and extended debt Dow Jones Sustainability Index Real facilities, with average debt maturity Estate Leader for the second year in extended to 5 years a row Results Summary Year ended 31 December 2010 2009 Variance Realised Operating Income(1) $410.0m $375.8m 9% Net Profit After Tax $707.3m ($1,070.6)m 166% Net Tangible Assets per Security (NTA) $3.60 $3.46 4% Distribution per Ordinary Security 16.3 cents 22.5 cents 28% Total Assets $9.8bn $9.2bn 6% Total Borrowings $2.5bn $2.2bn 12% Gearing(2) 24.9% 23.5% 6% (1) Represents net profit after interest and tax, but prior to the payment of distribution on exchangeable securities on issue and statutory (non cash) adjustments. (2) Based on net debt. Portfolio Real estate December 2010 December 2009 investments 7% 6% 4% 51% 7% 50% 10% Retail 8% Retail Office Office Industrial Industrial 8% GWOF 9% GWOF GWSCF GWSCF Non-core Non-core 20% 20% Income December 2010 December 2009 10% 8% 45% 48% Retail 17% Retail 16% Office Office Industrial Industrial Funds Funds 9% Management 8% Management Non-core Non-core 20% 19% GPT’s Business The GPT Group (GPT) is an active Business model owner and manager of a 5 $9.8 billion diversified portfolio of GPT’s business model is based on quality Australian retail, office and being an active owner and manager industrial property assets. of high quality property. The Group owns, and has created, Development is a core part of some of Australia’s most iconic real GPT’s business, focused around estate assets, including the MLC enhancement of existing assets Centre, Australia Square, Rouse Hill to ensure their relevance and Town Centre and Melbourne Central. sustainability in the long term. GPT is listed on the Australian Stock This is complemented by funds Exchange (ASX) and, with a market management. The GPT funds capitalisation of approximately $5.8b, management platform comprises is in the top 50 ASX listed companies. two wholesale funds focused on the retail and office sectors with a Over 55% of GPT’s security holders are combined $5.2 billion of funds under based in Australia. management. This provides GPT with GPT’s 434 people are predominantly an important source of income through located in Sydney and Melbourne. The management fees and distributions. teams within the Group’s shopping Furthermore, the funds provide a centres extend GPT’s reach along the diversified source of capital to the east coast of Australia and into Darwin. Group. Heritage Values Founded by one of Australia’s most GPT’s values of integrity, empowerment visionary entrepreneurs, the late Dick and accountability, excellence and Dusseldorp, GPT has 40 years of heritage courage underpin its focus to create with a culture focused on innovation, communities of interest with each of its excellence, corporate governance and stakeholders. business ethics. CHARLESTOWN SQUARE, NSW Strategy The GPT strategy picture Our Purpose We create and sustain environments GPT’s strategy is simple – that enrich people’s lives GPT is focused on owning and actively managing Our Strategy quality Australian We own and actively manage a diversified property assets and GPT portfolio of quality Australian property assets, delivering long term benefits is resolutely determined to deliver superior risk adjusted returns to For our investors... For our customers... security holders. We are a secure, reliable investment We provide well-designed, well-managed, targeting superior risk-adjusted sustainable properties that create great returns over time customer experiences Since 2009, GPT has 2010 been reinvigorating its business around this 9Total returns >9% per annum GPT Our Goals 9Average EPS Growth > CPI +1% per annum(1) central focus. 9Leading relative Total Shareholder Return (TSR) (1) EPS defined as Realised Operating Income (ROI) per ordinary security ANNUAL REVIEW Chairman’s Report “GPT is focused on improving returns to its security holders through the performance of its core property portfolio, returns from its funds management business, the delivery of successful developments and optimisation of all aspects of the organisation.” ROB FERGUSON, CHAIRMAN 2010 was a turn around year for in Australia, enabled the Group’s core GPT completed a 1:5 security GPT following a period of significant business to perform relatively well in consolidation in May 2010, which was transformation in 2009.