GMT Annual Meeting of Unitholders | New Zealand
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GMT Annual Meeting of Unitholders

Friday, 8 July 2022

Good afternoon everyone and welcome to this annual meeting of Unitholders. I’m Keith Smith, Independent Director and Chair of Goodman (NZ) Limited, the Manager of Goodman Property Trust.

Alexandra Park is a new venue for us and it’s a pleasure to be here today.

The meeting has a hybrid format, with investors either attending in person or participating through a live webcast. For those in the room, please be aware there are cameras and audio equipment streaming proceedings.

Today’s presentations will focus on our investment strategy for the Trust and how we deliver sustainable long-term growth for the benefit of all our stakeholders. We will also address our Board renewal programme and CEO succession plan.

As such, the meeting will consider one ordinary resolution relating to my re-appointment as an Independent Director. I have advised the Board that this will be my final term, and that I intend to retire once the transition to a new Chief Executive Officer is complete, and a replacement Director has been appointed.

Before we proceed, I would like to cover off certain health and safety practices relating to the use of this venue.

In the unlikely event of an emergency, you will be required to evacuate to a designated safe zone. Should this occur please exit the room through the doors to my left or those to the rear of this room, following the directions of the venue staff to the outside assembly area.


A key difference between the physical meeting and the live webcast is in the way questions and voting are dealt with.

For Unitholders participating through the live webcast, polling has now opened. Votes can be cast by selecting the polling icon on the instruction screen and following the prompts. Votes can be amended up until the time the poll closes, which is at the conclusion of the meeting.

Now the meeting has started, questions can also be submitted through the webcast portal. We have allocated time at the end of the presentations to answer these, but they can be submitted at any stage. 

If you experience any technical issues casting your vote or submitting questions, please refer to the online help or the instructions provided in the Virtual Meeting Guide that accompanied the Notice of Meeting.


I would now like to introduce the members of the Board and executives of the Manager who are in attendance today.

Joining me we have David Gibson, Laurissa Cooney, Andy Eakin, Leonie Freeman and John Dakin. Greg Goodman and Phil Pryke join us online.

On behalf of the Board I’d also like to acknowledge and congratulate James Spence, who will replace John as CEO from 2023.

After more than 18 years in the role, John is stepping down at the end of the year. He is not retiring however and will continue as a Director of the Manager.

James is a highly capable leader who has extensive property and corporate experience, having worked in both Europe and New Zealand in investment management roles with Goodman. He has worked closely with John and the Board over the last five years, leading the property services team and implementing the wider business strategy for GMT.

James is in the audience, and you’ll have opportunity to hear from him later in the meeting.


In addition to the directors and executives present today, we also have representatives of the Trustee and other advisors present. These representatives will be available to answer any questions if required.


I’d now like to work through some of the formalities of an annual meeting.

I’d like it noted that, in accordance with the Trust Deed, I have been nominated by the Trustee to act as Chair of this meeting and I have now tabled this nomination.

I also confirm that the meeting has been properly convened and notice has been formally given to Unitholders.

And finally, I can confirm that we have satisfied the requirements for a quorum.

Now the formalities have been addressed we can proceed.


The strength of GMT’s recent operating results has reinforced the value of an investment strategy focused on urban logistics in Auckland. The continued execution of this strategy has been supported by a rapidly growing digital economy and sustained customer demand for warehouse and logistics space.

The Board is extremely satisfied with the performance of the Trust. High occupancy levels, positive leasing results, new development completions and strategic acquisitions have all contributed to the 3% increase in operating earnings before tax. A substantial portfolio revaluation gain has also underpinned a record statutory profit.

With GMT outperforming its benchmark of listed peers by around 8% on a total return basis, a performance fee of $15.7 million was earned by the Manager this year.

The fee is excluded from operating earnings as the Trust Deed requires it to be reinvested in new GMT units. With a cornerstone unitholding of around 25% the requirement reinforces the already strong alignment of interests between the Manager, Goodman Group and other Unitholders.


Cash earnings, a non-GAAP financial measure, is our preferred measure of underlying operating performance of the business.

The Trust recorded a 6.5% increase in cash earnings this year to $93.1 million, and paid cash distributions of 5.5 cents per unit. The level of distribution representing around 83% of GMT’s cash earnings.

Guidance for FY23 reflects a 7% increase is cash distributions, to around 5.9 cents per unit, approximately 85% of forecast cash earnings.

At yesterday’s closing price of around $2.05 per unit, this represents a 2.9% cash yield to investors. As a listed PIE, GMT’s distributions are tax paid for individual, New Zealand resident investors.

Recognising that today’s economic outlook is more uncertain and that capital markets are volatile, our guidance for FY23 is subject to there being no material change in operating conditions or other adverse events. 


Strategies to deal with the disruption of COVID-19 evolved over the last 12 months as the public health response to the virus changed.

New technologies and agile work practices enabled our people to work through the various Alert Level and Traffic Light restrictions. New health and safety measures were applied to our worksites and governed our interactions with customers, contractors, and other stakeholders. These precautions protected everyone’s wellbeing.

While the pandemic has brought challenges, it has also accelerated the key structural trends that are contributing to GMT’s strong results. The expansion of e-commerce is a positive trend for the Trust with our customers adapting their operations to incorporate the rapid growth in online retail.

GMT’s $4.8 billion property portfolio provides essential logistics infrastructure for these companies, facilitating the storage and distribution of goods and materials.

The majority of the Trust’s customers have adapted to the more challenging operating environment. New leasing and development enquiries remain steady and, with the portfolio at capacity, GMT’s substantial rental cashflows are contracted well into the future.


Adhering to our business strategy also means we’ve continued to make progress toward our 2025 sustainability objectives. These goals extend across the business, encompassing our corporate operations, development and investment activity, our people and our community initiatives.

Prioritising carbon reduction and management projects has been reflected in lower emissions and an improved climate score from CDP, a global disclosure system for environmental reporting.

The CDP rating of B and the assurance provided by Toitū carbonzero certification for our business operations show we are making positive and credible progress toward our emission reduction targets.

Our reporting has also been extended to include voluntary disclosures on embodied carbon within our development projects. It’s an area of real opportunity with lower carbon materials and building systems being developed to reduce the high level of emissions generated by construction activity.

While we are focused on carbon measurement and reduction, the purchase of New Zealand and internationally sourced carbon credits to offset both operational and development related emissions reinforces our carbon neutral commitment.

A sustainable capital structure, which features low gearing and a diverse range of funding sources, provides GMT with the financial resilience to withstand a more challenging operating environment.

The strong liquidity position has enabled the team to secure new investment opportunities and commit to development projects that are expected to drive GMT’s future growth.

The Board continued its disciplined capital management approach with a new wholesale bond in December 2021, the launch of a Sustainable Finance Framework in March 2022 and subsequent Green Bond issue in April 2022.

I’d now like to pass over to Andy Eakin, who will continue the financial overview and provide more commentary on our sustainable finance initiatives.


Thank you, Keith, and good afternoon everyone.

GMT has continued to demonstrate that it is a robust and resilient property business, delivering an outstanding operating performance despite further disruption from COVID.

We have continued to be successful by remaining agile, embracing opportunities and making positive changes to our business.


Focusing our investment strategy exclusively on the Auckland industrial sector more than five years ago recognised the emerging trends and unique structural drivers that have made this New Zealand’s strongest performing commercial real estate market.

Demographic changes, regional growth, and the rapid expansion of online retailing have all contributed to the unprecedented level of demand for well-located and operationally efficient urban logistics space across the city.

The unique demand drivers in our preferred property class are being reflected in high occupancy levels, sustained rental growth and an increased level of development activity for the Trust.

These factors, together with the additional revenue from recent acquisitions, have offset the impact of redevelopment projects and contributed to the 2.7% increase in net rental income, to over $157 million.

The additional income has driven a corresponding increase in operating earnings, to $118.3 million before tax and $99.3 million after-tax.

A higher level of new leasing and development activity this year has provided additional tax deductions for GMT, contributing to a lower effective tax rate of just 16.1%.  A positive feature of the PIE regime means that, in effect, these deductions are passed through to our Unitholders, the majority of whom have no further tax to pay on the distributions they receive.

A substantial portfolio revaluation is the main reconciling item between the Trust’s operating result and its after tax statutory profit of $748.6 million.

The increase in the value of the portfolio, contributed $660.4 million of fair value gains to this year’s record profit.

The revaluation reflects a combination of strong property market fundamentals and increased investor demand for high-quality Auckland industrial assets, particularly in the first six months of the financial year.

The portfolio capitalisation rate strengthened 50 bps, to an average 4.2% at our interim balance date and was unchanged at year end. New leasing and market rental growth were the main drivers of the further lift in property values over the second half of the year.

The revaluation also underpinned the 23% increase in net tangible asset backing, to around $2.60 per unit at 31 March 2022.


Maintaining high occupancy and customer retention levels is a key driver of our success. The strength of our customers’ businesses underpins our own financial performance, providing the strong rental cashflows that drive growth in both earnings and distributions.

An occupancy rate of over 99% and weighted average lease term of more than six years means that these secure rental streams are contracted well into the future.

The Trust has always been managed prudently with a well-capitalised balance sheet providing added resilience against the economic shocks and market disruptions that can impact property values.

At 31 March 2022, the Trust had a loan to value ratio of 21.3%. The level of gearing is at the lower end of the Board's 20% to 30% preferred medium-term range, and well below the 50% maximum allowed under the Trust Deed and debt facility covenants.

GMT’s financial strength is also reflected in its BBB investment grade credit rating from S&P Global Ratings. The assessment has remained stable since it was first assigned in 2009.

The Trust’s debt is rated one notch higher at BBB+, benefitting from the security granted over the property assets.


New capital management initiatives have provided additional liquidity and further extended the range of funding sources available to the Trust.

The successful issue of $200 million of fixed rate, six-year bonds to wholesale investors in December 2021 was the largest of these initiatives. The bonds pay an annual interest rate of around 3.7%.

The establishment of a Sustainable Finance Framework in March 2022 provided a pathway to further diversify our capital structure. The new Framework sets out how GMT intends to issue or enter into bonds and loans to fund new sustainable assets and achieve our broader sustainability commitments.

The inaugural issue of $150 million of fixed rate, five-year, green bonds was made on 14 April 2022, following the Trust's financial year end. The proceeds from the issue are allocated to the development of new properties targeting a 5 Green Star Built rating from the New Zealand Green Building Council.

With increasing numbers of investors now prioritising sustainable investments, in time green bonds are expected to attract a pricing premium over ordinary debt issues, contributing to lower interest costs for the Trust.

The margin on the new bonds was just 110 bps above the corresponding swap rate, with the annual interest rate set at 4.74%.

In addition to the new bond issues, we have also refinanced and extended the Trust’s syndicated bank facility. Renewed on competitive terms, the size of the facility was increased from $400 million to $570 million and in addition, a new $100 million facility has been established with BNZ. The extra liquidity these facilities provide enables GMT to continue to take advantage of new development and investment opportunities as they arise.

While the impacts of COVID have tested many companies over recent years, the consistent operating performance of the Trust has demonstrated the robustness of our business.

A more challenging operating outlook doesn’t change our approach. We will continue to act prudently and remain focused on the delivery of sustainable, long-term results.

I’ll now hand over to John who will continue with the operational review.


Thanks Andy, and good afternoon, everyone.

At recent meetings I’ve spoken about our investment strategy and how the focus on urban logistics is positive for our business and for our customers. This year I want to turn the spotlight on our customers and the value of the long-term relationships we have fostered and will continue to build with these companies.

As Andy noted earlier, it is the strength of our customers’ businesses and their growing demand for space that underpins our own success.

In my presentation today I’ll also explain how we are making our development programme more sustainable, with Green Star rated, carbon neutral projects.


GMT has a substantial portfolio, totalling almost 1.1 million sqm of warehouse and logistics space. The scale of the portfolio and our development capability means we have a warehousing property solution for most businesses.

The current slide includes a satellite image of Auckland. The map highlights the density of the metropolitan area and the city’s geographic constraints.

Overlaid on the map are our estates. There are 15 in all, an increase from last year with complementary acquisitions in Albany, Mangere, Mt Wellington and Penrose since then.

You’ll note the location of our properties relative to key transport infrastructure such as the airport, port, motorway network and rail corridor. With a rapidly growing digital economy, easy access and proximity to consumers are important factors in the property decisions of many of our customers. It simplifies distribution and creates efficiencies that leverage the growth in e-commerce.


There are over 220 customers that lease our properties, and we estimate that combined, they employ around 10,000 Aucklanders. These businesses represent a range of industries but are predominantly focused on warehousing and logistics.

Our largest 20 customers provide almost half of GMT’s net annual income. The top eight are shown on screen now and you’ll note that the list includes many leading national and international businesses.

The largest of these is NZ Post.

Our relationship with NZ Post stretches back to 2007, when the Trust delivered its first facility for the customer at Highbrook Business Park in East Tamaki. Since then, we have developed additional facilities, establishing a business partnership that now encompasses almost 110,000 sqm of warehouse space.

The relationship continues to grow with two large, parcel processing facilities to be developed for NZ Post at our sites in Mt Roskill and Albany. The Mt Roskill development is already under way, while the second project in Albany has a longer lead time and will commence once existing leases have expired in 2023.


Both the NZ Post commitments are reflected in our development workbook which includes $426 million (total project cost) of work in progress.  Now 100% pre-committed, these seven developments will add almost 100,000 sqm of net lettable area to the portfolio. Representing about 9% of the current portfolio, the additional space will generate over $21 million in annual rental income when completed.

It’s an increased level of development activity, with the new facilities for NZ Post two of the largest projects.

NZ Post is a business that has adapted to the new digital age and the huge demand for its logistics and fulfillment services created by the rapid growth in e-commerce. More than 80 million parcels were delivered in 2020 and the trend is expected to continue, with the customer investing substantially in its network infrastructure over the next ten years.

Bringing forward our redevelopment plans for Roma Road in Mt Roskill, and acquiring the Bush Road property in Albany has facilitated the latest development agreements with NZ Post.

The location of these brownfield sites close to consumers provides competitive advantages for NZ Post, minimising travel distances and transport-related emissions while improving the delivery times of its fulfilment services.

A commitment to sustainable business ensures that both these projects, like all our new developments, will be carbon neutral. This means using lower emission building materials and systems in the construction process, minimising waste, and offsetting the residual carbon embodied in the building structure.

To ensure our facilities are industry leading, we are also targeting a minimum 5 Green Star Built rating for all new projects.

The certification, from the New Zealand Green Building Council, assesses the sustainability attributes of the project, and the quality of the workspaces it provides. A 5 Green Star Built rating reflects New Zealand excellence.

The current slide highlights the typical features of a green star rated industrial building.

Similar in size at around 17,700 sqm, both NZ Post developments will incorporate many of these design features. The new parcel processing facilities will be highly sustainable and energy efficient, with high quality workspaces designed around the wellbeing of the occupants.

To align with its own sustainability commitments NZ Post is adding roof top solar energy systems and including charging infrastructure for a growing fleet of electric trucks and vans.

NZ Post will also be investing in new automated sorting equipment in its warehouses, to extend the efficiency of its distribution network. The smart technology is easily scalable and will allow them to accommodate the expected growth in parcel volumes over the next 20 years.

Customers investing in automation and sophisticated warehouse management systems is a growing trend across our portfolio and globally. It’s a feature of the highly constrained leasing market and reflects inflationary pressures, as businesses mitigate the impact of rising costs through better space utilisation.

Construction is now well advanced on the NZ Post facility at Roma Road, the first of four warehouses planned at the Mt Roskill estate. Located alongside SH20 many of you will have driven past and seen the transformation firsthand.

An urban ngahere (forest) will improve the biodiversity and resilience of the natural landscape, replacing the ageing exotic pines that used to line the urban boundary of the property.

Native planting is a feature of our larger estates, and we are currently in the process of planting 3,600 shrubs on undevelopable land at our Highbrook estate. 


Mainfreight is another substantial business that we have extended our relationship with over the last 18 months. To support its growth, the global logistics operator has committed to a long-term lease over a new twin-warehouse facility to be built at Favona Road in South Auckland.  

Formerly a commercial glasshouse and market garden, the 6.1-hectare property is being redeveloped into a 36,000 sqm, supersite for the supply chain service provider.

It will be Mainfreight’s largest New Zealand facility, with the company expected to become GMT’s second largest customer when the project completes in mid-2023.

With the development programme increasingly focused on the regeneration of our non-core assets, over 70% of the current workbook is being constructed on brownfield sites like this.  

The redevelopment of these properties into modern and sustainable distribution facilities, makes use of existing infrastructure and improves the efficiency of Auckland’s industrial building stock. Through intensification of use it also helps limit urban sprawl, while the recycling of demolition materials minimises landfill waste.

The deconstruction of the 40,000 sqm glasshouse structure included the sorting and transport of the metal framing, glass panels and concrete to resource recovery operators. In total there were more than 260 truckloads, over 2,500 tonnes of material, recovered from the site.

Around 90% of the demolition material at Favona Road, was recycled.  Diverting this volume of waste from landfill was an impressive result that illustrates our absolute commitment to sustainable development.


The NZ Post and Mainfreight examples demonstrate the importance of GMT’s development capability in extending our customer relationships.  With the remaining land at Highbrook Business Park now fully allocated, we’re increasing our investment in strategic locations to accommodate the rapid growth in demand for urban logistics space.

We’ve made six acquisitions since 31 March 2021. With a combined acquisition cost of $300 million, these properties were acquired for their future development potential and the value-add opportunity they provide.

The largest of the transactions was the acquisition of 34 hectares of light industrial zoned land, adjoining the Villa Maria winery in Māngere. The $75 million purchase will replenish the Trust’s landbank and is expected to support the development of up to 120,000 sqm of new warehouse and logistics space over time.

The balance of the acquisitions are 94% leased, with existing improvements providing steady holding income. These new properties have a combined site area of 15.1 hectares and offer a range of intermediate and longer-term redevelopment options that will contribute to GMT’s future growth.


The Goodman Foundation, has always been a unique point of difference with other listed property entities. An initiative of the Manager, it’s an area of our business that provides a sense of pride for our team and is especially rewarding for those involved.

Many of you will have heard me talk previously about KiwiHarvest.

It is the largest of our community partnerships, with the rent and operating costs of its distribution centre at Highbrook paid by the Goodman Foundation.

With its focus on food rescue, KiwiHarvest is an organisation that is having a real impact in our communities. By collecting the large volumes of good food destined for land fill and redirecting it to those in need, it is contributing directly to better social and environmental outcomes.

In a year when food insecurity was exacerbated by the impacts of the pandemic and rising inflation, KiwiHarvest redistributed a record 1.8 million kgs of food to foodbanks and other social agencies. Equivalent to over 5.1 million meals it included surplus produce, protein, mislabelled goods and grocery items approaching expiry.

Our support of KiwiHarvest as a founding partner is one of the many social initiatives that are making a tangible and sustainable difference to people’s lives in the locations where we invest.

If you’d like to learn more, our recent annual report includes further detail on the work of the Goodman Foundation and the goals of our wider sustainability programme. The report can be found online, and hard copies are available at the registration desk.


As many of you will know, it was announced in early June that I’ll be stepping down as CEO at the end of the year but continuing as an executive Director. I will also be continuing in my role as a Goodman Executive, contributing to the global group with new responsibilities.

It has been a privilege to have led this business over the last 18 years and I’m proud of the growth and success of GMT over this time.

With GMT repositioned and delivering strong results, the time is right for a new leader to oversee the next growth phase.

James Spence has been an outstanding performer for Goodman and is an extremely capable replacement. I’m especially proud that my successor is a home-grown Kiwi talent from within Goodman.

James takes on the new role with my full support and the expectation that he will continue to work in the best interest of all our stakeholders.

Before we move on to questions, I’d like to invite James to briefly address the meeting.