16 August 2022
Appendix 4E
Growthpoint Properties Australia results for the year ended 30 June 2022
Results for announcement to the market
Revenue from ordinary activities
Profit from ordinary activities after tax attributable to Securityholders 1
Net profit attributable to Securityholders
Distribution to Securityholders
Distributions
Final distribution payable on 31 August 2022
Interim distribution paid on 28 February 2022
Net tangible assets per stapled security
Net tangible assets per stapled security
Year ended
30-Jun-22
Year ended
30-Jun-21
Change
$m
311.5
214.0
459.2
160.6
$m
294.2
198.3
553.2
154.4
%
5.9
7.9
(17.0)
4.0
Amount per
security/unit
cents
10.40
10.40
Franked
amount per
security
%
-
-
Record date
30-Jun-22
31-Dec-21
30-Jun-22
$
4.56
30-Jun-21
$
4.17
Change
%
9.4
Additional information regarding the results for the year is contained in the FY22 annual report and the FY22 results
presentation released to the Australian Securities Exchange (ASX) on the date of this announcement.
Entities over which control was gained or lost during the year
Growthpoint Properties Australia established the following entities during the year:
Entity
Bowes Street Property Trust
Camberwell Road Property Trust
Growthpoint Funds Management Limited
Growthpoint Holding Trust No.1
Growthpoint Nominees (Aust) 3 Pty Limited
Growthpoint Nominees (Aust) 4 Pty Limited
Thomas Street Property Trust
Date Control Gained
29 November 2021
21 December 2021
26 October 2021
26 November 2021
25 November 2021
19 May 2022
20 May 2022
1 In our FY22 annual report and the FY22 presentation, profit from ordinary activities after tax attributable to Securityholders is referred to as funds
from operations (FFO).
Growthpoint Properties Australia Trust ARSN 120 121 002
Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409
Details of associates and joint venture entities
Nil.
Distribution Reinvestment Plan
The Distribution Reinvestment Plan remains suspended and will not be in operation for the final distribution payment.
Audit
The above information is based on the financial report contained within the FY22 annual report which has been
audited and contains an independent auditor’s report.
The remaining disclosures required to comply with ASX Listing Rule 4.3A are contained within the FY22 annual report.
This announcement was authorised for release by Growthpoint’s Board of Directors.
For further information, please contact:
Kirsty Collins
Investor Relations and Communications Manager
Telephone: +61 3 8681 2933
Growthpoint Properties Australia
Level 31, 35 Collins St, Melbourne, VIC 3000
growthpoint.com.au
About Growthpoint
Growthpoint provides space for you and your business to thrive. For more than 13 years, we’ve been investing in high-quality
industrial and office properties across Australia. Today, we own and manage 59 properties, valued at approximately $5.3 billion.2
We actively manage our portfolio. We invest in our existing properties, ensuring they meet our tenants’ needs now and into the
future. We are also focused on growing our property portfolio.
We are committed to operating in a sustainable way and reducing our impact on the environment. We are targeting net zero by
2025.
Growthpoint Properties Australia (ASX: GOZ) is a real estate investment trust (REIT), listed on the ASX, and is part of the
S&P/ASX 200. Moody’s has issued us with an investment-grade rating of Baa2 for domestic senior secured debt.
2 Valuations as at 30 June 2022. Includes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
Growthpoint Properties Australia
Growthpoint Properties Australia Trust ARSN 120 121 002
Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409
FY22
annual report.
for the year ended 30 June 2022
space to thrive.
2
What’s
inside.
Directors’ Report
Operating and financial review
Business overview
FY22 overview
Who we are
Our strategy
Introduction from the Chairman
and Managing Director
Property portfolio performance
The office market
The industrial market
Our office portfolio
Our industrial portfolio
FY22 sustainability performance
Financial performance
Risk management
Governance
Board of Directors
Executive Management Team
Remuneration report
Additional information
Financial Report
Contents
Financial Statements
Notes to the Financial Statements
Directors’ declaration
Auditor’s independence declaration
Independent Auditor’s Report
Additional information
Detailed portfolio information
Securityholder information
Glossary
Contact details
3
3
3
4
6
8
12
12
13
14
16
18
20
26
30
30
32
34
55
57
58
62
95
96
97
101
103
105
106
About this report
This report is a consolidated summary of
Growthpoint Properties Australia’s (comprising
Growthpoint Properties Australia Limited,
Growthpoint Properties Australia Trust and their
controlled entities) (Growthpoint or the Group)
operational and financial performance for the 12
months ended 30 June 2022 (FY22 or the year).
Growthpoint’s reporting suite for FY22 includes the
following documents:
FY22 Annual Report
A review of Growthpoint’s financial and operational
performance for FY22, the Group’s remuneration
report and its financial statements.
FY22 Results Presentation
An overview of Growthpoint’s operational and
financial performance for the financial year.
FY22 Property Compendium
A summary of Growthpoint’s property portfolio as
at 30 June 2022.
FY22 Corporate Governance Statement
An overview of Growthpoint’s governance
framework and practices. Download a copy:
growthpoint.com.au/corporate-governance
FY22 Sustainability Report
A review of our approach to sustainability and
an update on our progress in achieving our
sustainability goals, which will be published in
September 2022.
Important information
This report contains forward looking statements,
guidance, forecasts and estimates, opinions
and estimates, which are based on market
trends, contingencies and assumptions made by
Growthpoint, which are subject to certain risks,
uncertainties and assumptions and may change
without notice. Should one or more of the risks
or uncertainties materialise, or should underlying
assumptions prove incorrect, there can be no
assurance that actual outcomes for Growthpoint
will not differ materiality from statements made
in this report. The forward looking statements are
based on information available to Growthpoint
as at the date of this report (16 August 2022).
Past performance is not a guarantee of future
performance. The actual results of Growthpoint
may differ materially from those expressed or
implied by the forward looking statements in this
report and you should not place undue reliance on
forward looking statements. Except as required by
law or regulation (including the ASX Listing Rules),
Growthpoint does not undertake to update any
forward-looking statements in this report.
Front cover image: GSO Dandenong,
165-169 Thomas Street, Dandenong, VIC
Contents page image: Building 3, 570 Swan Street,
Richmond, VIC (Botanicca 3)
3
FY22
overview.1
Property portfolio value
$5.1b
30 June 2021: $4.5b, +13.3%
Profit
after tax
Funds from
operations (FFO)
Distributions
$459.2m
27.7cps
20.8cps
FY21: $553.2m, -17.0%
FY21: 25.7cps, +7.8%
FY21: 20.0cps, +4.0%
Net tangible assets
(NTA) per security
$4.56
Portfolio
occupancy
97%
Weighted average
lease expiry (WALE)
6.3yrs
30 June 2021: $4.17, +9.4%
30 June 2021: 97%
30 June 2021: 6.2yrs
Average NABERS
Energy rating
5.2
GRESB
score
80/100
FY21: 5.1 stars
PCP: 74/100, +8.1%
1. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 4
Directors’ report
Operating and financial review
Who
we are.
As at 30 June 20221
Total
properties
58
Property
portfolio value
$5.1b
Market
capitalisation
$2.6b
Total
employees2
39
Number of
tenants
170
Number of
investors
>4,380
Growthpoint provides space for you and your business
to thrive. For more than 13 years, we’ve been investing
in high-quality industrial and office properties across
Australia. We own and manage 58 properties, valued
at approximately $5.1 billion.1
What we do:
We actively manage our portfolio. We invest in our existing
properties, ensuring they meet our tenants’ needs now and into
the future. We are also focused on growing our property portfolio.
We are committed to operating in a sustainable way and
reducing our impact on the environment. We are targeting net
zero by 2025.
Growthpoint Properties Australia (ASX: GOZ) is a real estate
investment trust (REIT), listed on the ASX, and is part of the S&P/
ASX 200. Moody’s has issued us with an investment-grade rating
of Baa2 for domestic senior secured debt.3
How we do it:
Our values underpin everything we do.
Respect Success Inclusion Integrity
Fun
Who we do it for:
Tenants, employees, Securityholders, debt providers, service
providers, local communities, government and regulators.
1. As at 30 June 2022. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
2. Excludes casual and contract employees.
3. Net zero 2025 target across 100% owned on balance sheet operationally controlled office assets and corporate activities.
Portfolio summary
as at 30 June 20221
Geographic diversity
by value
5
84%
located on
Eastern
seaboard
WA
$399.4m
1 office property
2 industrial properties
SA
$392.6m
1 office property
4 industrial properties
QLD
$1,191.7m
8 office properties
4 industrial properties
NSW
$1,282.2m
5 office properties
5 industrial properties
VIC
$1,615.3m
9 office properties
16 industrial properties
ACT
$257.1m
3 office properties
Geographic diversity
by value
Sector diversity
by value
Tenant type
by income
Victoria
31%
Queensland
23%
New
South
Wales
25%
Office
66%
Industrial
34%
Listed
company
55%
Western
Australia
8%
South
Australia
8%
Australian
Capital
Territory
5%
Government
25%
SME
4%2
Large
private
company
16%
1. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
2. Growthpoint estimate of proportion of tenants with revenue below $50 million.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 6
Directors’ report
Operating and financial review
Our
strategy.
Our goal is to provide Securityholders with sustainable income returns
and capital appreciation over the long term.
Invest in high-quality
assets
Maximise
value
We seek to invest in high-quality,
modern commercial real estate
assets, that provide an attractive
income yield and long-term capital
appreciation. All our properties are
located in Australia, where we have
an indepth understanding of the
market.
We develop asset management
and tenant retention strategies for
each of our properties to maximise
income and value. These include
plans for leasing, refurbishment,
expansion, development or
divestment.
Maintain
high-occupancy
We asset manage the properties
we own and we develop long-term
relationships with our tenants.
We are focused on ensuring our
properties meet our tenants’ needs
now and in the future. This helps us
to maintain high occupancy levels
and consistent rental income.
Long track record of delivery
Over $320 million invested in
high-quality assets:
— Acquired three high-quality
office assets in NSW, ACT
and VIC with blended WALE
7.2 years, yield 5.0%1
— Invested $60.3 million in
additional DXI2 securities,
maintaining circa 15% holding,
increasing exposure to
industrial assets
Achieved like-for-like valuation
uplift of $356 million, or 7.9%,
over FY22 (office: 4.3%,
industrial: 15.1%)
Invested $23 million in asset
expansions, creating value and
supporting lease extension –
BMW South Melbourne and
Symbion
Continued reinvestment in
refurbishment, including
enhancing building amenities
Industrial portfolio 100%
occupied, 97% across total
portfolio. 86% tenant retention3
Leasing success with
~234,000 sqm of leasing
completed, 17% of portfolio
income
Opportunities
for growth:
Property acquisition
Securities buy-back
Funds Management
M&A
1. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
2. Dexus Industria REIT.
3. Weighted by income, includes tenant renewals in future periods.
7
141 Camberwell Road,
Hawthorn East, VIC
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 8
Directors’ report
Operating and financial review
Introduction
from the Chairman
and Managing Director.
Timothy Collyer
Managing Director
Geoff Tomlinson
Independent Chairman
and Director
Over FY22, Australia continued to
see the impact of the COVID-19
pandemic on business and
individuals with re-introduction of
government restrictions early in
the period, national vaccination
program roll-out and subsequent
gradual lifting of pandemic
restrictions over the second half
the year.
We are pleased that Growthpoint has
continued to successfully navigate the
pandemic with no direct material impact
on financial results to date, which reflects
the strength of the Group’s financial
position over the period and the resilience
of the property portfolio.
Strong financial performance
Growthpoint has delivered a robust
performance in FY22, with funds from
operations (FFO) of 27.7 cents per
security (cps), a 7.8% growth on the prior
year. The Group’s performance exceeded
expectations, with an increasingly certain
and positive performance over the first
half of the year allowing for the upgrade
to initial FY22 FFO guidance from
26.3 cps to at least 27.0 cps, and FY22
distribution from 20.6 cps to 20.8 cps
in December 2021. FY22 FFO guidance
was further upgraded to at least 27.7 cps
in June 2022, reflecting progress made
in the second half which included the
purchase of two office assets (settlement
of 2-6 Bowes Street, Phillip, ACT and
141 Camberwell Road, Hawthorn East,
VIC), Woolworths confirmation of their
five-year lease option at their Queensland
distribution centre at Larapinta and
continued leasing success across the
portfolio.
The Group’s performance in FY22 reflects
the successful execution of the Group’s
strategy and the underlying strength of
the business. The final FY22 distribution
of 20.8 cps represents a payout ratio
75%, in line with the Board’s decision to
maintain a payout ratio of between 75%
and 85%, assisting the Board’s objective
to provide Securityholders with growing
distributions going forward since its
introduction in the prior year.
TSR outperforms index
over the long term
The Group has outperformed the S&P/
ASX 200 REIT Accumulation Index (the
Index) over the short, medium and long
term, as highlighted in the chart on the
opposite page.
Growthpoint’s total securityholder return
(TSR) performance of -11.7% in FY22 has
outperformed the Index by 60 bps, with
sector-wide security price performance
being significantly impacted in the final
months of FY22 as the broader market
responded to a changing economic
environment of central bank interest rate
hikes, rising long-term bond yields and
increasing inflation.
9
Since 2009
20 property
disposals
$648.3m
54 property
acquisitions
$2.9b
Takeover of two A-REITs
and agreement to purchase
Fortius Funds Management3
$670m
2011
Takeover of Rabinov
Property Trust
(ASX listed)
(acquires four offices and
two industrial properties
valued at $184m)
10+
employees
2015
Gains inclusion in
S&P/ASX200 Index
2017
Commits to
net zero 2050
Enters USPP
market for the
first time
2022
Portfolio exceeds
$5.0b
58 assets2
(31 industrial,
27 office)
2019
Celebrates
10-year
anniversary
Aug 2022
Enters
agreement
to acquire
Fortius Funds
Management3
(initial purchase
price $45m)
20+
employees
35+
employees
Growthpoint’s
journey.1
2009
Growthpoint
Properties (JSE: GRT)
recapitalises Orchard
Industrial Property
Fund
GOZ listed
on the ASX
(5 August 2009)
23 assets
valued at $650m
(100% industrial)
5
employees
60+3
combined
employees
2021
New target set for
net zero 2025
2012
GOZ appoints
first female board
member
2014
Portfolio
exceeds
$2.0b
2010
Acquires first
office asset
2018
Reaches
50:50
employee
gender target
2016
Takeover of
GPT Metro
(ASX listed)
(acquires six A-Grade
office properties valued
at $440m)
Total Securityholder return
over 1, 3, 5 and 10 years (%)4
Growthpoint TSR
S&P/ASX 200 REIT
Accumulation Index TSR
Return on equity (%)
to 30 June 2022
16.0%
16.7%
14.3%
14.7%
11.9%
9.2%
7.6%
4.4%
5 years
10 years
1 year
3 years
5 years
10 years
1 year
3 years
-0.9%
-2.8%
-11.7%
-12.3%
1. Growthpoint’s journey is in calendar years.
2. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria.
3. Initial purchase price of $45 million (with a net asset adjustment) upon completion which is anticipated 1Q FY23, subject to satisfaction of conditions precedent.
4. Source: UBS Investment Research. Annual compound returns to 30 June 2022.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 10
Directors’ report
Operating and financial review
Introduction from the Chairman
and Managing Director.
Over the longer term, Growthpoint has
delivered TSR performance that has
outperformed the Index over the last
three, five and ten years. This reflects the
continued focus of the management team
and Board on successfully executing the
Group’s strategy for growth and delivering
long-term value for Securityholders.
Growthpoint’s evolution from its ASX
listing to today is outlined on the previous
page, with the Group’s office and
industrial property portfolio now valued at
$5.1 billion as at 30 June 2022.1
Strategic acquisitions
The Group has made a number of
strategic, accretive acquisitions in FY22,
investing over $320 million in three
high-quality modern office assets, and
acquiring additional Dexus Industria
REIT securities which further increased
the Group’s exposure to the growing
industrial sector.
We are also pleased that the Group has
successfully settled on the acquisition of
GSO2 Dandenong at 165-169 Thomas
Street, Dandenong, Victoria in July 2022
and entered into a share sale agreement
to acquire Fortius Funds Management,
a key strategic priority and growth
opportunity for the business.
WALE maintained,
strong leasing activity
The Group’s portfolio continues to be
leased to predominantly government,
listed or large organisations and has
maintained its high occupancy of 97%
and WALE of 6.3 years as at 30 June
2022.
Over FY22 Growthpoint has seen its
portfolio value increase by 7.9% or
$356 million on a like-for-like basis at
30 June 2022, with the uplift over 12
months reflecting the strength of the
industrial market and the Group’s leasing
success across both the office and
industrial portfolios in the year.
Significant leasing activity in the year
totalled ~234,000 sqm or 17% of
portfolio income, with key leases being
signed or renewed with Samsung,
Fox Sports, Scope and Bunnings in
the office portfolio and Woolworths,
Linfox and Eagers Automotive in the
industrial portfolio. We were pleased to
see Woolworths exercise their five-year
lease option for their major Queensland
distribution centre at Larapinta in the
second half of the year. Post balance
date, we have negotiated an additional
2.5 year extension to the Woolworths
lease, resulting in a 7.5 year lease term
from February 2022.
The highly desirable nature of the Group’s
property portfolio, leasing success and
proactive asset management over the
years contributes to the strength of
our portfolio. We are pleased to see
the Group maintain its high tenant
retention of 86% over the year and that
Growthpoint was ranked industry leader
on landlord satisfaction in a tenant
survey conducted by property research
specialists Brickfields Consultancy during
the year.
Net tangible assets (NTA) have increased
over FY22 to $4.56 per security,
demonstrating the resilience of the
Group’s growing property portfolio.
You can read more on our office and
industrial portfolio on pages 14 to 17.
Continued progress on
sustainability
Growthpoint is committed to operating in
a sustainable way and we have continued
to make progress on sustainability in
FY22. We have moved forward on our
pathway to net zero by 2025 target,3
including improving energy and resource
efficiency across our portfolio and
completing three solar installations in
our office portfolio. Performance in
external benchmarks remains strong
with the Group’s overall Global Real
Estate Sustainability Benchmark (GRESB)
score increasing by 8.1% to 80/100 and
above-average CDP score of B being
maintained. We were particularly pleased
to see the Group recognised by GRESB
as a sector leader in FY22 and also rank
in the top five for Energy ratings in the
NABERS Sustainable Portfolios Index
2022. You can read more about our
sustainability performance on page 18
and in our Sustainability Report which will
be published in September 2022.
Our people
We recognise that our experienced and
dedicated team of people are integral to
our success and remain committed to
ensuring Growthpoint is a great place
to work. We were pleased to again
see positive results from our externally
conducted annual employee survey
which placed the Group in the top decile
of its benchmark group on employee
engagement and top quartile on
employee alignment in FY22, building on
top quartile performance last year.
Growthpoint’s team has grown over FY22
and we have continued to evolve our
employee value proposition to allow the
Group to reward, motivate and attract a
high performing team. As we move into
FY23, we also look forward to welcoming
the Fortius Funds Management team to
Growthpoint.
Looking ahead to FY23
The changing external environment going
into FY23 has created a challenging
period for the A-REIT sector with markets
responding to and anticipating further
central bank rate rises, increasing interest
costs, and the impact of higher inflation.
Growthpoint’s exposure to favoured
industrial and metropolitan office property
markets and secure income from large
corporate and government tenants
provides a resilient foundation for our
business.
Early in FY22, Growthpoint enhanced
its capital position, taking advantage
of low pricing at the time to refinance
$715 million debt which reduced the
Group’s refinancing risk and extended its
weighted average debt maturity (WADM).
1. Excludes GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
2. Government Service Office.
3. Net zero 2025 target across 100% owned on balance sheet operationally controlled office assets and corporate activities.
Going into FY23, Growthpoint is
positioned to manage the business
through a period of higher inflation and
higher interest costs, with 61% of its
debt fixed at 30 June 2022 and ample
headroom to debt covenants. The
Group’s gearing of 31.6% at 30 June
2022 remains below the target range of
35-45%, providing flexibility to invest in
property or funds where we see value for
Securityholders.
The Group has provided FY23 FFO
guidance of 25.0-26.0 cps and FY23
distribution guidance of 21.4 cps. We
remain committed to providing our
Securityholders with sustainable income
returns and capital appreciation over the
long term.
We would like to take this opportunity
to thank our employees for their
dedication and contribution to delivering
a successful performance in FY22.
We would also like to acknowledge
our tenants, suppliers and other key
stakeholders for their continued support.
We also thank our Securityholders, for
their ongoing commitment to the Group.
Geoff Tomlinson
Chairman
Timothy Collyer
Managing Director
11
Strategic property
acquisitions.
Four properties acquired
since 30 June 2021
$426.6m
11 Murray Rose Avenue,
Sydney Olympic Park, NSW
2-6 Bowes Street,
Phillip, ACT
141 Camberwell Road,
Hawthorn East, VIC
GSO Dandenong,165-169 Thomas Street,
Dandenong, VIC
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
12
Directors’ report
Operating and financial review
Office market
overview.
Australian office markets continued to recover
throughout FY22, with solid tenant enquiry
and transactional activity recorded in most
major cities. Conditions continued to improve,
with unemployment falling to 3.5% and job
advertisements reaching record highs by
year end.
Occupier markets remained resilient despite increased
uncertainty. Physical occupancy rates continued to
increase as workers return to the office, although slowed
in recent months by cold, wet weather and increased
COVID-19 cases. Net absorption, although modest, was
positive in most markets, particularly metropolitan markets.
Small occupiers (<1,000sqm) were most active, seeking
larger footprints. After stagnating during the COVID-19
period, face rents began to increase in several of the
Group’s markets in FY22 including Melbourne Fringe,
Brisbane CBD and Brisbane Fringe.
After a strong first half, investment activity was more
subdued over the second half of FY22 as buyers digest the
impact of increased funding costs and higher bond yields.
Office investment volume totalled $16.6 billion1 over the
financial year. Higher quality assets, particularly securely
leased assets, continued to generate healthy demand
from both domestic and offshore purchasers. After initially
compressing in the first half of FY22, yields were relativ ely
unchanged over the second half of the year.
National office vacancy2 ($AU)
Total market vacancy (CBD)
GOZ office portfolio vacancy
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Commercial real estate investment volume3 ($AU)
Office
Industrial
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
5,000
2,000
0
2H
CY17
1H
CY18
2H
CY18
1H
CY19
2H
CY19
1H
CY20
2H
CY20
1H
CY21
2H
CY21
1H
CY22
Office net absorption CBD and Metro4 (sqm)
Net absorption (sqm)
% total market (sqm)
FY22
FY22
FY21
FY21
CBD markets
Metro markets
120,000
80,000
40,000
0
-40,000
-80,000
-120,000
-160,000
-200,000
15%
10%
5%
0
-5%
-10%
-15%
-20%
-25%
Sydney
CBD
Melbourne
CBD
Adelaide
CBD
% GOZ Office
Portfolio
0%
0%
0%
Perth
CBD
0%
Brisbane
CBD
Canberra
4%
8%
West
Perth
3%
Melbourne
South East
4%
Sydney
Olympic
Park5
8%
Parramatta Brisbane
Fringe
Melbourne
Fringe
16%
22%
28%
1. Cushman & Wakefield. 2. Source: Property Council Australia, Growthpoint. 3. Source: Cushman & Wakefield.
4. Source: JLL. 5. Sydney Olympic Park/Rhodes.
FY22 CBD
net absorption
143,550sqm
0.8% of the
market4
FY22 Metro
net absorption
246,077sqm
2.4% of the
market4
Positive net absorption
in Group’s markets
reflects strengthening
demand, improved tenant
confidence
13
Industrial market
overview.
Positive movement in the
industrial market continued to
accelerate in FY22 as the sector
benefited from macroeconomic
tailwinds including growth in
e-commerce, supply chain
infrastructure investment and
strong occupier fundamentals.
Leasing activity reached historic high
levels, with demand originating from
a broad range of industries including
medical supplies, supermarkets
and groceries, transport/logistics
and retailers investment in last mile
fulfilment. Vacancy continued to fall
in the Group’s markets, as demand
outstripped limited supply, with the
national vacancy rate reaching a
record low of 0.8% in June.1 Rent
growth accelerated over the year, with
most markets recording double digit
growth in face rents.
Investors, particularly institutional
investors, continued to seek exposure
to the sector. Industrial transaction
volume totalled $11.9 billion2 over
FY22. Investors sought prime and
secondary grade investments,
particularly those which provided
near term positive rent reversion
opportunities (i.e. short-medium WALE
assets). Yields continued to re-rate
across the year, particularly within the
first half.
Industrial floorspace gross take-up across Australia3 (sqm)
Millions
10-year average (2012-2021)
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
CY12
CY13
CY14
CY15
CY16
CY17
CY18
CY19
CY20
CY21
1HCY22
Industrial vacancy rates4 (%)
Sydney
Melbourne
Brisbane
Perth
Adelaide
10%
8%
6%
4%
2%
0%
2H CY19
1H CY20
2H CY20
1H CY21
2H CY21
1H CY22
Industrial net face rent growth5 (%)
Prime net face rent growth
FY20
FY21
FY22
20%
15%
10%
5%
0%
-5%
1. CBRE.
2. Cushman & Wakefield.
3. Source: JLL.
4. Source: CBRE.
5. Source: JLL.
Sydney
Melbourne
Brisbane
Perth
Adelaide
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 14
Directors’ report
Operating and financial review
Our
office
portfolio.
Our office portfolio consists of
271 high-quality office properties,
which represent 66% of our total
property portfolio by value. Our
office properties are predominately
located on the fringe of CBDs or in
key metropolitan markets.
Leasing
Growthpoint signed 34 office lease
agreements in FY22, totalling 41,180
square metres or 11.2% of our office
portfolio by income. The weighted
average lease term for new and renewed
leases was 6.0 years and the weighted
average annual rent review was 3.2%.
Due to this leasing success, our office
portfolio WALE only reduced moderately
from 7.0 years to 6.7 years over the
twelve months.
Strategic property
acquisitions.
The Group signed two large lease
renewals with key tenants, Samsung at
3 Murray Rose Avenue, Sydney Olympic
Park, New South Wales for 13,423
square metres and Fox Sports at Building
C, 219 Pacific Highway, Artarmon, New
South Wales for 8,092 square metres.
Importantly, these two large corporate
businesses extended their leases over
the same amount of floor space that they
were previously leasing from the Group.
After securing Bunnings as the key
13,886 square metre tenant at Building 3,
570 Swan Street, Richmond, Victoria
(Botanicca 3) in October 2020, we were
pleased to further expand their footprint
in November 2021 by an additional 2,068
square metres. This increased Bunnings’
occupancy within the building to 83%.2
A key thematic that the Group continued
to observe over the year has been a flight
to quality by office occupiers and an
increasing interest from large corporate
and government tenants in leasing highly
energy-efficient buildings. Growthpoint’s
A-grade, highly green credentialled office
portfolio is well positioned in this regard.
Capital Transactions
Since 30 June 2021, Growthpoint
has acquired four high quality,
modern, A-grade office assets, totalling
$426.6 million3 on a blended initial yield
of 5.1%, a weighted average lease term
of 8.1 years and an average NABERS
Energy rating of 5.2 stars.4 The assets
are occupied by government and large
corporate tenants and are all located
along Australia’s eastern seaboard.
Sydney
1
Canberra
2
Four properties acquired
since 30 June 2021
$426.6m5
3 4
Melbourne
1
2
3
4
$52.0m5
$84.6m5
$125.0m5
$165.0m5
11 Murray Rose Avenue,
Sydney Olympic Park, NSW
2-6 Bowes Street,
Phillip, ACT
141 Camberwell Road,
Hawthorn East, VIC
GSO Dandenong, 165-169 Thomas Street,
Dandenong, VIC
NLA: 5,684 sqm
WALE: 4.8 years
Occupancy: 100%
Major tenant: B2G Consortium
(metrics as at settlement Aug 21)
NLA: 12,376 sqm
WALE: 9.3 years
Occupancy: 96%
Major tenant: ACT Government
(metrics as at settlement Dec 21)
NLA: 10,233 sqm
WALE: 6.7 years
Occupancy: 99%
Major tenant: Miele Australia
(metrics as at settlement Feb 22)
NLA: 15,071 sqm
WALE: 9.4 years
Occupancy: 100%
Major tenant: VIC Government
(metrics as at settlement Jul 22)
1. Portfolio metrics exclude GSO Dandenong 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
2. By area.
3. Figure includes GSO Dandenong 165-169 Thomas Street, Dandenong, Victoria which settled in July 2022.
4. Excludes 141 Camberwell Road, Hawthorn East, Victoria, which is not rated.
5. Net sale price, excluding acquisition costs.
NSWVIC Redevelopment of
Autosports Group’s BMW
dealership at 75 Dorcas
Street, South Melbourne,
Victoria expected to be
completed in late August
75 Dorcas Street,
South Melbourne, VIC
Valuation
Over FY22, the value of Growthpoint’s
office portfolio increased by
$129.6 million, or 4.3% on a like-
for-like basis, to $3.4 billion. Nearly
eighty percent of the Group’s office
assets increased in value1, due to a
combination of leasing success, yield
compression and the advancement of
the BMW showroom development at
75 Dorcas Street, South Melbourne,
Victoria.
Demand for office investments,
particularly quality metropolitan
offices, was strong throughout FY22.
Over the year, the weighted average
capitalisation rate used to value the
Group’s office portfolio compressed
10 basis points to 5.15%.
1. Weighted by value.
Office portfolio
snapshot1
15
30 June 2022
30 June 2021
$3,025.6m
24
97%
Total portfolio value
$3,416.6m
LFL2 change in portfolio valuation
$129.6m or 4.3%
Number of assets
27
Occupancy
95%
WALE
6.7 years
Total lettable area
345,835 sqm
Tenant retention
72%
Weighted average capitalisation rate
5.1%
Weighted average rent review2
3.6%3
NPI
$161.3m
76%
5.3%
3.6%4
$152.5m
7.0 years
317,409 sqm
Developments
and Expansions
In late FY21 we entered into a new
15-year and 11-month lease with major
tenant, Autosports Group at 75 Dorcas
Street, South Melbourne, Victoria. As
part of the lease extension Growthpoint
has funded the redevelopment of
Autosports Group’s state of the
art BMW dealership. Growthpoint
is receiving a 7.5% coupon rate
for funding the $26.15 million
redevelopment which is targeting
completion in August 2022.
Office portfolio lease
expiry profile (%)
per financial year, by
income
32
21
15
10
6
5
5
6
Vacant
FY23
FY24
FY25
FY26
FY27
FY28
FY29+
Top ten
office tenants
as at 30 June 2022
NSW Police Force
Commonwealth of Australia
Country Road Group
Bank of Queensland
Bunnings Warehouse
ANZ Banking Group
Lion
Samsung Electronics
Collection House
Fox Sports
Total/weighted average
Balance of portfolio
Total portfolio
%
portfolio
income
WALE
(yrs)
11
10
5
5
4
4
3
3
3
3
51
49
100
22.5
4.0
10.0
4.6
8.8
3.0
1.8
4.7
3.9
8.5
9.2
4.2
6.7
1. Excludes GSO Dandenong, 165-169 Thomas Street,
Dandenong, Victoria which settled in July 2022.
2. Like-for-like.
3. Assumes CPI change of 6.1% per annum as per
ABS release for FY22.
4. Assumes CPI change of 3.85% per annum as per
ABS release for FY21.
5. Includes vacancies.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 16
Directors’ report
Operating and financial review
Our
industrial
portfolio.
Completed
~193,000 sqm of
leasing during the year,
or 30% of industrial
portfolio income
Valuation
Over FY22, the value of Growthpoint’s
industrial portfolio increased by
$226.4 million, or 15.1% on a like-for-
like basis, to $1.7 billion. Thirty of the
Group’s thirty-one industrial properties
increased in value over FY22, the result
of leasing success and positive market
fundamentals. Yield compression and
rent growth were primary drivers of
the value appreciation, with strong
rent growth recorded in all the Group’s
industrial markets.
Investors, particularly institutional
investors, continued to seek exposure to
the sector. Yields continued to re-rate,
particularly within the first half of the
year. The weighted average capitalisation
rate used to value the Group’s industrial
portfolio compressed 44 basis points to
4.72% over the year.
Developments and Expansions
In late 2021, Growthpoint agreed
to expand our property at 120-132
Atlantic Drive, Keysborough, Victoria,
constructing an additional 2,910 square
metres of warehousing for the building’s
occupier Symbion Pharmaceuticals.
The circa $3.4 million expansion was
funded by Growthpoint with Symbion
paying a rentalised yield of 5.75% on the
total project costs. The expansion was
completed in July 2022. Growthpoint
have separately agreed with Symbion
to add a 330kW solar array on the
roof of the property and Symbion have
committed to the property until 2032.
Our industrial portfolio consists
of 31 modern industrial
properties, which represent 34%
of Growthpoint’s total property
portfolio by value. Our industrial
properties are well-located, near
key logistics hubs or population
centres.
Leasing
Growthpoint signed eleven industrial
lease agreements in FY22, totalling
193,161 square metres or 30.3% of
our industrial portfolio by income. The
weighted average lease term for new and
renewed leases was 4.5 years and the
weighted average annual rent review was
2.8%.
The Group extended its largest industrial
lease by 5 years to Woolworths at
70 Distribution Street, Larapinta,
Queensland. Woolworths will continue to
utilise the 76,109 square metre regional
distribution facility as a key component of
their national grocery supply chain. This
lease represents approximately 13%1 of
the Group’s industrial portfolio income, or
4%1 of the Group’s total portfolio income.
Post balance date, we have negotiated
an additional 2.5 year extension to the
Woolworths lease, resulting in a 7.5 year
lease term from February 2022.
We were pleased to enter into a new
11.2-year lease with Eagers Automotive
Group for 14,726 square metres
at 5 Viola Place, Brisbane Airport,
Queensland in December 2021.
During FY22, we also agreed leases
with IPEC, IVE Group and Linfox. As a
result of our leasing success, the Group’s
industrial portfolio was 100% occupied
at 30 June 2022. (30 June 2021: 2%
vacancy).
1. Percentage based on Gross income of fully leased portfolio.
70 Distribution Street,
Larapinta, QLD
Renewed tenant:
Woolworths
NLA:
76,109 sqm
Term:
5.0 yrs
Industrial portfolio
snapshot
17
30 June 2022
30 June 2021
$1,495.4m
31
98%
Total portfolio value
$1,721.7m
LFL2 change in portfolio valuation
$226.4m or 15.1%
Number of assets
31
Occupancy
100%
WALE
5.3 years
Total lettable area
715,619 sqm
Tenant retention
98%
Weighted average capitalisation rate
4.7%
Weighted average rent review
3.7%1
NPI
$78.6m
78%
5.2%
3.1%2
$77.7m
715,619 sqm
4.7 years
Industrial portfolio lease
expiry profile (%)
per financial year,
by income
27
28
27-49 Lenore Drive,
Erskine Park, NSW
Renewed tenant:
Linfox
NLA:
29,476 sqm
Term:
2.0 yrs
10
8
5
0
18
4
Vacant FY23
FY24
FY25
FY26
FY27
FY28
FY29+
Top ten
industrial tenants
as at 30 June 2022
%
portfolio
income
WALE
(yrs)
Woolworths
Linfox
Australia Post
HB Commerce
Brown & Watson International
Laminex Group
The Workwear Group
Eagers Automotive
Autocare Services
Symbion
Total/weighted average
Balance of portfolio3
Total portfolio
38
11
6
3
3
3
3
2
2
2
73
27
100
6.6
3.6
9.0
0.2
3.1
3.0
5.0
10.6
8.3
9.5
6.0
3.4
5.3
5 Viola Place,
Brisbane Airport, QLD
New tenant:
Eagers Automotive
NLA:
14,726 sqm
Term:
11.2 yrs
1. Assumes CPI change of 6.1% per annum as per
ABS release for FY22.
2. Assumes CPI change of 3.85% per annum as per
ABS release for FY21.
3. Includes vacancies.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 18
Directors’ report
Operating and financial review
FY22
sustainability
performance.
Ranked 5th for
Energy ratings
in the NABERS
Sustainable
Portfolios Index
2022 (SPI)
NABERS
Energy rating
5.2
with 100% of office
portfolio rated
NABERS
Water rating
5.1
with 86% of office
portfolio rated
NABERS Indoor
Environment rating
4.2
with 87% of office
portfolio rated, up from
62% in FY21
Environment
People
Employee
engagement score
Employee
alignment score
Women in leadership
positions1
Tenant
satisfaction
77%
placing Group
in top decile of
benchmark group
61%
placing Group
in top quartile of
benchmark group
FY21: 77%, top
quartile of benchmark
group
FY21: 63%,
top quartile of
benchmark group
50%
FY21: 38%
Gender diversity
(all employees)2
51.3%
48.7%
Industry
leader on
landlord
satisfaction3
R E A L E S T A T E
sector leader 2021
B Rating
maintained
Governance
GRESB rating increased by 8.1% from pcp (FY21 74/100)
1. EMT and senior managers (permanent employees that report to an EMT member, excluding assistants).
2. Excludes casual and contract employees.
3. Tenant engagement survey conducted by property research specialists Brickfields.
3&5 Murray Rose Avenue,
Sydney Olympic Park, NSW
19
Growthpoint’s 2022
Sustainability report will be
published in September
growthpoint.com.au/sustainability
FY23
sustainability
framework.
Environment
Economic
People
Governance
_ Decarbonisation
_ Climate change
_ Tenant satisfaction
_ Natural resource
management
_ Waste and circularity
resilience
_ Green and social
economy
_ Employee engagement
_ Responsible and
sustainable supply
chain
_ Social impact
_ Sustainability
governance
_ Communication and
transparency
Aligned to UN SDGs
Aligned to UN SDGs
Aligned to UN SDGs
Aligned to UN SDGs
7
11
12
13
11
13
8
11
12
13
8
12
Progress on solar
projects across
our portfolio.
Roof-top solar PV
systems totalling
589kW
being installed across
the portfolio during
FY22-FY23
Office portfolio
Industrial portfolio
Completed solar
installations at
three office assets
in Queensland with
combined capacity
of 259 kW.
We are working with
our tenant at 120-
132 Atlantic Drive,
Keysborough, Victoria to
install a 330kW Solar PV
system, with installation
expected to start in
1Q23.
15 Green Square Close,
Fortitude Valley, QLD
66kW Solar PV System
22 Cordelia Street,
South Brisbane, QLD
100kW Solar PV System
52 Merivale Street,
South Brisbane, QLD
93kW Solar PV System
120-132 Atlantic Drive,
Keysborough, Victoria
330kW Solar PV System
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 20
Directors’ report
Operating and financial review
Financial
performance.
Growthpoint’s strong financial
performance for FY22 reflects
a year where the Group has
successfully executed on its
growth strategy, despite the
continued economic interruptions
from the COVID-19 pandemic.
Initial FY22 FFO guidance of at least
26.3cps and 20.6cps for distributions
was provided, with the Group looking
to increase growth over the year by
acquiring quality properties utilising
debt capital, bringing gearing up to the
bottom of its 35%-45% target range.
This was successfully delivered, with
over $320 million deployed across
three high-quality modern office assets
and an increase to the Group’s Dexus
Industria REIT (DXI) securities holding
which provides further exposure to the
growing industrial sector. Further growth
was achieved through key leasing
outcomes across the year in addition
to the refinancing of $715 million of
debt facilities on improved terms for
the Group.
Movements in NTA per security
for the 12 months ended 30 June 2022
These achievements have led to FY22
FFO of 27.7 cps, up 7.8% on the prior
year, and distributions totalled 20.8cps,
up 4.0% on the prior year. The Group’s
gearing remains at 31.6% as at 30 June,
increasing to a pro forma level of 34.3%
post the settlement of GSO Dandenong,
165-169 Thomas Street, Dandenong,
Victoria in July 2022 and the acquisition
of Fortius Funds Management which is
expected to settle in Q1 FY23.
NTA per security increased to $4.56,
9.4% on the prior year, primarily reflecting
the strong valuation uplift across both our
office and industrial property portfolios
in the first half of the financial year, with
growth more subdued in the second half
on rising interest rates, curtailing yield
compression seen earlier in the year.
Operating expenses
The Group’s management expense ratio
(MER) was 0.40%, in line with anticipated
MER being circa 0.40% moving forward
from FY22. This is up on the prior period
(FY21 MER: 0.35%) which was well below
the Group’s long-term average, largely
due to lower spending during periods
affected by the COVID-19 pandemic.
FY22’s increase in operating expense
also reflects an increased headcount to
support the current and future growth of
the business. It also includes an element
of ‘catch-up’ after a hiring freeze and
broader cost control during the early
phase of the pandemic.
Capital expenditure
Maintenance capital expenditure reduced
in total dollars spent in the period
($20.7 million, down from $21.2 million in
FY21) and as a percentage of the property
portfolio (0.42%, down from 0.48% in
FY21). Capital expenditure remained
within the Group’s guidance range of
between 0.3% and 0.5% of average
property value. The Group expects to
remain towards the upper end of its
guidance range over the short to medium
term.
+$0.03
+$0.10
+$0.04
+$0.18
+$0.01
-$0.01
$4.55
$4.56
-$0.05
-$0.08
+$0.17
$4.17
+9.4%
since
30 June 2021
NTA
30-Jun-21
Office
revaluations
Industrial
revaluations
DXI
revaluation
Retained cash
from FFO
Other
NTA
31-Dec-22
Office
revaluations
Industrial
revaluations
DXI
revaluation
Retained cash
from FFO
NTA
30-Jun-22
Financial performance snapshot
30 June 2022
30 June 2021
21
Funds from operations
$214.0m
Funds from operations
(per security)
27.7 cents
Distributions
$160.6m
Distributions
(per security)
20.8 cents
Net tangible assets
(per security)
$4.56
$198.3m
25.7 cents
$154.4m
20.0 cents
$4.17
Operating expenses
Total operating
expenses
Average gross
assets value
Operating expenses
to average gross
assets
FY22
FY21
$19.8m
$15.7m
$4,911.3m $4,425.3m
0.40%
0.35%
Capital expenditure
FY22
FY21
Total portfolio capex
$20.7m
$21.2m
Average property
asset value
Capital expenditure
to average property
portfolio value
$4,956.2m $4,384.8m
0.42%
0.48%
2-6 Bowes Street,
Phillip, ACT
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 22
Directors’ report
Operating and financial review
Financial performance.
Key debt metrics and changes during FY22
30 June 2022
30 June 2021
Change
Gross assets
Interest bearing liabilities
Total debt facilities
Undrawn debt
Gearing
Weighted average cost of debt (based on drawn debt)
Weighted average debt maturity
Annual interest coverage ratio (ICR) / covenant ICR
Actual loan to value ratio (LVR) / covenant LVR
Weighted average fixed debt maturity
% of debt fixed
Debt providers
$m
$m
$m
$m
%
%
Years
Times
%
Years
%
No.
5,499.8
1,740.0
2,101.5
353.5
31.6
3.4
4.2
4,777.8
1,327.1
1,720.0
387.5
27.9
3.3
4.1
5.2 / 1.6
33.6 / 60
4.8 / 1.6
29.6 / 60
3.8
60.9
21
4.3
65.0
20
722.0
412.9
381.5
(34.0)
3.7
0.1
0.1
0.4 / –
4.0 / –
(0.5)
(4.1)
1
Stress testing
covenants
Growthpoint has three
main debt and lending
covenants which are
regularly stress tested.
They are:
LVR <60%
GOZ: 33.6%
ICR >1.6x
GOZ: 5.2x
To breach this covenant,
GOZ cap rate would need
to rise by 429 bps1
To breach this covenant,
NPI would need to fall by
68%1
Secured
property %
>85%
GOZ: 97%
Percentage must
remain above 85%
Capital Management
During the year Growthpoint enhanced its
capital position, refinancing $715 million
of its debt facilities to secure favourable
pricing and extend its weighted average
debt maturity. The Group entered into
$350 million of new facilities to support
strategic acquisitions across the year.
The Group also restructured $200 million
of its interest rate swaps, entered into
five new interest rate swaps with a total
face value of $145 million in 2H22, with a
weighted average fixed rate of 2.87% and
a weighted average tenor of 5.1 years.
These transactions result in the Group
having 61% fixed debt at 30 June 2022.
In February 2022, Growthpoint extended
its on-market buy-back program for
up to 2.5% of its issued capital. The
program was lightly used over the year
with only 499,458 securities acquired
(0.06% of issued capital), with the Group’s
security price recovering for a large part
of the financial year, and the Group not
participating in the market as A-REIT
security prices fell substantially in the latter
part of the year, due to the Fortius Funds
Management transaction (see page 94).
Outlook
Strategic, accretive acquisitions made
in FY22, in addition to the acquisition
of Fortius Funds Management at the
beginning of FY23,2 will help support FFO
for the year ahead. However, the recent,
rapid rise in interest rates by the Reserve
Bank of Australia will result in higher
interest expense for the Group which will
offset these gains. As a result, Growthpoint
is providing guidance for FY23 FFO of 25.0
- 26.0 cps and a distribution of 21.4 cps.
1. As at 30 June 2022. For illustrative purposes only. Assumes no change to other inputs that could impact the calculation of this metric.
2. Subject to completion occurring. Completion of the transaction is subject to satisfaction of conditions precedent.
23
Funds from operations
Growthpoint uses FFO as its primary earnings measure. FFO enables Securityholders to identify the income which is available for
distribution and also assists in determining the relative performance of the Group.
The following table reconciles statutory profit to FFO and reports distributions paid to Securityholders.
Reconciliation from statutory profit to FFO
Profit after tax
Less FFO items:
- Straight line adjustment to property revenue
- Net (gain) in fair value of investment properties
- Net loss / (gain) in fair value of investment in securities
- Net (gain) / loss in fair value of derivatives
- Net loss / (gain) on exchange rate translation of interest-bearing liabilities
- Amortisation of incentives and leasing costs
- Deferred tax expense / (benefit)
- Other
FFO
Distributions provided for or paid during the year ($m)
FFO per security (cents)
Payout ratio to FFO (%)
FY22
$m
459.2
(12.1)
(285.1)
32.7
(57.2)
31.5
33.0
7.2
4.8
214.0
160.6
27.7
75.0
FY21
$m
553.2
(8.5)
(356.5)
(29.3)
43.8
(33.0)
26.9
(3.3)
5.0
198.3
154.4
25.7
77.9
Change
Change
$m
(94.0)
(3.6)
71.4
62.0
(101.0)
64.5
6.1
10.5
(0.2)
15.8
6.2
2.0
%
(17.0)
7.9
4.0
7.8
(2.9)
Gearing movement
for the 12 months ended 30 June 2021
45%
40%
35%
30%
25%
20%
15%
Gearing
target range
35%-45%
+3.2%
+0.4%
+5.4%
-1.4%
27.9%
-3.9%
31.6%
3.7%
increase since
30 June 2021
30-Jun-21
Acquisitions
and capex
Distribution
paid
FX translation
and MTM
derivatives
Investment
revaluations
Cash from
operating
activities
30-Jun-22
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
24
Directors’ report
Operating and financial review
Financial performance.
10-year financial performance summary
As at 30 June
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
Financial performance
Profit for the period
$m
459.2
553.2
272.1
375.3
357.7
278.1
219.4
283.0
117.3
94.0
Financial position
Total assets (at 30 June)
Total equity (at 30 June)
Securityholder value
Basic earnings per security
Funds from operations per security
Distributions per security
Total securityholder return2
Return on equity
Gearing (at 30 June)
NTA per security (at 30 June)
$m
$m
¢
¢
¢
%
%
%
$
5,499.8
4,777.8
4,500.7
4,117.9 3,474.6 3,328.4
2,879.6
2,407.1
2,128.8 1,680.4
3,519.9
3,221.4
2,822.6
2,546.5 2,157.0 1,901.5
1,522.4
1,411.5
1,165.1
804.1
59.5
27.7
20.8
(11.7)
14.3
31.6
4.56
71.7
25.7
20.0
34.0
19.7
27.9
4.17
35.3
25.6
21.8
(17.7)
10.8
32.2
3.65
52.9
25.1
23.0
21.0
16.9
34.3
3.52
53.5
25.0
22.2
22.3
18.5
33.9
3.19
42.7
25.5
21.5
6.3
18.6
38.5
38.1
22.9
20.5
7.4
13.5
41.2
50.4
21.8
19.7
36.4
23.9
36.3
25.7
20.2
19.0
10.8
17.5
40.3
2.88
2.61
2.48
2.16
23.7
N/A1
18.3
23.6
13.1
46.8
2.00
Market capitalisation (at 30 June)
$m
2,631.4
3,141.5
2,469.9
3,178.6 2,438.1 2,076.6
1,836.8
1,781.1
1,323.3
966.8
Market capitalisation and free float ($m)
Market capitalisation
Free float
1,781.1
1,836.8
2,076.6
3,178.6
3,141.5
2,438.1
2,469.9
2,631.4
1,323.3
966.8
409.2
271.1
623.9
634.2
724.3
839.9
1,200.9
1,187.8
933.9
994.5
June 2013
June 2014
June 2015
June 2016
June 2017
June 2018
June 2019
June 2020
June 2021
June 2022
1. Not applicable, no data available for these periods.
2. Source: UBS Investment Research.
25
141 Camberwell Road,
Hawthorn East, VIC
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 26
Directors’ report
Operating and financial review
Risk
management.
The Board has overall responsibility for the establishment and oversight
of the Group’s risk management framework. The Board has established
an Audit, Risk and Compliance Committee (ARCC), which is responsible
for oversight of the framework and how management monitor
compliance with the Group’s risk management policies and procedures.
Refer to the Group’s 2022
Corporate Governance
Statement for more details
on the Group’s risk management
framework.
growthpoint.com.au/corporate-
governance
Management provides regular reports to the ARCC in relation to the risks facing the
Group. The ARCC reviews the adequacy of the risk management framework in relation to the risks faced by the Group and makes
appropriate recommendations to the Board. The ARCC also reports regularly to the Board on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group to set appropriate risk limits and controls
and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Group’s activities. The Group, through its training, standards and procedures, aims to develop a disciplined
and constructive control environment in which all employees understand their roles and obligations.
The following table outlines the material risks that could impact Growthpoint’s achievement of its strategic and financial
objectives and summarises how we are managing these risks:
Material business risk
How Growthpoint is responding
Strategy and reputation
Financial performance
Not meeting financial performance
expectations due to a variety of risks
and factors, could impact our reputation,
stakeholder confidence, the value of our
portfolio and our ability to pay or grow
distributions.
Risk factors that could impact our financial
performance include macroeconomic impacts,
rising interest rates, high inflation, low or
negative growth and an increase in capital
expenditure and incentives paid.
We continually monitor the economic, financial and property markets to ensure
that all business decisions, acquisitions and disposals are supported by thorough
research.
As our earnings are derived from rental income, we look to protect this by
maintaining high occupancy rates across our property portfolio through active asset
management and tenant engagement. Across the portfolio we currently have an
occupancy rate of 97%, a WALE of 6.3 years and a high proportion of fixed annual
rent increases.
To ensure security of income, we carefully select our tenants and as a result our
assets are predominately leased to government, listed organisations and large
private companies.
We also limit development risk. We only develop properties in our portfolio to meet
our tenants’ requirements or to maximise the property’s value and will only acquire
properties under construction when there are material leases in place.
We have a structured and proactive approach to maintaining services across the
portfolio. This not only ensures that we are providing reliable services and conditions
at each asset but also allows us to proactively manage and budget capital
expenditure. This process is closely managed and regularly reviewed in conjunction
with lifecycle reporting to ensure that financial and operational forecasts remain
relevant.
We adopt and implement prudent capital management practices. This includes
maintaining sufficient liquidity, a percentage of fixed debt in accordance with our
Treasury Management Policy and have a long weighted average debt maturity of 4.2
years.
27
599 Main North Road,
Gepps Cross, SA
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 28
Directors’ report
Operating and financial review
Risk management.
Material business risk
How Growthpoint is responding
Physical assets
Property portfolio
The value of our property portfolio could
decrease based on new sales evidence,
change in valuers’ assumptions, the quality of
tenant base, the quality of our property assets,
the investment decisions we make, external
economic factors and the term of our ground
lease tenancies.
We have a resilient and high-green credentialed portfolio comprised of high-
quality and modern commercial real estate properties, predominately leased to
government, listed organisations or large private companies. Our exposure is limited
to office (primarily metropolitan) and industrial property sectors.
We continually monitor and look to improve the quality of our portfolio. This may
involve buying and selling properties at the right time of the property cycle or
investing in our existing properties to add value to our portfolio.
Detailed due diligence is also undertaken for all investment proposals.
Leasing risk
An inability to lease our assets in line with
asset management plans and forecasts or
prolonged material portfolio vacancies due to
weakened tenancy demand.
We focus on proactively engaging with our tenants to understand their tenancy
requirements, so that we can best position Growthpoint’s assets to meet their
changing needs and exceed their expectations. Through this active asset
management and tenant engagement we endeavour to minimise vacancy and
exposure to high incentives and long downtime.
Structural changes due to disruptive
industries and trends
Our portfolio and the industry are continually monitored through active research,
industry market briefings and developments.
The rise of remote working, innovative
competitors in the market and building
obsolescence can impact on our current and
future operations.
We monitor the potential impacts of the increase of automation and how it affects
our industrial portfolio.
We continue to monitor whether a shift to more flexible working arrangements
could lead to a reduction in demand for office space over the long term. To date,
there continues to be strong demand for our offices, with strong environmental
credentials, primarily located in metropolitan markets, from existing and potential
tenants, with a number of long leases signed over FY22. This may be driven by
several characteristics of metropolitan offices, which have become more attractive in
a post-pandemic world, including lower density, higher ratio of car parks than CBD
offices and often being located closer to where people live.
Finance and economics
Access to capital markets
Continuous access to debt and equity markets
is important to the sustainability of our business.
If our ability to obtain capital is constrained, it
may lead to increased costs of financing and our
strategic objectives not being met.
Operations, and people and culture
COVID-19 pandemic
Although the COVID-19 pandemic has had an
immaterial impact on us to date, the ongoing
pandemic may continue to create uncertainty
for our operating environment, including more
virulent strains that current vaccines are not as
effective against and the potential for further
outbreaks which may require further government
restrictions or recommendations.
Support from our banking partners is dependent on their financial covenants being
met. We regularly stress test these covenants. As at 30 June 2022, Growthpoint
was well within all its debt covenant limits. We also maintain an investment grade
credit rating of Baa2.
We exercise prudent capital management and our balance sheet gearing is
currently below our target range of 35% to 45%. Growthpoint also maintains strong
relationships with its equity investors, through its investor relations program.
Our priority since the outbreak of the COVID-19 pandemic has been protecting the
safety and wellbeing of our employees, our tenants and the broader community.
We proactively engage with our tenants to understand the impact that the
COVID-19 pandemic has had on their business and ensure rental relief has been
distributed fairly to those tenants who most need our support.
We maintained prudent capital management and high occupancy throughout the
financial year and, to date, the COVID-19 pandemic has had an immaterial impact
on the Group’s operational performance or financial position. Management and the
Board will continue to monitor the ongoing impact of COVID-19 on the business.
29
Material business risk
How Growthpoint is responding
Operations, and people and culture (cont)
Data, information and cybersecurity
Cyber security attacks could potentially interrupt
business operations and lead to a loss in
productivity and loss of business records, which
could cause reputational or financial damage.
We have a dedicated team that oversees our IT systems and regularly conduct
penetration testing of our IT systems. We also have a Disaster Recovery Plan and
provide training and education to our employees, to assist in reducing the risk and
impact of any cybersecurity attack.
We undertake IT security assessments of new key suppliers or suppliers of key
IT platforms and annually review the business continuity and disaster recovery
arrangements of existing key suppliers to minimise the impacts of third-party
providers outages on our business.
People and culture
The loss of key personnel, particularly
in the current environment of record low
unemployment, can result in a productivity
downturn, an increase in operating costs and
place a greater burden on remaining employees.
Not having the right team size with the right
skills may also adversely affect productivity and
the achievement of our strategic objectives.
Our remuneration framework is based on attracting and retaining suitability qualified
and experienced employees and is tailored to reward high performance and tenure.
We seek to foster a diverse and inclusive workplace culture where we celebrate our
successes. We undertake annual employee engagement surveys to identify areas
for improvement, which we act upon.
We also undertake regular workforce planning to ensure that we have the right team
size, skills and experience to support our business.
Professional development programs are tailored for individuals based on their career
goals and plans.
Legal and regulatory
Legal, compliance and regulatory
Non-compliance of laws or our AFSL or changes
in the legal or regulatory environment may
impact on our business and operations and
lead to reputational damage or an increase in
compliance costs.
Environmental and social sustainability
Environmental sustainability and climate
change
Inability to deliver on our environmental strategy
could result in poor asset performance, negative
reputation impacts and hamper our ability to
raise capital.
Social sustainability
Failure to comply with relevant legislation and
have a positive social impact in the communities
in which we operate could result in damage to
our reputation and relationship with stakeholders
and erode our social licence to operate.
Our compliance culture is guided by our policies and procedures to ensure that we
operate within regulatory requirements. Our team members receive regular training
on their compliance obligations, and we have an internal compliance and legal team
that ensures that new and updated regulatory requirements are communicated
throughout the business and actioned.
Our recently approved Sustainability Framework builds on our previous commitment
to achieve net zero carbon emissions by 2025. We invest in assets with strong
environmental credentials and seek to improve the resilience of physical assets via
the implementation of adaption plans to mitigate impacts of physical changes in
climate and investing in energy and building management systems.
We have published modern slavery statements that detail our approach to
identifying and managing modern slavery risks in our supply chain. In conjunction
with a specialist consultant, we have undertaken a deep dive risk assessment of our
supply chain. In addition, we have provided modern slavery training to all staff, and
the Board.
Via our Community Program we continue to sponsor and support a range of
community and social causes.
See the Group’s 2021 TCFD Statement which provides an overview of Growthpoint’s approach to managing the risks and
opportunities of climate change and shows it is well placed to respond to the potential physical and transitional impacts of
climate change over the next 10 years.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
30
Directors’ report
Governance
Board
of Directors.
Geoffrey Tomlinson
BEc – Independent Chairman
and Director
Term of office
Geoff was appointed as
a Director of the Board in
September 2013 and Chairman
in July 2014.
Timothy Collyer
B.Bus (Prop), Grad Dip Fin
& Inv, AAPI, F Fin, MAICD –
Managing Director
Term of office
Tim was appointed as Managing
Director and to the Board in July
2010.
Professional experience
Professional experience
Tim has over 33 years of
experience in property
investment and development,
property valuation and property
advisory at both ASX-listed and
unlisted property funds. He
has worked across the office,
industrial and retail property
sectors.
Prior to joining Growthpoint, Tim
was Property Trust Manager
at Australand Property Group.
He also held senior positions at
Heine Funds Management.
Board Committee Membership
– Investment Committee
Geoff has more than 49 years
of experience in the financial
services industry including
six years as Group Managing
Director of National Mutual
Holdings (which changed its
name to AXA Asia Pacific prior to
being acquired by AMP in 2011).
Geoff was previously a Director
on a number of other Boards,
including National Australia Bank
and IRESS Limited and the
Chairman of MLC.
Other directorships and
positions
Geoff is currently a Director of
Wingate Group.
Board Committee Membership
– Audit, Risk & Compliance
Committee
– Nomination, Remuneration
and HR Committee
Grant Jackson
Assoc. Dip. Valuations, FAPI –
Independent Director
Term of office
Grant was appointed as a
Director of the Board in August
2009.
Professional experience
Grant has over 36 years of
experience in the property
industry including 32 years as
a qualified valuer. Grant has
expertise in a wide range of
valuation and property advisory
matters on a national basis and
he regularly provides expert
evidence to courts and tribunals.
Other directorships and
positions
Grant is Executive Chairman of
m3property.
Board Committee Membership
– Chair - Investment Committee
– Audit, Risk & Compliance
Committee
Estienne de Klerk
BCom (Industrial Psych), BCom
(Hons) (Marketing), BCom
(Hons) (Accounting), CA (SA) –
Director
Term of office
Estienne was appointed as a
Director of the Board in August
2009.
Professional experience
Estienne has 26 years of
experience in banking and
property investment. He has
held senior roles at Growthpoint
Properties Limited for over 20
years, with responsibility for
mergers, acquisitions, capital
raisings and operating service
divisions.
Estienne is a past-President
of the South African Property
Owners Association.
Other directorships and
positions
Estienne is currently Growthpoint
Properties Limited’s Chief
Executive Officer: South
Africa. He is also a Director
of V&A Waterfront Holdings
and Chairman of the SA REIT
Association.
Estienne is not considered
independent due to his position
at Growthpoint Properties
Limited.
Board Committee Membership
– Audit, Risk & Compliance
Committee
31
Francois Marais
BCom, LLB, H Dip (Company
Law) – Director
Deborah Page AM
BEc FAICD FCA – Independent
Director
Norbert Sasse
BCom (Hons) (Acc), CA (SA) –
Director
Josephine Sukkar AM
BSc (Hons), Grad Dip Ed –
Independent Director
Term of office
Term of office
Term of office
Term of office
Francois was appointed as a
Director of the Board in August
2009.
Deborah was appointed as a
Director of the Board in March
2021.
Norbert was appointed as a
Director of the Board in August
2009.
Professional experience
Professional experience
Professional experience
Francois is an attorney and is
the practice leader and senior
director of Glyn Marais, a South
African corporate law firm which
specialises in corporate finance.
Other directorships and
positions
Francois was previously a
Director and Chairman of
Growthpoint Properties Limited,
as well as a Director of V&A
Waterfront Holdings.
Francois is not considered
independent due to his previous
position at Growthpoint
Properties Limited.
Board Committee Membership
– Nomination, Remuneration
and HR Committee
Deborah has extensive executive
experience, having held senior
financial and operational roles at
a number of leading Australian
companies, across the property,
financial services, technology
and legal sectors. Prior to this,
she was a partner at Touche
Ross/ KPMG Peat Marwick.
Deborah was formerly Chair
of Investa Office Fund and a
former non-executive Director of
Investa Property Group, GBST
Holdings Limited and Australian
Renewable Fuels Limited.
Other directorships and
positions
Deborah is currently Chair of
Pendal Group Limited, a non-
executive Director of Brickworks
Limited and Service Stream
Limited, and a member of the
Takeovers Panel.
Board Committee Membership
– Chair - Audit, Risk and
Compliance Committee
– Investment Committee
Norbert has over 26 years of
experience in corporate finance
dealing with listings, delistings,
mergers, acquisitions and capital
raisings, and over 19 years of
experience in the listed property
market.
Other directorships and
positions
Norbert is the Group Chief
Executive Officer and a Director
of Growthpoint Properties
Limited. He is also a Director
of V&A Waterfront Holdings,
and Capital & Regional plc
and Globalworth Real Estate
Investments Limited.
Norbert is not considered
independent due to his position
at Growthpoint Properties
Limited.
Board Committee Membership
– Chair - Nomination,
Remuneration & HR
Committee
– Investment Committee
Josephine was appointed as a
Director in October 2017.
Professional experience
Josephine is the co-founder
and the Principal of Buildcorp
which she established with her
husband over 32 years ago.
Josephine was previously a
Director of The Trust Company,
YWCA NSW, the University
of Melbourne’s Infrastructure
Advisory Board and Opera
Australia.
Other directorships and
positions
In addition to her position at
Buildcorp, Josephine is currently
a Governor of the Centenary
Institute, a Trustee of the
Australian Museum and a non-
executive Director of Washington
H. Soul Pattinson and Co.
Ltd, the Property Council of
Australia and the Green Building
Council of Australia. Josephine
is also Chair of the Buildcorp
Foundation and the Australian
Sports Commission.
Board Committee Membership
– Nomination, Remuneration
and HR Committee
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 32
Directors’ report
Governance
Executive
Management Team.
Timothy Collyer
B.Bus (Prop), Grad Dip Fin
& Inv, AAPI, F Fin, MAICD –
Managing Director
Tim joined Growthpoint in 2009
and has been Managing Director
since 2010.
Tim has over 33 years of
experience in property
investment and development,
property valuation and property
advisory at both ASX-listed and
unlisted property funds. He
has worked across the office,
industrial and retail property
sectors.
Prior to joining Growthpoint, Tim
was Property Trust Manager
at Australand Property Group.
He also held senior positions at
Heine Funds Management.
Jacqueline Jovanovski
LLB (Hons), BA, GradDipApp
(CorporateGov), FGIA FCG (CS,
CGP) – Chief Operating Officer
Jacquee joined Growthpoint
as Chief Operating Officer
in 2019. As part of this role,
Jacquee is also Growthpoint’s
General Counsel and Company
Secretary.
Previously, Jacquee held a
number of senior positions at
Vicinity Centres, most recently
Company Secretary and Head of
Compliance.
Prior to joining Vicinity Centres,
Jacquee was a lawyer with legal
firms Minter Ellison, Linklaters
and Herbert Smith Freehills, in
Melbourne and London.
Michael Green
B.Bus (Prop), GAICD
– Chief Investment Officer
Michael joined Growthpoint in
2009 and has been a member
of the Executive Team for over
a decade. He has held several
executive leadership roles and
is currently Chief Investment
Officer.
Michael has over 21 years of
experience in listed and unlisted
property fund management,
property investment and
development, both in Australia
and Europe.
Prior to joining Growthpoint,
Michael was based in London
and was Transaction Manager for
Cordea Savills.
Dion Andrews
B.Bus, FCCA, GAICD
– Chief Financial Officer
Dion joined Growthpoint in 2009
as Financial Controller. He was
appointed Chief Financial Officer
in 2011.
Dion is a Chartered Accountant,
with over 20 years of experience
in financial roles in Melbourne
and London.
Dion joined Growthpoint from
MacarthurCook, a listed property
funds group, where he held a
senior finance position.
33
5 Murray Rose Avenue,
Sydney Olympic Park, NSW
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 34
Directors’ report
Governance
Remuneration
report.
On behalf of the Board, I am
pleased to present Growthpoint’s
remuneration report, which
provides an overview of our
FY22 remuneration structure and
outcomes, and our approach to
FY23.
Positive performance with a
resilient, growing portfolio
The COVID-19 pandemic continued
to impact business and individuals in
Australia and across the world in FY22.
Growthpoint continued to successfully
navigate the pandemic, with no direct
material impact on the Group’s financial
results to date which reflects the strength
of the Group’s financial position over the
period and the resilience of its property
portfolio.
In FY22, Growthpoint has delivered strong
results with funds from operations (FFO)
of 27.7 cents per security (cps), 7.8%
growth on FY21. The Group has made
strategic, accretive acquisitions which
included investing $375 million in high-
quality modern A-grade office assets,
acquiring additional Dexus Industria REIT
(DXI) securities which provide an attractive
yield and further indirect exposure to
industrial assets, and progressed its
strategy to enter funds management, with
the announcement of the entry into an
agreement to acquire the Fortius Funds
Management platform in early August
2022.
The Group strengthened its capital
position during FY22, refinancing
$715 million in debt and entering into new
facilities totalling $350 million to support
the Group’s growth ambitions. The Group
has seen its portfolio value increase by
7.9% or $356 million on a like-for-like
basis at 30 June 2022, with the uplift
over 12 months reflecting the strength
of the industrial market and leasing
success across both office and industrial
portfolios. The Group has maintained
both its high portfolio occupancy of 97%,
predominantly leased to government,
listed or large organisations, and portfolio
weighted average lease expiry (WALE)
of 6.3 years as at 30 June 2022. Net
tangible assets (NTA) have increased
over FY22 to $4.56 per security, further
demonstrating the resilience of the
Group’s growing property portfolio.
Growthpoint has seen continued
outperformance of the S&P/ASX 200
REIT Accumulation Index (the Index)
over the short, medium and long term.
The total securityholder return (TSR)
performance of -11.7% in FY22 has
outperformed the Index by 60 bps, with
sector-wide security price performance
being significantly impacted in the latter
part of FY22 as the market responded to
an economic environment of central bank
interest rates hikes, rising long-term bond
yields and increased inflation.
FY22 FFO of 27.7 cps reflects a robust
financial performance, the successful
execution of the Group’s strategy and
underlying strength of the business.
The final FY22 distribution of 20.8 cps
represents a payout ratio of 75%, in line
with the Board’s decision to maintain
a more conservative payout ratio of
between 75% and 85% of FFO. This
assists in our objective of providing
Securityholders with growing distributions
going forward since its introduction in
FY21.
Growthpoint’s performance, FY17-22
FY17
FY20
FY22
2-year
CAGR
5-year
CAGR
FFO per security
Distribution per security (cents)
NTA per security (cents)
25.5
21.5
2.88
25.6
21.8
3.65
27.7
20.8
4.56
4.0%
-2.3%
11.8%
1.7%
-0.7%
9.6%
Norbert Sasse
Director
Total Securityholder return
over 1, 3, 5 and 10 years (%)
Growthpoint TSR
S&P/ASX 200 REIT
Accumulation Index TSR
11.9
9.2
7.6
4.4
1 year
3 years
-0.9
-2.8
5 years
10 years
-11.7
-12.3
Source: UBS Investment Research. Annual
compound returns to 30 June 2022.
35
11 Murray Rose Avenue,
Sydney Olympic Park, NSW
FY22 awards
The Executive Management Team (EMT)
short-term incentive (STI) entitlement is
divided into financial criteria (70% of total)
and non-financial criteria (30% of total).
To be eligible for 30% of the financial
entitlement EMT were required to deliver
a base target FY22 FFO of 26.4 cps,
which was set 0.2 cps or 0.8% ahead of
budget. A stretch target of 27.5 cps was
set at 1.3 cps or 5.0% ahead of budget,
providing a maximum 125% achievement.
The Board considered the strength of
the Group’s FY21 performance and the
ongoing COVID pandemic environment
in setting FY22 targets, with significant
achievement required to meet the stretch
target.
The Board was pleased to see the
Group outperform on its financial target,
achieving its stretch target to deliver
FY22 FFO of 27.7 cps, increasing FFO by
7.8% on FY21.
In addition to financial achievements,
the Board was pleased with the EMT’s
progress on a number of the Group’s
strategic objectives and non-financial
criteria for FY22 STI entitlement over the
year, outlined on page 43. This includes
the strategic, accretive acquisitions made
in FY22 noted above.
The EMT also progressed the Group’s
ESG performance, with its importance
reflected in an increased weighting to
25% of the FY22 STI non-financial criteria
from 20% in FY21. Growthpoint’s average
NABERS Energy rating has improved
to 5.2 stars, with 100% of the office
portfolio now rated. The Group’s overall
GRESB score increased six points to
80 and an above-average CDP score
of B has been maintained. Progress
has also been made on implementation
of solar projects across the portfolio,
energy efficiency initiatives and renewable
energy procurement to support the
Group’s pathway to its target of net
zero by 2025.1 The Group has also
progressed gender diversity with women
in leadership2 now 50% at 30 June 2022,
from 38% in FY21. The introduction of a
new sustainability framework and targets
toward the end of FY22 further evolves
the Group’s approach to ESG matters.
The framework is outlined on page 19,
with further detail to be provided in the
Group’s FY22 Sustainability Report which
will be published in September 2022.
The positive results of the annual
employee engagement survey
demonstrate the EMT’s focus on
building a positive, performance driven
team culture. The Group places in the
top decile of its benchmark group on
employee engagement score and top
quartile on employee alignment in FY22,
building on top quartile scores in FY21.
The Group has also reviewed employee
benefits and evolved its offer, introducing
additional tenure-based paid leave at the
end of FY22 (up to a maximum of five
days), in addition to paid superannuation
when employees are on unpaid parental
leave (for the balance of the first year that
is unpaid) and five days paid domestic
violence leave. These changes to
Growthpoint’s employee value proposition
allow Growthpoint to continue to reward
and motivate a high performing team.
The Group has further strengthened
its governance in FY22, establishing
an Investment Committee which has
streamlined acquisition and disposal
approval processes. The Group has also
developed key management personnel
succession plans.
1. Net zero 2025 target across 100% owned on balance sheet operationally controlled office assets and corporate activities. See page 106 for detail.
2. Women in leadership positions includes EMT and senior managers (employees that report to an EMT member, excluding assistants).
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 36
Directors’ report
Governance
Tenant engagement has seen a positive
improvement over FY22 with Growthpoint
achieving 80% tenant satisfaction in its
annual survey and ranking as industry
leaders on landlord satisfaction. The
Group was market leader in the office
category (10% above the average)
and ranked second in the industrial
category (8% above the average) in the
survey conducted by property research
specialists Brickfields Consultancy.
Reflecting the Group’s performance in
FY22, and the EMT’s STI performance
criteria (financial and non-financial) set
at the start of the year, the Board has
assessed that the EMT’s STI award will
be 111.38% of their FY22 STI opportunity
as outlined on pages 43 to 44. As
the Group’s financial results were not
materially impacted by the pandemic,
the Committee has not made any
adjustments to the FY22 STI Award.
In line with the Group’s remuneration
policy, the Committee will assess the
long-term incentive (LTI) award in October
for the LTI plan with a performance period
of 1 July 2019 to 30 June 2022. The LTI
award assesses the Group’s TSR and
return on equity performance relative to
the constituents of the S&P ASX 200
REIT Index over a three-year period.
FY23 remuneration
The STI structure for FY23 will be
consistent with FY22 but an adjustment
has been made to the terms of any
STI granted for FY23, which will now
be awarded as 80 percent cash and
20 percent GOZ securities which vest
over a two-year period (previously two
thirds cash, one third securities). This
adjustment allows the STI component of
EMT remuneration to remain competitive
relative to peers. The EMT all have
Minimum Security Holding Requirements
(MSR) as detailed on page 50 of this
report.
The Committee again engaged PwC
to benchmark the EMT’s remuneration
against an industry peer group, and other
listed ASX companies with a comparable
market capitalisation.3 Based on this
work, and the Group’s relative position
in the market, the Board has decided a
weighted average 7.2% increase to the
EMT’s total fixed remuneration (TFR) in
FY23.
Other matters
The Committee has considered Director’s
fees and has agreed an increase of 10%
following a review in comparison to the
Group’s peers which is further outlined
on page 50. Fees have not increased
since July 2019 and the Board believes
that the uplift reflects market competitive
fees at a level that ensures the Group can
attract and retain suitably qualified and
experienced persons to the Board in line
with the principles of remuneration.
The Committee oversees the recruitment
and appointment of Directors and has
made progress on board renewal and
succession planning during FY22. This
includes planning for the anticipated
retirement of Mr Grant Jackson and
the Board Chair, Mr Tomlinson, at or
prior to the end of their current term, as
announced at the 2020 and 2021 Annual
General Meetings respectively.
We hope that you find the following
report transparent and informative, and
welcome your feedback. The Board
remain committed to ensuring that the
EMT and Securityholder’s interests are
aligned.
Norbert Sasse
Chair – Nomination, Remuneration and
Human Resources Committee
3. Detail of the benchmarking approach can be found on page 52 of this report.
Remuneration report. 37
What’s inside.
Who this report covers
FY22 Executive KMP remuneration
policy and framework
FY22 short-term incentives (STI)
FY22 long-term incentives (LTI)
FY23 Executive KMP remuneration
Non-executive KMP arrangements
Executive and non-executive KMP shareholdings
Remuneration policy and role of the Nomination,
Remuneration and HR Committee
37
38
42
45
48
49
50
51
Who this report covers
This report covers Key Management Personnel (KMP),
comprising Executive Management Team (Executive
KMP) and Non-executive Directors.
Executive KMP
õ Timothy Collyer - Managing Director
õ Dion Andrews - Chief Financial Officer and
Company Secretary
õ Michael Green - Chief Investment Officer
õ Jacqueline (Jacquee) Jovanovski - Chief
Operating Officer and Company Secretary
Non-Executive Directors
õ Geoffrey Tomlinson - Independent Chairman
and Director
õ Estienne de Klerk - Director
õ Grant Jackson - Independent Director
õ Francois Marais - Director
õ Norbert Sasse - Director
õ Josephine Sukkar AM - Independent Director
õ Deborah Page AM - Independent Director
About the remuneration report
The Directors present this ‘Remuneration Report’ for
the Group for the year ended 30 June 2022. This report
summarises key compensation policies and provides
detailed information on the compensation for Directors
and other KMP.
The specific remuneration arrangements described in this
report apply to the Managing Director and the KMP as
defined in AASB 124.
Growthpoint’s remuneration practices outlined in this
report comply with best practice governance guidelines,
as per ASX Corporate Governance Principles and
Recommendations.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 38
Directors’ report
Governance
FY22 Executive KMP remuneration policy and framework
Components of FY22 remuneration
Total Fixed
Remuneration (TFR)
(including applicable
superannuation and
other benefits)
Short-term
incentives (STI)
Set at a level to attract and retain suitably qualified and experienced
persons in each respective role and tailored to encourage overall
performance of the Group which is in the best interests of all
Securityholders. TFR is targeting the straight-line midpoint between
the 25th and 50th percentile of the industry benchmark.
If specified performance criteria are met, eligibility of each Executive
KMP to receive an STI bonus payable as two thirds cash and one
third as deferred short-term incentive performance rights (Short-
term Performance Rights) in respect of each financial year.
Long-term
incentives (LTI)
LTI bonus payable under which, upon meeting specified
performance criteria, each Executive KMP is eligible to receive
securities in the Group over time to help align each Executive KMP’s
interests with those of Securityholders.
42
48
Current year
(FY22)
Next year
(FY23)
45
Current year
(FY22)
Executive KMP Remuneration delivery FY22
Executive KMP remuneration is structured to link rewards to individual performance and the execution of the Group’s strategy to
sustainably grow distributions and long-term capital growth. This leads to the creation of Securityholder value.
FY22
FY23
FY24
FY25
Fixed
Remuneration
100%
Base Salary,
Superannuation
and Other
Benefits1
STI
66.7% paid in Cash
Cash STI
33.3% deferred
Short-term
Performance Rights
16.65% deferred for one year
16.65% deferred for two years
LTI
delivered as
long-term
performance rights
(Long-term performance
rights)
100% subject to a
3 year performance
period2
50% subject to relative total securityholder
returns (TSR) growth
50% subject to relative return on equity (ROE) growth
1. Other Benefits comprise wellbeing and insurance arrangements provided to all Executive KMP.
2. The measurement period finishes on 30 June 2024 with vesting in early FY25.
Remuneration report.
39
Executive KMP Remuneration mix FY22 ($000)
TFR
STI - Cash
STI - deferred
LTI
Managing Director
Chief Financial Officer
$864 (27%)
$423 (13%)
$846 (26%)
$428 (16%)
$274 (11%)
$824 32%)
$326 (16%)
$193 (9%)
$473 (23%)
Performance
dependent
$382 (28%)
$149 (11%)
$299 (22%)
$187 (17%)
$98 (9%)
$283 (25%)
$121 (13%)
$68 (8%)
$166 (18%)
Performance
dependent
$1080
(34%)
$1080
(52%)
$1080
(41%)
$1080
(100%)
$545
(40%)
$545
(61%)
$545
(49%)
$545
(100%)
Maximum
Actual
(take home)
Actual
(accounting)
Minimum
Maximum
Actual
(take home)
Actual
(accounting)
Minimum
Chief Investment Officer
Chief Operating Officer
$382 (28%)
$149 (11%)
$299 (22%)
$187 (17%)
$98 (9%)
$283 (25%)
$121 (13%)
$68 (8%)
$166 (18%)
Performance
dependent
$327 (28%)
$128 (11%)
$259 (22%)
$148 (16%)
$82 (9%)
$243 (26%)
$54 (8%)
$141 (21%)
Performance
dependent
$545
(40%)
$545
(61%)
$545
(49%)
$545
(100%)
$468
(40%)
$468
(71%)
$468
(50%)
$468
(100%)
Maximum
Actual
(take home)
Actual
(accounting)
Minimum
Maximum
Actual
(take home)
Actual
(accounting)
Minimum
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 40
Directors’ report
Governance
Principles of remuneration for Executive KMP
1. Executive KMP should receive total remuneration which is competitive with rates for similar roles within the ASX A-REIT sector and
ASX listed companies of similar size (measured by market capitalisation), complexity, workload and the relative profit and expenses
versus the Group.
2. The total remuneration for Executive KMP should be set at a level to attract and retain suitably qualified and experienced persons in
each respective role and tailored to encourage overall performance of the Group which is in the best interests of all Securityholders.
3. Executive KMP are not eligible for any additional fees for additional roles within the Group such as acting as an officer of the
Company or being a responsible manager under the Group’s AFSLs.
4. From 1 July 2018, the Committee implemented a Minimum Securityholding Requirement (MSR) for KMP (refer to page 50 for details
of KMP’s current holdings and details of the MSR).
5. Executive KMP are entitled to receive certain payments including the vesting of all unvested performance rights if the Company
decides to terminate a position without cause including through redundancy or takeover (refer to page 53 for further information).
Total Executive KMP remuneration (Take home basis)
The following table presents the actual remuneration received by Executive KMP during FY22. This voluntary disclosure is provided to
increase transparency and includes:
õ Salary and other benefits received during FY22
õ FY21 cash STI received during FY22, and
õ The value of securities that vested during FY22.
The actual remuneration presented in this table is distinct from the disclosed remuneration presented further below, which is calculated
in accordance with statutory obligations and accounting standards and is therefore recognised in the Statement of Comprehensive
Income during FY22. These amounts can differ to the amounts actually received. The numbers in the audited disclosed remuneration
include accounting values for current and prior years’ LTI grants which have not been (or may not be) received, as they are dependent
on performance hurdles and service conditions being met.
Salary and
other benefits
Cash STI
Value of
deferred STI
rights vested1
Value of LTI
rights vested1
$
$
$
$
Timothy Collyer – Managing Director
Dion Andrews – Chief Financial Officer
Michael Green – Chief Investment Officer
Jacquee Jovanovski – Chief Operating Officer
1,080,000
545,000
545,000
467,500
472,737
166,311
166,311
141,132
193,460
67,931
67,931
53,851
326,328
121,068
121,068
–
TOTAL
$
2,072,525
900,310
900,310
662,483
Total
2,637,500
946,491
383,173
568,464
4,535,628
1. Based on market price at the time of vesting.
% of
remuneration
performance-
based
%
48%
39%
39%
29%
42%
Remuneration report. Total Executive KMP remuneration (accounting basis)
Short-term
benefits
Long-term
benefits
Security-based
payments
Base
salary
STI
cash
award
Performance
rights cash
distribution
Annual
leave1
Non-
monetary
benefits
Super-
annuation
benefits
Long
service
leave1
Deferred
STI Plan
expense
LTI Plan
expense
$
$
$
$
Timothy Collyer – Managing Director
$
–
1,068,700 801,940
5,814 (21,804)
27,500
35,612
273,530 428,426
2,619,718
990,000 461,024
9,753
15,143
954
25,000
1,827
135,409 369,761
2,008,871
$
$
$
$
Total
$
FY22
FY21
FY22
FY21
Total
FY22
FY21
Dion Andrews – Chief Financial Officer
FY22
FY21
525,675 283,278
2,041
17,121
482,500 162,198
3,241
9,231
Michael Green – Chief Investment Officer
FY22
FY21
525,675 283,278
2,041 (14,078)
475,077 162,198
3,241
5,533
Jacquee Jovanovski – Chief Operating Officer
447,013 242,995
1,621
9,841
406,375 137,868
1,595
11,297
2,567,063 1,611,491
11,517
(8,920)
–
–
–
–
–
–
–
27,500
18,828
98,152 186,608
1,159,203
25,000
3,558
50,664 154,133
890,525
27,500
17,457
98,152 186,608
1,126,633
25,000
4,422
50,664 154,133
880,268
27,500
1,234
82,409 147,545
960,158
25,000
2,700
40,577
88,435
713,847
110,000
73,131
552,244 949,187
5,865,713
2,353,952 923,288
17,830
41,204
954
100,000
12,507
277,314 766,462
4,493,511
1. The accounting value of leave movements may be negative; for example, where an Executive’s annual leave balance decreases as a result of taking more than the 20 days’
annual leave they accrue during the current year.
41
S300A
(1) (e) (i)
proportion of
remuneration
performance
related
%
58%
49%
49%
42%
51%
42%
49%
38%
43%
44%
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 42
Directors’ report
Governance
FY22 short-term incentives (STI)
Performance criteria for Executive KMP STI for current year (FY22)
The STI provides Executive KMP with the opportunity to receive cash and equity based on a one-year performance period following
an assessment against specified financial and non-financial performance conditions. For FY22 the maximum STI opportunity for the
Managing Director’s TFR was 117.5% and 82.25% for the other Executive KMP.
STI Plan and Performance Criteria
At the start of each financial year the Committee, in consultation with the Managing Director, and with assistance from remuneration
consultants as required, recommends performance targets and reward levels for STIs to the Board in respect of the year ahead. The
STI criteria is then set by the Board.
The STI is divided into two criteria, namely;
a) Financial criteria – 70% of total
All of the Executive KMP are subject to the same financial criteria which is based upon achieving above budgeted FFO per security,
whereby for FY22, 26.4 cps (base target, which was set 0.2 cps or 0.8% ahead of budget) provides a 30% score, with the opportunity
for outperformance of up to 125% of the financial criteria via a stretch target of 27.5 cps (which is 1.3 cps or 5.0% ahead of budget). If
FFO per security is below the base target, the Board has discretion whether to grant achievement under the financial criteria.
An FFO target range has been chosen because it demonstrates the closest correlation to Securityholder value creation (measured by
total Securityholder return).
For FY22 the achievement was 125% for the financial criteria due to achievement of 27.7 cps.
b) Non-financial criteria – 30% of total
The non-financial criteria are based upon measures relating to the performance criteria in the table on page 43, with some common
measures and others applicable to the Executive KMP’s individual roles and responsibilities. Achievement of this component is capped
at 100%.
The non-financial measures were chosen as they represent the key drivers for the short-term success of the business and provide a
framework for long term securityholder value.
STI assessment
The Committee undertakes a performance review near the end of each financial year of the Executive KMP’s achievement against
financial and non-financial criteria to recommend the STI award payable. Any award of a STI to Executive KMP requires Board approval.
Cash STI payments are made in August following the financial year in which they were earned.
The Board has ultimate discretion to apply judgement or make adjustments when approving the final performance outcomes. The
Board will disclose the exercise of any of these discretions, however, no discretions have been exercised in respect of the reporting
year FY22.
The Managing Director’s performance criteria, weighted achievements and outcomes for FY22 are reflected on the following page.
Other members of Executive KMP have similar measures tailored to their roles and aligned to the Managing Director’s strategic themes
with the same weightings.
Remuneration report. 43
Criteria
Weighting Strategic objectives
Result Performance detail
Financial
70%
Non-
Financial
30%
70% FFO per Security
– Base target 26.4 cps = 30% of financial
criteria (set 0.2 cps ahead of budget)
– Straight line increase to a maximum of
125% (stretch target) earned at 27.5
cps (100% = 27.3 cps, 50% = 26.8
cps)
87.5% _ FFO 27.7cps (+7.8% on FY21): 125% of financial
component achieved
5% Growth initiatives and funds
management
– Identify and acquire accretive FFO
3.63% _ Strategic, high quality property acquisitions1 of $374.6m
(+$322.6m on FY21), each accretive to FFO, AFFO
_ $60.3 million of additional Dexus Industria REIT (DXI)
and AFFO direct property and listed
securities opportunities for growth
– Implement funds management
strategy which provides opportunities
for the Group to grow funds under
management (FUM) and other earnings
– Maintain appropriate capital structure
to finance the targeted growth
securities acquired, increasing the Group’s exposure to
industrial assets and accretive to FFO
_ Several funds management opportunities identified and
explored over FY22. Due diligence completed to acquire
the Fortius Funds Management platform in FY22, which will
add $1.9 billion of FUM. Entry into an agreement to acquire
100% of the shares in Fortius Funds Management Pty
Limited was subsequently announced on 3 August 2022
_ $715m of debt extended, $350m of new facilities established
and gearing maintained below target range at 31.6% (FY21:
27.9%)
7.5% Leadership and culture
– Embed a positive, performance driven
team culture within Growthpoint,
centred on tenants and securityholders
– Implement an efficient pathway to
facilitate the review and approval of
acquisitions and disposals
– Maintain a strong governance culture,
board reporting and engagement
– Succession planning Executive KMP
7.5% Environmental, Social and Governance
(ESG) initiatives and targets
Deliver performance against ESG and
diversity targets including:
– Maintain minimum 4.5 stars NABERS
rating
– Maintain FY21 CDP and GRESB
scores
– Progress towards Net Zero strategy
– Promote and achieve diversity
objectives
10% External stakeholders and customer
– Maintain high level of engagement
with external stakeholders including
tenants, investors and analysts,
potential funders and broader financial
community
– Enhance Group profile commensurate
with ASX200 listed entity
– Maintain or improve customer
satisfaction (tenants and investors)
on FY21, measured via independent
surveys.
5.63% _ Positive FY22 employee alignment and engagement scores,
with engagement in top decile and alignment in top quartile
of the benchmark group (FY21: both scores were top
quartile)
_ Seamless implementation of COVID-19 tenant protocols and
plan
_ Established Investment Committee which streamlined the
Group’s approval processes for its acquisitions and disposals
_ Progressed governance processes to align with best practice
and new regulatory requirement developments
_ Executive KMP succession plans developed
6.38% _ NABERS Energy rating of 5.2 stars with 100% of office
portfolio now rated (FY21: 5.1 stars)
_ GRESB score increased to 80 (FY21: 74) and CDP
maintained at B
_ Progressed solar projects across portfolio, energy efficiency
initiatives and renewable energy procurement strategy to
support the Group’s pathway to net zero 2025 target
_ Women in leadership positions2 increased to 50% (FY21:
38%)
_ Published second Modern Slavery Statement detailing
actions taken to assess and address risks in the Group’s
operations and supply chain
8.25% _ Positive direct feedback and external survey results on the
Group’s engagement with tenants, with improved tenant
satisfaction of 80%. Ranked industry leaders in landlord
satisfaction in office and industrial vs. peer group
_ Positive feedback on Group’s performance and management
from direct investor and analyst meetings. Also positive
results from externally conducted investor perception study,
with increase in overall average score YoY and favourable
score vs. leading peer company
_ Positive media and analyst coverage, with Group coverage
extended to 5 from 4 analysts
_ Improved uptake on digital channels including LinkedIn
engagement and Group website visits
Total non-financial
Totals
100%
23.88%
111.38%
1. Includes settlement of 2-6 Bowes Street, Phillip, Australian Capital Territory on 23 December 2021, 141 Camberwell Road, Hawthorn East, Victoria on 23 February 2022
and GSO Dandenong, 165-169 Thomas Street, Dandenong, Victoria which the Group announced in May and settled in July 2022. Figure excludes 11 Murray Rose, Sydney
Olympic Park, New South Wales, which settled on 24 August 2021 and was included in FY21 scorecard.
2. Women in leadership positions includes EMT and senior managers (employees that report to an EMT member, excluding assistants).
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 44
Directors’ report
Governance
Other Executive KMP non-financial performance achievements on a weighted average basis were as follows:
Weighting
Dion Andrews – Chief Financial Officer
Michael Green – Chief Investment Officer
Jacquee Jovanovski – Chief Operating Officer
Results of FY22 STI
Financial
Non-Financial
70%
87.50%
87.50%
87.50%
30%
23.88%
23.88%
23.88%
Total
100%
111.38%
111.38%
111.38%
The table below shows the maximum in cash and Short-term Performance Rights that each Executive KMP could earn for FY22, and
the actual results achieved.
Names
Maximum for FY22
Result for FY22
Total
Cash
Short-term
Performance Rights
Total
Cash
Short-term
Performance Rights1
$
$
$
No.
$
$
$
No.
Timothy Collyer – Managing Director
1,269,000
846,042
422,958
105,475
1,202,850
801,940
400,910
99,977
Dion Andrews – Chief Financial Officer
448,263
298,857
149,406
37,258
424,896
283,278
141,618
35,316
Michael Green – Chief Investment Officer
448,263
298,857
149,406
37,258
424,896
283,278
141,618
35,316
Jacquee Jovanovski – Chief Operating Officer
384,519
256,359
128,160
31,960
364,474
242,995
121,479
30,294
Total
2,550,045 1,700,115
849,930
211,951
2,417,116 1,611,491
805,625
200,903
1. The number of Short-term Performance Rights was derived by dividing the maximum dollar value by the Volume Weighted Average Price (VWAP) of Growthpoint securities
over the first 10 trading days of FY22, being $4.01. The actual number of Short-term Performance Rights earned by Executive KMP will be split into two equal tranches with
the first tranche converting to stapled securities on 30 June 2023 and the second tranche converting on 30 June 2024, as long as the individual is still employed and has not
submitted their resignation prior to conversion date.
FY22 Deferred STI plan - valuation inputs (Binomial model)
Grant date
Performance period start
Performance period end
Security price at grant date
Fair value
Exercise price
Expected life (years)
Volatility
Risk free interest rate (per annum)
Distribution yield (per annum)
Tranche 1
Tranche 2
29-Nov-21
1-Jul-21
30-Jun-23
29-Nov-21
1-Jul-21
30-Jun-24
4.08
3.77
–
1.58
25
0.59
5.08
4.08
3.59
–
2.58
30
1.01
5.08
$
$
$
years
%
%
%
Remuneration report. 45
FY22 long-term incentives (LTI) Plan
The Group has had an Employee Securities Plan (the Plan) in place for all Employees and the Managing Director since 2011. The
Plan is designed to link employees’ remuneration with the long-term goals and performance of the Group with the aim of consistently
increasing total securityholder return.
All securities or LTI Performance Rights issued under the LTI are issued on a zero-exercise price basis.
LTI performance measures
The performance measures for the LTI are reviewed in advance of each financial year by the Committee and the Board. The
performance measures are set out below, with no change to the performance measures relating to the FY22 year.
The performance measurement period for the FY20, FY21 and FY22 forward looking plans are the three years to 30 June 2022,
30 June 2023 and 30 June 2024, respectively. For these plans, 100% of the maximum opportunity may vest into stapled securities
subject to the performance measures being met.
Total
securityholder
return (TSR)
50%
TSR is defined as being the amount of dividends/distributions paid/payable by Growthpoint Properties Australia during the
measurement period and the change in the price at which Growthpoint stapled securities are traded between the beginning
and the end of the measurement period.
TSR is benchmarked relative to the S&P/ASX A-REIT 200 Accumulation Index1 over a rolling 3-year period as set out in the
following vesting schedule:
Growthpoint Properties Australia’s TSR rank in the
relevant comparator group
% of TSR component of LTI Performance Rights that vest
At or below the 50th percentile
At the 51st percentile
Between 51st and 76th percentile
Nil
50%
Straight line pro rata vesting between 50% and 100% (i.e.
plus 2% for each percentile above the 51st percentile)
At or above 76th percentile
100%
Return on
equity (ROE)
50%
ROE measures the total return on equity employed and takes into account both capital appreciation of the assets of
Growthpoint Properties Australia and cash distributions of income. The return will be calculated on the starting NTA per
Growthpoint stapled security and includes the change in NTA per Growthpoint stapled security over the measurement period
plus the distribution made as a return on the starting NTA per Stapled Security.
ROE is benchmarked relative to the ROEs of constituents of the S&P/ASX A-REIT 200 Index1 over a rolling 3-year period as
set out in the following vesting schedule:
Growthpoint Properties Australia’s ROE
% of ROE Component to be granted as
Performance Rights
Below benchmark return
Achievement of benchmark
Nil
50%
Between 1% and 2% above the benchmark
Straight line pro rata vesting between 50% and 100%
At 2% or more above benchmark
100%
1. For both Performance Conditions, the Board has the discretion to adjust the comparator group to take into account events including, but not limited to, de-listings, takeovers,
and mergers or de-mergers that might occur during the measurement period, or where it is no longer meaningful to include a company within the comparator group.
LTI Maximum
The maximum LTI opportunity each financial year is 80% of total fixed remuneration (TFR) for the Managing Director and 70% of TFR
for other Executive KMP.
LTI Minimum
The Committee may determine that no grant will be made under the LTI.
LTI Rights Granted
The number of LTI Performance Rights granted is based on the VWAP of Growthpoint’s securities over the first 10 trading days of the
relevant performance period and rounded down to the nearest whole performance right.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 46
Directors’ report
Governance
LTI Achievement
The LTI performance results and vesting outcomes, being the percentage of granted rights in each tranche that shall successfully vest,
are independently calculated by Grant Thornton and reviewed by the Committee after the conclusion of the performance period. Any
rights that successfully vest are subsequently converted to issued stapled securities and any rights that fail to vest subsequently lapse.
ASX Listing Rules
In accordance with ASX Listing Rule 10.14, the issue of any stapled securities or performance rights to the Managing Director is
subject to Securityholder approval.
FY22 LTI Plan details
The table below shows LTI grants made during the year for the FY22 LTI Plan, subject to performance conditions over the three-
year performance period ending 30 June 2024. Accounting standards require the valuation of the grants be recognised over the
performance period. The minimum value of the grant to participants is nil if the vesting conditions are not met. The fair value reported
was calculated at the time of the grant and amortised in accordance with the accounting standard requirements.
LTI max
as a % of
remuneration
Performance
measure
Number of
performance
rights granted
Fair value per
performance
right
Total estimated
fair value
Plan participants
Timothy Collyer
– Managing Director
Dion Andrews
– Chief Financial Officer
Michael Green
– Chief Investment Officer
Jacquee Jovanovski
– Chief Operating Officer
Total
Total
Total
Total
%
80
70
70
70
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
No.
107,730
107,731
215,461
47,568
47,569
95,137
47,568
47,569
95,137
40,804
40,804
81,608
$
1.476
3.652
1.476
3.652
1.476
3.652
1.476
3.652
Key inputs used in valuing LTI Performance Rights were as follows:
Grant date
TSR performance start date
TSR expiry date
Share price at issue date ($)
Exercise price
Expected life (years)
Volatility
Risk free interest rate
Distribution yield
The fair value is determined by Grant Thornton using a Monte-Carlo simulation for the relative TSR component and a Binomial
methodology for the relative ROE component.
Hedging of performance rights by Executive KMP
Under the Group’s Securities Trading Policy, persons eligible to be granted securities as part of their remuneration are prohibited
from entering a transaction if the transaction effectively operates to hedge or limit the economic risk of securities allocated under the
incentive plan during the period those securities remain unvested or subject to restrictions under the terms of the plan.
$
159,009
393,434
552,443
70,210
173,722
243,932
70,210
173,722
243,932
60,227
149,016
209,243
23-Nov-21
1-Jul-21
30-Jun-24
$4.19
–
2.6
30%
1.01%
5.08%
Remuneration report.
47
Details of Performance Rights that vested to Executive KMP in FY22
Plan identification
Timothy Collyer – Managing Director
FY21 Deferred STI Plan
FY20 Deferred STI Plan
FY19 LTI Plan (forward looking)
Sub-total
Dion Andrews – Chief Financial Officer
FY21 Deferred STI Plan
FY20 Deferred STI Plan
FY19 LTI Plan (forward looking)
Sub-total
Michael Green – Chief Investment Officer
FY21 Deferred STI Plan
FY20 Deferred STI Plan
FY19 LTI Plan (forward looking)
Sub-total
Jacquee Jovanovski – Chief Operating Officer
FY21 Deferred STI Plan
FY20 Deferred STI Plan
Sub-total
Total
Value of
securities issued
on conversion of
performance rights
Number of
securities issued
on conversion of
performance rights
Value of
performance
rights still
to vest1
% of plan
that vested
during FY21
$
No.
119,439
74,021
326,328
519,788
42,021
25,909
121,068
188,998
42,021
25,909
121,068
188,998
35,716
18,134
53,850
35,026
21,707
77,329
134,062
12,323
7,598
28,689
48,610
12,323
7,598
28,689
48,610
10,474
5,318
15,792
951,634
247,074
$
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
%
50
50
50
50
50
50
50
50
50
50
50
1. Actual value will depend upon the security price at the time of vesting.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 48
Directors’ report
Governance
Movements in number of Performance Rights held by Executive KMP during FY22
STI performance rights
Plan participants
Timothy Collyer – Managing Director
Dion Andrews – Chief Financial Officer
Michael Green – Chief Investment Officer
Jacquee Jovanovski – Chief Operating Officer
Balance at
1 July 2021
No.
91,760
32,244
32,244
26,267
Rights
granted1
No.
105,475
37,258
37,258
31,960
Rights
lapsed1
No.
(5,498)
(1,942)
(1,942)
(1,666)
Rights
vested
Balance at
30 June 2022
No.
No.
(56,733)
(19,921)
(19,921)
(15,792)
135,004
47,639
47,639
40,769
Total
182,515
211,951
(11,048)
(112,367)
271,051
1. The maximum rights that may have been awarded under the FY22 deferred STI plan were granted during the year. The portion that lapsed based on the actual STI outcome
for the year are deemed to have lapsed on 30 June 2022.
LTI performance rights
Plan participants
Timothy Collyer – Managing Director
Dion Andrews – Chief Financial Officer
Michael Green – Chief Investment Officer
Jacquee Jovanovski – Chief Operating Officer
Balance at
1 July 2021
No.
583,003
244,778
244,778
147,138
Rights
granted
No.
215,461
95,137
95,137
81,608
Rights
lapsed
No.
(77,328)
(28,688)
(28,688)
–
Rights
vested
Balance at
30 June 2022
No.
No.
(77,329)
(28,689)
(28,689)
–
643,807
282,538
282,538
228,746
Total
1,219,697
487,343
(134,704)
(134,707)
1,437,629
FY23 Executive KMP remuneration
Proposed performance criteria for STI for next year (FY23)
The structure for FY23 STI for Executive KMP will remain split between financial measures (70%) (with a stretch arrangement allowing
for an opportunity of up to 125% of the financial component) and non-financial measures (30%).
The financial measure will be based on Group FFO per security targets agreed by the Committee for the financial year. The Managing
Director’s FY23 target STI opportunity is 100% of his FY23 TFR. With a stretch target, his maximum FY23 STI opportunity will be
117.5% of his FY23 TFR. The Chief Investment Officer’s FY23 target STI opportunity is 80% of his FY23 TFR. With a stretch target, his
maximum FY23 STI opportunity will be 94.0% of his FY23 TFR. The other Executive KMP’s FY23 target STI opportunity is 70% of their
FY23 TFR. With a stretch target, their maximum FY23 STI opportunity is 82.25% of their FY23 TFR.
An adjustment has been made to the terms of the FY23 STI, which will now be awarded as 80 percent cash and 20 percent GOZ
securities which vest over a two-year period (previously two thirds cash, one third deferred securities). This adjustment allows the STI
component of EMT remuneration to remain competitive relative to peers.
The non-financial measures will be assessed across measures set by the Committee relating to:
õ
the execution of operational and strategic priorities, external stakeholder engagement and people, culture and leadership;
õ ESG initiatives and targets; and
õ Customer satisfaction.
The Board has ultimate discretion to apply judgement or make adjustments when approving the final performance outcomes, including
in light of the COVID-19 environment.
Executive KMP FY23 remuneration
The weighted average of total fixed remuneration for Executive KMP payable in FY22 will generally increase in FY23 by 7.2%.
Remuneration report. 49
Non-executive KMP arrangements
There are currently seven Non-Executive KMP. An aggregate pool of $1,200,000 available for the remuneration of Non-Executive KMP
was approved by Securityholders at the Company’s Annual General Meeting in November 2017.
Remuneration paid and payable
The total remuneration to be paid to Non-Executive Directors for FY23 is listed on the following page.
Principles of remuneration for Non-Executive KMP
The principles of non-executive director remuneration are:
1. Non-Executive Directors should receive total remuneration at market rates for equivalent positions at listed Australian entities of
similar size (measured by market capitalisation), complexity and Non-Executive Director workload having regard to the industry in
which the Group operates.
2. Fees are set at a level to attract and retain suitably qualified and experienced persons to the Board.
3. The Chairman is entitled to a base annual fee and is not eligible for any additional fees for chairing or being a member of any Board
committees.
4. All Non-Executive Directors other than the Chair are entitled to a base annual fee plus additional fees for being a chairman or a
member of a committee.
5. All Non-Executive Directors’ fees are paid on a base fee for the year rather than per meeting.
6. All Non-Executive Directors’ fees are to be paid in cash and include superannuation where applicable.
7. From 1 July 2018, the Committee implemented a Minimum Securityholding Requirement (MSR) for Non-Executive KMP (refer to
page 50 for details of current holdings and details of the MSR).
8. Non-Executive Directors are not entitled to any termination or similar payments upon retirement or other departure from office.
9. In addition to remuneration, Non-Executive Directors may claim expenses such as travel and accommodation costs reasonably
incurred in fulfilling their duties.
10. With the prior approval of the Chairman, Non-Executive Directors may obtain independent advice at the Company’s cost.
FY22 Non-Executive KMP Remuneration
Geoff Tomlinson – Chair
(appointed 1 September 2013)
Grant Jackson
(appointed 5 August 2009)
Francois Marais
(appointed 5 August 2009)
Norbert Sasse
(appointed 5 August 2009)
Estienne de Klerk
(appointed 5 August 2009)
Josephine Sukkar AM
(appointed 1 October 2017)
Deborah Page AM
(appointed 1 March 2021)
Maxine Brenner (Resigned effective 30 November 2020)
Total
Short-term
Post-employment
Period
Committee
Fees
Fees
Superannuation
benefits
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY21
FY22
FY21
$
193,727
194,612
99,091
99,543
109,000
109,000
109,000
109,000
109,000
109,000
99,091
99,543
99,091
33,181
43,052
$
–
–
22,801
14,543
12,300
12,300
26,288
19,400
13,600
13,600
11,182
11,233
27,080
6,971
9,045
818,000
113,251
796,931
87,092
$
19,373
18,488
12,189
10,838
–
–
–
–
–
–
11,027
10,524
12,825
3,814
2,861
55,414
46,525
Total
$
213,100
213,100
134,081
124,924
121,300
121,300
135,288
128,400
122,600
122,600
121,300
121,300
138,788
43,966
54,958
986,457
930,548
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
50
Directors’ report
Governance
Non-Executive KMP FY23 remuneration
The Non-Executive Directors fees have not increased since 1 July 2019. During FY22, the Board and Committee fees were reviewed
in comparison to the Group’s A-REIT and market cap peer groups used for Executive KMP remuneration benchmarking, the ASX 200
A-REIT Accumulation Index and the overall ASX 200. It was determined that fees payable to the Non-Executive Directors in FY23 as
part of their membership of the Board and Committees will increase by 10% to ensure that the fees are market competitive and at a
level to attract and retain suitably qualified and experienced persons to the Board in line with the principles of remuneration. These fees
are set out below.
Board
Audit, Risk & Compliance Committee
Nomination, Remuneration & HR Committee
Investment Committee2
1. The Chairman does not receive Committee fees
2. The Investment Committee was established in FY22.
Chair fee1
Member fee
$234,410
$119,900
$25,190
$21,340
$16,500
$14,960
$13,530
$9,900
Executive and non-executive KMP shareholdings
From 1 July 2018, the Committee implemented a Minimum Securityholding Requirement (MSR) for Executive KMP and Non-Executive
KMP who must comply with the MSR by 30 June 2022 or four years from their employment or Directorship commencement, whichever
is later. The MSR is as follows:
õ Non-Executive Directors – 100% of base Directors fees in equivalent value of Growthpoint securities
õ Managing Director – 100% of TFR in equivalent value of Growthpoint securities, and
õ Other Executive KMP – 50% of TFR in equivalent value of Growthpoint securities.
The table below provides holdings as at the date of this report and indicates the current percentage holdings.
Name
Geoff Tomlinson
Grant Jackson
Francois Marais
Norbert Sasse
Estienne de Klerk
Josephine Sukkar AM
Deborah Page AM
Timothy Collyer
Dion Andrews
Michael Green
Jacquee Jovanovski
Holding as at
30 June 2021
Securities
granted as
compensation
Securities
acquired
Securities
disposed
Holding as at
30 June 2022
Portion
of MSR met1
MSR
No.
88,776
190,087
169,284
1,656,460
1,802,857
14,000
25,050
–
–
–
–
–
–
–
1,230,184
134,062
247,606
125,029
20,548
48,610
48,610
15,792
–
–
–
–
-
–
5,000
–
–
–
–
–
–
(25,000)
–
–
–
–
–
–
(35,000)
–
88,776
190,087
144,284
1,656,460
1,802,857
14,000
30,050
1,364,246
296,216
138,639
36,340
%
100
100
100
100
100
100
100
100
50
50
50
%
142
595
451
5182
5640
44
94
431
371
173
53
1. Calculated as the closing price of Growthpoint securities on 30 June 2022 ($3.41) multiplied by the holding, expressed as a percentage of the MSR .
All KMP other than Deborah Page (who commenced 1 March 2021) and Jacquee Jovanovski (who commenced 26 August 2019) were
due to meet the MSR requirement by 30 June 2022. The MSR requirement has been met by all KMP required by 30 June 2022 other
than Josephine Sukkar. Ms Sukkar has committed to the Board to meet her MSR requirement by 31 December 2022.
Remuneration report. 51
Remuneration policy and role of the Nomination, Remuneration and HR Committee.
The Committee advises the Board on compensation policies and practices generally and makes specific recommendations on
compensation packages and other terms of engagement for non-executive directors, executive directors and other senior executives.
The Committee also periodically reviews the compensation arrangements for other employees.
How Governance and remuneration decisions are made
Board of Directors: oversees remuneration
Nomination,
Remuneration
and HR committee
Advises on policy and
practices and makes
recommendation to
the board.
:
s
e
v
i
t
c
e
b
O
j
Provide
competitive
rewards to
attract, motivate
and retain highly
skilled directors
and management.
Set challenging
but achievable
objectives for
short and long-
term incentive
plans.
Link rewards
to the creation
of value for
Securityholders.
Limit severance payments
on termination to pre-
established contractual
arrangements that do
not commit the Group
to making unjustified
payments in the event of
non-performance.
Recommendations made to the Board using advice or benchmarking analysis from:
Managing
Director
External
Advisors
Committee members
The members of the Committee during the year and at the date of this Report are:
õ Norbert Sasse (Chairman) – non-executive director
õ Francois Marais – non-executive director
õ Geoff Tomlinson – independent, non-executive director and Board Chairman
õ Josephine Sukkar AM – independent, non-executive director
Delegated authority
The Committee operates under delegated authority from the Board. The duties of the Committee in relation to remuneration are to:
a) Recommend, for adoption by the Board, a remuneration package for the Chairman of the Board and the other Directors on a not
less than annual basis.
b) Recommend, for adoption by the Board, a remuneration package, including bonus incentives and related key performance
indicators, for the most senior executive officer of the Group both on appointment and on a not less than annual basis.
c) Review the most senior executive officer’s recommendations for the remuneration packages, including bonus incentives and related
key performance indicators, for other Group employees on a not less than annual basis.
d) Review the most senior executive officer’s recommendations for any bonus payments which are in excess of that delegated to the
most senior executive officer under the Group’s “Delegations of Authority Policy”. The Committee cannot approve payments which
exceed the bonus pool approved by the Board without Board approval.
e) Make recommendations to the Board in relation to the introduction of, and amendments to, any employee share plan established by
the Group.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 52
Directors’ report
Governance
Impact of performance on Securityholders’ wealth
In considering the Group’s performance and benefits for Securityholders’ wealth, the Committee has regard to the financial measures in
the table below in respect of the five financial years ended 30 June 2022.
Profit attributable to the owners of the Group
Dividends and distributions paid
Distribution per stapled security
Closing stapled security price
Change in stapled security price
Total Securityholder return1
Return on equity
1. Source UBS Investment Research.
Independent consultants
2022
2021
2020
2019
2018
$m
$m
$
$
$
%
%
459.2
160.6
0.208
3.41
(0.66)
(11.7)
14.3
553.2
154.4
0.200
4.07
0.87
34.0
19.7
272.1
168.2
0.218
3.20
(0.92)
(17.7)
10.8
375.3
167.4
0.230
4.12
0.51
21.0
16.9
357.7
148.4
0.222
3.61
0.47
22.3
18.5
During the year, the Committee engaged PwC as an independent consultant to provide benchmarking remuneration services in relation
to Executive KMP. The PwC analysis compared the relative positioning of remuneration for each EMT role against:
õ An industry peer group – 15 ASX listed A-REIT peer group
õ A market capitalisation peer group – 10 ASX listed companies above and below Growthpoint by market capitalisation
PwC also undertook a fixed regression analysis, using the industry peer group, to determine an implied remuneration positioning for
each EMT member to key metrics such as market capitalisation, square metres of portfolio, total assets, total liabilities and funds from
operations. The correlation of remuneration to the key metrics for each role varied from weak (low r-squared) to strong (high r-squared),
however, provided the Committee with additional analysis from which to set remuneration levels.
These services did not include specific recommendations to the Committee. PwC was paid a total of $30,000 in FY22 for providing
these services.
The Committee also had regard to additional third-party industry remuneration benchmarking surveys.
Remuneration reviews
The Committee reviews the appropriate levels of remuneration for all Directors and Employees based on:
1. Remuneration surveys and trends.
2. Benchmarking against peers.
3. Recommendations from the Managing Director (excluding in relation to his own remuneration).
Remuneration report. 53
Executive Director Remuneration and Service Contract
There is currently only one executive director being the Managing Director, Timothy Collyer.
Remuneration paid and payable
The total remuneration paid or payable to the Managing Director for FY22 is listed on page 40 to 41 of this report.
Service contract
The Managing Director has a contract of employment dated 22 August 2016 with the Group that specifies the duties and obligations to
be fulfilled by the Managing Director and provides that the Board and the Managing Director will, early in each financial year, consult to
agree objectives for achievement during that year. Changes to the Managing Directors’ remuneration requires full Board approval and,
in certain circumstances, Securityholder approval.
The Managing Director’s employment continues until terminated by either the Group or the Managing Director. The Managing Director
can resign by providing six months’ written notice. The Group can terminate his employment immediately for cause. In addition, the
Group can terminate the Managing Director’s employment without cause on nine months’ notice. The Group may elect to pay the
Managing Director in lieu of some or all of this nine months’ notice period.
On termination as Managing Director, he must resign as a director of any Group entity and he is restrained from a number of activities in
competition with or to the detriment of the Group for a period of six months from the date of termination.
Termination payments for redundancy comprise nine months’ notice and redundancy policy benefits.
Principles of remuneration for the Managing Director
The principles of remuneration for the Managing Director are included as part of the Executive KMP principles listed on page 40.
Other service contracts
The service contracts for other Executive KMP are unlimited in term but can be terminated by the Executive KMP on three months’
notice and by the Company immediately for cause and on six months’ notice. The Group may elect to pay the other Executive KMP in
lieu of some or all of this six-month notice period. The restraint of trade period for the other Executive KMP is six months.
Employees are also entitled to receive certain statutory entitlements on termination of employment including accrued annual and long
service leave, together with any superannuation benefits and, if applicable, redundancy payments in accordance with a redundancy
policy approved by the Committee.
Additional terms relating to LTI or STI performance rights issued to Executive KMP
Cessation of employment
Ceasing employment for cause or due to resignation
Where an Executive KMP’s employment with Growthpoint Properties Australia is terminated for cause or ceases due to resignation
(other than due to death, ill health or disability), all performance rights will lapse, unless the Board determines otherwise.
Ceasing employment for other reasons
If an Executive KMP’s employment ceases at any time for any other reason (including due to death, ill health, disability or bona fide
redundancy), all performance rights (whether or not the applicable performance conditions and/or service condition has been satisfied)
as at the date of cessation of employment will remain on foot and remain subject to the terms of the offer of the performance rights,
as though employment had not been ceased. However, the Board retains a discretion to determine to vest or lapse some or all of the
performance rights.
Takeover or Scheme
In summary, the Growthpoint Properties Australia Employee Incentive Plan Rules provide that in the event of each of:
õ a takeover bid being recommended by the Board or becoming unconditional; and
õ a scheme of arrangement, reconstruction or winding up of Growthpoint Properties Australia being put to members,
some or all performance rights may vest or may remain on foot at the Board’s discretion. In the case of STI performance rights, if any of
these events occur before the Board has exercised its discretion, the STI Performance Rights will vest.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 54
Directors’ report
Governance
Claw back
The Board has broad “clawback” powers to determine that performance rights lapse, stapled securities are forfeited, or that amounts
are to be repaid in certain circumstances (for example, in the case of fraud or dishonesty).
Non-Executive and Executive KMP Reviews
Non-Executive KMP reviews
The performance of the Board and individual Directors is regularly considered by the Chairman who, from time to time, arranges
Board meetings to specifically consider the function of the Board, the strategy of the Group and to hear any concerns/feedback from
directors. The Chairman typically meets with each individual Director not less than once per year.
Board composition
The Board currently comprises Directors with extensive experience and expertise in property, funds management, finance, law,
investment banking, accounting and corporate governance. Refer to pages 30 to 31 for full profiles of each Director.
Being a property company, the Board has expressed a particular desire to ensure it comprises directors with extensive Australian
commercial property knowledge and experience. The Board is eager to ensure that where Board members are replaced, the Board’s
property experience is not diminished. See page 8 of Growthpoint’s Corporate Governance Statement which outlines the current mix of
skills represented on the Board, which includes extensive experience within the property industry.
Succession planning for directors
The Committee has developed plans for the succession and/or temporary replacement of the Chairman and the Managing Director.
Executive KMP Reviews
The Managing Director’s performance is formally considered annually by the Committee and based on this formal assessment, the
Committee makes remuneration recommendations to the Board. In making its assessment, the Committee considers, among other
things, the STI performance measures listed on pages 42 to 43 and any remuneration benchmarking analysis it has obtained.
The Managing Director reviews the performance of the other Executive KMP and makes recommendations to the Committee on their
remuneration based, in part, on the STI performance measures listed on pages 42 to 43 and any remuneration benchmarking analysis
or remuneration survey information obtained.
Meetings of Directors (FY22)
Growthpoint Board
Audit, Risk and
Compliance Committee
Nomination,
Remuneration and
HR Committee
Investment Committee
Board member
eligible
to attend
attended
eligible
to attend
attended
eligible
to attend
attended
eligible
to attend
attended
G. Tomlinson – Chairman
T. Collyer – Managing Director1
E. de Klerk
G. Jackson
F. Marais
J. Sukkar
N. Sasse
D. Page
11
11
11
11
11
11
11
11
11
10
11
11
11
11
10
11
4
4
4
4
–
–
–
4
4
3
4
4
–
–
–
4
7
6
–
–
7
7
7
–
7
6
–
–
7
7
7
–
–
4
4
–
–
4
4
–
4
4
–
–
4
3
1. Tim Collyer, the Managing Director is a member of the Investment Committee He also has a standing invitation to the Audit, Risk and Compliance Committee and Nomination,
Remuneration and HR Committee meetings, unless the members of the relevant Committee determine otherwise, but is not a member of those Committees.
Remuneration report. Additional
information.
55
Directors
The following persons were members of the Board of Growthpoint Properties Australia Limited (the Company) during FY22:
õ Geoffrey (Geoff) Tomlinson, Independent Chairman
õ Timothy Collyer, Managing Director
õ Estienne de Klerk (deemed non-independent given role as CEO of Growthpoint Properties Limited: South Africa)
õ Grant Jackson, Independent Director
õ Francois Marais (deemed non-independent given previous position at Growthpoint Properties Limited)
õ Deborah Page AM, Independent Director
õ Norbert Sasse (deemed non-independent given role as Group CEO of Growthpoint Properties Limited)
õ Josephine Sukkar AM, Independent Director
Details of each Director’s appointment, qualifications and experience, together with their recent directorships, are set out on pages
30 to 31 of this report. Information about attendance at the meetings of Directors held during FY22 is contained in the Remuneration
Report on page 54 of this report.
Company Secretaries
Jacqueline (Jacquee) Jovanovski and Dion Andrews are the Company Secretaries of each member of the Group. Details of their
qualifications and experience are set out on page 32 of this report.
Principal activities
The principal activities of the Group during the year continued to be property investment. During the year there were no significant
changes in its state of affairs.
Review of operations and results
The Operating and Financial Review is contained on pages 3 to 29 of this report.
Indemnification and insurance of Directors, Officers and Auditor
The Company has entered into a Deed of Indemnity, Insurance and Access with each of its directors, Dion Andrews (Chief Financial
Officer), Michael Green (Chief Investment Officer) and Jacqueline Jovanovski (Chief Operating Officer) providing these persons with
an indemnity, to the fullest extent permitted by law, against all losses and liabilities incurred in their respective role for the Company.
The Deeds also require the Company to grant the indemnified person with access to certain Company documents and insure the
indemnified persons.
In compliance with the Deeds referred to above, the Company insured its Directors and officers against liability to third parties and
for costs incurred in defending any legal proceedings that may be brought against them in their capacity as Directors or officers of
the Group. This excludes a liability which arises out of a wilful breach of duty or improper use of inside information. The premium also
insures the Company for any indemnity payments it may make to its Officers in respect of costs and liabilities incurred. Disclosure of the
premium payable is prohibited under the conditions of the policy.
The Auditor is indemnified by the Group against claims from third parties arising from the provision of audit services except where
prohibited by applicable law and professional regulations or due to the negligence, wrongful or wilful acts or omissions by the auditor.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 56
Directors’ report
Governance
Additional information.
Non-Audit services
During the year EY, the Group’s auditor, has performed services other than the audit and review of financial statements and other
regulatory audit services.
Details of the amounts paid to EY for audit services provided during the year are set out below:
Audit and review of financial statements
Other regulatory audit services
Other non-audit services
Total paid to EY
Auditor’s independence
FY22
$
261,600
54,000
35,000
350,600
FY21
$
283,470
37,000
–
320,470
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 (Cth) is set out on
page 96.
Subsequent events
On 27 July 2022, settlement occurred on the acquisition of 165-169 Thomas Street, Dandenong, Victoria for $165.0 million (net sale price
excluding acquisition costs).
On 3 August 2022, the Company entered into a share sale agreement to acquire 100% of the shares in Fortius Funds Management
Pty Ltd. Under the terms of the agreement, Fortius shareholders will be entitled to receive from Growthpoint an initial purchase price of
$45 million (with a net asset adjustment) upon completion plus up to an additional $10 million earn out component based on agreed
milestones being met over the period to June 2024. Completion is anticipated to take place in the first quarter of FY23, subject to
conditions precedent being satisfied. Remaining disclosures required under accounting standards in relation to this business combination
will be included in the Company’s interim financial report for the period ending 31 December 2022.
There have been no other subsequent events from the end of the year to the date of this report likely to significantly affect the operations
of the business, the results of those operations or the state of affairs of the Group in future financial years.
Environmental Regulations
As a property owner, the Group is subject to the normal environmental regulations of landowners within Australia. The Directors are not
aware of any significant breaches during the year.
Rounding of amounts
All financial information presented is in Australian dollars and has been rounded to the nearest hundred thousand unless otherwise
stated, in accordance with Australian Securities and Investments Commission Instrument 2016/191.
About the Directors’ Report
The Directors’ Report comprises pages 3 to 56 of this report except where referenced elsewhere.
This report was approved in accordance with a resolution of the Directors of Growthpoint Properties Australia Limited.
Timothy Collyer
Managing Director
Growthpoint Properties Australia
16 August 2022
57
Financial
report.
Financial Statements
Consolidated Statement of Comprehensive Income 58
59
Consolidated Statement of Financial Position
60
Consolidated Statement of Changes in Equity
61
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Section 1: Basis of preparation, accounting
policies and other pronouncements
1.1 Basis of preparation
1.2 Significant accounting policies
1.3 Impact of new standards, amendments
and interpretations
62
62
63
63
Section 2: Operating results, assets and liabilities
64
2.1 Revenue and operating segment information
2.2 Investment properties
2.3 Investment in securities
2.4 Receivables and other assets
2.5 Trade and other liabilities
2.6 Cash flow information
Section 3: Capital structure and financing
3.1 Interest bearing liabilities
3.2 Borrowing costs
3.3 Lease liabilities
3.4 Derivative financial instruments
3.5 Financial instruments fair value hierarchy
3.6 Financial risk management
3.7 Contributed equity and reserves
3.8 Distributions to Securityholders
3.9 Earnings per stapled security (EPS)
3.10 Share-based payment arrangements
Section 4: Other notes
4.1 Income tax
4.2 Key Management Personnel (KMP)
compensation
4.3 Related party transactions
4.4 Contingent liabilities
4.5 Commitments
4.6 Controlled entities
4.7 Parent entity disclosures
4.8 Remuneration of auditors
4.9 Subsequent events
Declarations / Reports
Directors’ declaration
Auditor’s independence declaration
Independent Auditor’s report
64
65
72
72
73
74
75
75
76
77
78
79
80
84
85
85
86
87
87
90
92
92
92
93
94
94
94
95
96
97
About the Financial Report
This report covers Growthpoint Properties Australia Limited
and its controlled entities, Growthpoint Properties Australia
Trust and its controlled entities, together being a stapled group.
Growthpoint Properties Australia Limited is the Responsible Entity
for Growthpoint Properties Australia Trust. The financial report is
presented in Australian dollars.
Growthpoint Properties Australia Trust and its Responsible Entity,
Growthpoint Properties Australia Limited, are both domiciled in
Australia. The Responsible Entity’s registered office and principal
place of business is at Level 31, 35 Collins Street, Melbourne,
Victoria, 3000, Australia.
A description of the nature of the stapled group’s operations and
its principal activities is included in the Directors’ Report which is
not part of the financial report.
The financial report was authorised for issue by the Directors on
16 August 2022.
References to ‘the year’ in this report refer to the year ended 30
June 2022 unless the context requires otherwise. References
to ‘balance date’ in this report refer to 30 June 2022 unless the
context requires otherwise.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 58
Financial report
Consolidated Statement of
Comprehensive income.
For the year ended 30 June 2022
Revenue and other income
Property revenue
Distributions from investment in securities
Interest income
Total revenue and other income
Expenses
Property expenses
Borrowing costs
Other expenses
Depreciation of right of use assets
Total expenses
Other gains/losses
Net gain in fair value of investment properties
Net (loss) in fair value on sale of investment properties
Net (loss)/gain in fair value of investment in securities
Net gain/(loss) in fair value of derivatives
Net (loss)/gain on exchange rate translation of interest-bearing liabilities
Net gains from other items
Profit before tax
Income tax (expense)/benefit
Profit after tax
Other comprehensive income
Total comprehensive income
Total comprehensive income attributable to:
Owners of the Trust
Owners of the Company
Total comprehensive income
Earnings per security attributable to securityholders of the Group:
Basic earnings per stapled security (cents)
Diluted earnings per stapled security (cents)
Notes
2.1
2.3
2.1
3.2
2.2
2.3
3.4
3.1
4.1
3.9
3.9
2022
$m
303.7
7.7
0.1
311.5
(47.1)
(49.7)
(21.8)
(3.9)
(122.5)
285.1
–
(32.7)
57.2
(31.5)
278.1
467.1
(7.9)
459.2
–
459.2
461.6
(2.4)
459.2
59.5
59.3
2021
$m
288.7
5.4
0.1
294.2
(45.7)
(52.3)
(15.4)
(4.1)
(117.5)
356.5
(1.5)
29.3
(43.8)
33.0
373.5
550.2
3.0
553.2
–
553.2
554.3
(1.1)
553.2
71.7
71.5
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Consolidated Statement of
Financial Position.
As at 30 June 2022
Current assets
Cash and cash equivalents
Receivables and other assets
Total current assets
Non-current assets
Investment properties
Investment in securities
Receivables and other assets
Derivative financial instruments
Right-of-use assets
Plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Distribution to Securityholders
Trade and other liabilities
Current tax payable
Interest bearing liabilities
Lease liabilities
Deferred tax liabilities
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Lease liabilities
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained profits
Total equity
59
Notes
2.4
2.2
2.3
2.4
3.4
4.1
3.8
2.5
4.1
3.1
3.3
4.1
3.1
3.3
3.4
3.7
2022
$m
49.2
7.2
56.4
2021
$m
33.5
6.1
39.6
5,233.1
132.4
4,619.6
104.8
16.7
59.1
–
0.6
1.6
3.7
7.3
1.2
0.5
1.1
5,443.5
5,499.8
4,738.2
4,777.8
80.3
46.1
0.4
40.0
0.7
8.3
175.7
1,700.0
103.9
0.3
1,804.2
1,979.9
3,519.9
2,046.5
13.1
1,460.3
3,519.9
77.2
35.0
0.2
–
0.9
0.6
113.9
1,327.1
105.9
9.5
1,442.5
1,556.4
3,221.4
2,048.5
11.2
1,161.7
3,221.4
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
60
Financial report
Consolidated Statement of
Changes in Equity.
For the year ended 30 June 2022
Attributable to unitholders of
the Trust (Parent entity)
Attributable to shareholders of
the Company (other stapled entity)
Contri-
buted
equity
Retained
profits
Notes
$m
$m
Total
$m
$m
Contri-
buted
equity Reserves
Retained
profits
Equity as at 30 June 2021
1,978.0
1,161.3
3,139.3
70.5
Profit after tax
Other comprehensive income
Total comprehensive income
Transactions with Securityholders in
their capacity as Securityholders:
Security buybacks
Distributions provided or paid
Share-based payment transactions
–
–
–
461.6
461.6
–
–
461.6
461.6
(2.0)
–
–
–
(2.0)
(160.6)
(160.6)
–
–
Total transactions with Securityholders
(2.0)
(160.6)
(162.6)
Other reserves
–
–
–
–
–
–
–
–
–
–
–
Total
equity
$m
Total
$m
82.1
3,221.4
$m
0.4
(2.4)
(2.4)
459.2
–
–
–
(2.4)
(2.4)
459.2
–
–
–
–
–
–
–
(2.0)
(160.6)
1.9
1.9
1.9
(160.7)
–
–
$m
11.2
–
–
–
–
–
1.9
1.9
–
Equity as at 30 June 2022
1,976.0
1,462.3 3,438.3
70.5
13.1
(2.0)
81.6
3,519.9
Equity as at 30 June 2020
1,979.4
761.4
2,740.8
70.5
10.3
Profit after tax
Other comprehensive income
Total comprehensive income
Transactions with Securityholders in
their capacity as Securityholders:
Security buybacks
Distributions provided or paid
Share-based payment transactions
Total transactions with Securityholders
Other reserves
–
–
–
(1.4)
–
–
(1.4)
–
554.3
554.3
–
–
554.3
554.3
–
(1.4)
(154.4)
(154.4)
–
–
(154.4)
(155.8)
–
–
–
–
–
–
–
–
–
–
Equity as at 30 June 2021
1,978.0
1,161.3 3,139.3
70.5
–
–
–
–
–
1.4
1.4
(0.5)
11.2
1.0
(1.1)
–
81.8
(1.1)
–
2,822.6
553.2
–
(1.1)
(1.1)
553.2
–
–
–
–
0.5
0.4
–
–
1.4
1.4
–
(1.4)
(154.4)
1.4
(154.4)
–
82.1
3,221.4
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of
Cash Flows.
For the year ended 30 June 2022
Notes
Cash flows from operating activities
Cash receipts from customers
Cash payments to suppliers
Distributions from investment in securities
Borrowing costs
Interest received
Income tax paid
Net cash flows from operating activities
2.6
Cash flows from investing activities
Receipts from sale of investment properties
Payments for investment properties
Payments for investment in securities
Payments for plant & equipment
Net cash flows from investing activities
Cash flows from financing activities
Proceeds from external borrowings
Repayments of external borrowings
Payments for securities buy back
Payments to terminate derivatives
Repayments of lease liabilities
Distributions to Securityholders
Net cash flows from financing activities
Net cash flows
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
61
2022
$m
325.1
(100.2)
7.0
(48.1)
0.1
(0.5)
183.4
–
(326.6)
(60.3)
(0.3)
(387.2)
922.5
(538.5)
(2.0)
(3.9)
(1.1)
(157.5)
219.5
15.7
33.5
49.2
2021
$m
286.3
(92.1)
5.5
(46.6)
0.1
(1.5)
151.7
113.9
(25.1)
(5.6)
(0.1)
83.1
297.0
(384.4)
(1.4)
–
(0.8)
(154.4)
(244.0)
(9.2)
42.7
33.5
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
62
Financial report
Notes to the Financial
Statements.
Section 1: Basis of preparation, accounting policies and other pronouncements
1.1 Basis of preparation
Reporting entity
Growthpoint Properties Australia was formed by the stapling of two entities: Growthpoint Properties Australia Limited (the Company) and
Growthpoint Properties Australia Trust (the Trust) which are collectively referred to as Growthpoint Properties Australia (the Group).
The Group’s stapled structure was established for the purpose of facilitating a joint quotation of the Company and the Trust on the
Australian Securities Exchange (ASX: GOZ). The constitutions of the Company and the Trust ensure that, for so long as the two entities
remain jointly quoted, the number of shares in the Company and the number of units in the Trust shall be equal and the shareholders
of the Company and the unitholders in the Trust are identical. The Company, both in its personal capacity and in its capacity as the
Responsible Entity of the Trust, must always act in the best interests of the Group. The Group is a for profit entity.
In accordance with AASB 3 Business Combinations, the Trust is the parent entity and deemed acquirer of the Company in the stapling
arrangement. This financial report includes consolidated financial statements for the Trust, comprising the Trust and its controlled entities
and the Company and its controlled entities, for the year ended 30 June 2022. The Group is domiciled in Australia and its registered
address is Level 31, 35 Collins Street, Melbourne, Victoria, 3000, Australia.
The ultimate parent of the Group is Growthpoint Properties Limited, a South African Real Estate Investment Trust listed on the
Johannesburg Stock Exchange.
Net current asset deficiency
Net current asset deficiency is calculated as the difference between the Group’s current assets and current liabilities. The Group reported
a net current asset deficiency of $119.3 million as at 30 June 2022 (30 June 2021: $74.3 million) which is an expected outcome from its
policy of using cash that is surplus to the Group’s short term needs to repay debt facilities, which includes debt of $40.0m maturing on 17
December 2022. The Group has unutilised debt facilities of $353.5 million which can be drawn at short notice. The Group has sufficient
working capital and cashflows in order to fund all requirements arising from the net current asset deficiency.
Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 (Cth). The
consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting
Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board on 16 August 2022.
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis using historical cost except for derivative financial
instruments, investment properties, investment in securities and share-based payment arrangements which are measured at fair value.
Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Group’s functional currency. The Group is of
a kind referred to in ASIC Corporations (Rounding in Directors’ / Financial Reports) Instrument 2016/191 and in accordance with that
Instrument, all financial information presented in Australian dollars has been rounded to the nearest hundred thousand dollars unless
otherwise stated.
63
1.1 Basis of preparation (continued)
Use of estimates, assumptions and judgements
The preparation of financial statements in conformity with IFRS requires the Directors to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may
differ from these estimates
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimates are revised and in any future periods affected.
Information about estimates, assumptions and judgements that have the most significant risk of causing a material misstatement of
amounts recognised in the consolidated financial statements is included in the following notes:
õ Note 2.2 – Investment properties;
õ Note 3.4 – Derivative financial instruments; and
õ Note 3.10 – Share-based payment arrangements.
Determination of fair values
Several of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial
assets and liabilities. When applicable, information regarding the method of determining fair value and about the assumptions made in
determining fair value is disclosed in the note specific to that asset or liability.
1.2 Significant accounting policies
The significant accounting policies applied by the Group in this financial report are disclosed in the relevant notes in grey shaded text.
1.3 Impact of new standards, amendments and interpretations
No new accounting standards, amendments or interpretations have come into effect for the year ended 30 June 2022 that materially
affect the Group’s operations or reporting requirements.
No other standards, amendments or interpretations published that come into effect in a future reporting period are expected to materially
affect the Group’s operations or reporting requirements.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 64
Financial report
Section 2: Operating results, assets and liabilities
2.1 Revenue and operating segment information
Revenue recognition
Revenue is recognised at the fair value of the consideration received or receivable. All revenue is stated net of the amount of goods
and services tax (GST). Rent from investment properties is recognised and measured in accordance with AASB 16 on a straight-line
basis over the life of the lease for leases where the revenue under the lease terms is fixed and determinable. For leases where the
revenue is determined with reference to market reviews, inflationary measures or other variables, revenue is not straight-lined and is
recognised in accordance with the lease terms applicable for the period. The Group also earns revenue from tenants as stipulated in the
lease agreements for services including cleaning, security, electricity and other outgoings. This revenue is recognised and measured in
accordance with AASB 15 Revenue from Contracts with Customers.
Group earnings and operating segment results
The primary measure of recurring earnings for the Group is funds from operations (FFO), which is used to make strategic decisions and as
a guide to assessing appropriate distributions to investors. FFO represents profit after tax adjusted for various non-cash accounting items
which are listed in the reconciliation further below.
The Group has two operating segments, namely Industrial property investments and Office property investments. The primary measure of
performance of each operating segment is net property income.
The Group’s FFO and operating segment results are reported monthly to the Group’s Managing Director, who is the chief operating
decision maker.
2022
2021
Industrial
Office
Total
Industrial
Office
Total
$m
$m
$m
$m
$m
$m
Segment items
Property rental income
Revenue from services to tenants
Property revenue, excluding straight line lease adjustment
Property expenses1
Expense from services to tenants2
Net property income
84.3
13.4
97.7
(5.5)
(13.6)
170.5
254.8
23.4
36.8
193.9
291.6
(1.8)
(30.8)
(7.3)
(44.4)
78.6
161.3
239.9
83.9
12.9
96.8
(5.2)
(13.9)
77.7
162.2
21.2
183.4
(2.0)
(28.9)
152.5
Unallocated items
Amortisation of incentives and leasing costs
Other expenses3
Distributions from investment in securities
Borrowing costs net of interest income4
Current income tax expense
FFO
Distributions
Weighted average securities on issue (m)
FFO per stapled security (cents)
Distribution per stapled security (cents)
33.0
(19.8)
7.7
(46.1)
(0.7)
214.0
771.8
27.7
20.8
246.1
34.1
280.2
(7.2)
(42.8)
230.2
26.9
(15.7)
5.4
(48.2)
(0.3)
198.3
772.0
25.7
20.0
1. Property expenses in FFO include $4.5 million (2021: $4.4 million) of ground lease payments which are replaced with depreciation of right of use assets and interest expense
associated with leases on the Consolidated Statement of Comprehensive Income.
2. Outgoings expenses from services to tenants includes $7.6 million (2021: $8.7 million) that was not recoverable under the terms of certain leases.
3. Other expenses in FFO of $19.8 million (2021: $15.7 million) excludes $1.9 million (2021: $nil) in discontinued and non-FFO project costs and $0.2 million (2021: $0.2 million)
depreciation of plant and equipment and includes $0.3 million (2021: $0.5 million) rent payments for the Group’s head office at 35 Collins St, Melbourne which are replaced
with depreciation of right of use assets and interest expense associated with lease liabilities on the Consolidated Statement of Comprehensive Income.
4. Borrowing costs are shown in segment reporting net of $0.1 million (2021: $0.1 million) interest income and exclude the $3.5m (2021: $4.0 million) interest expense
associated with lease liabilities which is included on the Consolidated Statement of Comprehensive Income.
Notes to the Financial Statements. 2.1 Revenue and operating segment information (continued)
Reconciliation of Profit after tax to FFO
Profit after tax
Adjustments for non-FFO items
- Straight line adjustment to property revenue
- Net gain in fair value of investment properties
- Net loss/(gain) in fair value of investment in securities
- Net (gain)/loss in fair value of derivatives
- Net loss/(gain) on exchange rate translation of interest-bearing liabilities
- Amortisation of incentives and leasing costs
- Deferred tax expense/(benefit)
- Other
FFO
2022
$m
459.2
(12.1)
(285.1)
32.7
(57.2)
31.5
33.0
7.2
4.8
214.0
Reconciliation of total property revenue per segment note to revenue per Consolidated Statement of
Comprehensive Income
Property revenue from segments
- Straight line adjustment to property revenue
Property revenue as reported on the Consolidated Statement of Comprehensive Income
2022
$m
291.6
12.1
303.7
65
2021
$m
553.2
(8.5)
(356.5)
(29.3)
43.8
(33.0)
26.9
(3.3)
5.0
198.3
2021
$m
280.2
8.5
288.7
Major customer
Revenues from Woolworths Group Limited, in the Group’s Industrial segment represents $38.9 million (2021: $39.3 million) of the Group’s
total revenues.
2.2 Investment properties
Investment properties
The Group’s investment properties represent freehold and leasehold interest in land and buildings held for rental income and capital
appreciation. Investment properties are initially measured at cost including transaction costs. Costs incurred subsequent to initial
acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset
will flow to the entity and the cost of that capital expenditure can be measured reliably. All other costs are expensed in the Consolidated
Statement of Comprehensive Income in the period incurred.
Subsequent to initial recognition, investment properties are measured at fair value. Directors revalue the property investments based on
valuations determined internally or by external independent valuers on a periodic basis. The Group assesses at each balance date whether
these valuations appropriately reflect the fair value of investment properties.
Any gains or losses arising from changes in fair value of the properties are recognised in the Consolidated Statement of Comprehensive
Income in the period in which they arise.
Lease incentives and commissions
Any lease incentives provided to a tenant under the terms of a lease such as fit-outs or rent-free periods and any leasing commissions
paid to agents on signing of lease agreements are recognised on balance sheet in investment property and subsequently amortised as a
reduction of revenue on a straight-line basis over the term of the lease.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 66
Financial report
2.2 Investment properties (continued)
Determination of fair value
The fair value of the investment properties is determined either solely by Directors’ valuations or together with verification from an external,
independent valuer, with recognised professional qualifications and recent experience in the location and category of property being valued
generally. Every property is valued externally at least once every financial year.
Fair value is based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation
between a willing buyer and willing seller in an arm’s length transaction after proper marketing where the parties had each acted
knowledgeably, prudently and without compulsion.
The fair value of investment properties is classified as Level 3 in the fair value hierarchy based on the significant unobservable inputs into
the valuation techniques used. Further detail on the Group’s valuation process and valuation methods is described below.
Latest external valuation
Carrying amounts
Industrial properties
Date Valuation
Victoria
3 Maker Place
Truganina
1500 Ferntree Gully Road & 8 Henderson Road
Knoxfield
9-11 Drake Boulevard
Lots 2, 3 & 4, 34-44 Raglan Street
120-132 Atlantic Drive
40 Annandale Road1
120 Link Road1
130 Sharps Road1
20 Southern Court
3 Millennium Court
6 Kingston Park Court
31 Garden Street
19 Southern Court
60 Annandale Road1
101-111 South Centre Road1
75 Annandale Road1
Queensland
70 Distribution Street
13 Business Street
5 Viola Place1
3 Viola Place1
Western Australia
20 Colquhoun Road
2 Hugh Edwards Drive
58 Tarlton Crescent
10 Hugh Edwards Drive
36 Tarlton Crescent
1 Held under leasehold.
Altona
Preston
Keysborough
Melbourne Airport
Melbourne Airport
Melbourne Airport
Keysborough
Knoxfield
Knoxfield
Kilsyth
Keysborough
Melbourne Airport
Melbourne Airport
Melbourne Airport
Larapinta
Yatala
Brisbane Airport
Brisbane Airport
Perth Airport
Perth Airport
Perth Airport
Perth Airport
Perth Airport
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
QLD
QLD
QLD
QLD
WA
WA
WA
WA
WA
$m
70.3
61.6
58.5
52.8
45.0
43.4
25.2
24.7
22.5
19.3
18.0
15.8
14.7
14.0
13.4
10.4
30-Jun-22
31-Dec-21
30-Jun-22
31-Dec-21
30-Jun-22
30-Jun-22
30-Jun-22
30-Jun-22
31-Dec-21
30-Jun-22
30-Jun-22
31-Dec-21
31-Dec-21
30-Jun-22
30-Jun-22
30-Jun-22
2022
$m
2021
$m
70.3
61.8
58.5
55.3
45.0
43.4
25.2
24.7
24.5
19.3
18.0
17.3
14.9
14.0
13.4
10.4
48.3
55.3
48.0
41.1
34.8
38.3
21.1
26.0
19.4
15.4
14.5
15.0
12.8
11.9
11.2
8.3
30-Jun-22
255.0
255.0
31-Dec-21
31-Dec-21
31-Dec-21
17.5
14.2
3.6
18.2
14.2
3.6
235.0
15.4
9.2
3.3
31-Dec-21
220.0
225.0
213.0
30-Jun-22
30-Jun-22
30-Jun-22
30-Jun-22
24.3
19.8
14.6
11.7
24.3
19.8
14.6
11.7
17.8
17.2
12.0
10.3
Notes to the Financial Statements. 67
2.2 Investment properties (continued)
Determination of fair value (continued)
Industrial properties
New South Wales
27-49 Lenore Drive
6-7 John Morphett Place
51-65 Lenore Drive
34 Reddalls Road
81 Derby Street
South Australia
599 Main North Road
1-3 Pope Court
12-16 Butler Boulevard1
10 Butler Boulevard1
Total industrial properties
1 Held under leasehold.
Office properties
Victoria
75 Dorcas Street
Building 3, 570 Swan Street
Building 2, 572-576 Swan Street
109 Burwood Road
141 Camberwell Road1
Building B, 211 Wellington Road
Building 1, 572-576 Swan Street
Building C, 211 Wellington Road
Car Park, 572-576 Swan Street
Queensland
100 Skyring Terrace
15 Green Square Close
333 Ann Street
CB1, 22 Cordelia Street
A1, 32 Cordelia Street
A4, 52 Merivale Street
CB2, 42 Merivale Street
Erskine Park
Erskine Park
Erskine Park
Kembla Grange
Silverwater
Gepps Cross
Beverley
Adelaide Airport
Adelaide Airport
South Melbourne
Richmond
Richmond
Hawthorn
Hawthorn East
Mulgrave
Richmond
Mulgrave
Richmond
Newstead
Fortitude Valley
Brisbane
South Brisbane
South Brisbane
South Brisbane
South Brisbane
Car Park, 32 Cordelia Street & 52 Merivale Street South Brisbane
Latest external valuation
Carrying amounts
Date Valuation
$m
2022
$m
31-Dec-21
102.0
106.5
30-Jun-22
31-Dec-21
30-Jun-22
31-Dec-21
79.5
49.0
39.0
31.6
79.5
48.0
39.0
32.5
2021
$m
89.9
68.5
45.0
33.0
27.2
30-Jun-22
245.0
245.0
224.5
30-Jun-22
31-Dec-21
31-Dec-21
31.0
23.5
12.1
31.0
25.0
13.1
26.4
17.7
8.9
1,702.9
1,721.7
1,495.7
Latest external valuation
Carrying amounts
Date Valuation
$m
292.0
201.5
131.6
124.2
125.0
84.0
85.2
58.6
0.9
242.5
147.0
140.0
99.0
93.0
88.5
62.0
31.5
30-Jun-22
31-Dec-21
30-Jun-22
30-Jun-22
31-Dec-21
31-Dec-21
31-Dec-21
31-Dec-21
30-Jun-22
30-Jun-22
30-Jun-22
30-Jun-22
30-Jun-22
31-Dec-21
30-Jun-22
31-Dec-21
31-Dec-21
2022
$m
292.0
203.0
131.6
124.2
123.0
84.0
82.7
58.2
0.9
242.5
147.0
140.0
99.0
90.0
88.5
61.8
32.0
2021
$m
249.0
183.5
130.0
113.0
N/A
83.2
79.0
57.4
1.0
257.4
143.0
140.0
103.0
89.0
87.5
60.0
30.8
NSW
NSW
NSW
NSW
NSW
SA
SA
SA
SA
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
VIC
QLD
QLD
QLD
QLD
QLD
QLD
QLD
QLD
South Australia
33-39 Richmond Road
1. Acquired in February 2022.
Keswick
SA
31-Dec-21
79.0
78.5
69.0
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
68
Financial report
2.2 Investment properties (continued)
Determination of fair value (continued)
Office properties
New South Wales
1 Charles Street
Building C, 219-247 Pacific Highway
3 Murray Rose Avenue
5 Murray Rose Avenue
11 Murray Rose Avenue1
Australian Capital Territory
10-12 Mort Street
2-6 Bowes Street2
255 London Circuit
Western Australia
836 Wellington Road
Total office properties
Total portfolio at fair value
Ground leases as right-of-use assets
Total investment properties carrying amount
1. Acquired in August 2021.
2. Acquired in December 2021.
Valuation process
Latest external valuation
Carrying amounts
Date Valuation
Parramatta
Artarmon
NSW
NSW
30-Jun-22
31-Dec-21
Sydney Olympic Park NSW
30-Jun-22
Sydney Olympic Park NSW
31-Dec-21
Sydney Olympic Park NSW
30-Jun-22
Canberra
Canberra
Canberra
ACT
ACT
ACT
30-Jun-22
31-Dec-21
31-Dec-21
$m
555.0
146.0
116.0
107.3
53.8
90.0
84.6
82.5
2022
$m
555.0
146.0
116.0
106.0
53.8
90.0
84.6
82.5
2021
$m
525.0
137.0
111.0
100.5
N/A
95.0
N/A
81.0
West Perth
WA
30-Jun-22
104.0
104.0
100.0
3,424.6
3,416.6
3,025.3
5,138.3
4,521.0
94.8
98.6
5,233.1
4,619.6
Each investment property is valued either independently (externally) or internally in December and June each year. Investment properties
are valued according to the Group’s valuation policy which requires:
õ
Independent valuations of investment properties at least once per year;
õ External valuers are appropriately qualified. Qualified valuers must be authorised by law to carry out such valuations and have at least
five years’ valuation experience;
õ Any individual external valuer may perform valuations on a property on no more than two consecutive occasions;
õ
Internal valuations are undertaken at the end of a reporting period (half year and year end) if a property is not due for an independent
valuation; and
õ Where an internal valuation indicates a variance that exceeds prescribed percentage thresholds, an external valuation is undertaken
(even if this results in a property being independently valued twice in one year).
The valuation process is governed by the Board with input from the Executive Management Team. The process is reviewed periodically to
consider changes in market conditions and any other requirements that would need to be adopted.
At 30 June 2022, 31 investment properties representing approximately 63% (by value) of the portfolio were independently valued by
external valuers at eight valuation firms being JLL, CBRE, Savills, Knight Frank, Colliers, m3property, Urbis and Acumentis. Fair values for
the remaining 27 investment properties were based solely on Directors’ internal valuations.
Notes to the Financial Statements.
69
2.2 Investment properties (continued)
Valuation methodology
The Group determines a property’s value within a range of reasonable fair value estimates and, in making that assessment, considers
information from a variety of sources including:
õ Current prices for comparable properties, as adjusted to reflect differences for location, building quality, tenancy profile and other
factors;
õ Discounted cash flow (DCF) projections based on estimates of future cash flows; and
õ Capitalised income projections based upon a property’s estimated net market income, and a capitalisation rate derived from analysis of
market evidence.
Under the DCF approach, a property’s fair value is estimated by projecting a series of cash flows over a specified time horizon (typically
10 years) and discounting this cash flow, including the projected exit or terminal value, at a market-derived discount rate. Projected cash
flows are derived from contracted or expected market rents, operating costs, lease incentives, capital expenditure and future income on
vacant space. The net present value of the discounted cash flow represents the fair value of the property.
The income capitalisation approach involves estimating the potential sustainable gross market income of a property from which annual
outgoings are deducted to derive the net market income. Net market income is then capitalised in perpetuity at an appropriate market-
derived capitalisation rate (market yield). Appropriate capital adjustments are then made where necessary to reflect the specific cash flow
profile and general characteristics of the property.
At reporting date, the key assumptions used by the Group in determining fair value were as follows:
Industrial
Discount rate
Terminal yield
Capitalisation rate
Expected vacancy period
Rental growth rate
Office
Discount rate
Terminal yield
Capitalisation rate
Expected vacancy period
Rental growth rate
Discount Rates
2022
2021
5.3%-6.5%
4.0%-9.8%
4.0%-7.0%
4-9 months
2.5%-3.5%
5.3%-7.3%
4.3%-10.3%
4.0%-7.5%
4-12 months
2.4%-3.5%
2022
2021
5.5%-6.5%
4.1%-6.5%
3.8%-6.8%
6-18 months
2.2%-3.7%
5.5%-6.8%
4.4%-6.9%
3.8%-6.8%
6-18 months
2.2%-3.6%
As shown in the below table, over the twelve months to 30 June 2022 discount rates utilised in the valuation of the Group’s property
portfolio tightened (i.e. lowered) by approximately 24 basis points. Over the same time period, the implied property risk premium
decreased by approximately 241 basis points. The implied property risk premium is the difference between the weighted average discount
rate and the 10-year Australian Government bond yield. The decrease in the implied property risk premium is largely due to a marked
increase in the 10-year Australian Government bond yield over the second half of the financial year.
10-year Australian Government bond rate
Implied property risk premium
Weighted average 10-year discount rate used to value the Group’s properties
2022
3.66%
2.18%
5.84%
2021
1.49%
4.59%
6.08%
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 70
Financial report
2.2 Investment properties (continued)
Capitalisation Rates
Office
Office investment volume totalled $16.6 billion1 over the 12 months to 30 June 2022. Higher quality assets, particularly those securely
leased, continued to generate healthy demand from both domestic and offshore purchasers. $4.6 billion of office sales were recorded
in the last quarter of the financial year, despite rising interest rates and bond yields. After initially compressing in the first half of the year,
yields were relatively unchanged in the second half of the year. The weighted average capitalisation rate used to value the Group’s office
portfolio firmed 10 basis points to 5.15% over the 12 months to 30 June 2022.
Industrial
Investors, particularly institutional investors, continued to seek exposure to the industrial sector in FY22 as macroeconomic tailwinds
including the growth of e-commerce, supply chain infrastructure investment and strong occupier fundamentals, continued to support
trends within the sector. Demand for industrial investments, particularly investments which offer near term positive rent reversion
opportunities (i.e. short WALE assets), was sustained at exceptionally high levels throughout the year. Industrial transaction volume totalled
$11.9 billion2 in FY22. Yields continued to re-rate, particularly within the first half of the year. The weighted average capitalisation rate used
to value the Group’s industrial portfolio compressed 44 basis points to 4.72% over the 12 months to 30 June 2022.
Valuation uncertainty
The fair value of investment property represents the price for which a property could be exchanged on the date of valuation, between
knowledgeable, willing parties in an arm’s length transaction. The best evidence of fair value is given by current prices in an active market
for comparable property in terms of investment characteristics such as location, lettable area and land area, building characteristics,
property condition, lease terms and rental income potential, amongst others.
The fair value of the Group’s investment properties has been assessed having regard to market conditions at the reporting date. While this
represents the best estimates of fair value as at the balance sheet date, typical valuation uncertainty means that if an investment property
is sold in future the price achieved may be higher or lower than the most recent valuation, or higher or lower than the fair value recorded in
the financial statements.
The key inputs used to measure fair value of investment properties held at fair value are described below, along with the directional impact
an increase and decrease in the input has on fair values:
Key valuation
input
Description
Market
capitalisation rate
Net market rent
(per sqm)
Discount rate
The rate at which the net market rental income is
capitalised to determine the value of the property. The
rate is determined with regard to market evidence
and the prior external valuation. Used within the
capitalisation method.
The estimated amount for which a property, or space
within a property, should lease between a lessor and
a lessee on appropriate lease terms in an arm’s length
transaction. Used within both the capitalisation method
and DCF method.
The rate of return used to discount cash flows, payable
or receivable in the future, into present value. The rate
is determined with regard to market evidence and the
prior external valuation. Used within the DCF method.
Terminal
capitalisation rate
The terminal capitalisation rate used to convert
(capitalise) the future net market rental income at the
end of the holding period into an indication of terminal
value of the property. Used in the DCF method.
Valuation input value
Impact on fair values
Jun-22
Jun-21
Increase
in the input
Decrease in
the input
5.0%
5.2%
Decrease
Increase
$249
$244
Increase
Decrease
5.8%
6.1%
Decrease
Increase
5.4%
5.6%
Decrease
Increase
The valuations of the Group’s investment properties are sensitive to increases or decreases in key inputs, including market rents, growth
rates and yields. An increase in discount rates, terminal yields and or capitalisation rates would decrease the fair value of investment
property, whereas a decrease in these inputs would increase the fair value of investment property. Similarly, lower market rents and market
rental growth rates would decrease the fair value of investment property, while higher rents and growth rates would increase fair values.
1. Cushman & Wakefield, June 2022.
2. Ibid.
Notes to the Financial Statements. 71
2.2 Investment properties (continued)
Contractual obligations
On 27 May 2022, the Group exchanged conditional contracts to purchase an A-grade modern office asset located at 165-169 Thomas
Street, Dandenong, Victoria (VIC) for $165 million (net sale price). The Group paid a deposit of $16.5 million with the balance to be funded
at settlement. Following balance date, the conditions were satisfied and settlement occurred on 27 July 2022.
The Group has an obligation to make available $6.0 million to the tenant at 1 Charles Street, Parramatta, New South Wales to spend on
capital expenditure or refurbishment at the property. As at 30 June 2022 $4.1 million of refurbishment works had been carried out, leaving
a balance of $1.9 million which is held as restricted cash (refer note 2.6). As part of the new 25-year lease arrangements with the tenant,
the Group also entered a refurbishment deed under which it will contribute up to $44.0 million of office fit out and building refurbishment
works. To the extent the tenant does not utilise the $44.0 million on these works, the balance will be provided as a rent abatement spread
over the remaining lease term.
Leasing arrangements
Most of the investment properties are leased to tenants under non-cancellable, long-term leases with rent payable monthly. The minimum
lease payments under these leases are receivable as follows:
Within one year
Later than one year but not later than five years
Later than five years
2022
$m
257.2
793.8
975.4
2,026.4
2021
$m
246.0
745.5
1,005.6
1,997.1
The Group holds ten investment properties on a leasehold basis which are subject to annual ground rent payments. The minimum lease
payments for these leases are presented in the table in note 3.3 Lease Liabilities.
Movement in investment properties’ carrying amounts
Opening balance
Acquisitions and expansion capital expenditure
Maintenance capital expenditure
Lease incentives and leasing costs
Amortisation of lease incentives and leasing costs
Disposals
Straight-lining of revenue adjustment
Net movement in ground leases as leasehold asset
Net gain from fair value adjustments
Closing balance
2022
$m
2021
$m
4,619.6
4,325.7
297.0
20.7
35.4
(33.0)
–
12.1
(3.8)
285.1
5,233.1
0.4
21.2
52.3
(26.9)
(113.7)
8.5
(4.4)
356.5
4,619.6
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
72
Financial report
2.3 Investment in securities
Determination of fair value
The Group holds an investment in stapled securities of Dexus Industria REIT. This financial asset was designated at fair value through profit
or loss at inception. Fair value is the last traded market price on the Australian Securities Exchange (ASX) as at reporting date, which at
30 June 2022 was $2.70 (30 June 2021: $3.32). The fair value of Investment in securities has been categorised as Level 1 in the fair value
hierarchy; being quoted prices (unadjusted) in active markets for identical assets.
The following table represents the fair value movement in investment in securities for the year ended 30 June 2022.
Opening balance
Acquisitions
(Loss)/gain in fair value
Closing balance
2.4 Receivables and other assets
2022
$m
104.8
60.3
(32.7)
132.4
2021
$m
69.9
5.6
29.3
104.8
Property revenue receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
rate method, less any allowance under the Expected Credit Loss (ECL) model. The amount of any impairment loss is recognised in the
Consolidated Statement of Comprehensive Income within property revenue. Non-current trade receivables are discounted to present value
based on the Group’s incremental borrowing rate.
Collectability of property revenue receivables is reviewed on an ongoing basis. Property revenue receivables are generally due
for settlement within 30 days. The Group often holds security deposits and/or bank guarantees from tenants in line with industry
practice for leasing agreements. Receivables are written off when assessed to be uncollectable relative to the cost and effort
required to further pursue collection.
Under its lifetime ECL model, the Group assesses the discounted cash flows expected to be received over the life of each receivable on a
probability weighted basis. Any difference between this and the amounts contractually receivable is recognised as an allowance for credit
losses. The assessment incorporates a provision matrix which assesses historic loss rates, relevant forward-looking macroeconomic
indicators and, for significant individual tenant balances, relevant circumstances known about the tenant including liquidity risk, financial
health and levels of engagement.
At 30 June 2022 the Group had $2.6 million in property revenue receivables outstanding (2021: $2.9 million). During the year the Group
granted nil rental relief to tenants in the form of deferrals (2021: $0.2 million) as required for qualifying tenants under the National Cabinet’s
Mandatory Code of Conduct for Small to Medium Enterprise (SME) commercial leasing principles during the COVID-19 pandemic which
was given effect by state and territory legislation. Deferrals granted during the pandemic have been agreed with tenants to be repaid over
periods between October 2020 and June 2023 and have been classified between current and non-current receivables accordingly.
Of the current property revenue receivables balance not subject to COVID-19 deferrals, $0.8 million is more than 30 days past its due date
(2021: $0.8 million). As at 30 June 2022, the Group recognised $0.2 million allowance for ECL (2021: $0.1 million). During the year the
Group incurred $0.1 million in credit losses (2021: $nil).
Notes to the Financial Statements. 2.4 Receivables and other assets (continued)
Receivables and other assets are presented as follows:
Current
Property revenue receivables
Property revenue receivables (COVID-19 deferrals)
Allowance for expected credit losses
Distribution receivables
Prepayments
Non-Current
Property revenue receivables (COVID-19 deferrals)
Deposit and acquisition costs for investment property1
73
2022
$m
1.9
0.9
(0.2)
2.1
2.4
7.2
–
16.7
16.7
2021
$m
0.9
1.2
(0.1)
1.4
2.7
6.1
0.9
2.8
3.7
1. In 2022, balance includes deposit and acquisition costs for 165-169 Thomas Street, Dandenong, Victoria.
2.5 Trade and other liabilities
Trade and other liabilities are for goods and services provided to the Group prior to the end of the reporting period which are unpaid. The
amounts are unsecured and are usually paid within 30 days of recognition. Trade and other liabilities are initially recognised at fair value,
net of transaction costs incurred and are subsequently measured at amortised cost.
Trade and other liabilities are presented as follows:
Current
Trade payables
Employee entitlements
GST payable
Accrued expenses - other
Unearned income
Other liability1
2022
$m
0.7
1.3
1.5
19.4
22.1
1.1
46.1
2021
$m
0.4
1.2
1.7
13.7
16.9
1.1
35.0
1. The other liability of $1.1 million is an amount of cash received from a tenant which is required to be used to fund capital expenditure by the Company as the custodian of the
Charles Street Property Trust in relation to that tenancy. The amount held is classified as restricted cash (Refer to Note 2.6).
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
74
Financial report
2.6 Cash flow information
Reconciliation of profit after tax to net cash inflow from operating activities
Profit after tax
Net (gain) in fair value of investment properties
Net loss/(gain) on exchange rate translation of interest-bearing liabilities
Net loss in fair value on sale of investment properties
Net loss/(gain) in fair value of investment in securities
Net (gain)/loss in fair value of derivatives
Amortisation of borrowing costs
Depreciation of right of use assets
Depreciation of plant and equipment
Share based payments expense
Change in operating assets and liabilities:
- (Increase) in lease incentives and leasing costs
- (Increase) in receivables
- (Increase)/decrease in prepayments
- Decrease/(increase) in net deferred tax liabilities
- Increase in payables
Net cash inflow from operating activities
2022
$m
459.2
(285.1)
31.5
–
32.7
(57.2)
0.1
3.9
0.2
1.9
(2.4)
(8.0)
(6.8)
7.2
6.2
183.4
2021
$m
553.2
(356.5)
(33.0)
1.5
(29.3)
43.8
0.9
4.1
0.2
1.4
(25.2)
(8.3)
2.0
(3.3)
0.2
151.7
The Group held $3.0 million of restricted cash in trust as at 30 June 2022 (30 June 2021: $3.1 million) in relation to its role as custodian
of the Charles Street Property Trust. The balance comprises $1.9 million of the Group’s own cash along with $1.1 million received from a
tenant. These funds are not available for general use by the Group.
Notes to the Financial Statements. 75
Section 3: Capital structure and financing
3.1 Interest bearing liabilities
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in the Consolidated Statement of Comprehensive Income over the period of the borrowings using the effective interest
method. Foreign denominated debt is translated at the balance date spot rate in accordance with AASB 121 Effects of Changes in
Foreign Exchange Rates, with associated gains/losses recognised in the Consolidated Statement of Comprehensive Income. Borrowings
with maturities greater than 1 year from balance date are classified as non-current liabilities.
The table below shows the movements in the Group’s interest-bearing liabilities during the year along with facility limits and dates of
maturity. The carrying amounts and facility limits are reported in Australian dollars.
Movement during period
Opening
balance
1-Jul-21
Net cash
(repayments)/
drawdowns of
borrowings
Foreign exchange
rate adjustments
recognised in
profit or loss
Closing
balance
30-Jun-22
Facility
limit
Facility
headroom Maturity
Secured loans
Current
Floating bank facility 11
Total current loans
Less unamortised up-front costs
Carrying amount - Current
Non-current
Syndicated bank facility
- Facility B
- Facility C
- Facility D
- Facility E
- Facility G
- Facility H
- Facility I
- Facility K
- Facility L
- Facility M
- Facility N
- Facility O
- Facility P
- Facility Q
Loan note 1
Loan note 2
USPP 1 (USD 100.0m)2
USPP 2 (USD 40.0m)2
USPP 3 (AUD 26.0m)
USPP 4 (USD 115.0m)2
$m
40.0
40.0
(0.1)
39.9
100.0
245.0
70.0
150.0
–
62.5
–
–
–
–
–
–
–
–
200.0
100.0
133.1
53.1
26.0
152.8
Total non-current loans
Less unamortised up-front costs
1,292.5
(5.3)
Carrying amount – non-current
1,287.2
Total loans
1,332.5
Less: unamortised up-front costs
(5.4)
Total carrying amount
1,327.1
$m
–
–
0.1
0.1
–
–
–
–
150.0
(62.5)
–
–
–
75.0
75.0
75.0
71.5
–
–
–
–
–
–
–
384.0
(2.7)
381.3
384.0
(2.6)
381.4
$m
$m
$m
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12.4
4.9
–
14.2
40.0
40.0
–
40.0
100.0
245.0
70.0
150.0
150.0
–
–
–
–
75.0
75.0
75.0
71.5
–
200.0
100.0
145.5
58.0
26.0
167.0
90.0
90.0
Dec-22
50.0
50.0
100.0
245.0
70.0
150.0
150.0
75.0
75.0
50.0
50.0
75.0
75.0
75.0
75.0
50.0
200.0
100.0
145.5
58.0
26.0
167.0
–
Mar-26
–
Dec-26
–
Dec-26
–
Jun-26
–
Sep-26
75.0
Dec-24
Dec-24
75.0
50.0 May-25
50.0 May-27
Nov-25
–
Nov-25
–
Apr-27
–
Apr-27
3.5
Apr-27
50.0
Mar-25
–
Dec-26
–
Jun-27
–
Jun-29
–
Jun-29
–
– May-29
31.5
1,708.0
2,011.5
303.5
–
(8.0)
31.5
1,700.0
31.5
1,748.0
2,101.5
353.5
–
(8.0)
31.5
1,740.0
1. Previously classified as non-current at 30 June 2021.
2. USD denominated debt closing balance and facility limits are reported in AUD at the 30 June 2022 spot rate of 0.69 (30 June 2021: 0.75).
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 76
Financial report
3.1 Interest bearing liabilities (continued)
The Group made the following changes to interest bearing liabilities during the year:
õ
õ
õ
In November 2021, the Group refinanced $715 million of its existing syndicated bank facilities to extend facilities B, C, D & E by three
years and facility G by one year at market pricing.
In November 2021, the Group established syndicated bank facilities M and N, of $75 million each, with four year tenor at market
pricing.
In April 2022, the Group established syndicated bank facilities O and P of $75 million each and facility Q of $50 million, with five year
tenor at market pricing.
The weighted average all-in interest rate on interest bearing liabilities (including bank margin and amortisation of upfront fees paid) at
30 June 2022 was 3.38% per annum (2021: 3.32% per annum). Refer to note 3.4 for details on interest rate and cross currency swaps.
Fair value
As at 30 June 2022, the Group’s interest-bearing liabilities had a fair value of $1,639.2 million (2021: $1,389.5 million).
The carrying amount of these interest-bearing liabilities was $1,740.0 million (2021: $1,327.1 million). The difference between the carrying
amounts and the fair values is due to:
õ Unamortised up-front costs which are included in the carrying amounts but excluded from fair values; and
õ Movements in discount rates applied in fair value discount cash flows based on current funding curves.
Assets pledged as security
The bank loans, Loan Notes and USPP payable by the Group are secured by first ranking mortgages over the Group’s real property
interests, including those classified as investment properties.
3.2 Borrowing costs
Borrowing costs are interest and other costs incurred in connection with interest bearing liabilities including derivatives, lease liabilities and
the discounting of non-current receivables and recognised as expenses in the period in which they are incurred, except where they are
incurred for the construction of any qualifying asset where they are capitalised during the period of time that is required to complete and
prepare the asset for its intended use.
Borrowing costs can be analysed as follows:
Bank interest expense and charges
Amortisation of borrowing costs
Interest expense on lease liabilities
2022
$m
44.5
1.6
3.6
49.7
2021
$m
46.0
2.3
4.0
52.3
Notes to the Financial Statements. 77
3.3 Lease liabilities
In December 2021, the Group exercised an option to terminate its head office lease effective 31 October 2022. The right of use asset and
liability associated with the lease have been derecognised, with the net balance of $0.3m recognised in the Statement of Comprehensive
Income.
The Group’s minimum lease payments fall due as follows:
Ground Leases
Not later than one year
Later than one but not more than five years
More than five years
Total
Head Office Lease
Not later than one year
Later than one but not more than five years
More than five years
Total
Total Leases
Not later than one year
Later than one but not more than five years
More than five years
Total
3.4 Derivative financial instruments
2022
$m
4.6
25.5
140.9
171.0
0.1
–
–
0.1
4.7
25.5
140.9
171.1
2021
$m
4.5
24.9
145.0
174.4
0.4
1.3
–
1.7
4.9
26.2
145.0
176.1
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at fair
value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument.
The Group takes out certain derivative contracts as part of its financial risk management, however, it has elected not to designate these
to qualify for hedge accounting under AASB 9 Financial Instruments. Changes in fair value of derivative instruments are recognised in the
Consolidated Statement of Comprehensive Income.
Determination of fair value
The fair value of derivatives is estimated using valuation techniques including discounting estimated future cash flows based on the terms
and maturity of each contract and using market interest rates for a substitute instrument at the measurement date. Fair values reflect the
credit risk of the instrument, the Group and counterparty when appropriate.
Derivative financial instruments
Derivative financial instruments can be analysed as follows:
Derivative financial instrument contracts
Total non-current derivative financial instrument assets
Total non-current derivative financial instrument liabilities
2022
$m
59.1
(0.3)
58.8
2021
$m
7.3
(9.5)
(2.2)
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
78
Financial report
3.4 Derivative financial instruments (continued)
Instruments used by the Group
The Group is party to derivative financial instruments to hedge exposure to fluctuations in interest and currency rates in accordance with
the Group’s financial risk management policies.
Interest rate swap contracts
The Group uses interest rate swaps to economically hedge part of its floating rate debt to fixed rate debt. Interest rate swaps in effect at
30 June 2022 covered 31% (30 June 2021: 27%) of the loan principal outstanding. With total fixed interest rate debt of $1,048.5 million
outstanding as at 30 June 2022 (30 June 2021: $868.5 million), the total fixed interest rate coverage of outstanding principal is 61% (30
June 2021: 65%).
The average fixed interest rate of interest rate swaps at 30 June 2022 was 1.33% per annum (30 June 2021: 1.05% per annum) and the
variable interest rate (excluding bank margin) is 1.13% per annum (30 June 2021: 0.06% per annum) at balance date. See table below for
further details of interest rate swaps in effect at 30 June 2022:
Counter Party
Amount of Swap
Swap Expiry
Fixed Rate
Term to Maturity
Interest rate swaps
NAB
WBC
ANZ
WBC
NAB
ANZ
ANZ
NAB
NAB
ANZ
WBC
ANZ
CBA
Total / Weighted average
$m
20.0
15.0
25.0
75.0
25.0
100.0
100.0
35.0
25.0
20.0
15.0
50.0
35.0
540.0
Dec-23
Dec-23
Feb-24
Sep-24
Sep-24
Jun-25
Jun-25
Dec-25
Jun-26
Jun-26
Jun-26
Mar-27
Feb-29
%
Years
0.22
0.21
0.22
0.50
0.44
0.60
1.29
1.48
4.08
3.73
3.72
2.08
2.29
1.33
1.5
1.5
1.6
2.2
2.2
3.0
3.0
3.5
4.0
4.0
4.0
4.7
6.7
3.2
These contracts require settlement of net interest receivable or payable each 30 days. The settlement dates generally coincide with the
dates on which interest is payable on the underlying debt. These contracts are settled on a net basis.
Cross currency swap and Cross currency interest rate swap contracts
The Group is a party to several swaps to mitigate the currency and/or interest rate risk exposures of its USPP bonds.
Cross currency interest rate swaps
The cross-currency interest rate swaps hedge both foreign exchange risk and interest rate risk. The quarterly coupon payments are
swapped from a USD denominated principal at a fixed interest rate into an AUD denominated principal at a fixed AUD interest rate. The
USD denominated principal repayment at expiry is swapped into a fixed AUD amount.
Notes to the Financial Statements. 79
3.4 Derivative financial instruments (continued)
Cross currency swap
The cross-currency swap hedges the quarterly coupon payments from a USD denominated principal at a fixed interest rate into an AUD
denominated principal exposed to BBSW plus a fixed margin. The USD denominated principal repayment at expiry is swapped for a fixed
AUD amount.
Counter Party
Amount of Swap
Swap Expiry
Fixed Rate
3 months
BBSW+
Term to Maturity
Cross currency interest rate swaps
NAB
Westpac
ANZ
CBA
NAB
Westpac
ANZ
CBA
Cross currency swap
Westpac
Total / Weighted average
$m
32.6
32.6
32.6
32.6
13.0
13.0
13.0
13.0
161.0
343.4
Jun-27
Jun-27
Jun-27
Jun-27
Jun-29
Jun-29
Jun-29
Jun-29
May-29
%
5.29
5.29
5.27
5.26
5.47
5.47
5.45
5.44
–
5.33
%
–
–
–
–
–
–
–
–
3.28
3.28
Years
5.0
5.0
5.0
5.0
7.0
7.0
7.0
7.0
6.9
6.2
3.5 Financial instrument fair value hierarchy
The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:
õ Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
õ Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices).
õ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
30-Jun-22
Investment in securities
Derivative financial assets
Derivative financial liabilities
30-Jun-21
Investment in securities
Derivative financial assets
Derivative financial liabilities
Level 1
Level 2
Level 3
$m
$m
$m
132.4
–
–
132.4
104.8
–
–
104.8
–
59.1
(0.3)
58.8
–
7.3
(9.5)
(2.2)
–
–
–
–
–
–
–
–
Total
$m
132.4
59.1
(0.3)
191.2
104.8
7.3
(9.5)
102.6
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
80
Financial report
3.6 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
õ credit risk;
õ market risk (including interest rate risk); and
õ
liquidity risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for
measuring and managing risk, and the management of capital as well as relevant quantitative disclosure on risks.
Refer to the Group’s 2022 Corporate Governance Statement for details about its overall risk management framework. Specific risks faced
by the business are also addressed in the Directors’ report.
Financial instruments used by the Group
The Group’s principal financial instruments are those used to raise finance for the Group’s operations, comprising bank loans and Loan
Notes (including USPP Notes). The Group has various other financial instruments such as cash and cash equivalents, receivables and
payables, other assets and investments in securities which arise directly from its operations. The Group enters derivative transactions to
manage the interest rate risks arising from its financial instruments.
It is the Group’s policy that no speculative trading in financial instruments shall be undertaken. Details of the significant accounting policies
and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses
are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in the relevant note to the
financial statements.
Credit risk
Credit risk is the risk that counterparties to a financial asset will fail to discharge their obligations, causing the Group to incur a financial
loss.
For cash and current receivables, the maximum exposure to credit risk at the reporting date is the carrying amount of each class of
receivable.
The Group has significant derivative financial instruments held with four major Australian banks, NAB, Westpac, ANZ and CBA, which are
considered high quality financial institutions. At balance date, the fair value of these financial instruments is a net asset of the Group (refer
to Note 3.4).
The Group manages credit risk and the losses which could arise from default by ensuring that parties to contractual arrangements are of
an appropriate credit rating, or do not show a history of defaults. Cash at bank is held with a major Australian bank.
Tenants for each of the properties held by the Group are assessed for creditworthiness before a new lease commences. This assessment
is also undertaken where the Group acquires a tenanted property. If necessary, a new tenant will be required to provide lease security
(such as personal, director or bank guarantees, a security deposit, letter of credit or some other form of security) before the tenancy is
approved. Tenant receivables are monitored by property managers and the Group’s asset managers on a monthly basis. If any amounts
owing under a lease are overdue these are followed up for payment. Where payments are outstanding for a longer period than allowed
under the lease, action to remedy the breach of the lease can be pursued, including legal action or the calling of security held by the
Group under the lease in accordance with the terms of the lease, subject to any applicable restrictions at law (including State based
COVID-19 legislation). The Group assesses aged amounts for collectability based on various criterion in its ECL model and where
applicable, raises an ECL allowance through profit or loss. Refer Note 2.4 for additional information on ECL allowances.
Fair values
The carrying values of the Group’s financial assets and liabilities approximate their fair values except for interest-bearing liabilities as
outlined in Note 3.1. Further information about the methods and assumptions adopted in determining fair values is disclosed in the
relevant notes.
Notes to the Financial Statements. 81
3.6 Financial risk management (continued)
Market risk
Market risk is the risk that changes in market prices (such as foreign exchange rates, interest rates and equity prices) will affect the
Group’s income or the value of its holding of financial instruments.
A potential market risk to the Group arises from changes in interest rates. This relates to its floating debt facilities with a principal amount
outstanding of $1,051.5 million at balance date (2021: $667.5 million) and a cross currency swap with a principal amount of $161.0 million
at balance date (2021: $161.0 million).
The Group is party to derivative financial instruments in the normal course of business to hedge its exposure to fluctuations in interest
rates.
The following table sets out the carrying amount of the financial instruments that are exposed to interest rate risk:
Financial assets
Cash and cash equivalents
Derivative financial instruments
Financial liabilities
Derivative financial instruments
Borrowing facilities
Borrowing facilities – hedged
Borrowing facilities – unhedged
Fixed/Floating
Floating
Fixed/Floating
Fixed
Fixed
Fixed
Floating
2022
$m
49.2
59.1
108.3
0.3
529.4
540.0
678.6
2021
$m
33.5
7.3
40.8
9.5
512.1
360.0
460.4
1,748.3
1,342.0
Derivative financial instruments – interest rate swaps
The Group is exposed to financial risk from movement in interest rates. To reduce its exposure to adverse fluctuations in interest rates,
the Group has employed the use of interest rate swaps whereby the Group agrees with a bank to exchange at specified intervals, the
difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount. Any
amounts paid or received relating to interest rate swaps are recognised as adjustments to interest expense over the life of each swap
contract, thereby adjusting the effective interest rate on the underlying obligations.
Derivative financial instruments – cross currency swaps
The Group is exposed to financial risk from the movement in foreign exchange rates based on its USD255.0 million denominated debt.
To mitigate this exposure, the Group entered into cross currency swaps and cross currency interest rate swaps at inception of the USD
denominated debt facilities, which convert USD denominated debt principal repayments and all future interest payments from USD to
AUD, thereby eliminating its direct foreign currency exposure.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
82
Financial report
3.6 Financial risk management (continued)
Sensitivity analysis – interest rate risk
The following sensitivity analysis is based on the interest rate risk exposures at balance date. At 30 June 2022, if interest rates had
increased or decreased 100 basis points (bps), with all other variables held constant, profit and equity would be impacted as follows,
noting that all USD interest payments have been converted into AUD through swaps:
+100 bps
Cash and borrowings
Interest rate derivatives
Cross currency derivatives
-100 bps
Cash and borrowings
Interest rate derivatives
Cross currency derivatives
Profit after tax higher/(lower)
2022
$m
(6.2)
15.0
(10.9)
(2.1)
6.2
(15.6)
11.7
2.3
2021
$m
(4.4)
10.1
(11.5)
(5.8)
4.4
(10.4)
12.5
6.5
These fair value gains or losses would be unrealised and non-cash unless the interest rate swaps were closed or sold.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its obligations in relation to investment activities or other operations of the
Group. The Group manages its liquidity risk by ensuring that on a daily basis there is sufficient cash on hand or available loan facilities
to meet the contractual obligations of financial liabilities as they fall due. The Board sets budgets to monitor cash flows. In addition, the
Company, as an Australian Financial Services Licensee, is required to prepare a rolling 12-month cashflow projection for approval by the
Directors. As at the balance date, the Group had cash and cash equivalents totalling $49.2 million (2021: $33.5 million) and undrawn debt
facilities of $353.5 million (2021: $387.5 million).
Notes to the Financial Statements.
83
3.6 Financial risk management (continued)
Maturities of financial liabilities
The maturity of financial liabilities (including trade and other payables, provision for distribution, provision for current tax payable, derivative
financial instruments and interest-bearing liabilities) at reporting date is shown below, based on the contractual terms of each liability in
place at reporting date. The amounts disclosed are based on undiscounted cash flows, including interest payments based on variable
rates at 30 June 2022.
Carrying
amount
Total
contractual
cashflows
6 months
or less
6 to 12
months
1 to 5
years
More than
5 years
$m
$m
$m
$m
$m
$m
2022
Non-derivative financial liabilities
Bank loans and Loan Notes
1,740.0
1,935.6
Lease liabilities
Trade and other liabilities
Derivative financial liabilities
Interest rate swaps used for hedging
104.6
109.7
171.0
109.7
1,954.3
2,216.3
0.3
0.3
10.0
10.0
2021
Non-derivative financial liabilities
Bank loans and Loan Notes
1,327.1
1,502.2
Lease liabilities
Trade and other liabilities
105.9
95.3
176.1
95.6
1,528.3
1,773.9
59.6
2.3
107.3
169.1
0.8
0.8
16.5
2.5
93.2
112.2
18.9
2.3
1.3
22.5
0.8
0.8
1,596.4
25.5
1.1
1,623.0
8.3
8.3
260.8
140.9
–
401.7
–
–
16.4
1,221.5
2.4
1.1
26.2
1.2
247.9
145.0
–
19.9
1,248.9
392.9
Derivative financial liabilities
Interest rate swaps used for hedging
9.5
9.5
11.0
11.0
1.8
1.8
1.9
1.9
7.3
7.3
–
–
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
84
Financial report
3.7 Contributed equity and reserves
Contributed equity
Stapled securities are classified as equity. Costs directly attributable to the issue of stapled securities are recognised as a deduction from
equity, net of any tax effects.
Distributions and dividends
Provision is made for any distribution or dividend declared, determined or publicly recommended by the Directors on or before the end of
the period but not distributed at the balance date.
Contributed Equity
Contributed equity can be analysed as follows:
Opening balance at 1 July
Securities issued through employee incentive plans
Total equity issued
Securities bought back on market
Total equity cancelled
Closing balance at 30 June
Ordinary stapled securities
2022
No. (m)
771.9
0.3
0.3
(0.5)
(0.5)
771.7
2022
$m
2,048.5
–
–
(2.0)
(2.0)
2021
No. (m)
771.8
0.5
0.5
(0.4)
(0.4)
2021
$m
2,049.9
–
–
(1.3)
(1.3)
2,046.5
771.9
2,048.6
Ordinary stapled securities entitle the holder to vote at securityholder meetings in person or by proxy and to participate in dividends and
distributions in proportion to the number of stapled securities held, subject to being on the register at the relevant record date.
Distribution reinvestment plan
The Distribution Reinvestment Plan was suspended for the 31 December 2021 and 30 June 2022 distributions of the Group.
Capital risk management
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern, so that the Group can continue
to provide returns for Securityholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
In order to maintain or adjust the capital structure, the Group may adjust the amounts of dividends and distributions paid to
Securityholders, return capital to Securityholders, issue new securities or buy back securities, vary the level of borrowings and/or sell
assets.
In February 2021, the Group announced an on-market buy-back of up to 2.5% of the ordinary stapled securities on issue, which it
extended for a further 12 months in February 2022. At 30 June 2022, the Group has bought back and cancelled 916,101 ordinary stapled
securities, representing 0.1% of the ordinary stapled securities on issue at the time of the announcement.
The Group holds an independent credit rating to aid it in accessing debt capital markets. In April 2022, Moody’s confirmed the Group’s
independent credit rating of Baa2 on senior secured debt with a stable outlook.
Refer to Note 3.1 for capital management initiatives made by the Group for its debt facilities. The Group maintains undrawn debt facilities
to aid in capital management.
The Group monitors capital by using several measures such as gearing, interest cover and loan to valuation ratios.
The Group has a target gearing range of 35% to 45%. At 30 June 2022, the gearing ratio was 31.6% (30 June 2021: 27.9%). The gearing
ratios at 30 June 2022 and 30 June 2021 were calculated as follows:
Total interest-bearing liabilities less cash
Total assets less cash and right-of-use assets
Gearing ratio
2022
$m
1,690.8
5,354.4
31.6%
2021
$m
1,293.6
4,642.5
27.9%
Notes to the Financial Statements.
85
3.7 Contributed equity and reserves (continued)
Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve comprises the cumulative fair value expensed in the Consolidated Statement of Comprehensive
Income for performance rights issued, less any amounts transferred to equity upon vesting, or to retained profits upon forfeiture. Refer to
Note 3.10 for more share-based payment information.
Deferred tax expense charged to equity
This reserve comprises deferred tax balances attributable to amounts that are also recognised directly in equity. Refer to Note 4.1 for
further income tax information.
3.8 Distributions to Securityholders
Period for distribution
Half year to 31 December 2021
Half year to 30 June 2022
Total distributions for the year ended 30 June 2022
Half year to 31 December 2020
Half year to 30 June 2021
Total distributions for the year ended 30 June 2021
3.9 Earnings per stapled security (EPS)
Distributions
Total stapled
securities
Distributions
per stapled
security
$m
80.3
80.3
160.6
77.2
77.2
154.4
No. (m)
772.1
771.7
772.2
771.9
(cents)
10.4
10.4
20.8
10.0
10.0
20.0
Basic EPS is determined by dividing the profit after tax by the weighted average number of equivalent securities outstanding during the
financial year.
Diluted EPS adjusts the figures used in the determination of basic EPS by including amounts unpaid on securities and the effect of all
dilutive potential ordinary securities.
Profit after tax of the Group
Profit after tax of the Trust as parent entity
Basic weighted average number of stapled securities on issue for the year
Adjustment for potential dilution from performance rights on issue
Diluted weighted average number of stapled securities on issue for the year
EPS attributable to securityholders of the Group
Basic EPS
Diluted EPS
EPS attributable to unitholders of the Trust as parent entity
Basic EPS
Diluted EPS
$m
$m
No. (m)
No. (m)
No. (m)
Cents
Cents
Cents
Cents
2022
459.2
461.6
771.8
2.3
774.1
59.5
59.3
59.8
59.6
2021
553.1
554.3
772.0
1.8
773.7
71.7
71.5
71.8
71.6
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 86
Financial report
3.10 Share-based payment arrangements
The fair value of share-based payment awards granted to employees is recognised as an expense over the period during which the
services are performed. For market-based performance rights, the fair value is independently valued using a Monte Carlo simulation
pricing model that takes into account the exercise price, the term of the rights, impact of dilution, stapled security price at grant date,
expected price volatility of the underlying stapled security, expected dividend yield and the risk-free interest rate for the term of the rights
and market vesting conditions. The impact of any non-market vesting conditions (for example, profitability, changes in net tangible assets)
are excluded. For non-market-based performance rights, the fair value is independently valued using a Binomial pricing methodology. The
amount recognised as an expense is adjusted to reflect the number of rights expected to vest. Details of valuations obtained during the
year are reported on pages 46 of the Remuneration Report within the Directors’ Report.
At 30 June 2022, the Group had two share-based payment schemes in place (30 June 2021: two):
(a) Deferred Short-term Incentive Performance Rights
Any Short-term Incentive (STI) payable to Executive Key Management Personnel (KMP), which for STI plans on foot (FY22 and prior) are
paid as 66.7% cash with the remainder deferred and awarded as Deferred STI Performance Rights. Half of these rights vest after one year
and the other half after two years. Further details of this plan are reported on pages 42-44 of the Remuneration Report.
(b) Long-term Incentive Performance Rights
The Group has Long-term Incentive Performance Rights plans in place for participating employees. The plans are designed to align
employees’ remuneration with the long-term goals and performance of the Group and the maximisation of returns for its Securityholders.
The measures for the plans are reviewed regularly by the Nomination, Remuneration and HR Committee and/or the Board. Details of
the various Long-term Incentive Plans in place, applicable performance measures, fair value calculation methodologies and details are
reported on pages 45-46 of the Remuneration Report.
The table below shows the movement in rights under each type of share-based payment scheme:
Rights outstanding at 30 June 2020
Rights granted
Rights lapsed
Rights vested to GOZ stapled securities1
Rights outstanding at 30 June 2021
Rights granted
Rights lapsed
Rights vested to GOZ stapled securities2
Rights outstanding at 30 June 2022
Short-term
Performance
Rights
Long-term
Performance
Rights
No.
No.
228,027
202,358
(154,001)
(93,869)
182,515
211,951
(11,048)
(112,367)
271,051
1,166,323
994,569
–
(363,509)
1,797,383
820,610
(336,541)
(184,590)
2,096,862
Total
No.
1,394,350
1,196,927
(154,001)
(457,378)
1,979,898
1,032,561
(347,589)
(296,957)
2,367,913
1. In October 2020, 363,509 rights under the FY17 backward-looking plan, the FY19 and FY20 transitional Long-term Incentive Plans were converted to Growthpoint stapled
securities with a total value of $1,225,025.
2. In October 2021, 184,590 rights under the FY19 forward looking Long-term incentive plans were converted to Growthpoint stapled securities with a total value of $778,970.
During the year, $1.9 million was expensed and recognised in the Company’s share-based payments reserve (2021: $1.4 million).
Notes to the Financial Statements. 87
Section 4: Other notes
4.1 Income tax
Trusts
Property investments are held by the Trust for the purpose of earning rental income. Under current tax legislation, the Trust is not liable for
income tax provided the taxable income of the Trust, including realised capital gains, is attributed in full to its securityholders each financial
year. Securityholders are subject to income tax at their own marginal tax rates on amounts attributable to them.
Company and other taxable entities
For the Company and other taxable entities, income tax expense comprises current and deferred tax. Current and deferred tax are
recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other
comprehensive income.
Current and deferred tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at reporting date, and any adjustment to tax payable in respect of prior years. Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit or loss, and taxable temporary differences arising
on the initial recognition of goodwill. Deferred tax is measured at the tax rates (and laws) that have been enacted or substantively enacted
by balance date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is
settled.
Deferred income tax liabilities and assets - recognition
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses. Deferred tax assets are reviewed each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax liabilities are recognised for all taxable temporary differences
Net deferred tax assets or liabilities
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities, when the
deferred tax balances relate to the same taxation authority and the Group intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Tax relating to equity items
Current and deferred tax balances attributable to amounts recognised directly in equity are recognised directly in equity.
Adoption of Voluntary Tax Transparency Code
The Tax Transparency Code (TTC), a voluntary code, is a set of principles and minimum standards to guide medium and large businesses
on public disclosure of tax information. The TTC recommends specified tax information be publicly disclosed to help educate the public
about medium and large corporate compliance with Australia’s tax laws. Growthpoint has adopted the TTC and the required disclosures
are contained in this note.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 88
Financial report
4.1 Income tax (continued)
Income tax expense
The tables below relate to income tax for the Group’s income tax paying entities.
(a) Income tax expense:
Current tax expense
Deferred tax (expense) / benefit
Income tax (expense) / benefit in the Statement of Comprehensive Income
2022
$’000
(662)
(7,218)
(7,880)
2021
$’000
(304)
3,243
2,939
(b) Reconciliation of accounting profit to prima facie tax at 30%, statutory income tax expense reported and current tax
expense:
Profit before income tax expense
Less: Trust profit not subject to tax
Profit / (loss) subject to taxation in the Group’s companies
2022
$’000
467,100
(443,706)
23,394
2021
$’000
550,195
(562,004)
(11,809)
Prima facie tax (expense) / benefit at 30%
(7,018)
3,543
Tax effect of amounts not deductible / assessable in calculating income tax expense:
Non-deductible expenses
Long-term employee benefits
Short-term employee benefits
Non-deductible project expenses
Refundable tax offsets
2021 Tax loss carry back
Over provision
Statutory income tax (expense) / benefit
Deferred tax (expense) / benefit (Refer section (d))
Current tax expense (payable for the current year)
(c) (i) Effective tax rates:
Profit / (loss) subject to taxation
Statutory income tax (expense) / benefit
Accounting and TTC Effective tax rate¹
(9)
(400)
(164)
(288)
–
–
(1)
(7,880)
(7,218)
(662)
2022
$’000
23,394
(7,880)
33.68%
(8)
(339)
(89)
–
51
(51)
(168)
2,939
3,243
(304)
2021
$’000
(11,809)
2,939
(24.88%)
1. The group operates in Australia and has no offshore operations, therefore is subject solely to Australian income tax. The accounting effective tax rate was the same as the
TTC effective tax rate in both the current and prior financial years.
Notes to the Financial Statements.
4.1 Income tax (continued)
Income tax expense (continued)
(c) (ii) Current income tax payable:
Income tax payable at beginning of financial year
Less: income tax paid during the year
Add: Current tax expense
Current tax payable
(c) (iii) Deferred tax balances
Deferred tax assets (Growthpoint Properties Australia Limited)
Deferred tax (liabilities) (Growthpoint Finance Pty Ltd)
Net deferred tax (liabilities) / assets
89
2022
$’000
246
(493)
662
415
2022
$’000
1,561
(8,285)
(6,724)
2021
$’000
1,441
(1,499)
304
246
2021
$’000
1,089
(586)
503
As at 30 June 2022, the Company had franking credit balance of $5,628,817 (30 June 2021: $5,135,983).
(d) Reconciliation of deferred tax balances
Net deferred tax assets attributable to:
Right-of-use assets
Lease liability
Plant and equipment
Other accrued expenses
Short-term employee benefits
Non-trade payables
Other
Net deferred tax liabilities attributable to:
Interest-bearing liabilities
Derivative financial instruments
Recognised tax losses
Net total
Opening
balance
1 July 2021
Recognised in
profit or loss
Recognised
in equity
Balance
30 June 2022
$’000
$’000
$’000
$’000
(367)
476
84
42
490
306
58
1,089
(8,748)
8,162
–
(586)
503
367
(476)
–
10
289
144
146
480
9.451
(17,388)
238
(7,699)
(7,219)
–
–
–
–
–
–
(8)
(8)
–
–
–
–
(8)
–
–
84
52
779
450
196
1,561
703
(9,226)
238
(8,285)
(6,724)
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance
90
Financial report
4.1 Income tax (continued)
Income tax expense (continued)
Net deferred tax assets attributable to:
Right-of-use assets
Lease liability
Plant and equipment
Other accrued expenses
Short-term employee benefits
Non-trade payables
Other
Net deferred tax liabilities attributable to:
Interest-bearing liabilities
Derivative financial instruments
Recognised tax losses
Net total
Opening
balance
1 July 2020
Recognised in
profit or loss
Recognised in
equity
Balance
30 June 2021
$’000
$’000
$’000
$’000
(463)
576
85
97
232
236
91
854
1,157
(4,976)
220
(3,599)
(2,745)
96
(100)
(1)
(55)
258
70
(33)
235
(9,905)
13,138
(220)
3,013
3,248
–
–
–
–
–
–
–
–
–
–
–
–
–
2022
$
(367)
476
84
42
490
306
58
1,089
(8,748)
8,162
–
(586)
503
2021
$
5,159,699
4,221,253
73,132
165,414
1,510,116
6,908,361
12,507
146,525
1,043,775
5,424,060
4.2 Key Management Personnel (KMP) compensation
Short-term employee benefits
Other long-term employee benefits
Post-employment benefits
Share-based payments
Individual Directors’ and KMP compensation disclosures
Information regarding individual Directors’ and KMP compensation and equity instruments disclosure as required by Corporations
Regulation 2M.3.03 is provided in the Remuneration Report.
Apart from the details disclosed in this note, no Director has entered a material contract with the Group since the end of the prior financial
year and there were no material contracts involving Directors’ interests existing at year-end.
Notes to the Financial Statements.
91
4.2 Key Management Personnel (KMP) compensation (continued)
Movements in securities
The movement in the number of ordinary stapled securities in the Group held directly, indirectly or beneficially, by Directors and Executive
KMP including their related parties is as follows:
2022
Securityholder
G. Jackson
N. Sasse
E. de Klerk
T. Collyer
F. Marais
D. Andrews
M. Green
G. Tomlinson
J. Sukkar AM
J. Jovanovski
D. Page AM
Opening
securities
1 July
Securities
granted as
compensation
Acquired
securities
Disposed
securities
190,087
1,656,460
1,802,857
1,230,184
169,284
247,606
125,029
88,776
14,000
20,548
25,050
–
–
–
134,062
–
48,610
48,610
–
–
15,792
–
–
–
–
–
–
–
–
–
–
–
5,000
–
–
–
–
(25,000)
–
(35,000)
–
–
–
–
Closing
securities
30 June
190,087
1,656,460
1,802,857
1,364,246
144,284
296,216
138,639
88,776
14,000
36,340
30,050
During the year to 30 June 2022, a total of 247,074 stapled securities with a total value at the time of vesting of $951,635 were issued to
KMP upon vesting of performance rights under employee incentive plans.
2021
Securityholder
G. Jackson
N. Sasse
E. de Klerk
T. Collyer
F. Marais
D. Andrews
M. Green
G. Tomlinson
J. Sukkar AM
J. Jovanovski
D. Page AM
Opening
securities
1 July
Securities
granted as
compensation
Acquired
securities
Disposed
securities
190,087
1,656,460
1,752,863
1,035,744
169,284
176,671
53,823
88,776
14,000
–
–
–
–
–
194,440
–
70,935
71,206
–
–
20,548
–
–
–
49,994
–
–
–
–
–
–
–
25,050
–
–
–
–
–
–
–
–
–
–
–
Closing
securities
30 June
190,087
1,656,460
1,802,857
1,230,184
169,284
247,606
125,029
88,776
14,000
20,548
25,050
During the year to 30 June 2021, a total of 357,129 stapled securities with a total value at the time of vesting of $1,269,233 were issued
to KMP upon vesting of performance rights under employee incentive plans.
KMP loans
The Group has not made, guaranteed or secured, directly or indirectly, any loans to any KMP or their personally related entities at any time
during the reporting period.
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 92
Financial report
4.3 Related party transactions
Responsible Entity
There has been no change to the Responsible Entity of Growthpoint Properties Australia Trust, being Growthpoint Properties Australia
Limited, since its appointment on 5 August 2009.
Responsible Entity’s/Manager’s fees and other transactions
Under the current stapled structure, the management of the Trust is internalised and no Responsible Entity or management fees are paid
to external parties. No performance fee or other fees were paid or payable during the year.
Director transactions
Several Directors, or their related parties, hold positions in other entities that result in them having control or significant influence over the
financial or operating policies of those entities.
One of these entities transacted with the Group in the reporting period. The terms and conditions of the transaction were no more
favourable than those available, or which might reasonably be expected to be available, on similar transactions with non-related parties on
an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to directors and entities over which they have significant control or
significant influence were as follows:
Director
Transaction
G. Jackson1
G. Jackson1
Investment property valuation
Statutory and other valuation
Aggregate amounts payable at the reporting date
2022
$
30,525
32,835
39,545
2021
$
42,075
6,545
12,375
1. The Group used the valuation services of m3property, a company of which Mr Jackson is a director, to independently value eight properties (2021: seven). The Group has
also used m3property for statutory valuations reviews during the year. Amounts were billed based on normal market rates for such services and were due and payable under
normal payment terms and Mr Jackson was not directly involved in the Group’s engagement of m3property.
Transactions with significant securityholders
During the year there were no transactions with significant securityholders other than distributions to all Securityholders. There were no
balances outstanding from transactions other than distributions with significant securityholders as at 30 June 2022 (2021: nil).
4.4 Contingent liabilities
The Group has no contingent liabilities as at the date of this report (2021: nil).
4.5 Commitments
For details of commitments in relation to investment properties refer Note 2.2.
The Group has no other significant capital, lease or remuneration commitments in existence at reporting date which have not been
recognised as liabilities in these financial statements (2021: nil).
Notes to the Financial Statements. 93
4.6 Controlled entities
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Where control of an entity is obtained during a period, its results are included in the
Consolidated Statement of Comprehensive Income from the date on which control commences. Where control of an entity ceases during
a period its results are included only for that part of the period during which control existed. The accounting policies of subsidiaries have
been changed when necessary to align them with the policies adopted by the Group.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expense arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Controlled entities
The controlled entities of the Group during the year ended 30 June 2022 are listed below. All entities were domiciled in Australia.
Ann Street Property Trust
Atlantic Drive Property Trust
Bowes Street Property Trust
New South Wales 2 Property Trust
Newstead Property Trust
Nundah Property Trust
Broadmeadows Leasehold Trust
Pope Street Property Trust
Building 2 Richmond Property Trust
Preston 2 Property Trust
Building C 211 Wellington Road Property Trust
Queensland Property Trust
Camberwell Road Property Trust
Rabinov Property Trust
CB Property Trust
Rabinov Diversified Property Trust No. 2
Charles Street Property Trust
Rabinov Diversified Property Trust No. 3
Coolaroo Property Trust
Derrimut Property Trust
Ravenhall Property Trust
Richmond Car Park Trust
Drake Boulevard Property Trust
South Brisbane 1 Property Trust
Erskine Park Pharmaceutical Trust
South Brisbane 2 Property Trust
Erskine Park Truck Trust
Erskine Park Warehouse Trust
SW1 Car Park Property Trust
Thomas Street Property Trust
Growthpoint Developments Pty Ltd
Wellington Street Property Trust
Growthpoint Finance Pty Ltd
Wholesale Industrial Property Fund
Growthpoint Funds Management Limited
William Angliss Drive Trust
Growthpoint Holding Trust No.1
Growthpoint Metro Office Fund
WorldPark Property Trust
Yatala 1 Property Trust
Growthpoint Properties Australia Limited
Yatala 2 Property Trust
Growthpoint Nominees (Aust) 2 Pty Limited
Yatala 3 Property Trust
Growthpoint Nominees (Aust) 3 Pty Limited
3 Maker Place Trust
Growthpoint Nominees (Aust) 4 Pty Limited
3 Millennium Court Property Trust
Growthpoint Nominees (Aust) Pty Limited
6 Kingston Park Court Property Trust
Kembla Grange Property Trust
11 Murray Rose Avenue Trust
Kewlink East Trust
Kilsyth 1 Property Trust
Kilsyth 2 Property Trust
Laverton Property Trust
Lot S5 Property Trust
19 Southern Court Property Trust
20 Southern Court Property Trust
75 Dorcas Street Trust
211 Wellington Road Property Trust
255 London Circuit Trust
Mort Street Property Trust
1500 Ferntree Gully Road Property Trust
New South Wales Property Trust
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 94
Financial report
4.7 Parent entity disclosures
The parent of the Group throughout the year was Growthpoint Properties Australia Trust.
Financial position at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity comprising:
Contributed equity
Retained profits
Total equity
Profit after tax
Total comprehensive income
2022
$m
20.4
5,453.4
117.7
2,015.1
3,438.3
1,976.0
1,462.3
3,438.3
461.6
461.6
2021
$m
22.6
4,757.3
113.4
1,618.2
3,139.1
1,978.0
1,161.1
3,139.1
554.3
554.3
The contractual commitments of the parent entity are identical to those disclosed in Note 2.2. The parent entity has no contingent liabilities
(2021: $nil).
4.8 Remuneration of auditors
The following fees were paid or payable for services provided by the auditor of the Group during the year. There were non-audit
services paid to auditors during the year (2021: $nil):
Audit services - EY
Audit and review of financial statements
Other regulatory audit services
Other non-audit services
4.9 Subsequent events
2022
$
261,600
54,000
35,000
350,600
2021
$
283,470
37,000
–
320,470
On 27 July 2022, settlement occurred on the acquisition of 165-169 Thomas Street, Dandenong, Victoria for $165.0 million (net sale price
excluding acquisition costs).
On 3 August 2022, the Company entered into a share sale agreement to acquire 100% of the shares in Fortius Funds Management
Pty Ltd. Under the terms of the agreement, Fortius shareholders will be entitled to receive from Growthpoint an initial purchase price of
$45 million (with a net asset adjustment) upon completion plus up to an additional $10 million earn out component based on agreed
milestones being met over the period to June 2024. Completion is anticipated to take place in the first quarter of FY23, subject to
conditions precedent being satisfied. Remaining disclosures required under accounting standards in relation to this business combination
will be included in the Company’s interim financial report for the period ending 31 December 2022.
There have been no other subsequent events from the end of the year to the date of this report likely to significantly affect the operations
of the business, the results of those operations or the state of affairs of the Group in future financial years.
Notes to the Financial Statements.
Directors’
declaration.
95
In the opinion of the Directors:
a) the attached Financial Statements and notes, and the Remuneration Report in the Directors’ Report set out on pages 34 to 54 are
in accordance with the Corporations Act 2001 (Cth), including:
i. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001 (Cth); and
ii. giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for the financial year ended
on that date; and
b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1 to the Financial
Statements; and
c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth) from the Managing
Director and Chief Financial Officer for the financial year ended 30 June 2022.
This declaration is made in accordance with a resolution of the Directors.
Timothy Collyer
Managing Director
Growthpoint Properties Australia
16 August 2022
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 96
Financial report
Auditor’s independence declaration.
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Auditor’s Independence Declaration to the Directors of Growthpoint Properties Australia Limited, being the Responsible Entity of Growthpoint Properties Australia Trust As lead auditor for the audit of the financial report of Growthpoint Properties Australia for the year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Growthpoint Properties Australia and the entities it controlled during the financial year. Ernst & Young David Shewring Partner 16 August 2022 Independent Auditor’s report.
97
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Independent auditor’s report to the Stapled Security Holders of Growthpoint Properties Australia Report on the audit of the financial report Opinion We have audited the financial report of Growthpoint Properties Australia Limited and Growthpoint Properties Australia Trust (collectively Growthpoint Properties Australia or the ‘Group’), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 98
Financial report
Independent Auditor’s report.
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 1. Investment Property Portfolio – Carrying Value and Revaluations Why significant How our audit addressed the key audit matter The Group owns a portfolio of property assets with a carrying value of $5,233.1 million as at 30 June 2022, which represents 95% of total assets of the Group. As outlined in Note 2.2, the property portfolio is carried at fair value, which is based upon valuations sourced from suitably qualified independent valuation experts and internal valuations on a rotation basis, based on market conditions existing at the reporting date. The valuation of the property portfolio is based on a number of assumptions, such as capitalisation rates, discount rates and terminal yields, which require significant estimation and judgement. Minor adjustments to certain assumptions can lead to significant changes in the valuation of the office and industrial property assets. The valuation of investment properties is inherently subjective given there are alternative assumptions and valuation methods that may result in a range of values. We have, therefore, considered this a key audit matter. Note 2.2 of the financial report describes the accounting policy, overview of the valuation methodology, process for valuations (including the use of independent expert valuers and internal valuations), significant assumptions and the relative sensitivity of the valuation to changes in these assumptions in the determination of fair value of investment properties and how this has been considered by the directors in the preparation of the financial report at 30 June 2022. Our audit procedures included the following: We discussed the following matters with management: movements in the Group’s investment property portfolio; changes in the condition of each property including an understanding of key developments; and controls in place relevant to the valuation process, both for internal director valuations, and independent external valuations. On a sample basis, we: Evaluated the key assumptions applied in both internal and external valuations, including rents, capitalisation rates and capital expenditure; Compared the net income used in the valuations to the actual financial performance of the underlying properties. We performed tests of control over the tenant revenue process and tenancy schedules, which are used as source data in the property valuations; Reviewed the portfolio of assets with reference to external market data and portfolio performance in order to identify and investigate items that were outside of our expectations; Tested the mathematical accuracy of the adopted valuations; Involved our real estate valuation specialists to determine a risk-based sample of properties and assist with the assessment of the key valuation assumptions and methodologies; Assessed the competence, qualifications and objectivity of the valuers; and Evaluated the suitability of the valuation methodology across the portfolio. We have also considered whether the financial report disclosures are appropriate. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s 2022 annual report, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 99
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 100
Financial report
Independent Auditor’s report.
A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Growthpoint Properties Australia for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young David Shewring Partner Melbourne 16 August 2022 Detailed
portfolio information.
101
Office portfolio
Address
75 Dorcas St
South Melbourne
Bldg 3, 570 Swan St
Richmond
Bldg 2, 572-576 Swan St
Richmond
109 Burwood Rd
Hawthorn
141 Camberwell Rd
Hawthorn East
Bldg B, 211 Wellington Rd
Mulgrave
Bldg 1, 572-576 Swan St
Richmond
Book
Value
$m
292.0
203.0
131.6
124.2
123.0
84.0
82.7
VIC
VIC
VIC
VIC
VIC
VIC
VIC
Valuer
Cap
rate
Discount
rate
Major
tenant WALE
Lettable
area
Site
area
%
%
years
sqm
sqm
CBRE 4.88
5.75 ANZ Banking Group
5.7 24,136
9,632
Directors 4.75
5.88 Bunnings Warehouse
8.0 19,336
8,525
CBRE 5.00
6.00 Country Road Group
10.0 14,602
7,130
Colliers 5.00
Directors 4.75
Directors 5.88
5.75
5.75
6.25
McConnell Dowell
Corporation
4.4 12,388
3,529
Miele
6.4 10,233
–
Monash University
3.7 12,780 11,040
Directors 5.00
6.00 Country Road Group
10.0
8,554
8,365
Bldg C, 211 Wellington Rd
Mulgrave
VIC
58.2
Directors 6.13
6.38
Guardian Community
Early Learning
1.5 10,289 11,070
Car Park, 572-576 Swan St Richmond
VIC
0.9
CBRE 23.54
GE Capital Finance
Australasia
–
4.9
–
3,756
100 Skyring Ter
Newstead
QLD
242.5 Knight Frank 5.75
6.00 Bank of Queensland
4.6 24,665
5,157
15 Green Square Cl
Fortitude Valley
QLD
147.0
Urbis 5.75
6.38
Queensland Urban
Utilities
2.8 16,441
2,519
333 Ann St
Brisbane
QLD
140.0 Knight Frank 6.02
5.75 Federation University
3.8 16,302
1,563
CB1, 22 Cordelia St
South Brisbane
A1, 32 Cordelia St
A4, 52 Merivale St
South Brisbane
South Brisbane
CB2, 42 Merivale St
South Brisbane
QLD
QLD
QLD
QLD
99.0
90.0
88.5
61.8
Acumentis 5.88
Directors 5.75
Colliers 5.75
Directors 5.63
Car Park, 32 Cordelia St
& 52 Merivale St
South Brisbane
QLD
32.0
Directors 5.63
1 Charles St
Parramatta
NSW 555.0
Savills 3.75
Bldg C, 219-247 Pacific Hwy Artarmon
NSW 146.0
Directors 5.25
6.13
6.00
5.88
6.00
6.25
5.50
6.00
Integrated Clinical
Oncology Network
2.6 11,399
5,772
Jacobs Group
3.3 10,003
2,667
Stantec Australia
Peabody Energy
3.4
2.6
9,405
2,331
6,598
3,158
Secure Parking
2.6
–
9,319
NSW Police Force
22.5 32,356
6,460
Fox Sports
5.6 14,406
4,212
3 Murray Rose Ave
Sydney Olympic Park NSW 116.0
JLL 5.14
6.00 Samsung Electronics
4.7 13,423
3,980
5 Murray Rose Ave
Sydney Olympic Park NSW 106.0
Directors 5.37
11 Murray Rose Ave
Sydney Olympic Park NSW 53.8
JLL 5.05
33-39 Richmond Rd
Keswick
SA
78.5
Directors 5.75
10-12 Mort St
2-6 Bowes St
Canberra
Phillip
ACT
ACT
90.0
84.6
JLL 6.75
Directors 5.38
6.25
6.00
6.50
6.50
6.25
Lion
1.8 12,386
3,826
B2G Consortium
3.8
5,684
2,642
Coffey Corporate
4.3 11,730
4,169
Commonwealth of
Australia
2.7 15,398
3,064
ACT Government
8.8 12,376
4,485
255 London Cct
Canberra
ACT
82.5
Directors 5.25
6.00
836 Wellington St
West Perth
WA
104.0
Savills 5.75
Total / weighted average
3,416.6
5.15
6.00
5.93
Commonwealth of
Australia
Commonwealth of
Australia
5.2
8,972
2,945
4.6 11,973
4,304
6.7 345,835 135,620
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 102
Additional information
Detailed portfolio information.
Industrial portfolio
Address
Book
Value
$m
Valuer
Cap
rate
Discount
rate
Major
tenant WALE
Lettable
area
%
%
years
sqm
Site
area
sqm
3 Maker Pl
Truganina
VIC
70.3
CBRE 4.00
5.50
HB Commerce
0.2 31,092
49,810
1500 Ferntree Gully Rd
& 8 Henderson Rd
Knoxfield
VIC
61.8
Directors 4.50
5.75
9-11 Drake Blvd
Altona
Lots 2, 3 & 4, 34-44 Raglan St Preston
120-132 Atlantic Dr
Keysborough
VIC
VIC
VIC
58.5
JLL 4.00
55.3
Directors 4.25
45.0
JLL 4.00
40 Annandale Rd
Melbourne Airport VIC
43.4 m3property 6.50
5.25
5.50
5.50
5.50
Brown & Watson
International
Peter Stevens
Motorcycles
3.3 22,009
40,844
4.0 25,743
41,730
Paper Australia
1.8 27,978
42,280
Symbion
9.5 12,864
26,181
Australia Post
9.0 44,424
75,325
120 Link Rd
130 Sharps Rd
20 Southern Crt
3 Millennium Crt
6 Kingston Park Crt
31 Garden St
19 Southern Crt
60 Annandale Rd
Melbourne Airport VIC
25.2 m3property 6.75
5.50 The Workwear Group
5.0 26,517
51,434
Melbourne Airport VIC
24.7 m3property 7.00
5.50
Laminex Group
3.0 28,100
47,446
Keysborough
Knoxfield
Knoxfield
Kilsyth
Keysborough
VIC
VIC
VIC
VIC
VIC
24.5
Directors 4.50
5.75 Sales Force National
0.5 11,430
19,210
19.3
18.0
JLL 4.25
JLL 4.25
5.50
5.50
Opal Packaging
3.7
8,040
14,750
NGK Spark Plug
–
7,645
12,795
17.3
Directors 4.50
5.75 Cummins Filtration
14.9
Directors 4.50
5.75
Wabtec Australia
1.4
4.8
8,919
6,455
17,610
11,650
Melbourne Airport VIC
14.0 m3property 6.75
5.75 Garden City Planters
7.9 16,276
34,726
101-111 South Centre Rd
Melbourne Airport VIC
13.4 m3property 7.00
5.75
Direct Couriers
5.4 14,082
24,799
75 Annandale Rd
70 Distribution St
13 Business St
5 Viola Pl
3 Viola Pl
Melbourne Airport VIC
10.4 m3property 7.00
Larapinta
QLD 255.0
Savills 5.07
Yatala
QLD
18.2
Directors 5.25
5.75
5.50
5.75
Unipart Group
Australia
0.4 10,310
16,930
Woolworths
4.7 76,109
250,900
Volo Modular
3.1
8,951
18,630
Brisbane Airport QLD
14.2
Directors 5.00
6.00
Eagers Automotive
10.6 14,726
35,166
6.25
5.50
5.25
5.25
5.75
Brisbane Airport QLD
3.6
Directors 5.50
27-49 Lenore Dr
Erskine Park
NSW 106.5
Directors 4.00
6-7 John Morphett Pl
Erskine Park
NSW 79.5 Knight Frank 4.00
Cargo Transport
Systems
0.7
3,431
12,483
Linfox
3.2 29,476
76,490
Linfox
2.7 24,881
82,280
51-65 Lenore Dr
34 Reddalls Rd
81 Derby St
Erskine Park
NSW 48.0
Directors 4.00
Kembla Grange NSW 39.0
CBRE 4.50
Linfox
Autocare Services
Silverwater
NSW 32.5
Directors 4.00
5.25 IVE Group Australia
5.7
8.3
3.2
3,720
36,720
355
141,100
8,253
13,490
599 Main North Rd
Gepps Cross
SA
245.0
CBRE 4.00
5.50
Woolworths
12.9 91,686
233,500
1-3 Pope Crt
12-16 Butler Blvd
10 Butler Blvd
20 Colquhoun Rd
Beverley
Adelaide Airport
Adelaide Airport
Perth Airport
Hugh Edwards Dr & Tarlton Cres Perth Airport
SA
SA
SA
WA
WA
31.0
JLL 5.50
25.0
Directors 5.41
13.1
Directors 6.16
225.0
Directors 5.14
70.4
JLL 5.40
6.25
5.75
6.00
6.25
6.24
Aluminium
Specialties Group
3.4 14,459
25,660
Australia Post
9.1 16,835
30,621
IPEC
2.4
8,461
16,100
Woolworths
3.3 80,374
193,936
Mainfreight
4.8 32,018
57,617
Total / weighted average
1,721.7
4.72
5.65
5.3 715,619 1,752,213
Securityholder
information.
103
Top 20 legal Securityholders as at 29 July 2022
Rank Name
Number of securities % of issued capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
GROWTHPOINT PROPERTIES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
RABINOV HOLDINGS PTY LTD
SHARON INVESTMENTS PTY LTD
AUSTRALIAN EXECUTOR TRUSTEES LIMITED
ESTIENNE DE KLERK + KANDI DE KLERK
JONAERE PTY LTD
MS KYLIE MAREE CECILIA THOMAS
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
BNP PARIBAS NOMS (NZ) LTD
UBS NOMINEES PTY LTD
NAVIGATOR AUSTRALIA LTD
Sub total
Balance of register
Total issue capital
Substantial Securityholders as at 29 July 2022
480,025,424
90,582,017
63,850,748
39,545,351
17,363,866
13,458,936
2,827,920
2,483,649
2,347,279
2,255,779
1,877,621
1,785,166
1,200,000
1,176,065
1,138,285
636,653
624,436
595,597
592,586
538,696
724,906,074
46,763,821
771,669,895
62.21
11.74
8.27
5.12
2.25
1.74
0.37
0.32
0.30
0.29
0.24
0.23
0.16
0.15
0.15
0.08
0.08
0.08
0.08
0.07
93.94
6.06
100.00
Name
Number of securities
% of issued capital
Growthpoint Properties Limited
480,025,424
62.21
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 104
Additional information
Securityholder information.
Distribution of Securityholders as at 29 July 2022
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Rounding
Total
Number of securities
Number of holders
% of issued capital
462,188
3,895,860
5,267,629
22,383,566
739,660,652
771,669,895
1,230
1,424
716
922
92
4,384
0.06
0.50
0.68
2.90
95.85
0.01
100.00
Based on the 29 July 2022 closing price of $3.76, the number of Securityholders with less than a marketable parcel of 133 securities
($500) was 413 and they held a total of 6,545 Growthpoint securities.
Class of securities
Growthpoint has only one class of securities, ordinary securities, which are traded on the ASX.
Voting rights
Ordinary stapled securities entitle the holder to vote at securityholder meetings in person or by proxy and to participate in dividends
and distributions in proportion to the number of stapled securities held, subject to being on the register at the relevant record date.
Securities restricted or subject to voluntary escrow
There are no securities that are restricted or currently held subject to voluntary escrow.
On market buy-back
On 17 February 2022, the Group announced it was extending its on-market securities buy-back program of up to 2.5% of
Growthpoint’s ordinary securities on issue. As at 30 June 2022, the Group had purchased 916,101 securities at an average price of
$3.72. The program remains in place. For further information on the buyback, please refer to the Group’s Appendix 3D which was
lodged with the ASX on 17 February 2022.
Glossary.
ABS Australian Bureau of Statistics
ACT Australian Capital Territory, Australia
A-REIT Australian Real Estate Investment
Trust
ASX Australian Securities Exchange
b Billion
GSO Dandenong Government Service
Office (GSO) Dandenong at 165-169
Thomas Street, Dandenong, Victoria
Growthpoint or the Group Growthpoint
Properties Australia comprising the
Company, the Trust and their controlled
entities
Botanicca 3 Building 3, 570 Swan Street,
Richmond, Victoria
ICR Interest coverage ratio
IRR Internal rate of return
105
SA South Australia, Australia
SME Small and medium-sized enterprise
sqm Square metres
TCFD Task Force on Climate-related
Financial Disclosures
TSR or total securityholder
return Change in security price plus
distribution paid or payable for the relevant
period
USPP United States Private Placement
VIC Victoria, Australia
bps Basis points
capex Capital expenditure
cap rate or capitalisation rate The
market income produced by an asset
divided by its value or cost
JLL The Australian arm of Jones Lang
LaSalle, an international professional
services and investment management firm
LVR Loan to value ratio
WA Western Australia, Australia
m Million
WADM Weighted average debt maturity
CBD Central business district
MER Management expense ratio
WALE Weighted average lease expiry
Women in leadership positions includes
EMT and senior managers (permanent
employees that report to an EMT member,
excluding assistants)
Woolworths Woolworths Group Limited
yr Year
CBRE An international commercial real
estate services firm
NABERS National Australian Built
Environment Rating System
CDP a global environmental disclosure
system
CPI Consumer price index
cps Cents per security
Cushman & Wakefield An international
professional services and property
investment firm
DPS Distribution per security
DXI Dexus Industria REIT
EMT Growthpoint’s Executive
Management Team
ESG Environment, social and governance
FFO Funds from operations
FUM Funds under management
FY Financial year
gearing Interest bearing liabilities less
cash divided by total assets less finance
lease assets less cash
GOZ Growthpoint or Growthpoint’s ASX
trading code or ticker
GRESB Global Real Estate Sustainability
Benchmark
Net zero 2025 target Net zero emissions
by 1 July 2025 for all scope 1 and scope
2 emissions from our 100% owned on
balance sheet operationally controlled
office assets and scope 1, scope 2
and some scope 3 emissions from our
corporate activities
NLA Net lettable area
NPI Net property income plus
distributions from equity related
investments
NSW New South Wales, Australia
NTA Net tangible assets
Payout ratio Distributions ($million)
divided by FFO ($million)
PCP prior corresponding period
PV Photovoltaic
Q Quarter
QLD Queensland, Australia
RBA Reserve Bank of Australia
REIT Real Estate Investment Trust
ROE or return on equity Calculated as
the percentage change in NTA plus the
distributions for a given period divided by
the opening NTA
Growthpoint Properties AustraliaFY22 Annual ReportFinancial reportOperating and financial reviewAdditional informationGovernance 106
Additional information
Contact
details.
Corporate Directory
Contact us
Retail Investors
Computershare
1300 665 792 (within Australia)
+61 (3) 9415 4366 (outside Australia)
webqueries@computershare.com.au
Institutional Investors
+61 (3) 8681 2933
investor.relations@growthpoint.com.au
Growthpoint Properties Australia
Level 31, 35 Collins Street,
Melbourne VIC 3000
+61 (3) 8681 2900
info@growthpoint.com.au
growthpoint.com.au
Growthpoint Properties Australia
Limited
ABN 33 124 093 901; AFSL No 316409
Growthpoint Properties Australia Trust
ARSN 120 121 002
Registered Office
Level 31, 35 Collins Street,
Melbourne VIC 3000
Phone: +61 (3) 8681 2900
growthpoint.com.au
Directors
Geoffrey Tomlinson, Timothy Collyer,
Estienne de Klerk, Grant Jackson,
Francois Marais, Deborah Page AM,
Norbert Sasse, Josephine Sukkar AM
Company Secretaries
Jacquee Jovanovski, Dion Andrews
Auditor
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
ASX
Growthpoint Properties Australia’s
securities are listed on the ASX under the
ticker ‘GOZ’.
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FY22 Annual Report
Growthpoint Properties Australia
Level 31, 35 Collins Street, Melbourne VIC 3000
growthpoint.com.au