Growthpoint Properties Australia Trust ARSN 120 121 002
Growthpoint Properties Australia Limited ABN 33 124 093 901 AFSL 316409
22 August 2024
Appendix 4E
Results for the year ended 30 June 2024
Results for announcement to the market
Year ended
Year ended
Change
30-Jun-24
30-Jun-23
$m
$m
%
Revenue and other income from ordinary activities
332.4
342.7
(3.0)
Profit from ordinary activities after tax attributable to Securityholders1
180.4
204.8
(11.9)
Net loss attributable to Securityholders
(298.2)
(245.6)
21.4
Distribution to Securityholders
145.5
162.6
(10.5)
Distributions
Amount per
Franked
amount per
security
Record date
security/unit
cents
%
Final distribution payable on 30 August 2024
9.65
-
28-Jun-24
Interim distribution paid on 29 February 2024
9.65
-
29-Dec-23
Net tangible assets per stapled security
30-Jun-24
30-Jun-23
Change
$
$
%
Net tangible assets per stapled security
3.45
4.00
(13.8)
Additional information regarding the results for the year is contained in the FY24 annual report and the FY24 results
presentation which have been released to the Australian Securities Exchange (ASX).
1 In the FY24 annual report and the FY24 results presentation, profit from ordinary activities after tax attributable to Securityholders is referred to as
funds from operations (FFO).
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 FY24 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 FY24 annual report.
This announcement was authorised by Growthpoint’s Board of Directors.
Jacqueline Jovanovski
Company Secretary
For further information, please contact:
Luke Maffei
Investor Relations and Communications Manager
Telephone: +61 3 8681 2933
Growthpoint Properties Australia
Level 18, 101 Collins St, Melbourne, VIC 3000
growthpoint.com.au
About Growthpoint
Growthpoint provides space for you and your business to thrive. Since 2009, we’ve been investing in high-quality Australian real
estate. Today, we have $6.0 billion total assets under management2. We directly own and manage 57 high-quality, modern office
and industrial properties, valued at approximately $4.4 billion. We also manage a further nine assets valued at $1.6 billion for third-
party wholesale syndicates and institutional investors through our funds management business, which invests in office, retail and
mixed-use properties.
We are committed to operating in a sustainable way and reducing our impact on the environment. We are on track to achieve Net
Zero by 1 July 2025 across our directly owned office assets and corporate activities.
Growthpoint Properties Australia (ASX: GOZ) is a real estate investment trust (REIT), listed on the ASX, and is part of the
S&P/ASX 300. Moody’s has issued us with an investment-grade rating of Baa2 for domestic senior secured debt.
2 As at 30 June 2024.
space to thrive.
for the year ended 30 June 2024
FY24
annual report.
What’s
inside
Directors’ Report
Operating and financial review
Business overview
3
FY24 performance summary
3
Who we are
4
Strategic highlights in FY24
5
Letter from the Chair
6
Letter from the CEO & Managing Director
8
Portfolio performance
10
Direct property portfolio overview
10
Our office portfolio
12
Our industrial portfolio
14
Funds management overview
16
FY24 sustainability performance
18
Financial performance
20
Governance
24
Board of Directors
24
Executive Management Team
26
Risk management
28
Remuneration Report
32
Additional information
54
Financial Report
Contents
55
Financial Statements
56
Notes to the Financial Statements
60
Consolidated Entity Disclosure Statement 98
Directors’ Declaration
101
Auditor’s Independence Declaration
102
Independent Auditor’s Report
103
Additional information
Detailed portfolio information
109
Securityholder information
111
Glossary
113
Contact details
114
Important information
115
Acknowledgement of Country
Growthpoint Properties Australia
acknowledges the Traditional Custodians of
Country throughout Australia and recognise
their continued connection to land, water and
community. We pay our respects to Elders
past and present and extend that respect to
First Nations people.
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 2024 (FY24 or the year).
Data contained in this report relates to the Group’s
directly held assets, unless otherwise indicated.
FY24 reporting suite
Growthpoint’s reporting suite for FY24 includes the
following documents:
FY24 Annual Report
A review of Growthpoint’s financial and operational
performance for FY24, the Group’s remuneration
report and its financial statements.
FY24 Results Presentation
An overview of Growthpoint’s operational and
financial performance for the financial year.
FY24 Property Compendium
A summary of Growthpoint’s property portfolio as
at 30 June 2024.
FY24 Corporate Governance Statement
An overview of Growthpoint’s governance
framework and practices. Download a copy:
growthpoint.com.au/corporate-governance
FY24 Sustainability Report
A review of our approach to sustainability and
an update on our progress in achieving our
sustainability goals, which will be released prior to
Growthpoint’s AGM and will be available online at
that time.
Our corporate reporting suite
documents are available for
download on the Growthpoint
Investor Centre growthpoint.com.au/
investor-centre
Front cover image: 130 Sharps Road,
Melbourne Airport, VIC.
Image this page: 599 Main North Road,
Gepps Cross, SA
2
FY24 performance
summary
Financial
performance
Funds from
operations (FFO)
23.9cps
above guidance
Distribution
19.3cps
in line with guidance
Net tangible assets
(NTA) per security
$3.45
30 June 2023: $4.00
Statutory loss after tax
($298.2m)
FY23: ($245.6m)
Capital
management
Gearing
40.7%
Target 35-45%
Hedging
74.5%
30 June 2023: 70.5%
Weighted average
cost of debt (WACD)
4.8% p.a.
30 June 2023: 4.6%
Operating
performance (Direct)
Portfolio
value
$4.4b
30 June 2023: $4.8b
Portfolio occupancy
95%
30 June 2023: 93%
Weighted average
cap rate (WACR)
6.3%
30 June 2023: 5.6%
Weighted average
lease expiry (WALE)
5.7 years
30 June 2023: 6.0 years
3
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Who
we are
Growthpoint Properties Australia | AUM $6.0b | 66 assets
Industrial & logistics
AUM $1.6b | 30 assets
Office
AUM $3.0b | 28 assets
Retail
AUM $1.4b | 8 assets
Directly held $4.4b
Third party $1.6b
Rental & co-investment income $313.7m
Management fee income $8.0m
Rundle Place,
Adelaide, SA
70 Distribution St,
Larapinta, QLD
100 Skyring Tce,
Newstead, QLD
1 Charles St,
Parramatta, NSW
307 Queen St,
Brisbane, QLD
40 Annandale Rd,
Melb. Airport, VIC
Cammeray Square,
Cammeray, NSW
What we do
Growthpoint provides space for you and your business to
thrive. Since 2009, we’ve been investing in high-quality
Australian real estate.
Today, we have $6.0 billion in total assets under management. We
directly own and manage 57 high-quality, modern office and industrial
properties, valued at approximately $4.4 billion. We also manage
a further nine assets valued at $1.6 billion for third-party wholesale
syndicates and institutional investors through our funds management
business, which invests in office, retail and mixed-use properties.
We are committed to operating in a sustainable way and reducing
our impact on the environment. We are on track to achieve our Net
Zero Target by July 2025 across our directly-owned office assets and
corporate activities.
Growthpoint Properties Australia (ASX: GOZ) is an internally managed
real estate investment trust (REIT), listed on the ASX, and is part of the
S&P/ ASX 300. Moody’s has issued us with an investment-grade rating
of Baa2 for domestic senior secured debt.
How we do it
Our values underpin everything we do.
Success
valuing performance, hard
work and high standards
Integrity
doing the right thing for
tenants, investors and team
Respect
dealing with others openly,
honestly and inclusively
Fun
enjoying work, being sociable
and playing as a team
Our business
4
Directors’ report
Operating and financial review
Strategic highlights
in FY24
Our goal is to provide Securityholders with sustainable income returns
and capital appreciation over the long term
Direct property
portfolio
Financial and
capital
management
Funds
management
Sustainability
c.108,000 sqm of
leasing completed
across the direct portfolio,
representing 11.0%
portfolio income
Occupancy of 95% and
5.7-year WALE
Achieved positive
industrial re-leasing
spreads of 31%
Completed the sale of
1-3 Pope Court, Beverley,
SA for $35.0m, c.15%
above the June 23 book
value
Delivered FFO of
23.9 cps, above
guidance, distributions
of 19.3 cps in line with
guidance
Gearing of 40.7%, around
the midpoint of target
gearing range 35%-45%
Extended $470 million of
bank debt, c.20% of total
bank debt facilities
Disciplined approach
to capital market
transactions in a
challenging environment.
Narrowing bid/ask spreads
across various sectors is
encouraging for FY25
Focussing on core
industrial, counter-
cyclical office and
opportunistic retail
assets for institutional and
wholesale investors
On track to achieve Net
Zero Target by 1 July 2025
Issued a further $500m
of sustainability-linked
loans, bringing the total on
issue to $1.02b, exceeding
all targets to date leading to
interest margin reductions
Maintained high portfolio
average NABERS ratings,
including portfolio NABERS
Energy rating of 5.2 stars
5
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Letter from
the Chair
Dear Securityholders,
On behalf of the Board of
Directors, I am pleased to present
the 2024 Annual Report for
Growthpoint Properties Australia
(“Growthpoint or the Group”)
In the 2024 financial year, property
markets adapted to the challenges of
higher interest rates, declining valuations,
and subdued transaction activity. Despite
these headwinds, we continued to see
positive performance from our industrial
portfolio, which represents 37% of our
directly held asset base, underpinned by
strong population growth, constrained
supply and rental increases.
While negative sentiment towards
the office sector continued, market
pricing activity became more apparent
toward the end of FY24, highlighted by
several high-profile transactions. In this
environment, Growthpoint’s portfolio
performed well with high occupancy and
a solid portfolio weighted average lease
expiry (WALE), providing a steady income
stream for Securityholders.
Growthpoint remained focused on
driving resilient income streams from
its high-quality property portfolio, while
also focusing on funds management
opportunities to provide scale and
exposure to industrial, office and retail
sectors for institutional and wholesale
syndicate investors.
Financial performance and
capital management
The Group’s FY24 performance reflects
the underlying strength and quality of
the portfolio. Growthpoint delivered FFO
of 23.9 cents per security (cps), above
guidance. Distributions to Securityholders
were in line with guidance of 19.3 cps,
representing a payout ratio of 81%,
consistent with the Board’s target payout
ratio of between 75% and 85%.
FFO performance in FY24 was lower
compared to FY23 due to a decrease
in lease surrender payments and higher
borrowing costs. Borrowing costs
increased from $76.4 million in FY23 to
$86.2 million, reflecting a higher weighted
average cost of debt. As at 30 June
2024, gearing was 40.7%, which is at the
midpoint of the target 35% - 45% range.
We continued to look at opportunities to
manage our overall gearing and in FY24
this was supported by the sale of 1-3
Pope Court Beverley, South Australia
for $35 million, c.15% premium to book
value.
In FY24, total securityholder return (TSR)
was -15.5%. This was below the S&P/
ASX 200 REIT Accumulation Index of
4.7%, excluding the Goodman Group,
which now represents more than 40% of
the Index.
Direct Portfolio
The Group’s direct portfolio is leased
primarily to government, ASX listed or
large organisations. As at 30 June 2024,
the portfolio had a solid occupancy of
95% and WALE of 5.7 years.
In FY24, the overall portfolio value
declined to $4.4 billion or 7.9% on a like-
for-like basis relative to FY23. The decline
was predominantly due to increases
in interest rates resulting in higher
capitalisation and discount rates within
valuations.
The office portfolio decreased 11.2%
(on a like-for-like basis), influenced by
negative sentiment in office markets and
increased transactional activity reflecting
market pricing. In contrast, the industrial
portfolio saw a smaller decrease of 1.8%
(on a like-for-like basis) as ongoing rental
growth offset the effects of capitalisation
rate expansion in this sector.
There was significant leasing activity
during the year with 108,000 sqm or
11.0% of portfolio income completed.
Government tenants continue to account
for c.40% of our office portfolio income.
Funds management
Growthpoint’s funds management
business manages $1.6 billion of assets
on behalf of third-party investors,
including wholesale syndicates and
institutional investors. In a challenging
interest rate environment, the business
continued to seek new opportunities
during the year and maintained a
disciplined approach to capital market
transactions. The Group completed the
sale of Taylors House, a Sydney CBD
fringe office asset for c.$87 million,
achieving an internal rate of return of 11%
over the 7-year fund term.
The Group impaired the goodwill
associated with its funds management
business by $26.6 million. The
impairment primarily relates to changed
economic conditions affecting the
funds management sector since the
acquisition, leading to revised FUM
growth assumptions. The Group remains
committed to growing funds under
management across the industrial, office
and retail sectors.
New Chief Executive Officer and
Managing Director
On 20 May 2024, Ross Less commenced
as Chief Executive Officer and Managing
Director, succeeding outgoing Managing
Director, Timothy Collyer. Ross brings
more than 20 years of real estate
investment management experience and
a deep understanding of commercial
property markets, funds management,
asset management, mergers and
acquisitions as well as equity capital
markets. He has held senior leadership
positions, including most recently as
Head of Funds Management at Centuria
Capital Group where he helped grow
its funds management platform from $4
billion to over $21 billion.
Andrew Fay
Independent Chair and Director
6
Directors’ report
Operating and financial review
Governance
In November 2023, independent non-
executive director Grant Jackson retired
from the Board. Grant joined the Board
in August 2009. On behalf of the Board,
we thank him for his contribution and
commitment and wish him the very best
for the future. The Board is committed to
maintaining diversity across gender, skills
and experience and is well progressed in
its search for a new independent director
to fill the vacancy.
Sustainability
Growthpoint continues to operate
sustainably with good progress on
National Australian Built Environment
Rating System (NABERS). For the third
year running, we were recognised as
a Sector Leader in the 2023 GRESB
Sustainability Benchmark in our regional
peer group of Diversified – Office/
Industrial. Our score increased to 84/100
from 81/100 in 2023 and we retained our
4-star ranking. The Group is on track to
achieve our Net Zero Target by July 2025.
During FY24 we increased the quantity of
offsite renewable energy (GreenPower) to
50% coverage of base building electricity
needs for our directly owned office
portfolio.
In addition, the Group entered into
another $500 million of Sustainability
Linked Loans (SLL), bringing the total
SLLs on issue to $1,020 million. Interest
margin reductions have been achieved
as we exceeded all targets tied to
sustainability related KPIs and targets.
1. Real Estate Australia Industry January 2024 benchmark provided by Culture Amp’s platform.
Our FY24 Sustainability Report will be
available on our website from in early
October 2024.
Our people
The positive results in our annual
employee engagement survey
demonstrate the Group’s focus on
building on our positive, performance-
driven culture. In FY24 we achieved an
employee engagement score of 75%,
slightly higher than our FY23 score of
74% and outperformed the property
sector benchmark of 70%1. Most notable
responses included 98% of employees
recommending Growthpoint as a great
place to work and 88% of employees are
proud to work for Growthpoint.
In FY24, we made progress with our
gender diversity, by maintaining at least
40% of employees of each gender in the
overall workforce. As at 30 June 2024,
43.6% of our workforce were women,
with 37.5% female representation on our
Board.
Outlook
Recent inflation data continues to track
above the Reserve Bank of Australia’s
target 2–3% range, placing some
pressure on short-term interest rates.
Commercial real estate transaction
activity remains subdued relative to
longer-term historical averages, but
price discovery across all markets is
anticipated to gather momentum in
FY25. Industrial markets remain positive
with solid rental growth expected
as new supply is absorbed due to
underlying demand in the logistics sector.
Growthpoint’s portfolio of modern office
assets and strong tenant base is resilient,
with the Brisbane fringe office market
performing strongly, where the Group has
over 20% of its office portfolio by value.
Subject to no material changes or events,
our targeted FY25 FFO guidance is
between 22.3 cps and 23.1 cps and
distribution guidance of 18.2 cps. A key
assumption to this guidance is interest
rates, with the Group assuming an
average FY25 floating rate of 4.35%.
We would like to take this opportunity to
thank our employees for their dedication
and contribution to delivering this
solid performance in FY24. We would
also like to acknowledge our tenants,
suppliers and other key stakeholders
for their continued support. Finally, we
thank our former Managing Director,
Timothy Collyer for his service. Tim
was Managing Director from 2009 and
made an enormous contribution to the
performance of Growthpoint and we wish
him all the best.
We also would like to thank our
Securityholders, for your ongoing
commitment to the Group.
Andrew Fay
Chair
1-3 Pope Court,
Beverly, SA
Sold during the first half for $35 million, c.15%
above the 30 June 2023 book value
7
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Dear Securityholders
It is a privilege to join Growthpoint,
an organisation with an impressive
history and an excellent portfolio of
office, industrial and retail assets with
strong customer tenant relationships.
Growthpoint’s purpose of creating spaces
for people and businesses to thrive, along
with the future growth prospects of its
funds management platform attracted me
to this opportunity.
In the first two months of joining, I have
visited all 66 assets in our portfolio and
spent time listening to our stakeholders.
What has stood out is the quality of our
assets and more importantly how our
team is living our values and delivering for
our tenants. This has been demonstrated
by the strong employee engagement
score of 75% above the property sector
benchmark of 70%1 and our industry
leader ranking for landlord customer
satisfaction in office (first) and industrial
(second) vs. a benchmarked peer group
for the third year in a row.2
Our directly held portfolio of modern
office (63%) and industrial assets (37%),
with a strong tenant base is resilient.
While our office assets make up the
majority of the portfolio value, over 20%
are located in the best performing office
market in Australia, the Brisbane fringe.
1. Real Estate Australia Industry January 2024 benchmark provided by Culture Amp’s platform.
2. Tenant engagement survey conducted by property research specialists Brickfields.
The decision to adopt a disciplined
approach to capital market transactions
in our funds management business
has been the right one as we are now
well placed to capitalise on attractive
opportunities for our funds investors. Our
retail assets held in our funds are high
quality, and there is scope to grow this
asset class. Over the next year, we will
focus on growing our funds management
in core industrial, counter-cyclical office
and opportunistic retail assets for
institutional and wholesale investors.
Solid platform for growth
We have a solid platform for growth:
quality office, industrial and retail assets,
strong customer tenant relationships and
promising growth prospects for our funds
management business.
There are numerous opportunities that we
are focusing on progressing in the year
ahead including optimising performance,
capital allocation, growing our funds
under management, building our brand,
evolving our sustainability framework and
importantly investing in the development
and capability of our people.
Outlook
Despite the current economic landscape,
we have an incredibly exciting future
ahead of us. While high vacancy rates
in office markets in Australia persist, we
are optimistic about the medium-term
prospects. Strong population growth
along with higher construction costs
for new buildings should see supply
moderate and benefit existing well leased
assets.
In addition to this, we are observing
a noticeable trend of organisations
reversing work from home policies. In
August 2024, the NSW Government
announced its return to office edict for
its workforce which will have far-reaching
benefits for the overall economy.
In the logistics sector, Australia benefits
from one of the lowest vacancy rates
globally which is expected to continue to
underpin rental growth.
I want to congratulate the Growthpoint
team and our previous Managing
Director, Timothy Collyer for delivering
this year’s solid result in what has been
a challenging market, particularly for the
Australian real estate sector.
Together with the Executive Management
Team, we look forward to building on our
purpose of creating spaces for people
and businesses to thrive and thank you
for your ongoing support.
Ross Lees
Chief Executive Officer and
Managing Director
Letter from the Chief Executive Officer
& Managing Director
Ross Lees
Chief Executive Officer
& Managing Director
8
Directors’ report
Operating and financial review
15 Green Square Close,
Fortitude Valley, QLD
Four leases completed during the period
totalling 6,081 sqm bringing the building
to 89% occupied (up from 56%)
100 Skyring Terrace,
Newstead, QLD
c.50% of NLA leased in past 24 months with
all leases to Government and listed tenants,
extending the building’s WALE to 4.0 years
Melbourne St
Brisbane CBD
100 Melbourne St,
South Brisbane
52 Merivale St,
South Brisbane
104 Melbourne St,
South Brisbane
32 Cordelia St,
South Brisbane
SW1 Precinct, South Brisbane, QLD
(4 offices plus underground car park)
4,527 sqm leased during the period
across 11 deals with an average term
of 7.3 years. Average occupancy
across the assets now 91% (up from
88% at 30 June 2023).
Brisbane fringe portfolio
Average
occupancy
93%
Total asset
value (7 assets)
$628.0m
Lettable
area
78,595 sqm
9
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Direct property
portfolio overview
Office
63%
Industrial
37%
Sector diversity
by value
Tenant type
by income
Listed
company
50%
Large
private
company
14%
Government
owned
30%
Other/
SME
6%
Geographic diversity
by property value
35%
Victoria
$1,555.0m
85%
of properties
located on
Eastern
seaboard
6%
South Australia
$285.3m
1
3
10 16
21%
Queensland
$918.9m
7
4
24%
New South Wales
$1,064.5m
5
5
5%
Australian
Capital Territory
$210.8m
1
2
9%
Western Australia
$381.0m
1
2
Office metropolitan properties
Office CBD properties
Industrial properties
$4.4b
Direct property
portfolio value
Annual rent review type
by income
Fixed
3.00-3.99%
72%
Fixed
over 4.00%
7%
Fixed
2.00-2.99%
14%
CPI
7%
Tenant use
by income
Office
63%
Logistics/
distribution
30%
Manu-
facturing
2%
Retail
3%
Car
parking
1%
Other
1%
Portfolio lease expiry
per financial year, by total portfolio
income, as at 30 June 2024
Office
Industrial
WALE
5.7 yrs
FY30+
31%
17%
FY26
9%
8%
Vacant
5%
FY25
4%
1%
FY29
3%
1%
FY28
4%
2%
FY27
13%
2%
0%
30 industrial assets
27 office assets
10
Directors’ report
Operating and financial review
Hugh Edwards Drive & Tarlton Crescent,
Perth Airport, WA (4 industrial properties)
Completed two leases at 58 Tarlton Crescent
during FY24 – a 6.0-year lease extension to
Railtrain Group for 3,359 sqm and a new 5.0-year
lease to Djinda Produce across 1,013 sqm
Tonkin Highway
Roe Highway
Perth Airport s
Hugh Edwards Dr
& Tarlton Cr,
Perth Airport, WA
Value: $72.5m
Lettable area: 32,018 sqm
WALE: 3.7 years
Major tenant: Mainfreight
Horrie Millar Drive
Perth Airport portfolio
Lettable area
112,392 sqm
Total value
$297.5m
Occupancy
100%
20 Colquhoun Road,
Perth Airport, WA
Value: $225.0m
Lettable area: 80,374 sqm
WALE: 1.3 years
Major tenant: Woolworths
11
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Our office
portfolio
1. Assumes CPI change of 3.8% per annum as per ABS release at June 2024.
2. Assumes CPI change of 6.0% per annum as per ABS release at June 2023.
3. Tenant engagement survey conducted by property research specialists Brickfields.
4. Includes vacancies.
Portfolio
occupancy
92%
30-Jun-23: 90%
Office portfolio
value
$2.8b
30-Jun-23: $3.1b
WALE
6.1 yrs
30-Jun-23: 6.3 yrs
WACR
6.5%
30-Jun-23: 5.7%
WARR1
3.5%
30-Jun-23: 3.6%2
Office portfolio lease
expiry profile (%)
per financial year, by income
19
6
Vacant FY25
5
8
FY26
12
FY27
FY28
FY29 FY30 FY31+
5
6
39
Top ten
office tenants
as at 30 June 2024
% portfolio
income
WALE
(yrs)
Australian Commonwealth
Government
12
3.5
NSW Government (Police)
12
20.5
Country Road Group
5
7.9
VIC Government
5
7.6
Bunnings Warehouse
4
5.9
Bank of Queensland
3
2.6
ANZ Banking Group
3
1.7
Samsung Electronics
3
2.7
Fox Sports
3
6.5
Jacobs Group
3
2.3
Total / weighted Average
53
8.2
Balance of portfolio4
47
3.8
Total portfolio
100
6.1
A modern A-grade portfolio
located predominantly across the
eastern seaboard in key fringe and
metro locations with high green
credentials and c.40% of income
derived from Government tenants.
Ranked #1 in landlord satisfaction
relative to 11 peers3.
Portfolio overview
Our direct office portfolio, which
represents 63% of our total property
portfolio by value, consists of 27 high-
quality office properties with a total
lettable area of 348,822 sqm. Tenant
retention in FY24 was 62% compared
with 61% in FY23.
Leasing
The Group executed 44 leases for 46,834
sqm of space in FY24, representing
12.5% of office portfolio income. The
weighted average lease term of the new
leases was 6.4 years with a weighted
annual rent review of 3.6%.
Major leases included the renewal of
15,398 sqm at 10-12 Mort Street,
Canberra, ACT with the Australian
Commonwealth Government for another
5 years and the National Heavy Vehicle
Regulator at 100 Skyring Terrace,
Newstead, QLD for a period of 10.6 years
across 4,328 sqm. The Group remains
focused on filling a major vacancy in
the portfolio at 5 Murray Rose Avenue,
Sydney Olympic Park, NSW, where over
10,500 sqm of space remains available.
Of the 44 leases signed, 32 were new
and the remainder were renewals.
Average incentives across the leases
signed in FY24 was 23%.
10-12 Mort Street,
Civic, ACT
Australian Commonwealth
Government signed a 5.0-year
lease renewal (commencing
March 2025) for the entire
building (15,398 sqm)
33-39 Richmond Road,
Keswick, SA
The South Australian
Government signed a new
10.0-year lease commencing
July 2024 for a total of
4,771 sqm
Average NABERS
Energy rating
5.2
30-Jun-23: 5.2 stars
12
Directors’ report
Operating and financial review
Office market
overview.
Market observations
Australian office markets continue to be impacted by higher vacancy rates,
particularly in the Melbourne and Sydney markets. Transaction activity
remains below historical averages, however toward the end of FY24,
several large transactions were completed, indicating a degree of price
discovery in office markets.
Vacancy remains elevated in most markets, though modest face rent
growth of c.4% occurred across the Group’s office markets over the
year. The Brisbane fringe market recorded 10% effective rent growth, the
Group retains over 20% of its office portfolio in this market. Positive net
absorption of c.68,000 sqm was recorded across the Group’s markets
vs the national which was negative c.45,000 sqm. The Group completed
c.47,000 sqm of leasing in FY24, up from c.32,000 sqm in FY23.
-275,000
-225,000
-175,000
-125,000
-75,000
-25,000
25,000
75,000
125,000
175,000
225,000
Melbourne Fringe
Brisbane Fringe
Perth CBD
Brisbane CBD
Canberra
Melbourne S.E.S.
Adelaide CBD
West Perth
Norwest
Sydney South
Parramatta
Sydney Olympic Park1
Sydney Fringe
North Sydney
Chatswood
St Leonards
Macquarie Park
Sydney CBD
Melbourne CBD
+c.461,000 sqm
Total net absorption,
FY21-FY24 – GOZ markets
-c.332,000 sqm
Total net absorption,
FY21-FY24 – Other markets
GOZ markets
Other markets
Source: JLL
1. Includes Rhodes
Net absorption – GOZ markets vs other markets
FY21-FY24 (sqm)
13
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Our industrial
portfolio
1. Assumes CPI change of 3.8% per annum as per ABS release at June 2024.
2. Assumes CPI change of 6.0% per annum as per ABS release at June 2023.
3. Net effective basis relative to prior passing rent.
4. Includes vacancies.
Portfolio
occupancy
100%
30-Jun-23: 100%
Industrial
portfolio value
$1.6b
30-Jun-23: $1.7b
WALE
4.9 yrs
30-Jun-23: 5.4 yrs
WACR
6.0%
30-Jun-23: 5.4%
WARR1
3.2%
30-Jun-23: 3.7%2
Industrial portfolio lease
expiry profile (%)
per financial year, by income
Vacant
0
FY25
5
FY26
27
FY27
FY28
FY29
3
7
5
FY30 FY31+
22
31
Top ten industrial
tenants
as at 30 June 2024
% portfolio
income
WALE
(yrs)
Woolworths
38
5.7
Linfox
12
1.6
Australia Post
6
7.0
101 Warehousing
3
5.3
Brown & Watson
International
3
9.1
Laminex Group
3
6.0
The Workwear Group
2
3.0
Eagers Automotive
2
8.6
Symbion
2
7.5
Autocare Services
2
6.3
Total / weighted Average
73
5.4
Balance of portfolio4
27
3.5
Total portfolio
100
4.9
A modern logistics and warehouse
portfolio with c.70% of assets
located on the eastern seaboard
close to transport hubs and urban
population centres underpinned
by quality tenants such as
Woolworths and Australia Post.
Portfolio overview
Our industrial portfolio comprises 30
modern industrial properties which
represent 37% of Growthpoint’s total
property portfolio by value. Tenant
retention in FY24 was 66% compared
with 64% in FY23.
Leasing
The Group executed six leases
totalling 60,794 sqm of space in FY24,
representing 7.9% of industrial portfolio
income. The weighted average lease
term of the new leases was 6.0 years
with a weighted annual rent review of
3.7%. Overall leasing activity remained
strong, with demand originating from
the transport/logistics and warehousing
sectors. Of the six leases signed in
FY24, three were with new tenants and
the remainder were renewals. Average
incentives on new leases and renewals
increased from c.10 to 15%, whilst re-
leasing spreads were 31%.3
The Group was pleased to renew
Laminex for 5 years at 130 Sharps Rd,
Melbourne Airport. This was the largest
industrial lease the Group executed in
FY24 totalling over 28,000 sqm. The
Group also welcomed TSS Sensitive
Freight as a new tenant at 9-21 Kimpton
Way, Altona, Victoria for a 10-year term
for 13,625 sqm.
130 Sharps Road,
Melbourne Airport, VIC
Long-term tenant, Laminex,
renewed their lease for 5.0
years across 28,100 sqm
9-21 Kimpton Way,
Altona VIC (3 warehouses)
New tenant, TSS Sensitive
Freight signed a 10-year term
across 13,625 sqm
Divestments
During the first half, the Group completed the
sale of 1-3 Pope Court, Beverley, SA with
an entity associated with the current tenant,
Aluminium Specialties Group (AS Group
Properties Pty Ltd). The Group achieved a
gross sale price of $35.0 million, c.15% above
the 30 June 2023 book value, representing an
unlevered internal rate of return of c.12% since
being purchased in 2015 for $20.8 million.
Kororoit Creek Rd
14
Directors’ report
Operating and financial review
Industrial market
overview.
Market observations
Industrial rents across Australia continued to trend
upwards in FY24, driven by ongoing demand-
supply imbalance that has left most markets with
limited relocation options for occupiers. This was
driven largely by the persistent low availability of
warehouse space in the leasing market. Incentives
are trending upwards in most markets, but from a
low base.
Vacancy increased slightly from a record low of
0.6% in June 2023 to 1.9% in June 2024.
Rent growth continued over the year, with
most markets recording double-digit growth
in face rents, but at slower levels relative to
2023. Investors remain attracted to prime and
secondary grade investments, particularly those
which provide near term positive rent reversion
opportunities (i.e. short-medium WALE assets).
Industrial prime net face rent growth (%)
12 months to 30 June 2024
NSW
16.0%
VIC
18.2%
QLD
17.4%
SA
12.7%
WA
National
Ave.
13.1%
1.1%
Source: JLL
9-21 Kimpton Way
Altona, VIC
Melbourne CBD
15
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Case study:
Fund completion
Funds management
overview
Adelaide
Sydney
Brisbane
1
1
1
1
1
3
1
Investor composition
by value, as at 30 June 2024
Wholesale
syndicates
55%
Institutional
investors
45%
Asset type and location
as at 30 June 2024
Office
Retail
Car Park
Mixed-use (Retail/Office)
Neighbourhood Shopping Centre
$1.6 billion of third-
party assets under
management for
wholesale syndicates
and institutional
investors
The funds management business
currently invests in office, retail and
mixed-use properties in Sydney, Brisbane
and Adelaide via closed-end funds. The
business has a 30-year track record of
investing through multiple cycles and an
extensive network advantage.
In the current cycle, we have taken a
disciplined approach to capital market
transactions given the challenging
environment. During the period, the
Group extended the term of several
funds representing c.25% of total FUM,
preserving value for investors. We
completed the sale of Taylors House for
c.$87 million, achieving a levered IRR of
11% over the 7-year fund term.
Our focus remains on driving growth in
FUM across multiple channels, targeting
industrial, office and retail sectors across
a range of investor styles and appetites.
Gross sale price
c.$87m
IRR (levered)
11%
Over the 7-year
fund term
Taylors House, 965 Bourke Street,
Waterloo, NSW
Sold in October 2023 following an extensive
marketing campaign. Settled in January 2024.
16
Directors’ report
Operating and financial review
Rundle Place, Rundle Mall,
Adelaide, SA
A premium flagship retail shopping centre
located in the retail core of the Adelaide
CBD. Rundle Place is Adelaide’s only
premium grade retail shopping centre
Cammeray Square,
Cammeray, NSW
A mixed-use retail, childcare and office
complex located in Sydney’s Lower
North Shore suburb of Cammeray,
c.4.5 radial kilometres north of the
Sydney CBD
17
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
FY24 sustainability
performance
$1.0b
of existing debt
now converted
to sustainability
linked loans (SLLs),
exceeding all targets
leading to interest
margin reductions
1. Employee engagement survey conducted by the Culture Amp platform.
2. Excludes casual and contract employees.
3. Tenant engagement survey conducted by property research specialists Brickfields.
4. Overall Regional Sector Leader – Diversified – Office/Industrial.
sector leader 2023
R E A L E S T A T E
Tenant customer
satisfaction rating
(CSAT)3
75%
FY23: 77%
Employee
engagement score
75%
placing the Group
5 percentage points
above the January 2024
Real Estate Australia
industry benchmark1
Gender diversity
(all employees)2
56%
44%
Average NABERS
Energy rating
5.2
with 100% of eligible office
portfolio rated
Average NABERS
Water rating
4.9
with 100% of eligible office
portfolio rated
Average NABERS
Indoor Environment
rating
4.8
with 100% of eligible
office portfolio rated
People
Governance
Economic
Environment
Growthpoint’s 2024 Sustainability report will be
published in early October at
growthpoint.com.au/sustainability
4
18
Directors’ report
Operating and financial review
Completed
In progress
N Announced
target of net zero
emissions by
2025
N Carbon intensity:
39kg CO2-e /sqm2
N Completed three
solar installations
(combined
capacity: 259 kW,
total portfolio solar:
10 assets)
N Developed
an energy
procurement
strategy to secure
our medium-term
energy needs
N Carbon intensity:
34kg CO2-e /sqm2
N Executed our
renewable
energy strategy,
including locking
in GreenPower for
the next five years
N Commenced
electrification
feasibility
assessments for
three commercial
assets
N Chiller upgrade
projects delivered
at three assets
N Carbon intensity:
28kg CO2-e /sqm2
N Completed six
onsite solar
installations
(capacity: 376kW,
total portfolio solar:
16 assets)
N Increased
GreenPower
coverage to c.50%
of electricity needs
N Developed our
carbon offset
strategy
N Commenced
electrification
feasibility
assessments for
a further three
commercial assets
N Carbon intensity
target: 12kg2,3
CO2-e /sqm
Our pathway to
Net Zero 2025
1
Expected
target
achievement
FY21
1 July 2025
FY22
FY23
FY24
FY25
1. Directly owned office assets and corporate activities.
2. Market-based carbon intensity.
3. Pending audit as part of FY24 sustainability reporting.
✓Targeting two
onsite solar
installation for
the office portfolio
✓Increase
GreenPower
coverage to
supply c.75%
of our electricity
needs
✓Electrification
feasibility
assessments for
four commercial
assets
✓Carbon intensity
target: 7kg2
CO2-e /sqm
19
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
The Group’s performance in FY24
reflects the underlying strength
of the portfolio. Growthpoint
delivered FFO of 23.9 cps,
above guidance. Distributions to
Securityholders were in line with
guidance of 19.3 cps, representing
a payout ratio of 80.7%,
consistent with the Board’s target
payout ratio of between 75% and
85%.
Excluding the net decline in lease
surrender payments from FY23 to FY24
of c.$14.5 million, like-for-like property
FFO was up 2.3%. FFO performance
reflects the lower net property income
received during the period due to the sale
of 333 Ann Street, Brisbane, QLD (Nov
22) and 1-3 Pope Court, Beverley, SA
(Oct 23) and lower surrender payments
received in FY24 relative to FY23.
The Group’s portfolio value decreased
by 8.5% representing a fair value
reduction of $424.3 million and on a
like-for like basis declined by 7.9% or
$380.2 million at 30 June 2024. NTA
declined by 13.8% to $3.45 per security
relative to 30 June 2023. The Group
impaired the goodwill associated with
its funds management business by
$26.6 million. The impairment primarily
relates to changed economic conditions
affecting the funds management sector
since acquisition, leading to revised FUM
growth assumptions.
Capital expenditure
Maintenance capital expenditure
increased to $30.4 million, from $22.1
million in FY23 and has increased as a
percentage of the total directly owned
property portfolio at 0.64% relative to
FY23. Capital expenditure was slightly
higher than the Group’s guidance range
of between 0.3% and 0.6% of average
property value and largely reflects the
decline in the Group’s direct property
portfolio during FY24. The Group expects
to remain towards the upper end of its
guidance range over the short to medium
term.
Capital Management
During the financial year Growthpoint
refinanced and extended $470 million of
bank debt facilities on favourable terms,
c.20% of total bank debt facilities. As
at 30 June 2024, the weighted average
remaining term to maturity is 3.0 years.
The Group converted $500 million of
existing debt facilities into a sustainability
linked loan (SLL), bringing the total
amount of SLL’s on issue to $1,020
million. Interest margin reductions have
been achieved as the Group exceeded
all targets which are tied to sustainability
related KPIs.
The Group also executed new interest
rate swaps with a face value of $395
million, at an average fixed rate of 3.7%
of which, $180 million, have a forward
start date in FY25.
Financial
performance
Funds from
operations (FFO)
23.9 cps
FY23: 26.8 cps
Distributions
19.3 cps
30-Jun-23: 21.4 cps
NTA
per security
$3.45
30-Jun-23: $4.00
Capital expenditure
(capex)
FY24
FY23
Total portfolio capex $m
30.4
22.1
Total average
property portfolio
value
$m
4,779.1 5,227.1
Capital expenditure
to average property
portfolio value
%
0.64
0.42
Gearing movement
for the 12 months ended 30 June 2024
46%
44%
42%
40%
38%
36%
34%
32%
30%
30-Jun-24
40.7%
30-Jun-23
37.2%
Distributions
paid
+3.3%
Investment
revaluations
+3.3%
FX Translation
and MTM
derivatives
+0.5%
Divestments
-3.5%
Cash from
operating
activities
-0.5%
Acquisitions
and capex
+0.4%
20
Directors’ report
Operating and financial review
$4.20
$4.10
$4.00
$3.90
$3.80
$3.70
$3.60
$3.50
$3.40
$3.30
$3.20
$3.10
$3.00
NTA
30-Jun-23
Office
revaluations
Industrial
revaluations
Retained cash
from FFO
Other
NTA
31-Dec-23
Office
revaluations
Industrial
revaluations
Retained cash
from FFO
Other
NTA
30-Jun-24
Growthpoint has three
main debt and lending
covenants which are
regularly stress tested
LVR <60%
42.6%
To breach this covenant,
Growthpoint’s cap rate
would need to rise by
259 bps1
ICR >1.6x
2.8x
To breach this covenant,
NPI would need to fall by
42.9%1
% property
secured >85%
96.7%
Stress testing covenants
Movements in NTA per security
for the 12 months ended 30 June 2024
40 Annandale Road,
Melbourne Airport, VIC
1. As at 30 June 2024. For illustrative purposes only. Assumes no change to other inputs that may impact the calculation of this metric.
$4.00
$3.75
-$0.02
-$0.03
-$0.28
-$0.01
-$0.02
-$0.24
$3.45
+$0.02
+$0.03
21
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
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 of profit after tax to FFO
FY24
FY23
Change
Change
$m
$m
$m
%
Loss after tax
(298.2)
(245.6)
(52.6)
21.4
Adjustment for non-FFO items:
- Straight line adjustment to property revenue
(10.2)
(12.6)
2.4
- Net loss in fair value of investment properties
424.3
388.4
35.9
- Net (gain) / loss in fair value of investment in securities
(11.5)
6.2
(17.7)
- Net loss in fair value of derivatives
16.4
1.1
15.3
- Net (gain) / loss on exchange rate translation of interest-bearing liabilities
(3.0)
14.8
(17.8)
- Amortisation of incentives and leasing costs
40.0
39.3
0.7
- Amortisation of intangible assets
1.1
1.7
(0.6)
- Goodwill impairment
26.6
8.8
17.8
- Deferred tax benefit
(5.4)
(5.1)
(0.3)
- Other
0.3
7.8
(7.5)
FFO
180.4
204.8
(24.4)
(11.9)
Financial performance
Key debt metrics and changes during FY24
30 June 2024
30 June 2023
Change
Gross assets
$m
4,764.9
5,210.8
(445.9)
Interest bearing liabilities
$m
1,923.8
1,918.7
5.1
Total debt facilities
$m
2,223.3
2,226.3
(3.0)
Undrawn debt
$m
293.0
300.0
(7.0)
Gearing
%
40.7
37.2
3.5
Weighted average cost of debt (based on drawn debt)
%
4.8
4.6
0.2
Weighted average debt maturity
years
3.0
3.4
(0.4)
Annual ICR / covenant ICR
times
2.8 / 1.6
3.4 / 1.6
(0.6) / -
Actual LVR / covenant LVR
%
42.6 / 60
38.7 / 60
3.9 / -
Weighted average fixed debt maturity
years
2.5
2.9
(0.4)
% of debt fixed
%
74.5
70.5
4.0
Debt providers
no.
22
22
–
22
Directors’ report
Operating and financial review
As at 30 June
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
Financial performance
Profit for the period
$m
(298.2)
(245.6)
459.2
553.2
272.1
375.3
357.7
278.1
219.4
283.0
Financial position
Total assets (at 30 June)
$m
4,764.9
5,210.8
5,499.8
4,777.8 4,500.7 4,117.9
3,474.6
3,328.4 2,879.6 2,407.1
Total equity (at 30 June)
$m
2,611.7
3,054.3
3,519.9
3,221.4 2,822.6 2,546.5
2,157.0
1,901.5 1,522.4 1,411.5
Securityholder value
Basic earnings per security
¢
(39.6)
(32.1)
59.5
71.7
35.3
52.9
53.5
42.7
38.1
50.4
Funds from operations per security
¢
23.9
26.8
27.7
25.7
25.6
25.1
25.0
25.5
22.9
21.8
Distributions per security
¢
19.3
21.4
20.8
20.0
21.8
23.0
22.2
21.5
20.5
19.7
Total securityholder return
%
(15.5)
(12.0)
(11.7)
34.0
(17.7)
21.0
22.3
6.3
7.4
36.4
Return on equity
%
(8.9)
(7.6)
14.3
19.7
10.8
16.9
18.5
18.6
13.5
23.9
Gearing (at 30 June)
%
40.7
37.2
31.6
27.9
32.2
34.3
33.9
38.5
41.2
36.3
NTA per security (at 30 June)
$
3.45
4.00
4.56
4.17
3.65
3.52
3.19
2.88
2.61
2.48
Market capitalisation (at 30 June)
$m
1,636.2
2,102.9
2,631.4
3,141.5 2,469.9 3,178.6
2,438.1
2,076.6 1,836.8 1,781.1
Market capitalisation and free float ($m)
10-year financial
performance summary
Market capitalisation
Free float
June 2015
624
1,781
June 2016
634
1,837
June 2017
724
2,077
June 2018
840
2,438
June 2019
1,201
3,179
June 2020
934
2,470
June 2021
1,188
3,142
June 2022
995
2,631
June 2023
764
2,103
June 2024
594
1,636
23
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Board
of Directors
Andrew Fay
BAgEc (Hons), A Fin
| Independent Chair
Term of office
Andrew was appointed as
a Director of the Board in
December 2022 and Chair in
March 2023.
Professional experience
Andrew is an experienced
company director across ASX
listed, private and regulated
entities. He has over 30 years’
experience in financial services,
including investments, funds,
property, and infrastructure
management. Senior executive
roles included Chief Executive
Officer and Chief Investment
Officer of Deutsche Asset
Management (Australia) as well as
Regional Chief Investment Officer
(Asia Pacific) for the broader
Deutsche Asset Management
group. Prior to Deutsche Asset
Management, he held senior
executive roles at AMP Capital,
and from 1998 to 2006 was
a member of the Investment
Board Committee of the Financial
Services Council.
Andrew was formerly a
non-executive Director of
Pendal Group Limited, Spark
Infrastructure RE Limited, South
Australian and Victorian Power
Networks, Gateway Lifestyle
Group, Deputy Chair of Cromwell
Property Group and an alternate
Director for Dexus Property
Group.
Other directorships and
positions
Andrew is currently a non-
executive Director of Integral
Diagnostics Limited, National
Cardiac Pty Limited and Utilities
of Australia Pty Limited (Trustee of
Utilities Trust of Australia).
Board Committee Membership
– Nomination, Remuneration and
HR Committee
Ross Lees
MAppFin, BBus (Prop Econ)
| Chief Executive Officer and
Managing Director
Term of office
Ross was appointed as Chief
Executive Officer and Managing
Director and to the Board in May
2024.
Professional experience
Ross has over 20 years of real
estate investment management
experience and a deep
understanding of commercial
property markets, funds
management, asset management,
mergers and acquisitions and
equity capital markets.
He has previously held senior
leadership positions at Centuria
Capital, Dexus, LOGOS and
Stockland.
Ross holds a Masters of
Applied Finance from Macquarie
University and a Bachelor of
Business (Property Economics)
from Western Sydney University.
Ross has also had active
involvement with both the
Property Council of Australia and
the Property Funds Association.
Board Committee Membership
– Investment 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 27 years of
experience in banking and
property investment. He has
held senior roles at Growthpoint
Properties Limited for over 21
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
– Chair – Investment Committee
Deborah Page AM
BEc FAICD FCA
| Independent Director
Term of office
Deborah was appointed as a
Director of the Board in March
2021.
Professional experience
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 Pendal Group Limited and
Investa Office Fund, and a former
non-executive Director of Investa
Property Group, GBST Holdings
Limited, Australian Renewable
Fuels Limited and Service Stream
Limited.
Other directorships and
positions
Deborah is currently a non-
executive Director of Magellan
Financial Group Limited,
Brickworks Limited and The Star
Entertainment Group Limited, and
is a member of the Takeovers
Panel.
Board Committee Membership
– Chair - Audit, Risk and
Compliance Committee
– Investment Committee
Other Directors during the period
– Grant Jackson, Independent Director – retired 16 November 2023
– Timothy Collyer, Managing Director – retired 20 May 2024
24
Directors’ report
Governance
Norbert Sasse
BCom (Hons) (Acc), CA (SA)
| Director
Term of office
Norbert was appointed as a
Director of the Board in August
2009.
Professional experience
Norbert has over 27 years of
experience in corporate finance
dealing with listings, delistings,
mergers, acquisitions and capital
raisings, and over 20 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, 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
– Nomination, Remuneration and
HR Committee
Josephine Sukkar AM
BSc (Hons), Grad Dip Ed
| Independent Director
Term of office
Josephine was appointed as a
Director in October 2017.
Professional experience
Josephine is co-owner and
Principal of construction company
Buildcorp, founded 34 years ago
with her husband Tony. She is a
professional company director, a
Fellow of the University of Sydney
and a Member of the Order of
Australia.
Josephine was formerly the
Chair of the Australian Sports
Commission, Chair of the Sport
Diplomacy Advisory Council
(DFAT), Chair of the Australian
Women’s Rugby Union, a
member of the Nominations
Committee of Rugby Australia
and the Australian Rugby
Foundation, a Non-Executive
Director of The Trust Company,
the Property Council of Australia,
Opera Australia, the Centenary
Institute of Medical Research, the
Parramatta Park Trust and the
YWCA NSW.
Other directorships and
positions
Josephine is currently a Non-
Executive Director of Washington
H. Soul Pattinson and the Green
Building Council of Australia.
She is a Trustee of the Australian
Museum Trust and Chair of the
Buildcorp Foundation.
Board Committee Membership
– Chair – Nomination,
Remuneration and HR
Committee
Michelle Tierney
GAICD BA (Journalism &
Comm), PgDip (Bus Admin),
MBA | Independent Director
Term of office
Michelle was appointed as a
Director of the Board in April
2023.
Professional experience
Michelle is an experienced
senior executive and board
member across ASX and NZX
organisations respectively. She
has over 20 years of executive
experience in the property and
funds management industry
having held senior executive,
funds management and property
roles with National Australia Bank
and The GPT Group. Prior to
her appointment, Michelle was
Chief Operating Officer for Region
Group (formerly SCA Property
Group).
Michelle was formerly an
executive Director of SCA
Unlisted Retail Fund RE Limited
and served as alternate Director
of the Shopping Centre Council of
Australia.
Other directorships and
positions
Michelle is currently a non-
executive Director of Stride
Property Group (ASX: SPG),
Peet Limited (ASX: PPC) and
Uniting NSW.ACT. Michelle is also
a Director of Cotton Research
and Development Corporation,
an Australian Commonwealth
Government entity under the
Primary Industries Research and
Development (PIRD) Act.
Board Committee Membership
– Audit, Risk and Compliance
Committee
– Investment Committee
Panico Theocharides
B.Com (Hons (Acc)), CA (SA)
| Director
Term of office
Panico was appointed as a
Director of the Board in April
2023.
Professional experience
Panico has over 20 years of
executive leadership experience
in listed real estate investment
trusts and the investment banking
advisory industries. He has held
senior financial and operational
roles at Investec and Sasfin Bank,
and was previously Joint CEO of
Annuity Properties Limited and
CEO of Annuity Asset Managers
and Annuity Property Managers.
Panico was formerly a non-
executive Director of Transcend
Residential Property Fund Limited
and a non-executive Director
and Chair of the Investment
Committees of two Westbrooke
Group property funds
(Westbrooke Alternative Tourism
Property Fund and Westbrooke
Student Accommodation Property
Fund).
Other directorships and
positions
Panico is currently Group Head
of Investments at Growthpoint
Properties Limited and is
a member of its Executive
Committee. He also serves as a
non-executive Director of Capital
& Regional plc and Globalworth
Real Estate Investments Limited.
Panico is not considered
independent due to his position at
Growthpoint Properties Limited.
Board Committee Membership
– Audit, Risk and Compliance
Committee
25
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Executive
Management Team
Ross Lees
MAppFin, BBus (Prop
Econ) | Chief Executive
Officer and Managing
Director
Ross joined Growthpoint
in 2024 as Chief Executive
Officer and Managing
Director.
Ross has over 20 years
of real estate investment
management experience
and a deep understanding
of commercial property
markets, funds
management, asset
management, mergers
and acquisitions and
equity capital markets.
He has previously held
senior leadership positions
at Centuria Capital, Dexus,
LOGOS and Stockland.
Ross holds a Masters
of Applied Finance from
Macquarie University and
a Bachelor of Business
(Property Economics)
from Western Sydney
University. Ross has also
had active involvement
with both the Property
Council of Australia
and the Property Funds
Association.
Dion Andrews
BBus, 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
22 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.
Michael Green
BBus (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 23 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.
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.
Sam Sproats
B.Fin Admin, GAICD –
Executive Director, Funds
Management
Sam joined Growthpoint
in 2022 and leads
the Group’s funds
management business.
Sam has over 29 years of
experience in real estate
funds management,
project delivery and
asset management. Sam
joined the Executive
Management Team on
the completion of the
acquisition of Fortius
Funds Management Pty
Ltd by Growthpoint in
September 2022.
Prior to joining
Growthpoint, Sam was
Chief Executive Officer
and Executive Director
of Fortius, holding senior
executive positions since
joining in 1998.
26
Directors’ report
Governance
4 Broadcast Way,
Artarmon, NSW
State of the art EOTF completed during the
second half including secure bike storage,
shower and changing facilities and ample
locker storage
27
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
The Board has overall responsibility for the establishment and oversight
of the Group’s risk management framework. The Board has 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.
Management provides regular reports to the ARCC in relation to the risks facing
Growthpoint. The ARCC reviews the adequacy of the risk management framework in
relation to the risks faced by Growthpoint and its operations and makes appropriate
recommendations to the Board. The ARCC also reports regularly to the Board on its
activities. A separate risk register for Growthpoint’s funds management business is
maintained and reported to the Growthpoint Investment Management Pty Ltd (GIM)
board (a wholly owned subsidiary of Growthpoint, which oversees the governance of the unlisted managed funds) on a semi-annual
basis.
Risk management policies are established to identify and analyse the risks faced by Growthpoint 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 business 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 and investor confidence, the value
of our portfolio and our ability to pay or grow
distributions.
Loss of funds management income or inability
to grow the funds management business due
to reduced investor sentiment, ability to attract
new capital partners and impact of adverse
market conditions.
Risk factors that could impact our financial
performance include macroeconomic impacts,
rising interest rates, high inflation and 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 predominately 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 directly owned
portfolio, we currently have an occupancy rate of 95%, a WALE of 5.7 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.
Our funds management team actively engages with existing investors and potential
capital partners with regard to investment opportunities and regularly reviews
performance of our managed funds.
We adopt and implement prudent capital management practices. This includes
maintaining sufficient liquidity, holding a percentage of fixed debt in accordance with
our Treasury Management Policy (74.5% as at 30 June 2024) and have a weighted
average debt maturity of 3 years.
Risk
management
Refer to the Group’s 2024
Corporate Governance
Statement for more details
on the Group’s risk management
framework.
growthpoint.com.au/corporate-
governance
28
Directors’ report
Governance
Material business risk
How Growthpoint is responding
Physical assets
Property portfolio
The value of our directly owned 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, tenant demand, 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 directly owned
portfolio exposure is limited to office (primarily metropolitan) and industrial property
sectors and is geographically diversified to mitigate the risk of localised valuation
impacts. We may also seek to co-invest in funds in other sectors where accretive
investment opportunities present as part of growing our funds management
business.
We continually monitor and look to improve the quality of our directly owned
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, with an
Investment Committee established by the Board to consider investment proposals
by Growthpoint over a certain monetary threshold.
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.
Structural changes due to disruptive
industries and trends
Remote working, innovative competitors in the
market and building obsolescence can impact
on our current and future operations.
Our portfolio and the industry are continually monitored through active research,
industry market briefings and developments and overseas trends.
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 good demand for our offices, with strong environmental credentials,
primarily located in metropolitan markets, from existing and potential tenants, with
significant leasing activity in FY24, totalling 46,834 sqm or 12.5% of our office
portfolio income.
Finance and economics
Access to capital markets
Continuous access to debt, equity markets and
third party investor capital is important to the
sustainability and growth of our business. If our
ability to obtain capital is constrained (e.g. due
to global credit markets contraction) it may lead
to increased costs of financing and our strategic
objectives not being met, including growing our
funds management business.
Support from our banking partners is dependent on their financial covenants being
met. We regularly stress test these covenants. As at 30 June 2024, Growthpoint
was well within all its debt covenant limits. We also maintain an investment grade
credit rating of Baa2.
We exercise prudent capital management, spread our debt expiries to minimise
short term impacts and our balance sheet gearing is currently at the midpoint of our
target range of 35% to 45%. Growthpoint also maintains strong relationships with its
equity investors, through its investor relations program.
We actively engage with existing or new third party capital partners to understand
their needs and develop strategies to ensure ongoing satisfaction, with the view
to repeat or new investments to grow our funds under management, investment
returns and revenue.
29
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Risk management
Material business risk
How Growthpoint is responding
Operations, and people and culture
Data, information and cyber security
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 Business Continuity Plan
which includes a Disaster Recovery Plan and provide training and education to our
employees, to assist in reducing the risk and impact of any cyber security attack.
We test our plans at least annually to ensure currency, enhance our preparedness
and minimise the impact of any incidents. The most recent test of our Business
Continuity Plan involved the full Board and Management team and included a
simulation of a cyber security data breach.
In 2024, we implemented a new General information Security policy to strengthen
our cyber security maturity and subscribed to additional cyber security measures
with our IT managed service provider.
We engage external specialists to review our cyber security framework including
cyber vulnerabilities and provide assurance on our controls environment.
We undertake IT security risk 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 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.
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 and we conduct an active wellness program focussing on employee
health and wellbeing.
Legal and regulatory
Legal, compliance and regulatory
Non-compliance of laws or our AFSL or
changes in legislation, government policies or
regulatory environment that may impact the
business, increase the costs of compliance and
its operations, lead to reputational damage or
impact its financial performance.
Our compliance culture is guided by our policies and procedures to ensure that we
operate within regulatory requirements. 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.
30
Directors’ report
Governance
Material business risk
How Growthpoint is responding
Environment 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.
Our Sustainability Framework builds on our previous commitment to achieve net
zero carbon emissions by July 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.
As a demonstration of our commitment to environmental stewardship and
responsible business practices, over $1 billion of our debt funding is in the form of
sustainability linked loans where interest margin reductions are tied to the successful
achievement of sustainability KPIs and targets. Additionally, we have undertaken
a detailed physical climate risk assessment, with plans to further strengthen our
understanding of, and response to, climate risks in the coming years.
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.
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 previously undertaken a deep dive risk
assessment of our supply chain. In addition, we have provided modern slavery
training to staff and the Board.
Via our Community Program we continue to sponsor and support a range of
community and social causes.
Growthpoint’s FY24 Sustainability report (due for release in early October 2024) will provide an overview of Growthpoint’s approach
to managing the risks and opportunities of climate change. The report will be available via our website at growthpoint.com.au/
sustainability
31
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration
Report
Josephine Sukkar AM
Independent Director, Chair – Nomination,
Remuneration and Human Resources
Committee
On behalf of the Board, I am
pleased to present the Group’s
FY24 Remuneration Report for the
financial year ended 30 June 2024.
This report sets out Growthpoint’s
approach to remuneration for
its Executive Key Management
Personnel (KMP) and the link
between strategy, performance,
reward and remuneration
outcomes. It also provides an
overview of our approach for
FY25. The remuneration policy and
framework apply to the Executive
Management Team (EMT), which
the Executive KMP form part of.
In FY24, the Nomination, Remuneration
and Human Resources Committee
(NRHRC) remained focused on
remuneration settings that attract top
talent and drive strong performance,
while ensuring reward outcomes
are aligned with the expectations of
Securityholders.
1. Real Estate Australia Industry January 2024 benchmark provided by Culture Amp’s platform.
2. Tenant engagement survey conducted by property research specialists Brickfields.
FY24 summary
In FY24, Growthpoint delivered funds
from operations (FFO) of 23.9 cents
per security (cps), ahead of original
guidance of 22.5 to 23.1 cps, as well
as upgraded guidance of 23.2 to 23.6
cps. Distributions were 19.3 cps, in line
with guidance. Despite this, Growthpoint
underperformed the S&P/ASX 200 REIT
Accumulation Index, in line with other
REITs with significant office exposure.
In addition to the financial achievements,
the Board was pleased with the EMT’s
non-financial short-term incentive (STI)
achievements over the year.
Growthpoint continued to deliver
sustainable outcomes including
maintaining high portfolio average
NABERS ratings, increasing our GRESB
score and procuring 50% of our green
power needs. Growthpoint also issued a
further $500 million of sustainability-linked
loans, bringing the total to $1.02 billion,
leading to interest margin reductions.
The annual employee engagement survey
results demonstrate the EMT’s focus on
building on our positive, performance-
driven culture. In FY24 we achieved an
employee engagement score of 75%,
slightly up from our FY23 score of 74%
and higher than the property sector
benchmark of 70%1.
Growthpoint scored 7.8/10 in its
annual landlord satisfaction survey,
demonstrating strong engagement with
its tenants.2 This result ranks Growthpoint
as industry leaders on landlord
satisfaction ahead of the benchmarked
peer group average rating of 6.9. The
Group also maintained an industry leader
ranking for landlord customer satisfaction
in office (1st) and industrial (2nd) vs. the
benchmarked peer group for the third
year in a row.
FY24 remuneration outcomes
1. The EMT’s FY24 STI opportunity
comprised of 60% financial criteria
(of which 45% was linked to FFO
performance versus budget and
15% linked to growth in funds under
management) and 40% non-financial
criteria.
2. For the FFO linked financial target,
the EMT was required to deliver a
minimum FFO of 22.4 cps. The EMT
outperformed the financial target,
delivering FFO of 23.9 cps. The FUM
growth target was not achieved,
due to a combination of limited
activity across the sector and our
disciplined approach to capital market
transactions.
3. The non-financial criteria component
was a combination of individual and
common KPIs relating to strategic
positioning, leadership, culture, ESG
and customer. The Board assessed a
71% achievement of this component
for the former Managing Director
(Timothy Collyer), with the other
Executive KMPs achieving between
71% to 80%.
4. Overall, the Board has assessed the
former Managing Director’s (Timothy
Collyer) FY24 STI award as 63.1% of
his maximum opportunity, with the
other Executive KMP between 63.1%
and 66.3%.
5. In line with the Group’s remuneration
policy, the NRHRC will complete its
assessment of the long-term incentive
(LTI) award in October 2024 for the
LTI plan with a performance period of
1 July 2021 to 30 June 2024.
6. The LTI award assesses the
Group’s TSR and return on equity
(ROE) performance relative to the
constituents of the S&P/ASX A-REIT
200 REIT Index over the three years
(each with a 50% weighting). The
TSR tranche has been assessed and
has not been met, resulting in a 0%
vesting outcome.
32
Directors’ report
Governance
7. The ROE tranche will be assessed
once the required information from
all the Index members becomes
available, anticipated to be around
September 2024.
FY25 remuneration framework
During FY24, the NRHRC reviewed the
remuneration framework to ensure it
remains fit for purpose and incentivises
the EMT to achieve the Group’s
objectives over the short and long term.
Following the review, the Board has
determined that the:
1. FY25 LTI opportunity structure will
remain the same as FY24, however
the comparator group for the FY25
LTI Plan will be the S&P/ASX A-REIT
300 Index (excluding Goodman
Group1) following the Group’s exit
from the S&P/ASX 200 in December
2023; and
2. FY25 STI structure will be largely
consistent with FY24, other than
the form of the STI award will revert
to two-thirds cash and one-third
deferred equity which vest over two
years. For the FY24 year, it was
80% cash, 20% deferred equity.
The financial measures will be based
on Group FFO per security targets
and funds management growth for
the financial year. The non-financial
criteria were reviewed to ensure
enhanced alignment with the Group’s
key strategic priorities.
1. The Board has determined that excluding the Goodman Group continues to be appropriate given its large index
weighting (c.40%) and the high proportion of earnings derived from development activities.
Other matters
In early FY24, the Board approved
new gender diversity targets. The new
targets include adopting 40:40:20
gender representation for our senior
management in addition to our workforce
generally and maintaining a Board gender
diversity target of at least 30% female
with an aspiration of achieving 40% over
the longer term. In FY24, Growthpoint
had a 43.6% female workforce and
37.5% female representation on the
Board.
In November 2023, we farewelled
independent non-executive director Grant
Jackson who retired from the Board.
We thank him for his contribution and
wish him the very best for the future. The
NRHRC is leading the search process
for a new independent director to fill this
vacancy which is well progressed.
Finally, the Board would like to welcome
Ross Lees as the new CEO and
Managing Director and thank former
Managing Director Tim Collyer for his
leadership of the Group since 2009.
We hope that you find the following
report transparent and informative, and
welcome your feedback. The Board
remains committed to ensuring that the
EMT are rewarded for the right outcomes
and their remuneration is aligned with the
long-term interests of securityholders.
Josephine Sukkar AM
Chair – Nomination, Remuneration and
Human Resources Committee
33
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
About the remuneration report
The Directors present this ‘Remuneration Report’ for
the Group for the year ended 30 June 2024. This report
summarises key compensation policies and provides
detailed information on the compensation for Directors
and other Key Management Personnel (KMP).
The specific remuneration arrangements described in this
report apply to the Executive KMP as defined in AASB
124. The report has been prepared in accordance with
section 300A of the Corporations Act 2001 (Cth) and has
been audited.
Growthpoint’s remuneration practices outlined in this
report comply with best practice governance guidelines,
as per ASX Corporate Governance Principles and
Recommendations (4th edition).
About the remuneration report
34
FY24 Executive KMP remuneration policy and
framework
35
FY24 short-term incentives (STI)
39
FY24 long-term incentives (LTI)
42
FY25 Executive KMP remuneration
46
Non-Executive Directors’ arrangements
47
Executive and Non-Executive KMP shareholdings 49
Remuneration policy and role of the Nomination,
Remuneration and HR Committee.
50
Who this report covers
This report covers KMP, comprising certain members
of the Executive Management Team (Executive KMP)
and Non-Executive Directors.
Executive KMP
õ
Ross Lees - Chief Executive Officer and Managing
Director (appointed effective 20 May 2024)
õ
Timothy Collyer – former Managing Director
(ceased being KMP effective 20 May 2024)1
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
Andrew Fay - Independent Chair of the Board and
Director
õ
Deborah Page AM - Independent Director
õ
Estienne de Klerk - Director
õ
Grant Jackson - Independent Director (retired
effective 16 November 2023)
õ
Josephine Sukkar AM - Independent Director
õ
Michelle Tierney - Independent Director
õ
Norbert Sasse - Director
õ
Panico Theocharides – Director
1. Timothy Collyer ceased being KMP upon the appointment of the new
Chief Executive Officer and Managing Director and upon his retirement
as a Director of the Company on 20 May 2024. He continued to have
transitional duties and was employed by the Group until 15 July 2024. He
is referred to in the remuneration report as the former Managing Director.
What’s
inside
34
Directors’ report
Governance
FY24 Executive KMP remuneration policy and framework
Components of FY24 remuneration
Fixed Remuneration
(including applicable
superannuation and
other benefits)
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.
Short-term
incentives (STI)
If specified performance criteria are met, eligibility of each Executive
KMP to receive an STI bonus payable as 80% cash and 20% as
deferred short-term incentive performance rights (STI Performance
Rights) in respect of each financial year, other than for the former
Managing Director, who will receive 100% cash as determined by
the Board as he retired and will not be an employee when the FY24
deferred STI Performance Rights will be granted (a requirement of
the Growthpoint Employee Incentive Plan).
Current
year (FY24)
Next year
(FY25)
Long-term
incentives (LTI)
LTI under which, upon meeting specified performance criteria,
each Executive KMP is eligible to receive securities in the Group
over time to help align Executive KMP’s interests with those of
Securityholders.
Current
year (FY24)
Next year
(FY25)
Executive KMP Remuneration delivery FY24
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.
Year 1
Year 2
Year 3
Year 4
Base Salary,
Superannuation and
Other Benefits1
80% Cash STI
10% deferred for one year
10% deferred for two years
Fixed
Remuneration
STI
80% paid in cash
20% deferred Short-term
Performance Rights
LTI
Delivered as
Long-term Performance
Rights (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 insurance arrangements and non-monetary benefits provided to Executive KMP.
2. The measurement period finishes on 30 June 2026 with any vesting in early FY27.
46
42
47
39
35
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
Executive KMP Remuneration mix FY24 ($000)
Fixed Remuneration
STI - Cash
STI - Deferred
LTI
Sign on awards
$1,055
(100%)
$1,385
(42%)
$844
(26%)
$1,055
(56%)
$671
(36%)
$159 (8%)
$1,055
(52%)
$874
(43%)
$119 (6%)
Former Managing Director
Maximum
Actual
(take
home)
Actual
(accounting)
Minimum
$3,284
$1,885
$2,046
$1,055
Chief Operating Officer
$529
(100%)
$529
(40%)
$342
(26%)
$86 (6%)
$370
(28%)
$529
(67%)
$207
(26%)
$48 (6%)
$529
(61%)
$227
(26%)
$59 (7%)
$48 (6%)
Performance dependent
Maximum
Actual
(take
home)
Actual
(accounting)
Minimum
$1,326
$784
$862
$529
Chief Executive Officer
& Managing Director
(Commenced 20 May 2024)
Maximum
Actual
(take
home)
Actual
(accounting)
Minimum
$111
(72%)
$43 (28%)
$154
$111
(100%)
$111
$111
(100%)
$111
$111
(100%)
$111
Chief Investment Officer
$605
(100%)
$605
(37%)
$477
(29%)
$119 (6%)
$423
(26%)
$605
(63%)
$288
(30%)
$60 (6%)
$605
(58%)
$302
(29%)
$76 (7%)
$60 (6%)
Maximum
Actual
(take
home)
Actual
(accounting)
Minimum
$1,624
$953
$1,043
$605
Performance dependent
$616
(100%)
$616
(38%)
$456
(28%)
$114 (7%)
$431
(27%)
$616
(65%)
$276
(29%)
$59 (6%)
$616
(60%)
$288
(28%)
$74 (7%)
$55 (5%)
Chief Financial Officer
Maximum
Actual
(take
home)
Actual
(accounting)
Minimum
$1,617
$951
$1,033
$616
Performance dependent
Performance dependent
$1,055
(32%)
36
Directors’ report
Governance
Principles of remuneration for Executive KMP
1. Executive KMP should receive total remuneration at market rates for similar roles within the ASX A-REIT sector and ASX listed
companies of similar size (measured by market capitalisation), complexity, workload and relative financial metrics versus the
Group’s peers.
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 any of the Group’s AFSLs.
4. From 1 July 2018, the Committee implemented a Minimum Securityholding Requirement (MSR) for KMP (refer to page 49 for details
of KMP’s current holdings and details of the MSR).
5. Executive KMP’s participation under any incentive plan will be in accordance with the plan rules and grant terms from time to time
(refer to page 52 for further information).
Total Executive KMP remuneration (Take home basis)
The following table presents the actual remuneration received by Executive KMP during FY24. This voluntary disclosure is provided to
increase transparency and includes:
õ
Salary and other benefits received during FY24
õ
FY23 cash STI received during FY24, and
õ
The value of securities that vested during FY24 (being tranche 2 of the FY22 STI deferred equity and tranche 1 of the FY23 STI
deferred equity).
The actual remuneration presented in this table is distinct from the total Executive KMP remuneration (accounting basis) 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 FY24. These amounts can differ to the amounts actually received. The numbers in the
total Executive KMP remuneration (accounting basis) 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
benefits1
Cash
STI
Value of
deferred STI
rights
vested2
Value of
LTI rights
vested2
TOTAL
% of
remuneration
performance-
based
$
$
$
$
$
%
Ross Lees
– Chief Executive Officer and Managing Director
110,593
-
-
-
110,593
0%
Timothy Collyer – former Managing Director3
1,055,369
671,233
158,785
-
1,885,388
44%
Dion Andrews – Chief Financial Officer
616,255
275,526
59,013
-
950,795
35%
Michael Green – Chief Investment Officer
604,714
288,257
59,983
-
952,954
37%
Jacquee Jovanovski – Chief Operating Officer
528,773
207,205
48,404
-
784,382
33%
Total
2,915,085
1,442,221
326,186
-
4,683,493
38%
1 Salary and Other Benefits comprises base salary, superannuation, insurance arrangements and non-monetary benefits.
2 Based on market price at the time of vesting.
3. Timothy Collyer ceased being KMP from 20 May 2024, as such only his base remuneration until this date has been included, however the value of his deferred STI that vested
on 28 June 2024 has been provided.
37
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
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
benefits2
Super-
annuation
benefits
Long service
leave1
Sign on
awards
expense3
Deferred
STI Plan
expense
LTI Plan
expense
Total
S300A (1) (e) (i)
proportion of
remuneration
performance
related
$
$
$
$
$
$
$
$
$
$
%
Ross Lees – Chief Executive Officer and Managing Director
FY24
105,947
-
-
6,155
2,363
2,283
126
43,320
-
-
160,194
27%
FY23
-
-
-
-
-
-
-
-
-
-
-
-
Timothy Collyer – former Managing Director4
FY24
1,025,381
874,1715
9,298 (23,397)
5,776
24,212
27,460
- 119,372
(3,244) 2,059,030
49%
FY23
1,123,510
656,586
19,794
41,674
-
27,500
8,939
- 246,513
458,501 2,583,017
53%
Dion Andrews – Chief Financial Officer
FY24
588,755
287,678
4,465
15,101
-
27,500
17,088
-
73,517
55,408 1,069,512
39%
FY23
564,347
270,092
6,987
12,570
-
27,500
18,715
-
90,159
202,517 1,192,887
48%
Michael Green – Chief Investment Officer
FY24
577,235
302,317
4,594
23,912
-
27,479 (27,955)
-
76,091
60,359 1,044,031
42%
FY23
592,056
282,737
6,987
1,940
-
27,500
23,274
-
91,215
204,870 1,230,579
48%
Jacquee Jovanovski – Chief Operating Officer
FY24
501,273
226,628
3,534
(2,535)
-
27,500
10,895
-
58,556
48,384
874,234
39%
FY23
480,228
202,741
5,983
5,946
-
27,500
2,515
-
74,818
168,136
967,867
47%
Total
FY24
2,798,591
1,690,793
21,892
19,235
8,139
108,974
27,614
43,320 327,535
160,907 5,207,001
43%
FY23
2,760,141
1,412,156
39,751
62,130
-
110,000
53,443
- 502,705
1,034,024 5,974,350
50%
1. The accounting value of leave movements may be negative, for example, where an Executive KMP’s annual leave balance decreases as a result of taking more than the leave
they accrue during the current year.
2. Non-monetary benefits include wellbeing arrangements and car parking paid by the Group on behalf of the Executive KMP.
3. Ross Lees will participate in a one-off sign on award to replace forgone incentives with his previous employer. The award is conditional on Growthpoint receiving approval
from its Securityholders at the 2024 Annual General Meeting. The number of performance rights to be granted has been determined by dividing the $800,000 face value of
the sign on award, split into two equal tranches, by the 10-day volume weighted average price (VWAP) of Growthpoint stapled securities for the period immediately prior to
his start date of 20 May 2024, being $2.41. The first tranche of the award will vest into Growthpoint stapled securities on or around 20 May 2025 and 20 May 2026 in two
equal portions, subject to continued employment and behaviour consistent with the Group’s values and policies. The second tranche of the award will vest into Growthpoint
stapled securities on or around 20 May 2026, 20 May 2027, 20 May 2028 and 20 May 2029 in four equal portions, subject to continued employment and behaviour
consistent with the Group’s values and policies, as well as satisfactory development and execution of the Group’s strategy as agreed by the Board. The sign on awards
expense presented in the table records the fair value of the award expensed in the relevant financial year and does not represent actual awards that will vest to Ross Lees.
4. Timothy Collyer ceased being KMP from 20 May 2024, as such only his remuneration until this date has been included. His security-based payments expenses recorded in
the table include the impact of an expense acceleration following his service period reducing to his end date on 15 July 2024, as well as the impact of LTI Plan performance
rights lapsing on a pro-rata basis based on the relevant performance period served, which has contributed to the LTI Plan expense being negative.
5. The FY24 STI cash award of $874,171 represents 100% cash as determined by the Board as he retired and will not be an employee when the FY24 deferred STI
Performance Rights will be granted. The FY23 the STI Award was 80% cash and 20% deferred equity.
38
Directors’ report
Governance
FY24 short-term incentives (STI)
Performance criteria for Executive KMP STI for current year (FY24)
The STI provides Executive KMP with the opportunity to receive cash and equity1 based on a one-year performance period following an
assessment against specified financial and non-financial performance conditions. For FY24 the maximum STI opportunity for the former
Managing Director’s total fixed remuneration (TFR) was 117.5%, 94.0% for the Chief Investment Officer and Chief Financial Officer and
82.25% for the Chief Operating Officer. The Chief Executive Officer and Managing Director was not eligible for the FY24 STI given his
start date.
STI Plan and Performance Criteria
For each financial year the Committee, in consultation with the Chief Executive Officer and Managing Director2 and with assistance from
remuneration consultants if required, recommends to the Board the performance targets and reward levels for Executive KMP STIs in
respect of the relevant year. The STI criteria is then set by the Board.
For FY24, the STI was comprised of financial and non-financial criteria, namely;
a) Financial criteria – 60% of total
All of the Executive KMP were subject to the same financial criteria which was based upon achieving budgeted FFO per security (45%
of the 60% financial criteria component) and third-party funds under management (FUM) growth (15% of the 60% financial criteria
component), with the opportunity for outperformance of up to 129% of the FFO financial criteria component via a stretch target of
23.85 cps (4.8% ahead of budget) and up to 129% via a stretch target of $502 million of FUM growth (123% above budget target).
An FFO target range was chosen because it demonstrates the closest correlation to Securityholder value creation (measured by total
Securityholder return). A FUM growth target range was chosen as FUM growth is a key strategic growth area for the Group.
b) Non-financial criteria – 40% of total
The non-financial criteria for the Executive KMP were based upon measures relating to the performance criteria set by the Committee
and approved by the Board, with some common measures relating to leadership, strategic positioning, culture, ESG and customer and
criteria applicable to the Executive KMP’s individual role 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 for
implementing strategies to drive long term securityholder value.
The non-financial measures for the former Managing Director are set out in the table on pages 40-41.
STI assessment
The Committee undertakes a half year and end of financial year performance review of the Executive KMP’s achievement against the
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 the following financial year in which they were earned1.
The Board has ultimate discretion to apply judgement or make adjustments when approving the performance outcomes of the
Executive KMP’s STI award for FY24. Although the Group achieved an FFO of 23.9 cps in FY24 (a 129% achievement for the FFO
financial criteria component), the Board made a downward adjustment to this outcome, resulting in a 102% achievement for the FFO
financial criteria component.
1. As noted on page 35, the Board has determined that the former Managing Director will be paid his FY24 STI award in cash as he retired and will not be an employee when
the FY24 STI deferred equity will be granted (which is a requirement of the Growthpoint Employee Incentive Plan).
2. For the FY25 year and onwards. Prior to this, it was the former Managing Director.
39
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
The former Managing Director’s performance criteria, achievements and outcomes for his FY24 STI opportunity are reflected below.
Criteria
Weighting
Strategic objectives
Result
Performance detail
Financial
60%
45%
FFO per Security targets
set by the Board:
– 22.76 cps (budget) = 25%
achievement
– Increase to a maximum
of 129% (stretch target)
earned at 23.85 cps
45.7%
_ FFO budget exceeded: 23.9 cps.
_ 102% of financial component awarded post FFO downward
adjustment as per page 39.
15%
FUM growth targets set by
the Board:
– $225 million new FUM
(budget target) = 45%
achievement
– Increase to a maximum
of 129% (stretch target)
earned at $502 million new
FUM
0.0%
_ FUM target was not achieved.
Total
Financial
60%
45.7%
Non-
Financial
40%
Leadership, strategic positioning and culture
20%
– Smooth transition to
successor and embed a
positive team culture within
Growthpoint, measured
by employee engagement
survey results
– Strategic plan for the
positioning and growth of
the funds management
business
14.7%
_ Positive FY24 employee engagement score (conducted with the
Culture Amp platform) of 75%, compared to the Real Estate Australia
industry January 2024 benchmark of 70% and Growthpoint’s FY23
engagement score of 74%. Survey responses included 98% of
employees recommending Growthpoint as a great place to work and
88% of employees are proud to work for Growthpoint.
_ Successful planning and transition to the new Chief Executive Officer
and Managing Director.
_ Plan developed.
Environmental, Social and Governance (ESG)
5%
– Maintain high ESG ratings
measured against FY23
results for GRESB and
NABERS
5.0%
_ Maintained portfolio average NABERS Energy rating1 of 5.2 stars
(FY23: 5.2 stars) and maintained its ranking in the top 10 for Energy
in the NABERS Sustainable Portfolio Index 2024 (SPI) (6th place in
2024 and equal 7th in 2023).
_ Portfolio average NABERS Water rating2 slightly reduced to 4.9 stars
(FY23: 5.1 stars), however the Group maintained its SPI performance
of 4th (also 4th in 2023).
_ Continued improvement of our portfolio average NABERS Indoor
Environment rating3, which increased to 4.8 stars (FY23: 4.5 stars).
_ Growthpoint continued to see its strong performance reflected in
ESG benchmarks during FY24. Its GRESB score increased to 84
(FY23: 81), its highest achievement to date and maintained Overall
Regional Sector Leader – Diversified – Office/Industrial position for
three years in a row.
_ Growthpoint was also recognised for its sustainability performance
with inclusion in the Dow Jones Sustainability Index (DJSI) for the first
time.
1. 100% of eligible, owned on balance sheet office assets rated.
2. 100% of eligible, owned on balance sheet office assets rated. Recycled water not included.
3. 100% of eligible, owned on balance sheet office assets rated.
40
Directors’ report
Governance
Criteria
Weighting
Strategic objectives
Result
Performance detail
Environmental, Social and Governance (ESG) (cont)
5%
– Progress towards Net
Zero Target1 by 2025 and
develop strategies for post
2025
4.0%
_ Progress has been made with respect to the Group’s Net Zero
Target. Key actions have included increasing the quantity of offsite
renewable energy (GreenPower) to 50% coverage of our base
building electricity needs for our operationally controlled office
portfolio and completing six onsite solar installations across our office
portfolio.
_ Growthpoint has undertaken a gap analysis of our preparedness
to meet proposed mandatory climate-related disclosure standards,
called the Australian Sustainability Reporting Standards (ASRS). Key
actions commenced include undertaking an internal review of climate
governance and assessing risks associated with physical changes to
the climate.
Customer satisfaction
5%
– Maintain high levels of
customer satisfaction,
measured by reference to
FY23 tenant and investor
surveys
3.7%
_ Positive direct feedback and external survey results on the Group’s
engagement with tenants and investors.
_ Continued positive customer satisfaction results from our tenants,
with a score of 75 (FY23: 77) for balance sheet assets (scored out of
100) and 72 for funds managed assets (FY23: 71).
_ Positive landlord satisfaction result for balance sheet assets of 7.8
(out of 10) (FY23: 8) compared to 6.9 (FY23: 7.1) for the industry
benchmark.
_ Maintained industry leader ranking for landlord customer satisfaction
in office (first) and industrial (second) vs. a benchmarked peer group
for balance sheet assets for three years in a row.
_ Positive feedback on the Group’s performance and management
from direct investor and analyst meetings, asset tours and
conferences.
_ Positive results from externally conducted investor perception
study, with a slight reduction in the overall average score on prior
year but still maintained a favourable and higher score vs. a leading
peer company. Management Responsiveness and Accessibility,
Management Discussion and Analysis, Disclosure and Transparency
and Investment Attractiveness were the highest ranking categories in
the survey.
_ Strengthened digital engagement from FY23, with LinkedIn followers
up c.28%, engagement of c.14% and increased website traffic.
5%
– Level of re-investment
by existing clients in new
funds launched
1.0%
_ Reinvestment as part of fund extensions approved by unitholders.
Total non-
financial
40%
28.4%
For total results for the former Managing Director and other Executive
KMP, see table below.
Executive KMP financial and non-financial performance achievements were as follows:
Financial
Non-Financial
Total of target STI
opportunity
Total of maximum
STI opportunity
Weighting
60%
40%
100%
Timothy Collyer – former Managing Director
45.7%
28.4%
74.1%
63.1%
Dion Andrews – Chief Financial Officer
45.7%
28.4%
74.1%
63.1%
Michael Green – Chief Investment Officer
45.7%
28.7%
74.4%
63.4%
Jacquee Jovanovski – Chief Operating Officer
45.7%
32.1%
77.8%
66.3%
1. Net zero 2025 target across 100% owned on balance sheet operationally controlled office assets and corporate activities.
41
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
Results of FY24 STI
The table below shows the maximum in cash and STI Performance Rights that each Executive KMP could earn for FY24, and the
actual results achieved. The Chief Executive Officer and Managing Director was not eligible for the FY24 STI given his start date.
Maximum for FY24
Result for FY24
Names
Total
Cash
Short-term
Performance Rights1
Total
Cash
Short-term
Performance Rights1
$
$
$
No.
$
$
$
No.
Timothy Collyer – former Managing Director2
1,384,569 1,384,569
-
-
874,171
874,171
-
-
Dion Andrews – Chief Financial Officer
569,553
455,643
113,911
52,252
359,597
287,678
71,919
32,990
Michael Green – Chief Investment Officer
596,219
476,975
119,244
54,699
377,896
302,317
75,579
34,669
Jacquee Jovanovski – Chief Operating Officer
427,528
342,023
85,506
39,222
283,285
226,628
56,657
25,989
Total
2,977,870 2,659,209
318,660
146,173 1,894,949 1,690,793
204,156
93,648
FY24 long-term incentives (LTI)
The Group has had an Employee Incentives Plan (the Plan) in place for Executive KMP and certain other employees 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 for FY24 are set out below. Compared to the FY22 and FY23 LTI plans on foot, the relevant comparator group
for the FY24 LTI plan excludes Goodman Group due to its size and its global operations, with the remaining companies in the S&P/ASX
A-REIT 200 Accumulation Index predominantly with Australian operations.
The performance measurement periods for the FY22, FY23 and FY24 LTI plans are the three years to 30 June 2024, 30 June 2025 and
30 June 2026 respectively. For these plans, 100% of the maximum opportunity in the form of granted LTI Performance Rights may vest
into Growthpoint stapled securities subject to the performance measures being met. The performance measures for the FY24 LTI plan
are relative total securityholder return and relative return on equity, with the two, equally weighted:
1. The number of Short-term Incentive Performance Rights was derived by dividing the actual dollar value by the volume weighted average price (VWAP) of Growthpoint stapled
securities over the first 10 trading days in FY25, rounded down to the nearest whole Performance Right, being $2.18. The actual number of Short-term Incentive Performance
Rights earned by Executive KMP will be split into two equal tranches with the first tranche vesting into stapled securities on 30 June 2025 and the second tranche vesting on
30 June 2026, as long as the individual has not had their employment terminated for cause or submitted their resignation (other than for death, ill health or disability) prior to
conversion date.
2. The Board has determined that the former Managing Director will be paid his FY24 STI 100% in cash as he retired from the Group on 15 July 2024 and therefore he will not
be an employee when the FY24 STI deferred equity is granted (which is a requirement of the Growthpoint Employee Incentive Plan). Despite ceasing to be KMP on 20 May
2024, his cash STI payment due in August 2024 is disclosed.
42
Directors’ report
Governance
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 Index (excluding Goodman Group)1 over the
three-year performance 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
Below the 50th percentile
Nil
At the 50th percentile
50%
Between 50th and 75th percentile
Straight line pro rata vesting between 50% and 100% (i.e.
plus 2% for each percentile above the 50th percentile)
At or above 75th 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 Index (excluding Goodman
Group)1 over the three-year performance period as set out in the following vesting schedule:
Growthpoint Properties
Australia’s ROE
% of ROE component of
LTI Performance Rights that vest
Below benchmark return
Nil
Achievement of benchmark
50%
Between 1% and 2% above the bench-mark
Straight line pro rata vesting between 50% and 100%
At 2% or more above benchmark
100%
LTI Maximum
The maximum LTI opportunity for the FY24 financial year is 80% of TFR for the former Managing Director2 and 70% of TFR for the other
Executive KMP (other than the new Chief Executive Officer and Managing Director, who was not eligible for the FY24 LTI opportunity
given his start date).
LTI Minimum
The Committee may determine that no grant will be made under the LTI plan.
LTI Rights Granted
The number of LTI Performance Rights granted for the FY24 year is based on the VWAP of Growthpoint’s securities over the first 10
trading days of the three-year performance period (being $2.80) and rounded down to the nearest whole LTI Performance Right.
LTI Achievement
The LTI performance results and vesting outcomes, being the percentage of granted LTI Performance 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.
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.
2. Noting that the FY24 LTI Performance Rights and FY23 LTI Performance Rights granted to the former Managing Director were subsequently pro-rated lapsed, based on the
portion of the three-year performance period that he served.
43
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
The table below reports the LTI achievement outcomes for the FY21 LTI Plan, covering the performance period of 1 July 2020 to 30
June 2023, and the outcome for the TSR performance condition of the FY22 LTI Plan, covering the performance period of 1 July 2021
to 30 June 2024, noting that the ROE performance condition will be assessed once the required information for all the comparator
group members becomes available.
ROE Tranche
TSR Tranche
Plan
Growthpoint
Benchmark
Vesting outcome
Growthpoint
Percentile
Vesting outcome
FY21 LTI Plan
26.6%
39.9%
0.0%
6.6%
13.7%
0.0%
FY22 LTI Plan
TBD
TBD
TBD
(31.6%)
0.0%
0.0%
ASX Listing Rules
In accordance with ASX Listing Rule 10.14, the issue of any stapled securities or the granting of performance rights to the Chief
Executive Officer and Managing Director is subject to Securityholder approval.
FY24 LTI Plan details
The table below shows LTI grants made during the year for the FY24 LTI Plan, subject to performance conditions over the three-
year performance period ending 30 June 2026. 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. No performance
rights were granted to the current Chief Executive Officer and Managing Director during the year for the FY24 LTI Plan given his start
date.
Plan participants
LTI max as a % of
remuneration
Performance
measure
Number of performance
rights granted
Fair value per
performance right
Total estimated
fair value
%
No.
$
$
Timothy Collyer
– former Managing
Director1
TSR
167,670
0.550
92,219
ROE
167,670
1.883
315,723
Total
80
335,340
407,941
Dion Andrews
– Chief Financial Officer
TSR
75,803
0.550
41,692
ROE
75,803
1.883
142,737
Total
70
151,606
184,429
Michael Green
– Chief Investment Officer
TSR
79,352
0.550
43,644
ROE
79,352
1.883
149,420
Total
70
158,704
193,063
Jacquee Jovanovski
– Chief Operating Officer
TSR
65,029
0.550
35,766
ROE
65,029
1.883
122,450
Total
70
130,058
158,216
1. The former Managing Director is a good leaver for the purposes of the FY23 and FY24 LTI Plans. In accordance with the terms of that plan, the number of FY23 and FY24 LTI
Performance Rights granted to him were pro-rated to 110,043 following his cessation of employment, based on the portion of the three-year performance period he served.
These rights left on foot will be performance tested in the ordinary course.
44
Directors’ report
Governance
Key inputs used in valuing LTI Performance Rights were as follows:
Grant date
16-Nov-23
TSR performance start date
1-Jul-23
TSR expiry date
30-Jun-26
Share price at issue date
$2.35
Exercise price
–
Expected life (years)
2.8
Volatility
25%
Risk free interest rate
4.12%
Distribution yield
8.25%
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.
Details of Performance Rights that vested to Executive KMP in FY24
Plan identification
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 FY23
$
No.
$
%
Timothy Collyer – former Managing Director
FY23 Deferred STI Plan
50,311
23,185
N/A
50
FY22 Deferred STI Plan
108,474
49,988
N/A
50
FY21 LTI Plan2
-
N/A
0
Sub-total
158,785
73,173
N/A
Dion Andrews – Chief Financial Officer
FY23 Deferred STI Plan
20,695
9,537
N/A
50
FY22 Deferred STI Plan
38,318
17,658
N/A
50
FY21 LTI Plan2
-
-
N/A
0
Sub-total
59,013
27,195
N/A
Michael Green – Chief Investment Officer
FY23 Deferred STI Plan
21,665
9,984
N/A
50
FY22 Deferred STI Plan
38,318
17,658
N/A
50
FY21 LTI Plan2
-
-
N/A
0
Sub-total
59,983
27,642
N/A
Jacquee Jovanovski – Chief Operating Officer
FY23 Deferred STI Plan
15,535
7,159
N/A
50
FY22 Deferred STI Plan
32,869
15,147
N/A
50
FY21 LTI Plan2
-
-
N/A
0
Sub-total
48,404
22,306
N/A
Total
326,186
150,316
N/A
No performance rights vested to the current Chief Executive Officer and Managing Director during the year.
1 Actual value will depend upon the security price at the time of vesting.
2. Performance measurement period ended on 30 June 2023. Performance measures were not achieved and the Performance Rights have lapsed.
45
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
Movements in number of Performance Rights held by Executive KMP during FY24
STI performance rights
Plan participants
Balance at
1 July 2023
Rights
granted
Rights
lapsed
Rights
vested
Balance at
30 June 2024
No.
No.
No.
No.
No.
Ross Lees
– Chief Executive Officer and Managing Director
-
-
-
-
-
Timothy Collyer – former Managing Director
96,357
-
-
(73,173)
23,184
Dion Andrews – Chief Financial Officer
36,732
-
-
(27,195)
9,537
Michael Green – Chief Investment Officer
37,625
-
-
(27,642)
9,983
Jacquee Jovanovski – Chief Operating Officer
29,464
-
-
(22,306)
7,158
Total
200,178
-
-
(150,316)
49,862
LTI performance rights
Plan participants
Balance at
1 July 2023
Rights
granted
Rights
lapsed
Rights
vested
Balance at
30 June 2024
No.
No.
No.
No.
No.
Ross Lees
– Chief Executive Officer and Managing Director
-
-
-
-
-
Timothy Collyer – former Managing Director
714,893
335,340
(559,856)1
-
490,377
Dion Andrews – Chief Financial Officer
316,821
151,606
(106,382)
-
362,045
Michael Green – Chief Investment Officer
322,219
158,704
(106,382)
-
374,541
Jacquee Jovanovski – Chief Operating Officer
270,947
130,058
(90,425)
-
310,580
Total
1,624,880
775,708
(863,045)
-
1,537,543
FY25 Executive KMP incentive opportunities
STI opportunity
The structure for FY25 STI for Executive KMP will remain the same as FY24, split between financial measures (60%) (with a stretch
arrangement allowing for an opportunity of up to 129% of the financial component) and non-financial measures (40%).
The financial measures will be based on Group FFO per security targets and for funds management growth approved by the
Committee and Board for the financial year. The Chief Executive Officer and Managing Director’s FY25 target STI opportunity is 100%
of his FY25 TFR. With a stretch target, his maximum FY25 STI opportunity will be 117.5% of his FY25 TFR. The Chief Investment
Officer and Chief Financial Officer’s FY25 target STI opportunity is 80% of their FY25 TFR. With a stretch target, their maximum FY25
STI opportunity will be 94% of their FY25 TFR. The Chief Operating Officer’s FY25 target STI opportunity is 70% of her FY25 TFR. With
a stretch target, her maximum FY25 STI opportunity is 82.25% of her FY25 TFR.
The non-financial measures will be assessed across measures set by the Committee, with some common measures and others tailored
to each Executive KMP’s role and responsibilities, relating to:
õ
the execution of strategic priorities, innovation and process improvements;
õ
brand and leadership;
õ
people and culture;
õ
ESG; and
õ
Customer.
1. For the former Managing Director, 274,916 LTI performance rights for the FY23 and FY24 LTI plans have pro-rata lapsed based on the proportion of the respective three-year
performance periods served until his end date on the 15 July 2024. The remainder of his FY23 and FY24 LTI performance rights will stay on foot (as a good leaver under
those plans) and be tested after the end of the respective performance periods against the performance conditions set out in the original grant terms. The performance
rights for the FY22 LTI plan, for which the former Managing Director served the entire performance period, will remain on foot and be tested around October 2024 against
the performance conditions set out in the original grant terms. The outcome for the TSR performance condition of the FY22 LTI Plan is set out on page 44 and the ROE
performance condition will be assessed once the required information for all the comparator group members becomes available.
46
Directors’ report
Governance
An adjustment has been made to the terms of the FY25 STI, which will now be awarded as two thirds cash and one third deferred
equity which vest over a two-year period. For the FY24 year, it was 80 percent cash, 20 percent deferred equity.
The Board has ultimate discretion to apply judgement or make adjustments when approving the final performance outcomes.
LTI opportunity
Following the review to the remuneration framework, the Board has determined that the appropriate comparator group for the FY25 LTI
Plan is the S&P/ASX A-REIT 300 Index (excluding Goodman Group) following the Group becoming part of this Index from December
2023. The VWAP to be used to derive the number of Performance Rights to be granted under the FY25 LTI Plan will be the first 10
trading days after the FY25 full year results release (for the FY24 year, it was the first 10 trading days of that financial year). There are no
other changes proposed to the LTI structure or performance conditions for FY25.
Non-Executive Directors’ arrangements
There are currently seven Non-Executive Directors. An aggregate pool of $1,500,000 available for the remuneration of Non-Executive
Directors was approved by Securityholders at the Company’s Annual General Meeting in November 2022.
FY24 Remuneration paid and payable
The total remuneration paid to Non-Executive Directors for FY24 is listed on the following page.
Principles of remuneration for Non-Executive Directors
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 Chair 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 Chair 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. Directors must comply with a Minimum Securityholding Requirement (MSR) (refer to page 49 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 Chair, Non-Executive Directors may obtain independent advice at the Company’s cost.
47
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
FY24 Non-Executive Directors’ Remuneration
Short-term
Post-employment
Period
Fees
Committee
Fees
Superannuation
benefits
Total
$
$
$
$
Andrew Fay – Board Chair (appointed as Director
on 1 December 2022 and Chair on 1 March 2023)
FY24
211,180
–
23,230
234,410
FY23
97,839
5,301
10,829
113,969
Estienne de Klerk
(appointed 5 August 2009)
FY24
119,900
14,025
–
133,925
FY23
119,900
13,695
–
133,595
Grant Jackson
(retired 16 November 2023)
FY24
40,991
10,756
5,692
57,439
FY23
108,507
28,471
14,382
151,360
Deborah Page AM
(appointed 1 March 2021)
FY24
108,018
31,613
15,359
154,990
FY23
108,507
31,756
14,727
154,990
Norbert Sasse
(appointed 5 August 2009)
FY24
119,900
13,530
–
133,430
FY23
119,900
26,813
–
146,713
Josephine Sukkar AM
(appointed 1 October 2017)
FY24
108,018
19,225
13,997
141,240
FY23
108,507
14,011
12,865
135,383
Panico Theocharides
(appointed 1 April 2023)
FY24
119,900
14,960
–
134,860
FY23
29,975
3,740
–
33,715
Michelle Tierney
(appointed 1 April 2023)
FY24
108,018
22,396
14,346
144,760
FY23
27,127
5,624
3,439
36,190
Geoff Tomlinson – Chair
(retired 1 March 2023)
FY24
–
–
–
–
FY23
142,240
–
14,935
157,175
Francois Marais
(retired 17 November 2022)
FY24
–
–
–
–
FY23
49,958
5,638
–
55,596
Total
FY24
935,926
126,505
72,624
1,135,054
FY23
912,459
135,048
71,178
1,118,685
Non-Executive Directors’ FY24 remuneration
The fees for FY24 are set out below (unchanged from FY23).
Chair fee1
Member fee
Board
$234,410
$119,900
Audit, Risk & Compliance Committee
$25,190
$14,960
Nomination, Remuneration & HR Committee
$21,340
$13,530
Investment Committee
$16,500
$9,900
1 The Board Chair does not receive Committee fees.
48
Directors’ report
Governance
Executive and Non-Executive KMP shareholdings
A Minimum Securityholding Requirement (MSR) exists for Executive KMP and Non-Executive Directors who are required to meet the
MSR within four years from commencement of their employment or Directorship commencement, respectively1 and must maintain
compliance with the MSR as at end of each financial year thereafter. The MSR is as follows:
õ
Non-Executive Directors – 100% of their annual base Directors fees (and in respect of the Board Chair, equivalent to 100% of the
Chair’s annual base fee) in equivalent value of Growthpoint securities
õ
Chief Executive Officer and Managing Director – 100% of his annual TFR in equivalent value of Growthpoint securities, and
õ
Other Executive KMP – 50% of their annual TFR in equivalent value of Growthpoint securities.
For the purposes of determining compliance with the MSR, the value of Growthpoint securities is calculated at the higher of the
acquisition/issue price or the closing price of Growthpoint securities at the end of the relevant financial year, multiplied by the holding.
The Growthpoint securities that count towards meeting the MSR are:
õ
Growthpoint securities owned by the individual Executive KMP or Non-Executive Director, and their spouse and associated entities,
as defined in the Corporations Act 2001 (Cth); and
õ
Growthpoint securities owned through a company, trust or in a superannuation fund or otherwise held for the benefit of a person or
entity referred to above.
For the avoidance of doubt, unvested rights/options do not count towards meeting the MSR.
There is a restriction on the sale of Growthpoint securities until the MSR is met, unless otherwise approved by the Board Chair or
Committee Chair, which will not be unreasonably withheld where the disposal is requested to cover any tax liability which arises from
the vesting of performance rights and the subsequent issuing of Growthpoint stapled securities unless it would be in breach of the
Group’s Securities Trading Policy.
The table below provides holdings for Executive KMP and Non-Executive Directors during the year.
Name
Holding as at
30 June 2023
Holding at time
of becoming
KMP
Securities
granted as
compensation
Securities
acquired
Securities
disposed
Holding at time
of cessation of
KMP
Holding as at
30 June 20242
No.
No.
No.
No.
No
No.
Andrew Fay3
59,000
–
–
42,000
–
–
101,000
Estienne de Klerk
1,833,857
–
–
41,600
–
–
1,875,457
Grant Jackson3
190,087
–
–
–
–
190,087
–
Deborah Page AM3
33,050
–
–
–
–
–
33,050
Norbert Sasse
1,656,460
–
–
–
–
–
1,656,460
Josephine Sukkar AM
50,000
–
–
–
–
–
50,000
Panico Theocharides3
–
–
–
33,000
–
–
33,000
Michelle Tierney3
–
–
–
49,000
–
–
49,000
Ross Lees3
–
60,000
–
–
–
–
60,000
Timothy Collyer3
1,541,855
–
–4
67,000
–
1,608,855
–
Dion Andrews
274,160
–
27,195
–
–
–
301,355
Michael Green
209,130
–
27,642
–
–
–
236,772
Jacquee Jovanovski
90,319
–
22,306
–
–
–
112,625
The MSR was met by KMP who were required to do so as at 30 June 2024.
1. Executive KMP and Non-Executive Directors of Growthpoint as at 1 July 2018 had 4 years to meet the MSR.
2. For Executive KMP and Non-Executive Directors who are considered KMP as at 30 June 2024 only.
3. Not required to meet MSR as at 30 June 2024 as commenced employment or Directorship within the last four years, or ceased being KMP before 30 June 2024.
4. Timothy Collyer was granted 73,173 securities on vesting of performance rights under the FY22 Deferred STI Plan (tranche 2) and FY23 Deferred STI Plan (Tranche 1) on 28
June 2024, which was after he ceased being KMP on 20 May 2024.
49
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
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
Committee members
The members of the Committee during the year and as at the date of this Report are:
õ
Josephine Sukkar AM (Committee Chair) – Independent, Non-Executive Director
õ
Norbert Sasse – Non-Executive Director
õ
Andrew Fay – Independent, Non-Executive Director and Chair of the Board
Delegated authority
The Committee operates under delegated authority from the Board. The duties of the Committee in relation to remuneration are to:
1. Recommend, for adoption by the Board, a remuneration package for the Chair of the Board and the other Directors on a not less
than annual basis.
2. Recommend, for adoption by the Board, a remuneration package, including bonus incentives and related key performance
indicators, for the Group’s Executive Management Team both on appointment and on a not less than annual basis.
3. Review and approve, having regard to the most senior executive officer’s recommendations, the remuneration packages for other
Group employees on a not less than annual basis.
4. Approve, having regard to the most senior executive officer’s recommendations, the bonus pool for non-Executive Management
Team employees each year.
5. Make recommendations to the Board in relation to the introduction of, and amendments to, any employee share plan established
by the Group and the employees who will be eligible to participate in the plan.
Board of Directors: oversees remuneration
External
Advisors
Chief Executive Officer
and Managing Director
Nomination,
Remuneration
and HR committee
Advises on policy and
practices and makes
recommendation to
the board.
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.
Objectives:
Recommendations made to the Board using advice or benchmarking analysis from:
50
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 2024.
2024
2023
2022
2021
2020
(Loss) / Profit attributable to the owners of the Group
$m
(298.2)
(245.6)
459.2
553.2
272.1
Dividends and distributions paid
$m
145.5
162.6
160.6
154.4
168.2
Distribution per stapled security
$
0.193
0.214
0.208
0.200
0.218
Closing stapled security price
$
2.17
2.79
3.41
4.07
3.20
Change in stapled security price
$
(0.62)
(0.62)
(0.66)
0.87
(0.92)
Total Securityholder return1
%
(15.5)
(12.0)
(11.7)
34.0
(17.7)
Return on equity
%
(8.9)
(7.6)
14.3
19.7
10.8
Remuneration consultants
The Committee engages external consultants from time to time to provide benchmarking remuneration services in relation to Executive
KMP.
No remuneration recommendations were provided to the Committee by remuneration consultants in FY24.
Remuneration reviews
The Committee reviews the appropriate levels of remuneration for Executive KMP based on:
1. Remuneration surveys and trends.
2. Benchmarking against peers.
3. Recommendations from the Chief Executive Officer and Managing Director (excluding in relation to his own remuneration).
Executive Director Remuneration and Service Contract
There is currently only one Executive Director being the Chief Executive Officer and Managing Director, Ross Lees. Ross commenced
in this position and as a Director of the Company on 20 May 2024. Timothy Collyer, former Managing Director, retired from being a
Director of the Company effective 20 May 2024.
Remuneration paid and payable
The total remuneration paid or payable to the Chief Executive Officer and Managing Director for FY24 is listed on pages 36 to 38 of this
report.
Service contract
The Chief Executive Officer and Managing Director has a contract of employment dated 6 March 2024 with Growthpoint that specifies
the duties and obligations to be fulfilled by him in this role.
The Chief Executive Officer and Managing Director’s employment continues until terminated by either party on six months’ notice.
Growthpoint may then require the Chief Executive Officer and Managing Director to serve out the notice period or may elect to pay him
in lieu of working out some or all of the six months’ notice period. The Group may summarily terminate Mr Lees’ employment without
notice in certain circumstances (including serious misconduct).
On termination as Chief Executive Officer and 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.
Non-solicitation restraint provisions for a period of twelve months will also apply from the date of termination.
The Chief Executive Officer and Managing Director is 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.
1 Source UBS Investment Research.
51
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Remuneration report
The Chief Executive Officer and Managing Director’s employment arrangements also include an entitlement to participate in a one-off
grant of equity (sign on award) with a face value of $800,000 to compensate for the loss of incentive opportunities from his previous
employer. The sign on award will be granted in the form of performance rights under the Growthpoint Employee Incentive Plan rules
and is subject to Securityholder approval at its 2024 Annual General Meeting. The first tranche of the award (face value of $400,000)
will vest into Growthpoint stapled securities on or around 20 May 2025 and 20 May 2026 in two equal portions, subject to continued
employment and behaviour consistent with the Group’s values and policies. The second tranche of the award (face value of $400,000)
will vest into Growthpoint stapled securities on or around 20 May 2026, 20 May 2027, 20 May 2028 and 20 May 2029 in four equal
portions, subject to continued employment and behaviour consistent with the Group’s values and policies, as well as satisfactory
development and execution of the Group’s strategy as agreed by the Board.
Principles of remuneration for the Chief Executive Officer and Managing Director
The principles of remuneration for the Chief Executive Officer and Managing Director are included as part of the Executive KMP
principles listed on page 37.
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 from the date
of termination.
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 and STI performance rights issued to Executive KMP
(based on terms for the FY24 grants)
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 (good leaver)
If an Executive KMP’s employment ceases at any time for any other reason (including due to death, ill health, disability, retirement or
bona fide redundancy), a pro-rata of LTI 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 based on the portion of the relevant
performance period and remain subject to the terms of the offer of the performance rights, as though employment had not been
ceased. In the case of STI performance rights, all performance rights as at the date of cessation of employment will remain on foot
as though employment had not 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.
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).
52
Directors’ report
Governance
Non-Executive and Executive KMP Reviews
Non-Executive Director reviews
The performance of the Board and individual Directors is regularly considered by the Chair 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 Chair 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, capital markets/
investment banking, finance/accounting and governance. Refer to pages 24 to 25 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
overall level of property experience is not diminished. See Growthpoint’s Corporate Governance Statement which outlines the current
mix of skills represented on the Board, which includes extensive experience within the property industry.
Transitional services by the former Managing Director
The former Managing Director continued to provide transitional support services to the Chief Executive Officer and Managing Director
until his retirement date on 15 July 2024.
Executive KMP Reviews
The Chief Executive Officer and Managing Director’s performance will be formally considered annually by the Committee and based
on this formal assessment, the Committee will make remuneration recommendations to the Board. In making its assessment, the
Committee will consider, among other things, the Chief Executive Officer and Managing Director’s performance and any remuneration
benchmarking analysis it has obtained.
The Chief Executive Officer and Managing Director will review the performance of the other Executive KMP and make
recommendations to the Committee on their remuneration based, in part, on their performance and any remuneration benchmarking
analysis or remuneration survey information obtained.
Meetings of Directors (FY24)
All Non-Executive Directors have a standing invitation to attend all Board Committee meetings. The former Managing Director had, and
the current Chief Executive Officer and Managing Director has, a standing invitation to attend all Board Committee meetings unless
the members of the relevant Committee determined otherwise. The table below only reflects attendance of members of the Board
Committees.
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
A. Fay – Chair
7
7
–
–
6
6
–
–
R. Lees – Chief Executive Officer
and Managing Director1
1
1
–
–
–
–
–
–
T. Collyer – former Managing
Director2
6
6
–
–
–
–
–
–
E. de Klerk
7
7
–
–
–
–
–
–
G. Jackson3
3
3
2
2
–
–
–
–
D. Page AM
7
7
4
4
–
–
–
–
N. Sasse
7
7
–
–
6
6
–
–
J. Sukkar
7
7
–
–
6
6
–
–
P. Theocharides
7
7
4
4
–
–
–
–
M. Tierney
7
7
4
4
–
–
–
–
1. Appointed 20 May 2024.
2. Ceased being KMP 20 May 2024.
3. Retired 16 November 2023.
53
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Additional
information
Directors
The following persons were members
of the Board of Growthpoint Properties
Australia Limited (the Company) during
the whole of FY24 and up to the date of
this report, unless otherwise stated:
õ
Andrew Fay, Independent Chair
õ
Ross Lees, Chief Executive Officer and
Managing Director (appointed effective
20 May 2024)
õ
Timothy Collyer, Managing Director
(former) (retired effective 20 May 2024)
õ
Estienne de Klerk, Director
õ
Grant Jackson, Independent Director
(retired effective 16 November 2023)
õ
Deborah Page AM, Independent
Director
õ
Norbert Sasse, Director
õ
Josephine Sukkar AM, Independent
Director
õ
Panico Theocharides, Director
õ
Michelle Tierney, Independent Director
Details of each Director’s appointment,
qualifications and experience, together
with their recent directorships, are set
out on pages 24 to 25 of this report.
Information about their attendance at
Board and Board Committee meetings
held during FY24 is contained in the
Remuneration Report on page 53 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 26 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 23 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.
Non-Audit services
During the FY24 year EY, the Group’s
auditor, did not provide any non-audit
services to the Group. Accordingly, the
Board has considered this and is satisfied
that there has not been a compromise to
the general standards of independence
for auditors imposed by the Corporations
Act 2001 (Cth).
Details of the amounts paid to EY for
audit services provided during the year
are set out below:
FY24
FY23
$
$
Audit and review of
financial statements
391,700
392,000
Other regulatory
audit services
91,128
85,970
Other non-audit
services
–
105,000
Total paid to EY
482,828
582,970
Auditor’s independence
A copy of the auditor’s independence
declaration as required under section
307C of the Corporations Act 2001 (Cth)
is set out on page 102.
Subsequent events
There have been no 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 54 of this report except where
referenced elsewhere.
This report was approved in accordance
with a resolution of the Directors of
Growthpoint Properties Australia Limited.
Andrew Fay, Chair
Growthpoint Properties Australia
22 August 2024
54
Directors’ report
Governance
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 18, 101 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 22 August 2024.
References to ‘the year’ in this report refer to the year ended 30
June 2024 unless the context requires otherwise. References
to ‘balance date’ in this report refer to 30 June 2024 unless the
context requires otherwise.
Financial
Report
Financial Statements
Consolidated Statement of Comprehensive Income 56
Consolidated Statement of Financial Position
57
Consolidated Statement of Changes in Equity
58
Consolidated Statement of Cash Flows
59
Notes to the Financial Statements
Section 1: Basis of preparation, accounting
policies and other pronouncements
60
1.1 Basis of preparation
60
1.2 Material accounting policy information
61
1.3 Impact of new standards, amendments and
interpretations
61
Section 2: Operating results, assets and liabilities 62
2.1 Revenue and operating segment information
62
2.2 Investment properties
64
2.3 Investment in securities
71
2.4 Receivables and other assets
72
2.5 Trade and other liabilities
73
2.6 Cash flow information
74
2.7 Intangible assets
75
Section 3: Capital structure and financing
78
3.1 Interest bearing liabilities
78
3.2 Borrowing costs
79
3.3 Lease liabilities
80
3.4 Derivative financial instruments
80
3.5 Financial instruments fair value hierarchy
82
3.6 Financial risk management
82
3.7 Contributed equity and reserves
85
3.8 Distributions to Securityholders
85
3.9 Earnings per stapled security (EPS)
87
3.10 Share-based payment arrangements
87
Section 4: Other notes
89
4.1 Income tax
89
4.2 Key Management Personnel (KMP)
compensation
92
4.3 Related party transactions
94
4.4 Contingent liabilities
95
4.5 Commitments
95
4.6 Controlled entities
95
4.7 Parent entity disclosures
97
4.8 Remuneration of auditors
97
4.9 Subsequent events
97
Consolidated Entity Disclosure
Statement
98
Declarations / Reports
Directors’ declaration
99
Auditor’s independence declaration
100
Independent Auditor’s report
101
55
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Consolidated Statement of
Comprehensive Income
For the year ended 30 June 2024
Notes
2024
2023
$m
$m
Revenue and other income
Property revenue
2.1
313.7
325.3
Funds management revenue
2.1
8.0
7.6
Distributions from investments in securities
2.1
8.1
8.4
Interest income
2.6
1.4
Total revenue and other income
332.4
342.7
Expenses
Property expenses
2.1
(55.2)
(52.3)
Borrowing costs
3.2
(92.9)
(81.8)
Other expenses
(31.7)
(32.7)
Depreciation and amortisation expenses
(6.8)
(6.7)
Impairment of goodwill
2.7
(26.6)
(8.8)
Total expenses
(213.2)
(182.3)
Other gains/losses
Net loss in fair value of investment properties
2.2
(424.3)
(388.4)
Net gain/(loss) in fair value on sale of investment properties
4.4
(0.6)
Net gain/(loss) in fair value of investments in securities
2.3
11.5
(6.2)
Net loss in fair value of derivatives
3.4
(16.4)
(1.1)
Net gain/(loss) on exchange rate translation of interest-bearing liabilities
3.1
3.0
(14.8)
Net losses from other items
(421.8)
(411.1)
Loss before tax
(302.6)
(250.7)
Income tax benefit
4.1
4.4
5.1
Loss after tax
(298.2)
(245.6)
Other comprehensive income
-
-
Total comprehensive loss
(298.2)
(245.6)
Total comprehensive loss attributable to:
Owners of the Trust
(264.8)
(229.2)
Owners of the Company
(33.4)
(16.4)
Total comprehensive loss
(298.2)
(245.6)
Earnings per security attributable to securityholders of the Group:
Basic earnings per stapled security (cents)
3.9
(39.6)
(32.1)
Diluted earnings per stapled security (cents)
3.9
(39.6)
(32.1)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
56
Financial report
Consolidated Statement of
Financial Position
As at 30 June 2024
Notes
2024
2023
$m
$m
Current assets
Cash and cash equivalents
2.6
42.2
49.4
Receivables and other assets
2.4
16.3
10.8
Intangible assets
2.7
0.9
4.5
Derivative financial instruments
3.4
6.8
1.3
Current tax receivable
4.1
-
1.6
Total current assets
66.2
67.6
Non-current assets
Investment properties
2.2
4,503.7
4,917.2
Investment in securities
2.3
140.9
129.5
Derivative financial instruments
3.4
39.9
56.4
Right-of-use assets
2.5
3.0
Plant and equipment
2.2
2.8
Intangible assets
2.7
6.3
33.7
Deferred tax assets
4.1
3.2
0.6
Total non-current assets
4,698.7
5,143.2
Total assets
4,764.9
5,210.8
Current liabilities
Distribution payable to Securityholders
3.8
72.8
80.6
Trade and other liabilities
2.5
46.1
46.7
Current tax payable
4.1
0.7
-
Interest bearing liabilities
3.1
200.0
-
Lease liabilities
3.3
2.1
1.8
Deferred tax liabilities
4.1
-
3.5
Total current liabilities
321.7
132.6
Non-current liabilities
Interest bearing liabilities
3.1
1,723.8
1,918.7
Lease liabilities
3.3
104.6
105.2
Derivative financial instruments
3.4
3.1
-
Total non-current liabilities
1,831.5
2,023.9
Total liabilities
2,153.2
2,156.5
Net assets
2,611.7
3,054.3
Equity
Contributed equity
3.7
1,986.4
1,986.4
Reserves
16.9
15.8
Retained profits
608.4
1,052.1
Total equity
2,611.7
3,054.3
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
57
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Consolidated Statement of
Changes in Equity
For the year ended 30 June 2024
Attributable to unitholders of
the Trust (Parent entity)
Attributable to shareholders of the
Company (other stapled entity)
Notes
Contri-
buted
equity
Retained
profits
Total
Contri-
buted
equity
Reserves
Retained
profits
Total
Total
equity
$m
$m
$m
$m
$m
$m
$m
$m
Equity as at 30 June 2023
1,917.2
1,070.5
2,987.7
69.2
15.8
(18.4)
66.6
3,054.3
Loss after tax
-
(264.8)
(264.8)
(33.4)
(33.4)
(298.2)
Other comprehensive income
-
-
-
-
-
-
Total comprehensive loss
-
(264.8)
(264.8)
-
-
(33.4)
(33.4)
(298.2)
Transactions with Securityholders in
their capacity as Securityholders:
Distributions provided or paid
3.8
-
(145.5)
(145.5)
-
-
-
-
(145.5)
Share-based payment transactions
-
-
-
1.1
-
1.1
1.1
Total transactions with Securityholders
-
(145.5)
(145.5)
-
1.1
-
1.1
(144.4)
Equity as at 30 June 2024
1,917.2
660.2
2,577.4
69.2
16.9
(51.8)
34.3
2,611.7
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
Loss after tax
-
(229.2)
(229.2)
-
-
(16.4)
(16.4)
(245.6)
Other comprehensive income
-
-
-
-
-
-
-
-
Total comprehensive loss
-
(229.2)
(229.2)
-
-
(16.4)
(16.4)
(245.6)
Transactions with Securityholders in
their capacity as Securityholders:
Security buybacks
(58.8)
-
(58.8)
(1.3)
-
-
(1.3)
(60.1)
Distributions provided or paid
3.8
-
(162.6)
(162.6)
-
-
-
-
(162.6)
Share-based payment transactions
-
-
-
2.7
-
2.7
2.7
Total transactions with Securityholders
(58.8)
(162.6)
(221.4)
(1.3)
2.7
-
1.4
(220.0)
Equity as at 30 June 2023
1,917.2
1,070.5
2,987.7
69.2
15.8
(18.4)
66.6
3,054.3
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
58
Financial report
Consolidated Statement of
Cash Flows
For the year ended 30 June 2024
Notes
2024
2023
$m
$m
Cash flows from operating activities
Cash receipts from customers
331.1
367.5
Cash payments to suppliers
(118.9)
(123.2)
Distributions from investment in securities
8.1
8.3
Borrowing costs
(90.3)
(76.1)
Interest received
2.6
1.4
Income tax received/(paid)
1.3
(1.9)
Net cash flows from operating activities
2.6
133.9
176.0
Cash flows from investing activities
Receipts from sale of investment properties
38.2
128.7
Payments for investment properties
(27.4)
(190.6)
Payments for acquisition of business (net of cash acquired)
-
(49.7)
Loans to related parties
(3.6)
-
Other
-
(3.8)
Net cash flows from investing activities
7.2
(115.4)
Cash flows from financing activities
Proceeds from external borrowings
153.0
428.0
Repayments of external borrowings
(146.0)
(264.5)
Payments for securities buy back
-
(60.1)
Repayments of lease liabilities
(1.9)
(1.4)
Distributions to Securityholders
(153.4)
(162.4)
Net cash flows from financing activities
(148.3)
(60.4)
Net cash flows
(7.2)
0.2
Cash and cash equivalents at the beginning of the year
49.4
49.2
Cash and cash equivalents at the end of the year
42.2
49.4
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
59
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
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 2024. The Group is domiciled in Australia and its registered
address is Level 18, 101 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 $255.5 million as at 30 June 2024 (30 June 2023: $65.0 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. The Group has unutilised debt facilities
of $293.0 million (30 June 2023: $300.0 million) which can be drawn at short notice to meet its current obligations as they fall due.
The Group has sufficient working capital and cashflows in order to fund all requirements arising from the net current asset deficiency.
Accordingly, the Financial Report has been prepared on a going concern basis.
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 22 August 2024.
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, business combination variable consideration classified as trade and other liabilities, 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.
60
Financial report
Critical accounting estimates, assumptions and judgements
The preparation of financial statements in conformity with applicable accounting standards 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 2.7 – Intangible assets;
õ
Note 3.4 – Derivative financial instruments; and
õ
Note 3.5 – Financial instrument fair value hierarchy.
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 Material accounting policy information
Material accounting policy information applied by the Group in this financial report is 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 2024 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.
1.1 Basis of preparation (continued)
61
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FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
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.
The amount of revenue recognised in each period is based on the delivery of performance obligations and when control has been
transferred to customers in accordance with the principles set out in AASB 15. Where the Group enters into contracts with multiple service
components, judgement is applied to determine whether the components are:
i) distinct – accounted for as separate performance obligations;
ii) not distinct – combined with other promised services until a distinct bundle is identified; or
iii) part of a series of distinct services that are substantially the same and have the same pattern of transfer to the customer.
For each performance obligation identified, it is determined whether revenue is recognised at a point in time or over time.
Revenue is recognised over time if:
i) the customer simultaneously receives and consumes the benefits provided over the life of a contract as the services are performed;
ii) the customer controls the asset that the Group is creating or enhancing; or
iii) the Group’s performance does not create an asset with an alternative use to the Group and has an enforceable right to payment for
performance completed to date.
At contract inception, the Group estimates the consideration to which it expects to be entitled and has rights to receive under the
contract. Variable consideration, where the Group’s performance could result in further revenue, is only included to the extent that it is
highly probable that a significant reversal of revenue recognised will not occur. In assessing the amount of consideration to recognise,
key judgements and assumptions are made on a forward-looking basis where required. To the extent revenue has not been received at
reporting date, a receivable is recognised in the Consolidated Statement of Financial Position.
Fund management fees are received for performance obligations fulfilled over time with revenue recognised accordingly. Fund
management fees are determined in accordance with relevant agreements for each fund, generally based on the fund’s Gross Asset Value
(GAV) or loan amount for debt funds.
Accounting and Trustee fees are received for performance obligations fulfilled over time with revenue recognised accordingly, determined
in accordance with the relevant agreements for each fund.
Transaction fees and leasing fees are received for performance obligations fulfilled at a point in time with revenue recognised accordingly,
determined in accordance with the relevant agreements for each fund.
62
Financial report
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 three operating segments, namely industrial property investments, office property investments and funds management.
The primary measure of the Group’s property investment segments is net property income. The primary measure of performance of the
Group’s funds management segment is funds management revenue.
The Group’s FFO and operating segment results are reported monthly to the Group’s Chief Executive Officer and Managing Director, who
is the chief operating decision maker.
2024
2023
Industrial
Office
Total
Industrial
Office
Total
$m
$m
$m
$m
$m
$m
Segment items
Property rental income
85.2
175.3
260.5
82.7
190.4
273.1
Revenue from services to tenants
15.5
27.5
43.0
14.9
24.7
39.6
Property revenue, excluding straight line lease adjustment
100.7
202.8
303.5
97.6
215.1
312.7
Property expenses1
(5.8)
(2.2)
(8.0)
(5.5)
(3.2)
(8.7)
Expense from services to tenants2
(17.4)
(36.5)
(53.9)
(15.0)
(33.1)
(48.1)
Net property income
77.5
164.1
241.6
77.1
178.8
255.9
Funds management revenue
8.0
7.6
Total segment revenue
249.6
263.5
Unallocated items – FFO adjustments
Amortisation of incentives and leasing costs
40.0
39.3
Other expenses3
(32.3)
(30.1)
Distributions from investment in securities
8.1
8.4
Borrowing costs net of interest income4
(86.2)
(76.4)
FFO income tax benefit5
1.2
0.1
FFO
180.4
204.8
Distributions
145.5
162.6
Weighted average securities on issue (m)
753.9
764.4
FFO per stapled security (cents)
23.9
26.8
Distribution per stapled security (cents)
19.3
21.4
1. Property expenses in FFO include $6.7 million (2023: $4.5 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 $10.9 million (2023: $8.5 million) that was not recoverable under the terms of certain leases.
3. Other expenses in FFO of $32.5 million (2023: $30.1 million) excludes $0.4 million (2023: $2.8 million) in discontinued and non-FFO project costs and $0.1 million (2023: $0.6
million) expensed for the Fortius Funds Management acquisition related retention rights, and includes $0.9 million (2023: $0.8 million) rent payments for the Group’s head
offices at 101 Collins St, Melbourne and 88 Phillip St, Sydney 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 $2.6 million (2023: $1.4 million) interest income and exclude the $4.0 million (2023: $4.0 million) interest expense
associated with ground lease liabilities which is included on the Consolidated Statement of Comprehensive Income.
5. FFO income tax benefit of $1.2 million excludes $2.2 million of non-operating tax expenses.
2.1 Revenue and operating segment information (continued)
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FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Reconciliation of loss after tax to FFO
2024
2023
$m
$m
Loss after tax
(298.2)
(245.6)
Adjustments for non-FFO items
- Straight line adjustment to property revenue
(10.2)
(12.6)
- Net loss in fair value of investment properties
424.3
388.4
- Net (gain)/loss in fair value of investment in securities
(11.5)
6.2
- Net loss in fair value of derivatives
16.4
1.1
- Net (gain)/loss on exchange rate translation of interest-bearing liabilities
(3.0)
14.8
- Amortisation of incentives and leasing costs
40.0
39.3
- Amortisation of intangible assets
1.1
1.7
- Goodwill impairment
26.6
8.8
- Deferred tax benefit
(5.4)
(5.1)
- Other
0.3
7.8
FFO
180.4
204.8
Reconciliation of total property revenue per segment note to revenue per Consolidated Statement of
Comprehensive Income
2024
2023
$m
$m
Property revenue from segments
303.5
312.7
- Straight line adjustment to property revenue
10.2
12.6
Property revenue as reported on the Consolidated Statement of Comprehensive Income
313.7
325.3
Major customer
Revenues from Woolworths Group Limited, in the Group’s industrial segment represents $37.4 million or 12.3% (2023: $35.7 million or
11.4%) of the Group’s property revenue from segments.
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.
2.1 Revenue and operating segment information (continued)
64
Financial report
Determination of fair value
The fair value of the investment properties is determined either by Directors’ valuations or a valuation performed by an external,
independent valuer, with recognised professional qualifications and recent experience in the location and category of property being
valued. 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
2024
2023
$m
$m
$m
Victoria
3 Maker Place
Truganina
VIC
30-Jun-24
62.3
62.3
66.5
9-21 Kimpton Way
Altona
VIC
30-Jun-24
59.5
59.5
60.0
Lots 2, 3 & 4, 34-44 Raglan Street
Preston
VIC
31-Dec-23
58.0
58.5
54.3
1500 Ferntree Gully Road & 8 Henderson Road
Knoxfield
VIC
31-Dec-23
59.1
57.2
60.0
40 Annandale Road1
Melbourne Airport
VIC
30-Jun-24
42.5
42.5
44.4
120-132 Atlantic Drive
Keysborough
VIC
30-Jun-24
40.8
40.8
45.5
130 Sharps Road1
Melbourne Airport
VIC
30-Jun-24
28.7
28.7
27.4
20 Southern Court
Keysborough
VIC
31-Dec-23
28.2
27.5
29.3
120 Link Road1
Melbourne Airport
VIC
30-Jun-24
25.0
25.0
28.7
31 Garden Street
Kilsyth
VIC
30-Jun-24
21.7
21.7
22.0
6 Kingston Park Court
Knoxfield
VIC
30-Jun-24
19.5
19.5
18.8
3 Millennium Court
Knoxfield
VIC
30-Jun-24
19.4
19.4
19.8
19 Southern Court
Keysborough
VIC
31-Dec-23
15.2
15.1
16.1
101-111 South Centre Road1
Melbourne Airport
VIC
30-Jun-24
14.1
14.1
15.5
60 Annandale Road1
Melbourne Airport
VIC
30-Jun-24
14.1
14.1
15.0
75 Annandale Road1
Melbourne Airport
VIC
30-Jun-24
10.3
10.3
12.1
Queensland
70 Distribution Street
Larapinta
QLD
31-Dec-23
255.0
255.0
255.0
13 Business Street
Yatala
QLD
31-Dec-23
19.0
19.0
18.6
5 & 7a Viola Place1
Brisbane Airport
QLD
31-Dec-23
13.5
13.0
13.4
3 Viola Place1
Brisbane Airport
QLD
31-Dec-23
4.1
3.9
4.2
Western Australia
20 Colquhoun Road
Perth Airport
WA
30-Jun-24
225.0
225.0
216.0
58 Tarlton Crescent
Perth Airport
WA
30-Jun-24
24.5
24.5
20.8
2 Hugh Edwards Drive
Perth Airport
WA
30-Jun-24
23.3
23.3
24.3
10 Hugh Edwards Drive
Perth Airport
WA
30-Jun-24
13.5
13.5
14.0
36 Tarlton Crescent
Perth Airport
WA
30-Jun-24
11.3
11.3
11.3
1. Held under leasehold; right-of-use asset recognised on ground lease.
2.2 Investment properties (continued)
65
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Latest external valuation
Carrying amounts
Industrial properties
Date
Valuation
2024
2023
$m
$m
$m
New South Wales
27-49 Lenore Drive
Erskine Park
NSW
31-Dec-23
112.5
112.0
107.5
6-7 John Morphett Place
Erskine Park
NSW
30-Jun-24
84.0
84.0
82.8
51-65 Lenore Drive
Erskine Park
NSW
31-Dec-23
46.3
45.0
46.5
34 Reddalls Road
Kembla Grange
NSW
30-Jun-24
36.0
36.0
38.5
81 Derby Street
Silverwater
NSW
31-Dec-23
33.0
33.0
32.8
South Australia
599 Main North Road
Gepps Cross
SA
31-Dec-23
200.0
192.0
216.0
1-3 Pope Court1
Beverley
SA
N/A
N/A
N/A
30.5
12-16 Butler Boulevard2
Adelaide Airport
SA
31-Dec-23
23.9
22.6
23.7
10 Butler Boulevard2
Adelaide Airport
SA
31-Dec-23
12.6
13.2
12.4
Total industrial properties
1,655.8
1,642.4
1,703.5
Latest external valuation
Carrying amounts
Office properties
Date
Valuation
2024
2023
$m
$m
$m
Victoria
75 Dorcas Street
South Melbourne
VIC
30-Jun-24
241.0
241.0
275.0
Building 3, 570 Swan Street
Richmond
VIC
30-Jun-24
165.0
165.0
190.0
165-169 Thomas Street
Dandenong
VIC
31-Dec-23
143.0
140.0
153.5
Building 2, 572-576 Swan Street
Richmond
VIC
30-Jun-24
108.0
108.0
125.0
109 Burwood Road
Hawthorn
VIC
30-Jun-24
108.0
108.0
116.5
141 Camberwell Road
Hawthorn East
VIC
31-Dec-23
102.0
99.5
111.0
Building B, 211 Wellington Road
Mulgrave
VIC
30-Jun-24
67.0
67.0
80.0
Building 1, 572-576 Swan Street
Richmond
VIC
30-Jun-24
65.7
65.7
72.0
Building C, 211 Wellington Road
Mulgrave
VIC
30-Jun-24
44.2
44.2
53.0
Car Park, 572-576 Swan Street
Richmond
VIC
31-Dec-23
0.5
0.5
0.7
Queensland
100 Skyring Terrace
Newstead
QLD
30-Jun-24
212.0
212.0
227.5
15 Green Square Close
Fortitude Valley
QLD
31-Dec-23
122.5
120.0
130.0
104 Melbourne Street
South Brisbane
QLD
31-Dec-23
80.8
84.5
86.5
32 Cordelia Street
South Brisbane
QLD
31-Dec-23
77.0
73.5
80.5
52 Merivale Street
South Brisbane
QLD
30-Jun-24
68.0
68.0
73.0
100 Melbourne Street
South Brisbane
QLD
30-Jun-24
42.5
42.5
51.5
Car Park, 32 Cordelia Street & 52 Merivale Street South Brisbane
QLD
30-Jun-24
27.5
27.5
35.8
South Australia
33-39 Richmond Road
Keswick
SA
30-Jun-24
57.5
57.5
71.0
1. Divested in October 2023.
2. Held under leasehold; right-of-use asset recognised on ground lease.
2.2 Investment properties (continued)
66
Financial report
Latest external valuation
Carrying amounts
Office properties
Date
Valuation
2024
2023
$m
$m
$m
New South Wales
1 Charles Street
Parramatta
NSW
30-Jun-24
440.0
440.0
500.0
4 Broadcast Way
Artarmon
NSW
30-Jun-24
121.0
121.0
142.0
3 Murray Rose Avenue
Sydney Olympic Park NSW
30-Jun-24
86.5
86.5
98.4
5 Murray Rose Avenue
Sydney Olympic Park NSW
30-Jun-24
67.0
67.0
81.6
11 Murray Rose Avenue
Sydney Olympic Park NSW
30-Jun-24
40.0
40.0
49.0
Australian Capital Territory
10-12 Mort Street
Canberra
ACT
30-Jun-24
82.5
82.5
74.0
2-6 Bowes Street
Canberra
ACT
30-Jun-24
67.8
67.8
79.0
255 London Circuit
Canberra
ACT
30-Jun-24
60.5
60.5
74.5
Western Australia
836 Wellington Road
West Perth
WA
30-Jun-24
83.5
83.5
92.0
Total office properties
2,781.0
2,773.2
3,122.7
Total portfolio at fair value
4,436.7
4,415.5
4,826.2
Ground leases as right-of-use assets
88.2
91.0
Total investment properties carrying amount
4,503.7
4,917.2
Valuation process
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 property 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
External valuation firms and or valuers may undertake valuations of an investment property for no more than two consecutive years;
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 2024, 38 investment properties representing approximately 69% (by value) of the portfolio were independently valued by
external valuers at eight valuation firms being JLL, Savills, Knight Frank, m3property, CBRE, Cushman & Wakefield, Colliers and Urbis. Fair
values for the remaining 19 investment properties were based solely on Directors’ internal valuations.
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.
2.2 Investment properties (continued)
67
Growthpoint Properties Australia
FY24 Annual Report
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Operating and
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Additional
information
Governance
Notes to the Financial Statements
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
2024
2023
Discount rate
6.8%-7.8%
6.0%-7.3%
Terminal yield
5.4%-11.6%
4.8%-11.0%
Capitalisation rate
5.3%-8.2%
4.5%-7.5%
Expected vacancy period
4-12 months
5-10 months
Rental growth rate
2.6%-3.9%
2.8%-3.9%
Office
2024
2023
Discount rate
6.6%-8.0%
5.8%-7.3%
Terminal yield
5.5%-8.0%
4.9%-7.1%
Capitalisation rate
5.0%-7.8%
4.3%-6.8%
Expected vacancy period
6-12 months
6-18 months
Rental growth rate
2.6%-3.6%
2.5%-3.7%
Discount Rates
As shown in the below table, over the twelve months to 30 June 2024 discount rates utilised in the valuation of the Group’s property
portfolio increased by approximately 79 basis points. Over the same time period, the implied property risk premium increased by
approximately 51 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 increase in the implied property risk premium is largely due to discount rates expanding at
a greater rate relative to 10-year Australian Government bond yields.
2024
2023
10-year Australian Government bond rate
4.31%
4.03%
Implied property risk premium
2.87%
2.36%
Weighted average 10-year discount rate used to value the Group’s properties
7.18%
6.39%
Capitalisation Rates1
Office
A total of $8.2 billion of office investment sales were recorded nationally over the year to 30 June 2024 (1H $3.7 billion, 2H $4.5 billion)
compared to $9.5 billion in FY23. Notably, more than 40% of transactions ($3.5 billion) occurred in the last quarter of FY24, representing
the highest quarterly level since 2022. After several quarters of price discovery, buyer and seller expectations are more closely aligned
leading to an increase in market activity. Notable transactions completed in Q4 include: 5 Martin Place Sydney, 367 Collins Street
Melbourne, and 240 Queen Street Brisbane. Sales that occurred within the Group’s markets, particularly those within the last quarter,
provide reasonable guidance for the Group’s office properties and revealed market capitalisation rate expansion. The weighted average
capitalisation rate used to value the Group’s office portfolio softened (increased) 81 basis points to 6.47% over the 12 months to 30 June
2024.
1. Transaction volume figures sourced from Cushman & Wakefield.
2.2 Investment properties (continued)
68
Financial report
Industrial
A total of $7.0 billion of industrial investment sales were recorded nationally over the year to 30 June 2024 (1H $3.5 billion, 2H $3.5 billion)
compared to $5.7 billion in FY23. The last quarter of the year saw an increase in sales volume with approximately 37% of total sales
occurring (by value), aided by larger portfolio deals. Investors remain attracted to the sector given tight vacancy and above average rental
growth. Notable transactions completed in Q4 include: a 12-asset Eastern seaboard portfolio for $780 million and the sale of a large unit
estate in Sydney’s outer north for circa $102 million. Sales that occurred within the Group’s markets, particularly those within the last
quarter, provide reasonable guidance for the Group’s industrial properties and revealed market capitalisation rate expansion. The weighted
average capitalisation rate used to value the Group’s industrial portfolio softened (increased) 61 basis points to 6.00% over the 12 months
to 30 June 2024.
Estimation of fair value
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:
Valuation input value
Impact on fair values
Key valuation
input
Description
Jun-24
Jun-23
Increase
in the input
Decrease in
the input
Market
capitalisation
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.
6.3%
5.6%
Decrease
Increase
Net market rent
(per sqm)
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.
$287
$271
Increase
Decrease
Discount rate
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.
7.2%
6.4%
Decrease
Increase
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 within the DCF method.
6.7%
6.0%
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.
2.2 Investment properties (continued)
69
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FY24 Annual Report
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Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Contractual obligations
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 2024, $4.6 million of refurbishment works had been carried out, leaving
a balance of $1.4 million which is held as restricted cash (refer note 2.6). As part of the lease arrangements with the tenant in 2020, 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. As at 30 June 2024, the Group has made $16.9 million of contributions, leaving a balance of $27.1 million. To the extent the tenant
does not utilise the balance on these works, it will be provided as a rent abatement spread over the remaining lease term which ends in
2044.
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:
2024
2023
$m
$m
Within one year
263.4
263.8
Later than one year but not later than five years
737.4
771.4
Later than five years
908.2
1,003.6
1,909.0
2,038.8
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
2024
2023
$m
$m
Opening balance
4,917.2
5,233.1
Acquisitions and expansion capital expenditure
-
181.8
Maintenance capital expenditure
30.4
22.1
Lease incentives and leasing costs
42.6
29.5
Amortisation of lease incentives and leasing costs
(40.0)
(39.3)
Disposals
(29.6)
(130.4)
Straight-lining of revenue adjustment
10.2
12.6
Net movement in ground leases as leasehold asset
(2.8)
(3.8)
Net loss from fair value adjustments
(424.3)
(388.4)
Closing balance
4,503.7
4,917.2
2.2 Investment properties (continued)
70
Financial report
2.3 Investment in securities
The Group’s investments in securities consists of minority equity interests in listed Dexus Industria REIT and co-investments in the Group’s
managed property funds. Financial assets are initially recognised at cost, excluding transaction costs. Transaction costs are expensed
as incurred in the Consolidated Statement of Comprehensive Income. Financial assets are subsequently measured at fair value with any
realised or unrealised gains being recognised in the Consolidated Statement of Comprehensive Income in the period in which they arise.
Accounted for at fair value through profit and loss
2024
2023
$m
$m
Listed
Dexus Industria REIT1
138.3
126.5
Unlisted
Co-investments in the Group’s managed property funds2
2.6
3.0
Closing Balance
140.9
129.5
Movement in investment securities’ carrying amounts
The following table represents the fair value movement in investments in securities for the year ended 30 June 2024.
2024
2023
$m
$m
Opening balance
129.5
132.4
Acquisitions
-
4.4
Disposals
(0.1)
(1.1)
Gain/(loss) in fair value
11.5
(6.2)
Closing balance
140.9
129.5
Determination of fair value
Listed investments comprise the investment in Dexus Industria REIT (ASX: DXI). Fair value is at the last traded market price on the ASX as
at the reporting date. The Dexus Industria REIT investment has been classified as Level 1 in the fair value hierarchy as the inputs used to
determine fair value are quoted prices (unadjusted) in active markets for identical assets.
Unlisted investments comprise investments in unlisted property fund securities. They have been designated on initial recognition to be
treated at fair value through profit or loss. Movements in fair value during the period have been recognised in the consolidated statement
of comprehensive income. These assets have been acquired with the intention of being long-term investments. Where the assets in this
category are expected to be sold within 12 months, they are classified as current assets; otherwise they are classified as non-current.
The carrying amount of investments in securities held at fair value through profit and loss, which are investments in unlisted securities,
is determined by reference to the corresponding balance date unit price of the fund, which represents the net asset value attributable to
each unit. The net asset values are largely driven by the fair values of investment properties held by the funds. Each property is externally
valued at least annually. Recent arm’s length comparable transactions, if any, are taken into consideration. A change in the fair value of
investment properties results in a corresponding change in the fund’s unit price. The investments in unlisted funds have been classified as
Level 3 in the fair value hierarchy as the inputs for the assets are not based on observable market data.
1. Fair value is at the last traded market price on the Australian Securities Exchange (ASX) as at the reporting date, which as at 30 June 2024 was $2.82 (30 June 2023: $2.58).
2. The fair value per security is the unit price for each fund, representing net asset value per unit as at 30 June 2024.
71
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Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Movement in investment in securities Level 3 fair value amounts
2024
2023
$m
$m
Opening balance
3.0
-
Additions (including from acquisition of business)
-
4.1
Disposals
(0.1)
(0.9)
Net movement from fair value adjustments
(0.3)
(0.2)
Closing balance
2.6
3.0
2.4 Receivables and other assets
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.
As at 30 June 2024, the Group had $6.7 million in property revenue receivables outstanding (30 June 2023: $1.1 million).
Of the current property revenue receivables balance $2.1 million was more than 30 days past its due date (30 June 2023: $0.8 million).
As at 30 June 2024, the Group maintained $0.1 million allowance for ECL (30 June 2023: $0.2 million). During FY24, the Group incurred
negligible credit losses (30 June 2023: $0.0 million).
Receivables and other assets are presented as follows:
2024
2023
$m
$m
Current
Property revenue receivables
6.8
1.3
Allowance for expected credit losses
(0.1)
(0.2)
Divested investment property retention receivable
-
3.5
Distribution receivables
2.0
2.0
Prepayments
4.0
3.6
Related party receivable
3.6
-
Contract asset receivables – performance fees
-
0.6
Total current receivables and other assets
16.3
10.8
2.3 Investment in securities (continued)
72
Financial report
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. Business combination variable consideration is
measured at the date of acquisition and re-measured in line with the business combination accounting policy.
Trade and other liabilities are presented as follows:
2024
2023
$m
$m
Current
Trade payables
1.4
1.9
Employee entitlements
2.2
2.7
GST payable
2.5
2.4
Accrued expenses
24.1
17.5
Unearned income
15.9
18.4
Other liability
-
1.1
Business combination variable consideration – performance fees
-
2.7
Total current trade and other liabilities
46.1
46.7
Determination of fair value
Performance fee earn-out liabilities are classified as variable consideration in the business combination. They have been designated on
initial recognition to be treated at fair value through profit or loss. Movements in fair value during the period have been recognised in the
Consolidated Statement of Comprehensive Income.
The fair value of the business combination variable consideration is classified as Level 3 in the fair value hierarchy based on the significant
unobservable inputs into the valuation techniques used.
Key valuation inputs
The key inputs used to measure fair value of the business combination variable consideration held at fair value are disclosed below, along
with the directional impact an increase and decrease in the input has on fair values:
Impact on earn out
liability fair values
Key valuation
input
Description
Increase
in the input
Decrease in
the input
Current property
valuation
The fund’s current property valuation, used as proxy for the sale price at
expected exit date of the fund in the valuation cash flow, has a significant
influence on the performance fee outcome.
Increase
Decrease
Forecast fund
distributions
The forecast cashflow from fund distributions through to the expected exit
date of the fund, reflecting the net income of the fund, primarily net property
income from the underlying property, offset by borrowing costs and any fund
level expenses.
Increase
Decrease
Discount rate
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 comparable
acquisition fair value assessments. Includes additional risk premium to allow
for volatility in property valuations and capitalisation rates over the remainder
of each fund’s expected term.
Decrease
Increase
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Operating and
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Additional
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Governance
Notes to the Financial Statements
Movement in business combination variable consideration fair value amounts
2024
2023
$m
$m
Opening balance
2.7
-
Business combination variable consideration
-
4.1
Additional consideration corresponding to contract asset receivable
-
0.6
Fair value adjustments
(2.7)
(2.0)
Closing balance
-
2.7
2.6 Cash flow information
Reconciliation of loss after tax to net cash inflow from operating activities
2024
2023
$m
$m
Loss after tax
(298.2)
(245.6)
Net loss in fair value of investment properties
424.3
388.4
Net (gain)/loss on exchange rate translation of interest-bearing liabilities
(3.0)
14.8
Net (gain)/loss in fair value on sale of investment properties
(4.4)
0.6
Net (gain)/loss in fair value of investment in securities
(11.5)
6.2
Net loss in fair value of derivatives
16.4
1.1
Amortisation of borrowing costs
2.4
2.1
Depreciation of right of use assets
4.8
4.5
Depreciation of plant and equipment
0.8
0.6
Share based payments expense
1.1
2.7
Amortisation of intangible assets
1.1
1.7
Impairment of goodwill
26.6
8.8
Change in operating assets and liabilities:
- (Increase)/decrease in lease incentives and leasing costs
(2.8)
10.0
- Increase in receivables
(17.0)
(11.0)
- (Increase)/decrease in prepayments
(3.1)
1.6
- Decrease in net deferred tax liabilities
(5.0)
(5.4)
- Increase/(decrease) in payables
1.4
(5.1)
Net cash inflow from operating activities
133.9
176.0
The Group held $1.4 million of restricted cash in trust as at 30 June 2024 (30 June 2023: $3.0 million) in relation to its role as custodian of
the Charles Street Property Trust and these funds are not available for general use by the Group.
2.5 Trade and other liabilities (continued)
74
Financial report
2.7 Intangible assets
Management rights
Management rights – base fees
Intangible assets that are acquired by the Group and have finite useful lives, are initially measured at fair value and then subsequently
measured at initial value less accumulated amortisation and any accumulated impairment losses. Management rights – base fees are
classified as current where the funds are expected to crystallise within 12 months.
Management rights – performance fees
Intangible assets acquired by the Group, for which there is a contractual obligation to forward any performance fee earned on existing
funds during their current terms to the previous vendors net of income tax, have finite useful lives and are measured at fair value less
any accumulated impairment losses. Management rights – performance fees are classified as current where the funds are expected to
crystallise within 12 months.
Amortisation is calculated to expense the cost of intangible assets using the straight-line method over their estimated useful lives and is
generally recognised in profit or loss. The estimated useful lives are calculated in line with the expected exit dates of each respective fund,
which range from acquisition date through to April 2027. Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if not appropriate.
Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
At each reporting date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication of
impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or cash generating units (CGUs). Goodwill arising from a business combination
is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal (if measurable). Value
in use is based on the estimated future cash flows, discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss. They are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
Intangible assets are presented as follows:
2024
2023
$m
$m
Current
Management rights – base fees
0.9
1.2
Management rights – performance fees
-
3.3
Total current intangible assets
0.9
4.5
Non-current
Management rights – base fees
0.7
1.5
Goodwill
5.6
32.2
Total non-current intangible assets
6.3
33.7
75
Growthpoint Properties Australia
FY24 Annual Report
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Operating and
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Additional
information
Governance
Notes to the Financial Statements
The following table represents the movement in intangible assets for the year ended 30 June 2024:
2024
2023
$m
$m
Management rights – base fees
Opening balance
2.7
-
Acquisition through business combination
-
4.4
Amortisation
(1.1)
(1.7)
Closing balance
1.6
2.7
Management rights – performance fees
Opening balance
3.3
-
Acquisition through business combination
-
5.9
Impairment1
(3.3)
(2.6)
Closing balance
-
3.3
Goodwill
Opening balance
32.2
-
Acquisition through business combination
-
41.0
Impairment
(26.6)
(8.8)
Closing balance
5.6
32.2
Funds Management CGU – goodwill impairment assessment
Goodwill was attributed to the Group’s Funds Management business as a single CGU. The goodwill carrying amount was tested for
impairment as at 30 June 2024.
The carrying amount of assets attributable to the Funds Management CGU comprised goodwill of $32.2 million, management rights –
base fees of $1.6 million and other net working capital of $2.2 million, totalling $36.0m.
The recoverable value of the Funds Management CGU was a value-in-use assessment of the five-year forecast of cash flows expected to
be generated from the CGU and a Gordon Growth Model perpetuity growth rate, discounted to net present value (NPV).
The recoverable amount assessed of $9.4 million was lower than the carrying amount of $36.0 million, therefore an impairment of $26.6
million was recognised at 30 June 2024. This impairment is primarily from changed economic conditions affecting the funds management
sector since acquisition leading to revised funds under management (FUM) growth assumptions.
Components of impairment recognised
2024
2023
$m
$m
Impairment from goodwill
26.6
8.8
Impairment management rights - performance fee intangibles
3.3
2.6
Corresponding reduction to business combination variable consideration – performance fees
and associated deferred tax liabilities
(3.3)
(2.6)
Net impairment
26.6
8.8
1. The impairment of management rights – performance fees are offset by a reduction in its corresponding liability and associated deferred tax liabilities. Please refer to
components of impairment recognised as per table on this page..
2.7 Intangible assets (continued)
76
Financial report
Key valuation assumptions
The scale of new funds to be launched in future periods has been revised lower compared to the 30 June 2023 assessment given the
changed economic conditions and lower transaction environment affecting the funds management business.
The other key assumptions used by management in the estimation of the recoverable amount are set out below:
Input value
Impact on Value-in-use
Key valuation
assumption
Description
Jun-24
Jun-23
Increase
in the input
Decrease in
the input
Discount rate
The rate of return used to discount forecast cash flows
into present value. The rate is determined with regard
to market evidence, comprising the prevailing risk-free
rate and a typical risk premium for a funds management
business. The increase compared to June 2023 is due
to the risk-free rate.
12.8%
12.5%
Decrease
Increase
Perpetuity
growth rate
The perpetuity growth rate is incorporated into the
Gordon Growth Model formula to estimate the terminal
value. The rate is based on the Reserve Bank of
Australia’s long term target inflation range.
2.5%
2.5%
Increase
Decrease
2.7 Intangible assets (continued)
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FY24 Annual Report
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Operating and
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Additional
information
Governance
Notes to the Financial Statements
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 analyses the Group’s interest bearing liabilities. The carrying amounts and fair values are reported in Australian dollars.
30-Jun-24
30-Jun-23
Carrying
amount
Fair value
Carrying
amount
Fair value
$m
$m
$m
$m
Current liabilities
Loan notes
200.0
198.6
-
-
Total current liabilities
200.0
198.6
-
-
Non-current liabilities
Bank loans
1,222.0
1,203.3
1,215.0
1,171.6
US Private Placement Notes1
408.3
388.8
411.3
380.3
Loan notes
100.0
94.9
300.0
286.8
Total non-current liabilities
1,730.3
1,687.0
1,926.3
1,838.7
Total Loans
1,930.3
1,885.6
1,926.3
1,838.7
Less: amortised upfront costs
(6.5)
-
(7.6)
-
Total Interest bearing liabilities
1,923.8
1,885.6
1,918.7
1,838.7
Undrawn facilities
293.0
300.0
The difference between the carrying amounts and the fair values is due to:
õ
Unamortised up-front costs which are included in the carrying amounts but excluded from fair values; and
õ
Movements in discount rates applied in fair value discount cash flows based on current funding curves.
The Group’s debt maturity profile can be analysed as follows:
Group Debt maturity profile
As at 30 June 2024 ($ million)
1. USD denominated debt carrying amounts and fair values are reported in AUD at the 30 June 2024 spot rate of 0.67 (30 June 2023: 0.66).
Bank debt
Undrawn bank debt
Institutional term loan
USPP
200
400
445
258
377
FY25
FY26
FY27
FY28
FY29
FY30
FY31
100
193
100
150
78
Financial report
The Group made the following changes to interest bearing liabilities during the year:
õ
In November 2023, the Group extended two bank loan facilities totalling $150 million, by a further 3.2 years to new maturity dates in
February 2028.
õ
In January 2024, the Group extended one bank loan facility of $100 million, by a further 4.7 years to a new maturity date in January
2031.
õ
In March 2024, the Group extended two bank loan facility totalling $220 million, by a further 1.4 years to new maturity dates in
December 2027 and June 2028.
õ
During FY24, the Group converted $500 million of existing debt facilities into sustainability linked loans (SLLs) with interest margin
reductions tied to the achievement of predetermined sustainability Key Performance Indicators (KPIs) and targets. This brings total
amount of SLLs on issue to $1,020 million.
õ
The weighted average all-in interest rate on interest bearing liabilities (including bank margin and amortisation of upfront fees paid)
at 30 June 2024 was 4.84% per annum (30 June 2023: 4.55% per annum). Refer to note 3.4 for details on interest rate and cross
currency swaps.
Assets pledged as security
The bank loans, loan notes and USPP Notes repayable 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:
2024
2023
$m
$m
Bank interest expense and charges
86.5
75.7
Amortisation of borrowing costs
2.4
2.1
Interest expense on lease liabilities
4.0
4.0
Total borrowing costs
92.9
81.8
3.1 Interest bearing liabilities (continued)
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Growthpoint Properties Australia
FY24 Annual Report
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Operating and
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Additional
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Governance
Notes to the Financial Statements
3.3 Lease liabilities
The Group’s minimum lease payments fall due as follows:
2024
2023
$m
$m
Ground Leases
Not later than one year
5.0
4.8
Later than one but not more than five years
27.4
26.2
More than five years
131.7
135.3
Total
164.1
166.3
Head Office Leases
Not later than one year
1.0
1.0
Later than one but not more than five years
1.8
2.3
Total
2.8
3.3
Total Leases
Not later than one year
6.0
5.8
Later than one but not more than five years
29.2
28.5
More than five years
131.7
135.3
Total
166.9
169.6
3.4 Derivative financial instruments
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.
Derivative financial instruments
Derivative financial instruments can be analysed as follows:
2024
2023
$m
$m
Derivative financial instrument contracts
Total current derivative financial instrument assets
6.8
1.3
Total non-current derivative financial instrument assets
39.9
56.4
Total non-current derivative financial instrument liabilities
(3.1)
-
Total derivative financial instruments
43.6
57.7
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 borrowings to fixed rates. Interest rate swaps in effect
at 30 June 2024 covered 65% (30 June 2023: 59%) of the floating rate borrowings outstanding. With total fixed interest rate borrowings
of $1,436.0 million outstanding as at 30 June 2024 (30 June 2023: $1,357.5 million), the total fixed interest rate coverage of outstanding
principal is 74% (30 June 2023: 70%).
During FY24, the Group entered into fifteen new interest rate swaps with total face value $395.0 million. Seven of these interest rate
swaps, with total face value $180.0 million, have a forward starting date during FY25.
80
Financial report
The average interest rate swap fixed interest rate at 30 June 2024 was 2.87% per annum1 (30 June 2023: 2.07% per annum) and the
variable interest rate (excluding bank margin) is 4.35% per annum (30 June 2023: 4.11% per annum) at balance date. See table below for
further details of interest rate swaps in effect at 30 June 2024, grouped by year of maturity:
FY25
FY26
FY27
FY28
FY29
Total
Interest rate swaps
Notional ($m)1
225.0
205.0
240.0
275.0
135.0
1,080.0
Average fixed interest rate (%)
0.89
3.30
3.19
3.66
3.35
2.87
These contracts require settlement of net interest receivable or payable monthly. 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.
Extendable interest rate swap option contracts
During FY24, the Group entered into four sold option contracts, with total face value $90.0 million, where the counterparty has the right to
extend existing interest rate swaps at its prevailing fixed interest rate for a further term of between two and three years. The average fixed
interest rate of interest rate swap options is 3.62%. The weighted average term to maturity for the extendable interest rate swap option
contracts as at 30 June 2024 is 2.5 years, prior to any further extension.
Cross currency swap and Cross currency interest rate swap contracts
The Group is a party to several swaps to mitigate the currency and/or interest rate risk exposures of its USPP Notes.
Cross currency interest rate swaps
The cross-currency interest rate swaps hedge both foreign exchange risk and interest rate risk. The quarterly coupon payments are
swapped from a USD denominated principal at a fixed interest rate into an AUD denominated principal at a fixed AUD interest rate. The
USD denominated principal repayment at expiry is swapped for a known fixed AUD amount.
Cross currency swap
The cross-currency swap hedges the quarterly coupon payments from a USD denominated principal at a fixed interest rate into an AUD
denominated principal exposed to BBSW plus a fixed margin. The USD denominated principal repayment at expiry is swapped for a
known fixed AUD amount.
See table below for further details of these swaps, grouped by year of maturity:
FY25
FY26
FY27
FY28
FY29
Total
Cross currency interest rate swaps
Notional ($m)
-
-
130.3
-
52.1
182.4
Average fixed interest rate (%)
-
-
5.28
-
5.45
5.33
Cross currency swap
Notional ($m)
-
-
-
-
161.0
161.0
3 months BBSW+ (%)
-
-
-
-
6.56
6.56
The weighted average term to maturity for the cross currency interest rate swaps and cross currency swap is 4.2 years.
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 and exchange rates for a substitute instrument at the measurement date.
Fair values reflect the credit risk of the instrument, the Group and counterparty when appropriate. Derivatives are classified as Level 2 on
the fair value hierarchy as the inputs used to determine fair value are observable market data but not quoted prices.
1. Including forward starting interest rate swaps.
3.4 Derivative financial instruments (continued)
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Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
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).
Notes
Level 1
Level 2
Level 3
Total
$m
$m
$m
$m
30-Jun-24
Investment in securities
2.3
138.3
-
2.6
140.9
Derivative financial assets
3.4
-
46.7
-
46.7
Derivative financial liabilities
3.4
-
(3.1)
-
(3.1)
Total financial instrument fair value
138.3
43.6
2.6
184.5
30-Jun-23
Investment in securities
2.3
126.5
-
3.0
129.5
Derivative financial assets
3.4
-
57.7
-
57.7
Business combination variable consideration
2.5
-
-
(2.7)
(2.7)
Total financial instrument fair value
126.5
57.7
0.3
184.5
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 2024 Corporate Governance Statement for details about its overall risk management framework. Specific material
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 both the interest rate and foreign exchange risks arising from its principal financial instruments.
It is the Group’s policy that no speculative trading in financial instruments shall be undertaken. Details of the material 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, WBC, 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).
82
Financial report
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. 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.
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 $1,222.0 million at balance date (2023: $1,215.0 million) and a cross currency swap with a principal amount of $161.0
million at balance date (2023: $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:
Fixed/Floating
2024
2023
$m
$m
Financial assets
Cash and cash equivalents
Floating
42.2
49.4
Derivative financial instruments
Fixed/Floating
46.7
57.7
88.9
107.1
Financial liabilities
Derivative financial instruments
Fixed/Floating
3.1
-
Borrowing facilities
Fixed
535.9
537.5
Borrowing facilities – hedged
Fixed
900.0
820.0
Borrowing facilities – unhedged
Floating
494.4
568.8
1,933.4
1,926.3
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 uses 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.
3.6 Financial risk management (continued)
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FY24 Annual Report
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Operating and
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Additional
information
Governance
Notes to the Financial Statements
Derivative financial instruments – cross currency swaps
The Group is exposed to financial risk from the movement in foreign exchange rates based on its USD $255.0 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.
Sensitivity analysis – interest rate risk
The following sensitivity analysis is based on the interest rate risk exposures at balance date. At 30 June 2024, 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:
Profit after tax higher/(lower)
2024
2023
$m
$m
+100 bps
Cash and borrowings
(2.6)
(5.1)
Interest rate derivatives
22.9
18.8
Cross currency derivatives
(7.5)
(9.1)
12.8
4.6
-100 bps
Cash and borrowings
2.6
5.1
Interest rate derivatives
(23.7)
(19.5)
Cross currency derivatives
7.9
9.7
(13.2)
(4.7)
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 $42.2 million (2023: $49.4 million) and undrawn debt
facilities of $293.0 million (2023: $300.0 million).
3.6 Financial risk management (continued)
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Financial report
Maturities of financial liabilities
The maturity of financial liabilities (including trade and other payables, provision for distribution, 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 2024.
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
2024
Non-derivative financial liabilities
Bank loans and loan notes
1,923.8
2,161.9
41.1
239.1
1,881.7
-
Lease liabilities
106.7
166.9
3.0
3.0
29.2
131.7
Trade and other liabilities
103.8
103.8
101.3
2.4
0.1
-
2,134.3
2,432.6
145.4
244.5
1,911.0
131.7
Derivative financial liabilities
Interest rate swaps used for hedging
3.1
-
-
-
-
-
3.1
-
-
-
-
-
2023
Non-derivative financial liabilities
Bank loans and loan notes
1,918.7
2,208.6
40.8
40.8
1,854.6
272.4
Lease liabilities
107.0
169.6
2.9
2.9
28.5
135.3
Trade and other liabilities
107.1
107.1
104.6
1.3
1.2
-
2,132.8
2,485.3
148.3
45.0
1,884.3
407.7
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:
2024
2024
2023
2023
No. (m)
$m
No. (m)
$m
Opening balance at 1 July
753.7
1,986.4
771.7
2,046.5
Securities issued through employee incentive plans
0.3
-
0.4
-
Securities bought back on market
-
-
(18.4)
(60.1)
Closing balance at 30 June
754.0
1,986.4
753.7
1,986.4
3.6 Financial risk management (continued)
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Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
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Additional
information
Governance
Notes to the Financial Statements
Ordinary stapled securities
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 has remained suspended since the June 2018 distribution.
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.
The Group holds an independent credit rating to aid it in accessing debt capital markets. In April 2024, 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 2024, the gearing ratio was 40.7% (30 June 2023: 37.2%). The gearing
ratios at 30 June 2024 and 30 June 2023 were calculated as follows:
2024
2023
$m
$m
Total interest-bearing liabilities less cash
1,881.6
1,869.3
Total assets less cash, right-of-use assets and intangibles
4,624.8
5,028.6
Gearing ratio
40.7%
37.2%
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
Distributions
Total stapled
securities
Distributions per
stapled security
$m
No. (m)
(cents)
Half year to 31 December 2023
72.7
753.9
9.65
Half year to 30 June 2024
72.8
754.0
9.65
Total distributions for the year ended 30 June 2024
145.5
19.3
Half year to 31 December 2022
82.0
766.0
10.7
Half year to 30 June 2023
80.6
753.7
10.7
Total distributions for the year ended 30 June 2023
162.6
21.4
3.7 Contributed equity and reserves (continued)
86
Financial report
3.9 Earnings per stapled security (EPS)
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.
2024
2023
Loss after tax of the Group
$m
(298.2)
(245.6)
Loss after tax of the Trust as parent entity
$m
(264.9)
(229.2)
Basic weighted average number of stapled securities on issue for the year
No. (m)
753.9
764.4
Adjustment for potential dilution from performance rights on issue1
No. (m)
3.4
3.0
Diluted weighted average number of stapled securities on issue for the year
No. (m)
757.3
767.4
EPS attributable to securityholders of the Group
Basic EPS
Cents
(39.6)
(32.1)
Diluted EPS
Cents
(39.6)
(32.1)
EPS attributable to unitholders of the Trust as parent entity
Basic EPS
Cents
(35.1)
(30.0)
Diluted EPS
Cents
(35.1)
(30.0)
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 page 45 of the Remuneration Report within the Directors’ Report.
At 30 June 2024, the Group had three security-based payment schemes in place (30 June 2023: three):
Deferred Short-term Incentive Performance Rights
Half of the Short-term Incentive (STI) Deferred Performance Rights granted to Executive Key Management Personnel (KMP) for STI plans
on foot (FY24 and prior) vest after one year and the other half after two years. Further details of this plan are reported on pages 39-42 of
the Remuneration Report.
Long-term Incentive Performance Rights
The Group has Long-term Incentive (LTI) Performance Rights plans in place for Executive Key Management personnel and other eligible
employees. The plans are designed to align participating 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 Human Resources Committee and/or the Board. Details of the various LTI Plans in place, applicable performance
measures, fair value calculation methodologies and details are reported on pages 42-45 of the Remuneration Report.
1. Anti-dilutive due to loss position.
87
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Retention Rights
The Group granted Retention Rights to certain employees in August 2022, in relation to the Fortius Funds Management acquisition. The
vesting of rights is subject to participants satisfying employment service conditions and therefore is non-market based. No Retention
Rights were provided to KMP.
The table below shows the movement in rights under each type of security-based payment scheme:
STI
Performance
Rights
LTI
Performance
Rights
Retention
Rights
Total
No.
No.
No.
No.
Rights outstanding at 30 June 2022
271,051
2,096,862
-
2,367,913
Rights granted
188,740
1,273,582
269,880
1,732,202
Rights lapsed
(72,484)
(416,880)
(19,602)
(508,966)
Rights vested to GOZ stapled securities1
(170,600)
(265,157)
-
(435,757)
Rights outstanding at 30 June 2023
216,707
2,688,407
250,278
3,155,392
Rights granted
-
1,687,753
-
1,687,753
Rights lapsed
-
(1,269,143)
(24,431)
(1,293,574)
Rights vested to GOZ stapled securities2
(158,581)
-
(134,940)
(293,521)
Rights outstanding at 30 June 2024
58,126
3,107,017
90,907
3,256,050
During the year, $1.1 million was expensed and recognised in the Company’s security-based payments reserve (2023: $2.7 million).
1. In September 2022, 265,157 rights under the FY20 LTI plans were converted to Growthpoint stapled securities with a total value of $829,941.
2. In July 2023, 134,940 rights under the tranche 1 retention rights were converted to Growthpoint stapled securities with a total value of $369,736.
3.10 Share-based payment arrangements (continued)
88
Financial report
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. The Company and its wholly-owned controlled entities are in a tax consolidated group.
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.
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FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Income tax expense
The tables below relate to income tax for the Group’s income tax paying entities.
(a) Income tax expense:
2024
2023
$m
$m
Current tax (expense) / benefit
(1.0)
0.1
Deferred tax benefit
5.4
5.0
Income tax benefit in the Statement of Comprehensive Income
4.4
5.1
(b) Reconciliation of accounting profit to prima facie tax at 30%, statutory income tax
expense reported and current tax expense:
2024
2023
$m
$m
Loss before income tax expense
(302.6)
(250.7)
Add: Trust loss not subject to tax
255.4
218.3
Loss subject to taxation in the Group’s companies
(47.2)
(32.4)
Prima facie tax benefit at 30%
14.2
9.7
Tax effect of amounts not deductible / assessable in calculating income tax expense:
Loss on sale
-
(0.1)
Impairment of intangible assets
(6.5)
(2.6)
Non-deductible expenses
-
(0.1)
Long-term employee benefits
(0.2)
(0.6)
Short-term employee benefits
(0.1)
(0.1)
Non-deductible project expenses
-
(0.7)
Non-trade liabilities
(2.8)
(0.4)
Other
(0.2)
-
Statutory income tax benefit
4.4
5.1
Deferred tax benefit (Refer section (d))
5.4
5.0
Current tax (expense) / benefit payable for the current year
(1.0)
0.1
(c) (i) Effective tax rates:
2024
2023
$m
$m
Loss subject to taxation
(47.2)
(32.4)
Statutory income tax benefit
4.4
5.1
Accounting and TTC Effective tax rate1
(9.3%)
(15.7%)
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.
4.1 Income tax (continued)
90
Financial report
(c) (ii) Current income tax payable:
2024
2023
$m
$m
Income tax (receivable) / payable at beginning of financial year
(1.6)
0.4
Less: current tax refundable from acquisition
-
(0.1)
Less: income tax received / (paid) during the year
1.3
(1.9)
Add: Current tax expense
1.0
-
Current tax payable / (receivable)
0.7
(1.6)
(c) (iii) Deferred tax balances
2024
2023
$m
$m
Deferred tax assets
3.2
0.6
Deferred tax liabilities
-
(3.5)
Net deferred tax assets / (liabilities)
3.2
(2.9)
As at 30 June 2024, the Group had a franking credit balance of $6,937,878 (30 June 2023: $9,083,813).
(d) Reconciliation of deferred tax balances
Opening
balance
1 July 2023
Recognised in
profit or loss
Other
Balance
30 June 2024
$m
$m
$m
$m
Net deferred tax assets attributable to:
Right-of-use assets
(0.9)
0.1
-
(0.8)
Lease liability
0.9
(0.1)
-
0.8
Plant and equipment
0.1
-
-
0.1
Other accrued expenses
0.1
-
-
0.1
Short-term employee benefits
1.1
0.1
-
1.2
Co-investments
0.3
-
-
0.3
Non-trade payables
0.4
0.4
-
0.8
Intangible assets
(2.0)
0.8
0.6
(0.6)
Recognised tax losses
0.7
(0.2)
0.1
0.6
Interest-bearing liabilities
-
4.3
-
4.3
Derivative financial instruments
-
(3.5)
-
(3.5)
Other
(0.1)
-
-
(0.1)
0.6
1.9
0.7
3.2
Net deferred tax liabilities attributable to:
Interest-bearing liabilities
5.2
(5.2)
-
-
Derivative financial instruments
(8.9)
8.9
-
-
Recognised tax losses
0.2
(0.2)
-
-
(3.5)
3.5
-
-
Net total
(2.9)
5.4
0.7
3.2
4.1 Income tax (continued)
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Operating and
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Additional
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Governance
Notes to the Financial Statements
Opening
balance
1 July 2022
Acquired
through
business
combination
Recognised in
profit or loss
Balance
30 June 2023
$m
$m
$m
Net deferred tax assets attributable to:
Right-of-use assets
-
(0.2)
(0.7)
(0.9)
Lease liability
-
0.2
0.7
0.9
Plant and equipment
0.1
-
-
0.1
Other accrued expenses
0.1
-
-
0.1
Short-term employee benefits
0.8
-
0.3
1.1
Co-investments
-
0.3
-
0.3
Non-trade payables
0.4
0.3
(0.3)
0.4
Intangible assets
-
(2.5)
0.5
(2.0)
Recognised tax losses
-
0.7
-
0.7
Other
0.2
-
(0.3)
(0.1)
1.6
(1.2)
0.2
0.6
Net deferred tax liabilities attributable to:
Interest-bearing liabilities
0.7
-
4.5
5.2
Derivative financial instruments
(9.2)
-
0.3
(8.9)
Recognised tax losses
0.2
-
-
0.2
(8.3)
-
4.8
(3.5)
Net total
(6.7)
(1.2)
5.0
(2.9)
4.2 Key Management Personnel (KMP) compensation
2024
2023
$
$
Short-term employee benefits
5,601,081
5,321,685
Other long-term employee benefits
27,614
53,443
Post-employment benefits
181,598
181,178
Security-based payments
531,762
1,536,729
Total KMP compensation
6,342,055
7,093,035
Individual Directors’ and KMP compensation disclosures
Information regarding individual Directors’ and Executive 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.
4.1 Income tax (continued)
92
Financial report
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:
2024
Securityholder
Opening
securities
1 July
Holding at time
of becoming
KMP
Securities
granted as
compensation1
Acquired
securities
Disposed
securities
Holding at time
of cessation
of KMP
Closing
securities
30 June2
A. Fay
59,000
-
-
42,000
-
-
101,000
E. de Klerk
1,833,857
-
-
41,600
-
-
1,875,457
G. Jackson
190,087
-
-
-
-
190,087
-
D. Page AM
33,050
-
-
-
-
-
33,050
N. Sasse
1,656,460
-
-
-
-
-
1,656,460
J. Sukkar AM
50,000
-
-
-
-
-
50,000
P. Theocharides
-
-
-
33,000
-
-
33,000
M. Tierney
-
-
-
49,000
-
-
49,000
R. Lees
-
60,000
-
-
-
-
60,000
T. Collyer
1,541,855
-
-
67,000
-
1,608,855
-
D. Andrews
274,160
-
27,195
-
-
-
301,355
M. Green
209,130
-
27,642
-
-
-
236,772
J. Jovanovski
90,319
-
22,306
-
-
-
112,625
2023
Securityholder
Opening
securities
1 July
Holding at time
of becoming
KMP
Securities
granted as
compensation
Acquired
securities
Disposed
securities
Holding at time
of cessation
of KMP
Closing
securities
30 June3
A. Fay
-
-
-
59,000
-
-
59,000
E. de Klerk
1,802,857
-
-
31,000
-
-
1,833,857
G. Jackson
190,087
-
-
-
-
-
190,087
D. Page AM
30,050
-
-
3,000
-
-
33,050
F. Marais
144,284
-
-
-
-
144,284
-
N. Sasse
1,656,460
-
-
-
-
-
1,656,460
J. Sukkar AM
14,000
-
-
36,000
-
-
50,000
P. Theocharides
-
-
-
-
-
-
-
M. Tierney
-
-
-
-
-
-
-
G. Tomlinson
88,776
-
-
-
-
88,776
-
T. Collyer
1,364,246
-
177,609
-
-
-
1,541,855
D. Andrews
296,216
-
70,491
-
(92,547)
-
274,160
M. Green
138,639
-
70,491
-
-
-
209,130
J. Jovanovski
36,340
-
53,979
-
-
-
90,319
During the year to 30 June 2023, a total of 372,570 stapled securities with a total value at the time of vesting of $1,108,140 were issued
to Executive KMP upon vesting of performance rights under employee incentive plans.
1. Timothy Collyer was granted 73,173 securities with a value at the time of vesting of $158,785 under the FY22 Deferred STI Plan (tranche 2) and FY23 Deferred STI Plan
(Tranche 1) on 28 June 2024, which was after he ceased being KMP on 20 May 2024.
2. For Executive KMP and Non-Executive Directors who are considered KMP as at 30 June 2024 only.
3. For Executive KMP and Non-Executive Directors who are considered KMP as at 30 June 2023 only.
4.2 Key Management Personnel (KMP) compensation (continued)
93
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
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.
4.3 Related party transactions
Responsible Entity
There has been no change to the Responsible Entity of the Trust, being the Company, 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
A Director held a position in another entity that resulted in them having control or significant influence over the financial or operating
policies of that entity. This entity transacted with the Group in the reporting period while the Director held office.
The aggregate value of transactions paid for services rendered in the prior period relating to Directors, while they held office, and entities
over which they have significant control or significant influence were as follows:
Director
Transaction
2024
2023
$
$
G. Jackson1
Investment property valuation
69,520
82,445
G. Jackson1
Statutory and other valuation
7,150
6,050
The aggregate value of outstanding balances payable at the reporting date relating to directors and entities over which they have
significant control or significant influence were as follows:
Director
Transaction
2024
2023
$
$
G. Jackson1
Investment property valuation
-
72,270
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 2024 (2023: nil).
1. The Group used the valuation services of m3property, a company of which Mr Grant Jackson is a director, to independently value six properties (2023: sixteen), while they
held office. Mr Jackson retired from the Board of the Company effective 16 November 2023. 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 or the valuation of six properties.
4.2 Key Management Personnel (KMP) compensation (continued)
94
Financial report
Related entity transactions
All related party transactions are conducted on normal commercial terms and conditions. The transactions during the year and amounts
payable at year end between the Group and its related entities were as follows:
30-Jun-24
30-Jun-23
$m
$m
Funds management revenue from related entities
8.0
7.6
Distributions from investments in related entities
-
0.3
Capital return from investments in related entities
0.2
-
Interest income from related entities’ loans
0.3
-
30-Jun-24
30-Jun-23
$m
$m
Funds management revenue receivable from related entities
2.6
2.1
Capital return receivable from investments in related entities
-
0.1
Loans receivable from related entities
3.6
-
4.4 Contingent liabilities
The Group has no contingent liabilities as at the date of this report (2023: 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 (2023: nil).
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.
4.3 Related party transactions (continued)
95
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Notes to the Financial Statements
Controlled entities
The controlled entities of the Group during the year ended 30 June 2024 are listed below, all entities were domiciled in Australia.
õ
11 Murray Rose Avenue Trust
õ
Fortius Cammeray Pty Ltd
õ
Growthpoint Properties Australia Limited
õ
1500 Ferntree Gully Road Property Trust
õ
Fortius DC Pty Ltd
õ
Kembla Grange Property Trust
õ
19 Southern Court Property Trust
õ
Fortius Debt Capital Pty Ltd
õ
Kewlink East Trust
õ
20 Southern Court Property Trust
õ
Fortius FAPT No. 1 Pty Ltd
õ
Kilsyth 1 Property Trust
õ
211 Wellington Road Property Trust
õ
Fortius Grenfell No.1 Pty Ltd
õ
Kilsyth 2 Property Trust
õ
255 London Circuit Trust
õ
Fortius Grenfell No.2 Pty Ltd
õ
Laverton Property Trust
õ
3 Maker Place Trust
õ
Fortius Grenfell No.3 Pty Ltd
õ
Lot S5 Property Trust
õ
3 Millennium Court Property Trust
õ
Fortius Heitman Barracks Pty Ltd
õ
Mort Street Property Trust
õ
6 Kingston Park Court Property Trust
õ
Fortius Home HQ Holding Pty Ltd
õ
New South Wales Property Trust
õ
75 Dorcas Street Trust
õ
Fortius Home HQ Sub Entity Pty Ltd
õ
New South Wales 2 Property Trust
õ
Ann Street Property Trust
õ
Fortius Investment Management Pty Ltd
õ
Newstead Property Trust
õ
Artarmon Retail Centre TC Pty Ltd
õ
Fortius Investment Properties Pty Ltd
õ
Nundah Property Trust
õ
Atlantic Drive Property Trust
õ
Fortius Junction Fair Pty Ltd
õ
Pope Street Property Trust
õ
Bowes Street Property Trust
õ
Fortius QS No.1 Pty Ltd
õ
Preston 2 Property Trust
õ
Broadmeadows Leasehold Trust
õ
Fortius QS No.2 Pty Ltd
õ
Queensland Property Trust
õ
Building 2 Richmond Property Trust
õ
Fortius QS No.3 Pty Ltd
õ
Rabinov Diversified Property Trust No. 2
õ
Building C 211 Wellington Road
Property Trust
õ
Fortius Property Investment
Management Australia Ltd
õ
Rabinov Diversified Property
Trust No. 3
õ
Camberwell Road Property Trust
õ
Fortius Properties Pty Limited
õ
Rabinov Property Trust
õ
CB Property Trust
õ
Fortius Rundle No 1 Pty Ltd
õ
Ravenhall Property Trust
õ
Charles Street Property Trust
õ
Fortius Rundle No 2 Pty Ltd
õ
Richmond Car Park Trust
õ
Coolaroo Property Trust
õ
Fortius Rundle No 3 Pty Ltd
õ
Rundle Car Park Leasing No 2 Pty Ltd
õ
Derrimut Property Trust
õ
Fortius Waterloo Pty Ltd
õ
Rundle Car Park Leasing Pty Ltd
õ
Drake Boulevard Property Trust
õ
Growthpoint Developments Pty Ltd
õ
South Brisbane 1 Property Trust
õ
Erskine Park Truck Trust
õ
Growthpoint Finance Pty Ltd
õ
South Brisbane 2 Property Trust
õ
Erskine Park Pharmaceutical Trust
õ
Growthpoint Funds Management Limited
õ
SW1 Car Park Property Trust
õ
Erskine Park Warehouse Trust
õ
Growthpoint Holding Trust No.1
õ
Thomas Street Property Trust
õ
Fortius Allendale No. 3 Pty Ltd
õ
Growthpoint Hendra 1 Pty Ltd
õ
Wellington Street Property Trust
õ
Fortius Allendale No.1 Pty Ltd
õ
Growthpoint Hendra 2 Pty Ltd
õ
Wholesale Industrial Property Fund
õ
Fortius Allendale No.2 Pty Ltd
õ
Growthpoint Investment Management Pty Ltd
õ
William Angliss Drive Trust
õ
Fortius Asset Management Pty Ltd
õ
Growthpoint Metro Office Fund
õ
WorldPark Property Trust
õ
Fortius Barracks Pty Ltd
õ
Growthpoint Nominees (Aust) 2 Pty Limited
õ
Yatala 1 Property Trust
õ
Fortius Bourke Street Pty Limited
õ
Growthpoint Nominees (Aust) 3 Pty Limited
õ
Yatala 2 Property Trust
õ
Fortius Broadway No 1Pty Ltd
õ
Growthpoint Nominees (Aust) 4 Pty Limited
õ
Yatala 3 Property Trust
õ
Fortius Broadway No 2 Pty Ltd
õ
Growthpoint Nominees (Aust) Pty Limited
4.6. Controlled entities (continued)
96
Financial report
4.7 Parent entity disclosures
The parent of the Group throughout the year was the Trust.
2024
2023
$m
$m
Financial position at year end
Current assets
34.1
30.3
Total assets
4,724.4
5,129.3
Current liabilities
117.2
119.7
Total liabilities
2,147.0
2,141.6
Net assets
2,577.4
2,987.7
Equity comprising:
Contributed equity
1,917.2
1,917.2
Retained profits
660.2
1,070.5
Total equity
2,577.4
2,987.7
Loss after tax
(264.8)
(229.2)
Total comprehensive loss
(264.8)
(229.2)
The contractual commitments of the parent entity are identical to those disclosed in Note 2.2. The parent entity has no contingent liabilities
(2023: $nil).
4.8 Remuneration of auditors
The following fees were paid or payable for services provided by EY, the auditor of the Group, during the year. There were no non-audit
services paid to auditors during the year.
2024
2023
$
$
Audit services - EY
Audit and review of financial statements
391,700
392,000
Other regulatory audit services
91,128
85,970
Other non-audit services
-
105,000
Total paid to EY
482,828
582,970
4.9 Subsequent events
There have been no 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.
97
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Entity name
Entity Type
Body
corporate
country of
incorporation
Body
corporate
% of share
capital held
Australian
resident
or foreign
resident
Country of
tax residence
Artarmon Retail Centre TC Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Allendale No. 3 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Allendale No.1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Allendale No.2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Asset Management Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Barracks Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Bourke Street Pty Limited
Body Corporate
Australia
100%
Australia
Australia
Fortius Broadway No 1Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Broadway No 2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Cammeray Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius DC Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Debt Capital Pty Ltd
Body Corporate
Australia
65%
Australia
Australia
Fortius FAPT No. 1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Grenfell No.1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Grenfell No.2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Grenfell No.3 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Heitman Barracks Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Home HQ Holding Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Home HQ Sub Entity Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Investment Management Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Investment Properties Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Junction Fair Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius QS No.1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius QS No.2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius QS No.3 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Property Investment Management Australia Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Properties Pty Limited
Body Corporate
Australia
100%
Australia
Australia
Fortius Rundle No 1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Rundle No 2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Rundle No 3 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Fortius Waterloo Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Developments Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Finance Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Funds Management Limited1
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Hendra 1 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Hendra 2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Investment Management Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Nominees (Aust) 2 Pty Limited
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Nominees (Aust) 3 Pty Limited1
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Nominees (Aust) 4 Pty Limited1
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Nominees (Aust) Pty Limited1
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Properties Australia Limited
Body Corporate
Australia
100%
Australia
Australia
Growthpoint Properties Australia Trust
Trust
N/A
N/A
Australia
Australia
1. Trustee of a trust in the consolidated entity.
Consolidated Entity
Disclosure Statement
98
Financial report
Entity name
Entity Type
Body
corporate
country of
incorporation
Body
corporate
% of share
capital held
Australian
resident
or foreign
resident
Country of
tax residence
Rundle Car Park Leasing No 2 Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
Rundle Car Park Leasing Pty Ltd
Body Corporate
Australia
100%
Australia
Australia
11 Murray Rose Avenue Trust
Trust
N/A
N/A
Australia
Australia
1500 Ferntree Gully Road Property Trust
Trust
N/A
N/A
Australia
Australia
19 Southern Court Property Trust
Trust
N/A
N/A
Australia
Australia
20 Southern Court Property Trust
Trust
N/A
N/A
Australia
Australia
211 Wellington Road Property Trust
Trust
N/A
N/A
Australia
Australia
255 London Circuit Trust
Trust
N/A
N/A
Australia
Australia
3 Maker Place Trust
Trust
N/A
N/A
Australia
Australia
3 Millennium Court Property Trust
Trust
N/A
N/A
Australia
Australia
6 Kingston Park Court Property Trust
Trust
N/A
N/A
Australia
Australia
75 Dorcas Street Trust
Trust
N/A
N/A
Australia
Australia
Ann Street Property Trust
Trust
N/A
N/A
Australia
Australia
Atlantic Drive Property Trust
Trust
N/A
N/A
Australia
Australia
Bowes Street Property Trust
Trust
N/A
N/A
Australia
Australia
Broadmeadows Leasehold Trust
Trust
N/A
N/A
Australia
Australia
Building 2 Richmond Property Trust
Trust
N/A
N/A
Australia
Australia
Building C 211 Wellington Road Property Trust
Trust
N/A
N/A
Australia
Australia
Camberwell Road Property Trust
Trust
N/A
N/A
Australia
Australia
CB Property Trust
Trust
N/A
N/A
Australia
Australia
Charles Street Property Trust
Trust
N/A
N/A
Australia
Australia
Coolaroo Property Trust
Trust
N/A
N/A
Australia
Australia
Derrimut Property Trust
Trust
N/A
N/A
Australia
Australia
Drake Boulevard Property Trust
Trust
N/A
N/A
Australia
Australia
Erskine Park Truck Trust
Trust
N/A
N/A
Australia
Australia
Erskine Park Pharmaceutical Trust
Trust
N/A
N/A
Australia
Australia
Erskine Park Warehouse Trust
Trust
N/A
N/A
Australia
Australia
Growthpoint Holding Trust No.1
Trust
N/A
N/A
Australia
Australia
Growthpoint Metro Office Fund
Trust
N/A
N/A
Australia
Australia
Kembla Grange Property Trust
Trust
N/A
N/A
Australia
Australia
Kewlink East Trust
Trust
N/A
N/A
Australia
Australia
Kilsyth 1 Property Trust
Trust
N/A
N/A
Australia
Australia
Kilsyth 2 Property Trust
Trust
N/A
N/A
Australia
Australia
Laverton Property Trust
Trust
N/A
N/A
Australia
Australia
Lot S5 Property Trust
Trust
N/A
N/A
Australia
Australia
Mort Street Property Trust
Trust
N/A
N/A
Australia
Australia
New South Wales Property Trust
Trust
N/A
N/A
Australia
Australia
New South Wales 2 Property Trust
Trust
N/A
N/A
Australia
Australia
Newstead Property Trust
Trust
N/A
N/A
Australia
Australia
Nundah Property Trust
Trust
N/A
N/A
Australia
Australia
Pope Street Property Trust
Trust
N/A
N/A
Australia
Australia
Preston 2 Property Trust
Trust
N/A
N/A
Australia
Australia
Queensland Property Trust
Trust
N/A
N/A
Australia
Australia
99
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Entity name
Entity Type
Body
corporate
country of
incorporation
Body
corporate
% of share
capital held
Australian
resident
or foreign
resident
Country of
tax residence
Rabinov Diversified Property Trust No. 2
Trust
N/A
N/A
Australia
Australia
Rabinov Diversified Property Trust No. 3
Trust
N/A
N/A
Australia
Australia
Rabinov Property Trust
Trust
N/A
N/A
Australia
Australia
Ravenhall Property Trust
Trust
N/A
N/A
Australia
Australia
Richmond Car Park Trust
Trust
N/A
N/A
Australia
Australia
South Brisbane 1 Property Trust
Trust
N/A
N/A
Australia
Australia
South Brisbane 2 Property Trust
Trust
N/A
N/A
Australia
Australia
SW1 Car Park Property Trust
Trust
N/A
N/A
Australia
Australia
Thomas Street Property Trust
Trust
N/A
N/A
Australia
Australia
Wellington Street Property Trust
Trust
N/A
N/A
Australia
Australia
Wholesale Industrial Property Fund
Trust
N/A
N/A
Australia
Australia
William Angliss Drive Trust
Trust
N/A
N/A
Australia
Australia
WorldPark Property Trust
Trust
N/A
N/A
Australia
Australia
Yatala 1 Property Trust
Trust
N/A
N/A
Australia
Australia
Yatala 2 Property Trust
Trust
N/A
N/A
Australia
Australia
Yatala 3 Property Trust
Trust
N/A
N/A
Australia
Australia
Consolidated Entity Disclosure Statement
100
Financial report
Directors’
declaration
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 32 to 53 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 2024 and of its performance for the financial year ended
on that date;
b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1;
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; and
d) the consolidated entity disclosure statement set out on pages 98 to 100 required by section 295(3A) of the Corporations Act 2001
(Cth) is true and correct.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 (Cth) from the Chief Executive
Officer and Managing Director and Chief Financial Officer for the financial year ended 30 June 2024.
This declaration is made in accordance with a resolution of the Directors.
Andrew Fay
Chair
Growthpoint Properties Australia
22 August 2024
101
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
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 2024, 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
22 August 2024
102
Financial report
Independent
Auditor’s report
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 2024, 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 material
accounting policy information, the consolidated entity disclosure statement 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
2024 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.
103
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
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 $4,503.7 million as at 30 June
2024, 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 periodic 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 2024.
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 (including both
tenancy and capital expenditure); and
• controls in place relevant to the valuation process, both
for internal director valuations, and independent external
valuations.
In conjunction with our real estate valuation specialists, on a
sample basis, we performed the following procedures:
• 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
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;
• 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.
Independent Auditor’s report
104
Financial report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2.
Goodwill
Why significant
How our audit addressed the key audit matter
Goodwill impairment testing:
The Group reviews the carrying amount of the goodwill
acquired annually, or more frequently, if impairment
indicators are present.
The goodwill balance was tested for impairment at
year-end
applying
a
value-in-use
model.
The
recoverable amount has been assessed at $5.6 million
which is lower than the carrying amount of $32.2
million, therefore an impairment charge of $26.6
million was recognised at 30 June 2024.
The Group has disclosed in Note 2.7 to the
consolidated financial report the assessment method,
including the significant underlying assumptions and
the results of the assessment.
Goodwill impairment testing was considered a key
audit matter due to the quantum of the balance and
the significant judgements involved, including on
future cashflows for goodwill impairment testing.
Our audit procedures included the following:
•
Tested the mathematical accuracy of the value-in-use
impairment model;
•
Involving our valuation specialists, we assessed the key
assumptions adopted in the forecast cash flows, including
cash flows related to management and acquisition fees
receivable from the funds;
•
Assessed the Group’s current year actual results in
comparison to prior year forecasts to assess forecasting
accuracy;
•
Assessed the Group’s assumptions for future funds under
management (i.e., the forecast cash flows) in comparison to
the actual new funds under management entered into in the
current year;
•
Assessed the Group’s assumptions for annual and terminal
growth rates in the discounted cash flow model in
comparison to economic and industry forecasts;
•
Assessed the adequacy of the estimated EBITDA rates
utilised for calculation of future costs with reference to
historical performance of the business;
•
Involving our valuation specialists, considered earnings
multiples of comparable businesses as a valuation cross
check to the Group’s determination of recoverable amount;
•
Performed sensitivity analysis in respect of the assumptions
noted above, to ascertain the extent of changes in those
assumptions which either individually or collectively would
materially impact the recoverable amount; and
•
Assessed the adequacy of the Group’s disclosures in the
financial statements.
105
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 2024 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.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
a.
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001; and;
b.
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
ii.
The consolidated entity disclosure statement that is true and correct and is free of
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.
Independent Auditor’s report
106
Financial report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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.
► 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.
107
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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 2024.
In our opinion, the Remuneration Report of Growthpoint Properties Australia for the year ended 30
June 2024, 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
22 August 2024
Independent Auditor’s report
108
Financial report
Detailed portfolio
information
Office portfolio
Address
Book
Value
Valuer
Cap
rate
Discount
rate
Major
tenant WALE
Lettable
area
Site
area
$m
years
sqm
sqm
75 Dorcas St
South Melbourne
VIC
241.0
JLL
6.25
7.00
ANZ Banking Group
4.5
28,284
9,632
Building 3, 570 Swan St
Richmond
VIC
165.0
CBRE
6.25
7.00 Bunnings Warehouse
5.6
19,334
8,525
165-169 Thomas St
Dandenong
VIC
140.0
Directors
6.00
6.75
VIC Government
7.5
15,071
2,502
Building 2, 572-576 Swan St Richmond
VIC
108.0
JLL
6.50
7.00 Country Road Group
8.0
14,602
7,130
109 Burwood Rd
Hawthorn
VIC
108.0
m3property
6.25
7.25
Scope
3.9
12,388
3,529
141 Camberwell Rd
Hawthorn East
VIC
99.5
Directors
6.00
7.00
Miele
4.5
10,233
0
Building B, 211 Wellington Rd Mulgrave
VIC
67.0
m3property
7.25
8.00
Monash University
1.8
12,780
11,040
Building 1, 572-576 Swan St Richmond
VIC
65.6
JLL
6.50
7.00 Country Road Group
8.0
8,554
8,364
Building C, 211 Wellington Rd Mulgrave
VIC
44.2
CBRE
7.75
8.00
Moderna
1.7
10,289
11,070
Car Park, 572-576 Swan St
Richmond
VIC
0.5
JLL
0.00
7.50 Country Road Group
2.9
0
3,756
100 Skyring Ter
Newstead
QLD
212.0
Colliers
6.88
7.00
Bank of Queensland
4.0
24,665
5,157
15 Green Square Cl
Fortitude Valley
QLD
120.0
Directors
7.25
7.75
Optus
2.9
16,523
2,519
104 Melbourne St
South Brisbane
QLD
84.5
Directors
7.27
7.75
Integrated Clinical
Oncology Network
2.7
11,402
5,772
32 Cordelia St
South Brisbane
QLD
73.5
Directors
7.50
7.75
Jacobs Group
3.0
10,003
2,667
52 Merivale St
South Brisbane
QLD
68.0
C&W
7.50
7.75
Stantec Australia
3.1
9,405
2,331
100 Melbourne St
South Brisbane
QLD
42.5
m3property
7.25
7.75
Peabody Energy
0.7
6,597
3,158
Car Park, 32 Cordelia St & 52
Merivale St
South Brisbane
QLD
27.5 Knight Frank
6.75
7.75
Secure Parking
0.6
0
9,319
1 Charles St
Parramatta
NSW
440.0
Savills
5.00
6.63
NSW Government
(Police)
20.5
32,356
6,460
4 Broadcast Way
Artarmon
NSW
121.0
m3property
6.50
7.50
Fox Sports
6.0
14,457
4,212
3 Murray Rose Ave
Sydney Olympic Park NSW
86.5
CBRE
7.05
7.50 Samsung Electronics
2.7
13,423
3,980
5 Murray Rose Ave
Sydney Olympic Park NSW
67.0
CBRE
7.30
7.63
Bridgestone Mining
Solutions
0.7
12,269
3,826
11 Murray Rose Ave
Sydney Olympic Park NSW
40.0
Savills
7.01
7.25
B2G Consortium
4.0
5,684
2,642
33-39 Richmond Rd
Keswick
SA
57.5
Savills
7.00
7.50
SA Government
6.1
11,589
4,169
10-12 Mort St
Civic
ACT
82.5
Savills
7.51
7.75
Commonwealth of
Australia
5.7
15,398
3,064
2-6 Bowes St
Phillip
ACT
67.8
m3property
6.76
7.50
ACT Government
7.0
12,376
4,485
255 London Cct
Civic
ACT
60.5
Savills
6.76
7.25
Commonwealth of
Australia
3.2
9,167
2,945
836 Wellington St
West Perth
WA
83.5
C&W
7.00
7.50
Commonwealth of
Australia
2.6
11,973
4,304
2773.1
6.47
7.21
6.1 348,822 136,558
109
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Industrial portfolio
Address
Book
Value
Valuer
Cap
rate
Discount
rate
Major
tenant WALE
Lettable
area
Site
area
$m
%
%
years
sqm
sqm
3 Maker Pl
Truganina
VIC
62.3
Cushman &
Wakefield
5.75
7.13
101 Warehousing
5.3
31,109
49,810
9-21 Kimpton Way
Altona
VIC
59.5
Savills
5.38
7.00
TSS Sensitive Freight
7.7
25,743
41,730
Lots 2, 3 & 4, 34-44 Raglan St Preston
VIC
58.5
Directors
5.75
7.25
Paper Australia
1.5
27,978
42,280
1500 Ferntree Gully Rd & 8
Henderson Rd
Knoxfield
VIC
57.2
Directors
5.50
7.00
Brown & Watson
International
7.7
21,186
40,844
40 Annandale Rd
Melbourne Airport VIC
42.5
Savills
7.86
7.25
Australia Post
7.0
44,424
75,325
120-132 Atlantic Dr
Keysborough
VIC
40.8
C&W
5.50
7.00
Symbion
7.5
15,781
26,181
130 Sharps Rd
Melbourne Airport VIC
28.7
Savills
8.13
7.25
Laminex Group
6.0
28,100
47,446
20 Southern Crt
Keysborough
VIC
27.5
Directors
5.50
7.25 S&S Management Co
1.5
11,437
19,210
120 Link Rd
Melbourne Airport VIC
25.0
Savills
7.95
7.00 The Workwear Group
3.0
26,517
51,434
31 Garden St
Kilsyth
VIC
21.7
JLL
5.50
7.00
Cummins Filtration
4.4
8,919
17,610
6 Kingston Park Crt
Knoxfield
VIC
19.5
Urbis
5.25
7.00
Automotive Imports
3.1
7,677
12,795
3 Millennium Crt
Knoxfield
VIC
19.4
Urbis
5.25
7.00
Opal Packaging
1.7
8,040
14,750
19 Southern Crt
Keysborough
VIC
15.1
Directors
5.50
7.25
Wabtec Australia
2.8
6,455
11,650
101-111 South Centre Rd
Melbourne Airport VIC
14.1
Savills
8.22
7.00
Direct Couriers
3.4
14,082
24,799
60 Annandale Rd
Melbourne Airport VIC
14.1
Savills
8.13
7.25
Plantabl Packaging
6.4
16,274
34,726
75 Annandale Rd
Melbourne Airport VIC
10.3
Savills
8.04
7.00
Unipart Group
Australia
1.3
10,310
16,930
70 Distribution St
Larapinta
QLD
255.0
Directors
6.29
7.00
Woolworths
5.2
76,109
250,900
13 Business St
Yatala
QLD
19.0
Directors
6.00
7.25
Volo Modular
1.1
8,951
18,630
5 & 7A Viola Pl
Brisbane Airport
QLD
13.0
Directors
6.33
7.50
Eagers Automotive
8.6
14,726
35,166
3 Viola Pl
Brisbane Airport
QLD
3.9
Directors
7.05
7.50
Cargo Transport
Systems
1.7
3,431
12,483
27-49 Lenore Dr
Erskine Park
NSW
112.0
Directors
5.50
7.25
Linfox
1.2
29,476
76,490
6-7 John Morphett Pl
Erskine Park
NSW
84.0
CBRE
6.00
7.50
Linfox
0.7
24,881
82,280
51-65 Lenore Dr
Erskine Park
NSW
45.0
Directors
5.25
7.25
Linfox
3.7
3,720
36,720
34 Reddalls Rd
Kembla Grange
NSW
36.0
JLL
6.00
7.38
Autocare Services
6.3
355
141,100
81 Derby St
Silverwater
NSW
33.0
Directors
5.38
7.00
IVE Group Australia
1.2
8,062
13,490
599 Main North Rd
Gepps Cross
SA
192.0
Directors
5.63
7.25
Woolworths
10.9
91,686
233,500
12-16 Butler Blvd
Adelaide Airport
SA
22.6
Directors
6.60
7.75
Australia Post
7.1
16,835
30,621
10 Butler Blvd
Adelaide Airport
SA
13.2
Directors
6.60
7.75
Team Global Express
5.6
8,461
16,100
20 Colquhoun Rd
Perth Airport
WA
225.0
JLL
5.85
6.75
Woolworths
1.3
80,374
193,936
Hugh Edwards Dr & Tarlton Cr Perth Airport
WA
72.5
Savills
6.37
7.20
Mainfreight
3.7
32,018
57,617
1642.4
6.00
7.12
4.9 703,118 1,726,553
Detailed portfolio information
110
Additional information
Securityholder
information
Top 20 legal Securityholders as at 5 August 2024
Rank Name
Number of securities % of issued capital
1
GROWTHPOINT PROPERTIES LIMITED
480,025,424
63.66
2
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
65,140,552
8.64
3
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
61,512,350
8.16
4
CITICORP NOMINEES PTY LIMITED
39,878,032
5.29
5
BNP PARIBAS NOMS PTY LTD
12,114,390
1.61
6
NATIONAL NOMINEES LIMITED
5,229,154
0.69
7
NETWEALTH INVESTMENTS LIMITED
4,217,920
0.56
8
BNP PARIBAS NOMINEES PTY LTD
3,622,049
0.48
9
RABINOV HOLDINGS PTY LTD
2,347,279
0.31
10
SHARON INVESTMENTS PTY LTD
2,255,779
0.30
11
ESTIENNE DE KLERK + KANDI DE KLERK
1,816,166
0.24
12
BNP PARIBAS NOMINEES PTY LTD
1,577,898
0.21
13
JONAERE PTY LTD
1,410,000
0.19
14
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,145,537
0.15
15
MS KYLIE MAREE CECILIA THOMAS
1,144,332
0.15
16
SANDHURST TRUSTEES LTD
1,061,695
0.14
17
CITICORP NOMINEES PTY LIMITED
979,989
0.13
18
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
939,733
0.12
19
NETWEALTH INVESTMENTS LIMITED
752,702
0.10
20
GARRETT SMYTHE LTD
734,209
0.10
Sub total
687,905,190
91.22
Balance of register
66,196,112
8.78
Total issue capital
754,101,302
100.00
Substantial Securityholders as at 5 August 2024
Name
Number of securities
% of issued capital
Growthpoint Properties Limited
480,025,424
63.66
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information
Governance
Distribution of Securityholders as at 5 August 2024
Range
Total holders
Securities
% of securities
1 - 1,000
1,470
625,781
0.08
1,001 - 5,000
1,726
4,771,841
0.63
5,001 - 10,000
812
6,162,745
0.82
10,001 - 100,000
1,221
32,125,853
4.26
100,001 Over
116
710,415,082
94.21
Rounding
0.00
Total
5,345
754,101,302
100.00
Based on the 5 August 2024 closing price of $2.26, the number of Securityholders with less than a marketable parcel of 222 securities
($500) was 523 and they held a total of 31,209 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.
Securityholder information
112
Additional information
ABS Australian Bureau of Statistics
ACT Australian Capital Territory, Australia
A-REIT Australian Real Estate Investment
Trust
ASX Australian Securities Exchange
b Billion
bps Basis points
c. circa
capex Capital expenditure
cap rate or capitalisation rate The
market income produced by an asset
divided by its value or cost
CBD Central business district
CBRE An international commercial real
estate services firm
CPI Consumer price index
cps Cents per security
C&W, Cushman & Wakefield An
international professional services and
property investment firm
DPS Distribution per security
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
Growthpoint or the Group Growthpoint
Properties Australia comprising the
Company, the Trust and their controlled
entities
ICR Interest coverage ratio
JLL The Australian arm of Jones Lang
LaSalle, an international professional
services and investment management firm
LVR Loan to value ratio
m Million
MER Management expense ratio
NABERS National Australian Built
Environment Rating System
Net Zero 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)
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
SA South Australia, Australia
SME Small and medium-sized enterprise
sqm Square metres
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
WA Western Australia, Australia
WALE Weighted average lease expiry
Woolworths Woolworths Group Limited
yr Year
Glossary
113
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FY24 Annual Report
Financial report
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information
Governance
Corporate Directory
Growthpoint Properties Australia
Limited
ABN 33 124 093 901; AFSL No 316409
Growthpoint Properties Australia Trust
ARSN 120 121 002
Registered Office
Level 18, 101 Collins Street,
Melbourne VIC 3000
Phone: +61 (3) 8681 2900
growthpoint.com.au
Directors
Andrew Fay, Ross Lees,
Estienne de Klerk, Deborah Page AM,
Norbert Sasse, Josephine Sukkar AM,
Panico Theocharides, Michelle Tierney
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’.
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 18, 101 Collins Street,
Melbourne VIC 3000
+61 (3) 8681 2900
info@growthpoint.com.au
growthpoint.com.au
Contact
details
114
Financial report
This report was printed on ecoStar+, an
environmentally responsible paper made carbon
neutral, the fibre source is FSC Recycled
certified. ecoStar+ is manufactured from 100%
post consumer recycled paper in a process
chlorine free environment under the ISO 14001
environmental management system.
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 (22 August 2024).
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.
Important
information
115
Growthpoint Properties Australia
FY24 Annual Report
Financial report
Operating and
financial review
Additional
information
Governance
Growthpoint Properties Australia FY24 Annual Report
Growthpoint Properties Australia Trust
ARSN 120 121 002
Growthpoint Properties Australia Limited
ABN 33 124 093 901 AFSL 316409
Head Office
Level 18, 101 Collins Street
Melbourne VIC 3000
growthpoint.com.au