GPT : 2017 Interim Result Presentation (with speaker notes)

Good morning everyone, and welcome to GPT's 2017 Interim Results presentation.

I would like to start the proceedings by acknowledging the Traditional Custodians of the Land of Sydney, the Gadigal People of the Eora Nation. I extend my respects to Elders, Past and Present and to any First Nations people who have joined us for the presentation.

The format for today's presentation is similar to what you have seen previously from the team. I will start with an overview of the Results and key highlights for the half.

You will then hear from members of the management team on their areas of responsibility and I will then return to provide an update on the Group outlook, and the opportunity for you to ask questions.

First of all the Group has delivered strong results for the half.

FFO per security is up 3.5 per cent and distributions increased by 7.0 per cent per security on the prior period.

Asset valuation gains have again been strong, helping to deliver a 12 month total return of 16.9 per cent. This remains well ahead of our 'through the cycle' target of 8.5 per cent.

NTA per security increased by 6.3 per cent to $4.88 benefitting from the revaluation gains across the portfolio.

Our Balance Sheet remains in a very strong position with gearing of 24.1 per cent. During the period we also increased our hedge protection over the next 3 years to mitigate risk against rising interest rates.

Turning now to an overview of our business operations.

Our Management team has continued to deliver excellent results from our assets.

Like for Like income growth was 4.7 per cent. Our office portfolio outperformed, delivering 5.8 per cent, while our retail and logistics portfolios each delivered healthy like for like growth of 3.8 per cent.

Asset valuation gains totalled $480 million across the portfolio driven by income growth and cap rate compression of approximately 20 basis points. The weighted average capitalisation rate for the portfolio at June 30 was 5.39 per cent. Again, our office portfolio was the standout up 7.3 per cent for the half while our retail portfolio valuation increased by

2.2 per cent.

Our Funds Management Business continues to perform well with both our Shopping Centre Fund and Office Fund delivering total returns of approximately 13.5 per cent for the 12 months to June 30. Funds under management increased 3 per cent over the period to $10.7 billion.

In March, we successfully renewed terms for our Shopping Centre Fund for a further 10 years and subsequently increased our stake in this Fund, taking our ownership position to 29 per cent.

Post June 30, the Shopping Centre Fund exercised the pre-emptive right to acquire the remaining 25 per cent stake in the Highpoint Shopping Centre for $680 million. Highpoint is one of the top 5 retail assets in the country and the acquisition strengthens the quality of the fund. This will also result in a further increase in Funds under Management for the Group.

Our development pipeline continues to be a focus for the Group with all developments currently underway tracking in line with program and budget.

We had indicated in February that we expected the $250 million expansion of the Rouse Hill Town Centre to get underway in the second half of this year. While we remain optimistic about the opportunity, we won't be commencing the development during the second half as we remain in discussions with major tenants and other key stakeholders. The retail environment is quite dynamic, and appropriately, the expansion is being rigorously tested.

The Rouse Hill Town Centre continues to deliver exceptional growth and we remain confident that an expansion is well supported by strong fundamentals in the trade area.

Plans for Sydney Olympic Park and Camellia are also progressing. The proposal for both a new metro rail, and light rail, to service the area is currently being assessed by the NSW Government and is key to unlocking the redevelopment potential. We are advised that the revised masterplan for Sydney Olympic Park is expected to be gazetted by year end, and a rezoning of Camellia should occur in 2018.

Our logistics team is also making good progress with the sites we are developing in Western Sydney.

So as you can see we are continuing to progress the strategic priorities we set out in February 2016, and the business is delivering strong results.

To take you through the results in a little more detail I will handover to Anastasia Clarke our Group CFO.