Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

GDI PROPERTY GROUP Interim / Quarterly Report 2021

Feb 21, 2021

64974_rns_2021-02-21_c49b0020-2bfb-4a8b-8684-491804c6d07b.pdf

Interim / Quarterly Report

Open in viewer

Opens in your device viewer

GDI Property Group (ASX: GDI) GDI Property Group Limited ACN 166 479 189 GDI Property Trust ARSN 166 598 161

Appendix 4D Results for announcement to the market Period ended 31 December 2020

Appendix 4D Results for announcement to the market GDI PROPERTY GROUP

This Appendix 4D should be read in conjunction with the half yearly financial report of GDI Property Group for the half year ended 31 December 2020.

1. GDI Property Group

This report is for GDI Property Group (“GDI”), comprising the stapled entities GDI Property Group Limited (ACN 166 479 189) (“the Company”) and GDI Property Trust (ARSN 166 598 161) (“the Trust”).

GDI was formed on 16 December 2013 by the stapling of shares in the Company to units in the Trust. Each stapled security consists of one share in the Company and one unit in the Trust, which pursuant to a Co‐operation Deed dated 25 November 2013, cannot be dealt with or traded separately.

The responsible entity of the Trust is GDI Funds Management Limited (ACN 107 354 003, AFSL 253 142), a wholly owned subsidiary of the Company.

For the purposes of statutory reporting, the stapled entity, GDI, is accounted for as a consolidated group. Accordingly, one of the stapled entities must be the ‘deemed acquirer’ of the other, with the Company being chosen as the deemed acquirer of the Trust.

2. Reporting period

The financial information contained in this report is for the six‐month period from 1 July 2020 to 31 December 2020.

3. Highlights of the results

3. Highlights of the results
December 2020 December 2019
$'000 $'000
Revenue from ordinary activities 26,037 36,212
Comprehensive net profit attributable to securityholders after tax 5,811 58,389
Funds from operations (FFO1) 14,252 23,811
Distribution to security holders 21,004 21,015
Cents cents
Funds from operations per security 2.632 4.397
Distributions per security 3.875 3.875
Payout ratio
‐ Distributions as a % of FFO 147% 88%
‐ Distributions as a % of AFFO2 258% 114%
Basic earnings per security3 1.07 10.78
Diluted earnings per security3 1.07 10.71

1 FFO is a Property Council of Australia definition which adjusts AIFRS net profit for non‐cash changes in investment properties, non‐cash impairment of goodwill, non‐cash fair value adjustments to financial instruments, amortisation of incentives, straight‐line adjustments and other unrealised one‐off items. A reconciliation of total comprehensive income for the period to FFO is provided at section 2.1 of the Directors’ Report.

  • 2 AFFO adjusts FFO for incentives paid during the period and maintenance capex.

3 This calculation is based on the comprehensive profit attributable to stapled security holders of GDI.

1

GDI Property Group (ASX: GDI) GDI Property Group Limited ACN 166 479 189 GDI Property Trust ARSN 166 598 161

Appendix 4D Results for announcement to the market Period ended 31 December 2020

December 2020 June 2020
$'000 $'000
Total assets 992,021 968,525
Total borrowings 192,428 159,423
Securityholders equity 706,618 721,403
Market capitalisation 655,856 602,662
December 2020 June 2020
Net tangible assets per security ($) 1.27 1.30
Security price ($) 1.210 1.115
Securities on issue 542,030,027 540,503,681
Weighted average securities on issue 541,505,630 541,764,558

4. Commentary on the results

Refer to the Directors’ Report of the 31 December 2020 half yearly financial report for a commentary on the results of GDI.

5. Dividends/distributions declared and paid and dividend/distribution reinvestment plan

Distributions/dividends declared or paid in respect of the reporting period were:

Amount per Total Franked amount
security distribution per security
cents $’000 cents
2020 final – paid 31 August 2020 3.875 20,945 ‐
2020 interim – declared 14 December 2020 3.875 21,004 ‐

No distribution reinvestment plan was operated by GDI.

6. Changes in control over group entities

There were no acquisitions or disposals of controlled entities during the period.

7. Compliance statement

This Appendix 4D has been prepared in accordance with AASB Standards (including Australian interpretations) and other standards acceptable to the ASX. This Appendix 4D and the half yearly financial reports upon which it is based use the same accounting policies.

The financial report for the six‐month period ended 31 December 2020 has been reviewed by the auditors for GDI.

A copy of the GDI half yearly financial report for the six months ended 31 December 2020, with the auditor’s review conclusion, has been lodged with the ASX.

2

GDI Property Group

GDI Property Group Limited ACN 166 479 189

Half Yearly Financial Report 31 December 2020

GDI Property Group comprises GDI Property Group Limited ACN 166 479 189 (the Company) and its subsidiaries and GDI Property Trust ARSN 166 598 161 (the Trust) and its subsidiaries. The responsible entity of the Trust is GDI Funds Management Limited ACN 107 354 003, AFSL 253 142, a wholly owned subsidiary of the Company.

GDI PROPERTY GROUP

CONTENTS

Directors’ Report ............................................................................................................................................................. 1 Auditor’s Independence Declaration ................................................................................................................................ 7 Financial Report .............................................................................................................................................................. 8 Consolidated Statement of Profit or Loss and Other Comprehensive Income ....................................................................... 8 Consolidated Statement of Financial Position ........................................................................................................................ 9 Consolidated Statement of Changes in Equity ...................................................................................................................... 10 Consolidated Statement of Cash Flows ................................................................................................................................. 12 Notes to the Financial Statements ........................................................................................................................................ 13 1. Summary of significant accounting policies .............................................................................................................. 13 2. Property revenue ....................................................................................................................................................... 14 3. Finance costs ............................................................................................................................................................. 14 4. Non‐current assets held for sale ............................................................................................................................... 14 5. Other assets ............................................................................................................................................................... 14 6. Investment properties ............................................................................................................................................... 15 7. Borrowings ................................................................................................................................................................ 17 8. Dividends/distributions paid/payable ....................................................................................................................... 17 9. Segment reporting ..................................................................................................................................................... 18 10. Fair value measurements .......................................................................................................................................... 20 11. Contingent liabilities .................................................................................................................................................. 22 12. Events after the reporting date ................................................................................................................................. 23 Directors’ Declaration ................................................................................................................................................... 24 Independent Auditor’s Review Report ........................................................................................................................... 25

GDI PROPERTY GROUP DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

The Directors of GDI Property Group Limited ACN 166 479 189 (“the Company”) and GDI Funds Management Limited ACN 107 354 003; AFSL 253 142 as Responsible Entity for GDI Property Trust ARSN 166 598 161 (“the Trust”) present their report together with the half yearly financial report of the Company and its controlled entities and the Trust and its controlled entities for the six‐month period ended 31 December 2020. Shares in the Company are stapled to units in the Trust to form GDI Property Group (“GDI”).

The half yearly financial reports of the Company and its subsidiaries and the Trust and its subsidiaries have been presented jointly in accordance with ASIC Class Oder 13/1050 relating to combining or consolidating accounts under stapling and for the purpose of fulfilling the requirements of the Australian Securities Exchange (“ASX”). The Responsible Entity of the Trust is GDI Funds Management Limited. GDI Funds Management Limited is a wholly owned subsidiary of the Company and shares a common board.

1. Directors

The following persons were Directors of the Company and GDI Funds Management Limited during the half year and to the date of this Directors’ Report:

date of this Directors’ Report:
Director Appointment date
Gina Anderson Independent Chairman 5 November 2013
John Tuxworth Independent Non‐Executive 20 February 2017
Giles Woodgate Independent Non‐Executive 16 November 2017
Stephen Burns Independent Non‐Executive 15 November 2018
Steve Gillard Managing Director 5 November 2013

2. Review of results and operations

The Board monitors a range of financial information and operating performance indicators to measure performance over time. The Board uses several measures to monitor the success of GDI’s overall strategy, most importantly Funds From Operations (“FFO”) and GDI’s total return, calculated as the movement in net tangible assets (“NTA”) per security plus distributions per security. FFO is a Property Council of Australia definition which adjusts statutory AIFRS net profit for non‐ cash changes in investment properties, non‐cash impairment of goodwill, non‐cash fair value adjustments to financial instruments, amortisation of incentives, straight‐line adjustments and other unrealised one‐off items.

2.1 Financial performance

The reconciliation between GDI’s FFO and its statutory profit for the period ended 31 December 2020 is as follows:

GDI
31 December 2020
31 December 2019
$'000
$'000
Total comprehensive income for the year
Portfolio acquisition and other transaction costs
Contribution resulting from consolidated trusts
Distributions/funds management fees received from consolidated trusts
Straight lining adjustments
Amortisation of incentives
Amortisation of lease costs
Amortisation of loan establishment costs and depreciation
Net fair value (gain) / loss on investment property
Net fair value(gain) /loss on interest rate swaps		 10,476
59,546
823
‐
(4,295)
(2,297)
2,190
943
497
457
5,954
2,599
456
427
348
85
(2,318)
(37,949)
121
‐
Funds From Operation 14,252
23,811
Cents
Cents
Funds From Operationper stapled security 2.632
4.397

1

GDI PROPERTY GROUP DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

2.1 (a) Property business

Perth

GDI’s portfolio, both in its Property and Funds Management businesses, remains heavily weighted to Perth, with 84% of all assets under management located in Perth. We believe that Perth is the Australian city with the best short and medium term growth prospects given its export facing economy, the resultant economic growth prospects, and the lack of new CBD office supply. Although the CBD experienced 16,000sqm of negative absorption in 2020, the market achieved positive net absorption of 7,000sqm in Q4 2020. Furthermore, most commentators are still forecasting a number of years of positive absorption and rising effective rents, albeit at a lower rate in 2021 than was forecast this time a year ago.

COVID‐19

GDI’s portfolio is located in jurisdictions that have had the least exposure to COVID‐19 in terms of community transmissions and lockdowns. Although we provided some rent relief to a small number of tenants, during the six‐month period ended 31 December 2020 most tenants paid rent in accordance with pre COVID‐19 leases. During 2020, we waived and wrote off $733,354 of rent, $518,000 of which was reported at 30 June 2020.

Performance

GDI’s largest asset by capital value is Westralia Square, 141 St Georges Terrace, Perth. We purchased Westralia Square in October 2017 for $216.25 million, equating to a rate of approximately $6,700/sqm of NLA. In our opinion, we were able to purchase the property so well due to its very short lease expiry profile, with both the Minister for Works (25,664sqm) and UGL’s (3,374sqm) leases expiring in the first half of 2020. As previously disclosed, the Minister for Works agreed to two new leases commencing 1 February 2021, a five‐year lease[1] to the Western Australia Police Force (12,689sqm) and a six‐year lease to Births, Deaths and Marriages (1,833sqm). During the period we concluded the lease negotiations with Cash Converters Pty Limited for a new 10‐year lease (level 11, 1,807sqm) commencing 1 October 2021 and post balance date have executed a heads of agreement for all of level 12 (1,807sqm) for a new 6.5 year lease commencing early 2022. These successful leasing transactions, which together with the existing lease to Hartleys Limited, means Westralia Square is now 63% committed, and provided the current leasing momentum continues, we anticipate continued improvements in occupancy during 2021. However, due to the expiry of the Minister of Works and UGL’s leases during 2020, and the transition of the Western Australia Police Force from the upper floors to the lower floors in the second half of 2020, FFO from Westralia Square during the period was significantly lower at $4.0 million than the previous corresponding period (31 December 2019: $13.6 million).

Having the upper floors vacated during 2020 meant we were able to commence the refurbishment programme of those vacated floors. We are currently approximately 50% of the way through this refurbishment programme and anticipate completing it during 2021. During the period we also completed the upgrade of the end of trip facilities. No other major capital works are planned for the existing building.

During the period we made significant progress with the proposed development on the excess land at Westralia Square (WS2). Plans were submitted to the Approval Authority and post balance date we received development approval for the proposed new 9,300sqm tower. We intend to appoint a builder shortly, and anticipate the development will be completed towards the end of 2022. We believe the unique premium grade development will have high appeal for the occupier market.

GDI’s second largest asset by capital value is the three building Mill Green complex, comprising 197 St Georges Terrace, 5 Mill Street and 1 Mill Street Perth. During the period, at 197 St Georges Terrace, we leased level 13 (835sqm) for a period of five years commencing 1 February 2021 to Laing O’Rourke Australia Construction Pty Limited, and a 209sqm suite on level 10 to Aspect Studios Pty Limited commencing 1 June 2021, also for five years. These two leases take the committed space in 197 St Georges Terrace to 89% (30 June 2020: 85%) of NLA, with a further 5% of NLA being the former Chevron training facilities that are being shown as vacant notwithstanding it being offered to the market as conferencing facilities.

  1. Western Australia Police Force has certain 12‐month lease extension and termination rights on the giving of at least 18‐months’ notice, and in the case of termination, compensation to GDI.

2

GDI PROPERTY GROUP

DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

At 5 Mill Street, following the lease expiry and departures of ERM Australia Limited (737sqm) and 4 other smaller tenants (533.6sqm in total), occupancy fell to 65% from 83.1% as at 30 June 2020. Notwithstanding the competitiveness of the market for fitted out suites of less than 300sqm, we have successfully released or renewed 331sqm of NLA to three tenants, with the committed occupancy, including heads of agreement, now at 68%.

As previously disclosed, we are not looking at any immediate long‐term leasing of 1 Mill Street given both the time of the cycle and its redevelopment opportunities. To progress the redevelopment opportunities, in late 2020 we lodged a development application for a new approximately 45,000sqm office tower to be constructed at 1 Mill Street. We anticipate receiving development approval shortly and once received, we intend to demolish the existing building in readiness for a pre‐ commitment and commencing construction.

Mill Green delivered Property FFO of $8.9 million (31 December 2019: $10.0 million), with the reduction largely resulting from the decreased occupancy at 5 Mill Street.

During the period we also settled the acquisition of 180 Hay Street, Perth, for $12.595 million. 180 Hay Street was constructed in 1999 and comprises 4,925sqm of well‐presented office space over four floors of over 1,000sqm each and a mezzanine level. 180 Hay Street was purchased with vacant possession. GDI gained early access in June 2020 and immediately commenced a refurbishment programme including upgrading all the floors, a new end of trip facility and a chiller upgrade. The total cost of the refurbishment programme is expected to be approximately $3.5 million. At the date of acquisition 180 Hay Street was valued at $15.0 million.

Property FFO at GDI’s only other wholly owned property, 50 Cavill Avenue, Surfers Paradise, was $3.5 million for the period (31 December 2019: $3.5 million). However, occupancy has decreased slightly over the period to 91% of NLA (from 94.0% at 30 June 2020) following the net loss of three tenants. We are in negotiations with a number of existing tenants to expand in the property and new tenants to relocate into the building and are confident that occupancy will increase over 2021. We continue to hold 50 Cavill Avenue as a non‐current asset held for sale.

As GDI also owns 43.68% of the units on issue of GDI No. 42 Office Trust and 47.19% of the units on issue of GDI No. 46 Property Trust, for statutory accounting purposes we consolidate both trusts, but for FFO purposes we recognise in the Funds Business (see below) the funds management fees generated on the units we do not own and the quarterly distributions on the units we do.

GDI No. 42 Office Trust owns a 13,786sqm property at 235 Stanley Place, Townsville (Stanley Place). Stanley Place’s major tenant, the ATO (5,118sqm), lease expired in August 2020. Subsequently, the now largest tenant, Services Australia (Department of Human Services) leased a further 816sqm in addition to the 4,644sqm that it already leased. As a result of these movements in the tenancy profile, occupancy has fallen from 89% to 58% of NLA. We are having ongoing discussions with Services Australia about further office accommodation needs in Townsville and are hopeful of a successful leasing outcome in the near term.

GDI No. 46 Property Trust owns the IDOM Portfolio. The IDOM Portfolio comprises 17 well located car dealerships and service centres on major arterial roads in metropolitan Perth. The IDOM Portfolio is fully leased for a remaining term of approximately 10 years with the tenant[2] having 5 x 5‐year options. The leases have annual CPI[3 ] + 1% rental increases, with market reviews[3] in 2023 and 2028.

We obtained independent valuations for a number of our consolidated properties during the period. Westralia Square was revalued to $345.0 million (from $327.5 million) with the valuer now ascribing some value to the excess land. Mill Green was valued at $326.0 million (from $343.0 million), with a slight increase in the valuation of 1 Mill Street offset by decreases in the value of 5 Mill Street ($56.0 million vs $58.5 million at 31 December 2019) and 197 St Georges Terrace ($230.0 million vs $251.0 million at 31 December 2019). 5 Mill Street’s valuation was impacted by the increased vacancy, and 197 St Georges Terrace’s valuation by the impending lease expiries of Amec (FY23) and Jacobs (FY22). Stanley Place was revalued at $51.5, down from $53.5 million at 30 June 2019, with the decrease due to the increased vacancy following the ATO’s departure in August 2020. The IDOM portfolio was also revalued, with the portfolio’s value increasing to $105.9 million (from $98.0 million).

  1. The tenant is either Buick Holdings Pty Limited (Buick), or wholly owned subsidiaries of Buick. Buick is owned 67% by IDOM Automotive Group Pty Limited, a wholly owned subsidiary of IDOM Inc, an entity listed on the Tokyo Stock Exchange and 33% by entities associated with the DiVirgilio family.

  2. CPI is Perth Capital City CPI and the market reviews have a 10% cap and a 5% collar.

3

GDI PROPERTY GROUP DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

Following the revaluations, GDI’s portfolio metrics are provided below:

GDI
As at 31 December 2020
As at 30 June 2020
Occupancy4,5
Weighted average lease expiry4,5
Weighted average capitalisation rate4		 65.9%
81.1%
3.6 years
2.6 years
6.61%
6.92%

2.1 (b) Funds Management

GDI’s Funds Management business has a 27‐year track record of successfully managing unlisted, unregistered managed investment schemes. Over that time GDI has established nearly 40 unlisted, unregistered managed investment schemes, with over 30 of those now having been terminated. To date, no unlisted, unregistered managed investment scheme has returned a negative Internal Rate of Return (‘IRR’). Our successful track record is partly a result of our disciplined approach to acquisition opportunities and we will continue to review opportunities cautiously. Although we reviewed numerous acquisition opportunities during the period, we did not secure any properties to establish any new unlisted, unregistered managed investment schemes.

The Funds Business delivered FFO before interest and income tax expense of $3.7 million for the six‐month period to 31 December 2020 (31 December 2019: $2.0 million). A large contributor to this is the distributions received from the consolidated funds, GDI No. 42 Office Trust ($0.4 million) and GDI No. 46 Property Trust ($1.4 million), with the balance of FFO largely being ongoing management fees.

2.1 (c) Operating costs

Operating costs predominately relate to remuneration, including an accrual of $500,000 for staff bonuses and the issue of performance rights in FY21.

2.1 (d) Net interest expense

As at 31 December 2020, GDI’s Principal Facility was drawn to $152.8 million (30 June 2020: $120.0 million), secured by a security pool independently valued at $787.0 million, a loan to value ratio (LVR) of 19.4%. The $32.8 million increase in drawn debt was used to fund the acquisition of 180 Hay Street, Perth ($12.8 million) and general working capital purposes ($20.0 million).

Including the interest expense of the consolidated trusts, the interest expense for the period totalled $2.7 million (31 December 2019: $1.2 million). Although the interest expense of the consolidated trusts is included in the statutory accounts, it is not included in GDI’s FFO.

2.2 Financial position

2.2 (a) Balance sheet

GDI’s balance sheet is in a very strong financial position. As at 31 December 2020:

  • Net tangible asset (NTA) per security is $1.27 (30 June 2020: $1.30);

  • Total Principal Facility debt outstanding is $152.8 million, with undrawn facilities of $52.2 million; and

  • GDI is well within its Principal Facility covenants, with a Covenant Loan to Value ratio of 19.5% (Covenant 50%) and a Covenant Interest Cover ratio of 7.9X (Covenant of 2X).

  1. Excluding the IDOM Portfolio, GDI No. 46 Property Trust.

  2. Based on NLA and including heads of agreement to the date of this report.

4

GDI PROPERTY GROUP DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

2.2 (b) Capital management

GDI’s balance sheet is in a strong position with an LVR on the Principal Facility of 19.4%, below the Board’s maximum LVR of 40% and the bank’s covenant of 50%

As GDI No. 42 Office Trust and GDI No. 46 Property Trust are both consolidated into the statutory accounts of GDI, their facilities are also shown in GDI’s accounts. GDI No. 42 Office Trust has drawn debt of $10.0 million, 19.4% of the independent value of the asset held by GDI No. 42 Office Trust, and undrawn debt of $1.5 million, with an expiry June 2022. GDI No. 46 Property Trust has drawn debt of $30.0 million, 28.3% of the independent value of the IDOM Portfolio, with an expiry of February 2023.

This strong financial position enabled us to announce an on‐market securities buyback to acquire up to 5% of the securities on issue and take advantage of the extreme volatility in GDI’s security price. During the period we bought back and cancelled 917,835 securities in addition to the 1,824,220 securities we had purchased in the period to 30 June 2020. In August 2020, we also issued 2,444,181 new securities to satisfy performance rights granted in FY17 that vested on the signing of the FY20 financial accounts. Securities on issue at 31 December 2020 totalled 542,030,027.

2.2 (c) Hedging

GDI’s hedging policy is to allow management more flexibility in determining the level of interest rate hedging, particularly when total drawn debt is below $100.0 million. This new policy may mean that at times we may have no interest rate hedges and be subject to upward movements in interest rates. However, we currently have two $25.0 million interest rates swaps, one for three years (0.38% expiry May 2023) and one for five years (0.60% expiry May 2025).

As at 31 December 2020, neither GDI No. 42 Office Trust nor GDI No. 46 Property Trust had any interest rate hedges or fixed rate borrowings.

3. Future prospects

GDI’s existing portfolio of assets in both the Property business and the Funds Management business provide significant scope for capital appreciation, and the primary focus for CY21 is to continue to implement the asset management initiatives for each of our assets to deliver on this capital appreciation. Specifically, we intend to:

  • continue the development of the excess land and ongoing capital expenditure program at Westralia Square;

  • secure a pre‐commitment for a new development at 1 Mill Street, Perth;

  • complete the capital expenditure programme at 180 Hay Street, Perth; and

  • make significant progress with leasing the vacancies at 1 Adelaide Terrace, Perth (GDI No. 36 Perth CBD Office Trust) and 235 Stanley Street, Townsville (GDI No. 42 Office Trust).

We will also continue to review acquisition opportunities for the Property business funded by an increase in the size of our Principal Facility, and also for the Funds Management business.

4. Distribution guidance

We confirm that it is our intent to pay a cash distribution of 7.75 cents per security for FY21, regardless of our level of FFO, subject to no material change in circumstances or unforeseen events, noting that the cash distribution for the six‐month period ended 31 December 2020 was 3.875 cents per security. As with the period ended 31 December 2020, we would expect that a proportion of any cash distribution for the second half of FY21 will be paid out of capital.

5. Rounding of Amounts

Amounts in the financial report and the directors’ report have been rounded to the nearest thousand in accordance with ASIC Corporations Instrument 2016/191, unless stated otherwise.

5

GDI PROPERTY GROUP DIRECTORS’ REPORT

For the six‐month period ended 31 December 2020

6. Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7.

Signed in accordance with a resolution of the directors of GDI Property Group Limited and GDI Funds Management Limited.

==> picture [110 x 44] intentionally omitted <==

_______ Gina Anderson Chairman

==> picture [93 x 62] intentionally omitted <==

==> picture [158 x 28] intentionally omitted <==

----- Start of picture text -----

_______
Steve Gillard
Managing Director
----- End of picture text -----

Sydney Dated this 22[nd] day of February 2021

6

GDI PROPERTY GROUP AUDITOR’S INDEPENDENCE DECLARATION

==> picture [495 x 117] intentionally omitted <==

==> picture [204 x 322] intentionally omitted <==

==> picture [158 x 328] intentionally omitted <==

==> picture [495 x 117] intentionally omitted <==

==> picture [495 x 117] intentionally omitted <==

7

GDI PROPERTY GROUP FINANCIAL REPORT

For the six‐month period ended 31 December 2020

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Halfyear ended 31 December
Note		 GDI
2020
2019
$'000
$'000		 GDI
2020
2019
$'000
$'000		 Trust
2020
2019
$'000
$'000
Revenue from ordinary activities
Property income
2
Funds management income
Interest income
Other income		 24,606
35,103
1,322
1,064
53
45
56
‐		 24,709
35,123
‐
‐
49
40
18
‐
Total revenue from ordinary activities 26,037
36,212		 24,776
35,162
Net fair value gain/(loss) on interest rate swaps
Net fair valuegain/(loss)on investmentproperty		 (121)
‐
2,318
37,949		 (121)
‐
2,318
37,949
Total income 28,234
74,161		 26,973
73,112
Expenses
Property expenses
Finance costs
3
Corporate and administration expenses
Acquisition expenses		 10,356
9,095
2,689
1,232
4,047
4,286
823
‐		 10,356
9,095
2,698
1,373
2,221
3,208
797
‐
Total expenses 17,915
14,613		 16,072
13,677
Profit before tax 10,319
59,548		 10,902
59,434
Income tax(expense)/benefit 157
(3)		 ‐
‐
Netprofit for theperiod 10,476
59,546		 10,902
59,434
Other comprehensive income ‐
‐		 ‐
‐
Total comprehensive income for theperiod 10,476
59,546		 10,902
59,434
Profit and total comprehensive income
attributable to:
Company shareholders
Trust unitholders		 (426)
111
6,236
58,278		 ‐
‐
6,236
58,278
Profit and total comprehensive income attributable to
ordinary securityholders
External non‐controllinginterests – consolidated trusts		 5,811
58,389
4,665
1,156		 6,236
58,278
4,665
1,156
Profit and total comprehensive income 10,476
59,546		 10,902
59,434
Basic earnings per stapled security/trust unit
Diluted earnings per stapled security/trust unit		 1.07
10.78
1.07
10.71		 1.15
10.76
1.14
10.69

The accompanying notes form part of these financial statements.

8

GDI PROPERTY GROUP FINANCIAL REPORT

As at 31 December 2020

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note GDI
31 December
30 June

2020
2020
$'000
$'000		 GDI
31 December
30 June

2020
2020
$'000
$'000		 Trust
31 December
30 June
2020
2020
$'000
$'000
Current assets
Cash and cash equivalents
Trade and other receivables
Non‐current assets held for sale
4
Other assets
5		 7,106
10,100
9,095
5,581
102,156
102,240
9,770
8,919		 6,571
6,717
7,550
4,561
102,156
102,240
8,987
10,412
Total current assets 128,126
126,841		 125,264
123,930
Non‐current assets
Investment properties
6
Plant and equipment
Right of use asset
Deferred tax assets
Intangible assets		 843,681
822,850
84
95
979
‐
1,040
629
18,110
18,110		 843,681
822,850
‐
‐
‐
‐
‐
‐
‐
‐
Total non‐current assets 863,895
841,685		 843,681
822,850
Total assets 992,021
968,525		 968,945
946,780
Current liabilities
Trade and other payables
Operating lease liability
Provisions		 26,787
25,520
274
‐
463
405		 25,842
24,984
‐
‐
‐
Total current liabilities 27,524
25,926		 25,842
24,984
Non‐current liabilities
Borrowings
7
Derivative financial instruments
Operating lease liability
Provisions
Other liabilities		 192,428
159,423
447
326
710
‐
226
206
263
‐		 192,343
159,318
447
326
‐
‐
‐
‐
25
Total non‐current liabilities 194,074
159,954		 192,790
159,668
Total liabilities 221,598
185,880		 218,631
184,652
Net assets 770,423
782,645		 750,314
762,128
Equity
Contributed equity
Reserves
Retainedprofits		 22,342
22,296
174
203
(2,407)
(1,981)		 503,107
502,084
3,851
4,483
179,551
194,319
Equity attributable to equity holders of the Company/
Trust 20,109
20,517		 686,509
700,886
Non‐controlling interests
Unitholders of the Trust
Contributed equity
Reserves
Retainedprofits		 503,107
502,084
3,851
4,483
179,551
194,319		 ‐
‐
‐
‐
‐
‐
Total equity attributable to trust unitholders 686,509
700,886		 ‐
‐
Equity attributed to holders of stapled securities 706,618
721,403		 ‐
‐
External non‐controlling interest
Contributed equity
Retainedprofits		 64,625
64,575
(819)
(3,333)		 64,625
64,575
(819)
(3,333)
Total equity attributable to external non‐controlling interest
63,805
61,242		 63,805
61,242
Total equity
770,423
782,645		 750,314
762,128

The accompanying notes form part of these financial statements.

9

GDI PROPERTY GROUP FINANCIAL REPORT

As at 31 December 2020

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equityattributable to securityholders of GDI
Contributed
equity
Reserves
Retained
earnings
Total
Non‐
controlling
interest
(Trust)
External non‐
controlling
interest
(consolidated
trusts)
Total
equity
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Balance as at 1 July2019 22,301
193
(3,221)
19,274
676,945
24,657
720,876
Comprehensive income
Profit for theperiod		 ‐
‐
111
111
58,278
1,156
59,546
Total comprehensive income
for theperiod		 ‐
‐
111
111
58,278
1,156
59,546
Transactions with securityholders in their capacity as securityholders
Security‐based payments
expense
‐
57
‐
57
1,257
‐
1,314
Issued equity
81
(81)
‐
‐
‐
‐
‐
On market buy‐back
‐
‐
‐
‐
‐
‐
‐
Distributionspaid/payable
‐
‐
‐
‐
(21,015)
(1,081)
(22,097)
Total transactions with
securityholders in their
capacity as securityholders
81
(24)
‐
57
(19,758)
(1,081)
(20,783)
Balance as at 31 December 2019
22,382
169
(3,110)
19,442
715,465
24,732
759,639
Balance as at 1 July2020
22,296
203
(1,981)
20,517
700,886
61,242
782,645
Comprehensive income
Profit for theperiod
‐
‐
(426)
(426)
6,236
4,665
10,476
Total comprehensive income
for theperiod
‐
‐
(426)
(426)
6,236
4,665
10,476
Transactions with securityholders in their capacity as securityholders
Security‐based payments
expense
‐
59
‐
59
1,303
‐
1,362
Issued equity
88
(88)
‐
‐
‐
‐
‐
Issue and formation costs
‐
‐
‐
‐
(1)
‐
(1)
Disposal of equity to non‐
controlling interests
‐
‐
‐
‐
‐
50
50
On market buy‐back
(41)
‐
‐
(41)
(911)
‐
(953)
Distributionspaid/payable
‐
‐
‐
‐
(21,004)
(2,152)
(23,156)
Total transactions with
securityholders in their
capacity as securityholders
46
(29)
‐
18
(20,613)
(2,102)
(22,698)
Balance as at 31 December 2020
22,342
174
(2,407)
20,109
686,509
63,805
770,423

The accompanying notes form part of these financial statements.

10

GDI PROPERTY GROUP FINANCIAL REPORT

As at 31 December 2020

GDI PROPERTY GROUP
FINANCIAL REPORT
As at 31 December 2020
Equity attributable to unitholders of the
Trust
Contributed
equity
Reserves
Retained
earnings
Total equity
attributable
to
unitholders
of the Trust
External non‐
controlling
interest
(consolidated
trusts)
Total
equity
$'000
$'000
$'000
$'000
$'000
$'000
Balance as at 1 July2019 502,263
4,269
170,414
676,945
24,657
701,602
Comprehensive income
Profit for theperiod		 ‐
‐
58,278
58,278
1,156
59,434
Total comprehensive income for
theperiod		 ‐
‐
58,278
58,278
1,156
59,434
Transactions with unitholders in their capacity as unitholders
Security‐based payments expense
‐
1,257
‐
1,257
‐
1,257
Issued equity
1,793
(1,793)
‐
‐
‐
‐
On market buy‐back
‐
‐
‐
‐
‐
‐
Distributionspaid/payable
‐
‐
(21,015)
(21,015)
(1,081)
(22,097)
Total transactions with unitholders
in their capacity as unitholders
1,793
(536)
(21,015)
(19,758)
(1,081)
(20,839)
Balance as at 31 December 2019
504,056
3,732
207,677
715,465
24,732
740,197
Balance as at 1 July2020
502,084
4,483
194,319
700,886
61,242
762,128
Comprehensive income
Profit for theperiod
‐
‐
6,236
6,236
4,665
10,902
Total comprehensive income for
theperiod
‐
‐
6,236
6,236
4,665
10,902
Transactions with unitholders in their capacity as unitholders
Security‐based payments expense
‐
1,303
‐
1,303
‐
1,303
Issued equity
1,935
(1,935)
‐
‐
‐
‐
Issue and formation costs
(1)
‐
‐
(1)
‐
(1)
Disposal of equity to non‐
controlling interests
‐
‐
‐
‐
50
50
On market buy‐back
(911)
‐
‐
(911)
‐
(911)
Distributionspaid/payable
‐
‐
(21,004)
(21,004)
(2,152)
(23,156)
Total transactions with unitholders
in their capacity as unitholders
1,023
(632)
(21,004)
(20,613)
(2,102)
(22,715)
Balance as at 31 December 2020
503,107
3,851
179,551
686,509
63,805
750,314

The accompanying notes form part of these financial statements.

11

GDI PROPERTY GROUP FINANCIAL REPORT

For the six‐month period ended 31 December 2020

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CASH FLOWS
Halfyear ended 31 December GDI
2020
2019
$'000
$'000		 Trust
2020
2019
$'000
$'000
Cash flows from operating activities
Receipts in the course of operations
Payments in the course of operations
Interest received
Interestpaid		 28,073
39,321
(9,999)
(12,948)
53
45
(2,483)
(1,007)		 27,342
36,694
(10,117)
(8,257)
49
40
(2,473)
(1,007)
Net cash inflow from operating activities 15,643
25,412		 14,801
27,470
Cash flows from investing activities
Payments for investments
Payments for other capitalised costs
Payments for capital expenditure
Payment of tenant incentives and leasing costs
Loan to associated entities
Repayment of loans to associated entities
Disposal of equityto non‐controllinginterests		 (13,418)
(9,701)
(962)
(2,898)
(5,814)
(4,340)
(5,776)
(3,151)
(1,295)
‐
‐
‐
50
‐		 (13,392)
‐
(960)
(2,896)
(5,814)
(4,340)
(5,776)
(3,151)
‐
(19,225)
2,146
8,425
50
‐
Net cash used in investing activities (27,215)
(20,090)		 (23,747)
(21,186)
Cash flows from financing activities
Proceeds from borrowings
Payments for the on‐market buy‐back of securities
Payment of loan transaction costs
Equity issue and formation costs
Principal reduction in lease liabilities
Payment of distributions to securityholders/unitholders		 32,833
11,622
(998)
‐
(23)
(9)
(1)
‐
(135)
‐
(23,097)
(21,990)		 32,833
11,622
(911)
‐
(23)
(9)
(1)
‐
‐
‐
(23,097)
(21,990)
Net cash from financing activities 8,578
(10,377)		 8,800
(10,377)
Net (decrease)/increase in cash and cash
equivalents (2,994)
(5,055)		 (146)
(4,094)
Cash and cash equivalents at beginningofperiod 10,100
18,775		 6,717
17,202
Cash and cash equivalents at the end of theperiod 7,106
13,719		 6,571
13,108

The accompanying notes form part of these financial statements.

12

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GDI Property Group (“GDI”) was formed by the stapling of GDI Property Group Limited (the “Company”) and GDI Property Trust (the “Trust”). The Responsible Entity of the Trust is GDI Funds Management Limited, a wholly owned subsidiary of the Company. The Group was established for the purpose of facilitating a joint quotation of the Company and the Trust on the ASX. The constitutions of the Company and the Trust, together with a Co‐operation Deed dated 25 November 2013, ensure that for so long as the two entities remain jointly quoted, the number of units in the Trust and shares in the Company shall be equal and the unitholders and the shareholders be identical. Both the Responsible Entity of the Trust and the Company must at all times act in the best interests of the Group.

The Company has been deemed the parent entity of the Trust. The consolidated financial statements and notes represent those of the Company and its controlled entities, including the Trust and its controlled entities as the deemed acquiree. The financial report includes separate financial statements for:

  • the Group, consisting of the Company, the Trust and their controlled entities; and

  • the Trust, consisting of GDI Property Trust and its controlled entities.

The half yearly financial statements are authorised for issue on 22 February 2021 by the directors of the Company and the Responsible Entity of the Trust.

(a) Basis of preparation

These general purpose interim financial statements for the half year ended 31 December 2020 have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting . The Group is a for‐profit entity for financial reporting purposes under Australian Accounting Standards.

This half year financial report is intended to provide users with an update on the latest annual financial statements of the Group and its controlled entities and GDI Property Trust and its controlled entities. As such, it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the financial year ended 30 June 2020, together with any ASX announcements made during the following half year.

(b) Consolidated financial statements

The half yearly financial report of the Company and its subsidiaries and the Trust and its subsidiaries have been presented jointly in accordance with ASIC Class Order 13/1050 relating to combining or consolidating accounts under stapling and for the purpose of fulfilling the requirements of the Australian Securities Exchange (“ASX”).

The shares of the Company and the units in the Trust are stapled and issued as stapled securities of GDI. Whilst the shares and units are stapled, they cannot be traded separately and can only be traded as stapled securities. The stapling occurred on 16 December 2013, with trading on the ASX commencing on 17 December 2013.

The stapling has been accounted for pursuant to AASB 3: Business Combinations. The Company has been identified as the acquirer of the Trust whereby the Trust’s net assets are attributed to the trust unitholders. In this regard, the unitholders are treated as the non‐controlling interest in the post‐stapled financial statements of GDI, despite the fact that such owners also have an equal interest in the Company.

(c) Accounting policies

The same accounting policies and methods of computation have been followed in this half year financial report as were applied in the most recent annual financial statements.

13

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

NOTE 2 – PROPERTY REVENUE

NOTE 2 – PROPERTY REVENUE
Half year ended 31 December
Property revenue		 GDI
2020
2019
$'000
$'000		 Trust
2020
2019
$'000
$'000
Rent and recoverable outgoings
Amortisation of leasingcosts and incentives		 31,016
38,129
(6,410)
(3,027)		 31,119
38,149
(6,410)
(3,027)
Totalproperty revenue 24,606
35,103		 24,709
35,123

NOTE 3 – FINANCE COSTS

NOTE 3 – FINANCE COSTS
Half year ended 31 December
Finance costs		 GDI
2020
2019
$'000
$'000		 Trust
2020
2019
$'000
$'000
Interestpaid/ payable 2,689
1,232		 2,698
1,373
Total finance costs 2,689
1,232		 2,698
1,373

NOTE 4 – NON‐CURRENT ASSETS HELD FOR SALE

During 2019 and 2020, GDI engaged the services of real estate agents to market 50 Cavill Avenue, Surfers Paradise for sale. Accordingly, the property was classified as a Non‐current asset held for sale in the 31 December 2019 financial statements, 30 June 2020 accounts and again in these accounts. If 50 Cavill Avenue is sold, the strata unit at 46 Cavill Avenue, Surfers Paradise, would be considered non‐core and accordingly, that asset has also been classified as a Non‐current asset held for sale.

Assets held for sale GDI
31 December
30 June
2020
2020
$'000
$'000		 GDI
31 December
30 June
2020
2020
$'000
$'000		 Trust
31 December
30 June
2020
2020
$'000
$'000
Investmentproperties 102,156
102,240		 102,156
102,240
Total assets held for sale 102,156
102,240		 102,156
102,240

NOTE 5 – OTHER ASSETS

Other assets of both GDI and the Trust includes:

  • capitalised costs relating to the proposed development on the excess land at Westralia Square ($2.8 million);

  • capitalised costs relating to the proposed development at 1 Mill Street, Perth ($0.6 million); and

  • loans to associated entities of $5.4 million in the Trust and $6.2 million in GDI.

14

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

NOTE 6 – INVESTMENT PROPERTIES

NOTE 6 – INVESTMENT PROPERTIES NOTE 6 – INVESTMENT PROPERTIES
a) Investmentproperties at fair value GDI
31 December
30 June
2020
2020
$'000
$'000		 Trust
31 December
30 June
2020
2020
$'000
$'000
Movement in investment properties
Balance at beginning of the period
822,850
773,259
Additions – Investment property
12,595
98,000
Assets transferred to non‐current assets held for sale
‐
(102,240)
Non‐cash movement in non‐current assets held for sale
173
‐
Capital works
‐ Property improvements
5,107
6,014
‐ Maintenance capital (GDI Property Trust)
397
1,409
‐ Maintenance capital (consolidated trusts)
203
455
Straight lining of rental income
(506)
(1,021)
Leasing costs
393
1,399
Amortisation of leasing costs
(456)
(879)
Net gain/(loss) from fair value adjustments
2,318
32,862
Incentives paid (GDI Property Trust)
5,168
19,757
Incentives paid (consolidated trusts)
‐
‐
Non‐cash incentives paid
696
(53)
Amortisation of incentives (GDI Property Trust)
(5,864)
(6,121)
Amortisation of incentives (consolidated trusts)
(46)
(87)
Impact of COVID‐19
‐ Incentives paid
214
471
‐ Restructured rental payments
574
‐
‐ Amortisation of incentives paid
(44)
(29)
‐ Non‐cash incentivespaid
(94)
(345)		 822,850
773,259
12,595
98,000
‐
(102,240)
173
‐
5,107
6,014
397
1,409
203
455
(506)
(1,021)
393
1,399
(456)
(879)
2,318
32,862
5,168
19,757
‐
‐
696
(53)
(5,864)
(6,121)
(46)
(87)
214
471
574
‐
(44)
(29)
(94)
(345)
Balance 843,681
822,850		 843,681
822,850

b) Valuation basis

The basis of valuation of investment properties is fair value, being the amounts for which the assets could be exchanged between knowledgeable willing parties in an arm’s length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases.

The table below illustrates the key valuation assumptions used in the determination of the investment properties fair value.

Valuation basis
31 December 2020
Weighted average capitalisation rate1(%)
6.61%
Weighted average lease expiry by area1,2(years)
3.6 years
Occupancy1,2
65.9%		 30 June 2020
6.92%
2.6 years
81.1%
  1. Excluding the IDOM Portfolio, GDI No. 46 Property Trust. 2. Based on NLA and including heads of agreement to the date of this report.

Ten‐year discounted cash flows and capitalisation valuation methods are used together with active market evidence. In addition to the key assumptions set out in the table above, assumed portfolio downtime ranges from 6 to 24 months and tenant retention assumption of 50%.

c) Assets pledged as security

Borrowings (refer Note 7) are secured by General Security Agreement (GSA) over each entity plus charges over any building document, lease document, performance bond and bank guarantee in addition to a real property mortgage over each property.

15

GDI PROPERTY GROUP

NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

d) Details of investment properties

The following table presents individual properties owned by GDI and the Trust:

Title Acquisition date Acquisition price Independent valuation Independent Carrying amount Fair value
date valuation 31 December 2020 adjustment
Investmentproperties $'000 $'000 $'000 $'000
Mill Green Complex, Perth Freehold 16 December 2013 332,656 31 December 2020 326,000 326,000 (18,115)
235 Stanley Street, Townsville Freehold 16 June 2016 53,500 31 December 2020 51,500 51,500 (2,594)
141 St Georges Terrace, Perth Freehold 27 October 2017 216,250 31 December 2020 345,000 345,000 13,063
IDOM Portfolio, Perth Freehold 14 February 2020 98,000 31 December 2020 105,850 105,850 7,850
180 HayStreet,Perth Freehold 31 July2020 13,855 31 July2020 15,000 15,331 2,204
Total Investmentproperties 714,261 843,350 843,681 2,408
Non‐current assets held for sale
50 Cavill Avenue, Surfers Paradise Freehold 1 February 2016 46,139 30 June 2020 101,000 100,916 (89)
Unit 38,46 Cavill Ave,Surfers Paradise Strata 12 August 2016 1,240 ‐ ‐ 1,240 ‐
Total 761,640 944,350 945,837 2,318

16

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

NOTE 7 – BORROWINGS

Borrowings shown below are net of transaction costs which are amortised over the term of the loan.

Interest bearing liabilities – non‐current
**Borrowings **		 GDI
31 December
30 June
2020
2020
$'000
$'000		 GDI
31 December
30 June
2020
2020
$'000
$'000		 Trust
31 December
30 June
2020
2020
$'000
$'000
Secured liabilities:
Loans ‐ financial institutions
Transaction costs		 192,833
160,000
(405)
(577)		 192,833
160,000
(490)
(682)
**Total borrowings ** 192,428
159,423		 192,343
159,318
Borrowings of the Group and the Trust are the same and details at balance date are set out below:
Borrowing details
Facility
Utilised
Unutilised
Facility
Secured
Maturitydate
$'000
$'000
$'000
Facility Tranche B1
Yes
July 2022
73,000
73,000
‐
Facility Tranche C1
Yes
January 2022
132,000
79,833
52,168
Bank Bill Business Loan2
Yes
June 2022
11,500
10,000
1,500
Capital Loan Agreement3
Yes
February2023
30,000
30,000
‐
246,500
192,833
53,668
FacilityTranche D1,4
Yes
July2022
5,000
‐
‐
Total facility
251,500
192,833
53,668

  1. Facility Tranche B, C and D are secured by first registered mortgage over the wholly owned investment properties held by GDI and a registered GSA over the assets of GDI. Interest is payable monthly in arears at variable rates based on either the 30 or 90 day BBSY. Line fees are payable quarterly in advance.

  2. The Bank Bill Business Loan relates to GDI No. 42 office Trust and is secured against the assets of that trust.

  3. The Capital Loan Agreement relates to GDI No. 46 Property Trust and is secured against the assets of that trust. Interest is paid monthly in arrears at variable rates.

  4. GDI also has a $5 million bank guarantee supporting the financial requirements of GDI Funds Management Limited’s AFS Licence. This is undrawn and cannot be used for general working capital purposes.

NOTE 8 – DIVIDENDS/DISTRIBUTIONS PAID/PAYABLE

a) Dividends paid/payable by the Company

There were no dividends paid or payable by the Company in respect of the period ended 31 December 2020.

b) Distributions paid/payable by the GDI/Trust

Distributionspaid/ payable by the Group / Trust GDI
Half year ended
December 2020
cents/security		 Trust
Half year ended
December 2020
cents/unit
31 August 2020
28 February2021		 3.875
3.875		 3.875
3.875

17

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS For the six‐month period ended 31 December 2020

NOTE 9 – SEGMENT REPORTING

a) Identification of reportable segments

GDI

The Chief Operating Decision Maker (CODM) has been identified as the Board of Directors as they are responsible for the strategic decision making within GDI. The following summary describes the operations in each of the GDI’s operating segments:

segments:
Operatingsegments Products/Services
Property investment Investment and management of income producing properties
Funds management Establishment and management of property investment vehicles

The Board assesses the performance of each operating sector based on FFO. FFO is a global financial measure of the real estate operating performance after finance costs and taxes, adjusted for certain non‐cash items. The Directors consider FFO to be a measure that reflects the underlying performance of GDI. GDI’s FFO comprises net profit/loss after tax calculated in accordance with the Australian Accounting Standards and adjusted for property revaluations, impairments, derivative mark to market impacts, amortisation of tenant incentives, straight line rent adjustments, gain/loss on sale of assets, deferred tax expense/ benefit and rental guarantees.

Trust

The Trust operates in predominately one operating segment being property investment.

18

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

b) Segment information

  • (i) Segment performance
Property Funds Reviewed but Total
management unallocated
Halfyear ended 31 December 2020 $'000 $'000 $'000 $'000
Operating earnings
Net property income 14,250 ‐ ‐ 14,250
Funds Management income ‐ 1,322 ‐ 1,322
Other income ‐ ‐ 56 56
**Total operating earnings ** 14,250 1,322 56 15,628
FFO adjustments
Straight‐lining rental income 506 ‐ (8) 497
Amortisation and depreciation 6,410 140 13 6,562
Adjustment for consolidated funds (4,913) 2,190 19 (2,705)
FFO pre corporate, administration and interest
expenses/ income 16,253 3,651 79 19,983
+/‐ corporate, administration and interest expense / income
Interest paid (1,882) (11) ‐ (1,893)
Interest income 49 3 ‐ 52
Corporate and administration expenses (2,221) ‐ (1,827) (4,047)
Income tax(expense)/benefit ‐ 157 ‐ 157
Total FFO 12,199 3,801 (1,748) 14,252
+/‐ AIFRS adjustments from FFO to profit after tax from ordinary activities
Net fair value gain / (loss) on investment properties 2,318 ‐ ‐ 2,318
Net fair value gain / (loss) on interest rate swaps (121) ‐ ‐ (121)
Straight‐lining rental income (506) ‐ 8 (497)
Amortisation of leasing fees and incentives (6,410) ‐ ‐ (6,410)
Amortisation of loan establishment costs (196) ‐ ‐ (196)
Depreciation ‐ (140) (13) (153)
Adjustment for consolidated trusts 4,295 (2,190) ‐ 2,105
Acquisition costs (823) ‐ ‐ (823)
Profit after tax from ordinary activities 10,757 1,471 (1,752) 10,476
Property Funds Reviewed but Total
management unallocated
Halfyear ended 31 December 2019 $'000 $'000 $'000 $'000
Operating earnings
Net property income 26,007 ‐ ‐ 26,007
Funds Management income ‐ 1,064 ‐ 1,064
Other income ‐ ‐ ‐ ‐
**Total operating earnings ** 26,007 1,064 ‐ 27,072
FFO adjustments
Straight‐lining rental income 457 ‐ ‐ 457
Amortisation and depreciation 3,027 ‐ 10 3,037
Adjustment for GDI No. 42 Office Trust (2,458) 943 4 (1,511)
FFO pre corporate, administration and interest
expenses/ income 27,033 2,008 14 29,054
+/‐ corporate, administration and interest expense / income
Interest paid (1,000) ‐ ‐ (1,000)
Interest income 39 5 ‐ 45
Corporate and administration expenses (3,205) ‐ (1,081) (4,286)
Income tax (expense)/benefit ‐ (3) ‐ (3)

19

GDI PROPERTY GROUP

NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

Total FFO 22,868 2,010 (1,067) 23,811
+/‐ AIFRS adjustments from FFO to profit after tax from ordinary activities
Net fair value gain of investment properties 37,949 ‐ ‐ 37,949
Straight‐lining rental income (457) ‐ ‐ (457)
Amortisation of leasing fees and incentives (3,027) ‐ ‐ (3,027)
Amortisation of loan establishment costs (75) ‐ ‐ (75)
Depreciation ‐ ‐ (10) (10)
Adjustment for GDI No. 42 Office Trust 2,297 (943) ‐ 1,354
Profit after tax from ordinary activities 59,556 1,067 (1,078) 59,546
  • (ii) Segment assets and liabilities
Profit after tax from ordinary activities
(ii) Segment assets and liabilities		 59,556 1,067 (1,078) 59,546
Property Funds Reviewed but Total
management unallocated
As at 31 December 2020 $'000 $'000 $'000 $'000
Segment assets and liabilities
Total assets 896,497 95,524 ‐ 992,021
Total liabilities (200,092) (21,506) ‐ (221,598)
Net assets 696,405 74,018 ‐ 770,423
As at 30 June 2020
Segment assets and liabilities
Total assets 876,950 91,576 ‐ 968,525
Total liabilities (167,363) (18,517) ‐ (185,880)
Net assets 709,586 73,059 ‐ 782,645

NOTE 10 – FAIR VALUE MEASUREMENTS

a) Valuation techniques

GDI selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by GDI are consistent with one or more of the following valuation approaches:

  • Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.

  • Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.

  • Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, GDI gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

20

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

b) Financial instruments

The following table represents a comparison between the carrying amounts and fair values of financial assets and liabilities:

31 December 2020 30 June 2020
Carrying
amount
Fair value
$'000
$'000		 Carrying
amount
Fair value
$'000
$'000
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables		 7,106
7,106
9,095
9,095		 10,100
10,100
5,581
5,581
Total financial assets 16,201
16,201		 15,681
15,681
Financial liabilities at amortised cost
Trade and other payables
Provisions
Operating lease liability
Borrowings
Financial liabilities at fair value
Derivative financial instruments		 26,787
26,787
689
689
984
984
192,428
192,428
447
447		 25,520
25,520
611
611
‐
‐
159,423
159,423
326
326
Total financial liabilities 221,335
221,335		 185,880
185,880

c) Fair value hierarchy

GDI and Trust measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:

  • Derivative financial instruments; and

  • Investment properties.

GDI and Trust do not subsequently measure any other liabilities (other than derivative financial instruments) at fair value on a non‐recurring basis.

AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows:

to the measurement can be categorised into as follows:
Level 1 Level 2 Level 3
Measurements based on quoted Measurements based on inputs other Measurements based on
prices (unadjusted) in active markets than quoted prices included in Level 1 unobservable inputs for the asset or
for identical assets or liabilities that that are observable for the asset or liability.
the entity can access at the liability, either directly or indirectly.
measurement date.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.

21

GDI PROPERTY GROUP

NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

The following tables provide the fair values of GDI’s and the Trust’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy:

As at 31 December 2020
As at 30 June 2020
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
$'000
$'000
$'000
$'000
$'000
$'000
Recurring fair value measurements
Non‐financial assets
‐ Investmentproperties1		 ‐
945,837
‐
‐
925,090
‐
Total non‐financial assets recognised at fair
value on a recurring basis		 ‐
945,837
‐
‐
925,090
‐
Financial liabilities
Interest rate swaps		 447
326
Total financial liabilities recognised at fair
value on a recurring basis		 447
326

Valuation techniques and inputs used to measure Level 2 Fair Values

31 December 2020 30 June 2020 Valuation Inputs
$’000 $’000 technique Used
Financial assets/liabilities
Interest rate swaps 447 326 Income approach BBSY swap rate
using discounted
cash flow
methodology
Non‐financial assets
Investment properties1 945,837 925,090 Market approach Comparable
using discounted discount rates,
cash flow, rent capitalisation
capitalisation and rates and price
recent observable per square
market data metres of NLA
methodologies
  1. The fair value of Investment properties is determined annually based on valuations by an independent valuer who has recognised and appropriate professional qualifications and recent experience in the location and category of investment property being valued. The total includes investment properties held for sale.

d) Sensitivity information

Significant movement in any one of the inputs listed in the table above may result in a change in the fair value of the GDI’s investment properties and non‐current assets held for sale as follows:

Fair value measurement sensitivity to: Fair value measurement sensitivity to:
Inputs Significant increase in input Significant decrease in input
Discount rate Decrease Increase
Capitalisation rate Decrease Increase
Assumed market rent per square metre of NLA Increase Decrease
Price per square metre of NLA Increase Decrease

NOTE 11 – CONTINGENT LIABILITIES

There was no change in the contingent liabilities of GDI and the Trust as at 31 December 2020 since the last annual reporting period.

22

GDI PROPERTY GROUP NOTES TO THE FINANCIAL STATEMENTS

For the six‐month period ended 31 December 2020

NOTE 12 – EVENTS AFTER THE REPORTING DATE

No matter or circumstance has arisen since 31 December 2020 that has significantly affected or may significantly affect:

  • GDI’s operations in future years;

  • the results of these operations in future years; or

  • GDI’s state of affairs in future years.

23

DIRECTORS’ DECLARATION

GDI Property Group Limited and GDI Funds Management Limited as Responsible Entity for GDI Property Trust

Directors’ Declaration For the six month period ended 31 December 2020

The directors of GDI Property Group Limited and GDI Funds Management Limited as Responsible Entity for GDI Property Trust, declare that:

  • (a) the financial statements and notes that are set out on pages 8 to 23 are in accordance with the Corporations Act 2001, including:

  • (i) complying with Accounting Standard AASB 134: Interim Financial Reporting ; and

  • (ii) giving a true and fair view of the financial position as at 31 December 2020 and of the performance for the half year ended on that date;

  • (b) there are reasonable grounds to believe that GDI will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors of GDI Property Group Limited and GDI Funds Management Limited.

==> picture [110 x 44] intentionally omitted <==

Gina Anderson Chairman

Dated this 22[nd] day of February 2021

24

INDEPENDENT AUDITOR’S REVIEW REPORT

==> picture [481 x 682] intentionally omitted <==

25

INDEPENDENT AUDITOR’S REVIEW REPORT

==> picture [480 x 114] intentionally omitted <==

==> picture [480 x 113] intentionally omitted <==

==> picture [480 x 114] intentionally omitted <==

==> picture [480 x 114] intentionally omitted <==

==> picture [480 x 113] intentionally omitted <==

==> picture [480 x 114] intentionally omitted <==

26

More from GDI PROPERTY GROUP

Regulatory Filings 2026
May 27
Major Shareholding Notification 2026
May 12
Major Shareholding Notification 2026
Apr 1
Major Shareholding Notification 2026
Mar 3
Notice of Dividend Amount 2026
Feb 22
Interim / Quarterly Report 2026
Feb 22
Interim / Quarterly Report 2026
Feb 22
Interim / Quarterly Report 2026
Feb 22
Notice of Dividend Amount 2026
Feb 22
Report Publication Announcement 2026
Feb 15
View all filings →