INTERIM REPORT - Moorabbin Airport · 2018-09-05 · gdma ppt tst interim report 2018 gmt bd iss limitd interim report 2018 1 $229.4m contracted sales year to date $148.7m new development

G O O D M A N P R O P E RT Y T R U S TI N T E R I M R E P O R T 2 0 1 8

G M T B O N D I S S U E R L I M I T E DI N T E R I M R E P O R T 2 0 1 8

INTER

IM RE

PORT

2018

A PORTFOLIO OF THE VERY BEST INDUSTRIAL AND COMMERCIAL PROPERTIESHighbrook Business Park

G O O D M A N P R O P E R T Y T R U S T I N T E R I M R E P O R T 2 0 1 8G M T B O N D I S S U E R L I M I T E D I N T E R I M R E P O R T 2 0 1 8

This document comprises the interim reports of Goodman Property Trust and GMT Bond Issuer Limited for the six month period ended 30 September 2017.

+ The Units in Goodman Property Trust are listed on the NZX with the code of GMT.

+ Bonds issued by GMT Bond Issuer Limited, a wholly-owned subsidiary of Goodman Property Trust, are listed on the NZDX with the code of GMB020, GMB030 and GMB040.

CONTENTS

OPERATIONAL HIGHLIGHTS 02RESULTS OVERVIEW 03CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S REPORT 04 – 08FINANCIAL STATEMENTS GMT 09– 32FINANCIAL STATEMENTS GMT BOND ISSUER LIMITED 33– 39OTHER INFORMATION 40– 44

G O O D M A N P R O P E R T Y T R U S T I N T E R I M R E P O R T 2 0 1 8G M T B O N D I S S U E R L I M I T E D I N T E R I M R E P O R T 2 0 1 8 1

$229.4mCONTRACTED SALES YEAR TO DATE

$148.7mNEW DEVELOPMENT PROJECTS

$2.6bnPROPERTY PORTFOLIO

5.8yrs (1)

WEIGHTED AVERAGE LEASE TERM

97%(1)

PORTFOLIO OCCUPANCY70,000sqm (1)

LEASED ON NEW OR REVISED TERMS

OVER

OPERATIONALHIGHLIGHTS

Coda, Savill Link, Otahuhu(1) Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017.


RESULTSOVERVIEW

30 Sep 17 30 Sep 16%

change

Operating earnings before tax ($m) 59.8 59.9 (0.2)

Operating earnings after tax ($m) 51.4 51.0 0.8

Movement in fair value of investment property ($m) (8.4) 19.8 (142.4)

Profit before tax ($m) 45.3 73.1 (38.0)

Profit after tax ($m) 39.5 67.6 (41.6)

Operating earnings per unit before tax (cpu) 4.65 4.70 (1.1)

Operating earnings per unit after tax (cpu) 4.00 4.01 (0.2)

Cash distribution per unit (cpu) 3.325 3.325 -

Total assets for loan to value calculation ($m) (1) 2,575.0 2,310.1 11.5

Borrowings for loan to value calculation ($m) (1) 835.5 664.5 25.7

Look through loan to value ratio (%) (1) 32.4 28.8 12.5

Goodman+Bonds – Standard & Poor’s credit rating BBB+ BBB+ -

(1) Refer to note 3.5 of the GMT interim financial statements for further information.

OPERATING EARNINGSOperating earnings are a non-GAAP financial measure included to provide an assessment of the performance of GMT’s principal operating activities. Calculation of operating earnings are as set out in GMT’s Profit or Loss statement. Datacom, VXV Precinct


CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S REPORT

IMPROVING THE BUSINESSA development led growth strategy is repositioning the portfolio and focusing investment in the rapidly growing and supply constrained Auckland industrial sector.

VXV Plaza, VXV Precinct Highbrook Business Park


The Board and Management Team are extremely pleased with the results being achieved and the continual improvements being made to the composition and quality of the Trust’s $2.6 billion property portfolio.

Development and transactional activity are rebalancing the asset base, which is more than 80% invested in the Auckland industrial sector. It’s the continuation of an investment strategy that is focused on owning the very best industrial and business space properties.

Economic growth, demographic changes, technological advances and the development of online retailing are all contributing to the strong demand for logistics and warehouse space in Auckland. GMT’s position as the largest owner and developer of industrial property in the region means it is uniquely placed to benefit from these trends.

Keith Smith, Chairman and Independent Director — John Dakin, Chief Executive Officer and Executive Director

FINANCIAL PERFORMANCE – consistent operating result Operating earnings for the six months to 30 September 2017 were $59.8 million before tax, consistent with the previous corresponding period. The additional revenue from new acquisitions and developments, together with a reduction in administrative expenses and net interest costs, has largely offset lower net property income resulting from asset sales.

A lower effective tax rate of 14.0% leads to operating earnings after tax of $51.4 million, 0.8% higher than that recorded previously. On a weighted average unit basis,

operating earnings were 4.65 cents per unit before tax and 4.00 cents per unit after tax.

Profit before tax was $45.3 million compared to $73.1 million in the previous corresponding period. Fair value losses of $8.4 million on certain investment properties, compared to gains of $19.8 million previously, were the main variance.

Net tangible asset backing was largely unchanged at 130.2 cents per unit, compared to 130.4 cents per unit at 31 March 2017.

Positive leasing results, continued development momentum and further asset sales have been the operational highlights of the year to date.


Development and transactional activity are rebalancing the portfolio which is over 80% invested in the Auckland industrial sector. It’s the continuation of an investment strategy that is focused on owning the very best industrial and business space properties.

FOCUSED INVESTMENT lower gearing after portfolio repositioning Asset disposals are repositioning the portfolio and providing balance sheet capacity to fund the Trust’s development programme. It’s a successful strategy with over $600 million of sales completed since 2012.

Two further sales were contracted following the interim balance date, they are;

+ the recently completed Steel & Tube development in Hornby, Christchurch for $20.4 million. The unconditional sale is due to settle in April 2018.

+ the conditional sale of Central Park Corporate Centre for $209 million(1).

The sale of Central Park is a significant transaction for the Trust. It is the last of the planned major asset disposals and its successful conclusion would complete a substantial rebalancing of the portfolio, focusing investment in the Auckland industrial sector.

Asset sales are also providing the Trust with greater financial flexibility.

At 30 September 2017 GMT’s look through loan to value ratio was 32.4%. The low level of gearing provides the Trust with considerable headroom against the 50% maximum allowed under its debt and Trust Deed covenants.

The completion of the $100 million Goodman+Bond offer in May 2017 has also improved GMT’s liquidity and debt diversity position. At 30 September 2017, the Trust had undrawn bank facilities of $260 million.

Following the settlement of both conditional and unconditional sales the Trust’s gearing would reduce to just 25.8% and its undrawn bank facilities would increase to over $500 million, on a proforma 30 September 2017 basis.

(1) The transaction remains conditional on certain factors including Overseas Investment Office approval.

Highbrook Business Park


PROPERTY PORTFOLIO development and transaction activity raises quality The deliberate rebalancing of the business over the last three years has lifted the quality of the portfolio and focused its investment in the Auckland industrial sector.

Key portfolio metrics are shown in the table below:

Rentable area (sqm)

Average age (years)

Customers (number)

Occupancy (%)

Weighted average lease term (years)

Industrial portfolio 929,392 9.9 162 98.6 5.6

Office portfolio 143,120 12.9 107 91.8 7.3

Total investment portfolio 1,072,512 10.5 269 96.8 5.8

Note: Portfolio statistics include unconditional sales and leasing transactions signed after 30 September 2017.

Development activity, Highbrook Business Park(1) Total project cost including land allocation, all construction costs, management and other professional fees.

With an average age of 10.5 years, an occupancy level of around 97% and an average lease term of almost six years, GMT owns a portfolio of exceptional quality.

It provides around 930,000 sqm of industrial space, which represents around 20% of the city’s prime industrial stock. With strong customer demand, low vacancy levels and positive rental growth it’s a very buoyant market.

These positive operating conditions are reflected in GMT’s leasing results with over 70,000 sqm of space secured on new or extended terms since 31 March 2017. To meet current and forecast demand, the Trust is also undertaking a greater level of development activity.

Six substantial new industrial projects totalling $148.7 million(1) were announced in August 2017. The package, which includes a combination of build-to-lease and pre-committed facilities, utilises over 10 hectares of development land and will provide almost 60,000 sqm of rentable area on completion.

Almost $100 million of the new projects are being undertaken at Highbrook Business Park, GMT’s largest asset. It continues the recent momentum at this key estate which is expected to be over 90% complete within three years.

The leasing of the uncommitted warehouse development at 12 Pukekiwiriki Place before its completion, to AB Equipment, and the commitment from RSM for the top floor of Building 5 at The Crossing mean Highbrook is now 98% occupied.

The portfolio of campus style office properties in the VXV Precinct of central Auckland, which GMT owns jointly with GIC, has been extended to seven buildings following the settlement of the Bayleys House and Datacom acquisitions during the period. The modern portfolio, which includes three Green Star Design rated buildings also includes Auckland Transport, Fonterra and KPMG as key customers.


BUSINESS OUTLOOK positioned for long term growth The Trust has continued to take advantage of the positive business environment and delivered a half-year financial result that is consistent with earlier guidance.

The progression of the development programme, selective asset sales and targeted acquisitions are all having a positive impact, refining the portfolio and positioning GMT for sustainable growth.

These activities are also improving the financial metrics of the business, de-leveraging the balance sheet and providing substantial funding capacity for the future.

Demographic and technological change are also influencing the investment strategy, which is now more heavily focused on Auckland industrial property. This emphasis reflects the positive return characteristics of industrial property and the stronger economic drivers of New Zealand’s largest city.

With a stable business outlook, the Trust is expected to deliver full year operating earnings of around 9.1 cents per unit before tax.

Cash earnings of around 7.0 cents per unit are forecast for the year, with cash distributions totalling 6.65 cents per unit expected to be paid.

ACCO, Highbrook Business Park

John Dakin Chief Executive Officer and Executive Director

Keith Smith Chairman and Independent Director


GOODMAN PROPERTY TRUST CONTENTS

PROFIT OR LOSS 10

BALANCE SHEET 11

CASH FLOWS 12

CHANGES IN EQUITY 13

GENERAL INFORMATION 14

NOTES TO THE FINANCIAL STATEMENTS 1. INVESTMENT PROPERTY 152. INVESTMENT IN JOINT VENTURE 183. BORROWINGS 214. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONS 245. DERIVATIVE FINANCIAL INSTRUMENTS 256. ADMINISTRATIVE EXPENSES 267. TAX 278. RELATED PARTY DISCLOSURES 289. COMMITMENTS AND CONTINGENCIES 3010. OTHER INVESTMENTS 3011. FINANCIAL RISK MANAGEMENT 3112. OPERATING SEGMENTS 31

INDEPENDENT REVIEW REPORT 32

For the six months ended 30 September 2017

INTERIM FINANCIAL STATEMENTS

The Board of Goodman (NZ) Limited, the Manager of Goodman Property Trust, authorised these financial statements for issue on 8 November 2017. For and on behalf of the Board:

The Gate Industry Park, Penrose

Peter Simmonds Chairman, Audit Committee

Keith Smith Chairman

G O O D M A N P R O P E R T Y T R U S T I N T E R I M R E P O R T 2 0 1 8I N T E R I M F I N A N C I A L S T A T E M E N T S O F G O O D M A N P R O P E R T Y T R U S T 9

PROFIT OR LOSSFor the six months ended 30 September 2017

$ million Note6 months 30 Sep 17

6 months 30 Sep 16

Property income 1.1 79.7 82.8Property expenses (14.8) (15.3)Net property income 64.9 67.5

Share of operating earnings before tax from joint venture 2.1 4.8 4.0

InterestInterest income 3.1 3.6 2.4Interest cost 3.1 (12.2) (12.3)Net interest cost (8.6) (9.9)

Administrative expenses 6.1 (1.3) (1.7)

Operating earnings before other income / (expenses) and tax 59.8 59.9

Other income / (expenses)Movement in fair value of investment property 1.6 (8.4) 19.8Loss on disposal of investment property - (2.1)Share of other (expenses) / income and tax from joint venture 2.1 (1.0) (1.3)Movement in fair value of financial instruments 5.1 (1.2) 0.6Manager’s base fee expected to be reinvested in units 6.2 (3.9) (3.8)

Profit before tax 45.3 73.1

TaxIncome tax on operating earnings 7.1 (8.5) (8.4)Income tax on non-operating earnings 7.1 - 1.7Deferred tax 7.1 2.7 1.2Total tax (5.8) (5.5)

Profit after tax attributable to unitholders 39.5 67.6

There are no items of other comprehensive income, therefore profit after tax attributable to unitholders equals total comprehensive income attributable to unitholders.

Cents Note6 months 30 Sep 17

6 months 30 Sep 16

Basic earnings per unit after tax 4.2 3.07 5.30

G O O D M A N P R O P E R T Y T R U S T I N T E R I M R E P O R T 2 0 1 8I N T E R I M F I N A N C I A L S T A T E M E N T S O F G O O D M A N P R O P E R T Y T R U S T10

BALANCE SHEETAs at 30 September 2017

$ million Note 30 Sep 17 31 Mar 17

Non-current assetsStabilised properties 1.4 2,085.7 2,025.7Developments 1.4 94.5 48.9Land 1.4 133.7 174.7Investment in joint venture 2.2 74.5 70.7Derivative financial instruments 5.2 15.5 18.9Other investments 10 12.0 12.0Deferred tax assets 4.0 3.7Total non-current assets 2,419.9 2,354.6

Current assetsInvestment property contracted for sale 1.5 10.4 7.7Construction loan receivable 1.7 - 65.1Advances to joint venture 8.2 120.2 18.4Debtors and other assets 7.4 13.4Cash 3.5 0.9Derivative financial instruments 5.2 - 0.6Total current assets 141.5 106.1

Total assets 2,561.4 2,460.7

Non-current liabilitiesBorrowings 3.2 802.2 659.8Derivative financial instruments 5.2 20.1 18.2Deferred tax liabilities 30.0 32.4Total non-current liabilities 852.3 710.4

Current liabilitiesBorrowings 3.2 - 45.0Creditors and other liabilities 30.1 27.6Current tax payable 2.3 2.8Total current liabilities 32.4 75.4

Total liabilities 884.7 785.8

Net assets 1,676.7 1,674.9

EquityUnits 4.1 1,403.7 1,398.7Unit based payments reserve 5.0 5.0Retained earnings 268.0 271.2Total equity 1,676.7 1,674.9


CASH FLOWSFor the six months ended 30 September 2017

$ million6 months 30 Sep 17

6 months 30 Sep 16

Cash flows from operating activitiesProperty income received 77.9 87.8Property expenses paid (19.9) (20.3)Interest income received 9.2 0.9Interest costs paid (9.2) (12.2)Administrative expenses paid (1.6) (1.1)Manager’s base fee paid (3.9) (3.8)Net GST received/(paid) 0.3 (0.8)Tax paid (9.0) (10.8)Net cash flows from operating activities 43.8 39.7

Cash flows from investing activitiesAcquisition of investment properties (17.0) (1.9)Proceeds from the sale of investment properties - 48.4Capital expenditure payments for investment properties (44.6) (63.3)Holding costs capitalised to investment properties (7.2) (10.6)Construction loan repayment/(advances) 65.1 (16.7)Advances to joint venture (101.8) -Dividends received from joint venture - 1.2Net cash flows from investing activities (105.5) (42.9)

Cash flows from financing activitiesProceeds from borrowings 328.0 153.0Repayments of borrowings (226.0) (103.0)Proceeds from the issue of units 5.0 4.3Distributions paid to unitholders (42.7) (42.4)Settlement of derivative financial instruments - (6.9)Net cash flows from financing activities 64.3 5.0

Net movement in cash 2.6 1.8

Cash at the beginning of the period 0.9 1.1

Cash at the end of the period 3.5 2.9


CHANGES IN EQUITYFor the six months ended 30 September 2017

$ million Units

Unit based payments

reserveRetained earnings Total

As at 1 April 2016 1,389.5 4.3 142.4 1,536.2Profit after tax - - 213.8 213.8Distributions paid to unitholders - - (85.0) (85.0)Manager’s base fee - 9.9 - 9.9Issue of units 9.2 (9.2) - -As at 31 March 2017 1,398.7 5.0 271.2 1,674.9

Profit after tax - - 39.5 39.5Distributions paid to unitholders - - (42.7) (42.7)Manager’s base fee - 5.0 - 5.0Issue of units 5.0 (5.0) - -As at 30 September 2017 1,403.7 5.0 268.0 1,676.7

There are no items of other comprehensive income to include within changes in equity, therefore profit after tax equals total comprehensive income.


GENERAL INFORMATIONFor the six months ended 30 September 2017

REPORTING ENTITYGoodman Property Trust (“GMT” or the “Trust”) is a unit trust established on 23 April 1999 under the Unit Trusts Act 1960. GMT is domiciled in New Zealand. The Manager of the Trust is Goodman (NZ) Limited (“GNZ”) and the address of its registered office is Level 2, 18 Viaduct Harbour Avenue, Auckland.

The interim financial statements presented are consolidated financial statements for Goodman Property Trust and its subsidiaries (the “Group”). GMT’s investment in Wynyard Precinct Holdings Limited is accounted for as a joint venture using the equity method of accounting.

GMT is listed on the New Zealand Stock Exchange (“NZX”) and is a FMC reporting entity for the purposes of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.

The Group’s principal activity is to invest in real estate in New Zealand.

The interim financial statements for the six months ended 30 September 2017 are unaudited. Comparative balances for 30 September 2016 are unaudited, whilst the comparative balances for the year ended 31 March 2017 are audited.

BASIS OF PREPARATION AND MEASUREMENTThe interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with International Accounting Standard 34 ‘Interim Financial Reporting’ and New Zealand equivalent to International Accounting Standard 34 ‘Interim Financial Reporting’.

The interim financial statements of the Group have been prepared in accordance with the requirements of section the NZX Main Board Listing Rules.

The interim financial statements do not include all notes included in the annual financial statements. Accordingly, these notes should be read in conjunction with the annual financial statements for the year ended 31 March 2017, prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and International Financial Reporting Standards (“IFRS”).

The accounting policies and methods of computation used in the preparation of these interim financial statements are consistent with those used in the financial statements for the year ended 31 March 2017.

The interim financial statements have been prepared on the historic cost basis except for assets and liabilities stated at fair value as disclosed.

The interim financial statements are in New Zealand dollars, the Group’s functional currency, unless otherwise stated.


NOTES TO THE FINANCIAL STATEMENTSFor the six months ended 30 September 2017

1. INVESTMENT PROPERTYProperty income is earned from investment property leased to customers.

1.1 Property income


6 months 30 Sep 16

Gross lease receipts 72.2 77.0Service charge income 10.5 9.6Straight line rental adjustments 0.7 0.5Amortisation of capitalised lease incentives (3.7) (4.3)Property income 79.7 82.8

1.2 Future contracted gross lease receiptsGross lease receipts that the Trust has contracted to receive in future years is set out below. These leases cannot be cancelled by the customer.

$ million 30 Sep 17 31 Mar 17

Year 1 134.5 132.7Year 2 123.4 115.9Year 3 107.7 106.1Year 4 90.6 81.9Year 5 70.8 66.5Year 6 and later 94.2 92.4Total future contracted gross lease receipts 621.2 595.5

1.3 Weighted average lease termThe weighted average lease term (“WALT”) represents the average lease term for leases existing at balance date, which are weighted by the value of the gross lease receipts.

Years 30 Sep 17 31 Mar 17

Weighted average lease term 5.8 5.8


NOTES TO THE FINANCIAL STATEMENTS (continued)For the six months ended 30 September 2017

1. INVESTMENT PROPERTY (continued)1.4 Total investment propertyThis table details the total investment property value.

30 Sep 17 31 Mar 17

$ millionStabilised properties Developments Land Total

Stabilised properties Developments Land Total

Business parkHighbrook Business Park, East Tamaki 993.1 50.6 107.3 1,151.0 957.1 29.8 132.0 1,118.9M20 Business Park, Wiri 220.0 - 6.5 226.5 218.3 - 6.3 224.6

Industrial estateSavill Link, Otahuhu 216.5 16.5 11.6 244.6 216.0 4.7 13.4 234.1The Gate Industry Park, Penrose 176.2 - 0.4 176.6 164.2 8.3 0.4 172.9Westney Industry Park, Mangere 115.8 1.1 - 116.9 114.9 - - 114.9Penrose Industrial Estate, Penrose 59.8 - - 59.8 59.7 - - 59.7The Tamaki Estate, Panmure 35.0 - - 35.0 34.9 - - 34.9Connect Industrial Estate, Penrose 31.1 - - 31.1 30.9 - - 30.9

Concourse Industry Park, Henderson 12.7 8.7 - 21.4 - - - -

Glassworks Industry Park, Christchurch - 17.6 - 17.6 - 6.1 2.6 8.7

Office parkGreenlane Office, Auckland & Show Place, Christchurch 225.5 - 7.9 233.4 229.7 - 20.0 249.7

Total investment property 2,085.7 94.5 133.7 2,313.9 2,025.7 48.9 174.7 2,249.3

SIGNIFICANT TRANSACTIONSIn July 2017, GMT settled the acquisition of two adjoining industrial properties in Henderson, Auckland for $18.9 million.

During the period three developments were completed and were independently valued at a total of $45.7 million.

SUBSEQUENT EVENTIn October 2017, GMT unconditionally contracted the sale of a property at Glassworks Industry Park for $20.4 million, with settlement expected to occur in April 2018.



1. INVESTMENT PROPERTY (continued)1.4 Total investment property (continued)

KEY JUDGEMENTStabilised properties are recorded at the 31 March 2017 independent valuation, adjusted for movements in the book value since this date, with the exception of Show Place Office Park, which was independently valued at 30 September 2016, and Central Park Corporate Centre, for which the conditionally contracted sale price has been used as the best indicator of fair value.

Developments completed in the period, or adequately progressed to allow fair value to be reliably determined, have been independently valued at 30 September 2017 with the exception of the Glassworks Industry Park property for which the unconditionally contracted sale price has been used as the best indicator of fair value. All other developments are held at cost and tested for impairment.

Land is recorded at the 31 March 2017 independent valuation, adjusted for movements in the book value since this date, with the exception of Central Park land, for which the conditionally contracted sale price has been used as the best indicator of fair value.

1.5 Investment property contracted for sale


Glassworks Industry Park, Christchurch 10.4 7.7Total investment property contracted for sale 10.4 7.7

1.6 Movement in fair value of investment propertyMovement in fair value of investment property for the period is summarised below.


6 months 30 Sep 16

Stabilised properties (5.4) (3.9)Developments 10.1 10.8Land (12.7) (0.4)Investment property contracted for sale (0.4) 13.3Total movement in fair value of investment property (8.4) 19.8

The movement in fair value of investment property contracted for sale represents the difference between contracted sale price and expected book value at the date of settlement, less sale related costs.



1. INVESTMENT PROPERTY (continued)1.7 Construction loanA construction loan was provided by GMT to The Fletcher Construction Company (Fanshawe Street) Limited, whose ultimate parent is Fletcher Building Limited. The advances made were used to fund the development of the Datacom building acquired by a subsidiary of the Trust’s joint venture, Wynyard Precinct Holdings Limited. Acquisition occurred on completion in May 2017, at which time the loan was repaid. The loan incurred a market rate of interest for a loan of its type and was guaranteed by Fletcher Building Limited.

SIGNIFICANT TRANSACTIONSOn 12 May 2017, the construction loan was repaid by The Fletcher Construction Company (Fanshawe Street) Limited.

2. INVESTMENT IN JOINT VENTUREGMT owns 51% of Wynyard Precinct Holdings Limited (“WPHL” or the “joint venture”), with the remaining 49% owned by GIC, Singapore’s sovereign wealth fund. The shareholders’ agreement of WPHL ensures that joint control is maintained via equal board representation, with GMT unable to unilaterally direct the joint venture. Properties owned by WPHL are managed by Goodman Property Services (NZ) Limited (“GPSNZ”) on a similar basis to how GPSNZ manages GMT’s wholly owned properties.

2.1 WPHL Profit or Loss

$ million

WPHL GMT share at 51%6 months 30 Sep 17

6 months 30 Sep 16

6 months 30 Sep 17

6 months 30 Sep 16

Net property income 16.6 12.7Net interest costs (7.1) (4.7)Administrative expenses (0.1) (0.1)

Operating earnings before other income / (expenses) and tax 9.4 7.9 4.8 4.0

Other income / (expenses) and taxMovement in fair value of derivative financial instruments (0.6) (1.2)Manager’s base fee (0.7) (0.5)Income tax on operating earnings 0.2 (1.0)Deferred tax (0.8) 0.1Other income / (expenses) and tax (1.9) (2.6) (1.0) (1.3)

Profit after tax 7.5 5.3 3.8 2.7



2. INVESTMENT IN JOINT VENTURE (continued)2.2 WPHL Balance Sheet

$ millionWPHL GMT share at 51%

30 Sep 17 31 Mar 17 30 Sep 17 31 Mar 17

Non-current assetsStabilised properties 488.4 324.1Other assets 0.4 2.7

Current assets 5.7 2.0

Total assets 494.5 328.8

Non-current liabilitiesBorrowings 111.9 111.8Other liabilities 7.0 5.5

Current liabilitiesBorrowings - 45.0Advances from shareholders 235.6 36.0Other liabilities 7.5 5.5

Total liabilities 362.0 203.8

Net assets 132.5 125.0

Share capital 34.7 34.7Retained earnings 97.8 90.3Total equity 132.5 125.0 67.6 63.8

Goodwill 6.9 6.9Investment in joint venture 74.5 70.7

SIGNIFICANT TRANSACTIONSDuring the period WPHL repaid $45.0 million of maturing bank borrowings, and settled the acquisitions of the Datacom building for $86.2 million and Bayleys House for $62.3 million.



2. INVESTMENT IN JOINT VENTURE (continued)2.3 WPHL Cash flows

$ million

WPHL6 months 30 Sep 17

6 months 30 Sep 16

Cash flows from operating activitiesProperty income received 22.0 18.3Property expenses paid (8.4) (5.2)Net interest costs paid (4.3) (4.7)Other operating cash flows (1.2) (2.4)Net cash flows from operating activities 8.1 6.0

Cash flows from investing activitiesAcquisition of investment properties (148.3) -Capital expenditure payments for investment properties (9.2) (0.5)Capital expenditure payments for other non-current assets - (0.1)Net cash flows from investing activities (157.5) (0.6)

Cash flows from financing activitiesRepayment of borrowings (45.0) (3.4)Advances from shareholders 194.4 -Distributions paid to shareholders - (2.5)Net cash flows from financing activities 149.4 (5.9)

Net movement in cash - (0.5)

Cash at the beginning of the period 0.4 0.8

Cash at the end of the period 0.4 0.3



3. BORROWINGS3.1 Interest


6 months 30 Sep 16

Interest incomeInterest income 3.6 2.4Total interest income 3.6 2.4

Interest costsInterest expense (16.7) (20.0)Amortisation of borrowing costs (2.1) (2.1)Borrowing costs capitalised (1) 6.6 9.8Total interest costs (12.2) (12.3)

Net interest cost (8.6) (9.9)

(1) Borrowing costs of $4.7 million were capitalised to land (30 September 2016: $6.4 million).

3.2 Borrowings


CurrentWholesale bonds - 45.0Total current borrowings - 45.0

Non-currentSyndicated bank facility 340.0 293.0Retail bonds 300.0 200.0US Private Placement notes - New Zealand dollar amount on inception (1) 156.8 156.8Total non-current 796.8 649.8

US Private Placement notes - foreign exchange translation impact (1) 9.7 14.4Unamortised borrowings establishment costs (4.3) (4.4)Total non-current borrowings 802.2 659.8

Total borrowings 802.2 704.8

(1) US Private Placement notes comprise $156.8 million for funds received at the borrowing date and $9.7 million for the foreign exchange translation impact (31 March 2017: $14.4 million). These borrowings are fully hedged and GMT take no currency risk on interest and principal payments.



3. BORROWINGS (continued)3.3 Composition of borrowings

30 Sep 17 Date issued Expiry

$ million

Weighted average remaining term (years)

Interest rate

Facility drawn / Amount

Undrawn facility

Syndicated bank facilities - Oct 18 - Oct 21 2.5 Floating 340.0 260.0Retail bonds - GMB020 Dec 13 Dec 20 3.2 6.20% 100.0 -Retail bonds - GMB030 Jun 15 Jun 22 4.7 5.00% 100.0 -Retail bonds - GMB040 May 17 May 24 6.7 4.54% 100.0 -US Private Placement notes Jun 15 Jun 25 7.7 3.46% US$40.0 -US Private Placement notes Jun 15 Jun 27 9.7 3.56% US$40.0 -US Private Placement notes Jun 15 Jun 30 12.7 3.71% US$40.0 -

31 Mar 17 Date issued Expiry

$ million

Weighted average remaining term (years)

Interest rate

Facility drawn / Amount

Undrawn facility

Syndicated bank facilities - Oct 18 - Oct 21 3.0 Floating 293.0 307.0Retail bonds - GMB020 Dec 13 Dec 20 3.7 6.20% 100.0 -Retail bonds - GMB030 Jun 15 Jun 22 5.2 5.00% 100.0 -Wholesale bonds Sep 10 Sep 17 0.4 7.58% 45.0 -US Private Placement notes Jun 15 Jun 25 8.2 3.46% US$40.0 -US Private Placement notes Jun 15 Jun 27 10.2 3.56% US$40.0 -US Private Placement notes Jun 15 Jun 30 13.2 3.71% US$40.0 -

As at 30 September 2017 and 31 March 2017 a $600.0 million syndicated bank facility was provided to the Trust by ANZ Bank New Zealand Limited, Bank of New Zealand, Commonwealth Bank of Australia, Westpac New Zealand Limited (each providing $135 million) and The Hongkong and Shanghai Banking Corporation Limited (providing $60 million).

As at 30 September 2017, GMT’s borrowing facilities had a weighted average remaining term of 4.3 years (31 March 2017: 4.4 years), with 57% being drawn from non-bank sources (31 March 2017: 58%).

SIGNIFICANT TRANSACTIONSIn May 2017, GMT issued a new $100 million retail bond with a 7 year term expiring May 2024, paying an interest rate of 4.54%.

In September 2017, GMT repaid the $45 million wholesale bonds.



3. BORROWINGS (continued)3.4 Security and covenantsAll borrowing facilities are secured on an equal ranking basis over the assets of the wholly-owned subsidiaries of Goodman Property Trust. A loan to value ratio covenant restricts total borrowings incurred by the Group to 50% of the value of the secured property portfolio.

The Group has given a negative pledge to not create or permit any security interest over its assets. The principal financial ratios which must be met are the ratio of earnings before interest, tax, depreciation and amortisation to interest expense, and the ratio of financial indebtedness to the value of the property portfolio. Further negative and positive undertakings have been given as to the nature of the Group’s business.

3.5 Loan to value ratio calculationThe loan to value ratio (“LVR”) is a non-GAAP metric used to measure the strength of GMT’s Balance Sheet. The LVR calculation is set out in the table below. The GMT look through LVR incorporates GMT’s 51% share of WPHL and is the measure utilised by management when considering the Trust’s LVR.

$ million

30 Sep 17 31 Mar 17

GMTWPHL @ 51%

GMT look through GMT

WPHL @ 51%

GMT look through

Total borrowings 802.2 57.1 859.3 704.8 80.0 784.8US Private Placement notes - foreign exchange translation impact (9.7) - (9.7) (14.4) - (14.4)Cash (3.5) (0.2) (3.7) (0.9) (0.2) (1.1)Investment property contracted for sale (10.4) - (10.4) (7.7) - (7.7)Borrowings for LVR calculation 778.6 56.9 835.5 681.8 79.8 761.6

Investment property 2,313.9 249.1 2,563.0 2,249.3 165.3 2,414.6Other investments 12.0 - 12.0 12.0 - 12.0Construction loan receivable - - - 65.1 - 65.1Assets for LVR calculation 2,325.9 249.1 2,575.0 2,326.4 165.3 2,491.7

Loan to value ratio % 33.5% 22.8% 32.4% 29.3% 48.3% 30.6%

3.6 Weighted average cost of borrowingsThe weighted average cost of borrowings is a non-GAAP measure that represents the weighted average interest rate paid on borrowings after all costs, taking account of the effect of interest rate hedging.

30 Sep 17 31 Mar 17

Weighted average cost of borrowings 5.1% 5.0%



4. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONSIssued units represent capital contributed to GMT by unit holders. Distributions are paid to GMT unit holders when approved by the Board of the Manager.

4.1 Issued units

Issued units (million)

Value ($ million)

30 Sep 17 31 Mar 17 30 Sep 17 31 Mar 17

Balance at the beginning of the period 1,280.2 1,273.1 1,398.7 1,389.5Manager’s base fee reinvested 3.9 7.1 5.0 9.2Balance at the end of the period 1,284.1 1,280.2 1,403.7 1,398.7

4.2 Earnings per unitEarnings per unit is calculated as profit after tax divided by the weighted number of issued units for the period. Operating earnings is a non-GAAP financial measure included to provide an assessment of the performance of GMT’s principal operating activities. The calculation of operating earnings before other income / (expenses) and tax is set out in Profit or Loss, with a reconciliation of operating earnings after tax as follows:


6 months 30 Sep 16

Operating earnings before other income / (expenses) and tax 59.8 59.9Income tax on operating earnings (8.5) (8.4)Income tax on operating earnings of joint venture 0.1 (0.5)Operating earnings after tax 51.4 51.0

Weighted units for the Manager’s base fee reinvested are included as the services are rendered. There are no other weighted units.

millionWeighted units

30 Sep 17 30 Sep 16

Balance at the beginning of the period 1,280.2 1,273.1Manager’s base fee 5.9 2.2Weighted units 1,286.1 1,275.3

cents per unit6 months 30 Sep 17

6 months 30 Sep 16

Operating earnings per unit before tax 4.65 4.70Operating earnings per unit after tax 4.00 4.00Basic earnings per unit after tax 3.07 5.30



4. UNITS, EARNINGS PER UNIT AND DISTRIBUTIONS (continued)4.3 Net tangible assetsDiluted units, comprising issued units plus deferred units not yet issued, are used to calculate net tangible assets per unit.

millionDiluted units

30 Sep 17 31 Mar 17

Issued units 1,284.1 1,280.2Deferred units for Manager’s base fee expected to be reinvested 3.9 4.1Diluted units 1,288.0 1,284.3

30 Sep 17 31 Mar 17

Net tangible assets ($ million) 1,676.7 1,674.9Net tangible assets per unit (cents) 130.2 130.4

SUBSEQUENT EVENTOn 8 November 2017 a cash distribution of 1.6625 cents per unit with 0.3360 cents per unit of imputation credits attached was declared. The record date for the distribution is 30 November 2017 and payment will be made on 14 December 2017.

5. DERIVATIVE FINANCIAL INSTRUMENTSDerivative financial instruments are used to manage exposure to interest rate risks and foreign exchange risks arising from GMT’s borrowings.

5.1 Movement in fair value of financial instruments


6 months 30 Sep 16

Interest rate derivatives (2.3) (4.8)Cross currency interest rate derivatives relating to US Private Placement notes (3.6) (3.6)Total movement in fair value of derivative financial instruments (5.9) (8.4)

Foreign exchange rate movement on US Private Placement notes 4.7 9.0

Total movement in fair value of financial instruments (1.2) 0.6



5. DERIVATIVE FINANCIAL INSTRUMENTS (continued)5.2 Derivative financial instruments


Cross currency interest rate derivativesNon-current assets 6.1 9.7

Interest rate derivativesCurrent assets - 0.6Non-current assets 9.4 9.2Current liabilities - -Non-current liabilities (20.1) (18.2)

Net derivative financial instruments (4.6) 1.3

6. ADMINISTRATIVE EXPENSESAdministrative expenses are incurred to manage the operational activity of GMT. Excluded from administrative expenses categorised within operating earnings is the Manager’s base fee, which is expected to be used to reinvest in GMT units when payment of the fee occurs.

6.1 Administrative expenses incurred to derive operating earnings


6 months 30 Sep 16

Valuation fees (0.3) (0.3)Auditor’s fees (0.1) (0.1)Trustee fees (0.2) (0.2)Other costs (0.7) (1.1)Total administrative expenses incurred to derive operating earnings (1.3) (1.7)

6.2 Administrative expenses incurred but not included in operating earningsThese expenses, while excluded from GMT’s non-GAAP operating earnings measure, are included in other income / (expenses) within Profit or Loss.


6 months 30 Sep 16

Manager’s base fee expected to be reinvested in units (3.9) (3.8)Total administrative expenses incurred but not included in operating earnings (3.9) (3.8)



7. TAX7.1 Tax expense


6 months 30 Sep 16

Profit before tax 45.3 73.1

Tax at 28% (12.7) (20.5)Depreciation of investment property 2.7 2.6Movement in fair value of investment property (2.4) 5.6Disposal of investment property - (0.4)Deductible net expenditure for investment property 3.1 3.7Share of joint venture net profit less dividends received 1.1 0.9Derivative financial instruments (0.3) (0.2)Other - (0.1)Current tax on operating earnings (8.5) (8.4)

Depreciation recovery income for property sold and settled - (0.3)Settlement of derivative financial instruments - 2.0Current tax on non-operating earnings - 1.7

Current tax (8.5) (6.7)

Depreciation of investment property (0.3) (0.5)Reduction of liability in respect of depreciation recovery income 3.3 2.9Deferred expenses (0.7) (0.2)Derivative financial instruments 0.3 (1.1)Borrowing issue costs 0.1 0.1Deferred tax 2.7 1.2

Total tax (5.8) (5.5)

Current tax on operating earnings is a non-GAAP measure included to provide an assessment of current tax for GMT’s principal operating activities.



8. RELATED PARTY DISCLOSURESAs a Unit Trust, GMT does not have any employees. Consequently services that the Group requires are provided for under arrangements governed by GMT’s Trust Deed, or by contractual arrangements. The Trust has related party relationships with the following parties.

Entity Nature of relationship

Goodman (NZ) Limited GNZ Manager of the Trust

Goodman Property Services (NZ) Limited GPSNZ Provider of property management, development management and related services to the Trust and to its joint venture

Goodman (Wynyard Precinct) Limited GWP Developer of Bayleys House, acquired by the WPHL joint venture

Goodman Investment Holdings (NZ) Limited GIH Unitholder in GMT

Goodman Limited GL Parent entity of GNZ, GPSNZ, GIH and GWP

Goodman Industrial Trust GIT Property co-owner with GMT

Wynyard Precinct Holdings Limited WPHL Joint venture between GMT and GIC, Singapore’s sovereign wealth fund

8.1 Transactions with related parties other than WPHL

$ million Related party

Recorded Capitalised Outstanding6 months 30 Sep 17

6 months 30 Sep 16

6 months 30 Sep 17

6 months 30 Sep 16 30 Sep 17 30 Sep 16

Manager’s base fee GNZ (4.5) (4.6) 0.6 0.9 (5.0) (4.6)Manager’s performance fee GNZ - - - - - -Property management fees (1) GPSNZ (1.7) (1.7) - - (0.3) (0.3)Leasing fees GPSNZ (1.1) (0.6) - - - (0.5)Acquisition and disposal fees GPSNZ (0.3) (1.2) - - - (1.2)Minor project fees GPSNZ (0.7) (0.8) 0.7 0.8 - (0.4)Development management fees GPSNZ (1.8) (3.1) 1.8 3.1 - (1.0)Total fees (10.1) (12.0) 3.1 4.8 (5.3) (8.0)

Reimbursement of expenses for services provided GPSNZ (0.7) (0.9) - - - (0.1)Total reimbursements (0.7) (0.9) - - - (0.1)

Land acquisition - Savill Link GIT (2.3) - - - (2.3) (3.0)Total capital transactions (2.3) - - - (2.3) (3.0)

(1) Of the property management fees charged by GPSNZ, $1.6 million was paid by customers and was not a cost borne by GMT (30 September 2016: $1.5 million).



8. RELATED PARTY DISCLOSURES (continued)8.2 Transactions with WPHL

$ million Related party

Recorded Capitalised Outstanding6 months 30 Sep 17

6 months 30 Sep 16

6 months 30 Sep 17

6 months 30 Sep 16 30 Sep 17 30 Sep 16

Advances to joint venture WPHL 101.8 - - - 120.2 23.5Interest income received from joint venture WPHL 2.5 0.9 - - - -Funding fee received from joint venture WPHL 0.1 0.5 - - - 0.5Dividends received from joint venture WPHL - 1.3 - - - -

Advances to WPHL are unsecured and subordinated to WPHL’s bank debt. They are repayable on demand and incur a market rate of interest for advances of this type.

SIGNIFICANT TRANSACTIONSAdvances to the joint venture were provided in the period to enable WPHL to repay $45.0 million of maturing bank borrowings, settle the acquisition of the Datacom building for $86.2 million, settle the acquisition of Bayleys House for $62.3 million and fund other capital expenditure as required. Bayleys House was acquired by a subsidiary of WPHL from Goodman (Wynyard Precinct) Limited.

8.3 Other related party transactionsCapital transactions

Capital transactions that occur with related parties can only be approved by the independent directors of GNZ, with non-independent directors excluded from the approval process.

No properties were acquired pursuant to the Co-ownership Agreement between GMT and Goodman Industrial Trust (30 September 2016: none). This agreement was approved by unitholders at a general meeting held on 23 March 2004.

GMT purchased land at Savill Link for $2.3 million (30 September 2016: none) that was co-owned via the Co-ownership Agreement between GMT and Goodman Industrial Trust. This amount was outstanding at 30 September 2017 (30 September 2016: $3.0 million outstanding for land purchased at Savill Link in March 2016).

Key management personnel

Key management personnel are those people with the responsibility and authority for planning, directing and controlling the activities of an entity. As the Trust does not have any employees or Directors, key management personnel is considered to be the Manager. All compensation paid to the Manager is disclosed within this note.

At 30 September 2017, Goodman Group, GNZ’s ultimate parent, through its subsidiary Goodman Investment Holdings (NZ) Limited, held 269,569,477 units in GMT out of a total 1,284,102,670 units on issue. At 31 March 2017 Goodman Group held 268,169,407 units in GMT out of a total 1,280,222,885 units on issue.



8. RELATED PARTY DISCLOSURES (continued)8.4 Other related party capital commitments

$ million Related party 30 Sep 17 31 Mar 17

Development management fees for developments in progress GPSNZ 1.5 1.4Funding for WPHL to acquire the Datacom building WPHL - 44.0Total other related party capital commitments 1.5 45.4

9. COMMITMENTS AND CONTINGENCIES9.1 Non-related party capital commitmentsThese commitments are amounts payable for contractually agreed services for capital expenditure. For related party capital commitments refer to note 8.4.


Completion of developments 32.5 32.0Construction loan funding to be provided to The Fletcher Construction Company (Fanshawe Street) Limited (1) - 1.9Total non-related party capital commitments 32.5 33.9

(1) This loan was repaid in full in May 2017 on settlement of the acquisition of the Datacom building by a subsidiary of WPHL. Repayment of the loan provided the Trust with funds to meet its commitment to the joint venture for the purchase of the Datacom building.

9.2 Contingent liabilitiesGMT has no material contingent liabilities.

10. OTHER INVESTMENTSGMT holds a $12.0 million investment in units in the Millennium Centre Proportional Ownership scheme (“MCPO”) managed by Oyster Management Limited (“Oyster”), a wholly owned subsidiary of Oyster Property Group Limited. This investment was made as part of the agreement by GMT to sell the Millennium Centre to MCPO, with settlement of the sale of properties and GMT’s investment in MCPO taking place on 15 March 2017.

The units owned by GMT rank equally with all other units in the syndicate and earn GMT a minimum pre-tax cash return of 8% per annum. GMT has agreed that it will not dispose of any units for a maximum period of 12 months from settlement date (this period may be shorter if certain conditions are met), however Oyster has the ability to repurchase the units from GMT at their original issue price during this time. In the event that Oyster has not repurchased GMT’s units in MCPO, GMT has the right to put the units back to Oyster two years after settlement date, at the original subscription price. Oyster’s obligation is guaranteed by Oyster Property Group Limited. On 1 November 2017, $1.5 million of units were repurchased by Oyster.



11. FINANCIAL RISK MANAGEMENT11.1 Fair value of financial instrumentsExcept for the retail bonds, wholesale bonds and US Private Placement notes, the carrying values of all balance sheet financial instruments approximate their estimated fair value. The estimated fair values of retail bonds, wholesale bonds and US Private Placement notes are as follows:

$ million Fair value hierarchy 30 Sep 17 31 Mar 17

Retail bonds Level 1 314.9 211.6Wholesale bonds Level 2 - 45.5US Private Placement Notes Level 2 US$112.1 US$118.5

12. OPERATING SEGMENTSThe Trust’s activities are reported to the Board of the Manager as a single operating segment. Therefore these financial statements are presented in a consistent manner to that reporting.


INDEPENDENT REVIEW REPORTTo the unitholders of Goodman Property Trust

REPORT ON THE INTERIM FINANCIAL STATEMENTSWe have reviewed the accompanying financial statements of Goodman Property Trust (the Trust) and its controlled entities (together, the Group) on pages 9 to 31, which comprise the balance sheet as at 30 September 2017, and the statement of profit or loss, the statement of changes in equity and the statement of cash flows for the period ended on that date, and selected explanatory notes.

MANAGER’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe directors of Goodman (NZ) Limited (the Manager) are responsible on behalf of the Trust for the preparation and presentation of these financial statements in accordance with New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34) and International Accounting Standard 34 Interim Financial Reporting (IAS 34) and for such internal control as the Manager determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

OUR RESPONSIBILITYOur responsibility is to express a conclusion on the accompanying financial statements based on our review. We conducted our review in accordance with the New Zealand Standard on Review Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34 and IAS 34. As the auditor of the Trust, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.

A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. Accordingly, we do not express an audit opinion on these financial statements.

We are independent of the Group. Other than in our capacity as the auditor and provider of other related assurance services, we have no relationship with, or interests in, the Group.

CONCLUSIONBased on our review, nothing has come to our attention that causes us to believe that these financial statements of the Group are not prepared, in all material respects, in accordance with NZ IAS 34 and IAS 34.

WHO WE REPORT TOThis report is made solely to the Trust’s unitholders, as a body. Our review work has been undertaken so that we might state to the Trust’s unitholders those matters which we are required to state to them in our review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Trust’s unitholders, as a body, for our review procedures, for this report, or for the conclusion we have formed.

For and on behalf of:

Chartered Accountants Auckland8 November 2017


GMT BOND ISSUER LIMITED

For the six months ended 30 September 2017

INTERIM FINANCIAL STATEMENTS

The Board of GMT Bond Issuer Limited, authorised these interim financial statements for issue on 8 November 2017. For and on behalf of the Board:

Big Chill Supersite, Highbrook Business Park

CONTENTS

PROFIT OR LOSS 34

BALANCE SHEET 34

CASH FLOWS 35

CHANGES IN EQUITY 35

GENERAL INFORMATION 36

NOTES TO THE FINANCIAL STATEMENTS 1. BORROWINGS 372. ADVANCES TO RELATED PARTIES 373. COMMITMENTS AND CONTINGENCIES 374. FINANCIAL RISK MANAGEMENT 385. EQUITY 38

INDEPENDENT REVIEW REPORT 39

Peter Simmonds Chairman, Audit Committee

Keith Smith Chairman

G M T B O N D I S S U E R L I M I T E D I N T E R I M R E P O R T 2 0 1 8I N T E R I M F I N A N C I A L S T A T E M E N T S O F G M T B O N D I S S U E R L I M I T E D 33

PROFIT OR LOSSFor the six months ended 30 September 2017


6 months 30 Sep 16

Interest income 7.1 5.6Interest cost (7.1) (5.6)

Profit before tax - -

Tax - -

Profit after tax attributable to shareholder - -

There are no items of other comprehensive income, therefore profit after tax attributable to shareholder equals total comprehensive income attributable to shareholder.

BALANCE SHEETAs at 30 September 2017

$ million Note 30 Sep 17 31 Mar 17

Non-current assetsAdvances to related parties 2 300.0 200.0Current assetsInterest receivable from related parties 2 4.7 3.2Total assets 304.7 203.2

Non-current liabilitiesBorrowings 1 300.0 200.0Current liabilitiesInterest payable on retail bonds 4.7 3.2Total liabilities 304.7 203.2

Net assets - -

EquityContributed equity 5 - -Retained earnings - -Total equity - -

G M T B O N D I S S U E R L I M I T E D I N T E R I M R E P O R T 2 0 1 8I N T E R I M F I N A N C I A L S T A T E M E N T S O F G M T B O N D I S S U E R L I M I T E D34

CASH FLOWSFor the six months ended 30 September 2017

$ million6 months30 Sep 17

6 months 30 Sep 16

Cash flows from operating activitiesInterest income received 5.6 5.6Interest costs paid (5.6) (5.6)Net cash flows from operating activities - -

Cash flows from investing activitiesRepayment of related party advance - -Related party advance made (100.0) -Net cash flows from investing activities (100.0) -

Cash flows from financing activitiesProceeds received from retail bonds 100.0 -Repayment of retail bonds - -Net cash flows from financing activities 100.0 -

Net movement in cash - -

Cash at the beginning of the period - -

Cash at the end of the period - -

There are no reconciling items between profit after tax and net cash flows from operating activities.

CHANGES IN EQUITYFor the six months ended 30 September 2017

$ millionContributed

equityRetained earnings Total

As at 1 April 2016 - - -Profit after tax - - -As at 31 March 2017 - - -

Profit after tax - - -As at 30 September 2017 - - -

There are no items of other comprehensive income to include within changes in equity, therefore profit after tax equals total comprehensive income.


GENERAL INFORMATIONFor the six months ended 30 September 2017

REPORTING ENTITYGMT Bond Issuer Limited (“the Company”) was incorporated on 5 November 2009. The address of its registered office is Level 2, 18 Viaduct Harbour Avenue, Auckland. GMT Bond Issuer Limited is an issuer for the purposes of the Financial Reporting Act 2013 as its issued debt securities are listed on the New Zealand Debt Exchange (“NZDX”). GMT Bond Issuer Limited is a registered company under the Companies Act 1993.

GMT Bond Issuer Limited is a profit-oriented company incorporated and domiciled in New Zealand. The Company was incorporated to undertake issues of debt securities with the purpose of on lending the proceeds to Goodman Property Trust (“GMT”) by way of interest bearing advances.

The interim financial statements were authorised for issue by the Board of Directors on 8 November 2017. The Board does not have the power to amend these interim financial statements once issued.

The interim financial statements for the six months ended 30 September 2017 are unaudited. Comparative balances for 30 September 2016 are unaudited, whilst the comparative balances for the year ended 31 March 2017 are audited.

BASIS OF PREPARATION AND MEASUREMENTThe interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with International Accounting Standard 34 ‘Interim Financial Reporting’ and New Zealand equivalent to International Accounting Standard 34 ‘Interim Financial Reporting’.

The interim financial statements do not include all notes included in the annual financial statements. Accordingly these notes should be read in conjunction with the annual financial statements for the year ended 31 March 2017, prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and International Financial Reporting Standards (“IFRS”).

The accounting policies and methods of computation used in the preparation of these interim financial statements are consistent with those used in the financial statements for the year ended 31 March 2017.

The interim financial statements have been prepared on the historic cost basis.

The interim financial statements are in New Zealand dollars, the Company’s functional currency.


NOTES TO THE FINANCIAL STATEMENTSFor the six months ended 30 September 2017

1. BORROWINGS Security and covenants

All borrowing facilities are secured on an equal ranking basis over the assets of the wholly-owned subsidiaries of the Company’s parent entity, Goodman Property Trust. A loan to value covenant restricts total borrowings incurred by the Goodman Property Trust Group to 50% of the value of the secured property portfolio.

The Goodman Property Trust Group has given a negative pledge which provides that it will not create or permit any security interest over its assets. The principal financial ratio which must be met is the ratio of financial indebtedness to the value of the property portfolio. Further negative and positive undertakings have been given as to the nature of the Goodman Property Trust Group’s business.

SIGNIFICANT TRANSACTIONSIn May 2017, the Company issued a 7 year $100.0 million retail bond paying 4.54% interest per annum, maturing in May 2024. Proceeds from the issue were received by Computershare Investor Services Limited as registrar for, and on behalf of, GMT Bond Issuer Limited.

2. ADVANCES TO RELATED PARTIESAll advances are to Goodman Property Trust. GMT Bond Issuer Limited is a wholly-owned subsidiary of Goodman Property Trust. All members of the Goodman Property Trust Group are considered to be related parties of the Company.

Covenant Trustee Services Limited (as Trustee for Goodman Property Trust) has entered into a guarantee under which Goodman Property Trust unconditionally and irrevocably guarantees all of the obligations of GMT Bond Issuer Limited under the Bond Trust Documents.

3. COMMITMENTS AND CONTINGENCIES 3.1 Capital commitments payable

GMT Bond Issuer Limited has no capital commitments.

3.2 Contingent liabilitiesGMT Bond Issuer Limited has no material contingent liabilities.



4. FINANCIAL RISK MANAGEMENT 4.1 Fair value of financial instruments

The fair value of financial instruments has been estimated as follows:

$ millionFair value hierarchy 30 Sep 17 31 Mar 17

Related party advances Level 2 314.9 211.6Retail bonds Level 1 (314.9) (211.6)

For instruments where there is no active market, the Company may use internally developed models which are usually based on valuation methods and techniques generally recognised as standard within the industry.

5. EQUITYAs at 30 September 2017, 100 ordinary shares had been issued for nil consideration (31 March 2017: 100 ordinary shares for nil consideration). All shares rank equally with one vote attached to each share.

The Company does not have any tangible assets, and its net assets are nil, being an advance to a related party offset by a liability for retail bonds. Consequently, the net tangible assets per bond at 30 September 2017 was nil (31 March 2017: nil).


INDEPENDENT REVIEW REPORTTo the shareholder of GMT Bond Issuer Limited

REPORT ON THE INTERIM FINANCIAL STATEMENTSWe have reviewed the accompanying financial statements of GMT Bond Issuer Limited (the Company) on pages 33 to 38, which comprise the balance sheet as at 30 September 2017, and the statement of profit or loss, the statement of changes in equity and the statement of cash flows for the period ended on that date, and selected explanatory notes.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe directors are responsible on behalf of the Company for the preparation and presentation of these financial statements in accordance with New Zealand Equivalent to International Accounting Standard 34 Interim Financial Reporting (NZ IAS 34) and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

OUR RESPONSIBILITYOur responsibility is to express a conclusion on the accompanying financial statements based on our review. We conducted our review in accordance with the New Zealand Standard on Review Engagements 2410 Review of Financial Statements Performed by the Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects, in accordance with NZ IAS 34. As the auditor of the Company, NZ SRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial statements.

A review of financial statements in accordance with NZ SRE 2410 is a limited assurance engagement. The auditor performs procedures, primarily consisting of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. Accordingly, we do not express an audit opinion on these financial statements.

We are independent of the Company. Other than in our capacity as the auditor and provider of other related assurance services, we have no relationship with, or interests in, the Company.

CONCLUSIONBased on our review, nothing has come to our attention that causes us to believe that these financial statements of the Company are not prepared, in all material respects, in accordance with NZ IAS 34.

WHO WE REPORT TOThis report is made solely to the Company’s shareholder. Our review work has been undertaken so that we might state to the Company’s shareholder those matters which we are required to state to them in our review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company’s shareholder, for our review procedures, for this report, or for the conclusion we have formed.

For and on behalf of:

Chartered Accountants Auckland8 November 2017


12 Pukekiwiriki Place, under construction, Highbrook Business ParkBig Chill Supersite, Highbrook Business Park

OTHER INFORMATION

CONTENTS

OTHER STATUTORY AND LISTING RULE DISCLOSURES 41INVESTOR RELATIONS 42GLOSSARY 43CORPORATE DIRECTORY 44


OTHER STATUTORY AND LISTING RULE DISCLOSURESNZX WAIVERS NZX has granted waivers to GMT and GMT Bond Issuer at various times, some of which have been relied upon by GMT during the six months ended 30 September 2017.

FEES Under paragraph 39(d) of the waivers that were granted to GMT by NZX on 12 November 2012, GMT is required to disclose in its interim financial statements the fees that were paid to GPSNZ under the property management and development management agreements between HDL and GPSNZ, and between HBPL and GPSNZ during the period they were in force.

Included within property management fees and development management fees paid is $0.2 million paid pursuant to the property management and development management agreements between HBPL and GPSNZ for the six months to 30 September 2017.

Included within property management fees and development management fees paid is $2.3 million paid pursuant to the property management and development management agreements between HDL and GPSNZ for the six months ended 30 September 2017.

GMT BOND ISSUER LIMITED On 18 May 2017, NZX granted GMB a waiver from NZX Listing Rule 5.2.3 in relation to the Goodman+Bonds issued on 31 May 2017 (“GMB040 Bonds”) to enable GMB to apply for quotation on the NZX Debt Market even though the GMB040 Bonds may not initially be held by at least 500 members of the public holding at least 25% of the GMB040 Bonds issued (as required by NZX Listing Rule 5.2.3). The waiver has been granted for a period of six months from the quotation date of the GMB040 Bonds (being 1 June 2017).

The effect of the waiver from NZX Listing Rule 5.2.3 is that initially the GMB040 Bonds may not be widely held and there may be reduced liquidity in the GMB040 Bonds. To the extent that the GMB040 Bonds meet the spread requirements of NZX Listing Rule 5.2.3, GMB will notify NZX accordingly. GMB has agreed to notify NZX as soon as practicable if there is a material reduction to the total number of members of the public holding GMB040 Bonds, and/or the percentage of GMB040 Bonds held by members of the public holding at least a minimum holding. GMB has also agreed to clearly and prominently disclose this waiver, its conditions and their implications in each offer document relating to the GMB040 Bonds and in its half-year report and its annual report for the period the waiver is relied on.

A complete copy of the waivers provided by NZX can be found at www.nzx.com under the GMT code.

BASE FEE UNITS As described in the Notice of Meeting provided to Unitholders and the NZX on 15 July 2014, and as approved by Unitholders on 5 August 2014, certain amendments were made to the Trust Deed to require GNZ (or its nominee), as manager of GMT, to use its base management fee to subscribe for new Units for a five year period from 1 April 2014. Under paragraph 11(b) of the waivers that were granted to GMT by NZX on 15 July 2014, GMT is required to disclose in its interim financial statements the number and price of the base management fee units that were issued to GNZ during the relevant period.

During the six months to 30 September 2017 GNZ was issued 3,879,785 units at 127.61 cents per unit.

SUMMARY OF RECENT TRUST DEED AMENDMENTSThere have been no amendments to the Trust Deed during the period from 1 April 2017 to 30 September 2017. A copy of the Trust Deed is available on the Corporate Governance section of the Goodman Property Trust Website at www.goodman.com/nz.


INVESTOR RELATIONS

BONDHOLDER INTEREST PAYMENTS Interest is paid semi-annually in June and December, each year, until redemption for GMB020 and GMB030 Bondholders. For GMB040 Bondholders it is May and November.

No dividends or distributions have been paid by GMT Bond Issuer Limited.

REGISTRAR Computershare Investor Services Limited is the registrar with responsibility for administering and maintaining the Trust’s Unit and Bond Registers.

If you have a question about the administration of your investment, Computershare can be contacted directly:

+ by phone, on its toll free number 0800 359 999 (+64 9 488 8777 outside New Zealand);

+ by email, to [email protected]; or

+ by mail, to Computershare Investor Services Limited, Private Bag 92119, Auckland 1142.

COMPLAINTSComplaints may be made to the Manager or Supervisor.

As a financial service provider registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, the Manager is a member of an approved dispute resolution scheme (registration number FSP36542).

Financial Dispute Resolution Freepost 231075 PO Box 2272 Wellington 6140

Toll Free: 0508 337 337 (within New Zealand) Telephone: +64 4 910 9952 (outside New Zealand) Email: [email protected]

There will be no fee charged to any complainant in connection with investigation.

UNITHOLDER DISTRIBUTIONS The Trust typically pays its distributions quarterly in the third month that follows each quarter. For example the distribution for the June 2017 quarter was paid in September 2017. The table below shows the composition and timing of distributions per unit that have been paid, or declared, since the beginning of this financial period.

Distribution for quarter endedCash distribution

Imputation credits

Total distribution Payment date

31 March 2017 $0.016625 $0.002315 $0.018940 22 June 2017

30 June 2017 $0.016625 $0.003418 $0.020043 21 September 2017

30 September 2017 $0.016625 $0.003360 $0.019985 14 December 2017*

* Distribution announced but not yet paid at the date of this report.

INTRODUCTION Ensuring Unitholders and Bondholders are well informed and easily able to manage their investment is a key priority of the Manager’s investor relations team. Regular meetings and communications, its website and a dedicated toll free contact number provide investors with the means to make informed decisions.

ANNUAL MEETING GMT’s Trust Deed requires at least one meeting of Unitholders each financial year. The most recent Annual Meeting was held on 2 August 2017. The address and presentation are available on GMT’s website.

PUBLICATIONS For Unitholders and Bondholders who opt to receive printed copies, the Interim and Annual Reports are typically mailed in December and June of each year respectively. Goodresults newsletters detailing the performance and operational activities of the Trust over the intervening periods are mailed to Unitholders in March and September.

INVESTOR CENTRE The Trust’s website, www.goodman.com/nz, enables Unitholders and Bondholders to view information about their investment, download investor forms, check current prices and view publications and announcements.

HELPLINE The Manager has a dedicated toll free number, 0800 000 656 (+64 9 375 6073 outside New Zealand), which will connect Unitholders and Bondholders directly with the investor relations team who will assist with any queries.


GLOSSARY

$ and cents New Zealand currency.

Balance Date 31 March 2017.

Board the Board of Directors of the Manager and GMT Bond Issuer Limited.

Bondholder a person whose name is recorded in the register as a holder of a Goodman+Bond.

CEO the Chief Executive Officer of the Manager.

Chairman the Chairman of the Board of the Manager.

Co-ownership Agreement the agreement of that name between the Manager, Goodman Property Aggregated Limited, the Trustee, Goodman Funds Management Limited as responsible entity of GIT, Tallina Pty Limited as trustee of Penrose Trust, and Trust Company Limited as custodian of Tallina Pty Limited, dated 1 April 2004 as amended by the Restructuring Agreement between the same parties dated 7 March 2005, relating to the buying, selling and holding of property by the Trust and Goodman Group in 50/50 shares.

CPU or cpu cents per unit.

Director a director of the Manager and GMT Bond Issuer Limited.

GIC the sovereign wealth fund of Singapore.

GIT Goodman Industrial Trust and its controlled entities, as the context requires.

GL Goodman Limited and its controlled entities, as the context requires.

GMB GMT Bond Issuer Limited, a wholly owned subsidiary of Goodman Property Trust.

Goodman means Goodman (NZ) Limited as the Manager of the Trust.

Goodman Group or GMG means GL, GIT and Goodman Logistics (HK) Limited, operating together as a stapled group. Where either GL, GIT or and Goodman Logistics (HK) Limited is party to a contract or agreement or responsible for an obligation or liability, without the other, all references to Goodman Group as concerns that contract, agreement or responsibility shall be to that party alone.

Goodman+Bond or Bond a bond issued by GMB.

GPSNZ Goodman Property Services (NZ) Limited.

Independent Director has the meaning given to that term in the Listing Rules which, for the Manager are those persons listed on the following page.

Listing Rules the Listing Rules of NZX from time to time and ‘LR’ is a reference to any of those rules.

Management the senior executives of the Manager.

Manager or GNZ the manager of the Trust, Goodman (NZ) Limited.

NTA net tangible assets.

NZ IAS New Zealand equivalents to International Accounting Standards.

NZ IFRS New Zealand equivalents to International Financial Reporting Standards.

NZDX the New Zealand debt market operated by NZX.

NZX means NZX Limited.

Operating Earnings Operating earnings are a non-GAAP financial measure included to provide an assessment of the performance of GMT’s principal operating activities. Calculation of operating earnings are as set out in GMT’s Profit or Loss statement.

Registrar the unit registrar for GMT and Goodman+Bond registrar for GMB which, at the date of this Annual Report, is Computershare Investor Services Limited.

sqm square metres.

Trust Deed the GMT trust deed dated 23 April 1999, as amended from time to time.

Trust or GMT Goodman Property Trust and its controlled entities, including GMB, as the context requires.

Trustee the trustee of the Trust, Covenant Trustee Services Limited.

Unitholder or unitholder any holder of a Unit whose name is recorded in the register.

Unit or unit a unit in GMT.

WPHL or Wynyard Precinct Wynyard Precinct Holdings Limited, the joint venture between GMT and GIC, in which GMT owns 51%.


CORPORATE DIRECTORY

MANAGER OF GOODMAN PROPERTY TRUST Goodman (NZ) Limited Level 2, 18 Viaduct Harbour Avenue Auckland 1010PO Box 90940 Victoria Street West Auckland 1142

Toll free: 0800 000 656 (within New Zealand)

Telephone: +64 9 375 6060 (outside New Zealand)

Email: [email protected] Website: www.goodman.com/nz

ISSUER OF GOODMAN+BONDS GMT Bond Issuer Limited Level 2, 18 Viaduct Harbour Avenue Auckland 1010PO Box 90940 Victoria Street West Auckland 1142



Email: [email protected] Website: www.goodman.com/nz

Directors of Goodman (NZ) Limited and GMT Bond Issuer Limited Chairman and Independent Director Keith Smith Independent Directors Leonie Freeman Susan Paterson ONZM Peter Simmonds Executive Director John Dakin Non-executive Directors Gregory Goodman Phillip Pryke

Management Team of Goodman (NZ) Limited and GMT Bond Issuer Limited

Chief Executive Officer John Dakin

Chief Financial Officer Andy Eakin

General Counsel and Company Secretary Anton Shead

General Manager Development Michael Gimblett

Director Investment Management James Spence

Director Investment Management and Capital Transactions Kimberley Richards

Head of Corporate Affairs Jonathan Simpson

Marketing Director Mandy Waldin

AUDITOR PricewaterhouseCoopers PwC Tower 188 Quay Street Private Bag 92162 Auckland 1142

Telephone: +64 9 355 8000

Facsimile: +64 9 355 8001

REGISTRAR Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna Private Bag 92119 Auckland 1142



Facsimile: +64 9 488 8787

Email: [email protected]

LEGAL ADVISORS Russell McVeagh Level 30, Vero Centre 48 Shortland Street PO Box 8 Auckland 1140

Telephone: +64 9 367 8000

Facsimile: +64 9 367 8163

TRUSTEE AND SUPERVISOR FOR GOODMAN PROPERTY TRUST Covenant Trustee Services Limited Level 6, Crombie Lockwood Building 191 Queen Street PO Box 4243 Auckland 1140

Telephone: +64 9 302 0638

BOND TRUSTEE Public Trust Level 9 34 Shortland Street PO Box 1598 Shortland Street Auckland 1140



Facsimile: 0800 371 001

This Interim Report for the six month period ended 30 September 2017 has been prepared by Goodman (NZ) Limited as the Manager of GMT and by GMT Bond Issuer Limited. The information in this Interim Report is general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision relating to your investment or financial needs. This Interim Report is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in New Zealand currency unless otherwise stated. November 2017.


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