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GDI Property Group 2018 Annual General Meeting

GDI Property group held it's AGM this week wherein its Chairman Graham Kelly, provided his final address to investors.

In terms of a Board composition, Graham talked about the importance of a good team with no pretenders, and above all, complete honesty. He spoke about the increasing complexity of corporate regulation and the how it compromises entrepreneurship, replaces insight with formalism and can reduce the focus from successful execution to the successful compliance forms.

He notes that the need for a rules based system is unfortunate replacement for the lack of honest and respect that many in the industry have had as has been shown though the banking royal commission.

Graham also comments on the push toward more "skin in the game" remuneration as opposed to fixed remuneration and that what started as a good idea has born a bred of parasitic Remuneration Consultants.

In his Annual Report address he also describes GDI's simply strategy;

1. Acquiring commercial assets at what prices not reflecting their real potential; 2. Improving the assets, both physically (through simple things like better lobbies and improved lifts) and commercially (through better yielding rental returns and improved lease profiles); and 3. Selling assets at sufficiently improved values to generate proper reward for investors.

GDI's business has been one of ongoing asset trading as opposed to an asset gatherer.

During FY2018, GDI acquired;

  • 141 St George's Terrace for $216.3M (valued up to $255M as at 30th June)

  • 6 Sunray Drive, Innaloo for $143.5M

and Sold;

  • 66 Goulburn Street for $252M having bought it for $136M in July 2014.

The business also significantly increased the occupancy of in several of its key holdings.

Key Financial highlights;

  • NTA of $1.18 per security

  • FFO of 8.40c per security

  • Payout ratio of 92.3%

  • Distribution of 7.75cents per security

  • Absolute Total Return of 12.28% for FY18 and 14.8% since listing

See Chairman Address & Presentation