Goodman Property Trust (GNZ) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to this Annual Meeting of Unitholders. I'm John Dakin, the Chair of Goodman Property Services, Manager of Goodman Property Trust. This is our first annual meeting as an internalized business, and it's certainly a pleasure to welcome you all here to the Sofitel and engage directly with you about your investment. To ensure these events are accessible to the widest possible audience, today's meeting has a hybrid format. For those that are in the room, please be aware that there are cameras and audio equipment, streaming proceedings for those participating online. Our presentations this afternoon will focus on GMT's 2024 operating results and our strategy for growth. We'll also provide an update on our sustainability initiatives and climate-related disclosures we've recently released under the new Aotearoa New Zealand Climate Standards. The formal business of the meeting includes 4 resolutions, the reappointment of Laurissa Cooney, Leonie Freeman and David Gibson as Independent Directors and the approval of an increase in the remuneration pool for directors. I'll explain the proposed changes to the remuneration pool in more detail shortly, and you'll hear from each of the 3 directors later in the meeting. We also have an opportunity to ask questions before we vote on these resolutions. I'd now like to cover off certain meeting formalities. I'd like it noted that in accordance with the trust deed, I have been nominated by the trust deed to act as Chair of this meeting, and I have now tabled this nomination, which would be -- which would be this piece of paper. Thank you. I can also confirm that this meeting has been properly convened and the requirements for a quorum have been satisfied. For unitholders joining us online, questions can be submitted through the webcast portal at any time. These will be moderated, and we will have allocated time at the end of the meeting to answer these. Polling has also opened and votes can be cast by selecting the polling icon on the instruction screen and following the prompts. Votes can be amended up until the time the poll closes at the conclusion of the meeting. Likely event of an emergency, you will be required to evacuate to a designated safe zone. Should this occur, please exit the room through the fire escape doors to the left and right and also to the entrance to the room following the directions of the Sofitel staff. Right, that's our formalities. Now I'd like to introduce the other directors of the Board and executives of the manager who are in attendance today. From my far left, you're right, we have Keith Smith, Leonie Freeman, David Gibson, Laurissa Cooney, Andy Eakin; and James Spence. Greg Goodman joins us online from Sydney. You can see his picture. And I can assure you he can hear everything, and we'll be able to hear him if he has something to say. We also have representatives from our trustee, auditors, solicitors and tax advisers present. These representatives will be available to answer any questions if required. Just before we move on to the presentations, I would like to first acknowledge Keith's decision to retire from the Board before next year's annual meeting. Keith has been an outstanding independent director who has made a significant contribution to the success of this business over an extended period of time. As commercial experience and expertise have been hugely beneficial with his leadership as Chair of the Board for 13 years overseeing the repositioning and growth of GMT as an industrial property specialist. On behalf of the Board, Keith, the wider Goodman team and all our security holders would like to sincerely thank you for your considerable efforts, dedication and contribution to the business. Thank you. We expect to appoint another Independent Director in due course, maintaining the Board that 6 directors with the majority being independent. Now on to the business. The 2024 financial year was significant for our business with internalization being a major milestone in GMT's 25-year history. The change to the corporate structure received overwhelming support from unitholders with almost 100% approval of the resolutions to effect the change at the special meeting on the 26th of March this year. Internalization has effectively bought management in-house, integrating investment, development and property management functions within GMT. It builds significantly on what we've already achieved, secures the knowledge and expertise of our team and provides a framework for sustainable long-term growth. The immediate financial benefit of internalization, as was outlined at the time has been the elimination of external management fees. The most significant benefit of internalization, however, is the flexibility it provides to pursue wider investment opportunities in this market. These opportunities include the establishment of a complementary funds management business, which is a priority for our investment team. GMT's substantial Auckland industrial portfolio, urban logistics focus, development pipeline, sector expertise and scalable platform make it a highly desirable investment option for potential capital partners. With this flexibility now to sell assets into a fund, the funds management business would generate new fee revenue streams for GMT and provide us with alternative capital management options. The successful execution of the strategy is expected to support annualized earnings growth of between 5% and 7% over the next 3 to 5 years. That leads us into the directors' remuneration. One of the key operational differences with the new corporate structure as our directors and staff are now employed directly by GMT through its effective ownership of the new management entity. Chaired by David Gibson, a remuneration subcommittee of the Board was established to manage this additional responsibility and recognizing that the environment in which GMT operates has become significantly more complex. The committee has undertaken a review of the current Board remuneration. With increased regulatory risk and reporting obligations, there are now great demands on our directors that should be reflected in the fees they have paid. PwC have provided a comprehensive benchmark report that shows that the current remuneration entitlement of $815,000 per annum is almost 30% lower than the average of $1.147 million for comparable listed entity boards. So the Board have recommended that the total remuneration pool be increased to $1.07 million per annum, with the increase in fees reflecting current market rates and the new risk complexities and responsibilities of governing an internalized business. It will also ensure GMT can continue to attract and retain suitably qualified high-quality directors. The Board also committed to obtaining unitholder approval in future, should there be any material increases to the base fees paid to directors. The total amount expected to be paid in any 1 year is $732,500. This is significantly less than the total remuneration entitlement as both Greg Goodman and myself as representatives of Goodman Group have elected not to receive fees. And with no plans to change the existing arrangement, we expect to continue this beneficial practice for the immediate future. with Director fees now being paid directly by GMT, unitholder approval is required to increase the entitlement pool, and this is the fourth resolution we'll be voting on today. I'd now like to pass over to our CEO, James Spence, who will review our financial and operational performance and provide further commentary on our future growth initiatives. Thank you.

Thank you, John. Good afternoon, everyone. It's a real pleasure to be here today reviewing our recent results and sharing our growth plans. It's good to see some familiar faces in the crowd. Even my old economics teacher is here, so I will be sure to get my numbers right. Right, focusing our investment strategy on the Auckland industrial sector more than 5 years ago, recognized the key structural trends and supply constraints that continue to drive customer demand for well-located warehouse and logistics space. GMT's $4.5 billion urban logistics portfolio provides essential supply chain infrastructure for these businesses, facilitating the efficient storage and distribution of goods and materials. We have continued to refine the portfolio over the past 12 months, progressing developments and investing in new building technologies to meet customer demand for greater productivity, increased supply chain resilience and more sustainable property solutions. It has been a successful year with the additional revenue from new development completions, strong rental growth and positive leasing results, accounting for a $0.15 increase in net property income. The additional revenue has outweighed the impact of higher interest costs, contributing to just over a 7% increase in operating earnings before tax to $135.6 million. While the operating performance of the trust has been extremely pleasing, a 9.5% reduction in the fair value of the property portfolio and the one-off costs of the internalization have contributed to the statutory loss. We do take a longer-term view, however, on value creation, and we do note that a net $670 million of fair value gains from property valuations have been recognized in GMT's statutory accounts over the last 5 years and actually almost $1.3 billion of net gains over the last 10. The trust continues to be managed prudently with a well-capitalized balance sheet, providing operational flexibility and added resilience against the impacts of climate cycles and other market disruptions. As at 31 March, GMT had a loan-to-value ratio of around 31.5% and a committed gearing of 32.1%. This provides significant headroom against the covenant maximum that we have of 50%. Those of you familiar with our financial reporting know that we report on cash earnings as our preferred measure when evaluating the underlying performance of our business. It is a non-GAAP measure that assesses the net cash flow generated by the trust after adjusting for certain items. Underlying cash earnings of $0.0744 per unit was consistent with market guidance and 4.8% higher than the $0.071 per year achieved in the prior financial year. Quarterly distributions totaling $0.062 per unit have also been paid. The level of distributions represents about 83% of GMT's underlying cash earnings. Retaining a proportion of cash of our earnings to reinvest into the business ensures our distributions are financially sustainable. We expect to deliver another strong operating result in the year that we are now in, and our guidance includes a further increase in cash earnings to 7.5% -- $0.75 per unit. Cash earnings of -- our cash distribution, sorry, of $0.065 per unit are expected to be paid, reflecting an almost 5% increase again on the prior year. We announced the first quarter distribution earlier today with the payment of [ $0.01625 ] per unit made -- to be made on the 19th of next month. With some components of the internalization transaction being deductible for tax purposes, there is a substantial tax benefit to GMT that will be realized over time. Unitholders in the room will notice this in the applied distributions, which will have no imputation credits attached and will be excluded income for tax purposes for most investors over the next few years. Now just touch on the internalization for which we gathered about 5 months ago. I'm pleased to report that from an operational perspective, it's been a seamless transition. For our customers, contractors, service providers, staff, many of which are here today, our business functions have continued as usual with no change to the brand or team members they deal with. Unitholder approval of the transaction required Goodman Group to use the consideration received for the payment to subscribe for new units in GMT. With an increased cornerstone of 31.8% and a commitment to -- of up to $200 million of additional equity to help us establish a new funds management platform. Our former manager remains highly supportive and fully aligned investment partner. We're working towards the establishment of a new Auckland logistics fund and are leveraging Goodman group's global relationships to engage with capital -- potential capital partners. It's a carefully selected group that includes super funds, sovereign wealth funds and direct real estate funds with a mandate to invest in New Zealand. We look forward to reporting on progress with us in due course. I'd now like to elaborate more on our investment strategy and how this positions GMT for sustainable growth. We invest in high-quality urban logistics facilities in key locations. They are close to transport infrastructure and large consumer catchments as we believe these attributes will create the most value for our stakeholders. Auckland, as you can see on screen here, is our preferred investment location as it is New Zealand's gateway city and the country's largest industrial market, is also growing at an accelerated rate with the population expected to exceed 2 million by early 2030. It's where our customers want to be. With limited land availability, other factors creating high barriers to entry, industrial property market fundamentals remain strong, and there is minimal vacancy for prime space. The current slide shows the location of our 15 states. They're strategically positioned across the region. Featuring 170 individual buildings, it's a substantial portfolio that provides almost 1.2 million square meters of high-quality logistics and warehouse space leased to over 200 customers. That's the underlying performance of these properties that really drive our operating results. While the economy, and I'm sure everyone in this room will be aware, it has slowed and customer demand is moderating. The positive leasing dynamic with limited new supply has supported strong rental growth. The map also highlights the city's geographic constraints. And you'll note the proximity of our properties to major transport infrastructure such as the airport, port, Motorway and rail corridor. These locational advantages are important features for our logistics business operating in a highly competitive market. Proximity to large consumer catchments is also an important factor in the property decisions of our customers. It simplifies distribution and creates efficiencies that support e-commerce and all of us buying online. We estimate that the consumer catchment within the 20-minute truck drive of any of our estates here, which is really important, has an average purchasing power of around $28 billion per annum. With customers dealing with escalating costs and seeking greater supply chain resilience post COVID, these businesses are focused on productivity and maximizing the value of the warehouse and logistics facilities. Sustainability initiatives are helping achieve these objectives, and we have continued to invest in energy efficiency, water conservation and biodiversity projects that Andy will touch on a bit later, that improves the operational and environmental performance of our portfolio, with around 90% of this core investment portfolio built since 2004, development has always been an important driver of our business growth and expect to continue to be so. The range of locations and options for our development pipeline means that we can accommodate the property requirements of most of our customers. A more challenging operating environment is reflected in a lower level of new development inquiry, but with earlier precommitments creating a large workbook, the volume of projects being completed by our team remains significant. As you can see on the screen here, over the last 12 months, we have completed 4 development projects at Bush Road in Albany, Highbrook Business Park in East Tamaki, Favona Road in Mangere and Roma Road in Mt Roskill, totaling almost 80,000 square meters of space and with the current value of almost $370 million, these new facilities provide our customers with highly sustainable Green Star rated workspaces. New Zealand Post and Mainfreight lease the largest of the new facilities. Our development capability has enabled us to extend our relationship with these businesses -- both these businesses in the recent years as their property requirements have grown. They each now occupy multiple properties in the portfolio and our 2 largest customers. Following our 31 March balance date, we've also completed the remaining projects -- buildings at Roma Road Estate in [indiscernible]. You probably all know this site as you drive past it located next to the State Highway 20, between Waterview and Onehunga. You'll see the regeneration and repositioning of what was a former Brownfield site, and you've been able to see it -- get redeveloped firsthand. It's a great example of what can be achieved with more sustainable development practices. With the development program increasingly focused on the regeneration of our noncore properties, value-add opportunities like this asset, like Roma Road now may happen around 75% of our future development pipeline. It is a substantial portfolio -- pipeline that is expected to generate the development of almost 400,000 square meters of warehouse and logistics space over time. A growing digital economy is also creating new property investment and development opportunities. E-commerce, cloud computing and emerging technologies such as AI, machine learning are creating demand all around the world for information technology and data management services. Data centers provide the physical infrastructure to support the delivery of these digital services. It's a growing property asset class, and we are currently investigating the opportunity for GMT and what it could mean for our portfolio here in Auckland. So stay tuned. But before I hand over to Andy, our CFO, I'd like to briefly summarize the key points of the presentation that I've made this afternoon. GMT's strong operating performance and a more challenging economic environment has demonstrated again that it's a robust and resilient business. Over the last 12 months, we have increased rental income and delivered cash earnings growth of almost 5%. We've also progressed our development program and refined our corporate structure, initiatives that will help take our business forward. While the operating outlook does remain challenging, the quality and scale of our portfolio, the low gearing we have and focused investment strategy give us confidence about the year ahead. Thank you very much.

Thanks, James, and good afternoon, everyone. It does feel a bit strange standing here and not talking about the financial aspect of the results. But look, it's a privilege to be here. And in addition to my responsibilities as CFO, I'm also ahead of sustainability for the trust. It's an important focus for our business, and it's also an area of increased scrutiny and regulation. The introduction of the Aotearoa New Zealand Climate Standards has created mandatory disclosure obligations for most listed businesses for the first time this year. Hopefully, you've seen the e-mail directing you to our 2024 sustainability report that was released last month. It's designed to be a companion document to our annual report and includes our first disclosures under these new regulations. This afternoon, I want to discuss our strategic response to the challenges and opportunities of climate change, the initiatives that we're undertaking to reduce the intensity of our emissions and why this is positive for our business. I'll also outline the work of the Goodman Foundation and why we partner with community groups to improve social outcomes in the areas where we invest. As a leading real estate investor, our focus is on the built environment and the provision of sustainable property solutions for our customers. Understanding the complete emissions profile of our business provides the knowledge that underpins our targets for lower carbon, more climate-resilient future. Disclosing this data allows our stakeholders to assess progress against our targets and the credibility of our actions. We've been monitoring and reporting our corporate emissions since 2006 when we first contributed to CDP, previously known as the Carbon Disclosure Project. CDP undertakes an annual survey that encourages participants to monitor and reduce their impact on the environment, including through their greenhouse gas emissions. Evaluating almost 13,000 organizations worldwide, our climate score of A minus the 2023 survey was the highest rating achieved by a New Zealand organization and was shared with 2 other local companies. Our corporate carbon emissions largely reflect our operational activities and include the energy to run our offices and power our vehicle fleet and any business travel or other transport related emissions. They also encompass the common areas and services within the portfolio where we have direct operational control. Participation in the Toitu Net Carbon Zero Program since 2021 provides assurance that our corporate emissions have been measured in accordance with international standards and offset with locally sourced carbon credits and certified renewable energy certificates. This year, we've extended our sustainability reporting to include a more comprehensive emissions inventory that includes all indirect or Scope 3 emissions. The graphic on screen summarizes our inventory for 2024, and you'll see that our corporate emissions make up a small proportion of our total emissions, while indirect Scope 3 emissions, both upstream and downstream make up almost 99%. As a property investor, our development activity is the largest source of the Scope 3 emissions, accounting for around 65% of the total. Customer emissions, which arise principally as a result of their use of electricity and space leased from GMT represents a further 15%. Focusing our efforts on initiatives that reduce these emissions provides the greatest opportunity for our business. It also helps our customers achieve their climate goals with many of these businesses having their own carbon reduction targets. The creation of our sustainable finance framework in 2022 facilitated the issue of green bonds and the establishment of green bank loans with these financing initiatives supporting our ongoing investment in sustainable property solutions. To reduce emissions in our development program, we're working with consultants, contractors and building product suppliers to deliver lower carbon, more resource efficient and resilient buildings. By using lower emission materials and building systems, we've reduced the intensity of the upfront embodied carbon within the 4 development projects that completed last year by around 17% when compared to standard buildings of a similar size. Supported by independent life cycle assessments, we believe a carbon reduction target of between 10% and 20% is achievable for most new projects. We're also recycling and repurposing demolition and construction waste wherever possible and brownfield regeneration projects like Roma Road that James talked about before, included waste diversion target of at least 90% of all demolition material. Another important feature of our development program is our commitment to a 5 Green Star Built rating for all new projects, which represents New Zealand excellence. Targeting the standard for our best build specification helps ensure all our new warehouse and logistics facilities are highly sustainable and operationally efficient. It's been a successful strategy with all new projects since 2020 being developed to a minimum 5 Green Star rating. The Tawharau Lane multi-warehouse project at Highbrook Business Park, which achieved a sixth Green Star rating, and that represents world leadership standard. It was the first New Zealand industrial building to achieve this. The quality of this project was also recognized with an excellence award in the industrial category at the New Zealand Property Council awards in June. Maintaining our properties to a high standard and investing in upgrade projects that improve the operational and environmental performance of these buildings, also helps attract and retain customers. The building upgrade initiatives include the installation of electrical submetering to provide detailed energy monitoring, customer and public EV chargers, LED lighting upgrades, rooftop solar systems and water saving technologies. As part of our ongoing investment in these existing properties, over $20 million has been allocated to further progress these projects over the next few years. Our customers benefit from these initiatives with lower emissions, more resource efficient and resilient buildings. The high-quality workspaces they provide can also contribute to greater productivity and reduced operating costs. Our landscaping and biodiversity initiatives complement our investment in new development and building upgrades. Extensive landscaping is a feature of our properties, and we're extending this focus with projects to restore and boost biodiversity around our larger estates. In recent years, we've installed bee hives and planted more than 10,000 native plants at Highbrook Business Park and Roma Road Estate to improve the biodiversity and resilience of the natural landscape around these properties. We're also working with local iwi to improve waterways and a combined working bee earlier this month cleared rubbish, removed invasive weeds and planted natives beside the Puhinui Awa near our M20 Business Park. Helping alongside iwi and Goodman volunteers were customer representatives, members of the local community and contractors who donated both their time and equipment. We've spoken previously about KiwiHarvest as it's the largest of our charitable partnerships. With its focus on meeting essential needs, KiwiHarvest is a food rescue organizations having huge impact. In a year when the cost of living crisis made fresh food less accessible for many, KiwiHarvest redistributed a record 2,700 tonnes of goods to around 220 food banks and other recipient agencies. Over 20% more than the previous year and equivalent to around 5.9 million meals that included surplus produce, protein, mislabeled goods and grocery items approaching expiry. The social good this creates is estimated to have had a value of around $13.8 million. Our support as a founding partner of KiwiHarvest is one of the many initiatives that are making a sustained and tangible difference to people's lives in the locations where we invest. I hope my presentation has given you some insight into the scope of our sustainability program. It's been a comprehensive approach that recognizes the importance of building a lower carbon and more resilient business for the benefit of all of our stakeholders. Thank you, and I'll now hand you back to John.

Thank you, Andy, and thank you, James. That concludes the presentation to everyone, and we'll shortly move on to questions. But before we do that, however, I would like to thank all our customers, our investors and other stakeholders for their continued support of this business. And also I acknowledge the significant contribution of the entire Goodman team, particularly over what's been a very, very busy period in the last 12 months. So we'll now move to questions. For those that are participating through the live webcast, please submit your questions now. As I mentioned earlier, these need to be entered through the online portal and will be moderated to avoid duplication. I'd now like to open the floor here for questions. Please raise your hand, and Jordan or Bruno will pop over with the microphone. Are there any questions?

Richard Jenkins shareholder. It's good you're putting solar cells on new buildings, how about putting them on older buildings retrofitting them, is that an option?

Yes. Thanks, Richard, why don't I get Andy to answer that question.

Yes. So we have been doing that as well. And where customers are keen to do it, we're happy to work with them. And it's been quite interesting over the last 3 or 4 years, it's actually become quite economic to do that. We've got different arrangements with different customers who've asked us to do it. But the payback period on doing that has become much shorter. So -- but it's being very much customer-led. If they want us to do it, we're very happy to do that.

Thanks, Andy.

Yes, I was interested to see that New Zealand Post was increasing its leasing requirements. So what's going on there?

Yes. Good question. It's largely development lead. I'll get James to talk to the specifics, but they've been a big part of our development program in the last few years.

Yes. That's right. Come COVID, we all sort of found the online shopping, you all started buying online. And I think for a lot of users -- sorry, of our customers and NZ Post is one of them. They kind of got caught with. Well, this is the future. If everybody buys online, then we're going to need to rework our distribution networks. So maybe 3 years ago, is Post completely reworked their distribution network for parcel delivery to people's homes. And we were part of that. So we've been building out a network for them, which has got an East Auckland facility and North Auckland facility and sort of a central facility with Roma Road. So we've actually built 2 significant new facilities of about 18,000 square meters for them to handle all of us buying online and getting parcels to -- delivered to home. And they saw that coming. And it's been following trends we've been seeing all around the world, getting warehouses close to the end consumer, so you can get those products to build houses more efficiently and cost effectively.

Thanks, James. Any other questions in the room? Yes.

Thanks, [ Bruce ] shareholder. Saying the same thing. Carbon reduction, your scope 3 emissions of your main customers is Post and Freightways, has a big impact on what you can do? How can you control that?

That's an excellent question, that one, and that's been tossed around the Board table quite a lot. So should I ask you to answer that Andy ( sic ) [ Anton ] in the first instance.

The Scope 3 emissions of the customers that we consider our scope -- what are our Scope 3 emissions, those are the downstream Scope 3 emissions. Those are the ones that arise from the use of our buildings. So it's what happens within our property, not what happens outside of that. So New Zealand Post trucks running all over the country. Those are their emissions, but they don't impact us in any way. So the key thing for us to -- and it helps us both with the emissions that we report, but also the customers with their own emissions is for us to develop more energy-efficient buildings, it's principally electricity that they use within the bundling. So things like the LED lighting that we put in a standard and we've got a retrofit program across the existing buildings. That very significantly reduces the electricity use within those buildings. Solar panels on the new buildings and where customers want us to do it as well and some of the older ones again reduces the electricity usage. So we do what we can to help them have a lower footprint. It's good for what we report as our emissions are scope 3, but that sits within their operating emissions for themselves to Scope 1 and 2, so it helps them as well.

Yes. The big thing we do, Bruce, of course, is it lines up with our strategy, having that warehouse as close to the end consumer as possible to make that truck drive more efficient, not in terms -- not just in terms of cost and efficiency, but also footprint. So that's a big part of what we try to enable. And those strategies are very aligned.

Second question on your development pipeline. Will that be customer-driven or would you build and hope they will come?

Sure. [indiscernible] has never been a great business strategy in my experience. Yes, look, I think it will be demand led. But again, why don't I just get James maybe just expand a little bit.

Yes, good question. We've had both over the last 20 years which [ speaks ] some units without customers and lease them during the development period. That's been a really successful program for us. Lot of Highbrook was done that way. And we've also done design where a customer wants space. I think we will always judge it on a case-by-case basis. Things like [indiscernible] that we're developing. It's a big greenfield site that will be built out over the next 5, 10 years. I would envisage that, that would be a bit of a mix, and we'll sort of judge things as the economy and demand suits. But both I'd think will be a part of our future.

Thanks, [ Bret ]. Any other questions from the floor? If not, are there any questions online. No? Thanks, Anton. Perhaps There's no further questions. We can move to the formal business of the meeting. The composition of the Board is obviously very carefully managed to ensure -- includes a diverse range of directors with the required range of skills, knowledge and experience to effectively manage our business. Now that we've got an internalized model, unitholders have the right to nominate and vote on all directors. And this year, Laurissa Cooney, David Gibson and Leonie Freeman are retiring in accordance with the constitution of the manager and the NZX listing rules and being eligible, have offered themselves for reelection. Leonie has also indicated this will be her final term as a Director of the business. Following the call for nominations, none were received, and the 3 directors stand unopposed. Before we conduct the poll, I would like to invite each Director to address the meeting. We've got Laurissa first and then Leonie and David. Thank you.

[Foreign Language] connections into the [indiscernible] and I currently reside in the Sunny Bay of Plenty. It is a pleasure to be able to address our unitholders today, and I thank you for your time. It is an honor to be considered for reelection to the Goodman Property Services Board and to have a few moments to talk to you all. By way of background, I first joined the Board in November 2020. I'm also an Independent Director for Air New Zealand, and I provide governance leadership for several New Zealand environmental organizations, where I co-chair the Aotearoa Circle, and I'm a Steering Committee Member for the Institute of Directors, Chapter Zero. The sustainability insights from these roles have become important with Goodman's strong focus on sustainability in its recent climate-related disclosure reporting that we've just heard from [indiscernible]. I'm an active member of the Institute of Directors in a charter member status and a fellow of the Chartered Accountants, Australia and New Zealand society. The steep background and financial reporting, audit and risk management, coupled with my governance experience and prior CFO commercial experience has equipped me strongly to support the existing skill sets of the Board and to Chair the Audit Committee. I'm proud of Goodman, our CEO, James and Chair, John, for their leadership, our talented staff and my fellow Board members for their commitment and contribution to Goodman's ongoing success. The focus on our customers in providing high-quality, sustainable properties in key locations, coupled with great service supports the business to deliver sustainable returns for you, our unitholders. While recent changes to the corporate structure have positioned the company for the next phase of its business growth. We are committed to building a responsible long-term business that delivers positive outcomes for all of our stakeholders. I'm deeply committed to working on your behalf to achieve the best possible outcomes for the company with my fellow Directors. With your support, I would like to continue in this role and continue to bring a financial risk, sustainability and iwi perspective to this incredibly special company. Thank you for your time, [Foreign Language]

[Foreign Language] Leonie Freeman. Good afternoon to all of you, and welcome to this year's AGM. I just want to make special mention and welcome to my 2 nephews who are here today, Nick and Alex as well. I'll probably really embarrass them now. Thank you, John, and also thank all of you shareholders for this opportunity to address you as I put myself forward for reelection. I'm currently the Chief Executive of the Property Council of New Zealand, which is the membership organization representing the entire property sector. It includes the property owners, developers and consultancy services across all sectors of the property industry with the sole purpose of driving transformational change for the benefit of the property sector and more broadly for all New Zealanders. I've spent my entire career in the property industry since completing Masters of Commerce, majoring in property and valuation from Lincoln University. When I was calculating how long that has been, I realize somewhat scarily that it's now been over 35 years. I say that quite quietly because it's quite a big number now. But during this time, I have undertaken almost all roles in property from being trained as a valuer, property management, development, strategy and transformational change. This has included being responsible for the launch of [indiscernible] relends.co.mZ the 1996, which is today known as realestate.co.nz. Some years later in 2000, I bought a small rundown property management company and embarked on the transformation process over the next 7 years and sold that business in 2007. After a break following the sale of that, I focused on contribution to our city and to our country in the public sector. This included being the strategic property adviser in the setup of Auckland Super City and also being called into Housing New Zealand to turn around this stalled housing development program. And for many years, I've worked extensively on solving New Zealand housing issues. I believe our role in property is key, not only for today but for the future. I really like the word Kaitiakitanga which means guardianship or stewardship so that we ensure that what we are doing today is a positive contribution for our city and our country, not only now but for future generations. In property, whether it is residential, commercial or industrial, we have the responsibility of building our communities, our cities and our country. Whilst ensuring a financial return is absolutely critical, it is bigger than that. It is about developing buildings that we can be proud of and that contribute positively to our cities. I've been honored to be a Director of Goodman. I and all the Goodman team are very proud of what we create. But in addition to this, we share common values around the importance of people, both our staff, our customers and our shareholders. I have been an Independent Director of Goodman Property Trust since 2011. It is a position I have been honored and privileged to hold. Today, I hold myself eligible for reelection. Now [Foreign Language] and thank you.

[Foreign Language] Good afternoon, everyone. I was first elected to be a director in 2021, and I'm pleased to put myself forward for reelection again this year. Since I became a Director, there have been some major company milestones. We've had successful transition of the CEO from John to James. John has moved to Chair and I became Deputy Chair in 2023. This year, shareholders approved the internalization of the management structure, which is a process that I led on behalf of the independent directors. And from May this year, I now chair the Remuneration Committee. I'm very proud of the company's achievements. As a Board, we are aligned with the management team on our direction. There are lots of exciting opportunities in front of us. And if elected again, I will work hard focusing on increasing unitholder value and ensuring that the highest standards of governance are maintained. I very much enjoy my role at Goodman, and I hope to get your support for my second term as a Director.

Thanks Laurissa, Leonie and David. And I can tell you, they all add significant contribution in their own individual way to the Board and to the success of this business. So as I discussed earlier, the final resolution that we're voting on today as it relates to the increase in the remuneration for the directors. The proposed fee, as I just reiterate -- as the proposed fees the Directors will receive does reflect the greater demands on the Board, and you would hear Andy talk a little bit about what's been required and the climate reporting is just one example. It's a more complex business with a lot of increased regulatory obligations. We -- and despite this practice, we did have PwC benchmark. These fees with the current entitlement being around 30% lower than the average for comparable listed Boards, and the Board has recommended that the total remuneration pool be increased to $1.07 million. The actual amount expected to be paid is significantly less at $732,500. So let's now move on to the actual resolutions. The 4 resolutions are set out in the Notice of Meeting and on the voting form you will have received. As they have been notified, there is no requirement for a seconder. A majority of not less than half of persons entitled to vote and voting is required to carry each resolution. Are there any further questions on the resolutions relating to the appointment of directors? I'll just ask the room first of all. No, have you not got anything Anton anything online? And are there any questions relating to the increase in the remuneration pool for directors? Nothing on the floor, anything online Anton.

Nothing. Okay. I thought there was a late one coming in.

Okay. So now we'll -- there's no further questions, we'll proceed to a poll. For those that are participating through the live webcast that have not already voted, please submit your votes now. The poll will close in a few minutes. For those of you in the room who have already not -- that have not already voted, please complete your voting and proxy form and place it in the boxes provided. The result of the poll will be announced to the NZX once it has been confirmed, and a copy of the announcement will also be available on our website. On behalf of the Board, I'd like to thank you all for your participation today. It's a really strong turnout. I know it was a second meeting for the year. And -- but we're delighted you turned up to learn about how your investment is tracking. I'd like to declare the meeting closed and invite those in the room to join us in the lobby for refreshments. Thank you very much.