The axe has been wielded at leading office, shopping centre and logistics property group GPT, with a significant restructure and the loss of several senior executives in the fallout.
The driver for the changes hasn’t been underperformance; in fact it has been outperformance if anything thanks to the company’s successful plunge deeper into logistics to meet the challenges of online delivery and storage in the two years of the Covid pandemic and lockdowns.
The rapid growth in the company’s logistics business in the two years since GPT made the judgement that the Covid pandemic would mean significant long-term changes for its business mix, especially CBD buildings and retail, with logistics, online retailing and distribution and last mile delivery becoming more important over the medium term.
In Thursday’s statement GPT acknowledged this move and its success in saying it was announcing “changes to its Leadership Team and adjustments to its organisational structure to reflect the growth in the Group’s Logistics portfolio, provide greater sector alignment and enhance operational efficiencies.”
In other words, growth and prospects in the logistics business is now so great that it needed to be broken out into a new standalone structure with new leadership and the changes with that restructuring have rippled through the rest of GPT.
Logistics sector now accounting for around 27% of GPT’s investment property portfolio which is what the company was looking for to offset forecasts of a weak future for CBD office towers and big retail malls in the wake of Covid and its various waves.
It is being separated from the company’s Office business with separate CEO’s appointed both reporting to CEO Bob Johnston and presumably both in line to replace him at some time in the future
GPT says it expects further growth in this sector and the company says that “to ensure the sector has the appropriate strategic and operational focus” it has “created a separate Logistics business unit “with Chris Davis appointed as Head of Logistics reporting to Mr Johnston.
“Chris has more than 20 years of real estate experience and has been deeply involved in the Group’s Logistics acquisitions and developments over the past six years. Chris will lead the integrated Logistics team including the GPT QuadReal Logistics partnership.
That change will see the Office sector will become a separate business unit with Martin Ritchie appointed Head of Office reporting to Bob Johnston.
GPT said Mr Ritchie has 30 years of experience in the Office sector and has grown the GPT Wholesale Office Fund (GWOF) to be the largest wholesale office fund in Australia.”
“In his new role, Martin will lead the Group’s direct investments in the Office sector and also retain oversight of GWOF. The alignment of the GPT balance sheet Office portfolio and the GWOF portfolio under one leader will provide operational efficiencies, added focus on delivering the Office development pipeline and best position GPT to respond to the evolving customer needs in the sector.
“Chris Barnett will continue in his role as Head of Retail & Mixed-Use, with his role expanded to include oversight of the GPT Wholesale Shopping Centre Fund (GWSCF). Chris’ extensive retail and development experience will ensure a strong focus on asset performance, as well as unlock mixed-use opportunities across both GPT’s balance sheet and the GWSCF portfolios,” GPT said.
And as in any major revamp like this there have been casualties and GPT said senior executives, Matthew Faddy and Nicholas Harris will be leaving GPT.
Mr Faddy led GPT’s combined Office and Logistics business unit for the past six years and “instrumental in leading the growth for the Logistics business, in addition to delivering the Group’s recent Office developments and successful leasing outcomes.” Mr Harris led the growth in the Group’s Funds Management platform since inception and has ensured the Group has a very strong investor centric approach to Funds Management,” according to yesterday’s statement.
But despite those lauded successes, both men missed out on the brass rings in the revamp.
GPT also announced that James Coyne, the Group General Counsel and Company Secretary will be departing the Group as well at the end of April and will be replaced by Marissa Bendyk who is currently the General Counsel, Corporate and Governance & Group Company Secretary for AMP She will report to Bob Johnston and will be a member of GPT’s Leadership Team.
GPT securities fell 1.5% to $5.30 as investors took the news to be a negative when its really a positive in that the company’s deliberate strategy change nearly two years ago has paid off.