Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — FY2020 Earnings Presentation
31 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 18, 2020
Slide 1: FY2020 Results Presentation
FY2020 RESULTS PRESENTATION 18 AUGUST 2020 www.apngroup.com.au ASX Code: AQR
Slide 2: Agenda
Agenda 01 FY2020 snapshot 02 Financial performance 03 Investment overview 04 Market update and outlook Appendices 2
Slide 3: FY2020 Snapshot
01 FY2020 SNAPSHOT Raceview Convenience Centre, QLD 3
Slide 4: APN Convenience Retail REIT
APN Convenience Retail REIT Our strategy The opportunity ▪ Investing in strategically located ▪ Secure and sustainable long-term income growth with 80% of portfolio rental service stations and convenience income subject to fixed annual increases of 3% or more retail assets with long term leases to ▪
Slide 5: FY2020 snapshot
FY2020 snapshot Financial performance Portfolio performance Capital management 21.8c $31.9m $90.2m DISTRIBUTION PER SECURITY VALUATION UPLIFT TOTAL COMMITTED 4.3% on FY2019 ACQUISITIONS 21.6c 2.8% $101.6m FFO PER SECURITY CONTRACTED ANNUAL NEW EQUITY RAISED2 0.4% on FY20191 RENTAL GROWTH $3.27 10.6
Slide 6: Delivering on growth strategy
Delivering on growth strategy Portfolio growth since IPO $60m $509m $58m $448m $7m $32m $41m $340m $11m $358m $287m $12m AQR IPO Acquisitions Jun-18 Acquisitions Jun-19 Net acquisitions 2 Jun-20 Contracted Pro forma portfolio (Jul-17) + revaluations + revaluations + revaluations acquisitions & devel
Slide 7: Chevron acquires Puma Energy
Chevron acquires Puma Energy Enhanced credit quality of portfolio Overview of Chevron ▪ On 30 June 2020, Chevron announced that it had completed the • One of the world’s leading integrated energy companies acquisition of Puma Energy’s Australian fuel business for $425 • Operates ~19,550 service stat
Slide 8: COVID-19 impact in FY2020
COVID-19 impact in FY2020 Resilient income stream with minimal impact to date with all sites continuing to operate ▪ SME tenants represent 2.6% of portfolio rent ▪ Minimal relief of 1.2% of portfolio rent provided in FY2020 – split 50% deferred / 50% waived ▪ No relief currently being provided ▪ Ass
Slide 9: Financial Performance
02 FINANCIAL PERFORMANCE Brisbane Airport Link Service Centre, QLD 9
Slide 10: Financial performance
Financial performance Transparent income streams and capital structure A$m FY2020 FY2019 Change ▪ FFO of $19.3m, up 13.3% on FY2019 Net property income 26.4 24.7 6.9% – Up 0.3% on a per security basis due to an Straight lining of rental income 4.2 4.5 6.7% increase in the number of securities on iss
Slide 11: Balance sheet
Balance sheet NTA per security increased by 31 cents (+10.5%) June June A$m 2020 2019 Change ▪ $89.9 million increase in investment properties due to: Assets – Net property transactions of $58.0m ($67.8m of Cash and cash equivalents 2.3 0.3 Large acquisitions offset by $9.8m of disposals) Investment
Slide 12: Capital management
Capital management Balance sheet well capitalised for growth Key metric June 2020 June 2019 Facility limit $165.0m $125.0m ▪ Refinanced $105 million of facilities and increased debt facilities by $40 million in February 2020 Drawn debt $76.5m $116.0m ▪ New equity raised of $101.6m during the period1
Slide 13: Investment Overview
03 INVESTMENT OVERVIEW Woolworths Caltex Capalaba, QLD 13
Slide 14: Attractive convenience retail portfolio – long leases to quality tenants
Attractive convenience retail portfolio – long leases to quality tenants 5.9% 63.7% $60.4m 100% DISTRIBUTION TAX DEVELOPMENT OCCUPANCY YIELD1 DEFERRED PIPELINE & COMMITED ACQUISITIONS 79 $445m 6.6% 10.6 PROPERTIES PORTFOLIO WACR WALE VALUE (YEARS) DIVERSIFIED AND DEFENSIVE LONG LEASE PORTFOLIO SUSTA
Slide 15: Diversified portfolio
Diversified portfolio Major tenants 83% of the portfolio is located in 58.5% Australia’s eastern seaboard states 15.7% ~78% of Australia’s population live in the 9.3% eastern seaboard states1 4.2% 3.4% Major tenants account for 2.4% 97% of portfolio income 2.0% 1.3% Complementary 3.1% retail 11% 60%
Slide 16: Sustainable and secure income through long dated leases
Sustainable and secure income through long dated leases Rent review type by income ▪ Attractive lease expiry profile – No income expiring prior to FY22 CPI – 74% of lease income expiring FY30 and beyond 20% ▪ 80% of portfolio income subject to fixed annual increases of 3% or more WARR 2.8%1 ▪ Defens
Slide 17: Development projects
Development projects Invested $33.9m in development projects with a further $22.4m committed ▪ Six development projects completed since December 2019 ▪ Pipeline of further development opportunities emerging ▪ COVID-19 has created development fund-through opportunities with vendors and developers tar
Slide 18: Active year of acquisitions to enhancing portfolio diversity and scale
Active year of acquisitions to enhancing portfolio diversity and scale FY2020 acquisitions1 $90.2m Committed acquisitions $38.0m WACR 6.24% WALE 12.3 yrs $22.4m $128.2m $3.6m $30.3m $67.8m $34.0m Acquisition of Acquisition of Land acquired for fund- Total acquisitions Additional fund-through Contrac
Slide 19: APN Property Group – aligned and experienced manager
APN Property Group – aligned and experienced manager Strong investor Focused and Governance Manager with long alignment dedicated overseen by an track record and ▪ APN is strongly aligned to management team independent Board deep relationships delivering investor returns – owning a $36.3 million co-
Slide 20: Market Update & Outlook
04 MARKET UPDATE & OUTLOOK Brisbane Airport Link Service Centre, QLD 20
Slide 21: Market update
Market update Convenience retail Fuel Investment market ▪ Convenience retail sales (excluding ▪ Fuel sales recorded a CAGR of 1.4% ▪ Asset class remains highly sought fuel) were up 2.1% to $8.8 billion in from July 2010 to June 20202 after reflected by the success of 20191 multiple portfolio sales a
Slide 22: Outlook and guidance
Outlook and guidance Secure and growing income profile backed by long term leases to quality tenants ▪ AQR is well positioned – Passive income stream with contracted rental increases providing sustainable income growth – Strong balance sheet with significantly lower gearing – 16.5% (24.8% PF) vs 32.
Slide 23: Appendices
APPENDICES Liberty Pooraka, SA 23
Slide 24: Profit and Loss statement
Profit and Loss statement Financial period ended FY2020 FY2019 $’000 $’000 Income Net property income 26,352 24,732 Straight lining of rental income 4,175 4,473 Other income 111 - Interest income 25 22 Total income 30,663 29,227 Expenses Management fees (2,526) (2,295) Finance costs (4,595) (5,186)
Slide 25: Reconciliation to FFO
Reconciliation to FFO Financial period ended FY2020 FY2019 $’000 $’000 Statutory net profit 45,799 24,001 Adjusted for: Straight line lease revenue recognition (4,175) (4,473) Fair value gain on investment properties (23,902) (5,341) Fair value loss on derivatives 952 2,402 Amortisation of borrowing
Slide 26: Portfolio revaluations
Portfolio revaluations 8.9% portfolio revaluation uplift ▪ Valuation gains predominately driven by cap rate No. of Valuation Cap Valuation change Site type compression properties ($m) rate ($m) % ─ Total portfolio tightened 33 basis points Metropolitan 58 $289.6 6.5% $16.7 +7.4% ─ Puma portfolio tig
Slide 27: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) 440 Roadhouse WA Puma Regional $5.2 7.75% 14.1 100% 11,372 Aeroglen QLD Puma Metropolitan $4.0 6.75% 13.5 100% 3,224 Atherton QLD Puma Metropolitan $2.0 7.00% 14.5
Slide 28: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Gepps Cross SA Andrash Metropolitan $5.1 6.35% 14.8 100% 3,850 Gin Gin QLD Puma Regional $4.4 7.00% 11.7 100% 20,380 Glasshouse Mountains QLD Puma Regional $5.5 6.
Slide 29: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Pooraka SA Liberty Metropolitan $5.3 6.00% 14.5 100% 1,977 Port Adelaide SA Liberty Metropolitan $5.2 6.00% 14.4 100% 3,851 Portsmith QLD Puma Metropolitan $6.3 6.
Slide 30: Disclaimer
Disclaimer This presentation has been prepared by APN Funds Management Limited (ACN 080 647 479, AFSL No. 237500) (the "Responsible Entity") as the responsible entity and issuer of the financial products in respect of Convenience Retail REIT No. 1 (ARSN 101 227 614), Convenience Retail REIT No. 2 (A
Slide 31: Contact
Contact Chris Brockett Fund Manager, APN Convenience Retail REIT Ph: (03) 8656 1000 : cbrockett@apngroup.com.au ASX Code: AQR Follow us… @apngroup APN Property Group Limited Level 30,101 Collins Street, APN Property Group Limited Melbourne, Vic 3000 apnpropertygroup apngroup.com.au http://blog.apng
Dexus Convenience Retail Reit — FY2020 Earnings Presentation on 6ix