Homeco Daily Needs Reit · ASX:HDN
Homeco Daily Needs Reit — FY2023 Earnings Presentation
36 slides from Homeco Daily Needs Reit's earnings presentation, Aug 17, 2023
Slide 1: FY23 Results Presentation
FY23 Results Presentation 17 August 2023
Slide 2: Acknowledgement of Country
Acknowledgement of Country HomeCo Daily Needs REIT acknowledges the Traditional Custodians of country throughout Australia and celebrates their diverse culture and connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal an
Slide 3: Agenda
Agenda. 1 Results Overview 2 Portfolio Update 3 Growth Opportunities 4 Financial Results 5 Outlook & Guidance Sid Sharma Will McMicking Paul Doherty HDN CEO HMC Capital Fund Portfolio Group CFO Manager Victoria Point (QLD)
Slide 4: Results Overview
Braybrook (VIC) Results Overview
Slide 5: FY23 Performance
FY23 Performance Daily Needs REIT Successfully absorbed significant growth in debt costs with strong underlying rental growth FINANCIAL ASSET MANAGEMENT INVESTMENT 8.6 cpu >99% ~$443m ACCRETIVE CAPITAL RECYCLING5 FY23 FFO OCCUPANCY $285m assets sold at combined In line with guidance In line with Jun
Slide 6: Investment Strategy
Investment Strategy Daily Needs REIT Owner and developer of strategic last mile infrastructure focused on daily needs & services MODEL PORTFOLIO STRONG INVESTMENT ACCRETIVE DEVELOPMENT STRATEGIC REAL ESTATE CONSTRUCTION FUNDAMENTALS PIPELINE INFRASTRUCTURE Portfolio Target $357/sqm $600m+ ~13m peopl
Slide 7: Portfolio Update
Ellenbrook (WA) 2. Portfolio Update
Slide 8: Property portfolio summary
Property portfolio summary Daily Needs REIT $4.7bn portfolio diversified by subsector, tenant and geography Platform Overview Tenant mix2 Rent composition2 Key portfolio metrics 9% Portfolio value $4,677m Large Format 36% Retail Fixed Neighbourhood 21% Landbank (sqm) 2.5m sqm CPI 16% Health & Site c
Slide 9: Robust operational performance
Robust operational performance Daily Needs REIT Resilient portfolio performance despite more subdued consumer confidence and expenditure 1 Occupancy Cash collection Comp Property NOI STRONG RENT COLLECTION AND GROWTH ✓ >99% >99% +3.8% for FY231 for FY23 vs 30-Jun-222 2 Leasing spreads3 Incentives4 L
Slide 10: Highly defensive and diversified income streams
Highly defensive and diversified income streams Daily Needs REIT High quality and diversified portfolio delivering secure and growing cash flow $357 >83% 3.9% 70% 21% 9% Avg. rent / sqm National retailers1 WARR2 Fixed CPI Supermarket3 Top 10 tenants – by gross income1 Portfolio subsectors – gross in
Slide 11: FY23 Achievements
Sustainability FY23 Achievements Daily Needs Implementing HMC Capital’s Sustainability Commitments across the HDN portfolio REIT Environmental Social Governance Our inaugural Sustainability Report details six sustainability commitments towards "Creating Healthy Communities” ✓ On track with Net Zero
Slide 12: Sustainability progress
Sustainability progress Daily Needs REIT Energy roadmap Net Zero Progress Baseline Formed Advancing towards a green, low carbon economy & FY22 Net Zero by 2028 FY23 ✓ Solar Baseline Formed ✓ Solar Net Zero Target Solar PV active in 50% ✓ EV Charging 10 sites, with an FY24 Reduction Rollout additiona
Slide 13: Growth Opportunities
Daily Needs REIT South Nowra (NSW) 3. Growth Opportunities 12
Slide 14: Development track record
Development track record Daily Needs REIT Significant value unlocked since IPO >$160m >9% 16 projects Capex committed Completed since Average ROIC1 since IPO in Nov-20 IPO in Nov-20 Daily Needs Large Format Retail Health & services Gregory Hills (NSW) South Nowra (NSW) Aurrum Kids Penrith (NSW) 3 pr
Slide 15: HDN development pipeline overview
HDN development pipeline overview Daily Needs REIT $600m value accretive development pipeline capitalising on low portfolio site coverage of 37% HDN Development pipeline evolution Pipeline continues to offer compelling risk ✓x adjusted returns >$600m >$500m Accelerating remixing towards more ✓x defe
Slide 16: FY23 development commencements
FY23 development commencements Daily Needs >$80m of accretive developments on track to open in FY24 and deliver ~7% ROIC1 REIT Leasing Under Indicative Cost to Major Projects pre- Completion Construction capex complete commitments2 1. South Nowra (NSW) ▪ >11,000sqm repurposing of ex-Masters site and
Slide 17: Successful completion of HomeCo South Nowra
Successful completion of HomeCo South Nowra Daily Needs REIT Tenant demand led strategy resulting in leading Leisure & Lifestyle precinct High quality >8% 100% 4 star Tenant covenant ROIC1 Pre-committed2 Green Star building rating3 Notes: 1. Return on invested capital (ROIC) represents cash yield on
Slide 18: Glenmore Park & Mackay development progress
Glenmore Park & Mackay development progress Daily Needs REIT 100% pre-committed tenant demand-led development strategies Glenmore Park, NSW Mackay, QLD 4 level Health & Services precinct anchored by Service NSW Construction of additional leisure & lifestyle precinct $22m 2,400sqm 100% $34m ~8,000sqm
Slide 19: FY24 development opportunities
FY24 development opportunities Daily Needs ~$120m of development projects planned for commencement in FY24 at ~7% target ROIC1 REIT Development Opportunities Project Description GLA (sqm) Cranbourne (VIC) Leisure & lifestyle repurpose opportunity Marsden Park (NSW) Centre expansion opportunity DA AP
Slide 20: Financial Results
Daily Needs REIT Vincentia (NSW) 4. Financial Results 19
Slide 21: Earnings summary
Earnings summary Daily Needs REIT FY23 FFO of 8.6 cents per unit (in line with guidance) representing 12% CAGR since inception $ million FY22 FY23 Property NOI 141.6 261.3 ▪ Property NOI grew to $261m in FY23, which was driven by the full year impact of the Aventus merger which Distribution from equ
Slide 22: Balance sheet
TBU Balance sheet Daily Needs REIT Resilient portfolio valuation provides platform for continued asset recycling and organic growth $ million Jun-22 Jun-23 Cash and cash equivalents 23.2 16.2 ▪ HDN has a robust balance sheet at Jun-23 with net assets of $3.1bn and gearing of 33.8% Assets held for sa
Slide 23: Capital management
Capital management Daily Needs REIT Strong liquidity of $197m and 92% hedged debt $ million Jun-22 Jun-23 ▪ Jun-23 gearing of 33.8% is at the lower end of the target Debt summary gearing range of 30-40% and adjusted for the post Jun-23 Facility limit (bank debt) 1,820.0 1,820.0 contracted sale of Mi
Slide 24: Outlook & Guidance
Daily Needs REIT Victoria Point (QLD) 5. Outlook & Guidance 23
Slide 25: FY24 Outlook and guidance
FY24 Outlook and guidance Daily Needs REIT Strong top-line revenue growth continues to offset rising expenses FY24 OUTLOOK FY24 GUIDANCE UNDERLYING GROWTH ▪ Strong top-line revenue growth offsetting headwinds from rising OFFSETTING COST interest rates, property expenses & statutory charges INFLATION
Slide 26: Supplementary Information
Daily Needs REIT Prestons (NSW) 6. Supplementary Information 25
Slide 27: National portfolio
National portfolio Daily Needs REIT Critical last mile infrastructure supporting omni-channel retailing and fulfilment across Australia 20% 53 QLD: $0.9bn Properties1 Properties1 12 Total portfolio NT Greater Brisbane 18% Portfolio value $4.7bn QLD Tenants >1,200 WA 12 47% SA NSW: $2.2bn 4 Propertie
Slide 28: Track record
Track record Daily Needs REIT Portfolio delivering resilient and growing income streams which are noncyclical OCCUPANCY1 CASH RENT COLLECTION RE-LEASING SPREADS Underpinned by exposure to predominantly national Consistently collecting 99% of rental income Strong rental reversion as tenants recognise
Slide 29: HDN Owns Strategic Last Mile Infrastructure
HDN Owns Strategic Last Mile Infrastructure Daily Needs Strategic footprint spanning 2.5m sqm in Australia’s leading metropolitan markets & growth corridors REIT Greater Melbourne Greater Sydney Greater Brisbane & Gold Coast Murrindindi Woy Woy Rosenthal Coral Sea McGraths Hill (APS1) Sunshine Coast
Slide 30: Capital recycling
Capital recycling Daily Needs REIT $443m proactive asset recycling in FY23 into accretive daily needs acquisitions with repositioning and development upside $285m of lower yielding LFR assets disposed DISPOSALS of at combined Sunshine Coast (QLD) Epping (VIC) Midland (WA) ~3% premium to book value ▪
Slide 31: Investment in HMC Capital's Last Mile Logistics (LML) Fund
Investment in HMC Capital’s Last Mile Logistics (LML) Fund Daily Needs REIT Strategic investment in complementary strategy that provides future growth optionality Overview Complementary mandates ✓ Two distinct investment mandates & risk profiles ✓ HDN predominately targets stabilised, not transition
Slide 32: Last Mile Fulfilment
Last Mile Fulfilment Daily Needs REIT Our strategically located infrastructure is supporting a high proportion of our tenants with their store-based fulfilment strategies for both online and in-store sales The Omni-channel Model Value of the Omni-channel Model 1 ✓ Physical store networks complement
Slide 33: Additional financial information
Additional financial information Daily Needs REIT Statutory profit to FFO reconciliation Portfolio value to balance sheet reconciliation $ million FY22 FY23 $ million Jun-23 Total revenue 198.3 347.3 Portfolio valuation 4,677 Share of profit of equity-accounted investees 0.4 9.1 Midland book value 7
Slide 34: Portfolio summary metrics
Portfolio summary metrics Daily Needs REIT Occupancy WALE Asset State GLA (sqm) Site area (sqm) Site Coverage (%)1 Fair Value ($m) Cap rate (%) (by area)2 (by income)3 Operating Armstrong Creek VIC 12,539 59,709 21% 97% 7.9 112 4.88% Ballarat VIC 20,099 52,084 39% 100% 4.1 57 6.00% Bankstown NSW 17,
Slide 35: Contacts
Contacts Daily Needs REIT Investors and analysts Media Andrew Dodds Sid Sharma John Frey HMC Capital HDN CEO Corporate Communications Corporate Finance & IR Manager +61 423 810 851 +61 434 361 318 +61 411 361 361 andrew.dodds@hmccapital.com.au sid.sharma@hmccapital.com.au john@brightoncomms.com.au A
Slide 36: Disclaimer
Disclaimer Daily Needs REIT This presentation (Presentation) has been prepared by HMC Funds Management Limited (ACN 106 078 635, AFSL 237 257) (Responsible Entity) as responsible entity of HomeCo Daily Needs REIT (ARSN 645 086 620). Summary information This Presentation contains summary information
HomeCo Daily Needs REIT — FY2023 Earnings Presentation on 6ix