Dexus Convenience Retail REIT · ASX:DXC
Dexus Convenience Retail REIT — APN Property Group — Investor Presentation (December 2019)
37 slides from Dexus Convenience Retail REIT's investor presentation, December 2019
Slide 1: An Undiscovered World of Income and Growth Opportunities
AN UNDISCOVERED WORLD OF INCOME AND GROWTH OPPORTUNITIES APN ASIAN REIT FUND December 2019
Slide 2: Agenda
Agenda 1 The Asian growth opportunity 2 APN Asian REIT Fund: portfolio and performance 3 Market outlook 4 Investment team, Board and Key contacts 2
Slide 3: The Asian Century and Commercial Property
THE ASIAN CENTURY AND COMMERCIAL PROPERTY 3
Slide 4: Asia commercial property: a compelling story
Asia commercial property: a compelling story… There are more people living inside this circle than outside of it Source: Map created by reddit user valeriepieris, 2013 4
Slide 5: The Growth Engine – GDP
The Growth Engine – GDP ▪ Asia has been the growth engine of global growth in the 21st century far outstripping the mature Europe/North American regions. ▪ IMF projections have Asia remaining at the forefront of global growth. This expansion underpins the positive outlook for Asian real estate. 5
Slide 6: Asia – growing piece of the global pie
Asia – growing piece of the global pie Economic growth drives demand for all types of commercial property Middle class consumer spending Daily growth in investable real estate value $6,000 $5,000 $4,000 US$m $3,000 $2,000 $1,000 $- Rest of the Europe North America Asia World Notes: Inner ring: 2009
Slide 7: Asian REITs – growing piece of the global REIT market
Asian REITs – growing piece of the global REIT market 2001 2019 69% 79% 4% 7% 1% 16% 13% 11% ▪ Asia share of global REIT market was 1% in 2001, now 13% ▪ Asia is the second largest REIT market in the world ▪ Significant Asian markets slated to launch REITs ensures Asia’s share will continue to grow
Slide 8: Exponential growth: now a A$400 billion+ listed sector
Exponential growth: now a A$400 billion+ listed sector Asian listed property sector growing nearly twice as fast as the rest of the world ▪ Over A$400 Billion and counting ▪ Over triple the size of the Australian market 450 Market Capitalisation 400 350 300 250 A$ billions 200 150 100 50 0 Jun-10 Ju
Slide 9: Diversification: Asia has deeper pools of assets and capital
Diversification: Asia has deeper pools of assets and capital Australia Asia 195 29 Number of REIT stocks 406 Market capitalisation 131 (A$ billions) 6000 2500 Number of properties (approx.) 69% Market concentration (market 33% cap outside of top 10 stocks) Source: ASX300 AREIT Index and Bloomberg As
Slide 10: Asian Real Estate – comparable to the world's best retail assets
Asian Real Estate – comparable to the world’s best retail assets Asian REITs own commercial property which is as high quality as anywhere in the world VivoCity, Singapore Westfield Sydney Owner Mapletree Commercial Trust Scentre Group Size (sqm) 100,074 166,340 Shopper Traffic (pa) 55.0 Million 45.5
Slide 11: Asian Real Estate – comparable to the world's best office assets
Asian Real Estate – comparable to the world’s best office assets Asian REITs own commercial property which is as high quality as anywhere in the world CapitaGreen, Singapore 1 Bligh St, Sydney Owner Capitaland Commercial Trust Dexus Property Group Size (NLA sqm) 65,129 42,900 Latest valuation (AUD p
Slide 12: Governance: world leading regulatory regimes for Asian REITs
Governance: world leading regulatory regimes for Asian REITs • Stringent framework governing REITs in key Asian markets • Asian REITs are separate and distinct to the Asian real estate developers (non REIT) REITs in: Singapore Hong Kong Japan Payout requirement >90% of taxable income >90% of net inc
Slide 13: Asia-Pac REITs vs Asia-Pac Real Estate Equities
Asia-Pac REITs vs Asia-Pac Real Estate Equities Asia-Pac REITs are consistently less volatile than Asia-Pac Real Estate equities whose earnings are far more volatile (less income). Returns are better too. 13
Slide 14: Lend Lease vs Dexus vs Capitaland Commercial Trust
Lend Lease vs Dexus vs Capitaland Commercial Trust Lend Lease % Ebitda Dexus % of Income CCT % of Income Investments Development Investments Construction Development/Funds management Investments Source: Company Filings, 2019 14
Slide 15: Sustainability of Income
— SUSTAINABILITY OF. INCOME APN | Propert
Slide 16: Sustainability of income
Sustainability of income ▪ REITs are mandated to pay out a minimum percentage of income (~90%), cannot retain earnings ▪ Advantage of distributed income : every dollar that gets paid out to you is a dollar that you can invest in the best way possible ▪ Transparency, liquidity, and strong corporate g
Slide 17: APN Asian Fund – Income focus drives consistency
APN Asian Fund – Income focus drives consistency APN’s income focus reflected in the consistency of income returns and the larger contribution they make to Total Returns
Slide 18: APN Asian REIT Fund
stip. — APN | Property Group
Slide 19: Philosophy
APN’s investment approach PROPERTY FOR INCOME Philosophy ▪ Property as investment in an income stream ▪ Long term leases provide protection ▪ Predictable and sustainable growth in income streams Bottom up value style – based on fundamental research ▪ Hands on approach including asset level due dilig
Slide 20: Diversified portfolio – Global gateway cities in Asia
Diversified portfolio – Global gateway cities in Asia ▪ Invest mainly in developed markets of Hong Kong, Singapore and Japan ▪ Focus on quality markets that display stable rental growth, low vacancy rates and well established governance systems Geographic exposure Hong Kong / China 19.50% Japan Sing
Slide 21: APN Asian REIT Fund: stable income, lower volatility
APN Asian REIT Fund: stable income, lower volatility5 1. High level of recurring income Regular monthly income1 5.02% ✓ 5.02%3 pa current distribution yield 4.48% 4.07% ✓ Aim to deliver distributions of 110% of the Asian REIT Index ✓ Monthly distributions 2. Lower risk Index yield Benchmark Fund cur
Slide 22: APN Asian REIT Fund: performance history
APN Asian REIT Fund: performance history 30 September 2019 Fund’s active approach and income focus is benchmark unaware yet Fund has still outperformed index since inception APN Asian APN Asian APN Asian APN Asian BBAREIT Index Out/(under) BBAREIT Index REIT Fund REIT Fund REIT Fund REIT Fund Total
Slide 23: APN Asian REIT Fund: superior risk adjusted returns
APN Asian REIT Fund: superior risk adjusted returns Since inception to 31 December 2019 16.00% Global Equities APN Asian REIT Fund 15.00% Asian REIT Index Australian REIT Index 14.00% Global REITs 13.00% 12.00% Asian Equities 11.00% Australian Equities 10.00% 9.00% 8.50% 9.00% 9.50% 10.00% 10.50% 11
Slide 24: Portfolio diversification: lower volatility and correlation
Portfolio diversification: lower volatility and correlation Volatility – Asian REITs lowest risk1 15.5% 14.1% 11.6% 12.2% 10.2% 10.5% 8.84% APN Asian REIT Global Equities Asian Equities Australian Equities Global REITs US REITs Asian Developers 0.60 0.50 0.47 Correlation vs other asset classes 0.40
Slide 25: APN Asian REIT Fund - Leading research house ratings
APN Asian REIT Fund - Leading research house ratings SQM Research rates the APN AREIT Fund ‘4.25-stars’ on the belief that “The Fund offers retail investors a channel to gain exposure to a portfolio of Asia-focussed REITs, which is not commonly available in the Australian market… SQM Research believ
Slide 26: An actively managed Asian property securities fund
High Morningstar Sustainability Rating™ An actively managed Asian property securities fund mFund code: APF02 ▪ Income focused Superior running yield and risk adjusted returns compared to the Index ▪ Monthly distributions ▪ Lower than market APN Asian Metric REIT Fund¹ Index2 volatility Current runni
Slide 27: Market Outlook
APN | Property Group
Slide 28: Trade Wars
Trade Wars ▪ Trade War fears have not impacted real estate transaction values ▪ Listed REIT markets largely shrugged off the latest round of tariff announcements- - Globally, REITs have benefited from the Trade War uncertainty as the sector seen as a safe haven - Market is up 5% this month predomina
Slide 29: Market outlook - Singapore
Market outlook - Singapore - Singapore’s full-year gross GDP in 2019 is estimated at 0.7%. Forecasts for 2020 currently sit in the 0.9%-1.5% range, reflecting a cautiously positive outlook following signs of bottoming as well as confidence in the services sector, even external downside risks persist
Slide 30: Market outlook - Japan
Market outlook - Japan - Bank of Japan has been keeping its monetary policy unchanged. Financial markets have started 2020 in a risk-off mood owing to rising tensions in the Middle East, wavering US-China relations and the upcoming US presidential Economic election. - Yen has been strengthening due
Slide 31: Market outlook – Hong Kong
Market outlook – Hong Kong - Since early June 2019, Hong Kong has experienced increasing uncertainty and unrest in the form of pro-democracy protests that are still ongoing. This is on top of continuing headwinds from prolonged US-China trade tensions, current coronavirus impact and other global pol
Slide 32: Appendices
APPENDICES Pa APN | Property Group
Slide 33: Investment team
Investment team Corrine Ng Matthew Coleman Portfolio Manager, Asian Real Estate Securities Senior Investment Analyst, Real Estate Securities Corrine joined APN Property Group in February 2015 and is Matthew joined the Real Estate Securities Team at APN in June responsible for managing the Asian REIT
Slide 34: Investment team (continued)
Investment team (continued) APN Board and Executive Team Independent Responsible Entity Board Real Estate Securities Investment Team Asian REITs Corrine Ng Matthew Coleman Portfolio Manager Senior Analyst 17 years experience 8 years experience Pete Morrissey Michael Doble Mark Mazzarella Lorraine Mo
Slide 35: Boards and Management team
Boards and Management team Experienced real estate team, Independent Boards Board of Directors – APN Property Group Limited Independent Responsible Entity – APN Funds Management Limited Chris Aylward ▪ Over 30 years experience in property and construction Geoff ▪ Chairman since April 2012 and a Dire
Slide 36: Disclaimer
Disclaimer This presentation has been prepared by APN Property Group Limited (ACN 109 846 068 APD.ASX) (APN) and APN Funds Management Limited (APNFM) (ACN 080 674 479, AFSL No. 237500). APNFM is a wholly owned subsidiary of APN Property Group Limited and the responsible entity and issuer of the APN
Slide 37: Contact details
Contact details Investor Services 1800 996 456 (toll free) Check out our Blog for the latest articles and insights at: apngroup.blog Adviser Services 1300 027 636 Operating hours: 8.30am – 5.30pm (AEST) weekdays Follow us… @apngroup APN Property Group Limited APN Property Group Limited apnpropertygr
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