Region Group · ASX:RGN
Region — SCA Property Group — FY2013 Earnings Presentation
36 slides from Region's earnings presentation, Aug 28, 2013
Slide 1: SCA Property Group FY13 Results Presentation
SCA Property Group FY13 Results Presentation Murray Bridge, South Australia 28 August 2013
Slide 2: Agenda
Agenda Overview of FY13 Results Highlights Portfolio Overview Operational Performance Financial Performance Strategy and Outlook FY13 Results Presentation 2
Slide 3: FY13 Results
FY13 Results Good progress to date - results in line with PDS forecast • Financial results for the period from listing to 30-Jun-13 in line with PDS forecast: − Distributable earnings of $38.6m, $0.4m higher than PDS forecast − Distribution per unit declared of 5.6c in line with PDS forecast • Statu
Slide 4: Group Highlights
Group Highlights Delivering on the objectives set out in the PDS Solid progress on speciality leasing with portfolio occupancy increasing from 95% to 96.6% Integration of 11 newly-completed development centres into portfolio − Includes completion of new sub-regional centre in Lilydale, Victoria
Slide 5: Portfolio Acquisition
Portfolio Acquisition Off-market acquisition of 7 mature neighbourhood centres • Compliments existing portfolio and accretive to earnings and property income growth from FY14+ • Total purchase price of $135.8m, including $2m of development land – settled on 25 June 2013 − Average occupancy of 98% −
Slide 6: Market Conditions
Market Conditions Convenience retail outperforming AUSTRALIAN RETAIL SALES • Non-discretionary retail categories in Australia remain resilient 115 110 • Food retailing sales have grown 4.5% per annum over the last 5 years 105 100 • Food retailing has consistently outperformed discretionary categorie
Slide 7: Portfolio Overview
Portfolio Overview Convenience centres weighted to non-discretionary retail Anchor Anchor WALE As at 30 June 2013 (% fully leased (% fully leased (by GLA) GLA) gross income) Freestanding 99% 98% 17.2 years Neighbourhood 74% 64% 14.7 years Sub-regional 65% 42% 14.2 years Total 76% 62% 15.0 years • St
Slide 8: Portfolio Overview
Portfolio Overview A young portfolio experiencing strong sales growth • Strong supermarket MAT growth of 8.1% Supermarket Anchor trading(1) for centres open for > 24 months: sales growth 12 – 24 months - June 2012 to June 2013 15.9%(2) − Circa 3 years for a new centre to stabilise to > 24 months – c
Slide 9: Portfolio Overview
Portfolio Overview Geographically diversified portfolio Weighted Number of Number of GLA Occupancy Value As at 30 June 2013 average cap centres specialties (sqm) (% GLA) (A$m) rate (%) Freestanding 20 6 72,444 99.8% 224.0 7.88 Neighbourhood 47 469 235,624 96.1% 820.7 8.14 Sub-regional 5 235 109,825
Slide 10: Operational Performance
Operational Performance Specialty leasing remains key focus • Solid specialty leasing progress to date 11 Dec 12 • Higher rental guarantee receipts in FY13 due to PDS mainly to two factors: A$m 30 Jun 13 − Reimbursement of rent-free periods Reimbursement of rent-free periods provided Not 1.1 ▲ 1.1 p
Slide 11: Operational Performance
Operational Performance On track to achieve forecast stabilised occupancy levels • 13,240sqm leased in the last 7 months: Completed Development As at 30 June 2013 Total Portfolio Properties − ~11,500sqm to reach stabilised occupancy levels in 18+ months Leasing deals done (sqm) 5,269 7,971 13,240 •
Slide 12: Financial Performance
Financial Performance SEA Property Group
Slide 13: FY13 Financial Performance
FY13 Financial Performance Distributable earnings 11 Dec 12 • Distributable earnings of $38.6m, $0.4m higher A$m to PDS Change 30 Jun 13 than PDS forecast Rental income 59.3 63.2 ▼ 3.9 • Rental income down $3.9m compared to PDS Directly recoverable specialty costs 1.0(2) - ▲ 1.0 predominantly due to
Slide 14: FY13 Financial Performance
FY13 Financial Performance Secure and stable distributions • Payout ratio in line with PDS forecast on a like- 11 Dec 12 to PDS for-like basis: 30 Jun 13 A$m − Units issued in Jun-13 equity raise ranked 32.8 32.8 pari-passu for distribution Distribution – excluding Jun-13 placement Distribution – in
Slide 15: FY13 Financial Performance
FY13 Financial Performance Prudent capital management • Gearing of 28.9% within policy of 25% - 40% 30 Jun 13 • FY13 weighted average cost of debt (including Net debt drawn (net of cash) $437m establishment fees) of 5.5%(2) Facility limit (as at June 2013) $550m • $50m increase in debt facility in J
Slide 16: Strategy and outlook
Strategy and outlook SEA Property Group
Slide 17: Strategy
Strategy Defensive, resilient cashflows to support secure distributions Weighted to non- Focus on convenience- Long leases to quality discretionary retail based retail centres anchor tenants segment Appropriate capital Growth structure opportunities FY13 Results Presentation 17
Slide 18: NOI Growth Opportunities
NOI Growth Opportunities • Increase net operating income through active portfolio management: Optimise the − Internalise the leasing function portfolio − Develop unique leasing strategies for each centre − Leverage economies of scale to optimise asset management + • Integration of a further 2 new ce
Slide 19: Outlook
Outlook Key priorities • Driving NOI growth through leasing of speciality vacancies in existing portfolio remains key focus • Integration of the remaining 2 assets in FY14 subject to Development Management Agreements following completion of Lilydale, Victoria on 31 July 2013 • Generating value from
Slide 20: Appendices
Appendices SEA Property Group
Slide 21: Statutory Earnings Reconciliation
Statutory Earnings Reconciliation PDS Actual to 30 June 2013 PDS Unwind of Statutory Statutory Straight-lining Rental discount Fair value Transaction Distributable Distributable Income Income of rental reimburse- A$m on rental adj costs earnings earnings Statement Statement income ments(1) guarantee
Slide 22: Summary Balance Sheet
Summary Balance Sheet Australia NZ TOTAL A$m Investment properties (including rental guarantee)(1) 1330.2 174.2(2) 1,504.4 Derivative financial instruments - asset 2.3 Derivative financial instruments - liability (2.0) Other assets 9.1 Net debt (net of $2.3m establishment fees) (434.9) Other liabili
Slide 23: Property Values
Property Values $m 1,600 9 1,504 136 1,500 1,400 14 1 106 1,300 176 1,200 1,062 1,100 1,000 Allotment Newly Properties Gross up Property Acquisition FX 30 Jun 13 (1) 11 Dec 12 completed under for valuations Jun 13 properties construction works (2) in progress • Addition of newly-completed developmen
Slide 24: Summary NTA Movement
Summary NTA Movement $ per unit NTA as at 11 December 2012 1.58 Existing Portfolio: FX and other 0.01 June 2013 Portfolio Acquisition and Equity Raise: - Transaction costs/ issue of new units (0.01) - Fair value adjustments - Property acquisition costs (0.01) NTA – 30 June 2013 1.57 FY13 Results Pre
Slide 25: Management Expense Ratio
Management Expense Ratio • Reviewed industry practice FY13 FY13 Corporate costs MER(1) $m % Management Expense Ratio – prior to cost re-allocation 6.8 0.82% Re-allocation of directly attributable property costs to Property Operating Expenses: - Asset management - Valuation costs (0.9) - Property saf
Slide 26: Debt Facilities
Debt Facilities DEBT FACILITIES Facility Limit Drawn Debt All-in debt cost A$m Maturity (A$m) (A$m) (%) Unsecured bank facility – 3 year 200.0 194.0 Dec-15 Unsecured bank facility – 5 year 350.0 258.6 Dec-17 – AUD 155.5 – NZD 103.1 Total (as at 30 June 2013) 550.0 452.6 5.3% Total (post-balance date
Slide 27: Other Capital Management Policies
Other Capital Management Policies Interest Rate Exposure FIXED / HEDGED DEBT PROFILE – Target fixed interest rate exposure of 50 to 100% of A$m drawn borrowings 400 3.50% – 78% of drawn facilities hedged at fixed rates at 300 30 June 2013 200 3.25% 100 0 3.00% FY14 FY15 FY16 FY17 $Am hedged Average
Slide 28: Portfolio Occupancy
Portfolio Occupancy Portfolio Occupancy 97.9% 97.1% 96.6% 96.4% Completed Newly- Jun-13 Portfolio portfolio completed acquisition occupancy occupancy assets portfolio Completed Portfolio - Like for like occupancy 1.4% 96.4% 95% Portfolio Occupancy Increase in portfolio occupancy Portfolio Occupancy
Slide 29: Non-discretionary tenant mix
Non-discretionary tenant mix TENANTS BREAKDOWN (by GLA) TENANTS BY CATEGORY (by GLA) Specialties 21% Specialties 21% Target Anchor 1% tenants Woolworths Coles 79% and 1% Countdown Dan Murphy's supermarkets 2% 59% Big W 15% TENANT BREAKDOWN (by gross rent) TENANTS BY CATEGORY (by gross rent) Specialt
Slide 30: Specialty Leases
Specialty Leases RENT REVIEW STRUCTURE SPECIALTY TENANTS – BY CATEGORY CPI or CPI+ Other Discount Non retail Linked 1% Store 4% 2% Leisure / 13% Gyms 6% Takeaway/ Food 21% Fixed Fashion 10% annual increases 86% Mini Major 11% Other Retail 20% Retail Services 11% Medical and Pharmacy 14% Average ~4%
Slide 31: Portfolio WALE and Lease Expiry
Portfolio WALE and Lease Expiry WALE As at 30 June 2013 (years) Portfolio WALE 15.0 years Anchor WALE 18.2 years OVERALL LEASE EXPIRY (% of gross rent) SPECIALTY LEASE EXPIRY (% of gross rent) 68.2% 18.5% 19.1% 16.3% 14.5% 8.2% 9.0% 5.7% 6.2% 6.4% 4.9% 5.2% 4.8% 2.7% 1.8% 1.1% 2.5% 1.4% 3.0% 0.5% 20
Slide 32: Properties Under Construction
Properties Under Construction • 10 new centres opened with 97.1% average occupancy Anchor Specialty Total Total Total Completion Amount to Cap Centre type GLA GLA GLA GLA purchase date date ($m)(1) rate (sqm) (sqm) (sqm) commited price ($m)(1) Completed Centres – FY13 Fairfield Heights, NSW Freestan
Slide 33: Portfolio List
Portfolio List Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-13 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) Completed Portfolio Australia Pakenham VIC Sub-Regional Dec-11 16,862 100% 38 11.3 7.50% 68.0 Central Highlands QLD Sub
Slide 34: Portfolio List
Portfolio List Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-13 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) Ayr QLD Neighbourhood Centre Jan-00 5,513 96% 9 10.9 8.00% 18.7 Brookwater Village QLD Neighbourhood Centre Feb-13 6,76
Slide 35: Portfolio List
Portfolio List Valuation Completion Total GLA Occupancy Number of WALE Valuation Property State Property Type Jun-13 Date (sqm) (% by GLA) Specialties (Years by GLA) Cap Rate (A$m) New Zealand Kelvin Grove NZ Neighbourhood Centre Jun-12 3,611 95% 5 17.7 8.00% 9.1 Newtown NZ Neighbourhood Centre Dec-
Slide 36: SCA Property Group contact details and disclaimer
SCA Property Group Level 8, 50 Pitt Street Sydney NSW 2000 Tel: (02) 8243 4900 Fax: (02) 8243 4999 www.scaproperty.com.au Disclaimer This presentation has been prepared by Shopping Centres Australasia Property Group RE Limited (ABN 47 158 809 851) (SCPRE) as responsible entity of Shopping Centres Au