Dexus Convenience Retail REIT · ASX:DXC

Dexus Convenience Retail REIT — APN Property Group — H1 FY2017 Earnings Presentation

24 slides from Dexus Convenience Retail REIT's earnings presentation, Feb 22, 2017

  1. Slide 1: December 2016 Half Year Results Presentation

    DECEMBER 2016 HALF YEAR RESULTS PRESENTATION 22 FEBRUARY 2017 www.apngroup.com.au ASX Code: APD

  2. Slide 2: Overview

    Overview As at 31 December 2016 APN PROPERTY GROUP LIMITED $2.4 BILLION FUM REAL ESTATE BALANCE SHEET INDUSTRIA REIT DIRECT PROPERTY SECURITIES $106 MILLION NET $558 MILLION FUM $320 MILLION FUM $1,535 MILLION FUM TANGIBLE ASSETS ► Specialist commercial real estate investment manager ► Established 1

  3. Slide 3: Achievements – First Half FY2017

    Achievements – First Half FY2017 OPERATING EARNINGS1 $3.7 million ▲97% (1.22 cps3) FUM $2.4 billion ▲10% TOTAL SHAREHOLDER 1 year total return: 26.1% p.a. WesTrac - 1-3 Westrac Dr, Tomago NSW RETURN2 3 year total return: 32.3% p.a. FY2017 interim dividend: 1.25 cps DIVIDENDS FY2016 final dividend: 1

  4. Slide 4: Achievements – continued

    Achievements – continued  Successfully launched $106 million APN Retail Property Fund  Sold Eagleby and two of the South Nowra properties at premiums to book value  Industria REIT completed $158.6 million acquisition (WesTrac Newcastle) and associated equity and debt APN Retail Property Fund – Pu

  5. Slide 5: Income statement

    Income statement Dec Dec $000s Change  Funds management fees up 21% to $6.4 million 2016 2015 Funds management fees 6,410 5,296 ▲ 21%  Co-investment income up 52% to $2.0 million Performance & transaction fees 747 931 ▼ 20%  Proforma Operating EPS 1.22 cents – refer below for details Asset & proj

  6. Slide 6: Balance sheet

    Balance sheet  Cash $27.5 million (includes $5.0 million for AFS Licence)1 $000s Dec 2016 Jun 2016 Change  Co-investments $69.2 million Cash1 27,464 72,031 ▼ 62%  Net tangible assets $105.9 million / 33.7 cents per share (reflecting 10 cent per share (~$31 million) special dividend paid during pe

  7. Slide 7: Real Estate Securities

    Real Estate Securities FuM Growth  $80 million in net inflows into AREIT Fund  Other fund net outflows includes $27 million from realisation of Unlisted Property Fund assets ($14 $1,571m $1,535m million FUM at Dec 2016) $1,215m $1,042m  Asian REIT Fund exceeded $10 million in FUM at December 2016

  8. Slide 8: APN AREIT Fund

    APN AREIT Fund  Rated one of Australia’s leading property securities funds Research ratings and awards  HY2017 net inflows averaging $13.3m per month ($80 million in total)  Distribution yield of ~5.98%1 pa paid monthly  Launched NZ domiciled PIE Fund – Australian listed property strategy in Feb

  9. Slide 9: Industria

    Industria Achievements  Completed $158.6 million acquisition of WesTrac Newcastle - backed by triple-net 18 year lease  Maintained occupancy of 96%  Enhanced WALE to 7.8 years  FY2017 distribution guidance of 16.0 cps Outlook  Portfolio well positioned – active engagement with tenants is genera

  10. Slide 10: Direct

    Direct Achievements Funds FuM ($ million)  Funds under management up 56% versus FY2016 APN Retail Property Fund $106 to $320 million APN Property Plus Portfolio $90  APN Steller Development Fund – all six projects APN Regional Property Fund $46 now have planning permits, first three projects fully

  11. Slide 11: Investment property portfolio update

    Investment property portfolio update Woolworths/Masters South Nowra Property Update  13,000sqm NLA property located in South Nowra, NSW  Held on APN’s balance sheet (100% owned by APD)  15 year lease  Guaranteed by ASX-listed Woolworths Limited  Building completed; lease commenced 10 August 201

  12. Slide 12: APN Retail Property Fund

    APN Retail Property Fund  Pre-IPO unlisted fund with overall objective of listing on Fund launch 15 December 2016 ASX by December 2017 as part of a portfolio which may Pre-IPO unlisted fund with an overall include additional Puma properties and the APN Property Investment Objective objective to lis

  13. Slide 13: Growth opportunities

    Growth opportunities REAL ESTATE SECURITIES INDUSTRIA REIT DIRECT PROPERTY  Continuing inflows into Securities Funds  Continue strong recent leasing results to  New ASX-listed convenience retail property drive occupancy and property level income REIT well advanced  Asian Real Estate Securities F

  14. Slide 14: Market and outlook

    Market and outlook  Expect superior prospects for finding attractive acquisition opportunities through CY2017 and into CY2018 (direct property and other opportunities)  APN’s balance sheet is strongly positioned to capitalise on opportunities (no corporate debt, $27m+ cash)  Funds are well capita

  15. Slide 15: Earnings and dividend guidance reaffirmed

    Earnings and dividend guidance reaffirmed Original Updated and Reaffirmed Guidance Comment Guidance (subject to continuation of current market conditions) 0.55 cps Includes recurring as well as First Half FY2017 Actual (Proforma 1.22 cps – refer Appendix) Operating transactional and performance base

  16. Slide 16: Implied Funds Management platform valuation

    Implied Funds Management platform valuation1 At 31 December 2016 Market implied value of funds management platform of $26.0m based on $2.4bn FuM = 1.1% 45.0 Total co-investments of 40.0 $69.2m 8.3 A$ cents per share 35.0 30.0 8.7 1.4 25.0 4.4 20.0 42.0 6.5 15.0 10.0 15.5 5.0 0.0 IDR Other co- Invest

  17. Slide 17: Appendices

    APPENDICES APN | Property Group 17

  18. Slide 18: Proforma operating EPS reconciliation

    Proforma operating EPS reconciliation  AIFRS requires $2.1 million deduction for the special dividend paid to calculate statutory earnings per share  Note 11 to the Financial Statements provides a detailed reconciliation  All figures below are for continuing operations and on a diluted basis – re

  19. Slide 19: Funds under Management Summary

    Funds under Management1 Summary Fee Basis APN Co-investment Funds Sector Investors FuM Manage- Perfor- Other $ % ment mance APN AREIT Fund Property Securities Retail & Institutional $1,222m  $0.2m − APN Property for Income Fund Property Securities Retail & Institutional $170m  − − APN Property for

  20. Slide 20: Profit to operating cash flow reconciliation

    Profit to operating cash flow reconciliation $’000s Dec 2016 Dec 2015 Cashflow Reconciliation $’000s $’000s 5,000 631 4,410 Statutory profit after tax 3,020 15,955 4,500 Add/(deduct): 4,000 415 280 Non-controlling interests 64 3,644 3,500 3,020 64 3,000 Mark to market revaluations 280 (14,485) 2,500

  21. Slide 21: Operating Profit After Tax Reconciliation

    Operating Profit After Tax Reconciliation $‘000s 5,000 4,500 688 (44) (605) 4,000 680 3,742 3,500 1,114 (184) 139 50 3,000 2,500 2,000 1,904 1,500 1,000 500 - Operating Increase in funds Decrease in Increase in Increase in Increase in co- Increase in rent Increase in Increase in tax Operating earnin

  22. Slide 22: Asset level debt facility summary

    Asset level debt facility summary  Analysis below is presented independent of cash reserves on balance sheet Debt facility Facility Limit $10.5 million Drawn at 31 Dec 2016 $10.5 million Loan to Value Ratio (LVR) 43.5% LVR Covenant < 48.0% Interest Cover Ratio (ICR) 2.4 x ICR Covenant > 2.0 x Cost

  23. Slide 23: Disclaimer

    Disclaimer The financial information included in this presentation is based on APN Property Group’s financial statements and results that have been prepared in accordance with the Corporations Act 2001 (Cth), applicable Accounting Standards and Interpretations and in compliance with other applicable

  24. Slide 24: Contact details

    Contact details APN Property Group Limited Follow @apngroup Tim Slattery Michael Groth Chief Executive Officer Chief Financial Officer +613 8656 1000 +613 8656 1000 tim.slattery@apngroup.com.au mgroth@apngroup.com.au ASX Code: APD APN Property Group Limited Level 30,101 Collins Street, Melbourne, Vi

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