Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — FY2023 Earnings Presentation
27 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 7, 2023
Slide 1: Dexus Convenience Retail REIT (ASX:DXC)
Dexus Convenience Retail REIT (ASX:DXC) ASX release 7 August 2023 2023 Annual results presentation and property synopsis Dexus Convenience Retail REIT (ASX: DXC) releases its 2023 Annual results presentation. An investor conference call will be webcast today at 10.00am on www.dexus.com/investor-cent
Slide 2: 2023 Full Year Results
2023 Full Year Results 7 August 2023 Dexus Asset Management Limited ACN 080 674 479 AFSL 237 500 as responsible entity for Dexus Convenience Retail REIT
Slide 3: Acknowledgement of country
Acknowledgement of country Dexus Convenience Retail REIT acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing contribution to land, waters and community. We pay our respects to First Nations Elders past and present. Artwork: Chan
Slide 4: Agenda
Agenda Introduction and highlights page 4 Financials and transactions page 9 Summary page 14 Appendices page 16 3 2023 Full Year Results Presentation Corner Northcote Street & Main Road, Kurri Kurri NSW
Slide 5: Introduction and highlights
Introduction and highlights
Slide 6: DXC investment proposition
DXC investment proposition Providing investors with defensive income with embedded rental growth Generate defensive income with Maintain prudent capital Active approach to portfolio Aligned manager with deep real embedded rental growth structure optimisation asset capability › +3.7% average rent rev
Slide 7: FY23 highlights
FY23 highlights Resilient portfolio and active capital management Priorities Outcomes delivered Deliver guidance FFO & distributions of 21.6cps1 Generate defensive and +3.7% average rent review achieved growing income +2.7% like-for-like income growth Maintained 99%+ occupancy Further streng
Slide 8: Strategically located portfolio delivering defensive income with embedded rental growth
Strategically located portfolio delivering defensive income with embedded rental growth for investors Portfolio attributes Income resilience Growth 105 $781m 77% 99.4% 88% 9.7 year 75% 25% +3.7% properties portfolio weighted to occupancy income from WALE income fixed income linked average rent value
Slide 9: Sustainability progress
Sustainability progress DXC initiatives Dexus group initiatives FY23 ESG initiatives Supply chain Workplace Reflect monitoring inclusion Reconciliation Implemented EcoVadis Dexus was recognised as a Action Plan (RAP) Embedding supplier verification across Bronze Employer by Pride in Progressed the 1
Slide 10: Financials and transactions
Financials and transactions
Slide 11: FY23 financial result
FY23 financial result Distributions delivered in line with guidance Profit & loss FY23 FY221 Change › Reflects full-period contributions from acquisitions in HY22, partly offset by divestments Property FFO ($m) 47.0 43.9 6.9% › Like-for-like income growth of +2.7% Management fees ($m) (5.3) (5.0)
Slide 12: Balance sheet and capital management
Balance sheet and capital management Active and prudent approach to enhancing balance sheet strength › Programmatic divestment proceeds used to strengthen balance Key metrics 30 Jun 2023 30 Jun 2022 sheet, supporting long-term growth Gearing2 31.8%3 35.0% Cost of debt4 3.7% 2.6% › Focused on managin
Slide 13: Portfolio valuations
Portfolio valuations Valuations remain supported by predictable cash flows and strong tenant covenants › Portfolio cap rate expansion of 36 bps in a challenging environment of rising interest rates › Contracted rent growth partly offset the valuation impact of cap rate movements › Average cap rate o
Slide 14: Significant capital recycling
Significant capital recycling Enhancing the portfolio and balance sheet in a subdued market Outcomes1 Portfolio enhancement1 of assets sold located in 11 assets divested 42% regional areas total divestments value reduction in assets with $52.3m (7% of portfolio) 21% older tank infrastructure 226-228
Slide 15: Summary
Dexus Convenience Retail REIT dexus
Slide 16: Strong appeal in defensive and rental growth attributes of high-quality portfolio
Strong appeal in defensive and rental growth attributes of high-quality portfolio Well placed to deliver consistent property income growth underpinned by leases to high-quality international and national tenants Focus on enhancing balance sheet strength via continuing to explore additional asset sal
Slide 17: Appendices
Appendices
Slide 18: Transactions
Transactions $52.3 million of divestments at 2.5% average discount to book Property Property type Settlement 2215 David Low Way, Peregian Beach, QLD Metropolitan 19-Sep-22 4545 Flinders Highway, Reid River, QLD Regional 14-Nov-22 25 Kiernan Drive, Roseneath, QLD Regional 16-Dec-22 282 Wardell Street
Slide 19: Network overview
Network overview National portfolio predominantly weighted to the eastern seaboard Key metrics 676,000sqm total site area 35% average site coverage 23% Western Australia exposure to total Queensland 2.9m people within 3km radius 1 $69m valuation QLD motor vehicle fleet daily2 $471m valuation 9% of t
Slide 20: Portfolio tenancy mix
Portfolio tenancy mix 88% of income derived from 10 national and international major tenants Tenant % portfolio income Chevron 33% 7-Eleven 13% Viva Energy 12% EG Australia 10% Mobil 5% OTR 4% United 4% Ampol 3% Coles Express 2% 303 Glen Osmond Road, Glenunga SA BP 2% Top 10 88% QSR and other nation
Slide 21: Glass House Mountains fund-through development
Glass House Mountains fund-through development Optionality to significantly increase convenience retail offering Indicative project timing1 High-quality dual highway site totaling 87,660 square metres with FY24 FY25 low site coverage Site 1H 2H 1H 2H Northbound (stage 1) Opportunity to redevelop int
Slide 22: Market dynamics
Market dynamics Fuel sales volumes remain robust Transaction volumes broadly in line with historical levels Sales volumes of petroleum products1 National service stations transaction volumes2 Thousands Millions 50 45 $600 8.00% 40 7.00% $500 35 6.00% 30 $400 5.00% 25 $300 4.00% 20 15 3.00% $200 10 2
Slide 23: Consolidated profit & loss statement
Consolidated profit & loss statement $’000 FY23 FY22 Net property income1 51,914 47,844 Interest income 59 147 Total revenue 51,973 47,991 Management fees (5,330) (4,956) Finance costs (11,370) (3,398) Corporate costs (1,329) (970) Total expenses (18,029) (9,324) Net operating income 33,944 38,667 F
Slide 24: FFO reconciliation
FFO reconciliation $’000 FY23 FY22 Statutory net profit / (loss) after tax for the period (8,380) 82,639 Adjusted for: Net fair value (gain) / loss on investment properties 41,283 (30,836) Net fair value (gain) / loss on derivatives 1,041 (13,136) Incentive amortisation and rent straight-line (4,618
Slide 25: Consolidated balance sheet
Consolidated balance sheet $’000 30 Jun 2023 30 Jun 2022 Cash and cash equivalents 5,454 5,178 Investment properties 781,220 850,050 Other assets 16,189 17,894 Total assets 802,863 873,122 Borrowings (263,420) (299,611) Provisions (9,796) (11,256) Other liabilities (13,264) (7,737) Total liabilities
Slide 26: Important information
Important information This presentation (“Material”) has been prepared by Dexus Asset Management Limited (ACN 080 674 479, AFSL No. 237500) ("DXAM") as the responsible entity of Convenience Retail REIT No. 1 (ARSN 101 227 614), Convenience Retail REIT No. 2 (ARSN 619 527 829) and Convenience Retail
Slide 27: dexus
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