Slide 1: FY20 annual results
FY20 annual results 19 August 2020 Vicinity Centres | FY20 annual results | 19 August 2020
Slide 2: Welcome and Agenda
Welcome Agenda 3 FY20 annual results overview and FY21 outlook 7 Financial results 14 Portfolio performance Grant Kelley Nicholas Schiffer Peter Huddle 21 Development CEO AND MANAGING DIRECTOR CHIEF FINANCIAL OFFICER CHIEF OPERATING OFFICER 26 Strategic growth initiatives 30 Summary 33 Appendices Ca
Slide 3: FY20 annual results overview and FY21 outlook
FY20 annual results overview and FY21 outlook Grant Kelley CEO AND MANAGING DIRECTOR Vicinity Centres | FY20 annual results | 19 August 2020 Chadstone, VIC
Slide 4: FY20 annual results overview
FY20 annual results overview Continued to deliver on strategy, however COVID-19 has significantly impacted the retail industry Results materially impacted by COVID-19 after a solid first half Statutory net loss of $1,801.0m (FY19: net profit $346.1m) Funds from operations (FFO) of $520.3m1 (FY19: $6
Slide 5: Priorities in response to the challenging operating environment with COVID-19
Priorities in response to the challenging operating environment with COVID-19 Health, safety and wellbeing is our highest priority, along with the long-term success of Vicinity and our retailers Vicinity’s priorities in response to COVID-19 Our • Fortified financial position ‒ $1.2b equity raising b
Slide 6: Recovery and outlook
Recovery and outlook Retail industry recovering from COVID-19 at varying speeds Macro situation will impact portfolio into FY21 2020 customer visitation by state¹ Resurgence of COVID-19 infections in Victoria with ongoing risk in other states and consequent Weekly traffic as % of prior year increase
Slide 7: Financial results
Financial results Nicholas Schiffer CHIEF FINANCIAL OFFICER Vicinity Centres | FY20 annual results | 19 August 2020 DFO Moorabbin, VIC
Slide 8: Financial results overview
Financial results Overview First half results solid FFO per security of 8.95 cents, reflecting comparable1 FFO growth of 1.5% Delivering on strategy through acquisition, divestment and development Maintained strong balance sheet with gearing of 27.3%2 • Inaugural Euro MTN issued with €500m of 10-yea
Slide 9: Income statement
Financial results Income statement Income result solid in first half and materially impacted by COVID-19 1H FY20 2H FY20 FY20 FY19 ($m) ($m) ($m) ($m) in second half5 Net property income (NPI) 438.9 244.8 683.7 887.6 COVID-19 related corporate overhead cost reductions of $31m Property and developmen
Slide 10: NPI and rent collections
NPI and rent collections FY20 NPI reduced by 23% principally due to COVID-19 impacts FY19 to FY20 NPI waterfall ($m) Estimated impact of COVID-19 on FY20 rental income ~$169m1 Comprises $109m of estimated rent waivers and $60m of provisions on remaining debt, reflecting heightened collection risk in
Slide 11: Valuations for the six months to June 2020
Valuations for the six months to 30 June 20201 Reflecting impact of COVID-19 and the evolving retail landscape Portfolio valuations down 11.4% in second half Valuation summary Materially impacted by COVID-19 Net gain/(loss) Valuation Valuation Portfolio weighted average capitalisation rate softened
Slide 12: Gearing waterfall
Gearing waterfall Gearing at low end of target range $1.2b Placement undertaken in response to impact and uncertainty Significant capital preservation measures to remain in place in FY21 caused by COVID-19 and evolving retail landscape Development pipeline reviewed Gearing returned to the lower end
Slide 13: Capital management
Capital management Liquidity significantly enhanced during the past six months Liquidity New or extended debt Gearing Weighted avg cost of debt Weighted avg debt duration $2.1 billion 1 $3.5 billion 25.5% 3.6% 5.2 years Sufficient capacity for 1H FY20: €500m EMTN (A$812m) and $1.7b At the lower end
Slide 14: Portfolio performance
Portfolio performance Peter Huddle CHIEF OPERATING OFFICER Vicinity Centres | FY20 annual results | 19 August 2020 Roselands, NSW
Slide 15: Portfolio overview
Portfolio overview Continued execution on portfolio strategy, while responding agilely to COVID-19 Portfolio metrics strengthened in first half Centre priorities in response to COVID-19 COVID-19 had a material impact, with a significant drop in visitation Our business • Health, safety and wellbeing
Slide 16: COVID-19 impact on portfolio
COVID-19 impact on portfolio Flagship assets more impacted by COVID-19 in the short term, but we believe these assets have strong long-term fundamentals Flagship assets continue to have strong fundamentals Centre visitation and stores open by centre type Chadstone: Australia’s leading retail, dining
Slide 17: Portfolio sales performance
Portfolio sales performance Sales by store type Actual Store closures have impacted comparability of sales reporting Proportion of Monthly comparable1 growth MAT MAT MAT Jun-20 portfolio (%) Jun-20 Jun-20 May-20 Apr-20 Mar-20 Feb-20 Jan-20 Dec-19 Core portfolio performed better than other centres ($
Slide 18: COVID-19 impacts on rental income
COVID-19 impacts on rental income Short-term rental assistance negotiations progressing Government SME Code stipulated that rent assistance be offered Short-term lease variations1,2 to SME tenants in line with fall in sales % Negotiations with non-SME tenants undertaken in good faith to support reta
Slide 19: Short-term lease variations – additional detail
Short-term lease variations – additional detail Lease negotiations impacted by prevailing market conditions Core centres have higher proportion of unimpacted leases Status of short-term lease variations (% of leases)2 No. of leases Total 59 41 6,879 NSW and VIC have lower proportion of agreed1 lease
Slide 20: Portfolio outlook
Portfolio outlook Focused on operating through COVID-19 and recovery, and planning for future opportunities Prudent management through impacts of COVID-19 Maintaining vibrant and safe shopping centres Continue strong retail partnerships to create mutually beneficial outcomes Tight capital budgeting
Slide 21: Development
Development Carolyn Viney CHIEF DEVELOPMENT OFFICER Vicinity Centres | FY20 annual results | 19 August 2020 Ellenbrook Central, WA
Slide 22: Focused development pipeline provides growth opportunities
Focused development pipeline provides growth opportunities Driving income and long-term asset values Successful delivery of multiple development projects Final stage of major redevelopment of The Glen opened in October 2019, construction of three apartment buildings completed to ‘lock up’ and on tra
Slide 23: Chadstone, VIC
Chadstone, VIC Retail enhancements and mixed-use addition reinforcing centre as Australia’s leading retail, dining and leisure destination Project cost ~$550 million (Vicinity’s share: ~$275 million) Development in stages commencing 2021 DA approval for five new development projects • New nine-store
Slide 24: Box Hill Central, VIC
Box Hill Central, VIC Long-term masterplan released and three DAs lodged Vision to create bustling town centre and residential, office and retail mixed-use precinct Leveraging prime location One of Melbourne’s busiest rail and bus transport hubs Nearby health and education facilities 25m visitors an
Slide 25: Bankstown Central, NSW
Bankstown Central, NSW Long-term masterplan released and five DAs lodged Vision to create vibrant mixed-use urban neighbourhood to work, live, stay, dine and shop Leveraging prime location Within 100 metres of major bus interchange, train station and Sydney Metro station and new university campus 16
Slide 26: Strategic growth initiatives
Strategic growth initiatives Justin Mills CHIEF STRATEGY OFFICER Vicinity Centres | FY20 annual results | 19 August 2020 Northland, VIC
Slide 27: Retail sector trends
Retail sector trends COVID-19 implications and strategy moving forward COVID disruption Consumer spending resilient in the short term as stimulus underpins discretionary income Period of uncertainty exists as stimulus tapers and the timing of a recovery in domestic tourism unknown Gradual recovery f
Slide 28: Data analytics and insights
Data analytics and insights Powering decision-making through COVID-19 and beyond Data has aided COVID-19 response Post-recovery, advanced analytics to provide value uplift Real time centre density ‘heat map’ monitoring with automated SMS Vicinity has built an in-house advanced analytics platform to
Slide 29: Ancillary income: leveraging physical and digital assets
Ancillary income: leveraging physical and digital assets Re-building existing and driving new income streams for growth COVID-19 impact drives 11.8% decline in ancillary income FY20 progress 5.7% growth in the first half offset by 30.7% decline in second half largely due to reduced casual mall leasi
Slide 30: Summary
Summary Grant Kelley CEO AND MANAGING DIRECTOR Vicinity Centres | FY20 annual results | 19 August 2020 Queen Victoria Building, NSW
Slide 31: Leading retail platform
Leading retail platform High quality portfolio and experienced team to drive performance Clear strategy to deliver long-term growth Focused on market-leading destinations Realising retail-led mixed-use opportunities Leveraging third party capital High quality leading destination assets that access l
Slide 32: Summary and guidance
Summary and guidance Strategy positions Vicinity well to drive future growth Played a significant role in shaping the industry response to COVID-19 While COVID-19 has been challenging, consumers are quick to return to shopping centres when COVID-19 is contained Strong balance sheet with liquidity en
Slide 33: Appendices
34 Sustainability 42 Financial results 35 Strategy 45 Asset summaries Appendices 36 Direct portfolio 49 Contact details and disclaimer 41 Assets under management Vicinity Centres | FY20 annual results | 19 August 2020 Emporium Melbourne, VIC
Slide 34: Leadership in sustainability
Leadership in sustainability Delivering sustainable long-term value for our securityholders and communities Strong sustainability survey results Included in CDP 2019 Climate A-list Ranked 3rd global listed retail company by GRESB1 17% 25.2MW Ranked 6th most sustainable real estate company globally i
Slide 35: A strategy focused on sustainable growth
A strategy focused on sustainable growth Well positioned to create value over the long term Our business model Our investment proposition Horizon 1 #1 retail destination Current value driver Ongoing Strengthening Premium locations portfolio the portfolio review Leading Outlet Centre portfolio Market
Slide 36: Direct portfolio: Key statistics by centre type
Direct portfolio Key statistics by centre type Total Portfolio Chadstone Premium CBD DFO1 Core Number of retail assets 60 1 7 7 45 Gross lettable area (000’s)(sqm) 2,419 234 223 231 1,732 Total value2 ($m) 14,114 3,119 2,218 1,760 7,016 Portfolio weighting by value (%) 100 22 16 12 50 Capitalisation
Slide 37: Direct portfolio: Non-comparable centres for sales reporting
Direct portfolio Non-comparable centres for sales reporting Non-comparable status Centre Jun-20 Dec-19 DFO Perth, WA Post development Post development Roselands, NSW Post development Post development The Glen, VIC Post development Post development QueensPlaza, QLD Post development Under development
Slide 38: Direct portfolio: Sales by specialty category
Direct portfolio Sales by specialty category Jun-20 Dec-19 Comparable MAT Proportion of growth (%)1 total MAT MM and SS2 SS2 MM and SS2 SS2 Apparel 18 (14.6) (16.5) 4.3 2.9 Food catering 7 (14.4) (13.9) 5.0 4.0 Homewares 7 (3.3) (15.3) 2.1 (1.1) General retail 6 (7.2) (7.8) 0.1 0.9 Leisure 5 (6.1) (
Slide 39: Direct portfolio: Key portfolio tenants
Direct portfolio Key portfolio tenants Top 10 tenants by income Top 10 tenant groups by income Number % of Number % of Rank Retailer of leases income Brands Rank Retailer Retailer type of stores income Big W, BWS, Dan Murphy’s, Woolworths, 1 65 4.6 Woolworths Liquor, Woolworths Petrol 1 Supermarket
Slide 40: Direct portfolio: Lease expiry profile
Direct portfolio Lease expiry profile Lease expiry profile (by income) 25% Majors 21 20% All other retailers 15 15 15% 13 13 12 10% 8 5% 1 1 1 1 0 0% Holdover FY21 FY22 FY23 FY24+ FY25+ Weighted average lease expiry (years) Jun-20 Jun-19 by Area 4.6 4.8 by Income 3.6 3.8 Victoria Gardens Shopping Ce
Slide 41: Assets under management
Assets under management ~7,300 tenants across 64 assets under management1 Direct portfolio1 Managed Third party/ Total Wholly-owned Co-owned Total co-owned AUM1 Number of retail assets 32 28 60 4/28 64 Gross lettable area (000’s)(sqm) 944 1,475 2,419 134 2,552 Number of tenants 2,817 4,080 6,897 405
Slide 42: FFO reconciliation to statutory net loss/profit after tax
Financial results FFO reconciliation to statutory net loss/profit after tax FY20 FY19 ($m) ($m) Net (loss)/profit after tax (1,801.0) 346.1 Property revaluation decrement for directly owned properties 1,717.9 237.1 Non-distributable loss relating to equity accounted investments 145.3 13.2 Amortisati
Slide 43: Balance sheet
Financial results Balance sheet Jun-20 Jun-19 As at ($m) ($m) Cash and cash equivalents 227.4 34.9 Investment properties1 13,801.4 15,351.8 Equity accounted investments 527.6 670.1 Intangible assets 164.2 591.2 Other assets 518.8 345.6 Total assets 15,239.4 16,993.6 Borrowings 3,929.8 4,436.1 Other
Slide 44: Capital management
Financial results Capital management Key debt statistics Hedging profile4,8 As at: Jun-20 Jun-19 3,500 5.5% Total debt facilities1 $5.8b $5.8b 3,000 5.0% Drawn debt2 $3.9b $4.4b 2,500 4.5% Gearing3 25.5% 27.1% Notional A$m Hedge rate 2,000 4.0% Weighted average cost of debt 3.6% 4.5% Weighted averag
Slide 45: Asset summaries: Centre statistics and valuations
Asset summaries Centre statistics and valuations Moving Capitalisation rate annual Net Value Discount rate Ownership Occupancy turnover revaluation As at As at As at As at Centre type interest rate (MAT) movement1,2 30-Jun-201 30-Jun-20 31-Dec-19 Movement 30-Jun-20 (%) (%) ($m) ($m) ($m) (%) (%) (%)
Slide 46: Asset summaries: Centre statistics and valuations
Asset summaries Centre statistics and valuations Moving Capitalisation rate annual Net Value Discount rate Ownership Occupancy turnover revaluation As at As at As at As at Centre type interest rate (MAT) movement1,2 30-Jun-201 30-Jun-20 31-Dec-19 Movement 30-Jun-20 (%) (%) ($m) ($m) ($m) (%) (%) (%)
Slide 47: Asset summaries: Centre statistics and valuations
Asset summaries Centre statistics and valuations Moving Capitalisation rate annual Net Value Discount rate Ownership Occupancy turnover revaluation As at As at As at As at Centre type interest rate (MAT) movement1,2 30-Jun-201 30-Jun-20 31-Dec-19 Movement 30-Jun-20 (%) (%) ($m) ($m) ($m) (%) (%) (%)
Slide 48: Asset summaries: Centre statistics and valuations
Asset summaries Centre statistics and valuations Moving Capitalisation rate annual Net Value Discount rate Ownership Occupancy turnover revaluation As at As at As at As at Centre type interest rate (MAT) movement1,2 30-Jun-201 30-Jun-20 31-Dec-19 Movement 30-Jun-20 (%) (%) ($m) ($m) ($m) (%) (%) (%)
Slide 49: Contact details and disclaimer
Contact details and disclaimer For further information please contact: Penny Berger Troy Dahms Head of Investor Relations Senior Investor Relations Manager T +61 2 8229 7760 T +61 2 8229 7763 E penny.berger@vicinity.com.au E troy.dahms@vicinity.com.au Authorisation The Board has authorised that this
Slide 50: Thank you
Thank you Vicinity Centres | FY20 annual results | 19 August 2020