Homeco Daily Needs Reit · ASX:HDN
Homeco Daily Needs Reit — FY2022 Earnings Presentation
43 slides from Homeco Daily Needs Reit's earnings presentation, Aug 18, 2022
Slide 1: FY22 Results Presentation (ASX Release)
Managed by HMC Funds Management Limited (ACN 105 078 635; AFSL 237257) as responsible entity of the HomeCo Daily Needs REIT (ARSN 645 086 620) ASX RELEASE 18 August 2022 FY22 RESULTS PRESENTATION HomeCo Daily Needs REIT (ASX: HDN) provides the attached FY22 Results Presentation. This announcement is
Slide 2: FY22 Results Presentation
FY22 Results Presentation 18 August 2022 AUSTRALIA’S LEADING DAILY NEEDS REIT
Slide 3: Acknowledgement of Country
Acknowledgement of Country HomeCo Daily Needs REIT acknowledges the Traditional Custodians of country throughout Australia and celebrates their diverse culture and connections to land, sea and community. We pay our respect to their Elders past, present and emerging and extend that respect to all Abo
Slide 4: Agenda
Agenda. 1 Highlights & Strategy 2 Portfolio Update 3 Growth Opportunities 4 Financial Results 5 Outlook & Guidance Sid Sharma Will McMicking HDN CEO HMC Capital Group CFO Rosenthal (VIC)
Slide 5: Capital stewardship
Capital stewardship Daily Needs REIT HDN has taken proactive measures to respond to the current economic environment KEY TAKEOUTS IN TODAY’S RESULT STRONG PORTFOLIO UNLOCKING VALUE PROACTIVE CAPITAL PERFORMANCE ACCRETIVE PIPELINE MANAGEMENT Capitalising on strong portfolio fundamentals $500m+ develo
Slide 6: 1. Highlights & Strategy
Rosenthal (VIC) 1. Highlights & Strategy
Slide 7: FY22 Performance
FY22 Performance Daily Needs REIT Successful delivery against FY22 FFO and DPU guidance and strong progress made to fortify capital position moving into FY23 FINANCIAL ASSET MANAGEMENT INVESTMENT 8.85 cpu >99% $37m FY22 FFO CASH COLLECTION FY22 DEVELOPMENTS +30% increase versus FY211 FY22 contracted
Slide 8: Investment Strategy
Investment Strategy Daily Needs REIT Owner and developer of strategic last mile infrastructure focused on daily needs & services Model Portfolio Construction Strong Investment Fundamentals Strategic Real Estate Infrastructure Portfolio Target Secure and growing income streams Unlocking real estate l
Slide 9: Transformational merger successfully integrated
Transformational merger successfully integrated Daily Needs Today’s result underscores the strong strategic rationale for the transformational merger REIT with Aventus and the significant progress being made to capitalise on HDN’s enhanced growth pipeline Enhanced scale Compelling financials Complem
Slide 10: 2. Portfolio Update
Victoria Point (QLD) 2. Portfolio Update
Slide 11: Australia's leading Daily Needs REIT
Australia’s leading Daily Needs REIT Daily Needs REIT High quality $4.6bn portfolio diversified by subsector, tenant and geography Platform Overview Tenant mix1 Rent composition1 Key portfolio metrics 8% Portfolio value $4,649m 33% Large Format 19% Fixed Retail Landbank (sqm) 2.5m sqm CPI Neighbourh
Slide 12: Strong operational performance
Strong operational performance Daily Needs REIT Resilient and growing income streams notwithstanding ongoing presence of COVID-19 Occupancy Cash collection Cash rent collection >99% >99% 99% 99% 99% 99% 99% 99% for FY221 for FY22 Comp Property NOI Development Leasing +5.1% 26,682m2 vs 30-June-212 Ja
Slide 13: Highly defensive and diversified income streams
Highly defensive and diversified income streams Daily Needs REIT Well positioned to deliver stable and growing distributions $349 >99% >80% 3.8% 73% 19% 8% Avg. rent / sqm Cash collection National retailers1 WARR2 Fixed CPI Supermarket Top 10 tenants – by gross income1 Portfolio subsectors – gross i
Slide 14: Portfolio Remixing Strategy
Portfolio Remixing Strategy Daily Needs REIT HDN is committed to its Model Portfolio and will seek to rebalance the portfolio through active tenant remixing, development, acquisitions and disposals Active Portfolio Management Example Jindalee, Queensland ▪ Increasing exposure to daily needs and heal
Slide 15: HDN Owns Strategic Last Mile Infrastructure
HDN Owns Strategic Last Mile Infrastructure Daily Needs Strategic footprint spanning 2.5m sqm in Australia’s leading metropolitan markets & growth REIT corridors Greater Melbourne Greater Sydney Greater Brisbane & Gold Coast Murrindindi Woy Woy Rosenthal Coral Sea McGraths Hill (APS1) Sunshine Coast
Slide 16: Last Mile Fulfilment is a Megatrend
Last Mile Fulfilment is a Megatrend Daily Needs REIT The physical store is now a last-mile logistics hub for e-commerce, fulfillment and distribution Click & collect Delivery from store Same day delivery Buy online pay in store Domestic Retailers International Retailers ▪ “Building a seamless omni-c
Slide 17: Last Mile Fulfilment is a Megatrend
Last Mile Fulfilment is a Megatrend Daily Needs ~77%1 of HDN’s tenants are supporting last-mile logistics within their existing store network REIT Click & Collect In-Store Fulfilment Supermarkets LFR - Automotive Direct to Boot & Pick Up - Woolworths Hawthorn In-store Fulfilment - Repco Penrith ▪ Di
Slide 18: Sustainability Progress at HDN
Sustainability Progress at HDN Daily Needs Implementing HMC Capital’s Sustainability Commitments across the HDN portfolio REIT Our inaugural Sustainability Report details six sustainability ENVIRONMENTAL SOCIAL GOVERNANCE commitments towards "Creating Healthy Communities” 1. CLIMATE ACTION 3. CONNEC
Slide 19: Sustainability Progress at HDN
Sustainability Progress at HDN Daily Needs REIT Energy Roadmap FY22 FY23 Solar Baseline Formed Net Zero Solar Progress Solar installed on Baseline Formed 18 sites FY24 EV Charging Net Zero Rollout Progress 5 Sites have EV 10% reduction chargers installed GRESB GRESB Public disclosure First lodgement
Slide 20: 3. Growth Opportunities
Daily Needs REIT Belrose (NSW) 3. Growth Opportunities 18
Slide 21: HDN Development Pipeline Overview
HDN Development Pipeline Overview Daily Needs REIT Significant development opportunities with latent embedded value identified $500m+ INVESTMENT OPPORTUNITIES 0 $75m+ $75m+ Development capability & track record1 WORK IN PROGRESS 50 ACROSS ~7 PROJECTS FY23 COMMENCEMENTS >500k sqm 45 >$1bn Successfull
Slide 22: FY22 Brownfield Developments Update
FY22 Brownfield Developments Update Daily Needs $37m of accretive developments returning a 10% ROIC1 REIT Projects Capex Completed 1. Gregory Hills (NSW) ▪ 3,120 sqm GLA centre extension anchored by Aldi $12.0m 2. Cranbourne (VIC) ▪ 2,192 sqm GLA Officeworks superstore $5.2m 3. Braybrook (VIC) ▪ 200
Slide 23: FY22 Brownfield Developments Update
FY22 Brownfield Developments Update Daily Needs REIT Accretive brownfield developments completed Gregory Hills (NSW) Penrith (NSW) Cranbourne (VIC) Braybrook (VIC) 21
Slide 24: FY23 Target Development Opportunities
FY23 Target Development Opportunities Daily Needs REIT >$75m >28,000m2 ~7% Forecast commencements Additional GLA Target blended ROIC1 Indicative Project start date Development opportunity Mackay 1H FY23 First stage of multi-stage LFR and lifestyle expansion opportunity on excess land Queensland Glen
Slide 25: FY24+ Development Pipeline
FY24+ Development Pipeline Daily Needs REIT Continued focus on unlocking development pipeline to drive enhanced FFO and NTA growth MINOR DEVELOPMENT MAJOR DEVELOPMENT 1 2 OPPORTUNITIES OPPORTUNITIES Brownfield development and remix opportunities with CAPEX Large scale development opportunities inclu
Slide 26: 4. Financial Results
Daily Needs REIT Woodlea (VIC) 4. Financial Results 24
Slide 27: Funds from Operations
Funds from Operations Daily Needs REIT Strong earnings growth with FY22 FFO per unit of 8.85cpu, ahead of guidance of 8.8cpu $ million FY21 FY22 ▪ HDN reported FFO of $105.6m (8.85cpu) for FY22, representing a 30% increase vs FY21 on an FFO Property NOI 34.0 141.9 cents per unit basis1 Investment ma
Slide 28: Balance sheet
Balance sheet Daily Needs REIT Acquisitions and valuation gains have resulted in a robust balance sheet, with a total asset base of $4.9bn and NTA of $1.52 per unit as at Jun-22 $ million Dec-21 Jun-22 ▪ HDN’s total assets as at Jun-22 increased to Cash and cash equivalents 5.9 23.2 $4.9bn, driven b
Slide 29: Capital management
Capital management Daily Needs REIT Gearing of 30.6% and strong liquidity position of $380m on a Jun-22 adj. basis (following sale of Sunshine Coast) Dec-21 Jun-22 Jun-22 $ million Adjusted1 Debt summary ▪ HDN upsized its senior debt facility by $200m in Mar-22 to Facility limit (bank debt) 800.0 1,
Slide 30: 5. Outlook & Guidance
Daily Needs REIT Gregory Hills (NSW) 5. Outlook & Guidance 28
Slide 31: FY23 guidance and closing remarks
FY23 guidance and closing remarks Daily Needs REIT HDN is pleased to deliver a solid FY23 outlook underpinned by strong underlying property NOI growth notwithstanding rising interest rates 8.6 cpu 8.3 cpu 3.3% >$75m 1 FFO per unit Distribution Comparable NOI FY23 developments 2 3 97% payout ratio gr
Slide 32: 6. Supplementary Information
Daily Needs REIT Caringbah (NSW) 6. Supplementary Information 30
Slide 33: National portfolio
National portfolio Daily Needs REIT Critical last mile infrastructure supporting omni-channel retailing and fulfilment across Australia 20% 53 QLD: $0.9bn Properties1 Properties1 12 Total portfolio NT Greater Brisbane 19% Portfolio value $4.6bn QLD Tenants >1,200 WA 12 47% SA NSW: $2.2bn 4 Propertie
Slide 34: Last Mile Fulfilment is a Megatrend
Last Mile Fulfilment is a Megatrend Daily Needs REIT Daily needs assets provide an attractively priced exposure to the last mile logistics thematic Typical HDN Property Historical yields (%)1 9.0% 1.6% Location Infill / Metro 8.0% 1.4% Barriers to entry High 1.2% 7.0% 1.0% Via low 6.0% Development u
Slide 35: Acquisitions & Disposals over FY22
Acquisitions & Disposals over FY22 Daily Needs REIT Acquisitions Settlement Date Purchase Price Acquisition WACR Armstrong Creek Pad Mar-22 $21.5m 5.00% Aventus Portfolio Mar-22 $2,519.0m n.a Coffs Harbour Oct-21 $22.4m 6.50% Gregory Hills Home Apr-22 $34.1m 5.75% HomeCo LFR Portfolio1 Jul-21 $266.4
Slide 36: Proven track record in development
Proven track record in development Daily Needs Braybrook case study REIT Medical Precinct 2016 2019 2022 New neighbourhood centre anchored by Coles, Development underway for 2 new drive-thru pad Empty Ex-Masters Tenancy Chemist Warehouse & TK Maxx sites and medical precinct Capex Nil Incremental cap
Slide 37: FY23 & Beyond Development Opportunities
FY23 & Beyond Development Opportunities Daily Needs REIT Potential to accelerate larger scale opportunities across the portfolio Glenmore Park (NSW) Mackay (QLD) Tuggerah (NSW) MASTERPLAN REDEVELOPMENT OPPORTUNITY Epping (VIC) Armstrong Creek (VIC) Richlands (QLD) DEVELOPMENT OPPORTUNITY EXISTING CE
Slide 38: Strong portfolio revaluation gains
Strong portfolio revaluation gains Daily Needs REIT Gains underpinned by solid operational and investment market fundamentals Portfolio valuation (A$m) +4.8% ($137m) $4,700m $203m $32m $4,500m $116m $4,300m $4,100m $4,786m $4,649m $4,649m $4,435m $3,900m $3,700m $3,500m 31 December 2021 Acquisitions
Slide 39: Portfolio summary metrics
Portfolio summary metrics Daily Needs REIT Occupancy WALE Asset State GLA (sqm) Site area (sqm) Site Coverage (%)1 Fair Value ($m) Cap rate (%) (by area)2 (by income)3 Operating Armstrong Creek VIC 9,635 31,629 30% 100% 9.1 73 4.75% Armstrong Creek PAD VIC 2,881 10,929 26% 100% 8.0 24 4.25% Ballarat
Slide 40: Additional financial information
Additional financial information Daily Needs REIT Statutory profit to FFO reconciliation Statutory profit to operating cash flow reconciliation FY22 FY22 $ million Actual $ million Actual Total revenue 198.3 Statutory Profit 335.1 Share of profits from associates – APS1 0.4 Property expenses (48.7)
Slide 41: Debt maturity and hedging profile
Debt maturity and hedging profile Daily Needs REIT Debt maturity profile (Jun-22 adj. post Sunshine sale) Hedging profile (Jun-22) 900 $1,200m 3.00% 800 700 $1,000m 2.50% $400m 600 $800m $357m 500 $400m $600m 2.00% 400 $810m 300 $400m $400m $675m $400m $400m 200 1.50% $353m $500m $300m $200m 100 $20
Slide 42: Contacts
Contacts Daily Needs REIT Investors and analysts Media Misha Mohl Sid Sharma John Frey HMC Capital HDN CEO Corporate Communications Group Head of Strategy & IR +61 422 371 575 +61 434 361 318 +61 411 361 361 misha.mohl@hmccapital.com.au sid.sharma@hmccapital.com.au john@brightoncomms.com.au 40
Slide 43: Disclaimer
Disclaimer Daily Needs REIT This presentation (Presentation) has been prepared by HMC Funds Management Limited (ACN 106 078 635, AFSL 237 257) (Responsible Entity) as responsible entity of HomeCo Daily Needs REIT (ARSN 645 086 620). Summary information This Presentation contains summary information
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