Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — Investor Presentation (June 2020)
35 slides from Dexus Convenience Retail Reit's investor presentation, Jun 16, 2020
Slide 1: Equity Raising
EQUITY RAISING 16 JUNE 2020 www.apngroup.com.au ASX Code: AQR
Slide 2: Important notice and disclaimer
Important notice and disclaimer IMPORTANT: You are advised to read the following carefully before making any use of the information contained in this presentation. This presentation has been prepared by APN Funds Management Limited (ACN 080 674 479) (“Responsible Entity”) as responsible entity of ea
Slide 3: Important notice and disclaimer
Important notice and disclaimer Any such forward-looking statements involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies and other factors, including the risks described in this presentation under “Key risks”. Such risks may be outside the co
Slide 4: Contents
Contents 01 Executive summary 02 Trading update 03 Equity raising Appendices 4
Slide 5: Executive Summary
01 EXECUTIVE SUMMARY Raceview Convenience Centre, QLD 5
Slide 6: Executive summary
Executive summary ▪ APN Convenience Retail REIT (“AQR” or the “Fund”) intends to undertake an equity raising comprising: – A fully underwritten institutional placement to raise approximately $50 million (“Placement”) – A non-underwritten security purchase plan (“SPP”) to eligible securityholders in
Slide 7: Executive summary
Executive summary ▪ The proceeds from the Placement will be used to strengthen AQR’s balance sheet by repaying debt, including debt incurred recently to complete the acquisitions of Coles Express Gatton and Coles Express Inverell, and to fund the associated transaction costs incurred in connection w
Slide 8: Key metrics post-Placement
Key metrics post-Placement 6.8% 100% $452m 23% FY20 DPS YIELD1 OCCUPANCY PORTFOLIO VALUE2 PRO FORMA GEARING3 83 6.9% 10.6 $366m PROPERTIES2 WACR4,5 WALE (YEARS)5 MARKET CAP6 DIVERSIFIED AND DEFENSIVE LONG LEASE PORTFOLIO SUSTAINABLE AND GROWING INCOME ALIGNED MANAGER WITH $32 MILLION CO-INVESTED 1.
Slide 9: Trading Update
02 TRADING UPDATE Woolworths Mitchelton, QLD 9
Slide 10: Investment highlights
Investment highlights 1 Stable, passive income stream with contracted rental increases providing sustainable income growth 2 Portfolio has been resilient through the challenging conditions created by COVID-19 3 Strong balance sheet with capacity to deploy capital to further grow and diversify the po
Slide 11: Trading update
Trading update ▪ Minimal impact to date with all sites remaining open and trading – sites regarded as essential services COVID-19 ▪ Little impact on rent collection to date – in discussions regarding rental relief with six small non-fuel tenants (c. 1.2% of impact portfolio rental income) ▪ $33.6m o
Slide 12: Balance sheet well capitalised for growth
Balance sheet well capitalised for growth Healthy balance sheet position Pro Forma ▪ Refinanced $105 million of facilities and increased debt facilities Key metric 31 Dec 2019 Post-Placement1 by $40 million post-31 December balance date in February 2020 ▪ Pro forma gearing adjusting for completed ac
Slide 13: Increasing portfolio growth and scale
Increasing portfolio growth and scale APN has a proven 17 year track record in the service station and convenience retail sector ▪ Unlisted APN Property Plus Portfolio (“PPP”) launched in September 2002 ▪ Unlisted APN Retail Property Fund (“RPF”) launched in December 2016 ▪ APN Convenience Retail RE
Slide 14: Fund-through development projects
Fund-through development projects $30.3 million of projects delivered, with completion of remaining $25.7m portfolio expected over the next 6 months ▪ As previously announced, AQR has has now completed six fund-through development projects since December 2019 ▪ Additional $25.7 million of funding co
Slide 15: Equity Raising
03 EQUITY RAISING Liberty Pooraka, SA 15
Slide 16: Sources and uses of proceeds
Sources and uses of proceeds ▪ Fully underwritten Placement of approximately $50 million Sources of proceeds $m ▪ Fixed issue price of $3.20 per New Security, representing a: Placement proceeds 50.0 – Discount of 4.8% to the last closing price of $3.36 on 15 June 2020 Total sources 50.0 – Discount o
Slide 17: Equity raising details
Equity raising details ▪ Fully underwritten Placement to raise approximately $50 million – AQR intends to allocate in full, on a best endeavours basis, to eligible institutional securityholders who bid for up to their pro rata share of the Placement1,2 Structure ▪ Non-underwritten SPP to eligible se
Slide 18: Indicative timetable
Indicative timetable Event Date (2020) Record date for SPP 7.00pm, Monday 15 June Trading halt and announcement of Placement Tuesday 16 June Placement bookbuild Tuesday 16 June Settlement of New Securities issued under the Placement Friday 19 June Allotment and normal trading of New Securities issue
Slide 19: The APN Convenience Retail REIT opportunity
The APN Convenience Retail REIT opportunity Exposure to AQR’s $452 million1 and Secure and growing income profile growing portfolio of strongly performing underpinned by an 10.6 year WALE and service station assets weighted average rental growth of 2.8%2 Attractive FY20 DPS yield of 6.8%3 Increased
Slide 20: Appendices
APPENDICES Puma Kempsey South, NSW 20
Slide 21: Appendix A: Pro forma balance sheet
Appendix A Pro forma balance sheet 21
Slide 22: Pro forma balance sheet
Pro forma balance sheet Dec 2019 DRP, 31 Dec 2019 acquisitions and 31 Dec 2019 Pro Forma $m (Audited) fund-throughs Pro Forma1 Placement Post-Placement2 Cash and cash equivalents 1.5 1.5 1.5 Investment properties 390.4 61.8 452.2 452.2 Other assets 7.0 (5.9) 1.1 1.1 Total assets 398.9 55.9 454.8 454
Slide 23: Appendix B: Key risks
Appendix B Key risks | Property Group
Slide 24: Key risks
Key risks This section discusses some of the risks associated with an investment in AQR. AQR's business is subject to a number of risk factors both specific to its business and of a general nature which may impact its future performance and forecasts. Before subscribing for New Securities, prospecti
Slide 25: Key risks
Key risks Re-leasing, market rent reviews and vacancy The portfolio’s leases come up for renewal on a periodic basis, and there is a risk that expiring leases may not be renewed in accordance with AQR’s assumptions including in relation to vacancy periods, rents and lease terms, particularly in the
Slide 26: Key risks
Key risks Interest rate risk Adverse fluctuations in interest rates, to the extent that they are not hedged, may impact AQR's funding costs adversely, resulting in a decrease in distributable income. Where interest rates are hedged by way of financial instruments, the value of those instruments can
Slide 27: Key risks
Key risks Environmental risk Certain asset classes to which AQR is exposed, in particular service station assets, typically have a higher rate of environmental contamination than other commercial property asset classes. There is a risk that a property may be contaminated now or in the future. Govern
Slide 28: Key risks
Key risks Share market conditions There are general risks associated with an investment in the share market. As such, the value of New Securities may rise above or fall below the offer price, depending on the financial position and operating performance of AQR and other factors. In addition, the mar
Slide 29: Key risks
Key risks Accounting standards and impairment AQR prepares its general purpose financial statements in accordance with IFRS and with the Corporations Act. Australian Accounting Standards are not within the control of AQR or its boards and are subject to amendment from time to time, and any such chan
Slide 30: Key risks
Key risks Underwriting risk (continued) l) a regulatory body: i. makes an adverse declaration or order; ii. issues, or publicly announces or indicates to AQR its intention to issue, proceedings; or iii. commences, or publicly announces or indicates to AQR its intention to commence, any inquiry or in
Slide 31: Key risks
Key risks Forward-looking statements There can be no guarantee that the assumptions and contingencies on which the forward-looking statements, opinions and estimates (including guidance on future FFO and distributions) are based will ultimately prove to be valid or accurate. The forward-looking stat
Slide 32: Key risks
Key risks General economic and political conditions Factors such as, but not limited to, domestic and international political changes, interest rates, exchange rates, inflation levels, commodity prices, AQR disruption, environmental impacts, international competition, taxation changes, changes in em
Slide 33: Appendix C: Foreign selling restrictions
Appendix C Foreign selling restrictions 33
Slide 34: Foreign selling restrictions
Foreign selling restrictions International Offer Restrictions This document does not constitute an offer of New Securities of AQR in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person in the Placement, and the New Securities may not be o
Slide 35: Contact
Contact Chris Brockett Fund Manager, APN Convenience Retail REIT Ph: (03) 8656 1000 : cbrockett@apngroup.com.au ASX Code: AQR Follow us… @apngroup APN Property Group Limited APN Property Group Limited apnpropertygroup Level 30,101 Collins Street, apngroup.blog Melbourne, Vic 3000 apngroup.com.au ap
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