Slide 1: FY19 interim results
FY19 interim results 15 February 2019 Vicinity Centres | FY19 interim results | 15 February 2019 DFO Perth, WA
Slide 2: Agenda and presenters
FY19 interim results Grant Kelley overview and strategy CEO AND MANAGING DIRECTOR update Financials and Michael O’Brien FY19 guidance CHIEF FINANCIAL OFFICER Kah Wong ACTING CHIEF FINANCIAL OFFICER Portfolio Stuart Macrae EGM LEASING Retail and mixed-use Carolyn Viney development EGM DEVELOPMENT Str
Slide 3: FY19 interim results overview and strategy update
FY19 interim results overview and strategy update Grant Kelley CEO AND MANAGING DIRECTOR Vicinity Centres | FY19 interim results | 15 February 2019 The Strand Arcade, NSW
Slide 4: Vicinity's strategy
Vicinity’s strategy Unlocking Vicinity’s potential Horizon 1 On balance sheet – Listed (VCX) Strengthening the core Create market-leading Accretive developments, Ongoing destinations divestments portfolio and review acquisitions Land parcel Wholesale carve outs assets Capital Capital Horizon 2 and f
Slide 5: FY19 interim results overview
FY19 interim results overview Strategy delivering results Financial results Statutory net profit of $235.3m Funds from operations (FFO) of 9.06 cps, reflecting 2.0% comparable growth1 Gearing reduced to 25.1% Strengthening the core Performance enhanced due to divestment of non-core assets Specialty
Slide 6: Market-leading destinations
Market-leading destinations Portfolio repositioning well progressed Progress on divestment of up to $1.0b of non-core assets Progress to market-leading destination portfolio Divested 11 assets for $631m in October 20181 Number of assets Progressing divestment of the four remaining assets, however no
Slide 7: Market-leading destinations: Flagship performance
Market-leading destinations Outstanding performance from Flagship assets, with plans to strengthen High Potential portfolio Chadstone, VIC QueensPlaza, QLD DFO Perth, WA Total MAT growth1 (%) Leasing spreads2 (%) Comparable NPI growth3 (%) 12 20 8 9.7 15.9 10 16 5.8 6 8 6.7 12 Total 9.2 Total 3.9 6
Slide 8: Market-leading destinations: Specialty MAT/sqm
Market-leading destinations ~40% of destination portfolio value comprised of highly productive Chadstone and Premium CBD assets Destination portfolio Flagship Specialty MAT/sqm $20,000 ~$18,400 ~$11,200 Occupancy costs $16,000 15.4% Specialty MAT/sqm $12,000 ~$10,100 17.5%1 ~$8,600 $8,000 11.3%1 $4,
Slide 9: High Potential assets present opportunities
Market-leading destinations High Potential assets present opportunities to strengthen performance Destination portfolio1 Live development High Potential assets category detail The Glen, VIC Live development 2% Development pipeline Development pipeline 11% Bankstown Central, NSW Box Hill Central, VIC
Slide 10: Vicinity response to macro environment
Vicinity response to macro environment Unique portfolio and strategic direction yielding benefits Wages growth is now out-pacing living costs growth Vicinity strategically well positioned 7% Wages Growth Living Costs Growth 6% Forecasts Focus on market-leading destinations 5% Continue to divest non-
Slide 11: Vicinity is uniquely positioned now and into the future
Vicinity is uniquely positioned now and into the future Attractive portfolio a first port of call for Australian and international retailers CHADSTONE DFOs Australia’s #1 Australia’s #1 retail asset Outlet Centre portfolio PREMIUM CBD LEADING LUXURY LOCATIONS OFFER Unrivalled Australian Australia’s
Slide 12: Financials and FY19 guidance
Financials and FY19 guidance Michael O’Brien CHIEF FINANCIAL OFFICER Kah Wong ACTING CHIEF FINANCIAL OFFICER Vicinity Centres | FY19 interim results | 15 February 2019 Chadstone, VIC
Slide 13: FY19 guidance re-affirmed
FY19 guidance re-affirmed1 Forecast comparable FY19 FFO per security growth of 2.3% to 3.4%1 FY19 FFO per security guidance of 18.0 to 18.2 cents FY19 FFO guidance reiterated 19 Represents 2.3% to 3.4% FFO per security comparable growth, after adjusting for the impact of portfolio changes2 Comparabl
Slide 14: Financial results
Financial results Statutory net profit of $235.3m, with comparable FFO per security growth of 2.0%1,2 Funds from operations2 FFO per security Comparable FFO per security1 Distribution per security $349.5 million 9.06 cents 2.0% growth 7.95 cents Underpinned by comparable Reflects the sale of non-cor
Slide 15: Financial position
Financial position Balance sheet strengthened Divested 12 non-core assets Gearing movements during period Proceeds of $670m received Asset sale proceeds reinvested into value-accretive opportunities Acquired 40m securities for $106m at 11.1% discount to Dec-18 NTA $154m invested into developments in
Slide 16: Valuations
Valuations Modest decline in portfolio net valuation, however Flagship portfolio continues to report solid growth Destination portfolio Weighted average capitalisation rate DFO portfolio Sydney CBD assets 0.4% increase 1 5.31% 7.2% increase 1 1.7% increase 1 Supported by average 2.4% net gain in Fla
Slide 17: Capital management
Capital management Well diversified funding sources, A/A2 credit ratings New or renegotiated debt Liquidity Weighted average cost of debt Weighted average debt duration $1.5 billion $1.3 billion 4.5% 4.3 years Significantly reducing FY19 and FY20 Sufficient capacity for planned investment Up 20 bps
Slide 18: Portfolio
Portfolio Stuart Macrae EGM LEASING Vicinity Centres | FY19 interim results | 15 February 2019 Emporium Melbourne, VIC
Slide 19: Portfolio highlights
Portfolio highlights Portfolio metrics remain strong Occupancy Comparable Leasing Specialty rate NPI growth1 spread2 occupancy cost3 99.7% +1.1% +4.4% 15.2% In line with 99.7% at Jun-18 Up from 1.0% over FY18 Comprising +5.5% for renewals Up from 14.7% at Jun-18 and +3.0% for replacements 1. Exclude
Slide 20: Sales summary
Sales summary Benefitting from ongoing active management Specialty MAT Specialty MAT/sqm Specialty and mini major Total productivity1 six-month growth1 MAT growth1 MAT growth1 $10,746 +6.0% +4.2% +2.7% Up from $10,133/sqm Reflecting portfolio repositioning Uplift due to positive remixing Strong mini
Slide 21: Sales performance
Sales performance Services, food catering and leisure continue to show strong growth Jewellery1,2 Leisure1,2 Retail services1,2 Apparel and footwear1,2 +12.7% +5.6% +5.2% +4.2% Strong growth from Chadstone Sporting goods +10.1% Hairdressing and beauty +6.2% Proactively expanding strong retailers and
Slide 22: Chadstone is Australia's #1 retail centre with $2.1b of MAT
Chadstone is Australia’s #1 retail centre with $2.1b of MAT International retailers, expanded luxury, quality dining and entertainment driving increased visitation #1 MAT across Australia for 17th consecutive year1 >60% higher than next peer Luxury precinct in Australia #1 New: Hermès, Van Cleef & A
Slide 23: Retail and mixed-use development
Retail and mixed-use development Carolyn Viney EGM DEVELOPMENT Vicinity Centres | FY19 interim results | 15 February 2019 DFO Perth, WA
Slide 24: Retail developments – A key driver for portfolio enhancement
Retail developments – A key driver for portfolio enhancement Pipeline to focus on high-returning opportunities Retail development pipeline a key driver of value Captures additional market share from growing trade areas Assets keep pace with changing consumer preferences Builds on success of existing
Slide 25: Expanding the DFO outlet portfolio
Expanding the DFO outlet portfolio DFO Perth, WA, success supports expansion of Australia’s premier retail outlet offer DFO Perth opened fully leased in October 2018 Has significantly exceeded expectations All 113 retailers were open and trading on Day 1 High quality tenant mix with many first-to-ma
Slide 26: The Glen, VIC
The Glen, VIC Development on time, on budget and opened stages performing well Stage three opened fully leased in October 2018 and trading strongly Includes UNIQLO, H&M, MECCA, homewares, lifestyle and apparel Stage one (fresh food precinct) and stage two (casual dining precinct) trading strongly si
Slide 27: Chadstone, VIC – Retail projects completed successfully in 2018
Chadstone, VIC – Retail projects completed successfully in 2018 Further enhancing Chadstone’s premium offering Expanded luxury precinct introducing Hermès and new Gucci flagship Victoria’s Secret flagship – Australia’s first full-line store Lower Ground dining atrium brings eight new casual dining o
Slide 28: Chadstone, VIC – Significant investment proposed
Chadstone, VIC – Significant investment proposed as part of long term masterplanning Multiple retail expansion projects and next commercial office building to leverage existing success of centre Chadstone is transforming into the key hub location for Melbourne’s South Eastern suburbs Several new pro
Slide 29: Chatswood Chase Sydney, NSW
Chatswood Chase Sydney, NSW Major redevelopment planned to expand retail offer to include premium categories Project seeks to create Sydney’s premium shopping, dining and leisure destination in one of Australia’s wealthiest trade areas Project leverages strong fundamentals and trading performance of
Slide 30: Ellenbrook Central, WA
Ellenbrook Central, WA Addition of Kmart to reinforce Ellenbrook Central as the dominant centre in strong growth corridor New $63m development Reinforces Ellenbrook Central as the dominant centre in strong growth corridor in Perth’s north eastern suburbs 10-year forecast population growth of 3.5% p.
Slide 31: Other prioritised retail development opportunities
Other prioritised retail development opportunities Significant repositioning of assets with strong fundamentals Box Hill Central, VIC Bankstown Central, NSW Two existing retail sites reconfigured to create a modern Plan to fully integrate retail with Bankstown CBD and metro rail retail destination i
Slide 32: Mixed-use pipeline reviewed and prioritised
Mixed-use pipeline reviewed and prioritised Resources to be focused on select large, strategic, high-value projects Vicinity’s footprint includes multiple valuable sites suitable Melbourne suburban loop rail - proposed for non-retail uses in combination with existing retail centres Vicinity is focus
Slide 33: Strategic growth initiatives
Strategic growth initiatives Justin Mills EGM SHOPPING CENTRE MANAGEMENT Vicinity Centres | FY19 interim results | 15 February 2019 Chadstone, VIC
Slide 34: Ancillary income
Ancillary income Strong existing income streams with a pipeline for growth Ancillary income drivers and growth for 1H FY19 12.0% Ancillary income contribution to NPI (34.2%) (0.9%) Ancillary income (excluding electricity income)1 23.0% 4.8% (25.8%) 4.8% Pipeline well positioned for stronger growth i
Slide 35: Opportunities created from physical and digital asset scale
Opportunities created from physical and digital asset scale Leveraging our assets to strengthen the business, diversify our income sources and create new strategic partnerships Scale and Digital Integrated scope enablement approach Physical assets Digital assets Opportunity Market-leading Portfolio-
Slide 36: Integrated media opportunity
Integrated media opportunity Connecting brands and retailers with customers at point of purchase to drive sales Integrated media platform 500m Annual centre visits 60m Web-page views 12m Unique devices connected 1.2m Social media followers 58% Australia’s population in our catchments 18% Growth in V
Slide 37: Integrated energy strategy generating significant benefits
Integrated energy strategy generating significant benefits Reducing grid reliance and exposure to volatile energy prices whilst providing strong investment returns Solar investment program Vicinity’s energy community $73 million Average solar project returns 12% IRR Solar projects built 8 projects S
Slide 38: Our intelligence platform provides a competitive advantage
Our intelligence platform provides Vicinity with a competitive advantage Data and technology powering the future of retail In-house advanced analytics capability 13 data scientists and engineers Data lake and governance framework WiFi converged network Shopper centricity Right/strong tenant mix Incr
Slide 39: Questions
Questions Grant Kelley CEO AND MANAGING DIRECTOR Vicinity Centres | FY19 interim results | 15 February 2019 DFO Perth, WA
Slide 40: Appendices
41 Sustainability 52 Capital management 42 Destination portfolio 53 Asset summaries Appendices 44 Assets under management 61 Key dates 45 Direct portfolio 62 Contact details and disclaimer 49 Financial results Vicinity Centres | FY19 interim results | 15 February 2019 DFOThe Galeries,NSW Homebush, N
Slide 41: Leading approach to sustainability
Leading approach to sustainability Delivering sustainable long-term value for our communities and securityholders No.1 in Australia No.3 REIT globally 5 Star rating Forbes rated Vicinity No.1 in Australia and 19th globally RobecoSAM rated Vicinity third most sustainable real Chadstone office achieve
Slide 42: Destination portfolio
Destination portfolio Indicative portfolio statistics Destination Total Key metrics portfolio1 portfolio Retail assets 50 62 Average asset value ($m) 516 416 Average centre size (GLA, sqm) 48,919 39,451 Average capitalisation rate (%) 5.20 5.31 Specialty MAT/sqm ($) 11,186 10,746 Specialty occupancy
Slide 43: Destination portfolio: key statistics by centre type
Destination portfolio Key statistics by centre type Destination portfolio1 Chadstone Premium CBD DFOs2 High Potential Number of retail assets 50 1 7 6 36 Gross lettable area (000’s)(sqm) 2,100 215 223 212 1,450 Total value ($m) 14,639 3,150 2,450 1,694 7,345 Portfolio weighting by value (%) 100 22 1
Slide 44: Assets under management
Assets under management ~7,700 tenants across 66 assets under management1 Direct portfolio1 Managed Third party/ Total Wholly-owned Co-owned Total co-owned AUM1 Number of retail assets 33 29 62 4/29 66 Gross lettable area (000’s)(sqm) 970 1,476 2,446 132 2,578 Number of tenants 3,031 4,308 7,339 405
Slide 45: Direct portfolio: additional sales information
Direct portfolio Additional sales information Actual Comparable1 growth Dec-18 Jun-182 MAT Proportion of Comparable MAT growth (%)1 MM and SS4 SS4 MM and SS4 SS4 Dec-18 portfolio (%) Dec-18 Jun-182 Apparel 4.2 2.5 (0.4) (1.1) ($m) By sales By rent (%) (%) Food catering 2.9 3.1 2.6 2.9 Specialty stor
Slide 46: Non-comparable centres for sales reporting
Direct portfolio Non-comparable centres for sales reporting Non-comparable status Centre Dec-18 Jun-18 DFO Perth, WA Post-development Under development Mandurah Forum, WA Post-development Post-development QueensPlaza, QLD Under development Pre-development Roselands, NSW Under developme
Slide 47: Key portfolio tenants
Direct portfolio Key portfolio tenants Top 10 tenants Top 10 tenant groups Number % of Number % of Rank Retailer Retailer type of stores income Rank Retailer of leases income Brands Big W, BWS, Dan Murphy’s, 1 Supermarket 39 3.5 1 83 4.8 Food For Less, Woolworths, Woolworths Liquor, Woolworths Petro
Slide 48: Leasing
Direct portfolio Leasing Leasing spread1 (%) 512 lease transactions completed1 Six months to 12 months to Dec-18 Jun-18 Leasing spread of 4.4% a strong result given fixed 5% annual rental increases Leasing spread – renewals 5.5% 0.6% Leasing spread – replacements 3.0% 0.9% Recent tenant administrati
Slide 49: Financial results
Financial results FFO per security growth of 2.0% on a comparable basis1 Dec-18 Dec-17 Change Change For the six months to ($m) ($m) ($m) (%) Net property income (NPI) 450.0 447.9 2.1 0.5 Partnerships and other income 35.3 35.5 (0.2) (0.6) Total income 485.3 483.4 1.9 0.4 Net corporate overheads 37.
Slide 50: FFO reconciliation to statutory net profit after tax
Financial results FFO reconciliation to statutory net profit after tax Dec-18 Dec-17 For the six months to ($m) ($m) Statutory net profit after tax 235.3 755.9 Property revaluation decrement/(increment) for directly owned properties 71.6 (417.0) Non-distributable loss/(gain) relating to equity accou
Slide 51: Strong balance sheet maintained
Financial results Strong balance sheet maintained Dec-18 Jun-18 Change As at ($m) ($m) ($m) Cash and cash equivalents 57.9 42.1 15.8 Investment properties1 15,355.8 15,892.7 (536.9) Equity accounted investments 694.3 681.1 13.2 Intangible assets 593.0 594.9 (1.9) Other assets 294.6 270.8 23.8 Total
Slide 52: Capital management
Capital management Strong balance sheet maintained Debt statistics summary Hedging profile5,6 4,000 5.0% As at Dec-18 Jun-18 3,500 4.9% Total debt facilities $5.4b $5.5b 3,000 4.8% Drawn debt1 $4.1b $4.4b Hedge rate Notional A$m 2,500 4.7% Undrawn debt $1.3b $1.1b 2,000 4.6% Weighted average interes
Slide 53: Asset summaries: centre statistics
Asset summaries Centre statistics Moving annual Specialty Ownership Occupancy turnover Centre Specialty occupancy Centre type interest GLA rate (MAT) MAT MAT costs1 (%) (sqm) (%) ($m) ($/sqm) ($/sqm) (%) New South Wales Chatswood Chase Sydney2 Major Regional 51 63,623 100.0 n.a. n.a. n.a. n.a. Banks
Slide 54: Asset summaries: centre statistics (continued)
Asset summaries Centre statistics (continued) Moving annual Specialty Ownership Occupancy turnover Centre Specialty occupancy Centre type interest GLA rate (MAT) MAT MAT costs1 (%) (sqm) (%) ($m) ($/sqm) ($/sqm) (%) Queensland QueensPlaza2 City Centre 100 39,153 100.0 n.a. n.a. n.a. n.a. The Myer Ce
Slide 55: Asset summaries: centre statistics (continued)
Asset summaries Centre statistics (continued) Moving annual Specialty Ownership Occupancy turnover Centre Specialty occupancy Centre type interest GLA rate (MAT) MAT MAT costs1 (%) (sqm) (%) ($m) ($/sqm) ($/sqm) (%) Victoria Chadstone Super Regional 50 215,056 99.8 2,134.9 12,489 18,695 17.1 Bayside
Slide 56: Asset summaries: centre statistics (continued)
Asset summaries Centre statistics (continued) Moving annual Specialty Ownership Occupancy turnover Centre Specialty occupancy Centre type interest GLA rate (MAT) MAT MAT costs1 (%) (sqm) (%) ($m) ($/sqm) ($/sqm) (%) Western Australia Galleria2 Major Regional 50 81,499 100.0 n.a. n.a. n.a. n.a. Mandu
Slide 57: Asset summaries: valuations
Asset summaries Valuations Net Value Capitalisation rate Discount rate Ownership revaluation As at As at As at As at Centre type interest movement1,2 31-Dec-181 31-Dec-18 30-Jun-18 Movement 31-Dec-18 (%) ($m) ($m) (%) (%) (%) New South Wales Chatswood Chase Sydney Major Regional 51 (2.9) 586.4 4.75
Slide 58: Asset summaries: valuations (continued)
Asset summaries Valuations (continued) Net Value Capitalisation rate Discount rate Ownership revaluation As at As at As at As at Centre type interest movement1,2 31-Dec-181 31-Dec-18 30-Jun-18 Movement 31-Dec-18 (%) ($m) ($m) (%) (%) (%) Queensland QueensPlaza City Centre 100 (1.0) 787.0 4.75 4.75 -
Slide 59: Asset summaries: valuations (continued)
Asset summaries Valuations (continued) Net Value Capitalisation rate Discount rate Ownership revaluation As at As at As at As at Centre type interest movement1,2 31-Dec-181 31-Dec-18 30-Jun-18 Movement 31-Dec-18 (%) ($m) ($m) (%) (%) (%) Victoria Chadstone Super Regional 50 42.4 3,150.0 3.75 3.75 -
Slide 60: Asset summaries: valuations (continued)
Asset summaries Valuations (continued) Net Value Capitalisation rate Discount rate Ownership revaluation As at As at As at As at Centre type interest movement1,2 31-Dec-181 31-Dec-18 30-Jun-18 Movement 31-Dec-18 (%) ($m) ($m) (%) (%) (%) Western Australia Galleria Major Regional 50 (20.5) 365.0 5.50
Slide 61: Key dates
Key dates Investor calendar Key dates FY19 interim results 15 February 2019 December 2018 distribution payment 4 March 2019 Ex-distribution date for June 2019 distribution 27 June 2019 Record date for June 2019 distribution 28 June 2019 FY19 annual results 14 August 2019 June 2019 distribution payme
Slide 62: 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 Disclaimer This document is a presentation of ge