Dexus Industria Reit · ASX:DXI
Dexus Industria Reit — Merger or Acquisition (November 2019)
33 slides from Dexus Industria Reit's merger presentation, Nov 20, 2019
Slide 1: Asset Acquisition and Equity Raising
ASSET ACQUISITION AND EQUITY RAISING 20 NOVEMBER 2019 www.apngroup.com.au ASX Code: ADI NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer Important notice and disclaimer preparing the pro forma financial information, certain adjustments were made to APN Industria REIT’s reviewed balance IMPORTANT: You are advised to read the following carefully before making any use of the information contained in this
Slide 3: Important notice and disclaimer
Important notice and disclaimer Forward-looking statements securities laws of any State or other jurisdiction of the United States. The New Securities to be offered and sold in the The presentation includes certain forward-looking statements. Forward-looking statements can generally be identified by
Slide 4: Contents
Contents 01 Executive summary 02 Acquisition 03 Trading update 04 Equity raising Appendices NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 4
Slide 5: Executive summary
01 EXECUTIVE SUMMARY NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 5
Slide 6: Executive summary
Executive summary APN Industria REIT (“Industria”) has entered into a heads of agreement to acquire 350 – 356 Cooper Street, Epping, Victoria, for $28.8 million (excluding transaction costs), reflecting an acquisition capitalisation rate of 6.0% (the “Acquisition”) The Acquisition is: – A strate
Slide 7: Key post transaction metrics
Key post transaction metrics 6.9% 6.1% $798m 32% FY20 FFO YIELD1 FY20 DPS YIELD1 TOTAL ASSETS PRO FORMA GEARING2 31 5.8 97% $566m ASSETS YEAR WALE3 OCCUPANCY MARKET CAP4 HIGH QUALITY OFFICE AND INDUSTRIAL ASSETS DELIVERING A STRONG INCOME PROFILE COMBINED WITH A CONSERVATIVE BALANCE SHEET PROVIDING
Slide 8: Acquisition
02 ACQUISITION NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 8
Slide 9: Acquisition overview
Acquisition overview Prime Commercial Zone 2 site – providing flexibility for multiple future uses including commercial, industrial, bulky goods and retail 2.3 hectares across two adjoining sites, occupied by Australia’s leading Ford service and sales dealership, and Volkswagen Leased to Autop
Slide 10: Exposure to major growth precinct north of Melbourne
Exposure to major growth precinct north of Melbourne Outlines indicative only The property is located opposite Melbourne Markets, is ~20km north of North the Melbourne CBD, and benefits from ~6 million vehicles per annum passing the site Epping is in the rapidly growing population growth corrido
Slide 11: Impact on portfolio metrics
Impact on portfolio metrics Post Portfolio diversification (post Acquisition)4 30 Jun 19 31 Oct 193 Acquisition Number of assets 28 30 31 21% Locations 29% Brisbane Technology Park Portfolio value ($m) 739 769 798 Rhodes Corporate Park Industrial (Westrac) 46% Industrial (ex-Westrac) WACR1 6.5% 6.5%
Slide 12: Trading update
03 TRADING UPDATE NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 12
Slide 13: Trading update
Trading update Active management generating outcomes Leasing results continue to be delivered: – Over 20 deals and over 3,900 square metres completed at BTP – Agreement for lease signed for 2,500 square metre childcare facility (under construction) at BTP, further improving amenity within the prec
Slide 14: Recent acquisitions overview
Recent acquisitions overview 60 Grindle Road, Wacol, QLD (Oct 19) 10 Brandl Street, Eight Mile Plains, QLD (Oct 19) 9,000 square metre warehouse occupied by Two-level 3,060 square metre office Purchase price $18.3m Purchase price $10.0m Vesco Foods, a leading manufacturer of ready- building situ
Slide 15: Equity raising
04 EQUITY RAISING NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 15
Slide 16: Sources and uses of proceeds
Sources and uses of proceeds Sources of proceeds $m The Acquisition will be partly funded by a $27 million fully underwritten Placement Placement proceeds 27.0 The remaining Acquisition and associated transaction costs will be funded by Draw on bank debt facilities 1.8 drawing on existing bank d
Slide 17: Equity raising overview
Equity raising overview Fully underwritten Placement to raise $27 million Non-underwritten SPP to eligible securityholders in Australia and New Zealand to raise up to $5 million1 Structure – Eligible securityholders will be invited to apply for up to a maximum of $30,000 of New Securities under
Slide 18: Indicative timetable
Indicative timetable Event Date (2019) Record date for SPP 7.00 pm, Tuesday, 19 November Announcement of the Acquisition and Placement Wednesday, 20 November Placement bookbuild Wednesday, 20 November Settlement of New Securities issued under the Placement Monday, 25 November Allotment and normal tr
Slide 19: The APN Industria REIT opportunity
The APN Industria REIT opportunity Exposure to a $798 million portfolio1 of Secure and growing income profile strongly performing office underpinned by a 5.8 year WALE2 and and industrial assets 97% occupancy1 Attractive FY20 FFO yield of 6.9%2 and Increased market capitalisation FY20 distribution y
Slide 20: Appendices
APPENDICES NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 20
Slide 21: Appendix A: Pro forma balance sheet
Appendix A Pro forma balance sheet NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 21
Slide 22: Pro forma balance sheet
Pro forma balance sheet Acquisitions Acquisition and Pro forma as at 30 Jun 19 (Audited) and BAU1 31 Oct 19 Placement2 31 Oct 192 Cash 2.4 0.8 3.2 (2.5) 0.8 Investment properties 739.4 29.4 768.7 29.1 797.8 Other assets 1.8 (0.1) 1.7 1.7 Total assets 743.6 30.0 773.6 26.6 800.3 Debt 225.0 253.6 1.8
Slide 23: Appendix B: Key risks
Appendix B Key risks NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 23
Slide 24: Key risks
Key risks This section discusses some of the risks associated with an investment in Industria. Industria'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 Securitie
Slide 25: Key risks
Key risks Property valuation risk The value of the properties held by Industria may be impacted by a number of factors, including a number of factors outside the control of Industria, affecting the property market generally, as well as Industria in particular including, but not limited to: changes
Slide 26: Key risks
Key risks Banking covenants Industria has various covenants in relation to its banking facilities, including interest cover and leverage ratio requirements. Unforeseen factors such as falls in asset values or the inability of Industria to extend current leases could lead to a breach in debt covenant
Slide 27: Key risks
Key risks Tenant concentration Industria relies on key tenants to generate the majority of its revenue. If a key tenant is affected by financial difficulties that tenant may default on its rental or other contractual obligations which may result in loss of rental income or losses to the value of Ind
Slide 28: Key risks
Key risks Dilution Securityholders will be diluted by the issue of New Securities under the Placement. Eligible securityholders should note that if they do not participate in the SPP, then their percentage securityholding in Industria will be diluted to a greater extent than would otherwise be the c
Slide 29: Key risks
Key risks Other acquisition risks Other risks associated with the Acquisition include delays to completion or an inability to complete (including due to failure to sign a binding contract for the Acquisition). If this occurs, Industria will need to consider alternative uses for, or ways to return th
Slide 30: Key risks
Key risks Compliance risk The Responsible Entity is subject to strict regulatory and compliance arrangements under the Corporations Act and ASIC policy. If the Responsible Entity breaches the Corporations Act or the terms of its Australian Financial Services Licence, ASIC may take action to suspend
Slide 31: Appendix C: Foreign selling restrictions
Appendix C Foreign selling restrictions NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES 31
Slide 32: Foreign selling restrictions
Foreign selling restrictions This document does not constitute an offer of new stapled securities ("New Securities") of Industria in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Securities may not be offered or sold, i
Slide 33: Contact
Contact Alex Abell Fund Manager – APN Industria REIT Ph: (03) 8656 1070 aabell@apngroup.com.au ASX Code: ADI Follow us… @apngroup APN Property Group Limited Level 30,101 Collins Street, APN Property Group Limited Melbourne, Vic 3000 apnpropertygroup apngroup.com.au http://blog.apngroup.com.au apnp
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