Dexus Industria Reit · ASX:DXI
Dexus Industria Reit — FY2024 Earnings Presentation
43 slides from Dexus Industria Reit's earnings presentation, Aug 14, 2024
Slide 1: Dexus Industria REIT ASX release: 2024 Annual Results presentation
Dexus Industria REIT (ASX:DXI) ASX release 14 August 2024 2024 Annual Results presentation and property synopsis Dexus Industria REIT (DXI) releases its 2024 Annual Results presentation. An investor conference call will be webcast at today at 10.00am on www.dexus.com/investor-centre The property syn
Slide 2: Full year results
Full year results 14 August 2024 Dexus Asset Management Limited ACN 080 674 479, AFSL 237500 Dexus Asset Management Limited | ACN 080 674 479, AFSL 237500 as responsible entity for Industria Trust No. 1, Industria Trust No. 2, Industria Trust No. 3 As responsible entity for Industria Trust No. 1, In
Slide 3: Acknowledgement of Country
Acknowledgement of Country Dexus Industria REIT acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognises their ongoing contribution to land, waters and community. We pay our respects to First Nations Elders past and present. Artwork: The Land and
Slide 4: Agenda
Agenda 01 02 03 Introduction Financial Portfolio performance and highlights overview and market dynamics Page 4 Page 10 Page 15 04 05 Summary Appendices Page 22 Page 24 3 | 2024 Full Year Results
Slide 5: Introduction and highlights
01 Introduction and highlights 4 | 2024 Full Year Results 1 West Park Drive, Derrimut VIC
Slide 6: DXI investment proposition
DXI investment proposition To generate strong risk-adjusted returns for investors seeking listed industrial real estate exposure in Australia Delivering organic income Conservatively managing Active portfolio management Aligned manager with deep growth the balance sheet real asset capability - Well-
Slide 7: FY24 highlights
FY24 highlights Delivered upgraded guidance, strong rental growth and retained balance sheet flexibility Delivered − FFO of 17.4 cents per security, up 1.7% on the prior year and in line with guidance which ASCEND Industrial Estate at upgraded was upgraded during the year (17.1 cents initial guidanc
Slide 8: Delivering resilient income growth with development upside
Delivering resilient income growth with development upside Property Embedded growth Income resilience Track record of leasing success Fixed reviews with strong inflation protection Stable earnings with potential development upside (sqm)1 (% by income) (% by income) ~3% 150 30% Sqm (‘000) % Portfolio
Slide 9: Diverse and high-quality tenant base
Diverse and high-quality tenant base Diversified tenant base across range of sectors Top 10 tenants account for 41% of portfolio income (% of DXI income) (% of DXI income) 10.2 years remaining on 16% WesTrac lease 2 Heads of agreement signed with global 11% 5% manufacturer at 2 Maker Place, Truganin
Slide 10: Sustainability progress
Sustainability progress Carbon neutral status maintained for controlled building portfolio DXI initiatives Aligned to Dexus Sustainability Strategy Priority Area DXI future focus Maintained carbon neutral 100% renewable position across DXI controlled electricity sourced and managed operations for fo
Slide 11: Financial overview
02 Financial overview 10 | 2024 Full Year Results 140 Sharps Road, Tullamarine VIC
Slide 12: FY24 financial result
FY24 financial result Delivered FFO in line with upgraded guidance Profit & loss FY24 FY23 Change Impacted by divestments, partly offset by portfolio like-for-like growth of 7.8%3 Property FFO ($m) 81.1 83.4 (2.7)% supported by 4.4% average rent reviews and higher occupancy Lower average portfolio v
Slide 13: Balance sheet and capital management
Balance sheet and capital management Active approach to enhance flexibility and optimise overall debt costs Proactively strengthening Active capital Key metrics1 30 Jun 2024 30 Jun 2023 the balance sheet management approach - Proceeds from strategic divestments - Look-through gearing of 27.3%, below
Slide 14: Active capital recycling
Active capital recycling Preserving balance sheet strength and enhancing underlying portfolio quality Divestments since FY22 Capital redeployment Future pipeline remaining development total divestments look-through gearing, below $295m across five assets 27.3% 30-40% target range c.$163m pipeline sp
Slide 15: Portfolio valuation movements
Portfolio valuation movements Asset valuations supported by continued rental growth Property portfolio valuation summary – 30 Jun 20241 30 Jun 2024 Revaluation Cap rate Revaluation Cap rate Portfolio book value change 12 month mvmt change (%) (%) 100% of portfolio independently valued as at ($m) ($m
Slide 16: Property performance and market dynamics
03 Property performance and market dynamics 15 | 2024 Full Year Results Viridian, ASCEND Industrial Estate at Jandakot Airport, Perth WA
Slide 17: Industrial performance
Industrial performance High-quality portfolio generating strong organic growth Embedded rental growth - Average 4.5% rent reviews - 6.3%1 like-for-like income growth $1.2bn 5.80% 99.5% 6.4 year 72,100sqm3 - 28.3% 2H re-leasing spreads (FY24: 15.7%) book value WACR occupancy WALE leased across - Main
Slide 18: ASCEND Industrial Estate at Jandakot Airport performance
ASCEND Industrial Estate at Jandakot Airport performance Continued solid operating performance Amazon, ASCEND Industrial Estate Stabilised Developments General aviation airport and at Jandakot Airport, Perth WA portfolio infrastructure operations - 4.0%1 like-for-like income - Targeting 6.25%+ yield
Slide 19: Active asset management
Active asset management Driving long-term value creation 2 Maker Place, 10 Orion Road, Truganina VIC Jandakot WA - Negotiated early tenant - Achieved 43% re-leasing departure with asset significantly spread with no downtime under-rented - Leased 15% ahead of - Heads agreed with global valuation rent
Slide 20: Developments
Developments Disciplined approach to activating development pipeline Total pipeline of $250 million across 306,900sqm expected to be Marley Spoon, ASCEND Industrial Estate at Jandakot Airport, Perth WA completed over the next five years1,2 Remaining spend of $23 million on committed projects; and ci
Slide 21: Industrial market outlook
Industrial market outlook High land and construction costs limiting supply while demand continues to grow Population growth expected to lead to structurally higher demand 2024 uncommitted supply remains below historical take-up Millions ‘000 sqm 5.0 › Anticipate additional 2.3m-2.6m sqm 1,000 requir
Slide 22: Brisbane Technology Park performance
Brisbane Technology Park performance Record occupancy achieved +12.4ppts Strong leasing outcomes on FY23 - 11,000sqm leased equivalent to 36% of total area: • 1,900sqm of leasing to technology and life sciences tenants $159m 7.37% 98.1% 3.6 year 16.0%2 • Average term of 3.6 years on new leases book
Slide 23: Summary
04 Summary 22 | 2024 Full Year Results 140 Sharps Road, Tullamarine VIC
Slide 24: Attractive investment proposition
Amazon, ASCEND Industrial Estate at Jandakot Airport, Perth WA Attractive investment proposition Well placed to generate organic income growth from attractive mix of fixed and CPI-linked rental escalators, with minimal near-term expiries providing high income visibility Continue to retain balance sh
Slide 25: Appendices
05 Appendices 24 | 2024 Full Year Results 1-3 Westrac Drive, Tomago NSW
Slide 26: Geographical presence
Geographical presence National portfolio at scale New South Wales Western Australia Delivering new developments in core Perth’s leading master-planned Queensland industrial markets with low vacancy estate with occupiers including $222m 16% 14 Leading investment at Westrac Amazon and Marley Spoon Wes
Slide 27: Market dynamics
Market dynamics Rent growth beginning to taper as vacancy normalises, demand remains broad-based Lack of available space has led to growth in rents Industrial demand remains relatively broad-based Outer West Sydney West Melbourne South Brisbane South Perth National take-up by tenant type from 2021-2
Slide 28: Lease expiry profile
7 Clunies Ross Court, Brisbane Technology Park QLD Lease expiry profile Industrial – 89% of portfolio value (% by total DXI income) 16.1% 11.0% 6.9% 1.2% 5.0% FY25 FY26 FY27 FY28 FY29 Brisbane Technology Park – 11% of portfolio value (% by total DXI income) 4.7% 3.7% 1.9% 2.3% 1.3% FY25 FY26 FY27 FY
Slide 29: Portfolio tenancy mix
Portfolio tenancy mix Tenant type (% by income) 23% 30% 8% 3% 18% 18% 1 West Park Drive, Derrimut VIC ASX listed Listed multinational National Multinational Government Private and other 28 | 2024 Full Year Results
Slide 30: ASCEND Industrial Estate at Jandakot Airport
ASCEND Industrial Estate at Jandakot Airport Stabilised Developments General aviation airport and Kmart, ASCEND Industrial Estate at Jandakot Airport, Perth WA portfolio infrastructure operations - 98.5% occupancy (by income) - $149 million estimated spend - 18.3 year WALE (by income) - 5.6 year WAL
Slide 31: ASCEND at Jandakot
ASCEND at Jandakot Key metrics1 55 assets $431m external valuation on investment property - $361m stabilised - $70m development $82m general aviation airport & infrastructure operations value2 289,000sqm development pipeline c. $204m development pipeline value c. $149m development spend remaining 6.
Slide 32: ASCEND Industrial Estate at Jandakot Airport proposition
ASCEND Industrial Estate at Jandakot Airport proposition Strategically located with convenient access to key regional infrastructure Located adjacent to arterial roads with good access to public transport › Access to Roe Highway and Kwinana Freeway, as well as public transport for the workforce – wi
Slide 33: Developments
Developments Building area Building area Development Est. project Remaining Est. yield on Project (sqm at DXI Est. final completion (sqm at 100%) status costs1 spend1 cost2 ownership) Completed3 Marley Spoon – Jul 23 ASCEND at Jandakot, WA 43,700 14,600 Completed $31m - 5.3%4 Caddy – Jul 23 8 Centur
Slide 34: Divestments
Divestments Asset # assets Price ($m) Settlement 5 Butler Boulevard, Adelaide Airport, SA 3 & 4 Forbes Close, Knoxfield VIC 2 $22.9 Aug-23 16-28 Quarry Road, Stapylton QLD 1 $66.9 Oct-23 57-67 Mark Anthony Drive, South 1 $13.5 Jan-24 Dandenong VIC 32-40 Garden Street, Kilsyth VIC 1 $31.51 Jan-24 1.
Slide 35: Independent valuations
Independent valuations Occupancy by Occupancy by Reval gain/(loss) Cap rate mvmt Property Book value ($m) Cap rate (%) income (%) area (%) ($m) (bps) 34 Australis Drive, Derrimut VIC 100% 100% $47.5 $(1.0) 6.00% 113 bps 80-96 South Park Drive, Dandenong South VIC 100% 100% $44.6 $6.7 5.50% - 1 West
Slide 36: Independent valuations (cont’d)
Independent valuations (cont’d) Occupancy by Occupancy by Reval gain/(loss) Cap rate mvmt Property Book value ($m) Cap rate (%) income (%) area (%) ($m) (bps) ASCEND at Jandakot – stabilised portfolio 98.5% 99.2% $361.4 $(13.8) 5.50% 50 bps ASCEND at Jandakot – development n.a. n.a. $69.6 $0.6 n.a.
Slide 37: Profit & loss and FFO reconciliation
Profit & loss and FFO reconciliation Direct investments (100% owned) Joint ventures1 Total portfolio $’000 FY24 FY23 FY24 FY23 FY24 FY23 Property revenue 71,718 77,623 30,341 27,157 102,059 104,780 Property expenses (13,641) (14,993) (7,282) (6,363) (20,923) (21,356) Property FFO 58,077 62,630 23,05
Slide 38: Interest reconciliation
Interest reconciliation $’000 FY24 FY23 Total statutory finance costs 12,483 16,469 Less: Debt modification (12) (696) Add: Finance costs attributable to investments accounted for using the equity method 4,584 3,897 Less: Interest expense on lease liability (1,394) (1,343) Finance costs for FFO1 15,
Slide 39: Balance sheet and gearing
Balance sheet and gearing Look-through balance sheet Gearing $’000 30 Jun 2024 30 Jun 2023 $’000 30 Jun 2024 30 Jun 2023 Cash and cash equivalents 12,919 17,143 Balance sheet gearing Investment properties1 1,384,779 1,557,819 Drawn debt 266,000 379,250 2 Finance lease receivable 64,213 60,098 Total
Slide 40: Book value reconciliation
Book value reconciliation Direct investments (100% owned) Joint ventures1 Total portfolio $’000 30 Jun 2024 30 Jun 2023 30 Jun 2024 30 Jun 2023 30 Jun 2024 30 Jun 2023 Investment properties 924,501 1,016,000 - - 924,501 1,016,000 Investments accounted for using the equity method - - 460,278 452,044
Slide 41: Interest rate hedging profile
Interest rate hedging profile Balance sheet Look-through $500m 5.0% $500m 5.0% 68% 47% 23% 11% $450m $450m 3.9% 4.0% 4.0% $400m 3.8% 4.0% $400m 4.0% 3.6% $350m $350m 299 $300m 2.6% 3.0% $300m 2.7% 3.0% $250m $250m 2.2% 216 206 $200m 2.0% $200m 2.0% $150m $150m 123 95 102 $100m 1.0% $100m 1.0% 50 50
Slide 42: Important information
Important information This presentation (“Material”) has been prepared by Dexus Asset Management Limited (ACN 080 674 479, AFSL No. 237500) ("DXAM") as the responsible entity of Industria Trust No. 1 (ARSN 125 862 875), Industria Trust No. 2 (ARSN 125 862 491), Industria Trust No. 3 (ARSN 166 150 93
Slide 43: dexus
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