Dexus Industria Reit · ASX:DXI
Dexus Industria Reit — Merger or Acquisition (December 2020)
42 slides from Dexus Industria Reit's merger presentation, Dec 10, 2020
Slide 1: Acquisitions and Equity Raising
ACQUISITIONS AND EQUITY RAISING 10 DECEMBER 2020 www.apngroup.com.au ASX Code: ADI NOT FOR DISTRIBUTION OR RELEASE 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 Acquisitions 03 Trading update 04 Equity raising Appendices 4 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 5: Executive summary
01 EXECUTIVE SUMMARY 5 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 6: Transaction overview
Transaction overview INDUSTRIAL FOCUSED ACQUISITIONS ENHANCED PORTFOLIO TOTAL PORTFOLIO VALUE INDUSTRIAL EXPOSURE +10% +5% 952 61% FOUR MODERN INDUSTRIAL WAREHOUSES 865 56% $92.1 MILLION | 7.2% PASSING YIELD 3.1 YEAR WALE | UPSIDE POTENTIAL Pre Post 1 Pre Post Acquisitions Acquisitions Acquisitions
Slide 7: Track record of delivering securityholder value
Track record of delivering securityholder value Total securityholder return1: 53% / 13% p.a. | Demonstrated ability to acquire high quality assets at attractive yields Acquisitions and equity raising 13 Ricky Way and 10 Jersey Drive Knoxfield and Kilsyth portfolio 350-356 Cooper St, Epping Butler Bl
Slide 8: Executive summary
Executive summary ▪ APN Industria REIT (“Industria”) has entered into agreements to acquire 3 properties at Adelaide Airport for $29.6 million1 and a property in Stapylton, Queensland for $62.5 million 1. The properties have a passing yield of 7.2% and a blended weighted average lease expiry (“WALE”
Slide 9: Executive summary
Executive summary ▪ The Acquisitions and Placement are approximately 5 – 6% accretive to Funds From Operations (“FFO”) per security on a full year annualised basis ▪ Including the impact of the Acquisitions and Placement, Industria upgrades its previous guidance, subject to current market Financial
Slide 10: Key post transaction metrics
Key post transaction metrics 6.9% 6.0% $618m 32.9% FY21 FFO YIELD1 FY21 DPS YIELD1 MARKET CAP2 PRO FORMA GEARING3 37 5.2 96% $952m ASSETS YEAR WALE4 OCCUPANCY TOTAL ASSETS5 HIGH QUALITY OFFICE AND INDUSTRIAL ASSETS DELIVERING A STRONG INCOME PROFILE COMBINED WITH A CONSERVATIVE BALANCE SHEET PROVIDI
Slide 11: Acquisitions
02 ACQUISITIONS 11 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 12: Butler Boulevard, Adelaide Airport, South Australia
Butler Boulevard, Adelaide Airport, South Australia ▪ Three modern warehouses developed between 2007 Butler Boulevard, Adelaide Airport and 2009, located in the prime industrial and Key metrics 5 18 – 20 20 – 22 Total commercial hub at Adelaide Airport Purchase price1 $9.2m $7.9m $12.5m $29.6m ▪ Lea
Slide 13: Adelaide Airport market
Adelaide Airport market ▪ Established precinct that includes retail, commercial and industrial occupiers: – Major logistics operators include Toll, TNT, FedEx, StarTrack and Australia Post – Higher value uses are also present – including Bunnings, IKEA, ALDI, Clinical Labs and AFL MAX ▪ Area is expe
Slide 14: 16-28 Quarry Road, Stapylton, Queensland
16-28 Quarry Road, Stapylton, Queensland ▪ 40,970 square metres across two warehouses – 16 Key metrics 16-28 Quarry Road, Stapylton Quarry Road (20,391 square metres) and 28 Quarry Road Purchase price1 $62.5m (20,579 square metres) Passing yield 5.94% ▪ 55% leased to Woolworths (Endeavour Drinks), 3
Slide 15: Yatala Enterprise Area
Yatala Enterprise Area ▪ Stapylton is a blue-chip industrial suburb located in the PORT OF BRISBANE Yatala Enterprise Area, ~40 kilometres south of the Brisbane and ~40 kilometres north of the Gold Coast BRISBANE AIRPORT ▪ The area is a value-add manufacturing region with businesses in food and beve
Slide 16: Leveraging APN's skill-set to deliver business plans
Leveraging APN’s skill-set to deliver business plans ▪ Business plans for the Acquisitions are to enhance the Reducing carbon emissions and energy costs income profile through proactive leasing and ESG 700 Solar installations (Kilowatts) initiatives, consistent with APN’s activity and the 600 outcom
Slide 17: Asset management delivery
Asset management delivery 632Kw solar system - 81 Rushdale St, Knoxfield, Victoria New Childcare Facility– Brisbane Technology Park WesTrac expansion Radio Frequency Systems warehouse, 32 - 40 Garden St, Kilsyth 17 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 18: Impact on portfolio metrics
Impact on portfolio metrics 31 Oct 201 Pro forma post Portfolio diversification (by value, post Acquisitions) 30 Jun 20 pre Acquisitions Acquisitions Number of assets 32 33 37 Locations 19% Brisbane Technology Park Portfolio value ($m) 826 865 952 Rhodes Corporate Park 38% Industrial (Westrac) Weigh
Slide 19: Trading update
03 TRADING UPDATE 19 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 20: Trading update
Trading update ▪ Leasing activity remains high, with 24,900 square metres completed in FY21 to date including: – New 7 year lease at South Park Drive agreed across 10,200 square metres – removing the only industrial vacancy in the portfolio – 2,200 square metres at Rhodes and BTP – with sub-400 squa
Slide 21: November 2020 acquisition – 78 Henderson Road, Rowville, Victoria
November 2020 acquisition – 78 Henderson Road, Rowville, Victoria ▪ 10,230 sqm warehouse built in 2008 and leased to CMW Key metrics 78 Henderson Road, Rowville Homewares for a remaining lease term of 3.2 years Purchase price $16.0m ▪ Acquired on a 5.1% passing yield and 5.75% cap rate – providing o
Slide 22: Equity raising
04 EQUITY RAISING 22 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 23: Sources and uses of proceeds
Sources and uses of proceeds Sources of proceeds $m ▪ The Acquisitions will be partially funded by a $35 million fully Placement proceeds 35.0 underwritten Placement Debt facilities 57.7 ▪ The remaining cost of the Acquisitions and associated transaction costs will be funded by drawing on existing a
Slide 24: Equity raising overview
Equity raising overview ▪ Fully underwritten Placement to raise $35 million Structure ▪ Non-underwritten SPP to eligible securityholders in Australia and New Zealand to raise up to $5 million 1 – Eligible securityholders will be invited to apply for up to a maximum of $30,000 of New Securities under
Slide 25: Indicative timetable
Indicative timetable Event Date Record date for SPP Wednesday, 9 December 2020 Announcement of the Acquisitions and Placement Thursday, 10 December 2020 Placement bookbuild Thursday, 10 December 2020 Settlement of New Securities issued under the Placement Tuesday, 15 December 2020 Allotment and norm
Slide 26: The APN Industria REIT opportunity
The APN Industria REIT opportunity Secure and growing income profile Exposure to a $952 million portfolio1 of underpinned by a 5.2 year WALE1 and strongly performing industrial and office assets 96% occupancy1 Attractive FY21 FFO yield of 6.9%2 and Increased market capitalisation FY21 distribution y
Slide 27: Appendix
APPENDIX 27 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 28: Appendix A: Pro forma balance sheet
Appendix A Pro forma balance sheet 28 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 29: Pro forma balance sheet
Pro forma balance sheet Pro forma Pro forma post 30 Jun 20 Rowville acquisition, pre Acquisitions Acquisitions and Acquisitions and (Audited) revaluations and BAU1 and Placement Placement2 Placement2 Cash 4.9 (1.0) 3.9 3.9 Investment properties 826.5 38.2 864.7 87.6 952.3 Other assets 21.3 2.5 23.8
Slide 30: Appendix B: Key risks
Appendix B Key risks 30 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 31: 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 32: Key risks
Key risks Re-leasing, market rent reviews and vacancy risk The portfolio’s leases come up for renewal on a periodic basis, and there is a risk that Industria may not be able to negotiate suitable lease renewals with existing tenants, maintain existing lease terms, or replace outgoing tenants with ne
Slide 33: Key risks
Key risks Interest rate risk Adverse fluctuations in interest rates, to the extent that they are not hedged, may impact Industria'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 instrument
Slide 34: Key risks
Key risks Environmental risk Certain asset classes to which Industria is exposed, in particular industrial assets, typically have a higher rate of environmental contamination than other commercial property asset classes. Industria is not aware of any environmental contamination at any of its propert
Slide 35: Key risks
Key risks Investor preferences The demand for property and listed property securities may change as investor preferences for particular sectors and asset classes change. The demand for property as an asset class may change over time and may be influenced by general economic factors such as interest
Slide 36: Key risks
Key risks Accounting standards and impairment Industria prepares its general purpose financial statements in accordance with IFRS and with the Corporations Act. Australian Accounting Standards are not within the control of Industria or its boards and are subject to amendment from time to time, and a
Slide 37: Key risks
Key risks Underwriting risk (continued) h) Industria or a Material Subsidiary (defined as any one of Industria’s subsidiaries or sub trusts which represents 5% or more of the consolidated assets or earnings of the Group) becomes insolvent or there is an act or omission which may result in Industria
Slide 38: Key risks
Key risks Underwriting risk (continued) u) any adverse change or disruption to the existing financial markets, political or economic conditions of Australia, Hong Kong, Singapore, the United States of America, the United Kingdom or the international financial markets or any change in national or int
Slide 39: 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 40: Appendix C: Foreign selling restrictions
Appendix C Foreign selling restrictions 40 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 41: 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 42: Contact
Contact Alex Abell Fund Manager – APN Industria REIT Ph: (03) 8656 1070 Mob: 0466 775 112 aabell@apngroup.com.au ASX Code: ADI Follow us… @apngroup APN Property Group Level 30,101 Collins Street, APN Property Group Limited Melbourne, Vic 3000 apnpropertygroup apngroup.com.au http://blog.apngroup.c
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