Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — FY2024 Earnings Presentation
31 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 12, 2024
Slide 1: Dexus Convenience Retail REIT ASX release: 2024 Annual results presentation
Dexus Convenience Retail REIT (ASX:DXC) ASX release 12 August 2024 2024 Annual results presentation and property synopsis Dexus Convenience Retail REIT (ASX:DXC) releases its 2024 Annual results presentation. An investor conference call will be webcast today at 10.00am on www.dexus.com/investor-cent
Slide 2: Full year results
Dexus Asset Management Limited ACN 080 674 479 AFSL 237 500 as responsible entity for Dexus Convenience Retail REIT Full year results 12 August 2024 473 North East Road, Hillcrest SA
Slide 3: Acknowledgement of Country
Acknowledgement of Country Dexus Convenience Retail 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: Chan
Slide 4: Agenda
01 Introduction and highlights Page 4 02 Financial overview Agenda Page 10 03 Summary Page 16 04 Appendices Page 18 3 | 2024 Full Year Results
Slide 5: Introduction and highlights
01 Introduction and highlights 4 | 2024 Full Year Results 14 Commercial Road, Shiedow Park SA
Slide 6: DXC investment proposition
DXC investment proposition Providing investors with exposure to defensive income with embedded growth Generate defensive income Prudent capital structure Active portfolio management Aligned manager with deep real asset capability − High occupancy and long WALE − Continuing to manage gearing − Contin
Slide 7: FY24 highlights
FY24 highlights Continued income resilience supported by active capital management Delivered 172 New England Highway, − FFO & distributions of 21.0 cents per security, at the upper end of the 20.8 – 21.1 cents Rutherford NSW upper end of guidance range guidance range − Gearing of 32.9% around the mi
Slide 8: Secure and defensive income with embedded growth
Secure and defensive income with embedded growth High-quality portfolio Income resilience Embedded growth Weighted to metro and highway sites No significant lease expiries until 2030+ Attractive property rental increases per annum (% by value) (% by income) (% by income) 89% 15% Fixed review (c. 3.1
Slide 9: Diverse and high-quality tenants committed to network enhancement
Diverse and high-quality tenants committed to network enhancement Top tenants continue to reinvest in their sites Chevron Viva Energy 7-Eleven Australia BP − Material investment into − Acquired On The Run Group − Acquired by 7-Eleven − Undertaking acquisition of re-branding national network and Redd
Slide 10: Sustainability progress
Sustainability progress DXC initiatives Aligned to Dexus Sustainability Strategy Priority Area DXC future focus Maintained carbon neutral 100% renewable Maximise value creation by supporting position across DXC electricity sourced tenants with their strategies for the controlled and managed for cont
Slide 11: Financial overview
02 Financial overview 10 | 2024 Full Year Results 485 Balfour Street, Southern River SA
Slide 12: FY24 financial result
FY24 financial result FFO and distributions delivered at upper end of guidance range Profit & loss FY24 FY23 Change Property FFO ($m) 45.2 47.0 (3.9)% Lower income from divestments, partly offset by like-for-like income growth of 2.8% Management fees ($m) (4.9) (5.3) (7.7)% Average portfolio value l
Slide 13: Balance sheet and capital management
Balance sheet and capital management Gearing at midpoint of target range, prudent hedging and minimal near-term expiries Key metrics 30 Jun 2024 30 Jun 2023 Gearing1 32.9% 31.8%2 Cost of debt3 4.2% 3.7% Leveraged Dexus Executed $30 million Continued to manage Average maturity of debt 4.2 years 4.2 y
Slide 14: Glass House Mountains fund-through redevelopment
Glass House Mountains fund-through redevelopment Significantly enhancing the convenience retail offering Site Est. project Est. yield on Site Redevelopment of a large dual highway site into two modern service stations area costs cost with an extensive convenience retail and quick service restaurant
Slide 15: Portfolio valuations
Portfolio valuations High income certainty continues to support valuation outcomes Property portfolio valuation summary – 30 Jun 2024 Pace of cap rate expansion slowed (20bps 1H; 10bps 2H) with 66bps total 30 Jun 2024 Cap rate expansion since FY22 Total reval Total reval Cap rate Portfolio Propertie
Slide 16: Transaction market
Transaction market Liquid transaction market allowing for asset price discovery Transactions volumes and average yield Number of transactions (#) Average yield (%) Fuel & convenience property transaction volumes below 140 6.5% historical averages due to interest rate environment, although overall vo
Slide 17: Summary
03 Summary 16 | 2024 Full Year Results Cnr Northcote Street & Main Road, Kurri Kurri NSW
Slide 18: Attractive investment proposition
1180 Beaudesert Road, Acacia Ridge QLD Attractive investment proposition Well placed to generate defensive income with embedded rental growth backed by high-quality tenant covenants Focus on maintaining a prudent capital structure with consideration for DXC’s defensive portfolio attributes Continue
Slide 19: Appendices
04 Appendices 18 | 2024 Full Year Results 303 Glen Osmond Road, Glenuga SA
Slide 20: Network overview
Network overview High-quality portfolio with national presence 100 66 properties specialty retail tenancies Queensland 61% 665,500sqm 2.7m $451m 61 total site area people within 3km 21% Western Australia exposure to total radius1 South QLD motor vehicle $61m 8% 10 fleet daily2 Australia $100m 14% 16
Slide 21: Valuable income producing landbank
Valuable income producing landbank Potential for circa 20 value-add 89% of zoning to high value opportunities over the long term, subject to land uses commercial considerations Book value by zoning (%) Value-add opportunities (#) Majority of value-add opportunities are metro located 9% 4 11% 45% 14%
Slide 22: Tenancy mix over time
Tenancy mix over time Increased tenant diversity and direct exposure to convenience retail tenancies IPO (July 2017) June 2020 June 2024 % of income % of income % of income Fuel operators receive 1% 2% 1% rental income from 2% convenience retail sub-tenants equivalent 4% 3% 12% to c. 11% of DXC’s in
Slide 23: Australian convenience retail sector
Australian convenience retail sector Growth in store sales and shift in consumer preferences towards higher margin sales categories Average convenience retail sales Average convenience gross profit per site per site Australian sector trends $m $m 1.6 Avg growth 3.0% p.a. 0.6 Avg growth 5.6% p.a. Ope
Slide 24: Market dynamics
Market dynamics Solid fuel sales volumes and fuel-reliant vehicle sales Fuel sales volumes grew 4.3% in the last 12 months YTD fuel-reliant sales on track to exceed pre-Covid volumes Sales volumes of petroleum products (megalitres, thousands)1 Australian car sales (m) 60 1.4 1.2 50 1.0 40 0.8 30 0.6
Slide 25: Lease expiry profile
Lease expiry profile Strong income visibility DXC WALE: 8.8 years 23% 15% 12% 11% 9% 6% 5% 5% 4% 2% 2% 2% 2% 1% 1% - FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 FY40+ % expiry by income 24 | 2024 Full Year Results
Slide 26: Transactions
Transactions $23.3 million of divestments settled in FY24 at 2.3% average discount to prior book value Divestments Property type Settlement 656 Bruce Highway, Woree, QLD Metro 18 August 2023 1182 Chapman Road, Glenfield, WA Regional 31 August 2023 323 North East Road, Hampstead Gardens, SA Metro 3 O
Slide 27: Consolidated profit & loss statement
Consolidated profit & loss statement $’000 FY24 FY23 Net property income1 48,350 51,914 Interest income 155 59 Total revenue 48,505 51,973 Management fees (4,920) (5,330) Finance costs (11,123) (11,370) Corporate costs (954) (1,329) Total expenses (16,997) (18,029) Net operating income 31,508 33,944
Slide 28: FFO reconciliation
FFO reconciliation $’000 FY24 FY23 Statutory net profit / (loss) after tax for the period 3,407 (8,380) Adjusted for: Net fair value (gain) / loss on investment properties 23,661 41,283 Net fair value (gain) / loss on derivatives 4,440 1,041 Incentive amortisation and rent straight-line (3,343) (4,6
Slide 29: Consolidated balance sheet
Consolidated balance sheet $’000 30 Jun 2024 30 Jun 2023 Cash and cash equivalents 1,918 5,454 Investment properties 740,680 781,220 Other assets 11,260 16,189 Total assets 753,858 802,863 Borrowings (243,204) (263,420) Provisions (9,113) (9,796) Other liabilities (10,625) (13,264) Total liabilities
Slide 30: 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 Convenience Retail REIT No.1 (ARSN 101 227 614), Convenience Retail REIT No.2 (ARSN 619 527 829) and Convenience Retail RE
Slide 31: Dexus
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