Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — APN Property Group — FY2020 Earnings Presentation
33 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 20, 2020
Slide 1: FY2020 Results Presentation
FY2020 RESULTS PRESENTATION 20 AUGUST 2020 www.apngroup.com.au ASX Code: APD
Slide 2: APN Property Group Overview
APN Property Group Overview Specialist real estate investment manager – ‘Property for income’ focus As at 30 June 2020 APN PROPERTY GROUP FUNDS UNDER MANAGEMENT CO-INVESTMENTS & CASH $2,665 MILLION2 $131 MILLION APN CONVENIENCE REAL ESTATE APN INDUSTRIA REIT RETAIL REIT DIRECT PROPERTY CASH CO-INVES
Slide 3: FY2020 financial highlights
FY2020 financial highlights Resilient performance through COVID19 and well positioned to grow the platform $10.4 million ▲12% on pcp, 3.12 cents per security (cps) OPERATING EARNINGS1 99% operating income from recurring sources Statutory NPAT: $4.2 million (1.02 cps) $2.7 billion ▼$265 million 9.0%
Slide 4: COVID19 update
COVID19 update Operational Fund Performance FUM and Revenue Acquisitions / Growth ▪ Limited impact on business ▪ Limited exposure to most impacted ▪ Securities FUM affected by negative ▪ Largely unaffected operations sectors (discretionary retail, hotels) market movements and volatility ▪ New securi
Slide 5: Track record of sustainable income and securityholder returns
Track record of sustainable income and securityholder returns Recurring Income Total Securityholder Return $4,000 $3,000 $2,281 $2,000 $25.0m $26.2m $26.1m $22.1m $17.4m $13.9m $1,000 $0 FY15 FY16 FY17 FY18 FY19 FY20 Jun 15 Jun 16 Jun 17 Jun 18 Jun 19 Jun 20 Funds Under Management Distributions 10.0
Slide 6: Strong operating earnings growth
Strong operating earnings growth Income Statement ($000s) FY2020 FY2019 Change Reflects higher FUM due to acquisitions in APN Industria REIT and APN Convenience Retail REIT, offset by lower Funds management fees 15,279 15,038 ▲ 2% FUM in real estate securities due to market movements Performance & t
Slide 7: Well capitalised for continuing growth
Well capitalised for continuing growth Balance Sheet ($000s) June 2020 June 2019 Change Comprises: Cash1 16,299 15,672 ▲ 4% ▪ $67.8 million in ADI at $2.36 per security (NTA at $2.82, weighted Co-investments 114,507 127,472 ▼ 10% average cap rate of 6.4%) ▪ $36.3 million in AQR at $3.40 per security
Slide 8: Real Estate Securities
Real Estate Securities Continued strong income focused returns as a result of our active management approach ▪ Benchmark unaware, income/risk focus: APN AREIT Fund distribution yield Division FUM growth of 6.5% pa1 (as at 30 Jun 2020) paid monthly ▪ Listed REITs significantly impacted by COVID-19 in
Slide 9: APN AREIT Fund consistently delivering Property for Income
APN AREIT Fund consistently delivering “Property for Income” Regular monthly cash distributions remain sought after in low rate, low growth environment Consistently delivering distributions in excess of the AREIT index1 11.9% APN AREIT Fund Yield² ASX 200 AREIT Div Yield³ 8.9% 8.8% 9.3% Aust. 10 yr
Slide 10: APN Asian REIT Fund
APN Asian REIT Fund Gaining momentum and increasing scale supported by strong fundamentals ▪ Delivers APN’s “Property for Income” investment process and philosophy by investing into key Asian commercial property markets – Singapore, Japan and Hong Kong ▪ Underpinned by multi-generation growth potent
Slide 11: New Fund: APN Global REIT Income Fund
New Fund: APN Global REIT Income Fund Leveraging APN’s experience to extend APN’s real estate securities product set Global commercial property: reliable and growing source Defensive: real assets investment underpins value and 1 3 of income provides inflation hedge ▪ Contracted rent: relatively low
Slide 12: APN Industria REIT (ASX: ADI)
APN Industria REIT (ASX: ADI) Strong and active period for the portfolio, focused on providing long term sustainable income ▪ Attractively positioned office and industrial portfolio delivering strong and growing distributions ▪ FY2020 earnings (FFO) increased 1.6% to 19.3 cents per security ▪ Low ge
Slide 13: APN Industria REIT (continued)
APN Industria REIT (continued) High quality, well leased industrial and business portfolio generating consistent and growing income 21% 29% WesTrac Newcastle Industrial Melbourne, Located adjacent to Adelaide and Brisbane M1 motorway Key industrial precincts 44% 56% ~$222 million valuation ~$243 mil
Slide 14: Resilient income profile from high quality tenants
APN Industria REIT (cont.) – resilient income profile from high quality tenants Tenant composition by income Tenants across the portfolio 95% 5% 5% ASX Listed 7% National Listed Multinational 10% Government 55% Multinational Private 18% Tenant composition by industry – office assets Tenant compositi
Slide 15: APN Industria REIT (cont.)
APN Industria REIT (cont.) Active management continues to deliver strong occupancy, income growth and reduce vacancy risk High occupancy Generating organic growth Cumulative leasing outcomes Rent review profile Square metres 97% 84% 126,500 96% 96%1 95% 95% 97,600 92% 83,900 70,300 45,900 9% 18,800
Slide 16: APN Convenience Retail REIT (ASX: AQR)
APN Convenience Retail REIT (ASX: AQR) Long lease term, non-discretionary retail focus delivering reliable and growing income ▪ FY2020 earnings (FFO) of $19.3m up 13.3% ▪ NTA per security increased by 31 cents to $3.27, up 10.5% ▪ Raised $101.6 million of new equity and made $90.2 million of acquisi
Slide 17: APN Convenience Retail REIT (cont.)
APN Convenience Retail REIT (cont.) Significant growth and portfolio improvement in FY2020 FY2020 saw over $125 million of new acquisitions and developments committed and 5 new high quality tenants added to the portfolio1 $38.0m $22.4m $3.6m $128.2m $30.3m $67.8m $34.0m Acquisition of Acquisition of
Slide 18: APN Convenience Retail REIT (cont.)
APN Convenience Retail REIT (cont.) Attractive portfolio metrics and rental growth profile Portfolio composition Rent review type by income 15.3% CPI 20% WARR 19.5% 2.8%1 65.1% Fixed 80% Metropolitan Highway Regional 1. Weighted average rent review assuming CPI of 1.8% Lease expiry profile (by incom
Slide 19: Direct Property – Unlisted Funds
Direct Property – Unlisted Funds Strong performance across leasing and capital transactions active over the year Fund Key achievements and performance FUM – Unlisted Direct Property Funds ▪ Exchanged contracts to sell Coburg North Shopping Centre for $21.3m APN Coburg North ▪ ~4% premium to book val
Slide 20: Direct property platform with scale and multiple capabilities
Direct property platform with scale and multiple capabilities APN’s position remains well placed to continue to deliver strong and growing income returns Attractive commercial property sectors Weighted towards East Coast capital city locations $415m $491m $465m Convenience retail Industrial Office $
Slide 21: Direct Property origination – active and disciplined in FY2020
Direct Property origination – active and disciplined in FY2020 APN’s funds acquired approximately 11% of assets we bid on during the year 72 properties reviewed $3.8 billion $1.7 billion $186 million and conducted value of property value of offers transactions preliminary due opportunities assessed
Slide 22: Outlook – APN remains well positioned for growth
Outlook – APN remains well positioned for growth External growth drivers Internal growth drivers Property Merger and Investment track Alignment and Strong ongoing Attractive product acquisition acquisition record and balance sheet investor demand set opportunities opportunities expertise capacity ▪
Slide 23: Distributions and FY2021 guidance
Distributions and FY2021 guidance Total FY2020 distributions in line with prior guidance; FY2021 guidance of 2.50 – 2.80 cps1 Interim Final FY2020 FY2021 Record date: 26 Feb 2020 Record date: 30 Jun 2020 distributions distribution guidance Payment date: 13 Mar 2020 Payment date: 31 Jul 2020 Total Di
Slide 24: Implied Funds Management platform valuation
Implied Funds Management platform valuation1 Implied value of funds management Implied value of funds management platform of $58.2m (2.2% of FUM) platform of $46.2m (1.7% of FUM) 60 Total co-investments of $114.5m 50 14.4 Cents per security 18.2 40 3.2 5.1 (5.1) 30 11.3 54.0 20 39.6 35.8 10 21.2 0 2
Slide 25: Appendices
PPENDICES APN | Property Group
Slide 26: Overview, security price and key information
Overview Summary Security Price and Volume ▪ Listed on ASX (Code: APD) $0.80 Volume (RHS) Price (LHS) 20.0k Volume (daily shares traded) ▪ Melbourne-based specialist real estate investment manager $0.70 15.0k ▪ Established 1996, listed 2005 Security price $0.60 ▪ $2.7 billion in Funds under Manageme
Slide 27: Funds Under Management summary
Funds Under Management summary Fee Basis APN Co-investment FUM Funds Sector Investors $m Manage- Perfor- Other $m % ment mance APN AREIT Strategy Property Securities Retail & Institutional 1,071 ✓ − − APN Property for Income Fund Property Securities Retail & Institutional 83 ✓ − − APN Property for I
Slide 28: Profit to Operating Cash Flow reconciliation
Profit to Operating Cash Flow reconciliation $’000s 20,000 18,000 12,971 9 16,000 14,000 12,000 10,000 857 8,333 8,000 (9,702) 6,000 4,198 4,000 2,000 0 Statutory profit Mark to market Non-cash Change in Other net working capital Operating Cash after tax revaluations expense items deferred tax asset
Slide 29: Operating Earnings After Tax Reconciliation
Operating Earnings After Tax Reconciliation $‘000s 12,000 1,423 10,350 10,000 420 (89) (73) (640) 241 (102) 9,232 (62) 8,000 6,000 4,000 2,000 - Operating Increase in funds Decrease in Increase in Decrease in Decrease in co- Decrease in rent Increase in Decrease in tax Operating earnings after tax m
Slide 30: Debt facility summary
Debt facility summary Facility Limit $9.0 million Drawn at 30 June 2020 $9.0 million Loan to Value Ratio (LVR) 15.1% LVR Covenant < 35.0% Distribution Cover Ratio (DCR) 13.7x DCR Covenant > 2.0x Cost of debt 3.8% pa Expiry September 2021 Security Mortgage over specified assets 30
Slide 31: Important notice
Important notice Disclaimer This investor presentation (Presentation) has been prepared by APN Property Group (ASX:APD) comprising APN Property Group Limited (ACN 109 846 068) and APN RE Limited (ACN 627 612 202, AFSL No. 510685 ) as responsible entity for APD Trust (ARSN 629 330 007), (APN). This P
Slide 32: Important notice
Important notice Third party ratings The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036 for the APN AREIT Fund as at September 2019 and APN Asian REIT Fund as at June 2019. SQM Research is an investment research firm that undertakes research on investment prod
Slide 33: Contact details
Contact details Tim Slattery Joseph De Rango Chief Executive Officer Chief Financial Officer +613 8656 1000 +613 8656 1000 +61400 444 864 +61403 966 574 tim.slattery@apngroup.com.au jderango@apngroup.com.au Follow us… @apngroup APN Property Group Limited APN Property Group apnpropertygroup Level