Slide 1: 1H FY23 Results Presentation
1H FY23 Results Presentation 6 February 2023 Essentially local Page 1
Slide 2: Agenda
1H FY23 Results Presentation Agenda 1. Overview of 1H FY23 Results 2. Financial Performance 3. Operational Performance 4. Growth Opportunities 5. Key Priorities and Outlook 6. Questions 7. Appendices Page 2
Slide 3: 1. Overview of 1H FY23 Results
1H FY23 Results Presentation 1. Overview of 1H FY23 Results Anthony Mellowes Chief Executive Officer Page 3
Slide 4: 1H FY23 Highlights
1H FY23 Results Presentation 1H FY23 Highlights Statutory Distribution Financial net loss after tax FFO per security per security Performance ($95.1m) 8.35 cps 7.50 cps down by 122.0%1 down by 2.6%1 up by 4.2%1 NTA per Average cost Weighted average Capital Gearing security of debt debt maturity Mana
Slide 5: Key Achievements
1H FY23 Results Presentation Key Achievements Solid leasing and sales results driving performance of our core business Optimising Convenience-based shopping centres Progressing well towards Net Zero by FY30 performance is resilient the core • All shopping centres have had LED lighting and • Comparab
Slide 6: 2. Financial Performance
1H FY23 Results Presentation 2. Financial Performance Evan Walsh Chief Financial Officer Page 6
Slide 7: Financial Results
1H FY23 Results Presentation Financial Results For the six months ended 31 December 2022 $m 31 Dec 2022 31 Dec 2021 % Change • FFO has decreased by 0.2% to $94.1m and AFFO has Property income 184.9 177.2 4.3% increased by 5.9% to $85.7m Property expenses (63.1) (58.6) 7.7% − Excluding the impact of
Slide 8: Balance Sheet
1H FY23 Results Presentation Balance Sheet At 31 December 2022 • Assets under management have increased to over $5.0bn, a $m 31 Dec 2022 30 June 2022 % Change 1.7% increase on 30 June 2022 Cash 3.3 8.7 (62.1%) • Investment properties have increased from $4,460.9m to Investment properties 4,486.7 4,4
Slide 9: Property Valuations
1H FY23 Results Presentation Property Valuations At 31 December 2022 Weighted average cap rate % • Independent external valuations were obtained for 20 shopping (excluding Carrara Shopping Centre) centres (out of total portfolio of 96 shopping centres) 30 June 2022 5.44% • The weighted average marke
Slide 10: Debt and Capital Management
1H FY23 Results Presentation Debt and Capital Management At 31 December 2022 • At 31 December 2022, cash and undrawn facilities of $277.3m 31 Dec 2022 30 June 2022 • The Group’s target gearing range is 30-40%. Proforma gearing Facility limit ($m) 1,757.1 1,757.1 decreases to under 30% following the
Slide 11: Debt and Capital Management
1H FY23 Results Presentation Debt and Capital Management Sources of Drawn Debt Gearing 60% ($m) (%) 50% Medium term notes 525.0 40% 541.0 US private placement 30% Bank and syndicated facilities 20% 407.1 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Proforma Gearing % Target range Covenant • Diversified
Slide 12: 3. Operational Performance
1H FY23 Results Presentation 3. Operational Performance Mark Fleming Chief Operating Officer Page 12
Slide 13: Portfolio Overview
1H FY23 Results Presentation Portfolio Overview Weighting towards non-discretionary food, health and retail services At 31 Dec 2022 Number of Number of GLA Site area Occupancy WALE Weighted average shopping Value ($m) specialties (sqm) (sqm) (% GLA) (yrs)6 cap rate (%) centres Sub-regional 13 625 25
Slide 14: Portfolio Occupancy
1H FY23 Results Presentation Portfolio Occupancy Portfolio Occupancy Stable specialty occupancy (% of GLA) 98.4% 98.4% 98.2% 98.2% 98.1% 98.0% 97.9% 97.4% • Continued strategic focus on remixing toward non-discretionary categories and reducing long-term vacancies where deals are accretive • Total po
Slide 15: Turnover Rent and Sales Growth
1H FY23 Results Presentation Turnover Rent and Sales Growth Non-discretionary tenants delivering solid sales • At 31 December 2022, total MAT1 had grown by 3.6% Comparable Store MAT Sales Growth by Category (%) − Compared to pre COVID-192, total MAT has grown by 12.2% with supermarkets increasing by
Slide 16: Supermarket Online Sales
1H FY23 Results Presentation Supermarket Online Sales We are continuing to support the growing online offering • Online sales continue to grow, although growth has moderated since COVID-19 and are an important part of the multi-channel strategy, which we support – Online sales are included in 96% of
Slide 17: Specialty Key Metrics
1H FY23 Results Presentation Specialty Key Metrics Increasing sales productivity and positive leasing spreads Total Specialty Metrics 31 Dec 2022 30 June 2022 • Specialty sales productivity has improved from $9,865 to $10,167 Comparable sales MAT growth (%)1 5.8% 0.4% with NSW and VIC specialty sale
Slide 18: Sustainability Strategy Update
1H FY23 Results Presentation Sustainability Strategy Update On track to achieve Net Zero by FY301,2 Completed Commenced • All shopping centres have had 100% LED and smart • Replacement of R22 mechanical plant across the portfolio digital energy meters installed • Feasibility studies underway of larg
Slide 19: 4. Growth Opportunities
1H FY23 Results Presentation 4. Growth Opportunities Anthony Mellowes Chief Executive Officer Page 19
Slide 20: Acquisitions and Divestments
1H FY23 Results Presentation Acquisitions and Divestments During the half year 31 December 2022 Total Implied Acquisition Anchor GLA Specialty GLA Total Occupancy Type purchase fully let date (sqm) (sqm) GLA (sqm) (% GLA) price ($m) yield Acquired shopping centres Dernancourt Shopping Centre, SA Nei
Slide 21: Convenience Based Shopping Centres
1H FY23 Results Presentation Convenience Based Shopping Centres Continued consolidation of a fragmented industry Ownership of convenience based shopping centres Convenience based shopping centre landscape 4%2% 3% • There are approximately 1,200 Coles and Woolworths anchored 8% 23% neighbourhood and
Slide 22: Funds Management
1H FY23 Results Presentation Funds Management Metro Fund (JV with GIC) offers a platform for growth • The Metro Fund commenced in FY22 with seven seed portfolio assets for $284.5m • The Fund acquired Beecroft Place in July 2022 for $65m • Key features of the fund: − Assets: metropolitan neighbourhoo
Slide 23: Indicative Development Pipeline
1H FY23 Results Presentation Indicative Development Pipeline Investment of over $250m in the next five years1, ensuring our centres remain the heart of the community Estimated capital investment (A$m) 1H FY23 2H FY23 FY24 FY25 FY26 FY27 FY28 Type Description Actual Developments Store refurbishments,
Slide 24: 5. Key Priorities and Outlook
1H FY23 Results Presentation 5. Key Priorities and Outlook Anthony Mellowes and Evan Walsh Chief Executive Officer and Chief Financial Officer Page 24
Slide 25: Core Strategy Unchanged
1H FY23 Results Presentation Core Strategy Unchanged Defensive, resilient cash flows to support secure and growing long term distributions to our security holders Focus on Weighted to non- Growth convenience- discretionary retail opportunities based shopping segments centres Long leases to quality A
Slide 26: Longer Term AFFO Growth Target
1H FY23 Results Presentation Longer Term AFFO Growth Target Indicative target growth rate for AFFO in the medium to longer term is 2% to 4%+ pa Indicative contribution to AFFO growth rate (% pa) Description and Assumptions – medium to longer term – Anchors represent 45% of rental income with 39% of
Slide 27: Key Priorities and Outlook
1H FY23 Results Presentation Key Priorities and Outlook Sustainable NOI growth while maintaining gearing around the lower end of our target range • Generating sustainable NOI growth by: Optimising the – Driving increased rental income from our specialty and mini major tenants core business – Partner
Slide 28: 6. Questions
1H FY23 Results Presentation 6. Questions Page 28
Slide 29: 7. Appendices
1H FY23 Results Presentation 7. Appendices Page 29
Slide 30: Income Statement: Statutory Loss to AFFO Reconciliation
1H FY23 Results Presentation Income Statement: Statutory Loss to AFFO Reconciliation For the six months ended 31 December 2022 Statutory loss AFFO AFFO FFO $m 6 months to 6 months to 6 months to % change adjustments 31 Dec 2022 31 Dec 2022 31 Dec 2021 Anchor rental income 75.1 - 75.1 73.6 2.0% Speci
Slide 31: Gearing Calculation
1H FY23 Results Presentation Gearing Calculation $m 31 Dec 2022 30 June 2022 • Gearing of 31.7% is within the target range of 30-40% Bilateral and syndicated facilities – unsecured • Proforma gearing, including the January 2023 DRP, the Bank and syndicated facilities drawn 541.0 370.0 sale of our CQ
Slide 32: Debt Facilities & Interest Rate Hedging
1H FY23 Results Presentation Debt Facilities & Interest Rate Hedging Financing Facility limit Drawn debt Maturity / Notes capacity A$m A$m A$m Bank and syndicated facilities Bank bilateral 50.0 50.0 - FY24: $50m Jun 2024 Bank bilateral 50.0 - 50.0 FY25: $50m Dec 2024 Bank bilateral 150.0 - 150.0 FY2
Slide 33: FY23 Forecast AFFO cps
1H FY23 Results Presentation Interest Expense / AFFO per security Sensitivity • Our FY23 interest expense forecast is based on the 3 month BBSW FY23 AFFO per security sensitivity market curve (cps) 15.26 • For a movement of 0.25% in the 3 month BBSW market curve during 2H FY23 – Interest expense wil
Slide 34: Anchor Tenants
1H FY23 Results Presentation Anchor Tenants 45% of gross rent generated by anchor tenants 30 June 30 June 30 June 30 June 31 Dec 2019 2020 2021 2022 2022 • Anchor tenants generate 45% of gross rent (Woolworths Woolworths Limited Limited 28%, Coles 11%, Wesfarmers 4% and other anchor Woolworths 58 58
Slide 35: Portfolio List
1H FY23 Results Presentation Portfolio List Our Portfolio List is available at regiongroup.au/investor-centre/reports-presentations/ Page 35
Slide 36: For further information, please contact
For further information, please contact: Anthony Mellowes Mark Fleming Evan Walsh Chief Executive Officer Chief Operating Officer Chief Financial Officer T: +61 2 8243 4900 T: +61 2 8243 4900 T: +61 2 8243 4900 E: anthony.mellowes@regiongroup.au E: mark.fleming@regiongroup.au E: evan.walsh@regiongro