Vicinity Centres · ASX:VCX
Vicinity Centres — Investor Day (June 2017)
45 slides from Vicinity Centres's investor day presentation, Jun 7, 2017
Slide 1: Perth Investor day and asset tours
For personal use only Halls Head Central, WA Perth Investor day and asset tours 7-8 June 2017
Slide 2: Welcome and overview
For personal use only Welcome and overview Angus McNaughton CEO and Managing Director Galleria, WA
Slide 3: Agenda
Perth Investor day and asset tours Agenda WEDNESDAY 7 JUNE THURSDAY 8 JUNE For personal use only 12.15 Welcome and overview 8.00 Depart Crown Metropol Angus McNaughton CEO and Managing Director Asset tour – Mandurah Forum WA economy James Fudge Project Director, WA Stephen Koukoulas Managing Directo
Slide 4: Our Strategy: simple and transparent business model with a single sector focus
Our Strategy: simple and transparent business model with a single sector focus Creating value and sustainable growth by owning, managing and developing quality Australian retail assets For personal use only Group investment principles Simple and transparent business model, with a single sector focus
Slide 5: Active repositioning reflected in improved key metrics
Active repositioning reflected in improved key metrics Delivering on strategy since Vicinity’s formation in June 2015 has driven strong results Delivered merger synergies and refinancing savings Dec-16 Jun-15 For personal use only Improved portfolio quality Total asset value ($b) 14.9 14.3 Sold inte
Slide 6: Retail trends
Retail trends Structural changes providing opportunities for Vicinity For personal use only Technology is changing the shopping centre landscape Merging physical and digital consumer experiences Increasing application of operational technology in-centre Operating, leasing and development decisions t
Slide 7: 2017 achievements
2017 achievements A productive calendar year to date For personal use only Strong balance sheet S&P have upgraded credit rating to A/stable Issued $400m of AMTNs and repaid FY18 expiries Improving portfolio quality Acquired the remaining 25% interest in DFO South Wharf and new multi-deck car park co
Slide 8: WA portfolio
For personal use only WA portfolio Michael O’Brien Chief Investment Officer Ellenbrook Central, WA
Slide 9: WA portfolio overview
WA portfolio overview Deep and experienced local capability For personal use only Long established presence in WA The largest retail team in WA Deep and experienced team of ~150 on the ground Scale benefits with 12 leasing and 11 development executives, and dedicated marketing and tenancy design exe
Slide 10: WA Regional shopping centre landscape
WA Regional shopping centre landscape Planning changes have facilitated development opportunities to service under-supplied retail market For personal use only Perth market is under serviced by Regional centres 33% less Regional centre space compared to national average1 Retail cap was lifted in 201
Slide 11: Ellenbrook Central acquisition
Ellenbrook Central Ellenbrook Central acquisition Significant value created through intensive asset management and development For personal use only Acquired in December 2015 from ICWA for $220m1 at 5.75% capitalisation rate, currently2 valued at $236m One of the fastest growing catchments in Austra
Slide 12: Ellenbrook Central: opportunities for further value creation
Ellenbrook Central Opportunities exist for further value creation Future development potential to broaden centre’s offer For personal use only Well positioned to take advantage of market opportunity Further opportunities to improve tenant mix to align to market demand Future development potential Fi
Slide 13: Leasing
For personal use only Leasing Stuart Macrae EGM Leasing QueensPlaza, QLD
Slide 14: Leasing trends
Leasing trends Greater focus on leisure, dining and experience For personal use only International retailers continue to expand New international flagships driving strong foot traffic and sales Uniqlo, H&M, Zara and Sephora Some impact on retailers who have not adapted to increased competition Re-we
Slide 15: Tenant administrations
Tenant administrations Remixing opportunities created through retailer administrations For personal use only Some retailers more impacted than others in current sales environment Performance varies across retail categories Varying retailer performance within categories Making good progress on sites
Slide 16: Development update
For personal use only Development update Carolyn Viney EGM Development Mandurah Forum, WA
Slide 17: Development achievements
Development achievements Actively improving portfolio quality through development For personal use only Chadstone, VIC 6 projects ~$1 billion1 >7% initial yield >11% IRR Halls Head Central, WA Warriewood Square, NSW DFO South Wharf, VIC Colonnades, SA Cranbourne Park, VIC 1. 100% interest (Vicinity’
Slide 18: Rigorous controls govern the development planning process
Rigorous controls govern the development planning process A structured process and consistent approach ensures efficient and successful project delivery Vicinity Board/ For personal use only Co-owner approval Iterative process Scope opportunity Concept planning Project validation Mobilisation Delive
Slide 19: Demonstrated development capability
Demonstrated development capability Structured to support strategy execution For personal use only Carolyn Viney EGM Development Jon Savell Stephen Beer Mark Kelley Josef Seidler Development Development Regional General Manager Regional General Manager Director Director Development Development NSW/V
Slide 20: Investing to create long-term value
Investing to create long-term value Extensive $2.8b development pipeline (Vicinity share: $1.3b) provides significant opportunities $m For personal use only Vicinity share Partner share Total Chadstone Retail and Office, VIC 333 666 Mandurah Forum, WA 175 350 Current The Glen, VIC 230 460 DFO Perth,
Slide 21: The Glen redevelopment underway
The Glen The Glen redevelopment underway Major redevelopment to capitalise on high income trade area and capture escape expenditure Key metrics For personal use only Cost1 $460m +18,900 sqm 2020 target Initial yield >6% GLA completion Expected IRR >10% $460m1 major redevelopment First stage fully le
Slide 22: The Glen lower ground level precinct plan
The Glen Lower ground level precinct plan Introduction of Aldi and relocated Woolworths to anchor fresh food market hall with Coles and a number of specialty stores For personal use only Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 22
Slide 23: The Glen ground level precinct plan
The Glen Ground level precinct plan New format David Jones, contemporary food gallery, lifestyle and fashion For personal use only Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 23
Slide 24: Chadstone retail and office development
Chadstone Chadstone retail and office development Delivering a world-class retail, dining and entertainment experience Australia’s leading retail offer strongly embraced by consumers For personal use only Largest luxury precinct in Australia Leading international flagship stores – H&M, Sephora, Uniq
Slide 25: Chadstone – the evolution continues
Chadstone Chadstone – the evolution continues High quality hotel offer to service business and tourist markets For personal use only Estimated development cost $120m (Vicinity share: $60m) Targeting 4 to 4.5 stars with full service amenity and conference facilities Proposal for 250 rooms over 13 lev
Slide 26: Chadstone – proposed hotel
Chadstone Chadstone – the evolution continues – proposed hotel Prime location at Chadstone Shopping Centre, close to Melbourne’s business, education and health science precincts For personal use only Artist’s impression Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 26
Slide 27: Mandurah Forum
For personal use only Mandurah Forum James Fudge Project Director, WA Artist’s impression
Slide 28: Mandurah Forum
Mandurah Forum Mandurah Forum Well located centre in one of Australia’s fastest growing catchments For personal use only Source: Nearmap Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 28
Slide 29: Mandurah Forum: The opportunity
Mandurah Forum The opportunity Transform Mandurah Forum into one of WA’s leading Major Regional shopping centres For personal use only Dominant ~40,000 sqm Regional centre in a captive market Perth being expanded to 64,500 sqm Major Regional centre 72km North Mandurah’s total trade area population g
Slide 30: Mandurah Forum: The market
Mandurah Forum The market Strong population and retail spending growth For personal use only Leading market position 19.1% market share of trade area1 Strong population growth ~95,800 people in trade area, forecast to grow at 2.8% p.a. through to 20281 Excellent transport infrastructure Serviced by
Slide 31: Mandurah Forum: The project
Mandurah Forum The project Development positioned to capture additional segments of the trade area For personal use only Key metrics Cost1 $350m +26,000 sqm Mid-2018 project Initial yield >6% GLA completion Expected IRR >10% New 850 space multi-deck car park opened in December 2016 • Centre to have
Slide 32: Mandurah Forum floor plan and construction staging
Mandurah Forum Floor plan and construction staging Desirable ‘race track’ configuration to improve customer experience and navigation For personal use only Stage 5 under construction Stage 4 under construction Stage 1 complete December 2016 Stage 2 opening end of July 2017 Stage 3 under construction
Slide 33: Mandurah Forum precinct plan
Mandurah Forum Precinct plan Well precincted layout to enhance the customer experience For personal use only Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 33
Slide 34: Galleria
For personal use only Galleria Andrew Weston RGM Development, WA Artist’s impression
Slide 35: The dominant Major Regional centre of north east Perth
Galleria The dominant Major Regional centre of north east Perth Strongly trading, well-located centre in growing catchment Trade area is large and growing (22% of Perth’s population) For personal use only Total trade area forecast to increase 2.0% p.a. from 453,000 (2016) to 553,000 (2026)1 Strong t
Slide 36: Galleria: The opportunity
Galleria The opportunity Galleria has a large, diverse trade area with strong demand from families For personal use only Opportunity to increase market share with expanded and more modern offer Council supportive of increasing the residential density in the immediate surrounds of the centre Sufficie
Slide 37: Galleria: Progressing through project validation phase
Galleria Progressing through project validation phase Transform Galleria to become one of the leading retail destinations in Perth For personal use only $700m DA approval FY18 redevelopment1 obtained target commencement Agreement reached to relocate stormwater basin Unlocks more desirable layout and
Slide 38: DFO Perth
For personal use only DFO Perth Stephen Beer Development Director, WA/SA Artist’s impression
Slide 39: DFO Perth: The opportunity
DFO Perth The opportunity Introduce proven DFO Outlet Centre format to under supplied market For personal use only Building on Vicinity’s DFO expertise and strong tenant relationships Perth has the lowest Outlet Centre floorspace per capita1,2 Trade area3 includes ~80% of Perth’s population and aver
Slide 40: DFO Perth: The project
DFO Perth The project Retail construction to commence in the coming weeks Key metrics low res diagram For personal use only Cost1 $150m 24,000 sqm 2018 target Initial yield >10% GLA completion Expected IRR >15% Joint venture to develop the first DFO in Perth • 120 specialty stores • Over 1,500 car s
Slide 41: DFO Perth: Prime location
DFO Perth Prime location Excellent exposure adjacent to main north/south highway and airport entry For personal use only TONKIN HIGHWAY FUTURE PUBLIC TRANSPORT MAIN AIRPORT ENTRY AUTHORITY CAR PARKING FUTURE CONVENIENCE RETAIL FUTURE FAST FOOD / SERVICE STATION SITE FUTURE OFFICE PRECINCT Artist’s i
Slide 42: DFO Perth: Optimal centre design supports strong precinct layout
DFO Perth Optimal centre design supports strong precinct layout Well-known brands offering quality stock at discounted prices and a significant food offer For personal use only Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 42
Slide 43: DFO Perth: Vibrant and engaging mall design
DFO Perth Vibrant and engaging mall design Inspired by location and surrounding natural environment For personal use only Artist’s impression Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 43
Slide 44: DFO Perth: Significant food offer
DFO Perth Significant food offer Contemporary food and dining options for DFO customers and Airport passengers and workers For personal use only Artist’s impression Vicinity Centres | Perth Investor day and asset tours | 7-8 June 2017 44
Slide 45: Contact details and disclaimer
Contact details and disclaimer For further information please contact: For personal use only Penny Berger Head of Investor Relations T +61 2 8229 7760 E penny.berger@vicinity.com.au Disclaimer This document is a presentation of general background information about the activities of Vicinity Centres