Slide 1: FY23 Results Presentation
FY23 Results Presentation 14 August 2023 Essentially local Moggill Page Village, 1 QLD
Slide 2: Agenda
FY23 Results Presentation Agenda 1. Overview of 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 FY23 Results
FY23 Results Presentation 1. Overview of FY23 Results Anthony Mellowes Chief Executive Officer Page 3
Slide 4: FY23 Highlights
FY23 Results Presentation FY23 Highlights Statutory Distribution Financial net loss after tax FFO per security AFFO per security per security Performance ($123.6m) 16.9 cps 15.3 cps 15.2 cps down by 125.4%1 down by 2.6%1 In line with FY22 Payout of 99.7% Capital NTA per Weighted average WACD3 Manage
Slide 5: Key Achievements
FY23 Results Presentation Key Achievements Core portfolio continues to outperform Defensive convenience based portfolio drives Progressing well towards Net Zero (scope 1 Optimising resilient operating performance and 2) by FY30 the core • Comparable NOI growth of 4.3% • 14.9MW of solar PV installed
Slide 6: 2. Financial Performance
FY23 Results Presentation 2. Financial Performance Evan Walsh Chief Financial Officer Page 6
Slide 7: Robust underlying earnings growth
FY23 Results Presentation Robust underlying1 earnings growth Adjusted Funds From Operations (AFFO) per security growth offset by increase in cost of debt 15.3 cps 4.3% 0.9% AFFOPS maintained comparable NOI WACD increase despite headwinds growth to 3.4% 0.1 0.3 ( 1.2 ) 0.8 16.5 cps 15.3 cps 15.3 cps
Slide 8: Financial Results
FY23 Results Presentation Financial Results For the year ended 30 June 2023 • Statutory net loss of $123.6m with the main driver being $m 30 Jun 2023 30 Jun 2022 % Change the unrealised $264.1m reduction in property valuations Property income 373.9 358.8 4.2% • FFO is in line with FY22 at $192.5m wi
Slide 9: Balance Sheet
FY23 Results Presentation Balance Sheet At 30 June 2023 • Assets Under Management of $4.9bn including the $m 30 Jun 2023 30 Jun 2022 % Change Metro Fund Cash and cash equivalents 23.8 8.7 173.6% • Net Tangible Assets per security decreased by 9.2% Investment properties 4,411.6 4,460.9 (1.1%) to $2.5
Slide 10: Property Valuations
FY23 Results Presentation Property Valuations At 30 June 2023 • The weighted average market capitalisation rate (cap rate) has Weighted average capitalisation rate (cap rate) % expanded by 42bps to 5.85% 30 June 2022 5.43% • Valuations reduced by 4.4% with a 6.2% reduction explained by cap 30 June 2
Slide 11: Debt and Capital Management
FY23 Results Presentation Debt and Capital Management At 30 June 2023 • Cash and undrawn facilities of $385.7m 30 Jun 2023 30 Jun 2022 − Total facility limit was increased by $50.0m to $1,807.1m with Facility limit ($m) 1,807.1 1,757.1 an increase and extension of an existing bilateral debt facility
Slide 12: Debt and Capital Management
FY23 Results Presentation Debt and Capital Management At 30 June 2023 Sources of Drawn Debt Debt Facilities Expiry Profile ($m) ($m) 363.1 Medium term notes 503.0 525.0 US private placement 103.3 225.0 Bank and 39.4 syndicated facilities 150.0 106.5 250.0 92.1 211.9 150.0 65.8 407.1 30.0 20.0 FY24 F
Slide 13: 3. Operational Performance
FY23 Results Presentation 3. Operational Performance Mark Fleming Chief Operating Officer Page 13
Slide 14: Portfolio Overview
FY23 Results Presentation Portfolio Overview Weighting towards non-discretionary food, health and retail services Number of Number GLA Site Occupancy WALE Weighted average Value ($m) At 30 June 2023 properties of specialties (sqm) area (sqm) (% GLA) (yrs)6 cap rate (%) Sub-regional 13 624 258,609 69
Slide 15: Portfolio Occupancy
FY23 Results Presentation Portfolio Occupancy Consistent specialty occupancy and reduced holdovers • Continued strategic focus on remixing toward non-discretionary Portfolio Occupancy categories, reducing number of tenants on holdover and (% of GLA) reducing long-term vacancies where deals are accre
Slide 16: Sales Growth and Turnover Rent
FY23 Results Presentation Sales Growth and Turnover Rent Sales grew strongly across all tenant categories Total Portfolio Comparable Store MAT Sales Growth by Category (%) • 4.5% total portfolio sales growth (by MAT)1 vs 3.6% at 31 December 2022 and 1.3% at 30 June 2022 Total portfolio 30 Jun 20231
Slide 17: Specialty Key Metrics
FY23 Results Presentation Specialty Key Metrics Increasing sales productivity and positive leasing spreads • Specialty sales productivity has increased by 4.8% from Total Specialty Metrics 30 Jun 2023 30 Jun 2022 $9,865 per sqm to $10,342 per sqm Comparable sales MAT growth (%)1 7.5% 0.4% • Occupanc
Slide 18: Resilience of our specialty tenants
FY23 Results Presentation Resilience of our specialty tenants Tenant health appears to remain strong with low arrears and occupancy costs • Specialty and mini-major tenants represent 52% of our total Non-discretionary Specialty Tenant Category gross property income with discretionary specialty tenan
Slide 19: Sustainability Strategy Update
FY23 Results Presentation Sustainability Strategy Update On track to achieve Net Zero by FY301,2 Completed FY24 Commitment Energy • To date, 14.9MW of solar PV installed or under • Installation of 5.1MW solar PV and Carbon construction of our 25MW solar PV target by FY26 • Complete a review of our e
Slide 20: 4. Growth Opportunities
FY23 Results Presentation 4. Growth Opportunities Anthony Mellowes Chief Executive Officer Page 20
Slide 21: Acquisitions and Divestments
FY23 Results Presentation Acquisitions and Divestments Average $224m of acquisitions per year over past 10 years - FY24 guidance assumes no acquisitions Acquisition Total purchase Implied fully let yield Total GLA Occupancy Type date price ($m) (%) (sqm) (% GLA) FY23 Acquisitions1 Dernancourt Shoppi
Slide 22: Convenience Based Shopping Centres
FY23 Results Presentation Convenience Based Shopping Centres Continued consolidation of a fragmented industry Ownership of Convenience Based Centres 2% 3% Convenience based shopping centre landscape 3% 8% 25% • There are approximately 1,200 Coles and Woolworths anchored neighbourhood and sub-regiona
Slide 23: Indicative Capital Investment Pipeline
FY23 Results Presentation Indicative Capital Investment Pipeline Investing in property enhancements, sustainability initiatives and major developments Estimated capital investment (A$m) FY23 FY24 FY25 FY26 FY27 FY28 Type Description Actual Developments Greenbank, Marketown Newcastle, North Orange, R
Slide 24: Focused investment in our existing portfolio
FY23 Results Presentation Focused investment in our existing portfolio Value creation through property enhancements and strategic site consolidation Allocating capital to drive our portfolio performance Strategic Site Consolidation • Minimal acquisitions are expected given current market pricing • T
Slide 25: Supporting Online Sales
FY23 Results Presentation Supporting Online Sales Investing alongside our supermarket tenants to drive sales growth Direct to Boot and Click ‘n’ Collect investment • Online sales are included in 96% of our supermarket turnover rent calculations − 86 including 100% of online sales − four including 50
Slide 26: Funds Management
FY23 Results Presentation Funds Management Metro Fund (JV with GIC) offers a platform for growth in the medium to longer term • The Metro Fund commenced in FY22 with seven seed properties for $284.5m • The Fund acquired Beecroft Place in July 2022 for $65.5m • Key features of the fund: − Invest in m
Slide 27: 5. Key Priorities and Outlook
FY23 Results Presentation 5. Key Priorities and Outlook Anthony Mellowes and Evan Walsh Chief Executive Officer and Chief Financial Officer Page 27
Slide 28: Core Strategy Unchanged
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 Appr
Slide 29: Longer Term AFFO Growth Target
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 48% of rental income with 46% of anc
Slide 30: FY24 AFFO Guidance – 13.7 cps
FY23 Results Presentation FY24 AFFO Guidance – 13.7 cps 10% reduction in earnings growth primarily impacted by increasing WACD 15.3 cps 3.0% 1.0% AFFOPS maintained comparable NOI WACD increase pre WACD increase growth to 4.4% (0.2) 0.7 (0.4) (0.1) (1.6) 15.3 15.3 13.7 FY23 AFFOPS Comparable NOI Grow
Slide 31: Key Priorities and Outlook
FY23 Results Presentation Key Priorities and Outlook Focus on the • Generating sustainable NOI growth by: core business – Driving increased rental income from our specialty and mini major tenants – Partnering with our anchor tenants to drive turnover rent – Leveraging our scale to minimise controlla
Slide 32: 6. Questions
FY23 Results Presentation 6. Questions Page 32
Slide 33: 7. Appendices
FY23 Results Presentation 7. Appendices Page 33
Slide 34: Income Statement: Statutory Loss to AFFO Reconciliation
FY23 Results Presentation Income Statement: Statutory Loss to AFFO Reconciliation For the year ended 30 June 2023 Statutory loss AFFO AFFO FFO $m 12 months to 12 months to 12 months to % change adjustments 30 Jun 2023 30 Jun 2023 30 Jun 2022 Anchor rental income 151.5 - 151.5 149.0 1.7% Specialty re
Slide 35: Gearing Calculation
FY23 Results Presentation Gearing Calculation Gearing (%) $m 30 Jun 2023 30 Jun 2022 Bilateral and syndicated facilities – unsecured Bank and syndicated facilities drawn 503.0 370.0 32.5 31.7 31.3 31.3 503.0 370.0 29.1 28.3 AU$ MTN – unsecured 25.6 Unsecured AU$ Medium term notes 525.0 525.0 525.0 5
Slide 36: Interest Expense Bridge and Sensitivity
FY23 Results Presentation Interest Expense Bridge and Sensitivity • 90% of average debt is hedged or fixed for FY24 FY23 to FY24 Interest Expense Bridge • A 0.25% average movement in the FY24 BBSW curve, impacts interest expense by $0.4m and AFFO per security by 0.03 cps 5.0 ( 3.7 ) 1.8 13.9 65.6 48
Slide 37: Debt Facilities & Interest Rate Hedging
FY23 Results Presentation Debt Facilities & Interest Rate Hedging Financing Facility limit Drawn debt Maturity / Notes capacity A$m A$m A$m Bank and syndicated facilities Bank bilateral 150.0 - 150.0 FY26: $50m Dec 2025 and $100m Mar 2026 Bank bilateral (including bank guarantee) 575.0 353.0 222.0 F
Slide 38: Anchor Tenants
FY23 Results Presentation Anchor Tenants 48% of gross rent generated by anchor tenants • Anchor tenants generate 48% of gross rent (Woolworths 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun Limited 29%, Coles 11%, Wesfarmers 5% and other anchor 2019 2020 2021 2022 2023 tenants 3% on a fully leased basis) Woolwo
Slide 39: Portfolio List
FY23 Results Presentation Portfolio List Our Portfolio List is available at regiongroup.au/investor-centre/reports-presentations/ Page 39
Slide 40: 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