Dexus Industria Reit · ASX:DXI
Dexus Industria Reit — HY23 Earnings Presentation
34 slides from Dexus Industria Reit's earnings presentation, Feb 8, 2023
Slide 1: Dexus Industria REIT 2023 Half Year Results ASX release
Dexus Industria REIT (ASX:DXI) ASX release 8 February 2023 2023 Half Year Results presentation and property synopsis Dexus Industria REIT (DXI) releases its 2023 Half Year Results presentation. An investor conference call will be webcast at today at 10.00am on www.dexus.com/investor-centre The prope
Slide 2: 2023 Half Year Results
2023 Half Year Results 8 February 2023 Dexus Asset Management Limited ACN 080 674 479, AFSL 237500 as responsible entity for Industria Trust No. 1, Industria Trust No. 2, Industria Trust No. 3 and Industria Trust No. 4 Industria Company No. 1 Limited ACN 010 794 957
Slide 3: Acknowledgement of country
Acknowledgement of country Dexus Industria 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, present and emerging. Artwork: The
Slide 4: Agenda
Agenda 1 Strategy and highlights page 4 2 Financial overview page 8 3 Portfolio performance and market dynamics page 12 4 Summary page 17 Appendices page 19 1-3 Westrac Drive, Tomago NSW
Slide 5: Strategy and highlights
Strategy and highlights
Slide 6: Vision and strategy
Vision and strategy Generating outperformance through active management and development To be the first choice for investors seeking listed industrial real estate exposure in Australia by generating Vision superior risk-adjusted returns Leveraging the leading asset management, transactional, develop
Slide 7: HY23 highlights
HY23 highlights Executing strategy in a challenging environment Financial & property performance Capital management On-track to deliver FY23 guidance Strong balance sheet HY23 FFO per security of 8.5 cents gearing of 23.3% (29.5% look-through) HY23 distributions per security of 8.2 cents below targe
Slide 8: High-quality portfolio
High-quality portfolio Generating strong organic growth Key portfolio metrics Lease expiry profile (% by income) 93 $1.6bn properties portfolio value 10.4% 9.5% 10.3% 5.13% 6.3 year WACR WALE 3.7% (by income) 1.9% FY23 FY24 FY25 FY26 FY27 97.4% 67,700sqm Annual rent review structure occupancy leased
Slide 9: Financial overview
Financial overview
Slide 10: HY23 financial result
HY23 financial result Solid industrial operating conditions › Full-period contribution from Jandakot, partially offset by Profit & loss HY23 HY22 Change divested assets › Portfolio like-for-like NOI growth of 2.7% supported by Property FFO ($m) 42.5 33.3 27.6% contracted rental uplifts Management
Slide 11: Balance sheet and capital management
Balance sheet and capital management Strong balance sheet with 23.3% gearing, $139 million liquidity and no refinancing until FY25 Key metrics1 31 Dec 2022 30 Jun 2022 › Gearing of 23.3%, or 29.5% on a look-through basis, below the 30-40% target range Balance sheet gearing 23.3% 28.9% › No debt matu
Slide 12: Portfolio valuation movements
Portfolio valuation movements › Like-for-like increase of $4.5m (0.3%) on prior book values › Favourable rental growth outcomes offsetting 20 basis points of cap rate expansion Property portfolio valuation summary – 31 Dec 20221 Cap rate 31 Dec 2022 Reval Reval Cap Portfolio Properties 6 month book
Slide 13: Portfolio performance and market dynamics
Portfolio performance and market dynamics
Slide 14: Industrial performance
Industrial performance Strong leasing outcomes supporting income growth HY23 key statistics $1.4bn 4.93% 100% 6.9 year 2.4% 61,700sqm book value WACR occupancy WALE like-for-like leased (by income) (by income) NOI growth Leasing completed and forthcoming expiry (by area, sqm)1 Solid financial result
Slide 15: Developments
Developments Embedded growth opportunities through development pipeline › $369 million total pipeline ($119 million committed, of which $94 million remaining spend) across 411,100sqm with projects to be delivered to 2027 › Expected to be funded by targeted divestments and existing headroom › Focused
Slide 16: Industrial market outlook
Industrial market outlook Take-up continues to outpace supply Millions sqm 5 Chart 4 title Industrial demand remains resilient 3 › Demand is broad-based including medical 10-yr average supplies, supermarkets, materials supporting 2 transport infrastructure, general ecommerce and 1 retailers investin
Slide 17: Brisbane Technology Park performance
Brisbane Technology Park performance Underpinned by smaller suite leasing strategy HY23 key statistics $177m 6.66% 84.3% 3.3 year 4.0% 6,000sqm book value WACR occupancy WALE like-for-like leased (by income) (by income) NOI growth Tenant type (% by BTP income) High-quality tenant base 3% › Technolog
Slide 18: Summary
Summary
Slide 19: Summary
Summary Focused on delivering long-term value to Security holders Well placed in an uncertain environment marked by inflationary pressures, rising interest rates and softening transaction volumes High-quality portfolio with embedded rental growth driven by fixed increases of 3.0 - 3.5% per annum and
Slide 20: Appendices
Appendices
Slide 21: Geographical presence
Geographical presence Exposure to all key markets in Australia Competitive advantage New South Wales Western Australia › Ability to capture strong rental growth › Enables national customer offering as industrial vacancy levels at all-time › Jandakot a gateway location to suit low growing e-commerce
Slide 22: Lease expiry profile
Lease expiry profile Industrial – 89% of portfolio value (% by total DXI income) 9.0% 7.9% 6.5% 3.0% 1.2% Amazon, Jandakot Airport industrial precinct, Perth WA FY23 FY24 FY25 FY26 FY27 Brisbane Technology Park – 11% of portfolio value (% by total DXI income) 3.9% 1.6% 1.2% 16-28 Quarry Road, Stapyl
Slide 23: Portfolio tenancy mix
Portfolio tenancy mix Tenant type (% by income) Tenant concentration (%) Tenant % portfolio income ASX listed Listed multinational Westrac 16% National Australian Postal Corporation 6% Multinational Government Qube 3% 17% Private and other Sandvik 3% 29% Woolworths Group 3% 11% Thornton Engineering
Slide 24: Developments
Developments Building Development Project Remaining Est. yield Est. final Project area (sqm) status cost est.1 spend1 on cost2 completion Committed Jandakot, WA 65,900 Construction $52m $27m 5-6% Mid FY24 Active leasing and Kemps Creek, NSW 42,300 $67m $67m n.a. Late FY24 planning Uncommitted3 Activ
Slide 25: Jandakot Airport industrial precinct
Jandakot Airport industrial precinct General aviation airport and Stabilised portfolio Development infrastructure operations › $330 million book value (DXI 33.3% share) › $74 million book value (DXI 33.3% share)1 › $80 million book value (DXI 33.3% share) › 100% occupancy (by income) › 19.3 year WAL
Slide 26: Industrial market conditions
Industrial market conditions Positive demand and low vacancy leading to significant rent growth Vacancy rates hit record lows across all markets Lack of space leading to rapid growth in rents Outer West Sydney West Melbourne Sydney Melbourne Brisbane Perth Adelaide $/sqm South Brisbane South Perth 1
Slide 27: Independent valuations
Independent valuations Occupancy by Occupancy by Cap rate mvmt Property income (%) area (%) Book value ($m) Reval gain ($m) Cap rate (%) (bps) 34 Australis Drive, Derrimut VIC 100% 100% $50.4 $8.0 4.50% - 80-96 South Park Drive, Dandenong South VIC 100% 100% $37.5 $(1.1) 5.00% 25 bps 1 West Park Dri
Slide 28: Independent valuations (cont’d)
Independent valuations (cont’d) Occupancy by Occupancy by Cap rate mvmt Property income (%) area (%) Book value ($m) Reval gain ($m) Cap rate (%) (bps) 5 Butler Boulevard, Adelaide Airport SA 100% 100% $19.2 $(1.3) 6.10% 26 bps 5b Butler Boulevard, Adelaide Airport SA 100% 100% $14.0 $(0.5) 5.85% 26
Slide 29: Summary balance sheet and gearing
Summary balance sheet and gearing Summary balance sheet Gearing $’000 31 Dec 2022 30 Jun 2022 $’000 31 Dec 2022 30 Jun 2022 Cash and cash equivalents 5,696 5,583 Gearing Investment properties 1,132,425 1,319,450 Drawn debt 353,250 480,500 Equity accounted investments 358,043 317,486 Total tangible a
Slide 30: Consolidated profit & loss statement
Consolidated profit & loss statement $’000 HY23 HY22 Total revenue 38,622 36,355 Property expenses (7,491) (6,372) Management fee expense (3,476) (3,159) Other expenses (644) (583) Total expenses (11,611) (10,114) Net operating income (EBIT) 27,011 26,241 Net fair value gain / (loss) on investment p
Slide 31: FFO reconciliation
FFO reconciliation1 $’000 HY23 HY22 Statutory net profit after tax 1,439 113,697 Adjusted for: Net fair value (gain) / loss on investment properties 26,719 (86,673) Fair value (gain) / loss on investment properties - ROU assets (5,681) 146 Fair value (gain) / loss on derivatives (197) (3,718) Incent
Slide 32: Look-through interest rate hedging profile
Look-through interest rate hedging profile $400m 4.0% 368 333 3.7% $300m 3.0% 237 2.1% $200m 2.0% 1.5% 1.8% 1.2% 123 $100m 1.0% 44 $0m 0.0% 2H23 FY24 FY25 FY26 FY27 Debt hedged (LHS) Weighted average hedge rate excl margin (RHS) 31 2023 Half Year Results Presentation
Slide 33: 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 Industria Trust No. 1 (ARSN 125 862 875), Industria Trust No. 2 (ARSN 125 862 491), Industria Trust No. 3 (ARSN 166 150 93
Slide 34: dexus
dexus