Dexus Convenience Retail REIT · ASX:DXC
Dexus Convenience Retail REIT — APN Convenience Retail REIT — HY2020 Earnings Presentation
30 slides from Dexus Convenience Retail REIT's earnings presentation, Feb 18, 2020
Slide 1: HY2020 Results Presentation
HY2020 RESULTS PRESENTATION 18 FEBRUARY 2020 www.apngroup.com.au ASX Code: AQR
Slide 2: Agenda
Agenda 01 HY2020 snapshot 02 Financial performance 03 Investment overview 04 Market update 05 Outlook and guidance Appendices 2
Slide 3: 01 HY2020 Snapshot
01 HY2020 SNAPSHOT Raceview Convenience Centre, QLD 3
Slide 4: APN Convenience Retail REIT
APN Convenience Retail REIT Our strategy The opportunity ▪ Investing in strategically located ▪ Secure and sustainable long-term income growth with 80% of portfolio rental service stations and convenience income subject to fixed annual increases of 3% or more retail assets with long term leases to ▪
Slide 5: HY2020 snapshot
HY2020 snapshot Financial performance Portfolio performance Capital management 10.9c 11.0 years 24.6% DISTRIBUTION PER SECURITY WALE GEARING2 4.3% on HY2019 10.8c 97.0% 75.7% FFO PER SECURITY OF INCOME FROM MAJOR DRAWN DEBT 0.5% on HY20191 SERVICE STATION TENANTS HEDGED $3.13 $78.7m 4.5x NTA PER SEC
Slide 6: 02 Financial Performance
02 FINANCIAL PERFORMANCE Puma Rutherford, NSW 6
Slide 7: HY2020 financial performance
HY2020 financial performance Transparent income streams and capital structure A$m 1H2020 1H2019 Variance ▪ FFO for the period up 6.8% on 1H2019 Net property income 12.7 12.3 3.3% – Up 0.5% on a cents per security basis due to an Straight lining of rental income 2.0 2.3 12.3% increase in the number o
Slide 8: Balance sheet
Balance sheet NTA per security increased by 17 cents (+5.7%) Dec June ▪ $32.1 million increase in investment properties from: A$m 2019 2019 Variance – Net property transactions of $19.8m ($29.2m of Assets acquisitions offset by $9.4m of disposals) Cash and cash equivalents 1.5 0.3 Large – Like-for-l
Slide 9: Capital management
Capital management Healthy balance sheet position Key metric Dec 2019 ▪ Refinanced $105 million of facilities and increased debt facilities Gearing 24.6% by $40 million post balance date ICR 4.5x – New 3, 4 and 5 year debt tenors Average all-in cost of debt (including line, margin, 4.2% – 0.2% reduc
Slide 10: 03 Investment Overview
03 INVESTMENT OVERVIEW Woolworths Caltex Capalaba, QLD 10
Slide 11: Attractive convenience retail portfolio – long leases to quality tenants
Attractive convenience retail portfolio – long leases to quality tenants 5.6% 75.9% $43.3m 100% CASH DISTRIBUTION TAX FUND-THROUGH OCCUPANCY YIELD1 DEFERRED PIPELINE 72 $389m 6.9% 11.0 PROPERTIES PORTFOLIO WACR WALE VALUE (YEARS) DIVERSIFIED AND DEFENSIVE LONG LEASE PORTFOLIO SUSTAINABLE AND GROWING
Slide 12: Diversified portfolio
Diversified portfolio Major tenants 87% of the portfolio is located in 62.7% Australia’s eastern seaboard states 16.8% ~78% of Australia’s population live in the eastern seaboard states1 9.9% 2.5% Major tenants account for 2.3% 97% 1.4% of portfolio income 1.2% Complementary 3.3% retail 10% 65% Port
Slide 13: Sustainable and secure income through long dated leases
Sustainable and secure income through long dated leases Rent review type by income ▪ Attractive lease expiry profile – No income expiring prior to FY22 20% – Over 73% of lease income expiring FY30 and beyond ▪ 80% of portfolio income subject to fixed annual increases of WARR 3% or more 2.9%1 ▪ Defen
Slide 14: Fund-through development projects
Fund-through development projects Investment in eight fund-through development projects with $43.3m funding committed ▪ Design upgrades and/or timing of obtaining council approvals have contributed to minor delays in delivery timeframes of 5 projects due to settle in 2HFY2020 – Design upgrades drive
Slide 15: Portfolio growth
Portfolio growth Maintaining a focused approach to our acquisition growth strategy ▪ AQR continues to actively review acquisition opportunities while maintaining a patient and focused approach, ensuring that they are attractively priced and meet our strict investment criteria ▪ Continued focus on de
Slide 16: APN Property Group – aligned and experienced manager
APN Property Group – aligned and experienced manager Strong investor Focused and Governance Manager with long alignment dedicated overseen by an track record and ▪ APN is strongly aligned to management team independent Board deep relationships delivering investor returns – owning a $33.6 million co-
Slide 17: 04 Market Update
04 MARKET UPDATE Puma Kempsey South, NSW 17
Slide 18: Market update
Market update ▪ There are 770 vehicles per 1,000 people in Australia, with over 98% of vehicles powered by either petrol or diesel 1 ▪ Diesel vehicles represent 24.6% of total vehicles, up from 18.5% in 2014 1 ▪ Electric vehicle sales comprised 0.6% of total new vehicle sales in Australia in 2019 2
Slide 19: Sale of Puma Energy to Chevron
Sale of Puma Energy to Chevron ▪ On 19 December 2019, Puma Energy announced that it Overview of Chevron had entered into a conditional Share Sale Agreement to sell its Australian fuel business to Chevron for $425 ▪ One of the world’s leading integrated energy companies million ▪ Operates ~19,550 ser
Slide 20: 05 Outlook and Guidance
05 OUTLOOK AND GUIDANCE Woolworths Mitchelton, QLD 20
Slide 21: Outlook and guidance
Outlook and guidance Secure and growing income profile backed by long term leases to quality tenants ▪ AQR is well positioned – Passive income stream with contracted rental increases providing sustainable income growth – Clear and focused acquisition growth strategy – Healthy balance sheet with capa
Slide 22: Appendices
APPENDICES Liberty Pooraka, SA 22
Slide 23: Profit and Loss statement
Profit and Loss statement Financial period ended HY2020 HY2019 $’000 $’000 Income Net property income 12,667 12,318 Straight lining of rental income 2,052 2,340 Interest income 14 14 Total income 14,733 14,672 Expenses Management fees (1,202) (1,143) Corporate costs (289) (348) Finance costs (2,352)
Slide 24: Reconciliation to FFO
Reconciliation to FFO Financial period ended HY2020 HY2019 $’000 $’000 Statutory net profit 19,464 14,461 Adjusted for: Straight line lease revenue recognition (2,052) (2,340) Fair value gain on investment properties (8,421) (4,452) Fair value loss on derivatives (153) 578 Amortisation of borrowing
Slide 25: Portfolio revaluations
Portfolio revaluations 3.5% like-for-like portfolio revaluation uplift Valuation change ▪ $12.3 million or 3.5% revaluation uplift No. of Valuation Cap Site type ▪ Valuation gains driven by a combination of annual rent properties ($m) rate ($m) % increases and cap rate compression Metropolitan 51 $2
Slide 26: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) 440 Roadhouse WA Puma Regional $4.9 8.25% 14.6 100% 11,372 Aeroglen QLD Puma Metropolitan $3.8 7.00% 14.0 100% 3,224 Atherton QLD Puma Metropolitan $2.0 7.25% 15.0
Slide 27: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Hamilton Hill WA Puma Metropolitan $4.8 7.00% 13.6 100% 1,998 Kedron QLD Puma Metropolitan $3.5 6.75% 15.6 100% 1,604 Kempsey South Service Centre NSW Puma Highway
Slide 28: Property portfolio
Property portfolio Major Site Book value Cap rate WALE Occupancy Land Area Property State Tenant Type ($m) (%) (years) (by income) (sqm) Reid River QLD Puma Regional $2.8 8.50% 14.0 100% 21,800 Rockhampton QLD BP Metropolitan $5.7 6.76% 7.3 100% 1,102 Roseneath QLD Puma Regional $7.5 7.25% 15.6 100%
Slide 29: Disclaimer
Disclaimer This presentation has been prepared by APN Funds Management Limited (ACN 080 647 479, AFSL No. 237500) (the "Responsible Entity") as the responsible entity and issuer of the financial products in respect of Convenience Retail REIT No. 1 (ARSN 101 227 614), Convenience Retail REIT No. 2 (A
Slide 30: Contact
Contact Chris Brockett Fund Manager, APN Convenience Retail REIT Ph: (03) 8656 1000 : cbrockett@apngroup.com.au ASX Code: AQR Follow us… @apngroup APN Property Group Limited Level 30,101 Collins Street, APN Property Group Limited Melbourne, Vic 3000 apnpropertygroup apngroup.com.au http://blog.apng
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