Dexus Convenience Retail Reit · ASX:DXC
Dexus Convenience Retail Reit — FY2018 Earnings Presentation
27 slides from Dexus Convenience Retail Reit's earnings presentation, Aug 21, 2018
Slide 1: FY18 Results Presentation
FY18 RESULTS PRESENTATION 21 August 2018 www.crreit.com.au
Slide 2: Agenda
Agenda 1. FY18 Highlights 2. Financial Results 3. Investment Overview 4. Market Update 5. Outlook 6. Appendices 2
Slide 3: 1. FY18 Highlights
1. FY18 Highlights convenience
Slide 4: Highlights
Highlights Exceeded PDS forecast NTA growth Acquisitions • FY18 FFO of 18.5 cps vs • NTA increased by 14 cents • Disciplined and focused PDS forecast of 18.2 cps per security to $2.87 (up approach 5.1% since IPO) • FY18 DPS of 18.1 cps vs • Four properties acquired or PDS forecast of 17.9 cps • $12.
Slide 5: Performance snapshot
Performance snapshot Financial performance1 Portfolio performance Capital management $2.87 12.6 31.7% NTA WALE GEARING 5.1% from IPO (years) (target range of 25% - 40%) 18.5c 100% 2.6 years FFO PER SECURITY OCCUPANCY WEIGHTED AVERAGE 1.6% on PDS FY18 forecast 0.6% since IPO DEBT MATURITY $ 12.8m 4.5
Slide 6: 2. Financial Results
2. Financial Results convenience
Slide 7: FY18 financial results
FY18 financial results Financial performance % A$m FY18 PDS change • FFO for the period of 18.5 cps exceeded PDS Income forecast by 1.6% Net property income 20.7 20.3 2.0% • Increase in net property income driven by property Straight lining of rental income1 4.6 4.2 9.5% acquisitions Interest income
Slide 8: FY18 financial results - balance sheet
FY18 financial results Balance sheet June At % A$m 2018 IPO change • NTA per Security growth of 14 cents (+5.1%) Assets • $32.8 million increase in investment properties a result Cash and cash equivalents 2.8 0.5 of acquisitions and revaluations Investment Properties 340.4 307.6 10.7% - $12.8 millio
Slide 9: Capital management
Capital management • Healthy balance sheet position Key metric June 2018 • Gearing within target range of 25 – 40% Gearing 31.7% • Interest cover of 4.5x ICR 4.5x • Debt facilities with two Australian banks Average all-in cost of debt (including line, margin, establishment fees and hedge costs) 4.4%
Slide 10: Portfolio revaluations
Portfolio revaluations • $12.8 million or 3.9% revaluation uplift No. of Valuation Cap Val Change - Portfolio weighted average cap rate firmed 16bps Site type Properties ($m) rate to 7.0% ($m) % • Valuation gains driven by a combination of annual Metropolitan 50 $220.5 6.9% $8.3 +3.9% rent increases
Slide 11: 3. Investment Overview
3. Investment Overview 11
Slide 12: Attractive retail portfolio – strong income profile
Attractive retail portfolio – strong income profile As at 30 June 2018 7.6%pa 79% 31.7% 100% FY19 CASH FY18 TAX GEARING OCCUPANCY DISTRIBUTION DEFERRED YIELD1 69 $340.4m 7.0% 12.6 INVESTMENT PORTFOLIO WACR WALE PROPERTIES VALUE (YEARS) • Diversified and defensive long lease portfolio • Sustainable a
Slide 13: Diversified portfolio
Diversified portfolio Major tenants 89% of portfolio located in 68% Australia’s eastern seaboard states ~78% of Australia’s population live in 19% the eastern seaboard states1 Major tenants 9% account for 1% 97% of portfolio income Complementary retail 3% 65% 11% Portfolio by site classification 15%
Slide 14: Long dated leases to leading convenience retail tenants
Long dated leases to leading convenience retail tenants Rent review type by income • Strong level of income security • WALE of 12.6 years by income 20% • 100% occupancy • 76% of lease income expiring FY30 and beyond - Only 0.6% of income expiring before FY22 • Contracted average annual rental growth
Slide 15: Acquisitions
Acquisitions • Four properties acquired or committed to be acquired1 • Total value of $27.4 million2 • WACR of 6.9% • WALE of 14.1 years 7-Eleven Durack, QLD • Accretive to earnings Puma Moree, NSW Puma Mount Larcom, QLD 7-Eleven Dakabin, QLD 1. Unconditional contract for the purchase of Mount Larco
Slide 16: Acquisitions
Acquisitions Purchase price Land size WALE Property State Major tenant Type Cap rate ($m) (sqm) (years) Durack QLD 7-Eleven Metropolitan $5.3 5,929 6.8% 11.2 Dakabin QLD 7-Eleven Metropolitan $4.4 3,324 6.8% 13.7 Moree NSW Puma Highway $10.4 30,500 7.0% 15.0 Mount Larcom1 QLD Puma Highway $7.3 12,48
Slide 17: APN Property Group – aligned and experienced manager
APN Property Group – aligned and experienced manager Strong investor Focused and Governance Manager with long alignment dedicated overseen by track record and ▪ APN is strongly aligned management team majority deep relationships to delivering investor ▪ Dedicated Fund independent Board across capita
Slide 18: 4. Market Update
4. Market Update 18
Slide 19: Market overview
Market overview Convenience retail Fuel Investment market • Convenience retailers adapting • Australian automotive fuel • Remain a highly sought-after and taking a customer-first sales recorded a CAGR of asset class due to their long approach by continuing to be 2.7% from July 2010 to June initial l
Slide 20: 5. Outlook
5. Outlook convenience 20 RETAILREIT
Slide 21: Outlook and guidance
Outlook and guidance Sustainable and secure returns backed by long term, high quality leases • FY19 FFO guidance of 21.3 – 21.7 cps, representing: - 5.4 – 7.4% growth on FY18 annualised; and - 3.4 – 5.3% above PDS FY19 forecast of 20.6 cps • FY19 DPS guidance of 20.9 cps – above PDS FY19 forecast of
Slide 22: 6. Appendices
6. Appendices RETAILREIT
Slide 23: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) 440 Roadhouse WA Puma Regional $4.6 8.25% 16.1 100% 11,372 Aeroglen QLD Puma Metropolitan $3.6 7.00% 15.5 100% 3,224 Atherton QLD Puma Metropolitan $1.8 7.25% 16.5 100
Slide 24: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) Hamilton Hill WA Puma Metropolitan $4.5 7.00% 15.1 100% 1,998 Kedron QLD Puma Metropolitan $3.1 7.00% 17.1 100% 1,604 Kempsey South Service Centre NSW Puma Highway $18
Slide 25: Property portfolio
Property portfolio Major Site Book value WALE Occupancy Land Area Property State Cap rate Tenant Type ($m) (years) (by income) (sqm) Sarina QLD Puma Regional $1.9 7.50% 16.5 100% 1,679 Slacks Creek QLD Woolworths Metropolitan $3.9 7.25% 3.3 100% 2,799 South Hedland WA Puma Regional $5.2 8.00% 15.3 1
Slide 26: 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 27: Contact
Contact Chris Brockett Fund Manager Ph: (03) 8656 1044 cbrockett@crreit.com.au Convenience Retail REIT Level 30,101 Collins Street, Melbourne, Vic 3000 crreit.com.au 27
Dexus Convenience Retail Reit — FY2018 Earnings Presentation on 6ix