FY24 Annual Report (RGN)

Contents

Auditor's Report Historical Key Metrics Security Analysis Directory

Cooleman Court, ACT

Meeting of Security Holders

This year's AGM will start at 2pm (AEDT) on Tuesday 15 October 2024. For further information, visit www.regiongroup.au/agm/

Corporate Calendar

Security Holders Register Details

You can view your holdings, access information and make changes by visiting investorcentre.linkgroup.com/Login/Login

Responsible Entity

Region RE Limited (ABN 47 158 809 851, AFSL 426603) Region Group comprises Region Management Trust (ARSN 160 612 626) and Region Retail Trust (ARSN 160 612 788), together, Region Group or RGN.

Sustainability

Our Sustainability Report is located on our website regiongroup.au/sustainability

Directors' Report Remuneration Report

Financial Statements

Directors' Declaration Auditor's Report Historical Key Metrics Security Analysis Directory

About us

We are passionate about making life's essentials easy and inspiring, enabling communities to thrive and grow.

REGION GROUP

STAPLED SECURITIES

Region Group is an internally managed real estate investment trust (REIT) with 92 convenience-based retail properties, valued at $4,368 million.

We remain the largest owner of convenience-based retail centres with 7% share of the market, which is dominated by private owners. This asset class has proven to be resilient due to its exposure to non- discretionary retail categories, including long leases with grocery-based anchor tenants.

Region (originally SCA Property Group ASX: SCP) was created out of Woolworths Group Limited (Woolworths) in late 2012, when ownership

in a number of retail properties was transferred. Since our announcement in November 2022, we have been operating under our new name, Region Group (ASX: RGN).

Our portfolio benefits from long leases to Woolworths and Coles Group Limited (Coles), which act as our anchor retail partner at more than 96% of our properties.

OUR PURPOSE

Our ambition to do better for the communities we operate in, our people, retail partners and security holders inspired us to think deeper. In 2022, ten years after the creation of SCA Property Group, we became Region with a clear purpose: supporting better communities through life's essentials.

We have defined critical pathways to our success - our people, our customers, our environment and our security holders. We believe in owning a portfolio of properties that are economically and environmentally sustainable. Our centres, directly and indirectly, provide employment for thousands of people and help support the economic resilience of their local communities.

Our Region people are experts in their field, and place great value in trust, collaboration, innovation and leadership.

At the heart of our strategy are our customers. This means the places we create will deliver both a practical and positive experience, as we work to be the first choice for essentials at a place nearby.

Operating responsibly is of great importance to our business, our communities and our security holders, and we are well placed in delivering our environmental, social and governance commitments.

The value of our business is more than its physical properties. It lies in the wellbeing of our people and the prosperity of our retailers as we work together to provide for the essential needs of our customers. Our positioning means we are resilient as a business, capable of delivering growth to our security holders, people, customers and the communities we serve.

Our values are what guide us in how we deliver on our ambition.

ACHIEVEMENT

Innovation

We embrace doing things differently to get people what they need, when and how they want it.

Leadership

We stand for what people need and show the way forward.

ONE TEAM

Trust

Our word is our bond.

Collaboration

We achieve and grow together as one team.

1. Region RE Limited is the Responsible Entity of Region Management Trust and Region Retail Trust
2. Region RE Limited as Responsible Entity of Region Retail Trust owns 20% of SCA Metro Convenience Shopping Centre Fund (Metro Fund 1)

Delacombe Town Centre, VIC

Our FY24

Performance

Highlights

OPERATIONAL

RESILIENT PORTFOLIO PERFORMANCE

FINANCIAL

DISCIPLINED CAPITAL MANAGEMENT

VALUE CREATION AND GROWTH

FOR SALE

$176.7m $34.1m

acquisition of

Cooleman Court, ACT

(at an implied initial

yield of 6.73%)

$394m

establishment of Metro Fund 2 with six new centres

(in September 2024)

On behalf of our fellow Directors, we are pleased to deliver our annual report for FY24. We are committed to delivering on our strategy to ensure defensive, resilient cash flows to support secure and growing long-term distributions to our security holders.

Operational Performance

Our portfolio of convenience-based retail centres has proved resilient with its high-quality mix of supermarket anchor retail partners and focus on non-discretionary specialties. As at 30 June 2024, our portfolio MAT growth was driven by 3.0% supermarket and 4.1% non-discretionary specialty sales growth.

Non-discretionary retail partners generated 88% of the gross rent and the portfolio weighted average lease expiry is strong at 5.1 years. Our retail partner's health remains sound with arrears at 1.0% of billings.

Our leasing activity has driven higher occupancy at 98.1% and improved specialty vacancy of 4.7%. The team achieved a record number of 552 leasing deals in FY24 at an average uplift of 4.0% and delivered increased average annual fixed rent reviews at 4.1%.

Essentially Local, our social impact pillar, is fundamental to how we deliver on our purpose. We have made a positive impact through our continued partnership with The Smith Family, where we have supported 208 students as part of their Learning for Life program. We are proud to have the opportunity to positively contribute to the prosperity of the local communities we operate in, with our teams implementing Local Community Engagement Plans resulting in more than 800 events held across our centres.

Finally, we have embarked on our journey towards being fully aligned with the proposed Australian Sustainability Reporting Standards by FY27.

More details around our sustainability framework and progress towards our commitments are set out in our FY24 Sustainability Report.

Financial Performance

Despite inflationary pressures on property expenses, we achieved:

• FFO 15.4 cps
• AFFO 13.6 cps
• Distribution 13.7 cps - in line with AFFO

Value Creation and

Growth Opportunities

We have substantially completed our capital recycling program where we divested $176.7m of non-core, lower yielding retail centres since May 2023 at an average passing yield of 5.3%. Proceeds have been reinvested into accretive opportunities such as the $74.0m acquisition of Cooleman Court at an implied initial yield of 6.73%, and reinvestments into our existing

portfolio, with any surplus proceeds temporarily used to reduce debt.

Our first tranche of centre repositioning projects is underway, where we plan to spend $35m across three centres to enhance the customer experience and drive asset value. We will also continue to co-invest with our supermarket retail partners to roll out their e-commerce facilities. Finally, we are well progressed on the development of Delacombe Town Centre stage 2, which is expected to be completed in December 2024.

Sustainability

Prioritising our long-term resilience and sustained future remains paramount. In FY24, we completed an evaluation of our sustainability strategy to ensure it continues to focus on these ambitions. As a result, we introduced an increased focus on Governance including Procurement, and Transparency & Accountability.

We have continued to progress on our sustainability targets, with 16.1MW of solar PV across 29 sites installed and operational at the end of FY24. We expect to reach our Net Zero (Scope 1 and 2) target by FY30, and as we progress our program, we are improving the data availability for our Scope 3 greenhouse gas emissions.

• Comparable NOI growth of 3.0%

Looking forward, we have mitigated our exposure to interest rates in FY25 and FY26 through our hedging activity. During the year we entered into $300m of interest rate swaps at zero cost and issued a 7-year, $300m Medium Term Note (MTN). The MTN orderbook was 4.6x oversubscribed, which allowed us to achieve a margin of 1.45%.

Following these transactions, we are 96% hedged in FY25 and 82% hedged in FY26.

Our balance sheet is well positioned for growth with market capitalisation rates stabilising during the second half of the year, pro forma gearing of 32.3% at the lower end of our target range and $262.4m of available liquidity.

The Next 12 Months

We remain concentrated on delivering defensive, resilient cash flows to support secure and long-term distributions to our security holders. To achieve this, our focus for FY25 will continue to be on:

• Serving our local communities for their everyday needs
• Partnering with our anchor retailers to improve their online offer
• Reinvesting in our centres to drive portfolio value
• Curating our portfolio based on our disciplined investment criteria and growing our funds under management
• Executing on our sustainability strategy

The productivity of our portfolio is positioned to increase, with continued strong population growth and limited new supply of retail space. With our planned centre reinvestment program and our low specialty occupancy cost, this provides the opportunity to increase specialty rents.

We are pleased to announce the establishment of Metro Fund 2 in August 2024 with a global institutional partner, which more than doubles our funds under management. The management rights for this new fund were acquired at zero cost and

consists of six new centres totalling $394m at a cap rate of 5.7%. We are focused on completing this transaction as well as remaining disciplined with growth plans in Metro Fund 1.

Supporting better communities through life's essentials is the foundation to our strategy. Our balance sheet remains strong and positions us for growth, our strategy is sound, and our properties remain resilient.

On behalf of our team, we thank you for your continued support and confidence in Region.

Steven Crane

Chair

Anthony Mellowes

Chief Executive Officer

About Us

Property Portfolio Retail Partners Strategy Performance Directors' Report Remuneration Report Financial Statements Directors' Declaration Auditor's Report Historical Key Metrics Security Analysis Directory

Our Property Portfolio

AT 30 JUNE 2024

We are the largest owner of convenience-based retail properties within Australia.

Our portfolio comprises of 13 sub-regional and 79 neighbourhood retail properties located in all states and territories across Australia. During the year, we divested four and acquired one retail property as part of our capital recycling program, with an additional three held for sale at 30 June 2024.

We also manage an additional seven neighbourhood retail properties located across four states on behalf of Metro Fund 1, bringing our total portfolio to 99 retail properties under management.

Sub-regional

Neighbourhood

Metro Fund 1

Sold - approaching settlement

About Us

Property Portfolio Retail Partners Strategy Performance Directors' Report Remuneration Report Financial Statements Directors' Declaration Auditor's Report Historical Key Metrics

Security Analysis Directory

Our Property Portfolio continued

PORTFOLIO OVERVIEW

88% of gross rent is generated from non-discretionary tenants.

Our Retail Partners

92

owned retail properties

2,109

number of speciality retailers

$4,368million

total owned portfolio value

gross lettable area

Specialties/Mini Majors 53%

Woolworths Group 28%

Coles Group 11%

Wesfarmers Group 5%

Other Anchors 3%

Specialty / Mini Major Tenants (by gross rent)

Food and Liquor 31%

Pharmacy and Healthcare2 20%

Services3 19%

Other Retail4 14%

Apparel 7%

Discount Variety 6%

Petrol 3%

Our portfolio comprises of convenience-based retail properties with a strong weighting to non- discretionary retail categories. Proactive leasing deals have reduced prior anticipated FY25 expiries from 11.1% to 9.6%. Anchor retail partners represent 47% of gross rent, with the remaining 53% of gross rent coming from specialty and mini major retail partners.

Overall lease expiry (% of gross income)

41.0%

1. Non-Discretionary includes ATM's, offices and other non-retail tenancies

2,488,771sqm

land

5.1years

weighted average lease expiry1

Geographic Diversication (by value)

About Us Property Portfolio Retail Partners

Strategy Performance Directors' Report Remuneration Report Financial Statements Directors' Declaration Auditor's Report Historical Key Metrics Security Analysis Directory

At the heart of our strategy is our customers. This means the places we create will deliver both a practical and positive experience, as we work to be the first choice for essentials at a place nearby. We know that through customer value we deliver security holder value. In our pursuit of delivering our strategic pillars we aim to ensure defensive, resilient cash flows to support secure and growing long-term distributions to security holders.

Focus on convenience-based retail centres

Weighted to non-discretionary retail segments

Bentons Square, VIC

Long leases to quality anchor tenants

Optimise value through targeted reinvestment in the portfolio

Grow through deploying capital into accretive opportunities

ELEVATING OUR CORE PORTFOLIO

We believe that access to life's essentials enables and inspires communities to thrive and grow. This belief drives our continued focus on optimising our portfolio through partnering with our supermarket retail partners to enhance their e-commerce experience, elevating our portfolio composition through our considered divestment program of lower yielding properties, and deploying recycled capital into accretive opportunities that drive portfolio performance.

DISCIPLINED CAPITAL MANAGEMENT

We maintain a conservative approach to managing our balance sheet by focusing on diversified funding sources and maintaining appropriate level of gearing within our target range of 30-40%.

OPERATING SUSTAINABLY

Operating sustainably is key and how we deliver on our purpose. We continue to build on our strategy as we place greater focus on Governance, particularly Procurement, and Transparency & Accountability across our business operations and our commitment to positively impact the communities in which we operate.

SCALING FUNDS MANAGEMENT

Our funds management platform through Metro Fund 1 and the establishment of Metro Fund 2 provides growth opportunities through acquisitions in the medium to long term.

Strategy Performance Directors' Report Remuneration Report Financial Statements Directors' Declaration Auditor's Report Historical Key Metrics Security Analysis Directory

Our Performance

FINANCIAL PERFORMANCE

Resilient Portfolio Performance

Our underlying FFO per security was stable compared to the prior year, driven by a 3.0% increase in comparable NOI. However, this growth was outweighed by the increase in cost of debt driven by the increase in market interest rates and headwinds from inflationary pressures.

Balance Sheet Positioned for Growth

Cap rates in the convenience-based sector have stabilised and our conservative balance sheet provides the flexibility for growth opportunities.

As at 30 June 2024, we have $4.8 billion Assets Under Management, which includes the recent $74.0 million acquisition of Cooleman Court, ACT, and $67.7 million disposal of non-core retail properties during the period.

Our gearing remains at the lower end of our 30-40% target range, sitting at 32.9%, and we have increased our liquidity with $262.4 million cash and undrawn debt capacity as at 30 June 2024, enabling us to remain agile in our pursuit for growth.

Property Valuations Stabilised

During the year, our portfolio valuation was impacted by a $74.4 million like-for-like fair value decrease. However, our income growth and stable cap rates drove a like- for-like fair value increase of $13.8 million in the second half of FY24.

The portfolio has a weighted average capitalisation rate of 6.07%, a 3bps movement since December 2023.

Portfolio Value ($m)

1. Excluding assets held for sale at 30 June 2024

Proactive Capital Management

FY24 capital management activity provides a secure platform for growth.

Debt Facilities Expiry Prole ($m)

During the year, we increased the amount of fixed debt to mitigate the impact from increased interest rates going forward. This comprises of 94.2% of debt fixed

• hedged in FY24 and 96% in FY25. We entered into an additional $300 million of interest rate swaps and issued a new 7-year, $300 million Medium Term Note (MTN) at a coupon of 5.55% including a margin of 1.45%.

Hedge Expiry Prole Based on Debt Drawn ($m)

% Hedged post new MTN and swap transactions % Hedged pre new MTN and swap transactions