FIRST HALF FY20 RESULTS PRESENTATION
3 February 2020
Shell Cove, NSW
AGENDA
- OVERVIEW OF FIRST HALF FY20 RESULTS
- FINANCIAL PERFORMANCE
- OPERATIONAL PERFORMANCE
- GROWTH INITIATIVES
- KEY PRIORITIES AND OUTLOOK
- QUESTIONS
- APPENDICES
slide
1
OVERVIEW OF FIRST HALF FY20 RESULTS
Anthony Mellowes
Chief Executive Officer
slide 3
FIRST HALF FY20 HIGHLIGHTS
FINANCIAL
PERFORMANCE
FFO per unit 1
8.44 cpu, up by 4.2%
Distribution per unit 1,2
7.50 cpu, up by 3.4%
Funds from operations (FFO) 1
$78.5m, up by 19.1%
CAPITAL
MANAGEMENT
Gearing 3
34.2%, up by 1.4%
NTA per unit 4
$2.29, up by 0.9%
Weighted cost of | Weighted average | |
debt 5 | debt maturity 5 | |
3.4% pa | 5.6 yrs | |
ACTIVE PORTFOLIO
MANAGEMENT
Portfolio occupancy 5 Specialty vacancy 5
98.3% 4.8%
Portfolio weighted average cap rate 6
6.46%
Acquisitions 7
$78.4m
- For the six months ended 31 December 2019 vs six months ended 31 December 2018
- Distribution of 7.50 cpu in respect of the six months ended 31 December 2019 was paid on 29 January 2020. "cpu" stands for Cents Per Unit
- As at 31 December 2019, compared to 30 June 2019. Gearing is calculated as Finance debt, net of cash (with USD denominated debt recorded as the hedged AUD amount) divided by total tangible assets (net of cash and derivatives). Target gearing range is 30% - 40%. Gearing is 32.8% when adjusted for the sale of Cowes, SURF 1 return of capital and underwritten DRP in January 2020
- As at 31 December, compared to 30 June 2019
- As at 31 December 2019
- As at 31 December 2019. Weighted average capitalisation rate as at 30 June 2019 was 6.48%
- During the six month period we acquired Warner Marketplace for $78.4 million (excluding transaction costs)
slide 4
KEY ACHIEVEMENTS
Supermarket anchored convenience centres continue to be resilient
OPTIMISING THE CORE BUSINESS
GROWTH
OPPORTUNITIES
CAPITAL
MANAGEMENT
EARNINGS
GROWTH DELIVERED
- Our tenants are performing well
- Supermarket and discount department store MAT sales growth has continued to improve over the last six months and turnover rental growth is increasing
- Specialty MAT sales growth has improved, sales productivity has increased, specialty vacancy has reduced and occupancy cost is now 9.8%
- Against a backdrop of a softening in the broader retail market, our strategy has continued to be to:
- Improve tenancy mix with a bias toward non-discretionary categories
- Maintain high retention rates on renewals; and
- Reduce specialty vacancy by focussing on difficult long term vacancies
- This strategy will ensure we have sustainable tenants paying sustainable rents, and ultimately support our strategy of generating defensive, resilient cash flows to support secure and growing long term distributions to our unitholders
- In the last six months, while average leasing spreads were negative and average incentives were higher, we have achieved a sustainable improvement in occupancy and tenancy mix across the portfolio
- Acquisition of Warner Marketplace, a Woolworths and Aldi-anchored convenience centre in Brisbane QLD, for $78.4m (excluding transaction costs) in December 2019
- Completion of Shell Cove Stage 3 development (5 additional specialty shops of 396sqm in total) for $4.8m in December 2019
- Agreed to sell Cowes VIC for $21.5m in December 2019 (10% above June 2019 book value), with settlement expected in February 2020
- Completed the sale process for the SURF 1 properties for $69.3m, 1.3% above June 2019 book value. Proceeds to be distributed to SURF 1 unitholders during 2H FY20
- Balance sheet remains in a strong position
- Gearing of 34.2% (within our target range). Gearing is 32.8% when adjusted for the sale of Cowes, SURF 1 return of capital and underwritten DRP in January 2020
- Weighted average cost of debt is currently 3.4%, weighted average term to maturity of debt is 5.6 years, 65.2% of drawn debt either fixed or hedged
- Cash and undrawn facilities of $145.8m
- 1H FY20 FFO per unit of 8.44 cpu represents growth of 4.2% on the same period last year
- 1H FY20 Distribution of 7.50 cpu represents growth of 3.4% on the same period last year
slide 5
2
FINANCIAL PERFORMANCE
Mark Fleming
Chief Financial Officer
slide 6
PROFIT & LOSS
For the six months ended 31 December 2019
- Net property income:
- Gross property income increase primarily due to acquisitions
- Property expenses slightly increased as a percentage of gross property income due to larger average centre size and growth of in-house leasing team
- Comparable NOI1 up by 1.6% on the prior year, slightly lower than the prior year growth rate due to execution of strategy in a softening retail market
- Distribution income relates to our CQR unitholding. In 1H FY19 we owned 15.5m CQR units. In 2H FY19 we sold 8.7m units. As at 31 December 2019 our residual CQR unitholding is 6.8m units
- Funds management income includes $0.7m SURF 1 disposal fee
- Corporate costs increase primarily due to increase in D&O insurance
- Fair value adjustments:
- Investment properties: fair value gain primarily due to increase in the value of the properties acquired from VCX in October 2018
- Minimal movements in the value of derivatives and foreign exchange due to relatively stable interest rate outlook and currency movements
- Share of net profit from associates relates to SURF 1, 2 & 3 co-investment stakes
- Net interest expense:
- Average debt drawn (vs December 2018) increased by ~$110m due to acquisitions and developments largely offset by decreased interest rates, with weighted average cost of debt now down to 3.4% (vs December 2018 of 3.8%)
31 Dec | 31 Dec | ||
$m | 2019 | 2018 | % Change |
Anchor rental income3 | 63.5 | 56.0 | 13.4% |
Specialty rental income3 | 64.4 | 53.7 | 19.9% |
Recoveries and recharge revenue3 | 17.4 | 13.4 | 29.9% |
Other income3 | 5.2 | 2.6 | 100.0% |
Straight lining and amortisation of incentives | (4.7) | (4.1) | 14.6% |
Gross property income | 145.8 | 121.6 | 19.9% |
Property expenses | (46.6) | (38.4) | 21.4% |
Property expenses / Gross property income (%)2 | 31.0% | 30.5% | 0.5% |
Net property income | 99.2 | 83.2 | 19.2% |
Distribution income from CQR | 1.0 | 2.2 | (54.5%) |
Funds management income from SURF funds | 1.3 | 1.3 | -% |
Net operating income | 101.5 | 86.7 | 17.1% |
Corporate costs | (6.8) | (6.5) | 4.6% |
Fair value of investment properties | 13.6 | (28.0) | nm |
Fair value of derivatives | 0.7 | 33.9 | (97.9)% |
Unrealised foreign exchange loss | 0.5 | (25.8) | nm |
Share of net profit from associates | 0.4 | 0.6 | (33.3)% |
Transaction fees | - | (2.2) | nm |
EBIT | 109.9 | 58.7 | 87.2% |
Net interest expense | (19.3) | (19.0) | 1.6% |
Tax expense | (0.4) | (0.4) | -% |
Net profit after tax | 90.2 | 39.3 | 129.5% |
1. | Comparable NOI growth is the net operating income growth from comparable centres excluding acquisitions, disposals & developments, and excluding the | |
income from, funds management income, distribution income and non-cash items such as straight lining and amortisation of incentives | slide 7 | |
2. | For the purpose of this ratio, gross property income excludes straight lining and amortisation of incentives | |
3. In prior periods, recoveries and recharge revenue was included in anchor retail income, specialty rental income and other income (due to change in AASB 15 Revenue from Contracts with Customers)
FUNDS FROM OPERATIONS
For the six months ended 31 December 2019
- Funds From Operations ("FFO") of $78.5m is up by 19.1% on the same period last year, primarily due to acquisitions completed during 1HFY19
- Non-cashand one-off items have been excluded from FFO
- Adjusted FFO (AFFO) of $70.1m is up by 15.7% on the same period last year
- New lease incentives have increased due to higher average incentives and increased deal volume
- Weighted average units on issue increased primarily due to distribution reinvestment plan (5.3m units in August 2019 and 10.6m units in January 2019), institutional placement (113.1m units in October 2018) and unit purchase plan (47.9m units in November 2018)
- Distribution of 7.50 cpu represents <100% of AFFO
- Estimated tax deferred component decreased to 22% which is in line with our expected normalised level. FY19 was higher due to deductions associated with the September 2018 USPP
- EPU and DPU increased by 4.2% and 3.4% respectively versus the same period last year
$m | 31 Dec | 31 Dec | |
2019 | 2018 | % Change | |
Net profit after tax (statutory) | 90.2 | 39.3 | 129.5% |
Adjustment for non cash items | |||
Reverse: Straight lining & amortisation | 4.7 | 4.2 | 11.9% |
Reverse: Fair value adjustments | |||
- Investment properties | (13.6) | 28.0 | (148.6)% |
- Derivatives | (0.7) | (33.9) | (97.9)% |
- Foreign exchange | (0.5) | 25.8 | (101.9)% |
Other adjustments | (2.1) | - | nm |
- Other income | |||
- Net unrealised (profit)/loss from SURF funds | 0.5 | 0.3 | 66.7% |
- Transaction fees | - | 2.2 | nm |
FFO | 78.5 | 65.9 | 19.1% |
Number of units (weighted average)(m) | 929.8 | 813.7 | 14.3% |
FFO per unit (cents) ("EPU") | 8.44 | 8.10 | 4.2% |
Distribution ($m) | 69.9 | 66.3 | 5.4% |
Distribution per unit (cents) ("DPU") | 7.50 | 7.25 | 3.4% |
Payout ratio (%) | 89% | 90% | (1.0)% |
Estimated tax deferred ratio (%) | 22% | 42% | (20.0)% |
Less: Maintenance capex | (1.9) | (2.2) | (13.6)% |
Less: Leasing costs and fitout incentives | (6.5) | (3.1) | 109.7% |
AFFO | 70.1 | 60.6 | 15.7% |
Distribution / AFFO (%) | 100% | 109% | (9.0)% |
slide 8
BALANCE SHEET
As at 31 December 2019
- Value of investment properties increased from $3,147.0m to $3,232.8m, primarily due to:
- Acquisition of Warner Marketplace for $78.4m, completion of Shell Cove Stage 3 development for $4.8m, and partially offset by disposal of Cowes property for $21.5m (June 2019 book value of $19.6m)
- Valuation uplift on like-for-like properties. The properties acquired from VCX increased by $17.8m to $594.2m vs the acquisition price of $573.0m
- Portfolio weighted average capitalisation rate is now 6.46% (sub-regionals 6.74% and neighbourhoods 6.36%) vs 6.48% in June 2019
- Portfolio investment property valuation implies $1,584 per square metre of aggregate land area
- Investment in CQR of 6.8m units held at its closing price on 31 December 2019 of $4.27 per unit
- Other assets includes derivative financial instruments with a mark-to-market valuation of $127.2m, SURF 1, 2 & 3 co-investment of $18.0m, receivables of $39.1m (including $8.0 m receivable due to SURF 1 capital return in January 2020) and other assets of $19.0m
- NTA per unit increased by 0.9% to $2.29, due to investment property uplift mostly associated with the properties acquired from VCX in October 2018
- SURF assets under management and co-investment includes $115.0m of properties in SURF 2 and 3, and $38.6m of cash in SURF 1 (to be distributed to SURF 1 unitholders in the current calendar year). Remainder of $2.9m includes receivables and other assets of SURF 1, 2, and 3
- MER increased to 39bps due to increased corporate costs primarily due to increase in D&O insurance
$m | 31 Dec 2019 | 30 June 2019 | % Change |
Cash | 3.8 | 4.2 | (9.5)% |
Assets - held for sale | 21.5 | - | nm |
Investment properties | 3,232.8 | 3,147.0 | 2.7% |
Investment in CQR | 28.9 | 29.6 | (2.4)% |
Other assets | 203.3 | 191.4 | 6.2% |
Total assets | 3,490.3 | 3,372.2 | 3.5% |
Debt | 1,222.2 | 1,137.5 | 7.4% |
Accrued distribution | 69.9 | 69.0 | 1.3% |
Other liabilities | 60.7 | 61.8 | (1.8)% |
Total liabilities | 1,352.8 | 1,268.3 | 6.7% |
Net tangible assets (NTA) | 2,137.5 | 2,103.9 | 1.6% |
Number of units (period-end)(m) | 931.8 | 925.6 | 0.7% |
NTA per unit ($) | 2.29 | 2.27 | 0.9% |
Corporate costs | (14.0)1 | (13.1) | 6.9% |
External funds under management | |||
- SURF 1, 2 & 3 assets under management | 156.5 | 186.4 | (16.0)% |
- Less: SURF 1, 2 & 3 co-investment | (18.0) | (26.5) | (32.1)% |
Assets under management | 3,628.8 | 3,532.1 | 2.7% |
MER2 (%) | 0.39% | 0.37% | 0.02% |
1. Full year FY20 forecast
2. MER stands for "Management Expense Ratio" and is calculated as Corporate Costs divided by Assets Under Management at year end (including SURF 1, SURF 2 and SURF 3). Bps stands for basis points.
slide 9
DEBT AND CAPITAL MANAGEMENT
As at 31 December 2019
31 Dec 2019 30 June 2019
• Gearing of 34.2% is within target range of 30% to 40%. Our preference is for gearing to | Facility limit ($'m) 1 | 1,307.1 | 1,257.1 | ||||||||||||||||||||||||||
remain below 35% at this point in the cycle | Drawn debt (net of cash) ($'m) 2 | 1,150.3 | 1,064.9 | ||||||||||||||||||||||||||
- Look through gearing (including CQR and SURF investments) is 34.7% | |||||||||||||||||||||||||||||
- Gearing is 32.8% when adjusted for the sale of Cowes, SURF 1 return of capital | Gearing (%) 3 | 34.2 | 32.8 | ||||||||||||||||||||||||||
and underwritten DRP in January 2020 | |||||||||||||||||||||||||||||
% debt fixed or hedged | |||||||||||||||||||||||||||||
65.2 | 70.4 | ||||||||||||||||||||||||||||
• Key movements in debt during the period: | |||||||||||||||||||||||||||||
Weighted average cost of debt (%) | 3.4 | 3.6 | |||||||||||||||||||||||||||
- Bank debt: we increased $50.0m bilateral bank debt facilities expiring in FY23 | |||||||||||||||||||||||||||||
• The earliest debt expiry is the A$MTN of $225.0m in April 2021. It is expected that the | Average debt maturity (yrs) | 5.6 | 6.1 | ||||||||||||||||||||||||||
Average fixed / hedged debt maturity (yrs) | 4.3 | 4.8 | |||||||||||||||||||||||||||
MTN will be initially repaid mainly from existing undrawn debt and cash of $145.8m | |||||||||||||||||||||||||||||
together with funds raised from the sale of Cowes for $21.5m, underwriting the | Interest cover ratio4 | 4.6x | 4.3x | ||||||||||||||||||||||||||
distribution paid in January 2020 (raised $27.9m) and other activities | |||||||||||||||||||||||||||||
• Weighted cost of debt reduced from 3.6% to 3.4% due to declining BBSW rates. | Debt Facilities Expiry Profile ($m) | ||||||||||||||||||||||||||||
Average debt maturity has decreased to 5.6 years as there have been no changes in the | |||||||||||||||||||||||||||||
debt profile since June 2019. Average fixed maturity has decreased to 4.3 years as there | |||||||||||||||||||||||||||||
have been no changes in the hedging profile since June 2019 | 300 | 142.0 | 225.0 | Bank debt undrawn | |||||||||||||||||||||||||
• We are well within debt covenant limits of less than 50% gearing and interest cover ratio | Bank debt drawn | ||||||||||||||||||||||||||||
250 | |||||||||||||||||||||||||||||
225.0 | MTN | ||||||||||||||||||||||||||||
(ICR) greater than 2.0x | |||||||||||||||||||||||||||||
USPP | |||||||||||||||||||||||||||||
200 | |||||||||||||||||||||||||||||
150 | 100.0 | 106.5 | 103.3 | 92.1 | |||||||||||||||||||||||||
100 | |||||||||||||||||||||||||||||
133.0 | 39.4 | 65.8 | |||||||||||||||||||||||||||
50 | |||||||||||||||||||||||||||||
1. Facility limit is the bank debt of $450.0m (including bilateral bank facility limits of $350.0m plus $100.0m syndicated | |||||||||||||||||||||||||||||
75.0 | |||||||||||||||||||||||||||||
non revolving facility) plus USPP A$ denominated facility of $50.0m plus the USPP US$ denominated facilities at | 0 | ||||||||||||||||||||||||||||
A$357.1m (being made up of USPP2014 US$ denominated facility at A$159.8m and the USPP2018 US$ | |||||||||||||||||||||||||||||
denominated facility at A$197.3 (both being the AUD amount received and hedged in AUD)), plus the A$ MTN | FY20 FY21 FY23 FY24 FY26 | FY28 | FY29 FY30 FY32 | FY34 | |||||||||||||||||||||||||
issuance of $450m. |
- Drawn debt (net of cash) of $1,150.3 is made up of: statutory debt of $1,222.2m less $69.7m (being the revaluation of the USPP US$ denominated debt from statutory value of $426.8m (using the prevailing December 2019 spot exchange rate) to restate the USPP to its hedged value of A$357.1m (refer note 1 above) plus unamortised debt fees and MTN discount of $1.6m less $3.8m cash
- Gearing calculated as drawn debt (net of cash) of $1,150.3m (refer note 2 above), divided by total tangible assets (net of cash and derivatives) being total assets of $3,490.3m less cash of $3.8m less derivative mark-to-market of $127.2 = $3,359.3m
- Interest cover ratio is calculated as calendar year Group EBIT $219.9m less unrealised and other excluded gains and losses of $38.2m, divided
by calendar year net interest expense of $41.1m | slide 10 |
5. Cash and undrawn facilities is made up of facility limit of $1,307.1m less drawn debt net of cash of $1,150.3 less $11.0m of debt facilities used for bank guarantees
3
OPERATIONAL PERFORMANCE
Anthony Mellowes
Chief Executive Officer
slide 11
PORTFOLIO OVERVIEW
Weighting towards food, health and retail services (non-discretionary)
As at 31 Dec 2019 | Number of | Number of | GLA | Site Area | Occupancy | Value | WALE | Weighted average | ||||||
centres | specialties | (sqm) | (sqm) | (% GLA) | ($m) | (yrs) | cap rate (%) | |||||||
Neighbourhood | 75 | 1,292 | 465,521 | 1,495,916 | 98.3% | 2,384.7 | 7.5 | 6.36% | ||||||
Sub-regional | 10 | 516 | 208,868 | 545,090 | 98.4% | 848.1 | 7.8 | 6.74% | ||||||
85 | 1,808 | 674,389 | 2,041,006 | 98.3% | 3,232.8 | 7.6 | 6.46% | |||||||
Asset held for sale | 1 | 14 | 4,820 | 14,160 | 98.0% | 21.5 | 10.3 | |||||||
86 | 1,822 | 679,209 | 2,055,166 | 98.3% | 7.6 | 6.46% | ||||||||
Tenants by Category (by gross rent)1 | Specialty Tenants by Category (by gross rent)1,2 | Geographic Diversification (by value) | ||||||||||||
Other Retail 11% | WA | |||||||||||||
Woolworths3 28% | Petrol 2% | 15% | NSW | |||||||||||
Fresh Food/Food | ||||||||||||||
24% | ||||||||||||||
Discount Variety 6% | Catering/Liquor 32% | |||||||||||||
VIC | ||||||||||||||
19% | ||||||||||||||
Specialties 52% | Apparel 8% | |||||||||||||
Big W 5% | ||||||||||||||
Coles 11% | Pharmacy & Health | TAS | QLD | |||||||||||
Services 21% | 11% | 25% | ||||||||||||
Other major5 1%Wesfarmers4 3% | Care 20% | |||||||||||||
SA | ||||||||||||||
6% |
- Annualised gross rent excluding vacancy and percentage rent
- Mini Majors represent 12% of annualised specialty gross rent. Mini major tenants have been split across the relevant categories
- Woolworths includes Endeavour Drinks (1.6% of gross rent)
4. | Wesfarmers includes Kmart 2.1%, Bunnings 0.5% and Target 0.4% | slide 12 |
5. | Other majors includes Aldi, Farmer Jacks and Grand Cinemas |
PORTFOLIO OCCUPANCY
Specialty vacancy has reduced
- Strategic focus on remixing toward non-discretionary categories, reducing long term vacancies and maintaining the retention rate on existing tenant renewals
- Total portfolio occupancy has improved to 98.3% of GLA
- Specialty vacancy has reduced to 4.8% (from 5.3% as at June 2019), within target range of 3-5%
- Long term stability of portfolio occupancy illustrates the resilience of the portfolio
- Refer to slide 31 for a comparison between existing and FY19 acquisition centres
- Specialty tenant holdover on total portfolio is 0.9% (down from 1.0% at June 2019)
- Anchor tenant expiries in 2020:
- The Markets Coles in October 2020: 2 x 5-year options (10 years in total) have been exercised, 3 x 5yr options remaining
- West End Plaza Coles in November 2020: we are finalising terms for new lease
- West End Plaza Kmart in November 2020: we are finalising terms for new lease
- Continued active management of lease expiry profile. Around 10% overall lease expiry per annum is consistent with c.50% of income from specialty tenants with 5- year leases
Portfolio Occupancy (% of GLA)
98.6% | 98.4% | 98.4% | 98.2% | 98.3% |
June 2016 | June 2017 | June 2018 | June 2019 | Dec 2019 |
Overall Lease Expiry (% of Gross Rent)
29.3%
12.0% 10.9% 10.0% | 9.1% | 7.2% | 7.3% | |||||||||||||||||
5.5% | 4.5% | 4.2% | ||||||||||||||||||
FY20 | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 | FY27 | FY28 | FY29 | |||||||||||
and | ||||||||||||||||||||
Beyond |
slide 13
SALES GROWTH AND TURNOVER RENT
Sales growth in our centres is increasing
• Supermarket portfolio MAT1 sales growth has improved to 2.6% (June 2019: 2.0%) | Comparable Store MAT1 Sales Growth by Category (%) |
- Both Coles and Woolworths showing an increased rate of growth |
- Discount Department Store (DDS) portfolio MAT sales growth has accelerated to 3.4% (June 2019: 2.2%)
- Big W continues to perform positively with sales steadily increasing
- Mini Majors portfolio MAT sales appear to be stabilising
- Discount variety category continues to be impacted and the apparel category continues to underperform
- Specialty portfolio MAT sales has increased to 2.3% (June 2019: 1.8%)
- Non-discretionarycategories MAT growth was 3.1%, continuing to outperform discretionary categories at 0.8%
- Discretionary categories such as apparel and leisure are continuing to feel the pressures from competition and online
-
Our core categories of Food/Liquor at 2.7% (June 2019: 2.2%), Retail Services
at 5.1% (June 2019: 3.6%) and Pharmacy at 3.0% (June 2019: 1.2%) continue to perform strongly - Neighbourhood centres MAT growth was 2.8%, continuing to outperform our Sub Regional centres which grew by 1.5%
- Turnover rent continues to increase:
- 34 anchor tenants paying turnover rent as at 31 December 2019 (30 supermarkets, 2 Kmart's and 2 Dan Murphy's) - represents 30% of portfolio anchors paying turnover rent
- Another 14 supermarkets are within 10% of their turnover thresholds
- 3 anchor tenant turnover rents crystallised to base rent during the year
- The sales numbers on this slide are for the total portfolio. Please refer to slide 31 for a breakdown between existing and acquired centres
Total Portfolio | As at | As at |
31 Dec 2019 | 30 June 2019 | |
Supermarkets | 2.6% | 2.0% |
DDS | 3.4% | 2.2% |
Mini Majors | (1.0%) | (3.1)% |
Specialties | 2.3% | 1.8% |
Total | 2.6% | 1.9% |
Turnover Rent ($m)
1.30
1.10 0.20
0.60 | 0.65 | 0.70 | Crystallised into Base Rent | |||
Total Portfolio | ||||||
1.10 | ||||||
1H FY16 | 1H FY17 | 1H FY18 | 1H FY19 | 1H FY20 |
15 Anchors 16 Anchors 20 Anchors 34 Anchors 34 Anchors
1. Moving annual turnover sales growth measures the growth in sales over the last 12 months compared to the previous 12 month | slide 14 |
period |
SPECIALTY KEY METRICS
Executing our strategy in a challenging retail market
- Strong metrics for specialty tenants:
- Sales growth increasing to 2.3% (June 2019: 1.8%)
- Sales productivity increased to $8,134 psm (June 2019: $8,010 psm)
- Our rents remain the lowest in the sector at $772 psm
- Occupancy cost reduced to 9.8% (June 2019: 10.1%)
- Against a backdrop of a softening in the broader retail market, our strategy has been:
- Maintain a high retention rate on renewals: up to 78% for the six months to December 2019 (compared to 77% for the 12 months to June 2019)
- Reduce specialty vacancy by doing a significantly increased volume of deals on difficult long term vacancies: 86 new deals done in six months to December 2019 (vs 87 in the 12 months to June 2019)
- Remix toward non-discretionary categories
- While average leasing spreads were negative and average incentives were higher, we have achieved a sustainable improvement in occupancy and tenancy mix across the portfolio. We are still maintaining 3%-4% annual fixed increases for 85% of specialty tenants, and we remain on track to achieve FY20 comparable NOI growth forecast of 1.6%
- The numbers on this slide are for the total portfolio. Please refer to slide 32 for a breakdown between existing and acquired centres
Specialty Lease Composition (as at 31 December 2019)
Annual Increase MechanismTenant Type
Other, 2% | |
CPI, 13% | |
National / | |
Local, 39% | Regional, |
61% | |
Fixed, 85% |
Specialty Tenant Metrics
Total Portfolio | 31 December 2019 | 30 June 2019 | |
Comparable sales MAT growth (%)1 | 2.3% | 1.8% | |
Average specialty occupancy cost (%)1 | 9.8% | 10.1% | |
Average specialty gross rent per square | $772 | $772 | |
metre | |||
Specialty sales productivity ($ per sqm)1 | $8,134 | $8,010 | |
Renewals | 6 months to | 12 months to | |
31 December 2019 | 30 June 2019 | ||
Number | 135 | 215 | |
Retention (%) | 78% | 77% | |
GLA (sqm) | 19,134 | 26,455 | |
Average uplift (%) | (1.7)% | (1.7)% | |
Incentive (months) | 0.3 | - | |
New Leases | 6 months to | 12 months to | |
31 December 2019 | 30 June 2019 | ||
Number | 86 | 87 | |
GLA (sqm) | 12,240 | 12,200 | |
Average Uplift (%) | (3.9)% | 4.9% | |
Incentive (months) | 15.9 | 11.0 | |
slide 15
1. Sales growth, occupancy cost and sales productivity metrics only include sales reporting tenants trading over 24 months
4
GROWTH INITIATIVES
Anthony Mellowes
Chief Executive Officer
slide 16
PORTFOLIO MANAGEMENT
One acquisition, one completed development and one disposal in the six months to 31 December 2019
ACQUISITION | Warner Marketplace (Warner, QLD) | DEVELOPMENT |
• Acquisition completed in Dec 2019 for $78.4m (5.92% implied fully let yield excluding balance of land)
• Anchored by Woolworths and Aldi supermarkets with 37 specialty tenancies, 2 Kiosks, 2 ATM's and 5 freestanding tenancies
• % of income from Anchors: 34%
• Overall WALE: 6.4 years
• Occupancy at acquisition: 96%
• Built: 2001; Expanded: 2014
Shell Cove - Stage 3 (Shellharbour,
NSW)
- Stage 3 refers to a main street strip of retail comprising five tenancies situated directly across from the SCP owned Shell Cove Neighbourhood centre
-
Development completed in Dec
2019 for total consideration of $4.8m
(6.25% implied fully let yield) - Asset will form part of the existing Shell Cove Neighbourhood Centre
- Two year rental guarantee for any vacancy
DISPOSAL
Cowes, VIC: Contracts were exchanged on 3 December 2019 for a sale price of $21.5m, reflecting a $1.9m (9.7%) uplift on June 2019 book value (yield of 6.85%)
slide 17
CONVENIENCE BASED CENTRES
Fragmented ownership provides acquisition opportunities
CONVENIENCE BASED CENTRE LANDSCAPE
- There are approximately 1,200 Coles and Woolworths anchored neighbourhood and sub regional centres in Australia
- SCP is the largest owner (by number) of neighbourhood and sub regional centres in Australia. SCP has an opportunity to continue to consolidate this fragmented segment by utilising its management capability, industry knowledge and funding ability to source and execute acquisition opportunities from private and corporate owners
- Since listing SCP has completed the acquisition of 50 neighbourhood and sub regional centres for over $1.7b and has divested 31 freestanding and neighbourhood centres for over $500m
RECENT TRANSACTIONS
- During the half year ended 31 December 2019:
- 17 neighbourhood centres changed hands for total consideration of ~$700m
- 1 sub regional centre changed hands for total consideration of ~$100m
- More institutional sellers, while syndicates and privates remain active on the buy side for neighbourhood centres
- SCP acquired one property over the half year, making up approximately 10% of total known transactions over the period
Ownership of Convenience Based Centres
(number of centres)
CQR | ISPT VCX | Syndicates, Funds | Indicative |
& Other | |||
SCP | |||
Institutions |
Private
HY20 Buyers | HY20 Sellers | ||
(by value) | (by value) | ||
SCP | |||
10% | |||
Private | Private | Institutions | |
54% | Institutions | 45% | 51% |
19% | |||
Syndicates | |||
Syndicates | & Funds | ||
4% | |||
& Funds | |||
17% |
slide 18
Source: Management estimates
INDICATIVE DEVELOPMENT PIPELINE
Over $115m of development opportunities identified at 31 of our centres over the next 5 years1
Estimated Capital Investment (A$m) | |||||||
DEVELOPMENT TYPE | CENTRE(S) | 1HY20 | FY22 | FY23 | FY24 | ||
Actuals | 2HY20 | FY212 | |||||
Centre expansions | Shell Cove, Epping North, Belmont, North Orange, Warner | ||||||
Marketplace, Wyndham Vale, Northgate, Central Highlands, | 5.5 | 3.0 | 11.7 | 18.3 | 20.1 | 21.7 | |
Gladstone, Greenbank, Jimboomba, Mackay, Ocean Grove | |||||||
Supermarket expansions | Treendale, West Dubbo | - | - | - | 0.5 | 4.0 | - |
Burnie, Ocean Grove, Oxenford, The Markets, New Town | |||||||
Centre improvements | Plaza, West End Plaza, Riverside, Shoreline, The Gateway, | 0.7 | 9.9 | 14.2 | 6.3 | 2.3 | 2.3 |
Whitsunday SC, Sturt Mall, Meadow Mews, Griffin Plaza, | |||||||
Warnbro, Sugarworld, Wonthaggi, Northgate, Kingston | |||||||
Preliminary & Defensive | Various | - | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
Total | 6.2 | 13.2 | 26.2 | 25.4 | 26.7 | 24.3 | |
Shell Cove Stage 3 completed in 1H FY20. The major projects in 2H FY20 are: The Markets, Epping North & Oxenford
1. | The exact timing of future developments, expansions and improvements are subject to prevailing market conditions and regulatory approvals | slide 19 |
2. | The $10m acquisition cost for the additional land at Greenbank occurring in December 2020 has been excluded from the Indicative |
Development Pipeline
FUNDS MANAGEMENT BUSINESS - AUM$156.5M
Potential to deliver additional earnings growth in the future
- First fund "SURF 1" was launched in October 2015, and has successfully sold the five assets, consistent with 5-year term set out in the original PDS
- Achieved sales price for the five assets of $69.3m (vs original cost of $60.9m and June 2019 book value of $68.4m)
- IRR expected to be in excess of 10%, with potential performance fee to be realised once full proceeds are distributed to unitholders
- The wind-up process will be completed during calendar year 2020
- Second and third funds performing in line with expectations
- "SURF 2" launched in June 2017
- "SURF 3" launched in July 2018
- Fee structure for all funds is the same1
- Establishment Fee: 1.5% of total asset value
- Management Fees: 0.7% of total asset value per annum
- Disposal Fee: 1.0% of assets disposed
- Performance Fee: if the equity IRR exceeds 10%, SCP will receive 20% of the outperformance
- No new funds are forecast for FY20. We will continue to monitor the retail and institutional market appetite for new product
- The funds management business will continue to allow SCP to recycle non-core assets, and utilise its expertise and platform to earn management fees in the future (subject to market conditions)
Moama Marketplace, NSW (SURF 3)
Warrnambool Target, VIC (SURF 3) | Swansea Woolworths, NSW (SURF 3) |
Woodford Woolworths, QLD (SURF 3) | ||
Woolworths and Big W, Katoomba (SURF 2) | Dan Murphy's, Mittagong (SURF 2) | slide 20 |
1. SCA may defer fees, or rebate a portion of its fees to wholesale clients, at its discretion
5
KEY PRIORITIES AND OUTLOOK
Anthony Mellowes and Mark Fleming
Chief Executive Officer & Chief Financial Officer
slide 21
CORE STRATEGY UNCHANGED
Defensive, resilient cashflows to support secure and growing long term distributions to our unitholders
FOCUS ON CONVENIENCE- | WEIGHTED TO | LONG LEASES TO | ||
NON-DISCRETIONARY | ||||
BASED RETAIL CENTRES | QUALITY ANCHOR TENANTS | |||
RETAIL SEGMENTS | ||||
APPROPRIATE | GROWTH | |
CAPITAL STRUCTURE | OPPORTUNITIES | |
slide 22
SUSTAINABILITY
We continue to focus on long-term sustainable performance
SCP remains on track to deliver our sustainability targets with dedicated resourcing and focus on the 3 pillars of our strategy
SCP achievements during this period:
Stronger Communities
- Planning and delivery on our commitment to roll out stronger communities campaigns across all our centres in FY20
Environmentally Efficient Centres
- Set up a specific sustainability development capex project to drive investment in sustainability initiatives that generate acceptable returns
- Solar panels operational across 5 centres. Expansion in capacity of renewable energy for both our centres and our tenants
- Installation of a further 2 Building Automation Systems for management of air conditioning, lighting and energy demand
- Ongoing discussions and trials for the onsite processing of food organics waste. Exploring how we can efficiently implement waste diversion practices across the portfolio for specialty tenants and common mall area organic waste
Responsible Investment
- Creation of a capital investment fund targeting initiatives that achieve the greatest ESG outcomes and returns
- Climate risk assessment across the portfolio underway
Our Sustainability Objectives
1 STRONGERCOMMUNITIES
2 ENVIRONMENTALLY EFFICIENT CENTRES
3 RESPONSIBLEINVESTMENT
Strengthen the relationships between our shopping centres and their local communities and help improve the wellbeing and prosperity of those communities
Reduce the environmental footprint of our shopping centres, particularly greenhouse gas emissions through reducing energy consumption
Manage environmental, social and governance (ESG) risks that are material to investment value and communicate our performance on this
slide 23
POTENTIAL EARNINGS GROWTH TRENDS
Continued solid earnings growth expected over time
Indicative Contribution
to FFO Growth Rate (% pa)
CORE BUSINESS
GROWTH INITIATIVES
Anchor
Rental
Growth
Specialty and Other
Rental Growth
Expenses
Property Development
Acquisitions
Other
Opportunities
Description and Assumptions
- Anchor rental income represents about 50% of overall gross property income
- Once turnover thresholds are met, rent will grow in proportion to Anchors' sales growth
- Specialty rental income represents about 50% of overall gross property income
- Specialty leases generally have contracted growth of 3-4% pa
- Property Expenses and Corporate Costs expected to grow at same percentage rate as rental income
- Interest expense is continuing to be actively managed
Indicative Comparable NOI Growth (%)
- Selective extensions and refurbishments of our existing centres
- We have identified over $115m of development opportunities over the next 5 years
- Selective acquisitions will continue to be made in the fragmented convenience based shopping centre segment
- Funds management business continues to be capital light
Indicative FFO Growth (%)
- medium to longer term -
0 - 1%
1 - 2%
0%
1 - 3%
1% +
2 - 4% +
slide 24
KEY PRIORITIES AND OUTLOOK
Continue to deliver on strategy in FY20
OPTIMISING THE
CORE BUSINESS
GROWTH
OPPORTUNITIES
CAPITAL MANAGEMENT
- Completion of remixing project for centres acquired in FY19
- Leasing focused on sustainable tenants at sustainable rents - maintain high retention rates on renewals and continue to reduce specialty vacancy
- Explore additional "other income" opportunities
- Manage expenses both at centre and corporate levels while maintaining appropriate standards within our centres
- Continue to explore value-accretive acquisition opportunities consistent with our strategy and investment criteria
- Progress our identified development pipeline
- New funds management opportunities as market conditions allow
- Continue to actively manage our balance sheet to maintain diversified funding sources with long weighted average debt expiry and a low cost of capital consistent with our risk profile
- Gearing to remain below 35% at this point in the cycle
EARNINGS GUIDANCE | • FY20 FFO per unit ("EPU") guidance increased from 16.7 cpu to 16.9 cpu (3.5% above FY19) and DPU guidance |
maintained at 15.10 cpu (2.7% above FY19) | |
slide 25
6
QUESTIONS
slide 26
7
APPENDICES
slide 27
FY20 FFO PER UNIT GUIDANCE
We have increased guidance to 16.90 cpu
Warner Marketplace acquisition, | Increase in corporate costs | Increased volume of | |
Shell Cove Stage 3 development, | debt offset by lower | Weighted average units on | |
Cowes divestment, SURF 1 | due to D&O insurance and | cost of debt due to | issue increased due to |
performance fee and assumes | additional tax on SURF 1 | decline of BBSW since | January 2020 DRP |
continue to hold remaining CQR | performance fee | August 2019 to | underwrite |
units | December 2019 |
16.70 | 0.32 | ( 0.06 ) | ( 0.02 ) | ( 0.04 ) | 16.90 |
- | ||||||||||||||
FY20 Guidance Aug 2019 | Growth Initiatives | Corporate & Tax | Interest Expense | Units on Issue | FY20 Guidance Feb 2020 | |||||||||
slide 28 |
LONG TERM LEASES TO WOOLWORTHS, COLES AND WESFARMERS
- 48% of gross rent is generated by anchor tenants (Woolworths 33%, Coles 11%, Wesfarmers 3% and Other majors 1% on a fully leased basis), with an Anchor WALE of 9.9 years
- Overall, a 7.6 year portfolio WALE combined with investment grade tenants and non- discretionary retail categories provides a higher degree of income predictability
- 135 specialty renewals completed in the 6 months to 31 December 2019 with majority on a 5 year lease term
PORTFOLIO LEASE EXPIRY PROFILE
WALE Years | ||
31 Dec 2019 | By Gross Rent | By GLA |
Portfolio WALE | 6.5 | 7.6 |
Anchor WALE | 10.4 | 9.9 |
Overall Lease Expiry (% of Gross Rent)
29.3%
12.0% 10.9% 10.0% | 9.1% | 7.2% | 7.3% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5.5% | 4.5% | 4.2% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY20 | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 | FY27 | FY28 | FY29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beyond | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCA (Including VCX) Overall Lease Expiry (% of Gross | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
17.8% | 18.1% | Rent) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16.4% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10.6% | 14.4% | 10.8% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.4% | 3.8% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2.1% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1.6% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY20 | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 | FY27 | FY28 | FY29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
beyond |
slide 29
ANCHOR TENANTS
- All of our centres are currently anchored by either Woolworths Limited, Coles Group Limited or Wesfarmers Limited retailers
- We are gradually increasing our relative exposure to Coles and Wesfarmers via acquisitions and divestments. Coles now represents 25% and Wesfarmers represents 6% of our anchor tenants
- Woolworths has announced the separation and potential demerger of Endeavour Group. We have 4 Dan Murphy's and 25 BWS stores accounting for 1.6% of our total gross rent
- Big W lease expiry dates:
- FY22: Ballarat (plus 4 x 5 year options)
- FY26-FY29:Lavington, Pakenham, Murray Bridge
- FY34-FY37:Central Highlands, Kwinana, Warnbro, Mt Gambier, Lilydale
30 June 2016 | 30 June 2017 | 30 June 2018 | 30 June 2019 | 31 Dec 2019 | ||
Woolworths Limited | ||||||
Woolworths | 53 | 54 | 54 | 58 | 59 | |
Big W | 8 | 7 | 7 | 9 | 9 | |
Dan Murphy's | 3 | 2 | 2 | 4 | 4 | |
Masters | 1 | - | - | - | - | |
Countdown | - | - | - | - | - | |
Total Woolworths Limited | 65 | 63 | 63 | 71 | 72 | |
Coles Group Limited | ||||||
Coles Group Limited | - | - | - | 28 | 28 | |
Total Coles Group Limited | - | - | - | 28 | 28 | |
Wesfarmers Limited | ||||||
Coles | 12 | 18 | 20 | - | - | |
Target | 3 | 2 | 2 | 2 | 2 | |
Kmart | 2 | 2 | 2 | 4 | 4 | |
Bunnings | - | 1 | 1 | 1 | 1 | |
Total Wesfarmers Limited | 17 | 23 | 25 | 7 | 7 | |
Other Anchor Tenants | ||||||
Aldi | 1 | 1 | 1 | 1 | 2 | |
Farmer Jacks | - | - | - | 1 | 1 | |
Grand Cinemas | - | - | - | 1 | 1 | |
Total Other Anchor Tenants | 1 | 1 | 1 | 3 | 4 | |
Total Anchor Tenants | 83 | 87 | 89 | 109 | 111 |
slide 30
FY19 ACQUISITIONS - KEY METRICS
Sales growth, turnover rent, portfolio occupancy, WALE
Existing Centres:
- Continue to perform strongly
-
MAT Sales growth of 3.3% (June 2019: 2.6%), including 3.5% for
supermarkets (June 2019: 2.7%) - Specialty vacancy reduced to 4.4% (June 2019: 4.7%)
Acquired Centres:
- We have owned the centres acquired from Vicinity for fifteen months. Remixing strategies in relation to these centres will be substantially completed by June 2020
- MAT Sales improved to (0.3)% (June 2019: (0.9)%)
Sales MAT Growth | Existing Centres | FY19 Acquisitions | Total Portfolio |
Supermarkets | 3.5% | (1.1)% | 2.6% |
DDS | 4.1% | 2.2% | 3.4% |
Mini-majors | (0.2)% | (3.4)% | (1.0)% |
Specialty | 2.7% | 1.3% | 2.3% |
Total | 3.3% | (0.3)% | 2.6% |
Turnover Rent | Existing Centres | FY19 Acquisitions | Total Portfolio |
# anchors | 23 | 11 | 34 |
$ | $0.9m | $0.2m | $1.1m |
• Specialty vacancy reduced to 6.0% (June 2019: 7.3%) | Portfolio Occupancy | Existing Centres | FY19 Acquisitions | Total Portfolio |
• Performance continues to be in line with our expectations | Portfolio occupancy (%) | 98.5% | 97.7% | 98.3% |
Specialty vacancy (%) | 4.4% | 6.0% | 4.8% | |
WALE (by GLA) | Existing Centres | FY19 Acquisitions | Total Portfolio | |
Portfolio | 8.1 | 5.8 | 7.6 | |
Anchor | 10.6 | 7.5 | 9.9 | |
slide 31
FY19 ACQUISITIONS - KEY METRICS
Specialty key metrics
Existing Centres:
- Tenant metrics improving vs June 2019 with improvements in sales MAT, occupancy cost and sales productivity
- Renewal spreads lower at 0.1% (June 2019: 5.3%) reflecting strategy to maintain retention rate against a backdrop of a softening in the broader retail market
-
New lease spreads lower at (6.0)% (June 2019: 2.4%) and
incentives higher at 16.5 months (June 2019: 11.1 months) reflecting strategy to reduce specialty vacancy by doing a significantly increased volume of deals on difficult long term vacancies. 59 deals completed in six month period, compared to 66 deals for the 12 months to June 2019
Acquired Centres:
- Tenant metrics improving vs June 2019, with improvements in sales MAT (1.3% vs 0.0% in June 2019), occupancy cost (11.0% vs 11.8% in June 2019) and sales productivity ($8,396 psm vs $8,179 psm in June 2019)
-
Renewal spreads improved to (4.8)% (June 2019: (14.6)%), new
lease spreads were 1.5% (June 2019: 10.6%) and incentives
were higher at 14.5 months (June 2019: 10.8 months) - Remixing will be substantially completed by 30 June 2020, after which these centres will be "business as usual"
- Portfolio NOI is expected to be in line with acquisition NOI by FY21
Spec Tenant Metrics | Existing Centres | FY19 Acquisitions | Total Portfolio |
Comparable sales MAT growth (%) 1 | 2.7% | 1.3% | 2.3% |
Average Spec Occupancy Cost | 9.3% | 11.0% | 9.8% |
Average Gross Rent $PSM 1 | $731 | $869 | $772 |
Sales Productivity $PSM 1 | $8,019 | $8,396 | $8,134 |
Renewals | Existing Centres | FY19 Acquisitions | Total Portfolio |
Number | 104 | 31 | 135 |
Retention (%) | 81% | 72% | 78% |
GLA (sqm) | 15,368 | 3,766 | 19,134 |
Average uplift (%) | 0.1% | (4.8)% | (1.7)% |
Incentive (months) | 0.4 | 0.1 | 0.3 |
New Leases | Existing Centres | FY19 Acquisitions | Total Portfolio |
Number | 59 | 27 | 86 |
GLA (sqm) | 8,086 | 4,154 | 12,240 |
Average Uplift (%) | (6.0)% | 1.5% | (3.9)% |
Incentive (months) | 16.5 | 14.5 | 15.9 |
1. Sales growth, occupancy cost and sales productivity metrics only include sales reporting tenants trading over 24 months | slide 32 |
DEBT FACILITIES & INTEREST RATE HEDGING
DEBT FACILITIES
As at 31 Dec 2019
Facility Limit | Drawn Debt | Financing capacity | Maturity / Notes | |
$m | (A$m) | (A$m) | (A$m) | |
Bank Facilities | ||||
Bank bilateral | 275.0 | 122.0 | 153.0 | FY 2023 (refer below & note 1) |
Bank bilateral | 25.0 | 25.0 | 0.0 | FY 2024 |
Bank bilateral non-revolving | 50.0 | 50.0 | - | FY 2024 |
Syndicated non-revolving | 100.0 | 100.0 | - | FY 2026 |
450.0 | 297.0 | 153.0 | ||
Medium Term Notes | ||||
Medium Term Note (#1) 4 | 225.0 | 225.0 | - | Apr 2021 |
Medium Term Note (#2) 4 | 225.0 | 225.0 | - | Jun 2024 |
450.0 | 450.0 | - | ||
US Private Placement | ||||
US$ denominated2 | 106.5 | 106.5 | - | Aug 2027 |
US$ denominated3 | 39.4 | 39.4 | - | Sep 2028 |
US$ denominated2 | 53.3 | 53.3 | - | Aug 2029 |
A$ denominated | 50.0 | 50.0 | - | Aug 2029 |
US$ denominated3 | 92.1 | 92.1 | - | Sep 2031 |
US$ denominated3 | 65.8 | 65.8 | - | Sep 2033 |
407.1 | 407.1 | - | ||
Total unsecured financing facililties | 1,307.1 | 1,154.1 | 153.0 | |
Add: cash | - | 3.8 | 3.8 | |
Net debt5 | 1,307.1 | 1,150.3 | 156.8 | |
Less: Debt facilities used for bank guarantees1 | (11.0) | Mar 2023; facility used for bank guarantees (refer note 1) | ||
Total debt facilities available plus cash | 145.8 | Net financing capacity of $145.8m |
INTEREST RATE
FIXED /
HEDGING PROFILE
Due to expiry of $225m MTN in April (coupon 3.75%) decrease in fixed average cost from 2.88% to 2.50%
Balance made up of: $225m MTN (expiry Jun '24 ) and $300m IRS (expiry Jul '25 / Jul'26 / Jul' 27)
Hedge rate %
1. | Bank guarantees of $11.0m are for the Group's compliance with its Australian Financial Services Licences | |
2. | USPP 2014 denominated repayment obligations have been fully hedged at A$ / US$ rate of 0.9387 | |
3. | USPP 2018 denominated repayment obligations have been fully hedged at A$ / US$ rate of 0.7604 | |
4. | The Group has two A$MTN issues. The first A$MTN (expiry April 2021) has a face value of $225.0m and coupon of 3.75%. The second A$MTN (expiry | |
June 2024) has a face value of $225.0m and a coupon of 3.90% | ||
5. | Drawn debt (net of cash) of $1,150.3m is made up of: statutory debt of $1,222.2m less $69.7m being the revaluation of the USPP US$ denominated debt | slide 33 |
from statutory value of $426.8m (using the prevailing December 2019 spot exchange rate) to restate the USPP to its hedged value of A$357.1m plus |
unamortised debt fees and MTN discount of $1.6m less $3.8m cash
ACQUISITIONS AND PENDING DIVESTMENTS DURING THE PERIOD
Six months to 31 December 2019
Acquisition | Anchor | Specialty | Total | % GLA | Total | Implied | |||
Centre Type | Purchase | ||||||||
GLA | GLA | GLA | Fully Let | ||||||
Date | Committed | Price | |||||||
(sqm) | (sqm) | (sqm) | Yield | ||||||
($m) | |||||||||
Acquired Properties | |||||||||
Warner Marketplace | Neighbourhood | Dec 2019 | 6,164 | 5,306 | 11,470 | 96% | 78.4 | 5.92% | |
Centre Type | Divestment | Anchor | Specialty | Total | % GLA | Total Sale | Divestment | ||
GLA | GLA | GLA | Price | ||||||
Date | Committed | Cap Rate | |||||||
(sqm) | (sqm) | (sqm) | ($m) | ||||||
Assets held for sale | |||||||||
Cowes | Neighbourhood | Feb 2020 | 3,495 | 1,325 | 4,820 | 98% | 21.5 | 6.85% | |
slide 34
PORTFOLIO LIST (I)
Completion | Total GLA | Occupancy | Number of | WALE | Valuation | Valuation | |||||||
Property | State | Property Type | Anchor Tenant(s) | Dec 2019 | |||||||||
Date | (sqm) | (% by GLA) | Specialties | (Years by GLA) | Cap Rate | (A$m) | |||||||
Lavington Square | NSW | Sub Regional | WOW; Big W | 2005 | 20,233 | 96% | 57 | 4.5 | 7.50% | 58.0 | |||
Sturt Mall | NSW | Sub Regional | Coles; KMart | 2011 | 15,326 | 98% | 49 | 3.5 | 6.50% | 76.8 | |||
West End Plaza | NSW | Sub Regional | Coles; KMart | 2009 | 15,876 | 100% | 44 | 1.6 | 6.75% | 68.1 | |||
Lilydale | VIC | Sub Regional | WOW; Big W; Aldi | 2013 | 21,737 | 100% | 59 | 10.4 | 6.00% | 116.5 | |||
Pakenham | VIC | Sub Regional | WOW; Big W | 2011 | 16,925 | 99% | 44 | 6.3 | 6.25% | 89.6 | |||
Central Highlands | QLD | Sub Regional | WOW; Big W | 2012 | 18,049 | 99% | 33 | 10.1 | 7.50% | 64.7 | |||
Mt Gambier | SA | Sub Regional | WOW; Big W; Bunnings | 2012 | 27,573 | 99% | 35 | 11.3 | 6.47% | 73.4 | |||
Murray Bridge | SA | Sub Regional | WOW; Big W | 2011 | 18,771 | 98% | 54 | 6.3 | 7.50% | 64.0 | |||
Kwinana Marketplace | WA | Sub Regional | Coles; WOW; Big W; Dan Murphy's | 2012 | 32,945 | 99% | 77 | 10.3 | 6.75% | 140.0 | |||
Warnbro | WA | Sub Regional | Coles; WOW; Big W | 2014 | 21,433 | 97% | 64 | 8.1 | 7.00% | 97.0 | |||
Belmont Central | NSW | Neighbourhood | WOW | 2008 | 7,868 | 96% | 21 | 7.2 | 7.04% | 31.2 | |||
Berala | NSW | Neighbourhood | WOW | 2012 | 4,013 | 100% | 6 | 12.2 | 5.50% | 28.8 | |||
Cabarita | NSW | Neighbourhood | WOW | 2013 | 3,426 | 100% | 11 | 10.8 | 6.25% | 22.5 | |||
Cardiff | NSW | Neighbourhood | WOW | 2010 | 5,848 | 100% | 14 | 12.3 | 6.25% | 26.2 | |||
Clemton Park | NSW | Neighbourhood | Coles | 2017 | 7,020 | 98% | 22 | 11.9 | 6.00% | 52.1 | |||
Goonellabah | NSW | Neighbourhood | WOW | 2012 | 5,115 | 98% | 9 | 10.5 | 6.75% | 20.5 | |||
Greystanes | NSW | Neighbourhood | WOW | 2014 | 6,005 | 100% | 28 | 10.2 | 5.75% | 61.0 | |||
Griffin Plaza | NSW | Neighbourhood | Coles | 1997 | 7,227 | 99% | 30 | 4.5 | 6.75% | 26.8 | |||
Lane Cove | NSW | Neighbourhood | WOW | 2009 | 6,721 | 98% | 13 | 10.2 | 5.75% | 58.8 | |||
Leura | NSW | Neighbourhood | WOW | 2011 | 2,546 | 100% | 6 | 11.7 | 5.75% | 19.0 | |||
Lismore | NSW | Neighbourhood | WOW | 2015 | 6,836 | 92% | 24 | 10.9 | 7.25% | 30.5 | |||
Macksville | NSW | Neighbourhood | WOW | 2010 | 3,446 | 100% | 5 | 13.2 | 5.75% | 14.8 | |||
Merimbula | NSW | Neighbourhood | WOW | 2010 | 5,012 | 100% | 9 | 11.3 | 6.50% | 19.4 | |||
Morisset | NSW | Neighbourhood | WOW | 2010 | 4,137 | 100% | 8 | 7.1 | 6.75% | 18.9 | |||
Muswellbrook Fair | NSW | Neighbourhood | Coles | 2015 | 9,007 | 99% | 22 | 3.8 | 6.50% | 31.9 | |||
North Orange | NSW | Neighbourhood | WOW | 2011 | 4,844 | 100% | 14 | 12.6 | 6.25% | 33.9 | |||
Northgate | NSW | Neighbourhood | Coles | 2014 | 4,126 | 100% | 13 | 3.4 | 6.50% | 16.8 | |||
Shell Cove | NSW | Neighbourhood | WOW | 2018 | 4,881 | 95% | 8 | 16.4 | 6.25% | 31.4 | |||
Ulladulla | NSW | Neighbourhood | WOW | 2012 | 5,281 | 97% | 10 | 13.3 | 6.00% | 25.7 | |||
West Dubbo | NSW | Neighbourhood | WOW | 2010 | 4,205 | 100% | 10 | 10 | 6.25% | 19.3 | |||
Albury | VIC | Neighbourhood | WOW | 2011 | 4,952 | 100% | 13 | 11.2 | 6.50% | 24.4 | |||
Ballarat | VIC | Neighbourhood | Dan Murphy's; Big W | 2000 | 8,963 | 100% | 4 | 1.9 | 7.00% | 18.1 | |||
Bentons Square | VIC | Neighbourhood | WOW; Dan Murphy's | 2009 | 9,996 | 100% | 43 | 6.5 | 6.25% | 81.0 | |||
Drouin | VIC | Neighbourhood | WOW | 2008 | 3,779 | 100% | 4 | 8 | 5.75% | 17.1 | |||
Epping North | VIC | Neighbourhood | WOW | 2011 | 5,258 | 100% | 16 | 10.8 | 5.75% | 30.9 | |||
Highett | VIC | Neighbourhood | WOW | 2013 | 5,476 | 99% | |||||||
13 | 12.3 | 5.50% | 30.6 | ||||||||||
Langwarrin | VIC | Neighbourhood | WOW | 2004 | 5,094 | 100% | 15 | 4.3 | 5.75% | 26.0 | |||
Ocean Grove | VIC | Neighbourhood | WOW | 2004 | 6,911 | 97% | 20 | 4.1 | 6.25% | 36.5 | |||
The Gateway | VIC | Neighbourhood | Coles | 2012 | 10,844 | 99% | 41 | 4.4 | 6.25% | 52.9 | |||
Warrnambool East | VIC | Neighbourhood | WOW | 2011 | 4,319 | 100% | 6 | 7.3 | 6.25% | 16.1 | |||
Wonthaggi | VIC | Neighbourhood | Coles; Target | 2012 | 11,831 | 99% | 23 | 6.1 | 6.75% | 45.5 | |||
Wyndham Vale | VIC | Neighbourhood | WOW | 2009 | 6,650 | 100% | 9 | slide 9.3 | 5.75% | 23.6 | |||
PORTFOLIO LIST (II)
Completion | Total GLA | Occupancy | Number of | WALE | Valuation | Valuation | ||||||
Property | State | Property Type | Anchor Tenant(s) | Dec 2019 | ||||||||
Date | (sqm) | (% by GLA) | Specialties | (Years by GLA) | Cap Rate | (A$m) | ||||||
Annandale Central | QLD | Neighbourhood | Coles | 2007 | 6,655 | 100% | 20 | 5.3 | 7.50% | 27.0 | ||
Ayr | QLD | Neighbourhood | Coles | 2000 | 5,455 | 98% | 8 | 5.3 | 7.00% | 18.7 | ||
Brookwater Village | QLD | Neighbourhood | WOW; | 2013 | 6,755 | 100% | 11 | 9.2 | 6.25% | 36.6 | ||
Bushland Beach | QLD | Neighbourhood | Coles | 2018 | 4,571 | 99% | 9 | 10.6 | 6.75% | 23.3 | ||
Carrara | QLD | Neighbourhood | WOW | 2011 | 3,717 | 94% | 6 | 8.0 | 6.50% | 18.0 | ||
Chancellor Park | QLD | Neighbourhood | WOW | 2001 | 5,859 | 100% | 18 | 12.5 | 6.00% | 46.0 | ||
Collingwood Park | QLD | Neighbourhood | WOW | 2009 | 4,567 | 100% | 10 | 12.3 | 6.50% | 12.0 | ||
Coorparoo | QLD | Neighbourhood | WOW | 2012 | 5,618 | 99% | 14 | 11.4 | 5.75% | 38.0 | ||
Gladstone | QLD | Neighbourhood | WOW | 2012 | 5,215 | 100% | 12 | 9.8 | 7.00% | 25.1 | ||
Greenbank | QLD | Neighbourhood | WOW | 2008 | 5,696 | 100% | 16 | 7.5 | 6.25% | 22.4 | ||
Jimboomba Junction | QLD | Neighbourhood | Coles | 2008 | 5,934 | 97% | 21 | 3.6 | 6.50% | 28.5 | ||
Lillybrook Shopping Village | QLD | Neighbourhood | Coles | 2004 | 6,996 | 98% | 21 | 6.8 | 6.00% | 30.5 | ||
Mackay | QLD | Neighbourhood | WOW | 2012 | 4,167 | 100% | 8 | 11.4 | 6.75% | 25.9 | ||
Marian Town Centre | QLD | Neighbourhood | WOW | 2014 | 6,707 | 96% | 19 | 9.1 | 7.00% | 32.7 | ||
Miami One | QLD | Neighbourhood | Coles | 2007 | 4,676 | 97% | 35 | 4.4 | 6.50% | 32.1 | ||
Mission Beach | QLD | Neighbourhood | WOW | 2008 | 3,904 | 96% | 8 | 7.1 | 6.50% | 12.5 | ||
Mt Warren Park | QLD | Neighbourhood | Coles | 2005 | 3,842 | 97% | 11 | 8.5 | 6.00% | 18.3 | ||
Mudgeeraba Market | QLD | Neighbourhood | WOW | 2008 | 6,142 | 98% | 39 | 6.5 | 6.25% | 35.5 | ||
North Shore Village | QLD | Neighbourhood | Coles | 2003 | 4,072 | 99% | 14 | 6.7 | 6.00% | 27.8 | ||
Oxenford | QLD | Neighbourhood | WOW | 2001 | 5,815 | 100% | 15 | 6.2 | 6.00% | 33.5 | ||
Sugarworld Shopping Centre | QLD | Neighbourhood | Coles | 2015 | 4,759 | 90% | 12 | 11.1 | 6.75% | 25.4 | ||
The Markets | QLD | Neighbourhood | Coles | 2002 | 5,253 | 89% | 22 | 1.6 | 7.25% | 29.3 | ||
Warner | QLD | Neighbourhood | WOW; Aldi | 2001 | 11,470 | 97% | 44 | 9.8 | 5.75% | 78.4 | ||
Whitsunday | QLD | Neighbourhood | Coles | 1986 | 7,660 | 93% | 34 | 4.9 | 7.50% | 35.5 | ||
Worongary Town Centre | QLD | Neighbourhood | Coles | 2004 | 6,898 | 98% | 43 | 3.6 | 6.00% | 48.0 | ||
Blakes Crossing | SA | Neighbourhood | WOW | 2011 | 5,078 | 100% | 13 | 7.1 | 6.75% | 21.8 | ||
Walkerville | SA | Neighbourhood | WOW | 2013 | 5,263 | 98% | 13 | 11.8 | 6.00% | 25.6 | ||
Busselton | WA | Neighbourhood | WOW | 2012 | 5,432 | 99% | 5 | 12.8 | 6.00% | 26.9 | ||
Currambine Central | WA | Neighbourhood | WOW; Dan Murphy's; Farmer Jacks; | 2016 | 17,031 | 98% | 41 | 6.9 | 6.75% | 90.7 | ||
Grand Cinemas | ||||||||||||
Kalamunda Central | WA | Neighbourhood | Coles | 2002 | 8,352 | 99% | 39 | 4.1 | 6.00% | 43.1 | ||
Stirlings Central | WA | Neighbourhood | WOW | 2013 | 8,446 | 94% | 35 | 7.5 | 7.00% | 42.1 | ||
Treendale | WA | Neighbourhood | WOW | 2012 | 7,319 | 98% | 19 | 5.5 | 6.50% | 31.8 | ||
Burnie | TAS | Neighbourhood | Coles; KMart | 2006 | 8,572 | 100% | 10 | 6.1 | 7.50% | 22.4 | ||
Claremont Plaza | TAS | Neighbourhood | WOW | 2014 | 8,046 | 100% | 25 | 7.7 | 6.50% | 38.8 | ||
Glenorchy Central | TAS | Neighbourhood | WOW | 2007 | 7,090 | 100% | 14 | 5.0 | 6.75% | 27.5 | ||
Greenpoint | TAS | Neighbourhood | WOW | 2007 | 5,955 | 90% | 11 | 2.9 | 7.25% | 17.2 | ||
Kingston | TAS | Neighbourhood | Coles | 2008 | 4,963 | 100% | 16 | 6.7 | 6.30% | 30.8 | ||
Meadow Mews | TAS | Neighbourhood | Coles | 2003 | 7,670 | 100% | 31 | 5.0 | 6.50% | 63.0 | ||
New Town Plaza | TAS | Neighbourhood | Coles; KMart | 2002 | 11,381 | 100% | 12 | 1.6 | 6.50% | 42.9 | ||
Prospect Vale | TAS | Neighbourhood | WOW | 1996 | 6,048 | 100% | 18 | 10.7 | 6.75% | 29.1 | ||
Riverside | TAS | Neighbourhood | WOW | 1986 | 3,107 | 100% | 7 | 1.7 | 7.50% | 8.0 | ||
Shoreline | TAS | Neighbourhood | WOW | 2001 | 6,285 | 100% | 18 | slide 2.0 | 6.25% | 39.3 | ||
Sorell | TAS | Neighbourhood | Coles | 2010 | 5,450 | 100% | 14 | 8.0 | 6.25% | 30.5 | ||
PORTFOLIO LIST (III)
Total GLA | Occupancy | Number of | WALE | Valuation | Valuation | |||||||
Property | State | Property Type | Anchor Tenant(s) | Completion Date | (Years by | Dec 2019 | ||||||
(sqm) | (% by GLA) | Specialties | GLA) | Cap Rate | (A$m) | |||||||
Properties Under Management - SURF 2 | ||||||||||||
Katoomba Marketplace | NSW | Freestanding | WOW; Big W | 2014 | 9,719 | 100% | - | 15.8 | 6.50% | 47.0 | ||
Mittagong Village | NSW | Neighbourhood | Dan Murphy's | 2007 | 2,235 | 96% | 4 | 9.7 | 7.00% | 9.6 | ||
Properties Under Management - SURF | 3 | |||||||||||
Moama Marketplace | NSW | Neighbourhood | WOW | 2007 | 4,518 | 99% | 7 | 12.9 | 7.00% | 14.4 | ||
Swansea | NSW | Neighbourhood | WOW | 2012 | 3,677 | 97% | 4 | 14.1 | 6.00% | 15.6 | ||
Warrnambool Target | VIC | Neighbourhood | Target | 1990 | 6,983 | 98% | 11 | 4.2 | 9.00% | 15.0 | ||
Woodford | QLD | Neighbourhood | WOW | 2010 | 3,672 | 100% | 5 | 6.8 | 6.25% | 13.4 | ||
slide 37
This document has been authorised to be given to the ASX by the Board of SCP.
CONTACT DETAILS AND DISCLAIMER
For further information please contact:
Anthony Mellowes | Mark Fleming |
Chief Executive Officer T: +61 2 8243 4900
E: anthony.mellowes@scaproperty.com.au
Chief Financial Officer
T: +61 2 8243 4900
E: mark.fleming@scaproperty.com.au
Disclaimer
This presentation has been prepared by Shopping Centres Australasia Property Group RE Limited (ABN 47 158 809 851) (SCPRE) as responsible entity of Shopping Centres Australasia Property Management Trust (ARSN 160 612 626) (SCA Management Trust) and responsible entity of Shopping Centres Australasia Property Retail Trust (ARSN 160 612 788) (SCA Management Trust) (together, SCA Property Group or the Group). This presentation should be read in conjunction with the Financial Report published on the same date.
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SCA - Shopping Centres Australasia Property Group Re Ltd. published this content on 04 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 February 2020 22:00:03 UTC