Dexus Convenience Retail REIT · ASX:DXC
Dexus Convenience Retail REIT — APN Real Estate Securities — APN AREIT Reporting Season Wrap Webinar March 2022
25 slides from Dexus Convenience Retail REIT's conference presentation, Mar 23, 2022
Slide 1: Reporting Season Wrap Update - March 2022
EPORTING : SEASON WRAP UPDATE - MARCH 2022
Slide 2: Disclaimer
Disclaimer This presentation] (“Material”) has been prepared by Dexus Asset Management Limited (ACN 080 674 479, AFSL No. 237500) (“DXAM”), the responsible entity and issuer of the financial products mentioned in this Material. DXAM is a w holly owned subsidiary of Dex us (ASX: DXS). Information in
Slide 3: APN Real Estate Securities and Dexus
APN Real Estate Securities and Dexus APN Property Group recently a part of Top 50 ASX company (code: ‘DXS’) 600+ staff $45.3bn Dexus Total Funds Under Australia wide Management A new parent, but ‘Property for income’ Strong Alignment Opportunities to same investment investment philosophy through co-
Slide 4: Experience and capability in global property securities
Experience and capability in global property securities Global APN Global REIT Income Fund Total return 17.85% pa1 Asia APN Asian REIT Fund Total return 10.40% pa1 Australia APN AREIT Fund Total return 11.38% pa1 Source: APN RES, 28 February 2022 1. Annual since Inception. Inception date APN Global
Slide 5: Reporting Season Sector Highlights
th | 2 ae | * Fieset| ety REPORTING SEASON. —- SECTOR HIGHLIGHTS
Slide 6: AREIT Sub-sector Performance – 2021 and 2022 YTD
AREIT Sub-sector Performance – 2021 and 2022 YTD 1500 Diversified Industrial Office Retail Index Since 2022 Returns 2021 YTD 1400 Diversified 11.7% -8.8% 1300 Industrial 19.4% -15.7% Office 18.0% -1.8% 1200 Retail 17.9% 0.3% 1100 Index 16.8% -8.0% 1000 900 800 Source: APN RES, Bloomberg. 6
Slide 7: Retail REITs: Distribution Guidances Reinstated
Retail REITs: Distribution Guidances Reinstated NPI relative to Dec-19 Re-leasing spreads – steady improvement Source: APN RES, Company Information, JP Morgan estimates See disclaimer in relation to forw ard looking statements. Past performance is not a reliable indicator of future returns. 7
Slide 8: Office REITs: Valuation support in an evolving sector
Office REITs: Valuation support in an evolving sector Physical office occupancy Flight to Quality Continuing Bifurcation Source: JLL, JP Morgan, PCA 8
Slide 9: Industrial REITs: Continuing to build momentum
Industrial REITs: Continuing to build momentum Increasing Logistics Demand Increasing Online Spend 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 - 2018 2019 2020 2021 Sydney Melbourne Average Source: APN RES, CBRE, GPT, Jefferies, ABS 9
Slide 10: Specialised REITs: Not so Alternatives
Specialised REITs: Not so Alternatives Self Storage Index Growth Healthcare: Risk-adjusted returns 2020 Source: Urbis, Home Consortium 10
Slide 11: Signals/Sector outlook
Signals/Sector outlook Signals Retail Office Industrial Alternatives ▪ Transaction volumes ▪ Supportive large mall ▪ Leasing recovery with ▪ Structural trends ▪ Cashflow resilience across the office, sales evidence, rents occupancy stabilising continue to drive with solid relative retail and industr
Slide 12: AREITs provide an opportunity to benefit from inflation
AREITs provide an opportunity to benefit from inflation ✓ Inflationary pressures are building while economic and consumer strength is variable “At its very core, ✓ REIT portfolios provide varying degrees of immediate inflation access commercial property is a ✓ Lease contracts stipulate annual escala
Slide 13: What do rising bond and interest rates mean for REITs?
What do rising bond and interest rates mean for REITs? AREIT EPS yield spread to bonds is above AREIT gearing is at an historical low & the historical average hedging relatively high Source: APN RES, Macquarie Research, UBS estimates 13
Slide 14: APN AREIT Fund Positioning
F i 7 APN ARE EUND POSITIONING
Slide 15: APN AREIT – Sector Positioning
APN AREIT – SECTOR POSITIONING 60% 52% 50% 40% 35% 33% 29% 29% 30% 27% 24% 23% 22% 22% 20% 20% 20% 20% 20% 14% 11% 10% 0% Industrial Office Retail Others Source: APN RES 31/12/2019 31/12/2020 31/12/2021 28/02/2022 15
Slide 16: Industrial – Case Study
Industrial – Case Study Centuria Industrial (ASX:CIP) • Australia’s largest domestic pure-play industrial REIT • Diversified portfolio exposed to major industrial sub-sectors • High portfolio occupancy of 99.2% • Long WALE of 8.9 years • Exposure to infill markets seeing greatest rental growth • FY2
Slide 17: Retail – Case Study
Retail – Case Study HomeCo Daily Needs (ASX:HDN) • Australia’s largest large format retail REIT post merger with Aventus • High quality portfolio & tenants (>80% income national tenants) • 78% of portfolio metro-located with low site coverage (devel potential) • High cash collection through 2021 at
Slide 18: Office – Case Study
Office – Case Study Growthpoint Properties (ASX:GOZ) ▪ Diversified metro office and industrial real estate landlord ▪ Premium Grade metropolitan office buildings with high quality tenants that include Bunnings, and NSW Police ▪ Key metro markets seeing positive net absorption relative to CBD’s ▪ Off
Slide 19: Alternatives – Case Study
Alternatives – Case Study Healthco (ASX:HCW) ▪ Sole healthcare REIT specialist in Australia ▪ National healthcare, aged care and childcare providers as tenants ▪ Substantial and planned development pipeline ▪ Long WALE of 10 years ▪ FY22 distribution guidance of ~3.8% Stock Bet Div Yield Asset Class
Slide 20: APN | Real Estate Securities Performance
APN | Real Estate Securities EREORMANC
Slide 21: APN AREIT Monthly Performance vs. Index - 2021/2022 YTD
APN AREIT Monthly Performance vs. Index - 2021/2022 YTD 8% Outperformance 6% Since 2021 Inception 4% 2% ALL 50% 50% 0% months -2% -4% UP 30% 29% -6% months APN AREIT Fund -8% S&P/ASX 300 A-Reit Index -10% DOWN 100% 85% months Returns after all fees and ex penses. Assumes distributions are reinvested
Slide 22: Downside Capture: 10 worst periods since APN AREIT Fund inception
Downside Capture 10 worst periods since APN AREIT Fund inception 0% 120% -5% 100% -10% 80% -15% -20% 60% -25% 40% -30% 20% -35% AREIT300 Index APN Fund Downside Capture (RHS) -40% 0% 31/03/20 28/02/09 31/01/22 31/10/09 31/10/16 31/07/11 30/09/14 31/07/17 29/02/20 30/09/11 ▪ Fund outperformed in 8/10
Slide 23: Current running yield
% % % 5.29 Current running yield pa 1 6.21 Current running yield pa 1 3.32 pa 1 Current running yield 1. As at 28 February 2022. Current running yield is calculated daily by dividing the annualised distribution rate by the latest entry unit price. Distributions may include a capital gains component.
Slide 24: Retail Distribution contacts
Simone Newman Paul Barsby Ryan Harbin Justin Murrihy Senior Manager, Regional Manager, Regional Manager, Regional Manager, Retail Distribution Retail Distribution | NSW, ACT Retail Distribution | QLD Retail Distribution | Vic, SA, WA M: +61 416 166 033 M: +61 417 229 409 M: +61 403 991 976 M: +61 40
Slide 25: Useful resources
Useful resources Articles Webinars Six big lessons for income investors from AREIT APN Asian REIT Fund update reporting season Event recording presentation slides It’s (not) the end of the world as we know it (and we feel fine) 25
APN Real Estate Securities — APN AREIT Reporting Season Wrap Webinar March 2022 on 6ix