Dexus Convenience Retail REIT · ASX:DXC

Dexus Convenience Retail REIT — APN Property Group — FY2015 Earnings Presentation

47 slides from Dexus Convenience Retail REIT's earnings presentation, Aug 24, 2015

1. Slide 1: FY2015 Results Presentation

   FY2015 RESULTS PRESENTATION 24 AUGUST 2015 www.apngroup.com.au ASX Code: APD

2. Slide 2: Contents

   Contents  FY2015 Highlights  Financial Results  Group Performance  Update on Equity Raising Initiatives  Outlook  Appendices

3. Slide 3: FY2015 Highlights

   FY2015 HIGHLIGHTS APN | Property Group

4. Slide 4: FY2015 Highlights

   FY2015 Highlights Financial Results  Statutory profit after tax of $12.6 million up 69%  Earnings per share1 of 5.58 cents up 42%  Operating earnings2 after tax:  Up 41% to $6.9 million 37 Brandl Street, BTP, Brisbane QLD  Up 19% to 3.05 cents per share  12 month total shareholder return of 31

5. Slide 5: FY2015 Highlights – continued

   FY2015 Highlights – continued Outlook  Attractive economic environment for APN’s products  Positive outlook for APN’s FY2016 prospects  Good momentum on new projects Earnings and dividend guidance 8 Clunies Ross Crt, Brisbane Technology Park QLD  Subject to continuation of current market conditi

6. Slide 6: Financial Results

   FINANCIAL RESULTS APN | Property Group 6

7. Slide 7: Income statement

   Income statement Income Statement ($’000s) FY2015 FY2014 Change Highlights Funds management fees 11,930 10,153 ▲ 18%  Operating earnings after tax up 41% Performance & transaction fees 6,346 6,726 ▼ (6%)  Strong growth in funds management fees up 18% Asset & project management fees 1,314 1,186 ▲ 1

8. Slide 8: Balance sheet and capital management

   Balance sheet and capital management Balance sheet Balance Sheet ($’000s) FY2015 FY2014  Cash of $20.2(1) million ($5.0 million required for licence) Cash 20,343(2) 6,034(2)  Co-investments total $65.6 million Co-investments 65,603 46,077  Net tangible assets of $86.5 million Other assets 16,274

9. Slide 9: Funds under management

   Funds under management1 $2.5bn Sale of APN 541 St APN Coburg North Kilda Rd Fund and Retail Fund Net FuM increase establishment and $2,227m Newmark APN Auburn $173m Property Fund asset revaluations $2,023m ($80m) $84m $26m $2.0bn Securities $1.5bn Securities $1.0bn Direct Direct Healthcare Healthcar

10. Slide 10: Group Performance

    GROUP PERFORMANCE APN | Property Group 10

11. Slide 11: Group Overview

    Group Overview As at 30 June 2015 $1,215 million $407 million Funds Under Management Funds Under Management 5 Securities 1 Funds Fund $199 million $406 million Funds Under Management Funds Under Management Direct 5 1 Funds Fund 11

12. Slide 12: Real Estate Securities

    Securities Real Estate Securities Highlights Excellent market support  Total FuM up 17% to over $1.2 billion  APN AREIT Fund net inflows averaging over $17 million per month  Net inflows of $99 million (all securities funds) over FY2015 (~$3 million net outflows from PFIFs)  Strong APN AREIT Fun

13. Slide 13: APN AREIT Fund

    Securities APN AREIT Fund Well supported marketing effort  Rated one of Australia’s leading property securities funds  Objective: consistent income  Distribution yield of ~6.62%(1) pa paid monthly  358 bps outperformance vs. AREIT index since inception  Consistently ranked in leading position f

14. Slide 14: APN Asian REIT Fund

    Securities APN Asian REIT Fund  Mandate to invest in Asian listed property trusts  Exposure to Asian growth markets – focus on Hong Kong, Singapore and Japan  19.35% pa total return since inception (outperformed the index by ~200 bps)  Running since 2011 (four years)  Below market risk / volati

15. Slide 15: Established Equity Raising and Distribution Platform

    Established Equity Raising and Distribution Platform Over nearly 20 years APN has built a broad market distribution reach. While more potential exists, this capability is a considerable advantage over some of our competitors an is an excellent foundation for future growth of new products  All the m

16. Slide 16: Healthcare

    Healthcare Healthcare Highlights  Acquired portfolio of three residential aged care assets  Raised $52.0 million in new equity  Total return of 32.6%, outperforming the S&P/ASX 300 A-REIT Accumulation Index return of 20.3% Outlook  Continue active portfolio management to drive value  Focus on g

17. Slide 17: Industria

    Industria Industria Highlights  Operating in some difficult market conditions  Significant recent leasing success: over 18,800 sqm of Key metrics leasing completed in FY2015, with over 10,000 sqm completed or pending post 30 June Market Capitalisation1 $231m Total Funds Under Management $406m  Si

18. Slide 18: Industria

    Industria Industria APN’s commitment to Industria REIT  Largest investor; fully aligned with Industria’s other investors  Committed to Industria and believe it offers an attractive investment proposition (including for APN’s shareholders via our co-investment)  Management team have and continue t

19. Slide 19: Direct Funds

    Direct Direct Funds Highlights Funds FuM ($ million)  Sold St Kilda Road for $35.75m, a 28% premium to APN Property Plus Portfolio $77 purchase price APN Regional Property Fund $41  Sold Auburn delivering a forecast total investor return of 55-60% APN Coburg North Retail Fund $19  Coburg acquired

20. Slide 20: APN Coburg North Retail Fund

    Direct APN Coburg North Retail Fund  Significant investor demand, closing over- subscribed Investment type Single asset, closed-end unlisted property fund  Recently built (2014) shopping centre anchored by Investment objective Stable income and capital growth Woolworths supermarket Property Coburg

21. Slide 21: Newmark APN Auburn Property Fund

    Direct Newmark APN Auburn Property Fund  Fixed end, unlisted private equity fund established to acquire and redevelop The Lidcombe Power Centre  $25 million in equity raised  Delivered a new 33,000 sqm NLA super sub- regional shopping centre  Announced sale and development agreement in February

22. Slide 22: APN Steller Development Fund

    Direct APN Steller Development Fund  Received strong initial interest and commitments Multi-site residential development, closed-end wholesale Investment type to date unlisted property fund Development 223 apartments over 6 medium density projects in South  Wholesale and sophisticated investor foc

23. Slide 23: APN Convenience Retail Property Fund

    Direct APN Convenience Retail Property Fund  Strong initial interest APN Convenience Retail Property Fund  Core ‘property for income’ style product Investment type Multi asset, unlisted property fund  Targeted towards direct retail investors Investment objective Stable income and capital growth I

24. Slide 24: Update on Equity Raising Initiatives

    UPDATE ON EQUITY RAISING INITIATIVES 24

25. Slide 25: Update on initiatives announced with April 2015 equity raising

    Update on initiatives announced with April 2015 equity raising Progress on strategy since capital raising Strategy to source and develop new opportunities April 2015 Equity Raising Deploy capital to take advantage of attractive new August 2015 1 and existing growth opportunities Presentation Invest

26. Slide 26: Outlook

    OUTLOOK APN | Property Group 26

27. Slide 27: Market commentary

    Market commentary  High level of transaction activity in Australian commercial property markets  Domestic and international buyers active  Disconnect between transactional and occupier (leasing) markets, particularly across different parts of Australia  Timing of economic growth uncertain  ‘Low

28. Slide 28: APN is well positioned for further growth...

    APN is well positioned for further growth... 1 Established funds management business with strong track record over 19 years 2 Multiple capital raising channels including deep retail distribution networks 3 Specialist investment manager focusing solely on real estate 4 No debt, cash available to enab

29. Slide 29: ... with supportive current key market drivers and dynamics

    ... with supportive current key market drivers and dynamics Australian superannuation assets $1.8 trillion(1); 6 forecast to grow to $3 trillion by 2020(2) 8.10% - (3) Income-orientated investment products are 8.50% 7 attractive assets for superannuation investors  Life expectancy uncertainty contr

30. Slide 30: NTA Per Share Analysis – attractive implied platform valuation

    NTA Per Share Analysis – attractive implied platform valuation 40 35 Market implied value of funds management 8.4 platform of ~8.4 cents per share or $25.4 million 30 Cents per share 25 20 37.0 15 1 28.6 10 5 0 Net Tangible Assets Share Price 1. Analysis and APN share price as at market close 30 Jun

31. Slide 31: Outlook

    Outlook  Good momentum  Four well established divisions – each with distinct and attractive opportunities A specialist real  Strong track record of delivering performance estate investment  Service levels remain high manager  Products are attractive and relevant to our customers  Simple strate

32. Slide 32: Earnings guidance

    Earnings guidance FY2015 original Measure Comments / description FY2016 guidance2 guidance  Includes recurring as well as transactional and performance based revenues, excludes co- Operating profit investment mark to market gains and losses 1.75 to 1.96 cents per share1 2.00 to 2.30 cents per share

33. Slide 33: Appendices

    APPENDICES APN | Property Group 33

34. Slide 34: Appendix A: Funds Under Management Summary

    APPENDIX A FUNDS UNDER MANAGEMENT SUMMARY 34

35. Slide 35: Funds under Management Summary

    Funds under Management1 Summary Fee Basis APN Co-investment Funds Sector Investors FuM Manage- Perfor- Other $ % ment mance APN AREIT Fund Property Securities Retail & Institutional $901m  $0.1m - APN Property for Income Fund Property Securities Retail & Institutional $190m  − - APN Property for I

36. Slide 36: Appendix B: Financial Information

    APPENDIX B FINANCIAL INFORMATION 36

37. Slide 37: Financial Performance

    Financial Performance Income Statement FY2015 FY2014 $’000s $’000s Net Funds Management Income Fund management fees 11,930 10,153 Performance & transaction fees 6,346 6,726 Development & project management fees 1,314 1,186 Registry, accounting & other fees 2,411 2,427 Total Net Funds Management Inco

38. Slide 38: Financial Performance: Operating Cashflow

    Financial Performance Operating Cashflow $’000s FY2015 FY2014 Cashflow Reconciliation 16,000 $’000s $’000s 2,274 (6,216) Statutory profit after tax 12,565 7,447 14,000 12,565 Add/(deduct): 12,000 Non-controlling interests 2,274 1,833 723 300 9,646 10,000 Mark to market revaluations (6,216) (3,556) 8

39. Slide 39: Operating Profit After Tax Reconciliation

    Operating Profit After Tax Reconciliation $‘000s 9,000 1,642 (381) 8,000 (56) (692) 7,000 6,922 1,777 (380) 128 (16) 6,000 5,000 4,900 4,000 3,000 2,000 1,000 - Operating profit Increase in funds Decrease in Increase in Decrease in Increase in co- Decrease in Decrease in MI Decrease in tax Operating

40. Slide 40: Balance sheet

    Balance sheet $’000s FY2015 FY2014 Cash and cash equivalents(1) 20,343 6,034 Trade and other receivables 9,576 6,531 Other assets - - Total Current Assets 29,919 12,565 Co-investments 65,603 46,077 Investment in joint venture 2 - Intangible assets 4,052 4,079 Deferred tax assets 4,821 4,643 Other as

41. Slide 41: Appendix C: Company Overview

    APPENDIX C COMPANY OVERVIEW 41

42. Slide 42: Philosophy

    Introduction Overview APN PROPERTY GROUP IS A SPECIALIST REAL ESTATE INVESTMENT MANAGER The Marketplace, Auburn NSW Philosophy PROPERTY FOR INCOME Coburg Hill Shopping Centre, Coburg North VIC INVESTMENT OUTSTANDING Approach PERFORMANCE SERVICE APN Property Plus Portfolio 42

43. Slide 43: Products and customers overview

    Products and customers overview Specialist property expertise in four key areas... ... Across multiple risk / return profiles $1,215 million $407 million Funds under Management Funds under Management Securities $199 million Direct $406 million Funds under Management Funds under Management 6% - 8% 9%

44. Slide 44: Overview

    Overview Overview Share Price and Volume  Listed on ASX (Code: APD) $0.50 1.40m Volume (RHS)  Melbourne-based specialist real estate investment manager $0.45 1.20m Volume (Daily Shares Traded) Price (LHS)  Established 1996, listed 2005 $0.40 1.00m Share price 0.80m  Over $2.2 billion in Funds un

45. Slide 45: Boards and Management team

    Boards and Management team Experienced real estate team, Independent Responsible Entity, well supported platform Board of Directors (APN Property Group Limited) Management Team Chris Aylward  Over 30 years experience in property and construction industry Chris Aylward Executive Chairman  Founding

46. Slide 46: Disclaimer

    Disclaimer The financial information included in this presentation is based on APN Property Group’s financial statements and results that have been prepared in accordance with the Corporations Act 2001 (Cth), applicable Accounting Standards and Interpretations and in compliance with other applicable

47. Slide 47: Contact details

    Contact details Chris Aylward Tim Slattery Michael Groth Executive Chairman Executive Director Chief Financial Officer Ph: (03) 8656 1000 Ph: (03) 8656 1000 Ph: (03) 8656 1000  [email protected]  [email protected]  [email protected] APN Property Group Limited Level 30,

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