Waypoint REIT released their results for the Half Year to June with an increase in earnings of 3.2% and a 140% increase in statutory profit due to valuation gains.
Hadyn Stephens, Chief Executive Officer of VER Manager, said, “Waypoint REIT has delievered another solid result in HY20 with a 3.2% increase in Distributable Earnings per security underpinned by contracted rental escalations and enhanced via acquisitions and development fund-through expenditure.
A 3.9% increase in net tangible assets per security was driven primarily by an $86.6 million valuation uplift across the portfolio. This valuation uplift also resulted in gearing of 30.5%, at the low end of Waypoint REIT’s 30-45% target range.
Despite the debt review event triggered by Viva Energy Australia’s selldown in February 2020, Waypoint REIT’s liquidity position remains very strong, with $325 million of debt refinanced and a c.A$250 million USPP issuance priced year-to-date. The overall impact of the USPP issue and the capital management work undertaken has seen Waypoint REIT’s weighted average debt maturity increase from 2.9 years in December 2019 to 4.3 years at June 2020 (pro forma basis) with the nearest maturity in June 2022.”
In the 6 months, the Group acquired 5 properties for $32.5m at a 6.25% cap rate with a further $7.2m invested across eight development fund-through projects (6.76% weighted coupon). Total acquisition / fund-through expenditure for the period was $39.7m at 6.34%, with 60% of total expenditure relating to metro sites.
The Waypoint portfolio now consists of 474 properties worth $2.8bn. THe portfolio has a 72% weighting to metropolitan areas.
The valuations gains were predominantly as a result of rental increases. The weighted average cap rate was 2Bps sharper at 5.79%.
Distribution
VER Limited as the responsible entity of the Waypoint REIT Trust confirms that the interim distribution for the six months ended 30 June 2020 is 7.41 cents per security.
Outlook
As announced to the market on 14 August 2020, Waypoint REIT’s updated guidance for Distributable Earnings per security growth in FY20 over FY19 is 4.00-4.25%, provided there are no material changes in market conditions as a result of COVID19 or other events and no other factors adversely affecting financial performance.
Mr. Stephens said, “The remainder of FY20 will see Waypoint REIT focusing on its existing property portfolio, with further acquisitions or development fund-throughs to be selectively considered. With the USPP transaction now priced, Waypoint REIT is comfortable with its current liquidity, gearing and maturity profile, but will continue to explore initiatives to diversify funding sources and extend the tenor of its debt and swap books.”
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