EmporiumMelbourne,VIC Investorday 8June2016
Welcome andoverview Angus McNaughton
Chadstone,VIC Investorday Agenda
MORNING Welcomeandoverview AFTERNOON Developmentoverview AngusMcNaughtonCEOandManagingDirector MichaelO’BrienChiefInvestmentOfficerandActingEGMDevelopment Page2 Page 43 Brandanddigital MandurahForum SimoneCarroll EGMDigital,Marketing,People&Culture JamesFudgeProjectDirector Page9 Page 48 Leasing TheGlen StuartMacraeEGMLeasing BarnabyGiudiceProjectDirector Page22 Page 62 Intensiveassetmanagement Roselands JustinMills EGMShopping Centres JonSavellDirector– Development Page 28 Page 80 OutletCentres Assettour– Chadstone MichaelO’BrienChiefInvestmentOfficerandActingEGMDevelopment MarkKelleyProjectDirector Page 36 StuartMacraeEGMLeasing Assettour–DFOSouthWharf Wrapup JustinBlumfieldRGMShoppingCentres(DFOs,TAS,SA,ACT) AngusMcNaughtonCEOandManagingDirector MichaelQuinnAreaCentreManager,DFOSouthWharf
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Strategicfocusisclear Createvalueandsustainablegrowthbyowning,managinganddevelopingqualityAustralianassetsacrosstheretailspectrum
Purpose Enrichingcommunityexperiences
Vision DeliveringtheleadingretailpropertyandlifestyleexperienceinAustralia
Strategicfocus Createvalueandsustainablegrowthbyowning,managinganddevelopingqualityAustralianassetsacrosstheretailspectrum
Value Investment Development Intensiveassetmanagement drivers platform
Capitaland Enablers Operationalexcellence People Digital
Strategic StrategicPartnerships
VicinityCentres| Investorday| 8June2016 4 Organisationalchart Structuredtosupportstrategyexecution
CEOandManagingDirector AngusMcNaughton
ChiefInvestment EGM EGM ChiefFinancial EGM EGM OfficerandActing Business GeneralCounsel Digital,Marketing, Officer Leasing ShoppingCentres EGMDevelopment Development People&Culture
RichardJamieson MichaelO’Brien DavidMarcun CarolynReynolds SimoneCarroll StuartMacrae JustinMills
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Groupinvestmentprinciples FocusedonlongͲtermvaluecreationanddeliveringsustainableearningsgrowththroughthecycle
Simpleandtransparentbusinessmodel Keyfinancialobjectives(‘throughcycle’basis) withasinglesectorfocus Grouplevel Target InvestinqualityAustralianassetsacrossthe Totalreturn1 >9.0%p.a. retailspectrum Underlying earningsgrowth >3.0% p.a. FocusonlongͲtermvaluecreation and sustainableearningsgrowth Portfoliolevel Target Propertylevelreturns >8.5%p.a. Maintainstrongbalancesheet andaccesstodiversecapitalsources Developmentreturns Initial yield6%to8+% Incremental IRR10% to15+% Efficientcoststructure
1. Calculatedas:(ChangeinNTAduringperiod+distributions)/NTAatstartofperiod.
VicinityCentres| Investorday| 8June2016 6 Executingonstrategy Astrongandactivestartinthefirst12months
November March May Rebrand $120mof Executed$926m developments ofdivestmentsand completed1 extendeddivestment December programto~$1.5b Reiteratedstrategy, April announced~$750mͲ$1b $350mMandurah divestmentprogram Forumdevelopment commenced
2015 2016
February May June StrongFY16 April DFOBrisbane Mergercompleted interimresultand November InauguralEMTN business 18monthsahead $320mofPerth launchedwith acquired onoperationalcost acquisitions £350missuance synergies May DFOPerth February JVagreement Mergerrefinancing complete
1. Vicinity’sshareis$63m.
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Deliveringonourportfolioenhancementstrategy StrongprogressmadeonourassetdivestmentprogramandreinvestmentintovalueͲenhancingopportunities
Assetdivestmentprogram Divestmentprogramof~$750mto$1bannouncedinDecember2015 FiveassetsalesagreedinMay2016for$926m Divestmentprogramextendedto$1.5binMay2016 Developments Fiveprojects(~$320m)completedinFY161 EnteredJVagreementstodevelopaDFO2 atPerthAirportfor~$145m Pipelineincreasedto$3.8b(Vicinityshare:$1.8b) Acquisitions AcquiredtwoPerthshoppingcentreswithattractivefundamentals Acquired3 DFOBrisbanebusinessfor~$55m Investmentincapability ResourcesaddedtoLeasing,DevelopmentandDigitalteams todrivegrowth
1. 100%interestandincludesWarriewoodSquare,NSWwhichwillbecompletedinJune2016.Vicinity‘sshareis$162m. 2. 100%interest.Vicinity‘sshareis50%. TheShopsatEllenbrook,WA 3. Excludingtransactioncostsandothercostsassociatedwiththetransaction.
VicinityCentres| Investorday| 8June2016 8 Brand anddigital SimoneCarroll
ChatswoodChaseSydney,NSW
Theroleoftheshoppingcentreinsociety Thegatheringplace
AGORA “GATHERINGPLACE”
VicinityCentres| Investorday| 8June2016 10 Theroleoftheshoppingcentreinsociety Inventionoftheshoppingcentre
“PROVIDETHENEEDEDPLACEAND OPPORTUNITYFORPARTICIPATIONIN MODERNCOMMUNITYLIFE”
Ͳ VICTORGRUEN,INVENTOROFTHESHOPPINGMALL
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Keytrends CustomerͲcentricity
CUSTOMERͲCENTRICITY
VicinityCentres| Investorday| 8June2016 12 Keytrends Technologyenhancedexperiences
TECHNOLOGYENHANCED EXPERIENCES
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Keytrends Rapidvalidationandspeedtomarket
RAPIDVALIDATIONAND SPEEDTOMARKET
VicinityCentres| Investorday| 8June2016 14 Keytrends Integratingdigitalintothefabricoforganisations
INTEGRATINGDIGITALINTOTHE FABRICOFORGANISATIONS
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Keytrends Experimentingacrossmultiplehorizons
EXPERIMENTINGACROSS MULTIPLEHORIZONS
VicinityCentres| Investorday| 8June2016 16 Visionforbrandanddigital Delivering‘Better,Easier,MoreEnjoyable’experiences
Consumer(B2C) Peoplewhovisit andexperience TheVicinitybrand “Better,Easier,
Customer Vicinity MoreEnjoyable” (B2B) Ourpeople, Ourretail destinations, partners products andservices
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Vicinity’sbrandarchitecture Atailoredapproach
Purpose Enrichingcommunityexperiences
Brandvision Tobeknownfor‘Better,Easier,MoreEnjoyable’experiences
Master Leadership Aspirational Heartland
Strategic brand brands brands brands pillars Develop Protectandgrow Testandlearn, Optimise
platform productdevelopment Strategic
Enablers People Digitalassets Physicalassets
VicinityCentres| Investorday| 8June2016 18 Vicinity’sconsumerͲleddigitalstrategy Enrichingcommunityexperiencesviaafullyintegrateddigitalandpropertyplatform
Purpose Enrichingcommunityexperiencesviaafullyintegrateddigitalandpropertyplatform
TobeAustralia'smostfrequentedandmostlovedretaildestinations Digitalvision throughseamlesslycombinedphysicalanddigitalconsumerexperiences
Strategic pillars platform Connectivity Online Omni/phygital Connectingourcommunities Leadingonlinedigitalassetsthatare Convergenceofdigitalandphysical alignedwithourphysicalassets solutionstoaddresscommunityneeds Strategic
Enablers People Digitalculture Technology
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Digitalroadmap Deliveryacrossmultiplehorizons
2016 2018 2020
Connectivity Connectingourcommunities
Online Leadingonlinedigitalassetsthat arealignedwithourphysicalassets
Omni/phygital Convergenceofdigitalandphysical solutionstoaddresscommunityneeds
VicinityCentres| Investorday| 8June2016 20 Brandanddigital Enrichingcommunityexperiences
1. Clearbrandstrategy
2. Digitalpathwayset
3. Teamcommittedtoexecutionalexcellence
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Leasing
StuartMacrae
EmporiumMelbourne,VIC Alargeportfoliowithbroadpotential Strongtenantrelationshipsunderpinnedbyaportfoliowithscaleandrelevance
95assetsundermanagementacrosstheretailspectrum anddiversifiedgeographically 9,500+ ~3,700 leases tenants Hightenantcommonalityacrosscentretypes
Criticalmassofpremiumassetsintheportfolio attractsluxuryandinternationalretailers ~1,500 #1centre(Chadstone) leasingdealsperannum1 fortotalsalesinAustraliafor14years Deepnationalretailerrelationships
LargestlandlordtoWesfarmersandWoolworths 70 40 leasingexecutives retaildesignanddeliveryexecutives
Note:Dataasat31December2015. 1.Excludingdevelopmentleasing.
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Aclearapproachtoleasingwithaproductfocus FocusingonretailmixandcustomerdemanddriveslongͲtermincomegrowth
Simple,consistentleasingparameterexpectationsdesigned tomaximiseincome
FiveͲyearstrategicleasingplanforeachasset,updatedannually
LongͲtermapproachfocusedoncustomer wantsandneeds
Dedicatedleasingexecutivesforthetop20retailers
Dedicatedretaildesignanddeliveryteamtoensurefitout qualityandoptimalturnaroundonanyvacatingtenants
HallsHeadCentral,WA
VicinityCentres| Investorday| 8June2016 24 Consistentspecialtystoreleasingparameterexpectationsdeliverstrongerresults Settingclearparameterexpectationsenablesatransparentdiscussionwithretailersandnarrowstheleasingnegotiation
Specialtystoreleasing parameter Rationale 5to6yearterms Providesbalance ofstabilityandflexibilityforbothownerandretailer 5%annualincrease Underpinsstronggrowthovertheleaseterm Maximises incomeeventhoughleasingspreadsonrenewalmaybenegative Providesrentalcertaintytobothownerandretailer Promotionalfund Maximisesmarketingspendtodrivefoottrafficand,inturn,salesandrents Fullfitoutsonexpiry Ensures individualstorefitoutsremainrelevantandconsistentwiththecentrelookandfeel Assistsinmaintainingconsistentpresentationstandardacrosstenancies Noincentivesorrentfreeonrenewals Clearpositionwithretailers
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Strategicleasingplansinplaceforeverycentre UniquecentreͲspecificplansdeliveratailoredcommunityexperience
Strategicleasingplansidentifykeyfocusareas Development Centreteam • customerrequirements • strongerperformingretailers Visionandmasterplanning Centreoperationalplan • productopportunities Development,refurbishment, Siteworks, • tenantrenewal/replacementstrategy andreconfiguration tenancydelivery • rentandcapitalrequirements requirements andretailer onͲboarding FiveͲyearleasingplans,updatedannually Strategic leasingplan
Customerandretailerinsights Demographicsandcustomerresearch Retailerperformanceandstrategy
VicinityCentres| Investorday| 8June2016 26 Opportunitiesinachangingretaillandscape Anticipatingretailtrendsenablesatimelyandproactiveresponse
9 Increasingdemandforinternationalandluxuryretailers Healthandwellbeing Qualityfoodanddiningout 9 Healthandwellbeingagrowingfocus 9 Increasingdesireforhighqualitycafesandrestaurants 9 Popularityofoutletcentres growingascustomers seekvalue 9 Majors rethinkingtheircustomerstrategiestoregain shareofcustomerspend 9 PhysicalpresencethefoundationofomniͲchannel retailing Internationalandluxuryretailers 8 Incentives 8 Pharmaciescontinuetobeimpactedbyregulatory changes 8 RationalisationofbankandMedicarebranches 8 ATMsbeingusedless duetopaymenttechnology
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Intensiveasset management JustinMills
QueensPlaza,QLD Shoppingcentremanagementplatform Vicinity’sscaleandintensiveassetmanagementapproachprovidessignificantbenefits
Significantancillaryincomeopportunities #1 #2 Operationalmanagementandprocurementbenefits inSub RegionalandOutletcentres inRegional centres Assetrefurbishmentteamprojectsenhanceassetquality andcustomerexperience Knowledgesharingacrossabroadnumberofshopping 95 3.0 millionsqm centreteams retailassetsundermanagement ofGLAundermanagement
$18.5billion 700+ inannualretailsales shopping centremanagementteam
Note:Dataasat31December2015.
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Structuredforperformanceandgrowth Hybridstructureunderpinsintensiveassetmanagementapproachwithfocusonincome,costandregionalsuccess
EGMShoppingCentres JustinMills
RGM RGM NationalManager GM GM GM ShoppingCentres ShoppingCentres GeneralServices MallSpace Operations Chadstone DFO,SA,TAS,ACT WA
Nationalteams RGM RGM RGM ShoppingCentres ShoppingCentres ShoppingCentres NSW QLD VIC
Regionalteams
EGM=ExecutiveGeneralManager;GM=GeneralManager;RGM=RegionalGeneralManager.
VicinityCentres| Investorday| 8June2016 30 Custommanageourcentrestooptimiseperformance Applicationofintensiveassetmanagementtoeveryassetinacosteffectiveway
Effectivemanagementofadiverseportfolio Bespokestructure Premiumstructure Focusedteamsandknowledgesharing Betterresourceutilisation Similartrendsexperiencedinnearbyassets Structuresalignedtobrandarchitecture
Chadstone,VIC Galleria,WA Midstructure Hubandspokestructure
CarlingfordCourt,NSW MorningtonCentral,VIC
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Addingvaluethroughintensiveassetmanagementapproach PRICEmodelisusedtoguideVicinity’sintensiveassetmanagementapproach
Peopleandprocesses WorldͲclasspeopleandbestpracticeprocesses
Riskmanagement Bestpracticeoperationalriskandcompliance
Income Optimisenewandorganicincomeopportunities
Cost Delivercustomerandretailervaluethroughincreasedoperationalefficiency
Experience Deliverexceptionalcustomerandretailerexperiencesthatdrivesales
VicinityCentres| Investorday| 8June2016 32 Incomeopportunities Opportunitytogrowancillaryincomestreamsacrosstheportfolio
Keycategory Opportunity
Casualmall • Significantscopetoincreaseoccupancy rate leasing anddriveincome
Electricity • Currentlyin57Direct Portfolioassets onͲsell • Opportunitytoimplementinadditional20assets
• SevenexistingdigitalscreensacrossDirectPortfolio • Additional10to15largeformatdigitalscreens Retailmedia expectedinnexttwoyears,supportedby supplementaryscreenstodeliversuperiornational digitalscreennetwork
• Opportunitiestomaximiseincomethroughnew Storage storagesitesandachievementofmarketrates
TheMyerCentreBrisbane,QLD
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Procurementopportunities Greaterscale,rationalisingcontractsandinnovationgeneratingcostsavingsandmoresustainableoutcomes
Directportfolio1 controllableexpenses~$145m Financialbenefits • Targeting5Ͳ10%savingsincontrollableexpensesbyFY18 Proportion ofcontrollable Number of suppliers expenses NonͲfinancialbenefits (%) Now Atmerger Cleaning 33 8 19 • Enhancedprocessandriskmanagement • Improvedstandardsandreporting Electricity 19 24 24 • Greaterefficiencies Repairs/maintenance 18 WIP 1,191 • Strongersupplierrelationships Security 14 2 2 Waste 5213Opportunities Mechanical services 2125• Cleaning • Electricity Others 9WIP46 • Waste Total 100 • Equipment • Design • Capitalexpenditure
1. DirectportfoliobudgetedFY16spend.
VicinityCentres| Investorday| 8June2016 34 Improvingcentreexperience Assetrefurbishmentteam(ART)projectsenhanceassetqualityandcustomerexperience
Smallcapitalinvestmentswithstrongreturns
Improvingassetqualityandrelevance
Providingbettercustomerandretailerexperience
Projectsfocusonimprovementsthatdrivefoottraffic, salesandleasability MorningtonCentral,VIC
BoxHillCentral,VIC
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OutletCentres
MichaelO’Brien
DFOHomebush,NSW OutletCentresoverview OutletsareanattractiveinvestmentpropositionandVicinity’sstrategyistoreinforceitsleadershippositioninthissector
PerformanceoffourDFOassetssinceacquisitionin2010to31December2015 LeaderinAustralianOutletCentres
$1.1bundermanagementacrosssixassets6 +10.1%p.a. +6.5%p.a. increaseinfoottraffic increase1 inspecialtyMAT/sqm Outletshavedesirablecharacteristics 9 Highbarrierstoentry 9 Strongdemandfromhighqualitytenants +6.8%p.a. +250bps 9 Performancethroughthecycle increase2 inspecialtystorerent/sqm increase3 inspecialtyoccupancycost duetostrongvalueproposition Vicinityhasaprovenabilitytoaddvalue +$209million 14.5% increase4 invalue internalrateofreturn5
1. Figuresincludedevelopmentimpactedcentres. 2. Excludesmarketingandpromotionalcontribution.ExcludesHomemakerretailers. 3. AtacquisitionfigureexcludesDFOSouthWharfwhichhadbeentradingforlessthan12months.December2015figureexcludesDFOHomebushwhichwasdevelopmentimpacted. 4. Valuationlesscapitalexpenditureandacquisitioncost. 5. Includingcapitalisedinterestandacquisitioncosts. 6. IncludesDFOPerthAirportdevelopmentandDFOBrisbanebusiness.
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Anattractiveinvestmentproposition Activeleasing,managementanddevelopmentofDFOportfoliohasgeneratedsignificantvalue
Vicinityhasauniqueskillbase DFOHomebushcasestudy 9 Breadthoftenantrelationshipsusedtoenhancemix Acquiredin2010 9 Abilitytodriveancillaryincomeandcostsavings $100mmajorredevelopmentcompletedinMarch2014 9 Furtherscopetoimproveexperientialelementse.g.dining ~$115m ofvaluecreatedsinceacquisition1
Performancemetrics At acquisition Current Valuation ($m) 2,3 135.5 365.8 (purchaseprice) Capitalisationrate(%) 4 7.75 6.00 Specialtysales($/sqm) 4,5 11,400 14,148 Specialtyoccupancycost(%) 4,5 7.4 8.8 Occupancyrate(%) 4 99.4 100.0
1. Valuationlesscapitalexpenditureandacquisitioncost. 2. Atacquisitionexcludesacquisitioncosts. Ancillaryincome($m) 0.0 3.0 3. Currentincludestheimpactof$100mredevelopmentcompletedinMarch2014. 4. OutletCentreonly. 6 5. Atacquisitionisfortheyearended30June2010. IRRsinceacquisition (%) 15.8 6. AsatDecember2015.Includesacquisitioncosts.
VicinityCentres| Investorday| 8June2016 38 ValueͲaddingrecentacquisitions FurthersolidifyingVicinity’smarketleadingpositioninOutletCentres
DFOPerthAirport $145mgreenfield development1 atPerthAirport 50:50jointventure, Vicinitywillbepropertyanddevelopmentmanager 31 year groundlease,with49yearoption Centrallylocatedonmajorarterialroads Over110storesacross24,000sqm ofGLAandover1,600carspaces Forecastinitialyieldof>8%andIRRof>13% Artist’simpression DFOBrisbanebusiness $55mpurchaseprice2,forecastinitialyieldof~7.5%andIRRof~9.5% ~150storesacross26,100sqmofGLAandover2,600carspaces Retailexpendituregrowthof4.1%p.a.inthetradearea(10Ͳyearforecast)3 LocatedatBrisbaneAirport,within30minutesdriveof1.3mresidents • 22mtravellersthroughtheairportannually4 Builtin2005andexpandedin2015
1. Vicinity’sshareis$72.5m. 2. Excludingtransactioncostsandothercostsassociatedwiththeacquisition. 3. TradeareareferstoMainTradeArea.ForecastbyMacroPlanDimasi. 4. Source:BrisbaneAirportCorporationPtyLtd.BasedonBrisbaneAirportvisitornumbersinFY15.
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DFOSouthWharf PartofaworldͲclassandevolvingmixeduseprecinct
Assetcomprisesanoutletcentre,homemakercentre, foodandbeverageprecinctandcarparking Acquired50%interestin2010andfurther25%interestin2014 IRRsinceacquisitionof13.9% Internationalpremiumandsportingretailfocus
Keymetrics1 Vicinityownership(%) 75 Valuation(Vicinityshare)($m) 325.0 Capitalisationrate(%) 6.50 TotalGLA(sqm) 56,470 Totalstores 214 Specialtysales($/sqm) 8,811 Specialtyoccupancycost(%) 10.5
1. Allmetricsareasat31December2015,exceptGLAandstorenumberwhichareasat31May2016.
VicinityCentres| Investorday| 8June2016 40 DFOSouthWharf $14mdevelopment1 completedwithminimajorreconfigurationandfoodcourtupgrade
FormerAnacondatenancyhasbeenreconfiguredintoaloopmallincorporatinganadditional22specialtystores Projectalsoincludedafoodcourtupgrade OpenedinMarch2016 Forecastinitialyieldof>18%andIRRof>25%,aheadofinitialprojections
Floorplan– basementlevel Currentfloorplan– basementlevel June2011 March2016 Reconfigured Anaconda April2013 reconfiguredMarch 2016 ANACONDA RIVERS RIVERS
BONDS OUTLET PODIUM SPORTS CALVIN KLEIN Legend Minimajor COTTON GLUE Specialtystore ON MEGA
1. 100%interest.Vicinity’sshareis75%.
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DFOSouthWharf Precinctexpansionandnewlargercarpark
Constructionofa1,113spacemultiͲdeckcarpark now underway inconjunctionwiththeStateGovernment ofVictoriaandPlenaryGroup’sexpansionofthe MelbourneConventionandExhibitionCentre(MCEC) andnew300Ͳroomhotel
MCECexpansionandenlargedcarparkwilldrive increasedcarparkincome,improvedaccess tothecentreandgreaterfoottraffic
Carparkgroundleasehasbeenextendedto2108, inlinewiththeretailcomponent
Projectcostof$61m(Vicinityshare:$46m)
Strongreturnsovertimedrivenbyadditionalcarpark incomeandlongerleaseduration
Completionexpectedearly2017 OutlineofexistingonͲgradecarpark
VicinityCentres| Investorday| 8June2016 42 Development overview MichaelO’Brien
HallsHeadCentral,WA
Developmentoverview Enhancingthequalityoftheportfolio Ourportfolioandthechangingretaillandscapecreatessignificantdevelopmentopportunities
$3.8billion 12projects expandeddevelopmentpipeline1 identifiedpipeline
$1.3billion 30 projectsunderconstruction2 developmentexecutives
Retaillandscapechangingdramatically Ourportfolioprovidessignificantdevelopmentopportunities Retailerswhocanadaptaremostprofitableandareexpanding Broadeningrangeofanchortenantoptions Assetownersandmanagerswithexpertisehaveadvantage
1. Vicinity‘sshareis$1.8b. 2. Vicinity‘sshareis$600m. Chadstone,VIC
VicinityCentres| Investorday| 8June2016 44 Developmentoverview Prioritisingprojects Acomprehensivesetofcriteriausedtoprioritisedevelopmentsandallocateresourceseffectively
Landavailability Authorities’support Majors’interest Specialtyretailerdemand Viableplan Expectedfinancialreturnsmeethurdles Riskisacceptablegivenexpectedreturns
Developmentreturns Target
Initialyield 6%to8+%
IncrementalIRR 10% to15+%
CranbournePark,VIC
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Developmentoverview Rigorouscontrolsgovernthedevelopmentplanningprocess Astructuredprocessandconsistentapproachensuresefficientandsuccessfulprojectdelivery
VicinityBoard/ Iterativeprocess CoͲownerapproval
Scopeopportunity Conceptplanning Projectvalidation Mobilisation Delivery
Ongoing 6– 24+months 6–15months 6–36months Masterplanning Conceptdevelopment Feasibilityanalysis Finalisedesign Developmentcontrolgroup Local authoritysupport Structureplanning Finaliseretailplan Constructiontenders establishedto oversee Anchortenant demand Preliminary feasibility Development Approval Satisfaction of allconditions • Safety,time,cost andquality Marketresearch process precedent • Leasing Landavailability Agree termswithanchors Project costing • Construction
Boardandseniormanagementoversightandprogressiveapprovalsthroughoutprocess
VicinityCentres| Investorday| 8June2016 46 Developmentoverview Expandeddevelopmentpipelinetotalling$3.8b1 Developmentpipelineprovidessignificantopportunityforvaluecreation
$m Vicinityshare Partnershare Total ChadstoneRetailandOffice 333 666 WarriewoodSquare 44 87 Current GatewayPlaza 79 MandurahForum 175 350 DFOSouthWharf 46 61
TheGlen 225 450 MidlandGate 100 EstimatedFY17 Roselands 325 650 commencements DFOPerthAirport 73 145 ChadstoneHotel 40 80
EstimatedFY18+ Galleria 400 800 commencements TheMyerCentreBrisbane2 150 300
Futurepipelineandscopeofidentifiedprojectsareindicativeonlyandwillchangeasprojectsadvance
1. Vicinity’sshareis$1.8b. 2. Note,aninprincipleagreementtosella25%interesttoISPThasbeenreached.Shouldthistransactionbeimplemented,Vicinity’sshareofthedevelopmentspendwouldbe$75m.
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MandurahForum JamesFudge MandurahForum Theopportunity TransformMandurahForumintooneofWA’sleadingMajorRegionalshoppingcentres
Dominant~40,000sqm Regionalcentreinacaptivemarket Perth beingexpandedto64,500sqm MajorRegionalcentre 72km North Locatedin oneofthefastestgrowingcatchmentsinAustralia
Existingcentretradesstrongly,36%abovecomparablecentres1
LeakageduetolimitedretailofferandoutͲdatedpresentation
Redevelopmenttocapturegrowthopportunityandleakage throughimprovedretailoffer
Propertymetrics2 Valuation($m)3 312.5 Capitalisationrate(%) 6.25 Discountrate(%) 8.50 Dateacquired 1985 Lastredevelopment 1995
1. Specialtysalespersqm,comparedtoUrbiscomparablecentreaverage. 2. Asat31December2015. 3. Expressedon100%basis.Vicinity’sinterestis50%.
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MandurahForum Developmentplan Majorredevelopmentwithsignificantlyimprovedproductoffer
New4,000sqm DavidJones,new5,700sqm Target Project metrics andrefurbishedKmart Status Deliveryphase ExpandedColessupermarket Forecastcost1 $350m FivenewminiͲmajorretailers Forecastcompletion 2018 Over180newspecialtystoresandkiosks(over80incremental) Targetreturns Yield>6% IRR>10% Newfoodcourt,freshfoodandcasualdiningprecincts On completion Change Completerefurbishmentofexistingcentre TotalcentreGLA(sqm) 64,500 +26,200 MajorsGLA(sqm) 30,300 +10,500 Specialtiesandminimajors Ͳ GLA(sqm) 34,000 +15,700 Ͳ number >220 >80 Carspaces 3,000 +700
1. 100%interest.Vicinity’sshareis50%.
VicinityCentres| Investorday| 8June2016 50 MandurahForum Themarket Leadingmarketpositionintradeareawithstrongpopulationandretailspendinggrowth
Leadingmarketposition 19.1%marketshareoftradearea1
Strongpopulationgrowth ~95,800peopleintradearea, forecasttogrowat2.8%p.a.throughto2028
Excellenttransportinfrastructure ServicedbyKwinanafreewayandsuburbanrail linefromPerth
Sizeabletouristmarket Over1.4mvisitornightsand1.9mdaytrippers annually
Strongtradearearetailspendinggrowth Forecasttogrowat~6%p.a.throughto2028
Source:UrbisSchemeAssessmentDecember2014. 1. TradeareaforMandurahForumreferstoMainTradeArea.
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MandurahForum Ourcustomers CapturebroadaudienceandgrowthopportunitybypositioningMandurahForumasthe‘EverydayGetaway’
Dominantsegmentsinthetradeareaareseeking Projectvision–‘EverydayGetaway’ arelaxedcoastallifestyle Alaidbackoasisofferingeverydayoccasionstoshop, Youngsuburbanfamilies savourandconnect Retiredprofessionalcouples(emptynesters) Projectpillars Recentmigrantfamilies StressͲfreeconvenience Alargetouristmarket Inside/outside– outside/inside Mandurah’sheart Engagingexcursion
Lookandfeel Comfortable,relaxingandfun Indoor,outdoorlandscapeintegrationandwaterelements Refreshinglyvibrant Naturaltonesandmaterialsdrawnfromtheregion
Source:Inivio LandscapeSegmentationData,March2015.
VicinityCentres| Investorday| 8June2016 52 MandurahForum Predevelopmentfloorplan– ground Existingcentreplanhaspoorcustomeramenityandaccess
VicinityCentres| Investorday| 8June2016 53
MandurahForum Preandpostdevelopmentfloorplan– ground 80%ofexistingcentrespecialtystoreareatobedemolished
Unchanged Demolished New
Note:Proposedplansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 54 MandurahForum Postdevelopmentfloorplan– ground Desirable‘racetrack’configurationwithconvenientaccessandcustomeramenitythroughout
Note:Plansareindicativeonlyandsubjecttochange.
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MandurahForum Postdevelopmentprecinctplan– ground Apremiumshoppingdestinationofferingavibrantretailexperiencetoadiverseandthrivingcommunity
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 56 MandurahForum Postdevelopmentfloorplan–level1andmezzanine Newparkingareawith3,000carspaces
Mezzanine
Level1
Note:Plansareindicativeonlyandsubjecttochange.
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MandurahForum DavidJonesfashionmall Artist’simpression
Groundfloor
VicinityCentres| Investorday| 8June2016 58 MandurahForum Centralhub‘heart’andeventspace Artist’simpression
Groundfloor
VicinityCentres| Investorday| 8June2016 59
MandurahForum Foodcourtalfrescoarea Artist’simpression
Groundfloor
VicinityCentres| Investorday| 8June2016 60 MandurahForum Alfrescocasualdiningprecinct Artist’simpression
Groundfloor
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TheGlen BarnabyGiudice TheGlen Theopportunity Assetrepositioningtocapitaliseonhighincometradeareaandcaptureescapedexpenditure
Expansionof~60,000sqmMajorRegionalcentreto77,600sqm Locatedinahighlydesirablecatchment Ͳ affluentcustomerbase, withaboveaveragenonͲfoodretailspend Lowmarketshareandsalesproductivityduetoofferlosingrelevance Opportunitytorecapturemarketsharebycreatingaunique andcompellingproduct • Tailoringandimprovingretailoffer • Buildingonthecurrentstrengthsofconvenienceandfood • Capitalisingontheopportunitytobringininternationalretailers
Propertymetrics1 Valuation($m)2 340.0 Capitalisationrate(%) 6.50 Discountrate(%) 8.25 Dateacquired 1994 Lastmajorredevelopment 1996
1. Asat31December2015. 2. Expressedon100%basis.Vicinity’sinterestis50%.
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TheGlen Developmentplan Majorredevelopmentwithsignificantlyimprovedproductoffertorepositioncentreandrecaptureescapedexpenditure
Latestformat8,000sqm DavidJones Project metrics RelocatedWoolworthsandnewAldi toanchorfreshfood Status Mobilisationphase marketwithColes Forecastcost1 $450m Newinternationalretailers Forecasttiming 2017Ͳ2019 Newcontemporaryfoodcourtwithelevatedviews On completion Change Newcasualdininghubovertwolevels TotalcentreGLA(sqm) 77,600 +18,900 Completerefurbishmentofexistingcentre MajorsGLA(sqm) 24,300Ͳ5,100 Threeresidentialtowersabovethecentrewith500apartments Specialtiesandminimajors Ͳ GLA(sqm) 48,400 +24,000 Ͳ number ~240 +~70 Carspaces 3,600 +500
1. 100%interest.Vicinity’sshareis50%.
VicinityCentres| Investorday| 8June2016 64 TheGlen Themarket Welllocatedwithanaffluentcustomerbase
Aboveaveragehouseholdincomes $88,294fortradearea1,abovetheMelbourneaverage
Increasingwealthwithlowlevelsofdebt 31%of~217,000 tradearearesidentshaveamortgage, Melbourneaverageis38%
Premiumbrandandfashionfocus Apparelspendingpercapitaoftradearea is7%aboveUrbisaverageforOtherRegionalCentres2
StrongAsianpresencewithdesireforfreshfood andAsiandiningoffers 26%oftradearearesidentsareAsianͲborn
Highlyvisiblewithexcellenttransportlinks 87,000carspassTheGleneveryday Source:UrbisSchemeAssessmentFebruary2016. 1. TradeareaforTheGlenreferstoMainTradeArea. 2. OtherRegionalCentresexcludesthetop10regionalcentresinAustraliaincludingChadstoneShoppingCentre.
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TheGlen Ourcustomers ReͲengageoursmart,sophisticatedclientelebypositioningasamoreintimate,uniquelylocal,‘boutique’experience
Tradeareahasmanycommoncharacteristics Projectvision– ‘MallͲtique’ Older,affluentandwellestablishedfamilies Uniquelydesignedtodeliveramorepersonal,familyfriendly Educated,informedandcommunityminded andauthenticallylocalexperience Enjoyingahighqualitylifestyle Projectpillars Multicultural Fashionablecollection Transformingeveryday Strongrepresentationof‘successstories’segments ~30%suburbanprofessionals Culinaryquarter ~15%successfulexecutives Aheartforthecommunity ~6%stylishtraditionalfamilies Lookandfeel Casualsophistication OriginalityandselfͲdiscovery Environmentsthattellastory Avibrant,comfortablezone
Source:Inivio LandscapeSegmentationData,March2015.
VicinityCentres| Investorday| 8June2016 66 TheGlen Residential Centretobenefitfromresidentialdevelopmentwithoutmateriallyaddingrisk
Planningapprovalfor500apartments Threetowersabovetheretailatthesouthernend ofthecentre Developmenttobeundertakenbymajorresidential developer– Vicinityreceivesvalueforairrights Locationanddesignoftowersdoesnotimpede longͲtermcentremasterplan 500residentialcarspacesinlowestbasement withseparateaccess Podiumslabwithservicesvoidtosegregate residentialservicesfromretail
Artist’simpression
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TheGlen Predevelopmentfloorplan–lowerground AnchoredbylowerlevelofDavidJonesandisolatedColessupermarket
VicinityCentres| Investorday| 8June2016 68 TheGlen Postdevelopmentfloorplan–lowerground Freshfoodprecinctincludingthreesupermarkets
Note:Plansareindicativeonlyandsubjecttochange.
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TheGlen Postdevelopmentprecinctplan–lowerground Freshfoodprecinctincludingthreesupermarkets
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 70 TheGlen Predevelopmentfloorplan– ground MallanchoredbyWoolworthstothesouthandupperlevelDavidJonestothenorth
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TheGlen Postdevelopmentfloorplan– ground Desirableracetrackconfiguration
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 72 TheGlen Postdevelopmentprecinctplan– ground DavidJones,Target,fashionandinternationaltenantsanddiningarea
Note:Plansareindicativeonlyandsubjecttochange.
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TheGlen Predevelopmentfloorplan–level1 Commercialofficeaccessiblevialiftfrommall,withnoretailorcarparks
Commercial office
VicinityCentres| Investorday| 8June2016 74 TheGlen Postdevelopmentfloorplan–level1 UpperlevelofDavidJonesandalfrescodiningprecinct
Commercial office
Note:Plansareindicativeonlyandsubjecttochange.
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TheGlen Townsquare,caféandrestaurantprecinct Artist’simpression
Groundfloor
VicinityCentres| Investorday| 8June2016 76 TheGlen Stylishnewmodernfeel Artist’simpression
Groundfloor
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TheGlen Restaurantprecinctwithextendedtradinghours Artist’simpression
Level1
VicinityCentres| Investorday| 8June2016 78 TheGlen LatestformattwoͲlevelDavidJones Artist’simpression
Groundfloor
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Roselands JonSavell Roselands Theopportunity ReͲestablishRoselandsasatrueMajorRegionalshoppingcentredestination
Expansionof~62,000sqmMajorRegionalcentreto95,000sqm Locatedcentrallywithfavourabledemographics • OneofAustralia’smostdenselypopulatedregions • OneofthelargesttradeareasforOtherRegionalCentres1 inAustralia • Aboveaverageretailspendinggrowth LowmarketshareduetolimitedhistoricalinvestmentandoutͲdated retailoffer SignificantpotentialtoincreasemarketsharebyreͲestablishing therelevanceofthecentretothecommunity Propertymetrics2 Valuation($m)3 370.0 Capitalisationrate(%) 6.50 Discountrate(%) 8.50 Dateacquired 2003 Lastredevelopment 2000
1. OtherRegionalCentresexcludesthetop10regionalcentresinAustraliaincludingChadstoneShoppingCentre. 2. Asat31December2015. 3. Expressedon100%basis.Vicinity’sinterestis50%.
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Roselands Developmentplan Majorredevelopmentwithsignificantlyimprovedproductoffer
Newfreshfoodmarketwithexpandedsupermarketoffer Project metrics Newfashionprecinctanchoredbyadepartmentstore, Status Projectvalidationphase internationalminimajorsandleadingnationalbrands Forecastcost1 $650m Refresheddiscountdepartmentstoreofferwith Forecasttiming 2017– 2019 new6,600sqm KmartandrelocatedTarget On completion Change Newcinemaandentertainmentprecinctwillcomplement TotalcentreGLA(sqm) 95,000 +34,500 theintroductionofaleisureanddiningexperience MajorsGLA(sqm) 43,200 +4,400 Newcontemporaryretaildesignthroughout Specialtiesandminimajors Ͳ GLA(sqm) 51,800 +30,100 Ͳ number ~280 +~115 Carspaces 3,600 +400
1. 100%interest.Vicinity’sshareis50%.
VicinityCentres| Investorday| 8June2016 82 Roselands Themarket Easilyaccessiblecentreindiversetradeareawithpocketsofaffluenceandresidentswhotendtobespenders
OneofAustralia’smostdenselypopulatedregions Tradearea1 populationof~472,000, 19%largerthanUrbisaverageforOtherRegionalCentres
Aboveaveragetradearearetailspendinggrowth Retailspendforecasttogrowat3.5%p.a.forthe next10years
Acentral,easilyaccessiblelocation,withacaptivemarket SouthͲwesternsuburbsofSydneywithgoodroadaccess
Morehomeownerswithlessmortgagedebt Homeownershiprateintradeareahigherthan Sydneyaverage
AnimageͲconsciouscustomerbasewhichenjoysspending Aspirationalshopperswhoseekoutbrands
Source:UrbisSchemeAssessmentDecember2014. 1. TradeareaforRoselandsreferstoTotalTradeArea.
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Roselands Ourcustomers ReͲestablishrelevancebypositioningRoselandsasanexciting‘FusionofFashion,FoodandFriendship’
Verydiversecustomerbase Projectvision–‘FusionofFashion,FoodandFriendship’ NewAsianandMiddleͲEasterncommunities TheepicentreofSydney’seclecticsouthͲwesternsuburbs Oldercommunities Projectpillars Youngsingles,couplesandfamiliesbuyinghomes Gobeyondthebasics Affluenthouseholdsinthesecondaryandtertiarysouth Ownaplaceinpeoples’minds(famousforfood) tradeareas Enticepeoplewithdiscoveryandbelonging Redevelopmenttargetscoremarketofyoungfamilies Retailassocialspace andkeysectorsinsouthͲwesternSydney Afuturethatreflectsandrespectsthepast
Lookandfeel Simplequality Convivial,welcoming,energeticandfun Eclecticandrichlytextured
Source:Inivio LandscapeSegmentationData,March2015.
VicinityCentres| Investorday| 8June2016 84 Roselands Floorplan–lowerground Creatingamarketleadingfreshfoodprecinct
Existing Proposed
Supermarket
Supermarket
Note:Proposedplansareindicativeonlyandsubjecttochange.
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Roselands Postdevelopmentprecinctplan–lowerground Creatingamarketleadingfreshfoodprecinct
Supermarket
Supermarket
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 86 Roselands Floorplan– ground Newfashionandyouthprecincts
Existing Proposed
Department store
Note:Proposedplansareindicativeonlyandsubjecttochange.
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Roselands Postdevelopmentprecinctplan– ground Newfashionandyouthprecincts
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 88 Roselands Floorplan–level1 Newfoodcourt,entertainmentandleisureprecinct
Existing Proposed
Department store
Note:Proposedplansareindicativeonlyandsubjecttochange.
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Roselands Postdevelopmentprecinctplan–level1 Newfoodcourt,entertainmentandleisureprecinct
Note:Plansareindicativeonlyandsubjecttochange.
VicinityCentres| Investorday| 8June2016 90 Roselands Floorplan–level2 Newcinemaoffertocomplementdiningprecinct
Existing Proposed
Cinema
Note:Proposedplansareindicativeonlyandsubjecttochange.
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Roselands Modernandopenmallspace Artist’simpression
Department store
Groundfloor
VicinityCentres| Investorday| 8June2016 92 Roselands Stylishretaildesigns Artist’simpression
Department store
Groundfloor
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Roselands Largeentertainmentcomplex Artist’simpression
Department store
Level1
VicinityCentres| Investorday| 8June2016 94 Roselands Vibrantnewdiningprecinct Artist’simpression
Department store
Level1
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Contactdetailsanddisclaimer
Forfurtherinformationpleasecontact:
PennyBerger TroyDahms HeadofInvestorRelations SeniorInvestorRelationsManager T+61282297760 T+61282297763 E[email protected] E[email protected]
Disclaimer This document is a presentation of general background information about the activities of Vicinity Centres (ASX:VCX) current at the date of lodgement of the presentation (8 June 2016). It is information in a summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment objective is appropriate.
This presentation contains certain forecast financial information along with forwardͲlooking statements in relation to the financial performance and strategy of Vicinity Centres. The words ‘anticipate’, ‘believe’,‘expect’,‘project’,‘forecast’,‘estimate’,‘outlook’,‘upside’,‘likely’,‘intend’,‘should’,‘could’,‘may’,‘target’,‘plan’and other similar expressions are intended to identify forwardͲlooking statements. Indications of, and guidance on, future earnings, financial position, performance and distributions are also forwardͲlooking statements. The forwardͲlooking statements included in this presentation are based on information available to Vicinity Centres as at the date of this presentation. Such forwardͲlooking statements are not representations, assurances, predictions or guarantees of future results, performance or achievements expressed or implied by the forwardͲlooking statements and involve known and unknown risks, uncertainties, assumptions and other factors, many of which are beyond the control of Vicinity Centres. The actual results of Vicinity Centres may differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forwardͲlooking statements and you should not place undue reliance on such forwardͲlooking statements.
Except as required by law or regulation (including the ASX Listing Rules), Vicinity Centres disclaims any obligation to update these forwardͲlooking statements.
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