Half Year 2026 Waypoint REIT Ltd Earnings Call Transcript
Key Points
- Distributable DEPS increased 3.4% to AUD 8.59 cents, driven by retail increases and the impact of the completed buyback.
- NTA per security rose by 2 cents to AUD 2.92, supported by a AUD 10.7 million valuation uplift from rent reviews across 94% of the portfolio.
- All 28 leases expiring in 2026 were resolved, with a 97.2% retention rate by income and a 10.3% positive reversion on renewals.
- Gearing fell slightly to 32.4%, and the company issued a new AUD 250 million six-year AMTN, extending debt maturity to 3.8 years with no maturities until March 2028.
- High hedging coverage of 95% for the second half and a weighted average hedge maturity of 2.5 years provide insulation against interest rate volatility.
- Viva Energy, the major tenant, reported strong interim results with group EBITDA up 154%, and fuel volumes and margins remained robust.
- The company reaffirmed full-year DPS guidance of AUD 0.1714, representing 3% growth, with a low MER of 31 basis points.
- Transaction volumes in the fuel and convenience asset market were down 20-30% versus prior periods, with activity impacted by interest rate uncertainty and Middle East conflict.
- Weighted average cap rate expanded by 10 basis points to 5.71%, with Melbourne assets seeing a 21 basis point softening due to negative sentiment on the Victorian economy.
- The OTR conversion program slowed significantly, with only five new stores opened or converted in the first half versus 35 in full year 2025, and a more moderate rollout is expected near term.
- Viva Energy exited or will exit two Brisbane sites (Brendale and Slacks Creek), requiring re-leasing or redevelopment efforts.
- Second-half earnings are expected to face drags from higher hedge rates, floating debt costs, the loss of income from the Nowra disposal, and normalized property expenses.
- The company has limited appetite for a buyback due to slow progress on non-core asset sales and the need to maintain liquidity and credit rating parameters.
- The introduction of unattended self-service formats (like U-GO) on nine sites raises uncertainty regarding valuation and market rent implications, with limited market evidence available.
Thank you for standing by and welcome to the Waypoint REIT 1H '26 results webcast. (Operator Instructions)
I would now like to hand the conference over to Hadyn Stephens, CEO and Managing Director. Please go ahead.
Thank you, and good morning, everyone. A summary of the key highlights for the six months to 30 June is provided on page 6 of the presentation. Starting with financial highlights for the half, distributable DEPS of AUD 8.59 cents was 3.4% higher than the corresponding period last year, with higher net interest expense being offset by retail increases and the impact of the buyback that was completed in the second half of last year. NTA per security increased by 2 cents to AUD 2.92 as at 30 June, primarily due to an increase in the value of our investment portfolio, and our MER remains one of the lowest in the sector at 31 basis points on an annualized basis.
Moving to our property portfolio, we saw a 10 basis point increase in Waypoint's
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