1
WAYPOINT REIT – APPENDIX 4E
FOR THE YEAR ENDED 31 DECEMBER 2024
Waypoint REIT is Australia’s largest listed REIT owning solely fuel and convenience retail properties,
with a high-quality network across all Australian states and mainland territories. Waypoint REIT’s
objective is to maximise the long-term returns from the portfolio for the benefit of all securityholders.
Waypoint REIT is a stapled entity, with each stapled security comprising one share in Waypoint REIT
Limited (ABN 35 612 986 517) and one unit in Waypoint REIT Trust (ARSN 613 146 464) and their
controlled entities (Waypoint REIT).
REPORTING PERIOD
This Financial Report details the consolidated results of Waypoint REIT for the year ended 31
December 2024 (FY24). The comparative figures for the Profit and Loss are for the year ended 31
December 2023 (FY23) and the comparative figures for the Balance Sheet are as at 31 December
2023.
RESULTS FOR ANNOUNCEMENT TO THE MARKET
1 Distributable Earnings is a non-statutory measure of profit and is calculated as net profit adjusted to remove transaction costs,
amortisation of tenant incentives, specific non-recurring items and non-cash items (including straight-lining of rental income, the
amortisation of debt establishment fees, long-term incentive expense and any fair value adjustment to investment properties and
derivatives).
2 Calculated on a weighted average basis using unrounded figures.
Profit and Loss
FY24
($’million)
FY23
($’million)
Change
Revenue from ordinary activities
165.0
164.3
0.4%
Net profit / (loss) after tax
131.5
(79.1)
266.2%
Distributable Earnings1
110.7
110.7
-
Distributable EPS (cents per security)2
16.48
16.48
-
Balance Sheet
31 Dec 2024
($’million)
31 Dec 2023
($’million)
Change
Total assets
2,825.0
2,797.9
1.0%
Net assets
1,854.8
1,832.6
1.2%
Net tangible assets (per security)
$2.76
$2.73
1.1%
2
RESULTS COMMENTARY
Financial Performance
• Distributable Earnings in FY24 were consistent with FY23 at $110.7 million, with increased rental
income from annual rent escalations ($4.8 million) and lower operating expenses ($0.2 million)
offset by higher net interest expense due to a higher cost of debt ($4.8 million) and higher tax
expense ($0.2 million).
• Distributable Earnings per security were 16.48 cents, in line with FY23.
• The statutory result increased by $210.6 million from a statutory net loss of $79.1 million in FY23
to a net profit of $131.5 million in FY24, primarily driven by valuation movements on investment
property, with a net gain of $28.4 million in FY24 compared to a net loss of $184.5 million in FY23.
• Net tangible assets per security at 31 December 2024 increased by 1.1% to $2.76 (31 December
2023: $2.73) primarily due to net valuation movements on investment property.
Property Portfolio
• 158 investment properties (representing approximately 40% of the portfolio by value) were
independently valued during the year, including 77 at 30 June 2024 and 81 at 31 December 2024.
Directors’ valuations were performed on the balance of the portfolio at each balance date.
• The weighted average capitalisation rate of the portfolio at 31 December 2024 was 5.72% (31
December 2023: 5.68%).
• At 31 December 2024, the weighted average lease expiry by income was 7.1 years (31 December
2023: 8.1 years) and portfolio occupancy was 99.9% (31 December 2023: 99.9%).
Capital Management
• As at 31 December 2024:
• Gearing was 32.6%3 (within the target range of 30-40%).
• Drawn debt was $931.6 million, with undrawn facilities of $167.0 million.
• The weighted average debt maturity was 4.1 years, with no debt facilities maturing until
December 2025 (this facility was undrawn at year end).
• 93% of Waypoint REIT’s debt was hedged through a combination of fixed rate debt and interest
rate swaps. The weighted average maturity of fixed rate debt and hedges was 2.6 years.
• During the year, Waypoint REIT entered into a new $500.0 million syndicated bank debt facility with
proceeds used to repay and cancel $450.0 million of existing bank facilities and term loans. The
new facility ranks equally with Waypoint REIT’s existing senior, unsecured debt and is structured
across three tranches: a $150.0 million three-year term loan, a $250.0 million five-year revolving
credit facility and a $100.0 million seven-year term loan.
• During the period, Waypoint REIT also entered into $325.0 million of additional forward start interest
rate swaps. These swaps add to interest rate hedging between FY25 and FY29, further supporting
the resilience of Waypoint REIT’s earnings against volatility in floating interest rates.
3 Calculated as net debt (excluding foreign exchange and fair value hedge adjustments) / total assets excluding cash. This differs from
Covenant Gearing which is equal to 34.3%.
3
DISTRIBUTIONS
Cents
per security
Date paid or
payable
Final for the year ended 31 December 2023
4.10
26 February 2024
Interim for the quarter ended 31 March 2024
4.12
10 May 2024
Interim for the quarter ended 30 June 2024
4.12
29 August 2024
Interim for the quarter ended 30 September 2024
4.12
15 November 2024
Final for the year ended 31 December 2024*
4.12
27 February 2025
* Record date for this distribution was 31 December 2024.
Distributions were 100% from Australian sourced income from Waypoint REIT Trust. No franked dividends
were paid or payable from Waypoint REIT Limited. Waypoint REIT’s Distribution Reinvestment Plan (DRP)
is currently inactive.
ADDITIONAL INFORMATION
For additional information regarding the results of Waypoint REIT for the year ended 31 December 2024,
please refer to the FY24 Results – ASX Release and the FY24 Results Presentation lodged with ASX on
27 February 2024. Attached with this Appendix 4E is a copy of the financial report for the year ended 31
December 2024.
This report is based on Waypoint REIT’s 31 December 2024 financial report, which has been audited by
PricewaterhouseCoopers. The Independent Auditor’s Report provided by PricewaterhouseCoopers is
included in the 31 December 2024 financial report.
1
FINANCIAL REPORT
For the Year Ended
31 December 2024
Contents
DIRECTORS’ REPORT
2
AUDITOR’S INDEPENDENCE DECLARATION
30
FINANCIAL STATEMENTS
31
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
73
DIRECTORS’ DECLARATION
75
INDEPENDENT AUDITOR’S REPORT
76
2
DIRECTORS’ REPORT
The Directors of Waypoint REIT Limited (Company) and VER Limited (Responsible Entity), the Responsible
Entity of Waypoint REIT Trust (Trust), present their report together with the financial statements of Waypoint
REIT (Waypoint REIT) and the financial statements of Waypoint REIT Trust Group (Trust Group) for the year
ended 31 December 2024.
Waypoint REIT is a stapled group consisting of the Company and the Trust and their respective controlled
entities. The financial statements of Waypoint REIT comprise the Company, the Trust and their respective
controlled entities. The financial statements of the Trust Group comprise the Trust and its controlled entities.
The portfolio of fuel and convenience retail properties is held by 100% controlled entities of the Trust.
The Company owns all of the shares in VER Limited (the Responsible Entity).
Directors of Waypoint REIT Limited
The following persons were Directors of Waypoint REIT Limited during the year and up to the date of this
report, unless otherwise noted:
Georgina Lynch
Independent Non-Executive Chair
Susan MacDonald
Independent Non-Executive Director
Christopher Lawton
Independent Non-Executive Director
Gai McGrath
Independent Non-Executive Director (appointed 1 August 2024)
Laurence Brindle
Independent Non-Executive Chair (retired 15 May 2024)
Hadyn Stephens
Managing Director and Chief Executive Officer
Tina Mitas was appointed as Company Secretary on 15 May 2018 and continues in office at the date of this
report.
Directors of VER Limited
The following persons were Directors of VER Limited during the year and up to the date of this report, unless
otherwise noted:
Georgina Lynch
Independent Non-Executive Chair
Susan MacDonald
Independent Non-Executive Director
Christopher Lawton
Independent Non-Executive Director
Gai McGrath
Independent Non-Executive Director (appointed 1 August 2024)
Laurence Brindle
Independent Non-Executive Chair (retired 15 May 2024)
Hadyn Stephens
Managing Director and Chief Executive Officer
Tina Mitas was appointed as Company Secretary on 15 May 2018 and continues in office at the date of this
report.
Principal activities
During the period, the principal activity of Waypoint REIT was investment in fuel and convenience retail
property.
Waypoint REIT is Australia’s largest listed REIT owning solely fuel and convenience retail properties, with a
high-quality network across all Australian states and mainland territories. Waypoint REIT’s objective is to
maximise the long-term income and capital returns from its ownership of the portfolio for the benefit of all
securityholders.
The majority of the properties in the portfolio are leased to Viva Energy Australia Pty Limited (Viva Energy –
a wholly owned subsidiary of Viva Energy Group Limited (Viva Energy Group)), with other tenants including
other fuel and convenience retail operators and non-fuel tenants.
3
Significant changes in state of affairs
There were no significant changes in the state of affairs of Waypoint REIT that occurred during the period.
Distribution to securityholders
Distributions paid during the period were as follows:
2024
2023
$ million
$ million
Distributions paid in the period to 31 December 2024
Final distribution for year ended 31 December 2023
– 4.10 cents per security paid on 26 February 2024
27.5
-
Interim distribution for the quarter ended 31 March 2024
– 4.12 cents per security paid on 10 May 2024
27.7
-
Interim distribution for the quarter ended 30 June 2024
– 4.12 cents per security paid on 29 August 2024
27.7
-
Interim distribution for the quarter ended 30 September 2024
– 4.12 cents per security paid on 15 November 2024
27.7
-
Distributions paid in the period to 31 December 2023
Final distribution for year ended 31 December 2022
– 4.03 cents per security paid on 27 February 2023
-
27.1
Interim distribution for the quarter ended 31 March 2023
– 4.12 cents per security paid on 12 May 2023
-
27.7
Interim distribution for the quarter ended 30 June 2023
– 4.16 cents per security paid on 28 August 2023
-
27.9
Interim distribution for the quarter ended 30 September 2023 –
4.10 cents per security paid on 15 November 2023
-
27.5
Total distributions paid
110.6
110.2
A distribution of 4.12 cents per security ($27.7 million) is to be paid on 27 February 2025 for the quarter ended
31 December 2024 and this has been provided for in the financial statements.
Operating and financial review
Distributable Earnings in FY24 were consistent with FY23 at $110.7 million, with increased rental income from
annual rent escalations ($4.8 million) and lower operating expenses ($0.2 million) offset by higher net interest
expense due to a higher cost of debt ($4.8 million) and higher tax expense ($0.2 million).
Distributable Earnings per security were 16.48 cents, in line with FY23.
The statutory result increased by $210.6 million from a statutory net loss of $79.1 million in FY23 to a net profit
of $131.5 million in FY24, primarily driven by valuation movements on investment property, with a net gain of
$28.4 million in FY24 compared to a net loss of $184.5 million in FY23.
The management expense ratio (MER) in FY24 was 0.30% (FY23: 0.30%) with lower operating expenses
offset by the impact of a lower asset base as a result of valuation movements on investment properties.
Gearing was 32.6%4 as at 31 December 2024 (31 December 2023: 32.8%). Net tangible assets per security
at 31 December 2024 increased by 1.1% to $2.76 (31 December 2023: $2.73) primarily due to net valuation
movements on investment property.
4 Calculated as net debt (excluding foreign exchange and fair value hedge adjustments) / total assets excluding cash. This differs from
Covenant Gearing which is equal to 34.3%.
4
Key financial metrics
FY24
FY23
Statutory net profit / (loss) after tax
$131.5 million
($79.1) million
Distributable Earnings (1)
$110.7 million
$110.7 million
Distributable EPS
16.48 cents
16.48 cents
Management expense ratio (2)
0.30%
0.30%
31 Dec 2024
31 Dec 2023
Total assets
$2,825.0 million
$2,797.9 million
Gross borrowings
$931.6 million
$927.6 million
Net assets
$1,854.8 million
$1,832.6 million
NTA per security
$2.76
$2.73
Gearing (3)
32.6%
32.8%
Covenant Gearing (4)
34.3%
34.6%
(1) Distributable Earnings is a non-statutory measure of profit and is calculated as net profit adjusted to remove transaction
costs, amortisation of tenant incentives, specific non-recurring items and non-cash items (including straight-lining of rental
income, the amortisation of debt establishment fees, long-term incentive expense and any fair value adjustment to
investment properties and derivatives).
(2) Management expense ratio is calculated on an annualised basis as the ratio of operating expenses (excluding net property
expenses) over average total assets (excluding derivative financial assets).
(3) Gearing is calculated as net debt (excluding foreign exchange and fair value hedge adjustments) / total assets excluding
cash.
(4) Covenant Gearing is calculated as total liabilities / total assets but excluding any mark-to-market valuations of derivative
assets / liabilities. This is the measure used to determine compliance with Waypoint REIT’s gearing covenants.
Financial results
FY24
$ million
FY23
$ million
Rental income
162.3
157.5
Finance income
1.1
0.9
Total operating income
163.4
158.4
Operating expenses
(9.7)
(9.9)
Interest expense
(42.8)
(37.8)
Income tax expense
(0.2)
-
Distributable Earnings
110.7
110.7
Net fair value gain / (loss) on investment properties
28.4
(184.5)
Net profit / (loss) on sale of investment properties
0.2
-
Straight-line rental income
1.6
5.9
Amortisation of borrowing costs
(2.8)
(1.7)
Amortisation of tenant incentives
-
-
Net loss from derivative financial instruments
(6.4)
(9.3)
Long-term incentive expense
(0.2)
(0.2)
Statutory net profit / (loss) after tax
131.5
(79.1)
5
Investment property portfolio
31 Dec 2024
31 Dec 2023
Total value of investment properties
$2,793.5 million
$2,769.3 million
Total properties in portfolio
400
402
Portfolio occupancy
99.9%
99.9%
Weighted average capitalisation rate
5.72%
5.68%
Weighted average lease expiry
7.1 years
8.1 years
During the year, 158 investment properties (representing approximately 40% of the portfolio, by number) were
independently valued, including 77 at 30 June 2024 and 81 at 31 December 2024. Directors’ valuations were
performed on the balance of the portfolio at each balance date (319 investment properties at 31 December
2024).
Capital management
As at 31 December 2024:
•
Gearing was 32.6%5 (within the target range of 30-40%);
•
Drawn debt was $931.6 million with $167.0 million of undrawn facilities;
•
Weighted average debt maturity was 4.1 years; and
•
93% of Waypoint REIT’s debt was hedged through a combination of fixed rate debt and interest rate
swaps. The weighted average maturity of fixed rate debt and hedges was 2.6 years.
During the year, Waypoint REIT entered into a new $500.0 million syndicated bank debt facility with proceeds
used to repay and cancel $450.0 million of existing bank facilities and term loans. The new facility ranks equally
with Waypoint REIT’s existing senior, unsecured debt and is structured across three tranches: a $150.0 million
three-year term loan, a $250.0 million five-year revolving credit facility and a $100.0 million seven-year term
loan.
During the period, Waypoint REIT also entered into $325.0 million of additional forward start interest rate
swaps. These swaps add to interest rate hedging between FY25 and FY29, further supporting the resilience
of Waypoint REIT’s earnings against volatility in floating interest rates.
Matters subsequent to the end of the financial period
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may
significantly affect:
•
the operations of Waypoint REIT in future financial years;
•
the results of those operations in future financial years; or
•
the state of affairs of Waypoint REIT in future financial years.
2025 outlook
Waypoint REIT expects to deliver Distributable Earnings per security of 16.48 cents in 2025, in line with 2024.
The guidance assumes no buybacks / capital returns, acquisitions or redevelopment expenditure in 2025,
although we will consider opportunities to do so if in the best interests of securityholders. The guidance also
assumes the sale of three non-core assets currently in due diligence (book value of approximately $15.0
million) and no material changes in Waypoint REIT’s operating environment.
5 Calculated as net debt (excluding foreign exchange and fair value hedge adjustments) / total assets excluding cash. This differs from
Covenant Gearing which is equal to 34.3%.
6
Material business risks
The material business risks that could adversely affect Waypoint REIT’s financial prospects include the
following:
Tenant concentration risk, financial standing and sector concentration risk
94.2% of Waypoint REIT’s rental income is currently received from Viva Energy. If Viva Energy’s financial
standing materially deteriorates and impacts its ability to make rental payments, Waypoint REIT’s financial
results, financial position and ability to service and/or obtain financing will be adversely impacted. Furthermore,
a material decline in the profitability of Viva Energy’s business due to the global transition to a low carbon
economy, the possible termination of Viva Energy’s right to use the Shell brand (current agreement expires in
2029), risks to the successful integration of the recent acquisition of Coles Express or On The Run or other
factors outside the control of Waypoint REIT could affect the perceived stability of the rental income of
Waypoint REIT and may affect Waypoint REIT’s security price and/or ability to obtain financing on acceptable
terms. A material decline in the profitability of Viva Energy’s business could also lead to reduced capacity or
ability for Viva Energy to pay market rents when renewal options are exercised, which could result in lower
rental receipts and/or a decline in the values of Waypoint REIT’s investment properties if Waypoint REIT is
unable to lease the property to an alternate tenant.
Collection risk
Waypoint REIT performs financial due diligence on potential new tenants and holds collateral in the form of
security deposits or bank guarantees where appropriate. Rent is due in advance on the first day of each billing
period (typically monthly), with arrears monitored and arrears notices issued on a regular basis (where
required). Waypoint REIT applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade and other financial assets. The loss allowances for trade
and other financial assets are based on assumptions about risk of default and expected loss rates. Waypoint
REIT uses judgement in making these assumptions, based on Waypoint REIT’s past history and existing
market conditions as well as forward looking estimates at the end of each reporting period.
Market rents
Market rents are a key component of Waypoint REIT’s biannual investment property valuation process, with
independent market rent determinations also incorporated into the majority of lease extension options where
the parties cannot agree on the market rent for a particular property. The assessment of market rents is
subjective, and there is a risk that the market rent set by an independent valuer at the end of the current lease
term will be different to the market rent used by Waypoint REIT’s independent valuer (for independently valued
properties) or Waypoint REIT itself (for Directors’ valuations), which could have an impact on future investment
property valuations and Waypoint REIT’s future income.
Re-leasing and vacancy risk
Waypoint REIT’s property portfolio is 99.9% occupied with a weighted average lease expiry of 7.1 years and
only 6 leases (representing 0.7% of annual rental income) are due to expire before the end of 2025. The
majority of the portfolio (354 of 416 contracted leases) is subject to multiple 10-year options in favour of the
tenant, with the rent from commencement of each option period to either be agreed between the parties or set
by independent market rent determination. However, there is a risk that tenants may not exercise their option,
or that the commencing rent will be lower than passing rent and/or market rent (if agreed between the parties).
Investment property value risk
The value of Waypoint REIT’s portfolio of investment properties may be adversely affected by a number of
factors, including factors outside the control of Waypoint REIT, including the supply of, and demand for, fuel
and convenience retail properties, general property market conditions, climate risks, the remaining lease term
of individual properties, the availability and cost of credit including sector-specific environmental, sustainability
and governance considerations, the ability to attract and implement economically viable rental arrangements,
Viva Energy’s financial condition deteriorating, occupiers not extending the term of leases, and general
economic factors such as the level of inflation and interest rates, which may adversely impact capitalisation
rates.
7
A key long-term consideration in the valuation of fuel and convenience properties is an increasing uptake of
vehicles fuelled by alternative energy sources due to factors including changes in consumer behaviour, pro-
emission reduction policies, reduced supply and/or higher pricing of fossil fuels.
As changes in valuations are recorded on the statutory statements of comprehensive income, any decreases
in value will have a negative impact on the statutory statements of comprehensive income and balance sheets
(including the net tangible assets per security) and in turn the market price of Waypoint REIT’s securities may
fall. Waypoint REIT’s financing facilities also contain gearing covenants, and the headroom to these gearing
covenants is affected by changes in the valuation of the portfolio.
The property portfolio is geographically diversified to mitigate the risk of localised valuation impacts and the
majority of assets are located in metropolitan areas which typically have higher underlying land values and
alternative use potential. Active portfolio management, including the disposal of assets with heightened
vacancy or negative rental reversion risk, also, in part, can mitigate this risk.
In addition, where a tenant proposes to undertake capital works on the property, there is a risk that this will
adversely impact the value of the asset. The majority of leases with Viva Energy include clauses that allow the
tenant to undertake capital works on the property. This right is typically subject to the landlord’s consent, which
cannot be unreasonably withheld. As landlord, a key consideration for Waypoint REIT when providing this
consent is any potential adverse impact on the value of the asset and this will largely depend on the facts in
any given situation.
Environmental and climate change risk
Waypoint REIT depends on its tenants to perform their obligations under various environmental arrangements
in relation to properties they lease. Waypoint REIT has an indemnity from Viva Energy in respect of certain
liability for historical environmental contamination across 354 assets acquired at the time of Waypoint REIT’s
initial public offering. Waypoint REIT also carries out environmental due diligence in relation to potential
property acquisitions. If any property in the portfolio is contaminated by a fuel tenant or its invitee during the
term of the lease, the tenant under that lease must remediate it, at their cost, to a standard consistent with
operating the site as a fuel and convenience property or similar commercial use. If the tenants were to fail to
meet their obligations under these arrangements (including due to their insolvency), Waypoint REIT may incur
significant costs to rectify contamination on its properties and also on other properties which may be
consequently impacted.
Waypoint REIT is subject to a range of regulatory regimes (including environmental or climate-change related
regulations) that cover the specific assets of Waypoint REIT and how they are operated. These regulatory
regimes are subject to ongoing review and change that may increase the cost of compliance, reporting and
maintenance of Waypoint REIT’s assets. There remains a risk that Waypoint REIT, as owner of the properties
in the portfolio, may face liability for breach by others of environmental laws and regulations.
Extreme weather and other climate change-related events have the potential to damage Waypoint REIT’s
assets and disrupt the tenants’ operations. Although 376 of Waypoint REIT’s 400 properties (89.8% of the
portfolio by value) are subject to triple-net leases where the tenant is responsible for maintenance and
insurance costs, such events may result in higher maintenance and insurance costs for Waypoint REIT’s
assets that are not subject to triple-net leases. Such events may also affect the ability to re-lease Waypoint
REIT’s investment properties in the future and the rent levels for which they can be leased, thereby adversely
affecting future investment property valuations and rental cash flows. Insurance premiums and/or deductibles
may change, or insurance may not be able to be obtained at all.
The precise nature of these risks is uncertain as it depends on complex factors such as policy and regulatory
change, technology development, market forces, and the links between these factors and climatic conditions.
The impacts of physical and transition risks on the valuation of Waypoint REIT’s property portfolio are further
considered under ‘investment property valuation’ risk above.
AFSL compliance risk
VER Limited, a subsidiary of Waypoint REIT Limited, holds an Australian Financial Services Licence (AFSL)
and acts as the Responsible Entity for Waypoint REIT Trust. The AFSL requires, among other matters,
minimum levels of net tangible assets, liquid assets, cash reserves and liquidity, which may restrict Waypoint
REIT in paying distributions that would breach these requirements.
8
The Directors review and monitor VER Limited’s balance sheet quarterly and the adequacy and ongoing
training of responsible managers annually to ensure compliance with its AFSL requirements.
Personnel risk
Loss of key personnel could potentially have an adverse impact on the management and the financial
performance of Waypoint REIT and in turn may affect the returns to securityholders. To mitigate this risk,
processes and procedures are standardised and automated to the extent practicable, remuneration structures
include components payable on a deferred basis, and employees are subject to market-standard notice
periods to ensure that Waypoint REIT has sufficient time in which to identify and hire replacement employees.
Cyber security risk
Cyber-attacks are becoming increasingly sophisticated and a material data breach, ransom attack or data loss
could have an adverse financial or reputational impact. To help mitigate this risk, Waypoint REIT uses the
services of third-party technology experts, has a business continuity and cyber incident response plan,
maintains regular data backups, provides regular staff training and performs pre-implementation and annual
reviews over key Software as a Service providers.
Debt agreement and refinancing risk
Waypoint REIT has outstanding debt facilities. General economic and business conditions, changes to
Waypoint REIT’s credit rating as well as sector-specific environmental, sustainability and governance
considerations could impact Waypoint REIT’s ability to refinance its debt facilities when required or may result
in Waypoint REIT being subject to increased interest rate margins and covenants restricting its ability to engage
in certain types of activities or to pay distributions to securityholders. Debt may not be able to be renewed or
obtained at all.
If debt facilities are not available or are not available in adequate volume, Waypoint REIT may need to sell
assets or raise equity to repay debt. There is no guarantee that there will be willing purchasers for Waypoint
REIT’s assets or that purchasers will pay prices at or greater than the book value of these investment
properties. There is also no guarantee that Waypoint REIT will be able to raise equity. To help mitigate this
risk, debt maturities are staggered, debt is held across a diverse set of sources, lenders and geographies, and
debt is typically refinanced at least 12 months in advance of maturity.
If a third-party entity gains control of Waypoint REIT, this would constitute a review event under certain of
Waypoint REIT’s debt facility agreements, and (subject to specified negotiation and notification periods) a
repayment of some or all of Waypoint REIT’s debt facilities may be required.
The Directors regularly monitor the debt facility covenants for compliance and consider the refinancing options
and timing available to Waypoint REIT.
Cash flow and fair value interest rate risk
Waypoint REIT’s floating rate borrowings and derivative financial instruments expose it to a risk of change in
future cash flows or the fair value of derivative financial instruments due to changes in interest rates. Waypoint
REIT uses interest rate derivative financial instruments to partially hedge its economic exposure to changes in
interest rates on variable rate borrowings. By hedging against changes in interest rates, Waypoint REIT has
reduced exposure to changes in interest rates on its outward cash flows so long as the counterparties to those
interest rate derivative financial instruments meet their obligations to Waypoint REIT.
Foreign exchange rate risk
A portion of Waypoint REIT’s debt is denominated in US dollars and as a result, Waypoint REIT is exposed to
a risk of change in fair value or future cash flows due to changes in foreign exchange rates. Waypoint REIT
economically hedges 100% of its exposure to changes in foreign exchange rates by using cross-currency
derivative financial instruments. By hedging against changes in foreign exchange rates, Waypoint REIT
eliminates its exposure to changes in foreign exchange rates on its outward cash flows so long as the
counterparties to those cross-currency derivative financial instruments meet their obligations to Waypoint
REIT.
9
Liquidity risk
Liquidity risk is the risk that Waypoint REIT may not be able to generate sufficient cash resources to settle its
obligations in full as they fall due or can only do so on terms that are materially disadvantageous. Waypoint
REIT monitors its exposure to liquidity risk by setting budgets and projecting cash flows to help ensure there
is sufficient cash on hand as required or debt facility funding is available to meet financial liabilities as they fall
due.
Environmental regulation
As a landlord, the operations of Waypoint REIT are subject to a range of environmental laws and regulations
under Commonwealth, state and territory law. However, the lease attaching to the majority of sites requires
the tenant to use reasonable endeavours to prevent contamination at each site and indemnify Waypoint REIT
for any contamination caused by their operations.
Waypoint REIT did not receive any environmental infringements or notices from environmental regulators in
the year ended 31 December 2024.
Information on Directors
Georgina Lynch
Independent Non-Executive Chair, Chair of the Nomination Committee and a member of the Audit and Risk
Management and Remuneration Committees.
Georgina is an experienced company director who has over 30 years’ experience in the financial services and
property industry. She is currently the Independent Non-Executive Chair of Cbus Property and an Independent
Non-Executive Director of both Vicinity Centres and PEXA.
Georgina has significant global experience in corporate transactions, capital raisings, initial public offerings
(IPOs), funds management, corporate strategy and acquisitions and divestments.
Georgina holds a Bachelor of Arts and Bachelor of Laws.
Susan MacDonald
Independent Non-Executive Director, member of the Audit and Risk Management, Nomination and
Remuneration Committees.
Susan has over 30 years of domestic and international experience in property investment management,
primarily in the retail sector, including asset, development, and funds management.
Susan has held executive positions with Mirvac, Lend Lease, AMP Capital and Galileo Funds Management,
and is a former Joint Deputy Chair, Shopping Centre Council of Australia and a former Global Trustee of the
Urban Land Institute (ULI).
Susan is currently a Non-Executive Director of both Queensland Investment Corporation (QIC) and Landcom,
an Independent Non-Executive Director of Cbus Property and a Strategic Advisor to the Board of Mainbrace
Constructions.
Susan holds a Bachelor of Arts degree from the University of New South Wales, is a Graduate of the Australian
Institute of Company Directors (GAICD).
Christopher Lawton
Independent Non-Executive Director, Chair of the Audit and Risk Management Committee and member of the
Remuneration and Nomination Committees.
Chris has over 40 years’ experience in professional services, including 25 years as an audit partner with EY
during which he focused on the real estate sector. Chris’ experience includes both assurance and transaction
advisory roles working with some of the largest real estate owners, managers and developers in Australia.
Chris also spent time in the USA supporting organisations with international portfolios spanning North America,
Japan and Europe.
10
Chris is currently an Independent Non-Executive Director of Stockland Corporation Limited.
Chris holds a Bachelor of Commerce from the University of New South Wales and is a member of Chartered
Accountants Australia and New Zealand.
Gai McGrath (appointed 1 August 2024)
Independent Non-Executive Director, Chair of the Remuneration Committee and member of the Audit and Risk
Management Committee.
Gai is currently an Independent Non-Executive Director of Insignia Financial Group, Steadfast Group, and HBF
Health. She is a former chair of BT Funds Management and Humanitix and a former director of a number of
entities including Investa Office Fund, Helia Group and Landcom.
Prior to her board career, Gai was a senior executive in the financial services sector. She was with the Westpac
Group for 12 years including having responsibility for the flagship Retail Banks in Australia and New Zealand
and in senior roles in the bank’s wealth management division, BT Financial Group.
Gai holds a Master of Laws (Distinction), Bachelor of Laws (Hons) and Bachelor of Arts.
Hadyn Stephens
Managing Director and Chief Executive Officer.
Hadyn has approximately 25 years’ experience in finance and commercial real estate, principally in strategy
and transaction related roles in the real estate funds management space covering direct capital transactions,
corporate transactions (M&A), debt and equity (listed and unlisted).
Hadyn’s previous positions in real estate included senior roles with AMP Capital, Centuria Capital, LaSalle
Investment Management, GPT Group and Merrill Lynch.
Hadyn holds a Bachelor of Laws and Bachelor of Commerce from the University of Otago, New Zealand.
Laurence Brindle (retired 15 May 2024)
Up to the date of his retirement, Laurence was Independent Non-Executive Chair, and a member of the
Nomination and Remuneration Committees.
Laurence has extensive experience in funds management, finance and investment and is currently an
Independent Non-Executive Director of Stockland Corporation Limited.
Until 2009, Laurence was an executive with Queensland Investment Corporation (QIC). During his 21 years
with QIC, he served in various senior positions including Head of Global Real Estate, where he was responsible
for QIC’s large global investment portfolio. Laurence was also a long-term member of QIC’s Investment
Strategy Committee.
Laurence provides advice to a number of investment institutions on real estate investment and funds
management matters. He is a former Chair of the Shopping Centre Council of Australia and National Storage
REIT, and a former Independent Non-Executive Director of Westfield Retail Trust and Scentre Group.
Laurence holds a Bachelor of Engineering (Honours) and a Bachelor of Commerce from the University of
Queensland, and a Master of Business Administration from Bayes Business School, London, where he
graduated with distinction.
Tina Mitas
Company Secretary.
Tina has over 17 years’ experience in corporate law including corporate governance, compliance, mergers
and acquisitions, private equity and information technology.
Tina’s previous positions include senior legal counsel roles at Aconex Limited and SMS Management Limited
and senior associate at Herbert Smith Freehills.
11
Tina holds a Bachelor of Laws (Hons) and Bachelor of Commerce from the University of Melbourne, and a
Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia (GIA). Tina is
a Chartered Secretary and Associate of the GIA, a member of the Institute of Chartered Secretaries and
Administrators (ICSA) and the AICD.
Meetings of Directors
The numbers of meetings of the Directors and of each Board Committee held during the year ended 31
December 2024, and the numbers of meetings attended by each Director were:
Name
Waypoint REIT
Limited
VER Limited
Audit and Risk
Management
Committee
Remuneration
Committee
Nomination
Committee
A
B
A
B
A
B
A
B
A
B
Georgina Lynch
11
11
11
11
5
5
3
3
2
2
Susan MacDonald
11
10
11
10
5
4
3
3
2
2
Christopher Lawton
11
11
11
11
5
5
3
3
2
2
Gai McGrath ***
4
4
4
4
3
3
1
1
1*
1*
Laurence Brindle **
5
5
5
5
1
1
2
2
-
-
Hadyn Stephens
11
11
11
11
5*
5*
3*
3*
2*
2*
A
Number of meetings held during the time the Director held office or was a member of the Board Committee during the year.
B
Number of meetings attended.
*
Attends committee meeting as an invitee / guest.
** Retired as a Director on 15 May 2024.
*** Appointed as a Director on 1 August 2024.
12
Remuneration Report
This remuneration report (Remuneration Report) presents Waypoint REIT’s remuneration arrangements for
Key Management Personnel (KMP) for the year ended 31 December 2024. The report has been prepared and
audited in accordance with the requirements of the Corporations Act 2001 and Corporations Regulations 2001.
Letter from Chair of the Remuneration Committee
On behalf of the Remuneration Committee and the Board, I am pleased to present the Remuneration Report
for the year ended 31 December 2024.
Waypoint REIT’s long-term remuneration objectives are to:
•
Reward strong performance;
•
Encourage executive retention;
•
Achieve the right balance between ‘fixed’ and ‘at risk’ pay; and
•
Achieve alignment between the interests of our executives and securityholders.
2024 remuneration considerations
Waypoint REIT entered 2024 in a solid position with a high-quality, well-positioned fuel and convenience
portfolio. The strategic and capital management initiatives undertaken in preceding years have enabled
Waypoint REIT to maintain earnings and distributions in the face of continued macro-economic headwinds,
including elevated inflationary pressures and higher interest rates. These previous initiatives included selling
$284 million of non-core assets in a strong market for vendors, returning $303 million of capital to
securityholders, maintaining gearing at the lower end of our target range and ensuring Waypoint REIT was
insulated against higher interest rates by maintaining a high level of interest rate hedging.
2024 saw a continuation of macro-economic pressures across the Australian economy, including persistent
inflation and ‘higher for longer’ interest rates, with the Reserve Bank of Australia maintaining its target cash
rate at 4.35% following 425 basis points of increases since 2022. Rising interest rates have had a significant
impact on real estate markets, including fuel and convenience retail real estate, with subdued transaction
activity and increasing capitalisation rates throughout the year.
Waypoint REIT’s major tenant, Viva Energy, also made a number of important changes across its Convenience
and Mobility Division in 2024, including the acquisition of leading convenience retailer On The Run (OTR) in
March 2024 following the acquisition of Coles Express in May 2023.
Against this backdrop, the Board believes that Waypoint REIT’s management team has demonstrated a solid
performance in 2024, delivering Distributable Earnings per security (DEPS) in line with both guidance and
2023 DEPS, prudently managing Waypoint REIT’s capital structure and interest rate hedging profile and
completing several initiatives related to Waypoint REIT’s medium and long-term strategy.
The key achievements of Waypoint REIT’s team in 2024 include:
•
Delivering 2024 DEPS of 16.48 cents, in line with guidance and in line with the 2023 result;
•
Significant refinancing of bank debt facilities via the establishment of a new $500.0 million multi-
tranche syndicated debt facility, the extension of a $100.0 million bilateral facility and the early
termination and repayment of $450.0 million of existing syndicated debt facilities and term loans;
•
100% tenant retention on 2024 lease expiries and solid progress on 2025 lease expiries;
•
Disciplined operating cost control with Waypoint REIT’s MER steady at 30 bps despite declining asset
values;
•
Further insulating Waypoint REIT’s interest rate exposure by actively managing its interest rate
hedging profile, with 93% of Waypoint REIT’s drawn debt being hedged at 31 December 2024;
•
Comprehensive analysis completed on risks and opportunities arising from VEA’s proposed OTR roll-
out, including potential landlord funding structures;
•
Preparing and executing disposal strategies for the priority non-core asset list resulting in two non-
core assets being sold / unconditionally exchanged by year end despite subdued purchaser sentiment;
and
•
Progressing Waypoint REIT’s ESG framework and Board-level reporting, including further preparatory
work readying Waypoint REIT for mandatory climate reporting; and maintaining net measured
13
emissions with respect to Scope 1, Scope 2 and direct Scope 3 emissions at zero via the utilisation of
accredited carbon offsets.
Board and management
Laurence Brindle retired as a non-executive director on 15 May 2024. Laurence joined the Board as Non-
Executive Chair in July 2016 and was a member of the Audit and Risk Management Committee, Remuneration
Committee and Nomination Committee.
Georgina Lynch was elected as Non-Executive Chair with effect from 15 May 2024. Georgina joined the Board
as a Non-Executive Director in July 2016 and remains the Chair of the Nomination Committee and a member
of the Audit and Risk Management Committee and Remuneration Committee.
Gai McGrath joined the Board as a Non-Executive Director on 1 August 2024. Gai has been a professional
Non-Executive Director for over 8 years at both listed and unlisted organisations. Prior to her board career,
Gai was a senior executive in the financial services sector including 12 years with the Westpac Group, where
she was responsible for the flagship retail banks in Australia and New Zealand and held senior roles in the
bank’s wealth management division, BT Financial Group. Gai is Chair of Waypoint REIT’s Remuneration
Committee and a member of the Audit and Risk Management Committee.
There were no changes to Waypoint REIT’s management team during 2024.
2024 summary remuneration outcomes
In recognition of the above achievements, the Board has awarded Executive KMP 66.7% of their maximum
short-term incentive (STI) for the year ended 31 December 2024.
The 2021 long-term incentive (LTI) plan’s three-year performance period ended on 31 December 2023. The
vesting outcome for this plan was considered by the Remuneration Committee and Board in 2024 and resulted
in approximately 38% of the securities under the plan (or 43,188 securities) vesting.
The 2022 LTI plan’s three-year performance period ended on 31 December 2024. The vesting outcome for
this plan will be considered by the Remuneration Committee and Board in 2025.
On behalf of the Directors and the Remuneration Committee, I look forward to welcoming you and receiving
your feedback at our upcoming Annual General Meeting.
Gai McGrath
Chair, Remuneration Committee
14
Report structure
This report is divided into the following sections:
(i)
Key Management Personnel (KMP)
(ii)
Remuneration governance
(iii)
Remuneration Policy for Executive KMP (defined as the Managing Director and Chief Executive
Officer (MD/CEO) and Other Reported Executives)
(iv)
FY24 annual remuneration summary
(v)
Detailed remuneration outcomes
(vi)
Executive KMP equity holdings
(vii)
Other information
(viii)
Remuneration Policy for Non-Executive Independent Directors
(ix)
Non-Executive Independent Directors fees and other information
(i) Key Management Personnel (KMP)
This report discloses the remuneration arrangements and outcomes for the individuals listed below, being
individuals who have been determined as KMP as defined by AASB 124 Related Party Disclosures.
Name
Role
KMP period
Independent Non-Executive Directors
Georgina Lynch
Chair from 15 May 2024
Full year
Susan MacDonald
Director
Full year
Christopher Lawton
Director
Full year
Gai McGrath
Director
From appointment on 1 August 2024
Laurence Brindle
Chair
Up to retirement on 15 May 2024
Managing Director
Hadyn Stephens
Managing Director & Chief Executive Officer
Full Year
Other Reported Executives
Aditya Asawa
Chief Financial Officer
Full Year
Tina Mitas
General Counsel & Company Secretary
Full Year
(ii) Remuneration governance
The Remuneration Committee oversees all remuneration-related matters, balancing both short-term and long-
term strategic objectives, corporate values and Waypoint REIT’s broader risk management framework. The
Remuneration Committee considers a range of remuneration matters (including Fixed Annual Remuneration
(FAR), Short-Term Incentives (STI) and Long-Term Incentives (LTI) for Executive KMP), Board and Committee
fees and makes recommendations to the Board for approval. The Remuneration Committee’s Charter, setting
out its detailed responsibilities, is reviewed annually.
To ensure that it is fully informed when making decisions, including on recent market trends and practices and
other remuneration-related matters, the Remuneration Committee may seek external remuneration advice
from time to time. Remuneration consultants are engaged directly by the Remuneration Committee as needed.
15
(iii) Remuneration Policy for Executive KMP
Remuneration objectives
The Board recognises the key to Waypoint REIT’s ongoing success lies in retaining and attracting high
performing people. Our remuneration framework is designed to link Waypoint REIT’s strategy of maximising
long-term income, capital returns and performance with the remuneration outcomes for Executive KMP and
foster strong alignment between executive pay and the interests of securityholders.
Remuneration structure
Our Executive KMP compensation structure maintains an appropriate balance of fixed and variable elements,
aligning with both Waypoint REIT’s needs and principles of fair reward.
The table below sets out Waypoint REIT’s Executive KMP remuneration arrangements.
Type
What?
Why?
FAR
Comprises base salary, superannuation
contributions and other benefits.
Reviewed annually and independently
benchmarked on a periodic basis against
comparable organisations.
Fixed component set with reference to role, market,
experience and skill-set to attract and retain high
performing executives to lead and deliver the
strategy.
STI
Opportunity award based on a percentage of
fixed remuneration, subject to specific
performance and employment conditions
(including a deferred equity component).
‘At risk’ component designed to maximise
performance in key strategic areas set and
measured through a balanced scorecard approach,
with KPIs aligned to the key financial and non-
financial value drivers of Waypoint REIT’s business.
Deferred equity component designed to encourage
retention and securityholder alignment.
LTI
Opportunity award based on a percentage of
maximum STI, in the form of performance rights
with a three-year performance period.
‘At risk’ component designed to align executive
performance with securityholder interests, to attract
and retain executives and provide the opportunity to
reward executives for long-term performance.
There were no changes to the remuneration framework for Executive KMP in 2024.
16
STI details
Basis
Each executive may be eligible for participation in an STI program, which may be amended,
replaced or withdrawn at any time at the Board’s absolute discretion.
STI awards are set with reference to a maximum STI opportunity level relative to the
executive’s FAR, with the actual STI award to be determined based on performance against
KPIs determined by the Board.
Purpose
To motivate and reward executives for increasing securityholder value by meeting or
exceeding Waypoint REIT and individual targets determined by the Board.
Performance conditions
The value of the STI award for each Executive KMP is determined as follows.
Criteria
Award scale
Criteria
Financial
0 – 33.3%
Delivery of initial Distributable Earnings per
security (DEPS) guidance. Initial guidance
must be met in order for any award under
this criteria.
Financial –
outperformance
0 – 33.3%
Delivery of DEPS in excess of initial
guidance. Award determined at the Board’s
discretion based on the level of
outperformance achieved.
Individual KPIs
0 – 33.3%
Delivery of financial and non-financial
performance criteria set out in KMP balanced
scorecards agreed at the start of the year.
The Board believes that having a mix of financial and non-financial KPIs will provide
measurable performance criteria strongly linked to year-on-year securityholder returns and
encourage the achievement of individual goals consistent with Waypoint REIT’s overall
strategic objectives. The key FY24 KPIs are detailed in section (v). The Board has selected
DEPS (as defined on page 4 of the Financial Report) as the most appropriate financial
measure as it enables alignment with the actual distributions paid to securityholders.
Performance
assessment
The MD/CEO evaluates the performance of the other Executive KMP against their KPIs as
set out in their balanced scorecard and other applicable measures, including evidence of
behaviour in line with Waypoint REIT’s corporate values and risk management framework.
This information is presented to the Remuneration Committee, which performs the same
evaluation of the MD/CEO performance. The Remuneration Committee then recommends
the STI awards, if any, to the Board for approval.
Delivery
MD/CEO
50% of the STI entitlement is payable in cash and the remaining 50% is payable in securities
subject to trade-lock with 25% vesting approximately one year after grant date and 25%
vesting approximately two years after grant date.
Other Reported Executives
Two-thirds of the STI entitlement is payable in cash and the remaining one-third is payable in
securities subject to trade-lock with vesting approximately one year after grant date.
While under trade-lock, Executive KMP will be entitled to distributions and voting rights
(subject to customary voting restrictions).
Cessation of
employment
Executive KMP will generally not be entitled to be paid any outstanding or unvested STI
award if they resign or if their employment is terminated with cause. In all other
circumstances (including due to genuine retirement, redundancy, death, permanent
disability, ill health, the expiry of a fixed term contract or separation by mutual agreement),
Executive KMP will be eligible for an STI award based on the portion of the vesting period
that has elapsed up until the date of cessation (unless the Board determines otherwise).
Board discretion
STI entitlements are at the sole discretion of the Board. Waypoint REIT can amend, replace
or withdraw any incentive program in its absolute discretion.
17
LTI details
Basis
An LTI award will be delivered in the form of an annual grant of performance rights to
Waypoint REIT stapled securities under the Waypoint REIT Equity Incentive Plan, with a
three-year performance period. Performance rights will be allocated to eligible executives
(including all Executive KMP) on or around the date of the Annual General Meeting (e.g.
FY24 performance rights were allocated in May 2024) based on a percentage of maximum
STI (as determined by the Remuneration Committee).
Purpose
The LTI program is designed to align the interests of eligible executives with the interests of
securityholders by providing them with the opportunity to receive an equity interest in
Waypoint REIT through the granting of performance rights. Waypoint REIT uses
performance rights because they create alignment between eligible executives and
securityholders, but do not provide eligible executives with the full benefits of security
ownership (such as distribution and voting rights) unless and until the performance rights
vest.
Value determination
The value of performance rights granted is determined by dividing the dollar value of an
eligible executive’s annual LTI opportunity (as recommended by the Remuneration
Committee and approved by the Board) by the weighted average traded price of Waypoint
REIT’s stapled securities traded on the ASX during the 10 business days following the
release of the annual results, rounded up to the nearest whole number of performance
rights.
Vesting period
The performance period commences on 1 January of the year performance rights are
granted and concludes on the third anniversary date (e.g. FY24 performance rights: 1
January 2024 to 31 December 2026).
Performance rights will vest on or around 1 March following the end of the performance
period (e.g. the FY24 performance rights will vest on or around 1 March 2027).
Vesting conditions
Vesting of the performance rights will be subject to the achievement of two vesting
conditions:
- 50% of the performance rights will be tested against a relative Total Securityholder
Return (TSR) condition; and
- the remaining 50% of the performance rights will be tested against an average growth
in DEPS condition.
See below for further details.
TSR Condition
(50% weighting)
The TSR condition measures Waypoint REIT’s performance relative to a peer group over the
performance period (e.g. the FY24 comparator group of companies comprises the
constituents of the S&P/ASX 300 A-REIT index as at 1 January 2024). TSR measures the
growth in Waypoint REIT’s security price together with the value of distributions paid during
the period, assuming that all those distributions are reinvested into new securities.
The vesting schedule applicable for the FY24 performance rights is shown in the table.
Percentile ranking
Vesting level of performance rights subject to TSR
condition
Equal to the 75th percentile
or higher
100%
Between the 50th and 75th
percentile
Straight-line pro rata vesting between 50% and 100%
Equal to the 50th percentile
50%
Below the 50th percentile
0%
DEPS Condition
(50% weighting)
The DEPS condition measures the average annual growth in Waypoint REIT’s DEPS over
the performance period.
The vesting schedule applicable for the FY24 performance rights is shown in the table.
Average annual growth
in DEPS
Vesting level of performance rights subject to the
DEPS condition
Equal to 4.5% or higher
100%
Between 3.75% and 4.5%
Straight-line pro rata vesting between 50% and 100%
At 3.75%
50%
Less than 3.75%
0%
18
Rationale for conditions
The LTI performance conditions have been set by the Board to align with securityholder
expectations and Waypoint REIT’s strategy.
The TSR condition measures the overall returns that an entity has provided its
securityholders, reflecting security price movements and the theoretical reinvestment of
distributions over a specified period. Relative TSR is the most widely used LTI hurdle
adopted in Australia. It ensures that value is only delivered to participants if the investment
return actually achieved for Waypoint REIT securityholders is sufficiently high relative to the
returns they could have received by investing in a portfolio of alternative S&P/ASX 300 A-
REIT index securities over the same period.
The DEPS condition aligns the LTI plan with commercial long-term performance which is
within executives’ ability to influence and aligns with securityholder expectations. The
performance hurdles have been set with reference to:
•
organic rental growth of WPR’s property portfolio (the majority of the portfolio is
subject to fixed annual rental reviews of 3.0%);
•
the effect of gearing (target gearing: 30-40%); and
•
WPR’s historical performance.
Distributions on
unvested LTI awards
Prior to vesting, performance rights do not entitle eligible executives to any distributions or
voting rights.
Forfeiture
LTI awards will usually be forfeited if an executive resigns or is summarily dismissed prior to
the vesting date (see the ‘Cessation of employment’ section below for more detail). If the
Board determines that an executive is responsible for misconduct resulting in material non-
compliance with financial reporting requirements or for excessive risk taking, the executive
will forfeit all unvested performance right entitlements.
Delivery
Each performance right entitles eligible executives to one ordinary security in Waypoint REIT
on vesting. Securities allocated on vesting of performance rights carry the same distribution
and voting rights as other securities issued by Waypoint REIT. The Board retains discretion
to make a cash equivalent payment in lieu of an allocation of securities.
Claw-back provisions
The Board has broad ‘clawback’ powers to determine that performance rights lapse, any
securities allocated on vesting of performance rights are forfeited or clawed back, or that
amounts are to be repaid, in certain circumstances.
Cessation of
employment
Where eligible executives’ employment with Waypoint REIT is terminated for cause or
ceases due to resignation, all unvested performance rights will lapse, unless the Board
determines otherwise. In all other circumstances (including genuine retirement, redundancy,
death, permanent disability or ill health, the expiry of a fixed term contract or separation by
mutual agreement), a pro rata portion of unvested performance rights will remain on foot
unless the Board determines otherwise.
Change of control
Where there is a change of control event (including a takeover bid or any other transaction,
event or state of affairs that, in the Board’s opinion, is likely to result in a change in the
control of Waypoint REIT), the Board may determine the manner in which all unvested
performance rights will be dealt with.
Board discretion
While the number of performance rights that vest will primarily be determined by testing
against the vesting conditions, the Board retains an overriding discretion to reduce or
increase the vesting outcome where it considers it appropriate in light of Waypoint REIT’s
performance overall and any other relevant circumstances.
Restrictions on dealing
Eligible executives must not sell, transfer, encumber, hedge or otherwise deal with
performance rights, unless the dealing is required by law.
19
(iv) FY24 annual remuneration summary
The were no changes to the remuneration framework for Executive KMP in 2024.
STI outcomes
In assessing Executive KMP delivery against their respective and collective KPIs, the Remuneration
Committee has determined the following assessment of achievement against the KPI criteria.
Criteria
Award scale
Criteria
Remuneration Committee
assessment
Financial
0 – 33.3%
Delivery of initial Distributable Earnings
per security (DEPS) guidance.
Achieved in full.
Financial –
outperformance
0 – 33.3%
Delivery of DEPS in excess of initial
guidance.
Not achieved.
Individual KPIs
0 – 33.3%
Delivery of financial and non-financial
performance criteria set out in KMP
balanced scorecards agreed at the start
of the year.
Achieved in full.
Accordingly, all members of the Executive KMP have been awarded 66.7% (two-thirds) of their maximum STI
for the year ended 31 December 2024.
LTI outcomes
The 2021 LTI plan’s three-year performance period ended on 31 December 2023. The vesting outcome for
this plan was considered by the Remuneration Committee and Board in 2024 and resulted in approximately
38% of the securities under the plan vesting.
For the TSR condition, Waypoint REIT delivered a TSR of 6.71% over the performance period, which ranked
WPR 11 out of 28 constituents in the comparator group (62nd percentile). After applying the vesting schedule
applicable to the TSR condition, this resulted in a vesting outcome of approximately 76% for this vesting
condition.
For the DEPS condition, Waypoint REIT delivered average annual DEPS growth of 2.83% over the
performance period, which is below the minimum 3.75% required for vesting. This resulted in a vesting
outcome of 0% for this vesting condition.
Vesting condition
Weight
Vesting outcome
Weighted vesting
outcome
TSR condition
50%
76%
38%
DEPS condition
50%
0%
0%
Overall plan
38%
The 2022 LTI plan’s three-year performance period ended on 31 December 2024. The vesting outcome for
this plan will be considered by the Remuneration Committee and Board in 2025.
20
(v) Detailed remuneration outcomes
Performance indicators
The Remuneration Committee and Board aim to align Executive KMP remuneration with Waypoint REIT’s
strategic and business objectives and securityholder returns. The table below shows statutory and non-
statutory measures of Waypoint REIT’s historical financial performance. Statutory measures are not
necessarily consistent with the measures used in determining the variable amounts of remuneration to be
awarded to Executive KMP as noted above. Consequently, there may not always be a direct correlation
between the statutory key performance measures and the variable remuneration awarded.
2020
2021
2022
2023
2024
Statutory profit / (loss) after tax ($m)
279.9
443.6
133.8
(79.1)
131.5
Distributable earnings1 ($m)
118.5
122.6
116.1
110.7
110.7
Basic earnings per security (cents)
35.79
57.17
19.00
(11.77)
19.57
DEPS1 (cents)
15.15
15.80
16.48
16.48
16.48
Distributions paid/payable (cents)
15.14
15.97
16.60
16.48
16.48
Capital return (cents)
-
17.00
-
-
-
Closing security price (31 December)
$2.73
$2.83
$2.75
$2.44
$2.33
Net tangible assets per security
$2.49
$2.95
$3.02
$2.73
$2.76
Weighted average securities on issue (m)
782.0
775.8
704.4
671.8
671.8
1 These measures are unaudited
FY24 STI annual assessment
The STI balanced scorecard contains three equally weighted elements that are assessed independently of
each other. These elements and the relevant criteria for FY24 are shown in the following table.
Element
Award scale
Criteria
Financial
0 – 33.3%
Achieve FY24 DEPS guidance as announced on 26 February 2024
(16.32 to 16.48 cents). Initial guidance must be met in order for any
award under this criteria.
Financial –
outperformance
0 – 33.3%
Exceed the FY24 DEPS guidance as announced on 26 February 2024
(16.32 to 16.48 cents). Award determined at the Board’s discretion
based on the level of outperformance achieved.
Individual KPIs
0 – 33.3%
Individual financial and non-financial performance criteria set in
conjunction with the Board or MD/CEO (as applicable). Please refer to
the table below.
Individual KPIs are formulated to align with Waypoint REIT’s investment objective of maximising long-term
income and capital returns for securityholders, whilst also promoting a strong risk management and corporate
governance culture.
21
Individual KPIs for Executive KMP in FY24 varied from person to person; however, the key KPIs driving the
Remuneration Committee’s recommendation and Board’s decision to award the FY24 STIs are summarised
in the table below.
KPI categories
KPI performance
Portfolio management
•
Proactively manage lease expiries.
•
Assess longer-term leasing risk across the
portfolio and formulate appropriate asset
strategies (including disposals and
contingency plans).
•
Engage with tenants on site and portfolio
optimisation opportunities.
•
Deliver acquisitions in line with approved
criteria and return hurdles.
•
100% tenant retention in FY24 (two leases); terms agreed
on five out of six leases expiring in FY25.
•
Two non-core assets sold or unconditionally exchanged (at
an average premium to prevailing book value of 3.7%).
•
14 leases assigned from VEA to Chevron; involved detailed
review of proposed assignee and establishment of
appropriate security arrangements.
•
Comprehensive analysis completed on risks and
opportunities arising from VEA’s proposed OTR roll-out,
including potential landlord funding structures.
•
Landlord consent provided for eight Reddy Express sites in
the portfolio being converted to OTR.
•
A number of acquisition opportunities were assessed in
FY24 but no acquisitions were completed due to them not
meeting the approved criteria and return hurdles.
Financial and capital management
•
Diversify and optimise debt funding sources
•
Optimise Waypoint REIT’s debt maturity
profile.
•
Manage Waypoint REIT’s exposure to market
interest rates through prudent interest rate
hedging.
•
Manage liquidity to support the delivery of
Waypoint REIT’s strategy.
•
Optimise capital management in coordination
with portfolio management strategy.
•
Bank debt restructured via the establishment of a new $500
million multi-tranche syndicated debt facility, the extension
of a $100 million bilateral facility and the early termination
and repayment of $450 million of existing syndicated debt
facilities and term loans.
•
The refinancing activity significantly extended Waypoint
REIT’s debt maturity profile, secured six new lending
relationships and accessed seven-year bank debt for the
first time.
•
Waypoint REIT’s interest rate hedge book was actively
managed resulting in 93% of Waypoint REIT’s drawn debt
being hedged at 31 December 2024.
•
Business funding, liquidity and gearing maintained within
approved parameters.
•
Moody’s Baa1 credit rating affirmed in December 2024.
ESG
•
Ongoing focus on people, culture and safety.
•
Maintain strong corporate governance.
•
Maintain our net measured carbon emissions
target of offsetting Scope 1, Scope 2 and
direct Scope 3 emissions under our
operational control through the purchase of
carbon offsets from an accredited provider.
•
Actively seek to improve ESG external
ratings.
•
Identify and execute other initiatives to further
ESG strategy.
•
Prepare for mandatory reporting.
•
Zero employee turnover; no employee injuries.
•
No reportable compliance breaches.
•
Zero Scope 1 and Scope 2 emissions in FY24
•
75% reduction in measured emissions in FY24 with carbon
offsets purchased from an accredited provider to offset
these residual emissions.
•
Ongoing involvement in ESG surveys (S&P Global and ISS
Corporate). Modest improvements were noted in ESG
scores from S&P Global and Sustainalytics while ISS
Corporate rating remained steady.
•
Further progressed Waypoint REIT’s ESG framework and
Board-level reporting, including further preparatory work to
enable Waypoint REIT to be prepared for mandatory
reporting.
•
Cyber Incident Response Plan created to address and
provide governance around increasing macro cyber risks.
•
No whistle-blower reports or complaints.
•
100% of mandatory employee training completed by all
employees.
22
In assessing Executive KMP delivery against their respective and collective KPIs, the Remuneration
Committee has determined the following assessment of achievement against the KPI criteria:
Criteria
Award scale
Criteria
Remuneration Committee
assessment
Financial
0 – 33.3%
Delivery of initial Distributable Earnings per
security (DEPS) guidance.
Achieved in full.
Financial –
outperformance
0 – 33.3%
Delivery of DEPS in excess of initial guidance.
Not achieved.
Individual KPIs
0 – 33.3%
Delivery of financial and non-financial
performance criteria set out in KMP balanced
scorecards agreed at the start of the year.
Achieved in full.
Accordingly, all members of Executive KMP have been awarded approximately 66.7% (two-thirds) of their
maximum STI for the year ended 31 December 2024. Refer to ‘FY24 STI outcomes’ section below for further
details.
FY24 STI outcomes
The following table sets out the awards made to each Executive KMP based on their performance during the
year ended 31 December 2024.
$
FAR as per
contract1
Maximum STI
as per contract
Actual STI
awarded
% of maximum
possible current
award earned
Hadyn Stephens
606,690
606,690
404,662
66.7%
Aditya Asawa
452,025
339,019
226,126
66.7%
Tina Mitas2
302,925
151,462
101,025
66.7%
1 FAR comprises salary and superannuation.
2 FAR and maximum STI are based on a 0.9 full-time Equivalent (FTE) basis consistent with Tina Mitas’s standard terms of
employment.
FY24 LTI outcomes
The 2021 LTI plan’s three-year performance period ended on 31 December 2023. The vesting outcome for
this plan was considered by the Remuneration Committee and Board in 2024 and resulted in the vesting of
approximately 38% of the securities under the plan. The table below shows Waypoint REIT’s performance
against the vesting conditions for the 2021 LTI plan.
LTI year
Performance
period
Vesting
condition
Vesting schedule
Result
Vesting
outcome
2021
1 January 2021
to 31 December
2023
TSR condition
50% of rights vest at the 50th
percentile with pro-rata
vesting until 100% vesting at
the 75th percentile.
TSR ranked 11 out of
28 constituents (62nd
percentile) in the
comparator group over
the performance period.
76%
DEPS
condition
50% of rights vest if DEPS
growth is 3.75% with pro-rata
vesting until 100% vesting if
DEPS growth is 4.5% or
greater.
Average annual DEPS
growth (2.83%) was
below 3.75% over the
performance period.
0%
Overall vesting
38%
A total of 43,188 securities were issued to meet the vesting outcome for the 2021 LTI plan.
23
FY24 Total Remuneration (Statutory Basis)
All figures in the table below are in dollars, unless otherwise stated.
Short-term benefits
Post-retirement benefits
Other
long-term benefits
Total
fixed
Short-term
benefits
Share-based payments
Total
variable
Grand
total
At-risk
element
(%)
Salary
Other
benefits
Super-
annuation
Termination
benefits
Annual
leave1
Long
service
leave1
Current
STI
(cash)
Deferred
STI2
(equity)
Deferred
LTI3
(rights)
Hadyn Stephens
2024
578,972
3,033
28,665
-
7,829
17,132
635,631
202,230
215,293
101,991
519,514
1,155,145
45
2023
553,475
4,220
26,346
-
(22,439)
14,706
576,308
182,874
235,869
71,934
490,677
1,066,985
46
Aditya Asawa
2024
423,360
-
28,665
-
(2,002)
11,141
461,164
150,675
69,171
63,388
283,234
744,398
38
2023
404,154
-
26,346
-
18,728
10,128
459,356
136,253
44,161
41,471
221,885
681,241
33
Tina Mitas
2024
273,900
1,515
28,665
-
865
8,452
313,397
67,317
34,795
25,739
127,851
441,248
29
2023
262,714
1,443
26,346
-
1,442
7,100
299,045
60,874
40,635
17,995
119,504
418,549
29
Total
2024
1,276,232
4,548
85,995
-
6,692
36,725
1,410,192
420,222
319,259
191,118
930,599
2,340,791
2023
1,220,343
5,663
79,038
-
(2,269)
31,934
1,334,709
380,001
320,665
131,400
832,066
2,166,775
1 Amounts disclosed represent the movement in the associated leave provisions.
2 Represents the accounting expense attributed to each Executive KMP in accordance with AASB2 Share-based Payment. Subject to ongoing service conditions being satisfied, the difference in value will be
expensed over FY25 ($182,771) and FY26 ($56,929) and FY27 ($6,427) accordingly.
3 Represents the accounting expense attributed to each Executive KMP in accordance with AASB2 Share-based Payment.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
24
(vi) Executive KMP equity holdings
The table below outlines the movement in Executive KMP’s security holdings during FY24.
Stapled securities
FY24 – number
of securities
Balance
1 January1
On-market
purchases
Granted as
compensation2
Vesting of
performance
rights
Sold on-market
Balance
31 December
Hadyn Stephens
218,285
10,000
75,367
29,272
(134,250)
198,674
Aditya Asawa
10,481
10,097
28,4593
-
(10,097)
38,940
Tina Mitas
43,901
-
12,9423
6,398
-
63,241
1 During FY24, 133,113 securities granted to KMP under the FY21 and FY22 STI were released from holding-lock.
2 The deferred portion of FY23 STI payable in securities subject to trade-lock restrictions were acquired on-market in March 2024 and are
held in Waypoint REIT’s Employee Share Trust until the end of the deferral period which is 15 March 2025 (78,263 securities) and 15
March 2026 (37,683 securities). The securities were granted on 11 March 2024 at a fair value of $2.43 based on the security price at
that date.
3 Includes 411 securities granted on 11 March 2024 under the General Employee Offer (refer note 3.(h) for details) at a fair value of $2.43.
Performance rights
Waypoint REIT performance rights granted in FY24 were all granted on 15 May 2024. All performance rights
have a nil exercise price, vest on or around 22 March 2027 if vesting conditions are met or otherwise expire
on this date and are subject to DEPS and TSR conditions over the performance period of 1 January 2024 to
31 December 2026.
Accounting standards require the fair value of the grants to be recognised over the performance period. The
minimum value of the grant is nil if the vesting conditions are not met. The maximum value is based on the
estimated fair value calculated at the time of the grant and amortised in accordance with the accounting
standard requirements.
FY24
Balance 1
January
#
Rights
granted re
FY24 LTI
#
Rights
vested and
exercised re
FY21 LTI
#
Rights
forfeited re
FY21 LTI
#
Balance 31
December
#
Fair value to be
expensed in
future years1
$
Hadyn Stephens
432,543
256,063
(29,272)
(47,843)
611,491
133,849
Aditya Asawa
198,993
143,089
-
-
342,082
76,011
Tina Mitas
105,576
63,928
(6,398)
(10,458)
152,648
33,469
1 The maximum value of the grants yet to vest is the fair value amount at the grant date yet to be reflected in Waypoint REIT's Consolidated
Statement of Comprehensive Income.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
25
The table below details performance rights granted to executives as part of their remuneration in the
previous and current reporting periods:
KMP
Grant
Grant date
Performance
period start date
Expected
vesting date
No. of
performance
rights
Fair value per
performance
rights
Hadyn Stephens
LTI FY22 tranche 1 (TSR)
12 May 2022
1 January 2022
1 March 2025
68,925
$1.08
LTI FY22 tranche 2 (DEPS)
12 May 2022
1 January 2022
1 March 2025
68,925
$2.02
LTI FY23 tranche 1 (TSR)
18 May 2023
1 January 2023
1 March 2026
108,789
$1.09
LTI FY23 tranche 2 (DEPS)
18 May 2023
1 January 2023
1 March 2026
108,789
$2.21
LTI FY24 tranche 1 (TSR)
15 May 2024
1 January 2024
22 March 2027
128,031
$0.98
LTI FY24 tranche 2 (DEPS)
15 May 2024
1 January 2024
22 March 2027
128,032
$1.98
Aditya Asawa
LTI FY22 tranche 1 (TSR)
4 October 2022
1 January 2022
1 March 2025
38,705
$1.68
LTI FY22 tranche 2 (DEPS)
4 October 2022
1 January 2022
1 March 2025
38,705
$2.13
LTI FY23 tranche 1 (TSR)
18 May 2023
1 January 2023
1 March 2026
60,792
$1.09
LTI FY23 tranche 2 (DEPS)
18 May 2023
1 January 2023
1 March 2026
60,792
$2.21
LTI FY24 tranche 1 (TSR)
15 May 2024
1 January 2024
22 March 2027
71,544
$0.98
LTI FY24 tranche 2 (DEPS)
15 May 2024
1 January 2024
22 March 2027
71,545
$1.98
Tina Mitas
LTI FY22 tranche 1 (TSR)
11 May 2022
1 January 2022
1 March 2025
17,200
$1.14
LTI FY22 tranche 2 (DEPS)
11 May 2022
1 January 2022
1 March 2025
17,200
$2.05
LTI FY23 tranche 1 (TSR)
18 May 2023
1 January 2023
1 March 2026
27,160
$1.09
LTI FY23 tranche 2 (DEPS)
18 May 2023
1 January 2023
1 March 2026
27,160
$2.21
LTI FY24 tranche 1 (TSR)
15 May 2024
1 January 2024
22 March 2027
31,964
$0.98
LTI FY24 tranche 2 (DEPS)
15 May 2024
1 January 2024
22 March 2027
31,964
$1.98
Performance rights are valued using the Black-Scholes-Merton methodology which discounts for distributions
foregone. This is used for allocation purposes for all rights and accounting purposes for non-market-based
performance rights. The Monte Carlo method is used for accounting purposes for market-based performance
rights. The accounting value determined using a Monte Carlo simulation valuation is in accordance with AASB
2 Share-based Payment.
(vii) Other information
Employment contracts and termination entitlements
Notice periods applicable to termination of an Executive KMP varies as shown in the table.
Termination by Executive KMP
Hadyn Stephens:
12 months
Aditya Asawa:
6 months
Tina Mitas:
3 months
Termination by Waypoint REIT without cause
All Executive KMP:
12 months
Waypoint REIT may terminate an Executive KMP’s service at any time without notice if serious misconduct
has occurred. Where termination with cause occurs the Executive KMP is only entitled to remuneration up to
the date of termination.
Other transactions with Executive KMP
There were no loans made, guaranteed or secured, directly or indirectly, by Waypoint REIT to Executive KMP
or their related parties during the year. There were no other transactions between Waypoint REIT and any
Executive KMP or their related parties during the year.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
26
(viii) Remuneration Policy for Non-Executive Independent Directors
Objective
The Remuneration Committee is responsible for making recommendations to the Board on the remuneration
arrangements for the Independent Non-Executive Directors. The Board and the Remuneration Committee
periodically assess, with the benefit of independent advice (as required), the appropriateness of the nature
and amount of remuneration of Non-Executive Independent Directors by reference to market rates with the
overall objective of attracting and retaining Board members with an appropriate combination of industry and
specialist functional knowledge and experience.
Remuneration structure
Under the Waypoint REIT Limited Constitution, the Board may decide the remuneration to which each Non-
Executive Independent Director is entitled for his or her services as a Director. However, the total amount
provided to all Non-Executive Independent Directors for their services as Directors must not exceed in
aggregate in any financial year the amount fixed by Waypoint REIT. This amount has been fixed at $1,000,000
per annum.
Annual fees payable, inclusive of superannuation, to Non-Executive Independent Directors during FY24 were
as shown in the table. All fees increased 5.0% effective 1 January 2024.
1 The Board Chair does not receive fees for membership on Board Committees.
(ix) Non-Executive Independent Director fees and other information
Details of Non-Executive Independent Director fees and security interests are set out below.
Fees
Fees payable to each Non-Executive Independent Director of Waypoint REIT during the year are set out below.
2024
2023
Base fee
$
Superannuation
$
Total
$
Base fee
$
Superannuation
$
Total
$
Georgina Lynch1
187,472
21,153
208,625
138,364
14,873
153,237
Susan MacDonald
128,502
14,460
142,962
119,854
12,884
132,738
Christopher Lawton2
142,211
15,998
158,209
25,234
2,776
28,010
Gai McGrath3
56,105
6,452
62,557
-
-
-
Laurence Brindle4
79,705
8,768
88,473
203,613
21,887
225,500
Stephen Newton5
-
-
-
113,426
12,136
125,562
Total
593,995
66,831
660,826
600,491
64,556
665,047
1
Appointed as Chair from 15 May 2024.
2
Appointed on 27 October 2023.
3
Appointed on 1 August 2024.
4
Retired on 15 May 2024.
5
Resigned on 27 October 2023.
Role
Board
Audit and Risk
Management
Committee
Remuneration
Committee
Nomination
Committee
Chair
$236,7751
$26,906
$21,525
$10,763
Member
$115,159
$13,453
$10,763
$5,381
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
27
Interests in securities
The number of securities held during the year by each Non-Executive Independent Director of Waypoint REIT,
including their personally related parties, are set out below.
FY24
Balance
1 January
On-market
purchases
On-market
disposals
Other
movements
Balance
31 December
Non-Executive Directors
Georgina Lynch
46,910
-
-
-
46,910
Susan MacDonald
43,000
-
-
-
43,000
Christopher Lawton
20,000
-
-
-
20,000
Gai McGrath
3,5001
-
-
-
3,500
Laurence Brindle
93,820
-
-
-
93,8202
1
Opening balance is at date of appointment (1 August 2024).
2
Closing balance is at date of retirement (15 May 2024).
Other transactions with Non-Executive Independent Directors
There were no loans made, guaranteed or secured, directly or indirectly, by Waypoint REIT to any Non-
Executive Independent Director or their related parties during the year. There were no other transactions
between Waypoint REIT and any Non-Executive Independent Director or their related parties during the year.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
28
Directors Report – continued (unaudited)
Insurance and indemnification of officers and auditors
The Company has paid premiums in respect of a contract insuring all Directors and officers of the Company
and its related entities against certain liabilities incurred in that capacity. The insurance policies also cover
former Directors and officers of the Company. Disclosure of the nature of the liability covered by the insurance
and premiums paid is subject to confidentiality requirements under the contract of insurance.
The Company and the Responsible Entity are party to Deeds of Indemnity with each of its Directors (including
Hadyn Stephens, Managing Director & Chief Executive Officer) and Aditya Asawa (Chief Financial Officer) and
Tina Mitas (Company Secretary) providing these persons with an indemnity on a full indemnity basis, to the
fullest extent permitted by law, against all losses and liabilities incurred in their respective roles for the
Company, the Responsible Entity and its related entities. The Deeds also require the Company to grant the
indemnified person access to certain Company documents and insure the indemnified persons.
In addition, the Company’s and the Responsible Entity’s constitutions provide for the indemnity of officers of
the Company/Responsible Entity or its related bodies corporate from liability incurred by a person in that
capacity.
No indemnity payment has been made under any of the documents referred to above during, or since the end
of, the financial year.
Waypoint REIT has not during or since the end of the financial year indemnified or agreed to indemnify an
auditor of Waypoint REIT or of any related body corporate against a liability incurred in their capacity as an
auditor.
Audit and non-audit services
Waypoint REIT may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with Waypoint REIT are important.
Details of the amounts paid or payable to the auditor for audit and non-audit services provided in relation to
the year ended 31 December 2024 are disclosed in Note 4.(d) to the consolidated financial statements.
The Directors have considered the position and, in accordance with advice received from Waypoint REIT’s
Audit and Risk Management Committee (ARMC), are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 for
the following reasons:
•
all non-audit services have been reviewed by the ARMC to ensure they do not impact the impartiality
and objectivity of the auditor; and
•
none of the services undermines the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
29
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 30.
Rounding of amounts to the nearest million dollars
Waypoint REIT is an entity of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the
’rounding of’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in
accordance with that instrument to the nearest hundred thousand dollars, or in certain cases to the nearest
dollar.
This report is made in accordance with a resolution of Directors.
Georgina Lynch
Chair
27 February 2025
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, BARANGAROO, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, PARRAMATTA NSW 2150, PO Box 1155 PARRAMATTA NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Waypoint REIT Limited and Waypoint REIT Trust for the year ended 31
December 2024, I declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Waypoint REIT Limited and the entities it controlled during the period
and Waypoint REIT Trust and the entities it controlled during the period.
JDP Wills
Sydney
Partner
PricewaterhouseCoopers
27 February 2025
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
31
FINANCIAL STATEMENTS
For the Year Ended
31 December 2024
This financial report is for Waypoint REIT.
Waypoint REIT comprises Waypoint REIT Limited (ABN 35 612 986 517) (Company) and VER Limited
(Responsible Entity) (ABN 43 609 868 000; AFSL 483795) as Responsible Entity of Waypoint REIT Trust
(ARSN 613 146 464) (Trust) and their controlled entities, together the ‘Waypoint REIT’.
This financial report is presented in Australian currency.
The registered office of the Company and VER Limited is:
Level 15, 720 Bourke Street
Docklands VIC 3008, Australia.
Contents
Financial Statements
•
Consolidated Statements of Comprehensive Income
32
•
Consolidated Balance Sheets
33
•
Consolidated Statements of Changes in Equity
34
•
Consolidated Statements of Cash Flows
35
•
Notes to the Financial Statements
36
Consolidated entity disclosure statement
73
Directors’ Declaration
75
Independent Auditor’s Report
76
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
32
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Waypoint REIT
Trust Group
2024
2023
2024
2023
Notes
$ million
$ million
$ million
$ million
Rental income from investment properties (incl. non-cash
straight-line lease adjustment)
163.9
163.4
163.9
163.4
Finance income
3. (b)
1.1
0.9
0.5
0.4
Net profit on sale of investment properties
2. (b)
0.2
-
0.2
-
Net fair value gain / (loss) on investment properties
2. (a)
28.4
(184.5)
28.4
(184.5)
Operating expenses
(9.9)
(10.1)
(10.1)
(10.1)
Finance expense
3. (b)
(45.6)
(39.5)
(45.6)
(39.5)
Net loss from derivative financial instruments
3. (b)
(6.4)
(9.3)
(6.4)
(9.3)
Net profit / (loss) before income tax
131.7
(79.1)
130.9
(79.6)
Income tax expense
(0.2)
-
-
-
Net profit / (loss) after tax
131.5
(79.1)
130.9
(79.6)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Unrealised gains / (losses) on cash flow hedges
1.1
(6.2)
1.1
(6.2)
Total comprehensive income
132.6
(85.3)
132.0
(85.8)
Total comprehensive income for the period attributable to
Waypoint REIT securityholders, comprising:
- shareholders of Waypoint REIT Limited
0.6
0.5
-
-
- unitholders of Waypoint REIT Trust (non-controlling interests)
132.0
(85.8)
132.0
(85.8)
132.6
(85.3)
132.0
(85.8)
Earnings per security
cents
cents
cents
cents
Basic earnings per security
1. (b)
19.57
(11.77)
19.48
(11.85)
Diluted earnings per security
1. (b)
19.55
(11.76)
19.46
(11.84)
The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
33
CONSOLIDATED BALANCE SHEETS
AT 31 DECEMBER 2024
Waypoint REIT
Trust Group
31 Dec 2024
31 Dec 2023
31 Dec 2024
31 Dec 2023
Notes
$ million
$ million
$ million
$ million
ASSETS
Current assets
Cash and cash equivalents
1. (c)
14.7
13.3
1.4
0.7
Derivative financial instruments
3. (c)
4.9
9.1
4.9
9.1
Other current assets
1.6
1.6
5.0
4.7
21.2
24.0
11.3
14.5
Assets held for sale
2. (b)
3.8
-
3.8
-
Total current assets
25.0
24.0
15.1
14.5
Non-current assets
Investment properties
2. (a)
2,793.5
2,769.3
2,793.5
2,769.3
Derivative financial instruments
3. (c)
6.1
4.0
6.1
4.0
Other non-current assets
0.4
0.6
-
-
Total non-current assets
2,800.0
2,773.9
2,799.6
2,773.3
Total assets
2,825.0
2,797.9
2,814.7
2,787.8
LIABILITIES
Current liabilities
Trade and other payables
3.7
3.7
5.3
5.0
Rent received in advance
3.6
3.0
3.6
3.0
Interest payable
3.8
4.4
3.8
4.4
Distribution payable
27.7
27.5
27.7
27.5
Derivative financial instruments
3. (c)
0.7
0.6
0.7
0.6
Provisions and other current liabilities
1.4
1.2
-
-
Total current liabilities
40.9
40.4
41.1
40.5
Non-current liabilities
Borrowings
3. (a)
917.4
892.7
917.4
892.7
Derivative financial instruments
3. (c)
11.4
31.5
11.4
31.5
Provisions and other non-current liabilities
0.5
0.7
-
-
Total non-current liabilities
929.3
924.9
928.8
924.2
Total liabilities
970.2
965.3
969.9
964.7
Net assets
1,854.8
1,832.6
1,844.8
1,823.1
EQUITY
Waypoint REIT Limited
Contributed equity
3. (e)
7.1
7.1
-
-
Retained profits
1.9
1.3
-
-
Other equity
3. (g)
1.0
1.1
-
-
Parent entity interest
10.0
9.5
-
-
Waypoint REIT Trust
Contributed equity
3. (e)
1,324.2
1,323.8
1,324.2
1,323.8
Retained profits
519.7
499.5
519.7
499.5
Reserves
3. (g)
0.9
(0.2)
0.9
(0.2)
Non-controlling interests
1,844.8
1,823.1
1,844.8
1,823.1
Total equity
1,854.8
1,832.6
1,844.8
1,823.1
The above Consolidated Balance Sheets should be read in conjunction with the accompanying notes.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
34
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Waypoint REIT
Trust Group
Contributed
equity
Retained
profits
Other
equity
Non-
controlling
interests
TOTAL
Contributed
equity
Retained
profits
Reserves
TOTAL
Notes
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
$ million
Balance at 1 January 2023
7.1
0.8
0.6
2,019.9
2,028.4
1,324.1
689.8
6.0
2,019.9
Profit for the period
-
0.5
-
(79.6)
(79.1)
-
(79.6)
-
(79.6)
Other comprehensive income:
Effective portion of changes in fair value of
cash flow hedges
-
-
-
(6.2)
(6.2)
-
-
(6.2)
(6.2)
Total comprehensive profit for the period
-
0.5
-
(85.8)
(85.3)
-
(79.6)
(6.2)
(85.8)
Transactions with owners in their capacity as
owners
Security-based payment expense
-
-
0.5
-
0.5
-
-
-
-
Acquisition of treasury securities
-
-
-
(0.3)
(0.3)
(0.3)
-
-
(0.3)
Distributions paid or provided for
1. (a)
-
-
-
(110.7)
(110.7)
-
(110.7)
-
(110.7)
Total transactions with owners in their
capacity as owners
-
-
0.5
(111.0)
(110.5)
(0.3)
(110.7)
-
(111.0)
Balance at 31 December 2023
7.1
1.3
1.1
1,823.1
1,832.6
1,323.8
499.5
(0.2)
1,823.1
Balance at 1 January 2024
7.1
1.3
1.1
1,823.1
1,832.6
1,323.8
499.5
(0.2)
1,823.1
Profit / (loss) for the period
-
0.6
-
130.9
131.5
-
130.9
-
130.9
Other comprehensive income:
Effective portion of changes in fair value of
cash flow hedges
-
-
-
1.1
1.1
-
-
1.1
1.1
Total comprehensive profit / (loss) for the
period
-
0.6
-
132.0
132.6
-
130.9
1.1
132.0
Transactions with owners in their capacity as
owners
Security-based payment expense
-
-
0.6
-
0.6
-
-
-
-
Acquisition of treasury securities
-
-
-
(0.3)
(0.3)
(0.3)
-
-
(0.3)
Securities vested under Incentive Plans
-
-
(0.7)
0.7
-
0.7
-
-
0.7
Distributions paid or provided for
1. (a)
-
-
-
(110.7)
(110.7)
-
(110.7)
-
(110.7)
Total transactions with owners in their
capacity as owners
-
-
(0.1)
(110.3)
(110.4)
0.4
(110.7)
-
(110.3)
Balance at 31 December 2024
7.1
1.9
1.0
1,844.8
1,854.8
1,324.2
519.7
0.9
1,844.8
The above Consolidated Statements of Changes in Equity should be read in conjunction with accompanying notes.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
35
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Waypoint REIT
Trust Group
2024
2023
2024
2023
Notes
$ million
$ million
$ million
$ million
Cash flows from operating activities
Rental income from investment properties (inclusive of GST)
181.6
174.8
181.6
174.8
Payments to suppliers and employees (inclusive of GST)
(28.7)
(27.2)
(28.9)
(26.0)
152.9
147.6
152.7
148.8
Interest received
1.1
0.9
0.5
0.4
Interest paid
(43.1)
(39.3)
(43.1)
(39.3)
Income taxes paid
(0.1)
-
-
-
Net cash inflow from operating activities
110.8
109.2
110.1
109.9
Cash flows from investing activities
Acquisition and capital expenditure
(0.2)
(0.2)
(0.2)
(0.2)
Net proceeds on sale of investment properties
2.7
-
2.7
-
Net cash (outflow) / inflow from investing activities
2.5
(0.2)
2.5
(0.2)
Cash flows from financing activities
Proceeds from borrowings (net of borrowing costs)
570.7
67.5
570.7
67.5
Repayments of borrowings
(572.0)
(67.0)
(572.0)
(67.0)
Distributions paid to securityholders
1. (a)
(110.6)
(110.2)
(110.6)
(110.2)
Net cash outflow from financing activities
(111.9)
(109.7)
(111.9)
(109.7)
Net increase / (decrease) in cash and cash equivalents
1.4
(0.7)
0.7
(0.0)
Cash and cash equivalents at beginning of the period
13.3
14.0
0.7
0.7
Cash and cash equivalents at end of the period
1. (c)
14.7
13.3
1.4
0.7
The above Consolidated Statements of Cash Flows should be read in conjunction with accompanying notes.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
36
NOTES TO THE FINANCIAL STATEMENTS
This financial report contains the financial statements of Waypoint REIT and Waypoint REIT Trust Group
(Trust Group) for the year ended 31 December 2024. The financial statements of Waypoint REIT comprise
the Company, the Trust and their respective controlled entities. The financial statements of the Trust Group
comprise the Trust and its controlled entities.
As permitted by Class Order 13/1050, issued by ASIC, this financial report is a combined financial report that
presents the financial statements and accompanying notes of both Waypoint REIT Limited and Waypoint REIT
Trust at and for the year ended 31 December 2024.
Waypoint REIT is a stapled group consisting of the Company and the Trust and their wholly owned entities.
The Trust indirectly owns the investment property portfolio through its 100% ownership of the trusts which own
the investment properties and receive rent under leases. The Company directly owns all of the shares in VER
Limited (Responsible Entity). Each stapled security consists of one share in the Company and one unit in the
Trust.
Waypoint REIT is listed on the Australian Securities Exchange (ASX) and is registered and domiciled in
Australia.
The notes to these consolidated financial statements include additional information which is required to
understand the operations, performance and financial position of Waypoint REIT. The notes are set out as
follows:
1. Performance and results – an overview of key metrics used by Waypoint REIT to measure financial
performance.
1. (a) Distributions to securityholders
1. (b) Earnings per security
1. (c) Cash and cash equivalents
1. (d) Cash flow information
2. Property portfolio – an overview of Waypoint REIT’s investment property portfolio.
2. (a) Investment properties
2. (b) Assets held for sale
2. (c) Sensitivities
2. (d) Commitments and contingencies
3. Capital management – an overview of Waypoint REIT’s capital management structure.
3. (a) Borrowings
3. (b) Net finance costs
3. (c) Derivative financial instruments
3. (d) Financial risk management
3. (e) Contributed equity
3. (f)
Non-controlling interests
3. (g) Reserves
3. (h) Security-based benefits expense
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
37
4. Additional information – additional disclosures relating to Waypoint REIT’s financial statements.
4. (a) Related party information
4. (b) Parent entity financial information
4. (c) Investments in subsidiaries
4. (d) Remuneration of auditors
4. (e) Subsequent events
4. (f)
Summary of material accounting policies
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
38
1.
Performance and results
Based on the reports reviewed to monitor the performance of Waypoint REIT and Trust Group, the Board of
Waypoint REIT, in its capacity as chief operating decision maker, determines that Waypoint REIT (and Trust
Group) has one reportable segment in which it operates, being fuel and convenience retail investment
properties. Refer to the Consolidated Statements of Comprehensive Income for the segment financial
performance and the Consolidated Balance Sheets for the assets and liabilities.
Key financial metrics used to define the results and performance of Waypoint REIT, including Distributable
Earnings, distributions, earnings per stapled security and Distributable Earnings per stapled security are set
out below.
Distributable Earnings is a non-statutory measure of profit and is calculated as net profit adjusted to remove
transaction costs, amortisation of tenant incentives, specific non-recurring items and non-cash items (including
straight-lining of rental income, the amortisation of debt establishment fees, long-term incentive expense and
any fair value adjustment to investment properties and derivatives).
A reconciliation between Distributable Earnings and statutory profit is set out below.
FY24
$ million
FY23
$ million
Rental income
162.3
157.5
Finance income
1.1
0.9
Total operating income
163.4
158.4
Operating expenses
(9.7)
(9.9)
Interest expense
(42.8)
(37.8)
Income tax expense
(0.2)
-
Distributable Earnings
110.7
110.7
Net fair value gain / (loss) on investment properties
28.4
(184.5)
Net profit / (loss) on sale of investment properties
0.2
-
Straight-line rental income
1.6
5.9
Amortisation of borrowing costs
(2.8)
(1.7)
Amortisation of tenant incentives
-
-
Net loss from derivative financial instruments
(6.4)
(9.3)
Long-term incentive expense
(0.2)
(0.2)
Statutory net profit / (loss) after tax
131.5
(79.1)
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
39
1. (a) Distributions to securityholders
2024
2023
$ million
$ million
Distributions paid in the period ended 31 December 2024
Final distribution for year ended 31 December 2023
– 4.10 cents per security paid on 26 February 2024
27.5
-
Interim distribution for the quarter ended 31 March 2024
– 4.12 cents per security paid on 10 May 2024
27.7
-
Interim distribution for the quarter ended 30 June 2024
– 4.12 cents per security paid on 29 August 2024
27.7
-
Interim distribution for the quarter ended 30 September 2024
– 4.12 cents per security paid on 15 November 2024
27.7
-
Distributions paid in the period ended 31 December 2023
Final distribution for year ended 31 December 2022
– 4.03 cents per security paid on 27 February 2023
-
27.1
Interim distribution for the quarter ended 31 March 2023
– 4.12 cents per security paid on 12 May 2023
-
27.7
Interim distribution for the quarter ended 30 June 2023
– 4.16 cents per security paid on 28 August 2023
-
27.9
Interim distribution for the quarter ended 30 September 2023
– 4.10 cents per security paid on 15 November 2023
-
27.5
Total distributions paid
110.6
110.2
A distribution of 4.12 cents per security ($27.7 million) is to be paid on 27 February 2025 for the quarter ended
31 December 2024 and this has been provided for in the financial statements.
The Company has franking credits available for subsequent reporting periods of $0.1 million based on a tax
rate of 25% (2023: $0.03 million). There was no dividend paid or payable from the Company during the period.
1. (b) Earnings per security
Waypoint REIT
Trust Group
2024
2023
2024
2023
Cents
Cents
Cents
Cents
Basic earnings per security (cents) attributable to:
Shareholders of Waypoint REIT Limited
0.09
0.08
-
-
Unitholders of Waypoint REIT Trust (non-
controlling interest)
19.48
(11.85)
19.48
(11.85)
Securityholders of Waypoint REIT
19.57
(11.77)
19.48
(11.85)
Diluted earnings per security (cents) attributable
to:
Shareholders of Waypoint REIT Limited
0.09
0.08
-
-
Unitholders of Waypoint REIT Trust (non-
controlling interest)
19.46
(11.84)
19.46
(11.84)
Securityholders of Waypoint REIT
19.55
(11.76)
19.46
(11.84)
Statutory net profit / (loss) after tax ($ million)
131.5
(79.1)
130.9
(79.6)
Distributable Earnings ($ million)
110.7
110.7
N/A
N/A
Distributable Earnings per stapled security (cents)
16.48
16.48
N/A
N/A
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
40
Waypoint REIT
Trust Group
2024
2023
2024
2023
million
million
million
million
Weighted average number of securities used as
the denominator in calculating basic earnings per
security
671.8
671.8
671.8
671.8
Adjustments for calculation of diluted earnings per
stapled security
• performance rights*
0.6
0.4
0.6
0.4
Weighted average number of securities and
potential securities used as the denominator in
calculating diluted earnings per security
672.4
672.2
672.4
672.2
* Performance rights are unquoted securities and conversion to stapled securities and vesting to executives is subject to
performance and/or service conditions.
1. (c) Cash and cash equivalents
Waypoint REIT
Trust Group
31 Dec
2024
31 Dec
2023
31 Dec
2024
31 Dec
2023
$ million
$ million
$ million
$ million
Cash at bank
14.7
13.3
1.4
0.7
Total cash and cash equivalents
14.7
13.3
1.4
0.7
Accounting policy – cash and cash equivalents
For the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents
include cash on hand, deposits held at call with financial institutions, and other short-term, highly liquid
investments with maturities of three months or less from the date of acquisition that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
41
1. (d) Cash flow information
(i)
Reconciliation of net profit after income tax to net cash inflow from operating activities
Waypoint REIT
Trust Group
2024
2023
2024
2023
$
million
$
million
$
million
$
million
Profit / (loss) for the year
131.5
(79.1)
130.9
(79.6)
Amortisation of borrowing costs
2.8
1.7
2.8
1.7
Net revaluation (gain) / loss on investment
properties
(28.4)
184.5
(28.4)
184.5
Straight-line adjustment on rental income
(1.6)
(5.9)
(1.6)
(5.9)
Net profit on sale of investment properties
(0.2)
-
(0.2)
-
Net loss from derivative financial instruments
6.4
9.3
6.4
9.3
Change in operating assets and liabilities
(Increases) / decrease in other current assets
-
0.3
(0.3)
1.9
Decrease in other non-current assets
0.2
-
-
-
Increase / (decrease) in trade and other payables
-
-
0.4
(0.4)
Increase in rent received in advance
0.7
0.1
0.7
0.1
Decrease in interest payable
(0.6)
(1.7)
(0.6)
(1.7)
Net cash inflow from operating activities
110.8
109.2
110.1
109.9
(ii) Non-cash investing and financing activities
Waypoint REIT
Trust Group
2024
2023
2024
2023
$
million
$
million
$
million
$
million
Loan establishment costs netted off against
borrowings drawn down
4.8
-
4.8
-
Total non-cash financing and investing activities
4.8
-
4.8
-
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
42
2.
Property portfolio
2. (a) Investment properties
(i) Valuations and carrying amounts
Waypoint REIT
Trust Group
31 Dec 2024
31 Dec 2023
31 Dec 2024
31 Dec 2023
$ million
$ million
$ million
$ million
Fuel and convenience retail
properties – at fair value
2,793.5
2,769.3
2,793.5
2,769.3
Investment properties
2,793.5
2,769.3
2,793.5
2,769.3
The key inputs and assumptions for valuation of investment properties are below.
31 Dec 2024
31 Dec 2023
Number of assets
400
402
Annual market rent per site
$125,000 to $1,604,840
$125,000 to $1,280,416
Weighted average capitalisation rate
5.72%
5.68%
Range of capitalisation rates
4.50% to 8.50%
4.25% to 8.50%
Range of fuel lease terms remaining
0.9 to 14.3 years
1.9 to 12.9 years
During the year, 158 investment properties were independently valued (representing 40% of the portfolio by
number) including 77 at 30 June 2024 and 81 at 31 December 2024. The Directors have reviewed the
independent valuation outcomes and determined they are appropriate to adopt at 31 December 2024. The key
inputs into the valuation are based on market information for comparable properties available as at that date
and the individual lease profiles for each investment property. The independent valuers have experience in
valuing similar assets and have access to market evidence to support their conclusions. Comparable sales
are considered to be those in similar markets, of similar scale and condition and with similar lease terms to the
subject property.
Directors’ valuations have been performed on the balance of the portfolio, with reference to the capitalisation
rates determined for the corresponding independently valued properties and additional market evidence in the
same geographic area with similar lease terms.
Investment properties have been classified as level 3 in the fair value hierarchy. There have been no transfers
between the levels in the fair value hierarchy during the period.
All investment properties are freehold except for all sites in the Australian Capital Territory that are subject to
Crown leases.
Accounting policy – investment properties
All of Waypoint REIT’s properties are treated as investment properties for the purpose of financial reporting.
Under Australian Accounting Standards, investment property buildings and improvements are not depreciated
over time. Instead, investment properties are initially valued at cost, including transaction costs, and at the end
of each accounting period the carrying values are restated at their fair value at the time.
Key estimate – valuation of investment properties
Changes in fair value are recognised as a non-cash gain or loss in the statutory net profit in the accounting
period in which they arise. As a result of this accounting policy, changes in the fair value of Waypoint REIT’s
investment properties may have a significant impact on its reported statutory net profit in any given period. The
fair value of investment property is determined based on real estate valuation techniques and the principles of
AASB 13 Fair Value Measurement.
The fair value of the properties is reviewed by the Directors at each reporting date. The Directors’ assessment
of fair value is periodically assessed by engaging an independent valuer to assess the fair value of individual
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
43
properties with at least one-sixth of the properties within the portfolio being independently valued every six
months. Valuations may occur more frequently if there is reason to believe that the fair value of a property has
materially changed from its carrying value (e.g. as a result of changes in market conditions, leasing activity in
relation to the property or capital expenditure). Each investment property is subject to independent valuation
at least once every three years.
The independent valuer is changed at least every three years unless the Board approves the use of a valuer
for a fourth year due to extenuating circumstances.
Valuations are primarily derived using a combination of the income capitalisation and the direct comparison
methods and with consideration for a number of factors that may include a direct comparison between the
subject property and a range of comparable sales, the present value of net future cash flow projections based
on reliable estimates of future cash flows, existing lease contracts, external evidence such as current market
rents for similar properties and using capitalisation rates and discount rates that reflect current market
assessments of the uncertainty in the amount and timing of cash flows.
(ii) Movements during the period
Waypoint REIT
Trust Group
2024
2023
2024
2023
At fair value
$ million
$ million
$ million
$ million
Opening balance (1 January)
2,769.3
2,947.6
2,769.3
2,947.6
Capital expenditure
0.3
0.3
0.3
0.3
Straight-line rental asset
1.6
5.9
1.6
5.9
Fair value adjustment to investment properties
28.4
(184.5)
28.4
(184.5)
Transfer to assets held for sale
(6.1)
-
(6.1)
-
Closing balance (31 December)
2,793.5
2,769.3
2,793.5
2,769.3
(iii) Amounts recognised in profit or loss for investment properties
Waypoint REIT
Trust Group
2024
2023
2024
2023
$ million
$ million
$ million
$ million
Rental income
162.3
157.5
162.3
157.5
Other non-cash rental income (recognised
on a straight-line basis)
1.6
5.9
1.6
5.9
Net property related operating expenses
(1.1)
(1.3)
(1.1)
(1.3)
Net revaluation of investment properties
28.4
(184.5)
28.4
(184.5)
Net gain on sale of investment properties
0.2
-
0.2
-
(iv) Leasing arrangements
The investment properties are leased to Viva Energy Australia Pty Limited (94.2% of rental income), other fuel
operators and various convenience store operators (5.8% of rental income) under predominantly long-term
operating leases with rent payable in advance monthly, quarterly or annually. Rental income for 94.0% of the
investment properties is subject to fixed annual increases of 3.0% or greater. The remainder of the leases
largely have CPI-linked rent reviews. Where considered necessary to reduce credit risk, Waypoint REIT may
obtain bank guarantees or security deposits for the term of the lease.
Minimum undiscounted future payments to be received under non-cancellable operating leases of investment
properties not recognised in the financial statements are receivable as follows.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
44
Waypoint REIT
Trust Group
31 Dec
2024
31 Dec
2023
31 Dec
2024
31 Dec
2023
$ million
$ million
$ million
$ million
Within one year
165.8
162.3
165.8
162.3
Later than one year but not later
than two years
167.8
166.0
167.8
166.0
Later than two years but not later
than three years
163.7
168.1
163.7
168.1
Later than three years but not
later than four years
157.6
164.0
157.6
164.0
Later than four years but not later
than five years
149.2
157.8
149.2
157.8
Later than five years
504.8
651.1
504.8
651.1
Total
1,308.9
1,469.3
1,308.9
1,469.3
Accounting policy – rental income
Rental income from operating leases is recognised as income on a straight-line basis. Where a lease has a
fixed annual increase, the total rent receivable over the operating lease is recognised as revenue on a straight-
line basis over the lease term. This results in more income being recognised early in the lease term and less
late in the lease term compared to the lease conditions (i.e. actual cash received). The difference between the
lease income recognised and the actual lease payment received is shown within the fair value of the investment
property on the consolidated balance sheet and reversed on disposal of an asset.
2. (b) Assets held for sale
Waypoint REIT
Trust Group
31 Dec 2024
31 Dec 2023
31 Dec 2024
31 Dec 2023
$ million
$ million
$ million
$ million
Investment properties – contracted
3.8
-
3.8
-
Current assets held for sale
3.8
-
3.8
-
During the year, Waypoint REIT reclassified two assets to held for sale. One of these assets completed
settlement during the year. At balance date, the other asset was contracted for sale and settlement was
completed on 6 February 2025.
Movements during the period
Waypoint REIT
Trust Group
2024
2023
2024
2024
At fair value
$ million
$ million
$ million
$ million
Opening balance
-
-
-
-
Net transfer from investment properties
6.1
-
6.1
-
Disposal costs
0.2
-
0.2
-
Net gain on sale of investment properties
0.2
-
0.2
-
Settlement of assets held for sale
(2.7)
-
(2.7)
-
Closing balance
3.8
-
3.8
-
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
45
Accounting policy – assets held for sale
Investment properties are classified as held for sale and measured at fair value if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use. This condition is met only
when the sale is highly probable and the asset is available for immediate sale in its present condition.
Management must be committed to the sale, which should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
2. (c) Sensitivities
Waypoint REIT’s property portfolio is 99.9% occupied with a weighted average lease expiry of 7.1 years. Only
6 leases (representing 0.7% of annual rental income) expire before the end of 2025. Waypoint REIT’s
investment properties are typically on long-term leases with contracted annual rental income escalations and,
accordingly, they are generally valued on a capitalisation of income basis. Waypoint REIT’s investment
properties are therefore mostly exposed to a risk of change in their fair values due to changes in market
capitalisation rates.
2024
2023
$ million
$ million
Sensitivity of fair value to movements in
market capitalisation rates (all else held equal):
Decreases by 25 basis points
127.7
127.5
Increases by 25 basis points
(117.0)
(116.7)
The impacts on carrying values as shown above for the noted movement in capitalisation rates (all else held
equal) would impact the statutory net profit but not impact Distributable Earnings (unless an interest margin
increase on borrowings is triggered by the lower investment property value causing the covenant gearing ratio
to rise beyond 40%), as the unrealised movement in carrying value of investment properties is excluded from
the Distributable Earnings calculation.
In relation to Waypoint REIT’s debt facility agreements at 31 December 2024, the market capitalisation rate
expansion (holding all other variables constant) required to trigger:
•
Higher margin pricing (when the covenant gearing ratio increases beyond 40%) is 96 bps (applies to
$100.0 million of facilities and is up to 25 bps increase to the applicable margin);
•
Applicability of draw stop provisions (when the covenant gearing ratio increases beyond 45%) is 180
bps (applies to all facilities); and
•
A covenant breach (event of default) (when the covenant gearing ratio increases beyond 50%) is 264
bps (applies to all facilities).
2. (d) Commitments and contingencies
There are no material outstanding contingent assets, liabilities or commitments as at 31 December 2024.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
46
3.
Capital management
Waypoint REIT’s activities expose it to numerous external financial risks such as credit risk, liquidity risk and
market risk. This section explains how Waypoint REIT utilises its risk management framework to reduce
volatility from these external factors.
3. (a) Borrowings
Waypoint REIT
Trust Group
31 Dec
2024
31 Dec
2023
31 Dec
2024
31 Dec
2023
$ million
$ million
$ million
$ million
Non-current liabilities
Bank facilities
483.0
439.0
483.0
439.0
USPP Notes1
241.2
218.0
241.2
218.0
AMTN2
199.5
199.4
199.5
199.4
Institutional term loans
-
40.0
-
40.0
Gross unsecured borrowings
923.7
896.4
923.7
896.4
Unamortised borrowing costs
(6.3)
(3.7)
(6.3)
(3.7)
Net unsecured borrowings
917.4
892.7
917.4
892.7
Total undrawn facilities available
167.0
121.0
167.0
121.0
1 Net of fair value hedge adjustment of $45.1 million (31 December 2023: $42.2 million).
2 Net of $0.5 million unamortised discount on the issue of these instruments (31 December 2023: $0.6 million unamortised discount).
USPP Notes
The USPP Notes are further detailed below.
USD fixed
coupon
Maturity
date
Notional
value of
cross-
currency
swaps
$ million
AUD
equivalent
on
issuance
date
$ million
Foreign
exchange
and fair
value
movement
$ million
Carrying
amount
31 Dec
2024
$ million
7-year tranche
2.89%
29 Oct 27
108.9
108.9
16.5
125.4
10-year tranche
3.18%
29 Oct 30
76.8
76.8
11.7
88.5
12-year tranche
3.33%
29 Oct 32
62.9
62.9
9.5
72.4
Total exposure
248.6
248.6
37.7
286.3
Fair value hedge adjustment
-
(45.1)
(45.1)
Total
248.6
(7.4)
241.2
Cross-currency interest rate swaps
10.0
Accrued interest on swaps
1.6
Total cross-currency interest rate swaps
11.6
Net USPP Notes exposure
252.8
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
47
Maturities, interest rates and covenants
Waypoint REIT’s weighted average debt maturity as at 31 December 2024 is 4.1 years (31 December 2023:
3.4 years).
The interest rate applying to the drawn amount of the bank and institutional term loan facilities is set on a
periodic basis (i.e. one, three or six months) at the prevailing market interest rate at the commencement of the
period (Australian dollar, bank bill swap rate), plus the applicable margin. For $100.0 million of these debt
facilities, the interest margin has a rate increase/decrease applied if:
•
Debt Covenant Gearing is higher than 40% – margin increase by up to 0.25%
•
Debt Covenant Gearing is lower than 30% – margin decrease by 0.10%
The interest rate applying to the USPP Notes is fixed in US dollars as noted above, with cross-currency swaps
in place for 100% of these facilities to mitigate the foreign exchange risk and convert the USD interest rate
exposure to a floating Australian dollar interest rate exposure.
Facility agreement covenants and related restrictions include:
•
Interest cover ratio of not less than 2.0 times (actual at 31 December 2024: 3.7 times);
•
Gearing ratio of not more than 50% (actual at 31 December 2024: 34.3%); and
•
A drawdown cannot be completed or any indebtedness incurred if Gearing is or will exceed 45% via
the drawdown being completed.
Waypoint REIT was in compliance with its covenants throughout the period.
The fair values of bank and institutional term loan borrowings are not materially different from their carrying
amounts due to their short-term nature.
The fair value of the USPP Notes and AMTN are $253.8 million and $181.0 million, respectively, as at 31
December 2024 based on discounted cash flows using the current borrowing rate. They are classified as level
3 fair values in the fair value hierarchy.
Accounting policy – borrowings
Borrowings are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest rate method. Under the effective interest rate method, any transaction fees, costs, discounts
and premiums directly related to borrowings are recognised in the profit and loss over the expected life of the
borrowings. Borrowings are removed from the consolidated balance sheet when the obligation specified in the
contract is discharged, cancelled or expired.
Borrowings with maturities greater than 12 months after reporting date are classified as non-current liabilities.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
48
3. (b) Net finance costs
Waypoint REIT
Trust Group
2024
2023
2024
2023
$ million
$ million
$ million
$ million
Finance income
1.1
0.9
0.5
0.4
Finance income
1.1
0.9
0.5
0.4
Interest expense
45.6
39.5
45.6
39.5
Finance expense
45.6
39.5
45.6
39.5
Designated hedge accounting relationship
Gain / (loss) on fair value movements – fair value hedges
(0.4)
1.0
(0.4)
1.0
Derivatives not designated in hedge accounting
Loss on fair value movements
(6.0)
(10.3)
(6.0)
(10.3)
Net gain / (loss) from derivative financial instruments
(6.4)
(9.3)
(6.4)
(9.3)
Accounting policy – finance costs
Finance costs include interest expense on debt financing arrangements, settlements (including restructure and
termination costs unless significant in which case separate disclosure will apply) of interest rate derivative
financial instruments and amortisation of upfront borrowing costs incurred in connection with the arrangement
of borrowings available to Waypoint REIT.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
49
3. (c) Derivative financial instruments
Waypoint REIT has the following derivative financial instruments.
Waypoint REIT
Trust Group
31 Dec
2024
31 Dec
2023
31 Dec
2024
31 Dec
2023
$ million
$ million
$ million
$ million
Current assets
Instruments held at fair value through profit or loss
Interest rate swaps
4.9
9.1
4.9
9.1
Current assets
4.9
9.1
4.9
9.1
Non-current assets
Instruments in a designated cash flow hedge
Interest rate swaps
-
1.2
-
1.2
Instruments in a designated fair value hedge
Cross-currency swaps
4.7
-
4.7
-
Instruments held at fair value through profit or loss
Interest rate swaps
1.4
2.8
1.4
2.8
Non-current assets
6.1
4.0
6.1
4.0
Total assets
11.0
13.1
11.0
13.1
Current liabilities
Instruments held at fair value through profit or loss
Interest rate swaps
0.7
0.6
0.7
0.6
Current liabilities
0.7
0.6
0.7
0.6
Non-current liabilities
Instruments in a designated fair value hedge
Cross-currency swaps
10.0
30.6
10.0
30.6
Instruments held at fair value through profit or loss
Interest rate swaps
1.4
0.9
1.4
0.9
Non-current liabilities
11.4
31.5
11.4
31.5
Total liabilities
12.1
32.1
12.1
32.1
Net total liability position
1.1
19.0
1.1
19.0
Accounting policy – derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. Waypoint REIT designates certain derivatives as either:
•
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
•
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges).
Where applicable, Waypoint REIT documents at the inception of the hedging transaction the relationship
between hedging instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions. Waypoint REIT also documents its assessment, both at hedge
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
50
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been
and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
(i)
Fair value hedges
Cross-currency swaps are used to hedge 100% of the currency risk on US dollar-denominated debt. The
portion of the cross-currency swap that equates to the fair value hedge having a $nil fair value at inception is
designated as a fair value hedge and hedge accounting is applied.
The gain or loss relating to interest payments on derivative financial instruments hedging fixed rate borrowings
is recognised in profit or loss within finance costs. Changes in the fair value of derivative hedging instruments
and the hedged fixed rate borrowings attributable to interest rate risk are recognised within ‘Net gains / (losses)
from derivative financial instruments’. The gain or loss relating to the ineffective portion is also recognised in
profit or loss within ‘Net gains / (losses) from derivative financial instruments’.
(ii)
Cash flow hedges
Interest rate derivative financial instruments are used to partially hedge interest rate risk on floating rate debt.
Cross-currency swaps are also used to hedge 100% of the currency risk on US dollar-denominated debt. The
residual portion of the cross-currency swap is designated as a cash flow hedge and hedge accounting is
applied.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss within other income or other
expense.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects
profit or loss. The gain or loss relating to the effective portion of interest rate derivative financial instruments
hedging variable rate borrowings is recognised in profit or loss within finance costs.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit
or loss.
The following table shows balance sheet movements during the year relative to the gain / (loss) recorded in
profit and loss for both borrowings and derivatives.
$ million
USD denominated
AUD denominated
Total
USPP
Foreign
exposure
Bank
loans
Term
loans
Interest
rate
swaps
(Increase) / decrease in borrowings
(23.2)
(23.2)
(44.0)
40.0
-
(27.2)
Net drawn / (repaid)
-
-
44.0
(40.0)
-
4.0
Gain / (loss) on fair value of debt
(23.2)
(23.2)
-
-
-
(23.2)
Increase / (decrease) in derivatives
25.3
25.3
-
-
(7.4)
17.9
Cash flow hedge reserve impact
(2.5)
(2.5)
-
-
1.4
(1.1)
Gain / (loss) on fair value of derivatives
22.8
22.8
-
-
(6.0)
16.8
Net gain / (loss) in profit and loss
(0.4)
(0.4)
-
-
(6.0)
(6.4)
(iii)
Derivatives that do not qualify for hedge accounting
Hedge accounting is not adopted for certain derivative instruments. Changes in the fair value of any such
derivative instrument are recognised immediately in profit or loss and are included in net gain / (loss) from
derivative financial instruments.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
51
Key estimate – valuation of derivative financial instruments
Waypoint REIT’s financial instruments are over-the-counter derivatives for which there are no quoted market
prices. Valuation techniques (including pricing models which estimate the present value of estimated future
cash flows based on observable yield curves) are used to determine fair values.
Models use observable data, to the extent practicable. However, areas such as credit risk (both own and
counterparty), volatilities and correlations require management to make estimates. Changes in assumptions
about these factors could affect the reported fair value of financial instruments.
(i) Interest rate derivative financial instruments
At 31 December 2024, interest rate derivatives with a notional value of $979.5 million were in place. The
relevant expiry dates are as follows.
Waypoint REIT
Trust Group
31 Dec 2024
31 Dec 2023
31 Dec 2024
31 Dec 2023
$ million
$ million
$ million
$ million
Less than 1 year
246.5
110.0
246.5
110.0
1 to 2 years
395.0
246.5
395.0
246.5
2 to 3 years
163.0
295.0
163.0
295.0
3 to 4 years
75.0
163.0
75.0
163.0
4 to 5 years
100.0
-
100.0
-
5 to 6 years
-
-
-
-
6 to 7 years
-
-
-
-
7 to 8 years
-
-
-
-
8 to 9 years
-
-
-
-
979.5
814.5
979.5
814.5
At 31 December 2024, 93% of Waypoint REIT’s debt was hedged (through a combination of fixed rate debt
and interest rate swaps). The weighted maturity of fixed rate debt and hedges was 2.6 years.
(ii) Cross-currency swaps
At 31 December 2024, cross-currency swaps were in place to cover 100% of debt denominated in foreign
currency and the weighted average term was 5.0 years. Refer to Note 3. (a) for further details.
3. (d) Financial risk management
(i)
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge its obligation and cause the
other party to incur a financial loss. Waypoint REIT’s maximum credit risk exposure at balance date in relation
to each class of recognised financial asset, other than derivative financial instruments, is the gross carrying
amount of those assets as indicated in the consolidated balance sheet.
Financial assets such as cash at bank and interest rate derivative financial instruments are held across a
number of high credit quality financial institutions; therefore, Waypoint REIT does not have a concentration of
credit risk in relation to these financial assets.
Tenant concentration risk, financial standing and sector concentration risk
94.2% of Waypoint REIT’s rental income is currently received from Viva Energy. If Viva Energy’s financial
standing materially deteriorates and impacts its ability to make rental payments, Waypoint REIT’s financial
results, financial position and ability to service and/or obtain financing will be adversely impacted. Furthermore,
a material decline in the profitability of Viva Energy’s business due to the global transition to a low carbon
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
52
economy, the possible termination of Viva Energy’s right to use the Shell brand (current agreement expires in
2029), risks to the successful integration of the recent acquisition of Coles Express or On The Run or other
factors outside the control of Waypoint REIT could affect the perceived stability of the rental income of
Waypoint REIT and may affect Waypoint REIT’s security price and/or ability to obtain financing on acceptable
terms. A material decline in the profitability of Viva Energy’s business could also lead to reduced capacity or
ability for Viva Energy to pay market rents when renewal options are exercised, which could result in lower
rental receipts and/or a decline in the values of Waypoint REIT’s investment properties if Waypoint REIT is
unable to lease the property to an alternate tenant.
Collection risk
Waypoint REIT performs financial due diligence on potential new tenants and holds collateral in the form of
security deposits or bank guarantees where appropriate. Rent is due in advance on the first day of each billing
period (typically monthly), with arrears monitored and arrears notices issued on a regular basis (where
required). Waypoint REIT applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all trade and other financial assets. The loss allowances for trade
and other financial assets are based on assumptions about risk of default and expected loss rates. Waypoint
REIT uses judgement in making these assumptions, based on Waypoint REIT’s past history and existing
market conditions as well as forward-looking estimates at the end of each reporting period.
The table below shows the ageing analysis of rent receivables of Waypoint REIT.
Less than
31 days
31 to 60
days
61 to 90
days
More than
90 days
Total
$ million
$ million
$ million
$ million
$ million
31 December 2024
Rent receivables
0.1
-
-
-
0.1
Expected credit loss provision
-
-
-
-
-
31 December 2023
Rent receivables
0.1
-
-
0.1
0.2
Expected credit loss provision
-
-
-
-
-
Accounting policy – rent receivables
Other current assets include rent receivables, which are recognised initially at fair value and subsequently
measured at amortised cost, less provision for expected credit losses. They are generally due for settlement
within 30 days and are therefore all classified as current. Waypoint REIT applies the AASB 9 simplified
approach to measuring expected credit losses, which involves a lifetime expected loss allowance for all rent
receivables and other financial assets.
To measure the expected credit losses, rent receivables are grouped based on shared credit risk
characteristics, the days past due and the expected loss rates based on historical credit losses experienced.
The historical loss rates are adjusted to reflect current and forward-looking information on macro-economic
factors affecting the ability of the customers to settle the rent receivables.
Rent receivables are written off where there is no reasonable expectation of recovery. Indicators that there is
no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment
plan with Waypoint REIT and a failure to make contractual payments for a period of greater than 365 days
past due. Impairment losses on rent receivables are recorded within operating expenses within Distributable
Earnings. Subsequent recoveries of amounts previously written off are credited against the same line item.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
53
(ii) Liquidity risk
Liquidity risk is the risk that Waypoint REIT may not be able to generate sufficient cash resources to settle its
obligations in full as they fall due or can only do so on terms that are materially disadvantageous. Waypoint
REIT monitors its exposure to liquidity risk by setting budgets and projecting cash flows to help ensure there
is sufficient cash on hand as required or debt facility funding is available to meet financial liabilities as they fall
due.
Debt agreement and refinancing risk
Waypoint REIT has outstanding debt facilities. General economic and business conditions, changes to
Waypoint REIT’s credit rating as well as sector-specific environmental, sustainability and governance
considerations could impact Waypoint REIT’s ability to refinance its debt facilities when required or may result
in Waypoint REIT being subject to increased interest rate margins and covenants restricting its ability to engage
in certain types of activities or to pay distributions to securityholders. Debt may not be able to be renewed or
obtained at all.
If debt facilities are not available or are not available in adequate volume, Waypoint REIT may need to sell
assets or raise equity to repay debt. There is no guarantee that there will be willing purchasers for Waypoint
REIT’s assets or that purchasers will pay prices at or greater than the book value of these investment
properties. There is also no guarantee that Waypoint REIT will be able to raise equity. To help mitigate this
risk, debt maturities are staggered, debt is held across a diverse set of sources, lenders and geographies, and
debt is typically refinanced at least 12 months in advance of maturity.
If a third-party entity gains control of Waypoint REIT, this would constitute a review event under certain of
Waypoint REIT’s debt facility agreements, and (subject to specified negotiation and notification periods) a
repayment of some or all of Waypoint REIT’s debt facilities may be required.
The Directors regularly monitor the debt facility covenants to ensure compliance and consider the refinancing
options and timing available to Waypoint REIT.
Cash flow and fair value interest rate risk
Waypoint REIT’s cash and cash equivalents, floating rate borrowings and derivative financial instruments
expose it to a risk of change in future cash flows or the fair value of derivative financial instruments due to
changes in interest rates. Waypoint REIT uses interest rate derivative financial instruments to partially hedge
its economic exposure to changes in interest rates on variable-rate borrowings. By hedging against changes
in interest rates, Waypoint REIT has reduced exposure to changes in interest rates on its outward cash flows
so long as the counterparties to those interest rate derivative financial instruments meet their obligations to
Waypoint REIT.
The table below analyses Waypoint REIT’s financial liabilities in relevant maturity groupings based on the
remaining period as at the reporting date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows and for borrowings the values include future interest payments.
Waypoint REIT has no drawn debt facilities due to expire in the next 12 months.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
54
Waypoint REIT
31 December 2024
Less than
12 months
Between 1
and 2 years
Over
2 years
$ million
$ million
$ million
Non-derivatives
Trade and other payables
3.7
-
-
Interest payable
3.8
-
-
Provisions and other liabilities
0.7
0.7
0.6
Distribution payable
27.7
-
-
Borrowings
38.8
38.8
1,185.2
Total non-derivatives
74.7
39.5
1,185.8
Derivatives
Interest rate swaps
0.1
0.9
1.2
Gross settled (cross currency swaps – fair value hedges)
(Inflow)
(5.1)
(5.1)
(182.8)
Outflow
9.7
9.1
184.5
Total derivatives
4.7
4.9
2.9
Contractual cash flows
79.4
44.4
1,188.7
31 December 2023
Less than
12 months
Between 1
and 2 years
Over
2 years
$ million
$ million
$ million
Non-derivatives
Trade and other payables
3.7
-
-
Interest payable
4.4
-
-
Provisions and other liabilities
0.6
0.6
0.8
Distribution payable
27.5
-
-
Borrowings
39.0
331.9
667.6
Total non-derivatives
75.2
332.5
668.4
Derivatives
Interest rate swaps
0.3
0.4
0.9
Gross settled (cross currency swaps – fair value hedges)
(Inflow)
(8.0)
(8.1)
(295.6)
Outflow
17.5
16.3
320.5
Total derivatives
9.8
8.6
25.8
Contractual cash flows
85.0
341.1
694.2
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
55
Trust Group
31 December 2024
Less than
12 months
Between 1
and 2
years
Over
2 years
Non-derivatives
$ million
$ million
$ million
Trade and other payables
5.3
-
-
Interest payable
3.8
-
-
Distribution payable
27.7
-
-
Borrowings
38.8
38.8
1,185.2
Total non-derivatives
75.6
38.8
1,185.2
Derivatives
Interest rate swaps
0.1
0.9
1.2
Gross settled (cross currency swaps – fair value hedges)
(Inflow)
(5.1)
(5.1)
(182.8)
Outflow
9.7
9.1
184.5
Total derivatives
4.7
4.9
2.9
Contractual cash flows
80.3
43.7
1,188.1
31 December 2023
Less than
12 months
Between 1
and 2
years
Over
2 years
$ million
$ million
$ million
Non-derivatives
Trade and other payables
5.0
-
-
Interest payable
4.4
-
-
Distribution payable
27.5
-
-
Borrowings
39.0
331.9
667.6
Total non-derivatives
75.9
331.9
667.6
Derivatives
Interest rate swaps
0.3
0.4
0.9
Gross settled (cross currency swaps – fair value hedges)
(Inflow)
(8.0)
(8.1)
(295.6)
Outflow
17.5
16.3
320.5
Total derivatives
9.8
8.6
25.8
Contractual cash flows
85.7
340.5
693.4
(iii) Capital risk management
Waypoint REIT aims to invest to meet its investment objectives while maintaining sufficient liquidity to meet its
commitments. Waypoint REIT regularly reviews performance, including asset allocation strategies, investment
and operational management strategies, investment opportunities and risk management.
In order to maintain an appropriate capital structure, Waypoint REIT may adjust the amount of distributions
paid to securityholders, return capital to securityholders, issue new securities, sell or buy assets or reduce or
raise debt.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
56
Waypoint REIT monitors capital through the analysis of a number of financial ratios, including the Debt
Covenant Gearing ratio.
31 Dec 2024
31 Dec 2023
$ million
$ million
Total liabilities (excluding derivative financial liabilities)
965.6
963.8
Total assets (excluding derivative financial assets)
2,814.0
2,784.8
Debt Covenant Gearing ratio
34.3%
34.6%
(iv) Market risk
Interest rate risk
Waypoint REIT’s cash and cash equivalents, floating rate borrowings and derivative financial instruments
expose it to a risk of change in fair value of derivative financial instruments or future cash flows due to changes
in interest rates. Waypoint REIT uses interest rate derivative financial instruments to partially hedge its
exposure to changes in interest rates on variable-rate borrowings. By hedging against changes in interest
rates, Waypoint REIT has reduced exposure to changes in interest rates on its outward cash flows so long as
the counterparties to those interest rate derivative financial instruments meet their obligations to Waypoint
REIT.
Waypoint REIT’s exposure to interest rate risk at reporting date, including its sensitivity to changes in market
interest rates that were reasonably possible, is as follows.
31 Dec 2024
31 Dec 2023
$ million
$ million
Financial assets
Cash and cash equivalents
14.7
13.3
Derivative financial instruments (notional principal amount)
•
Interest rate derivative financial instruments
664.5
604.5
Financial liabilities
Interest-bearing liabilities – floating rate interest
(483.0)
(479.0)
Derivative financial instruments (notional principal amount)
•
Interest rate derivative financial instruments
-
60.0
•
Cross-currency swaps
(248.6)
(248.6)
Net exposure
(52.4)
(49.8)
2024
2023
$ million
$ million
Sensitivity of Distributable Earnings to movements in market
interest rates:
Increased by 25 basis points
(0.1)
(0.1)
Decreased by 25 basis points
0.1
0.1
The interest rate range for sensitivity purposes has been determined using the assumption that interest rates
changed by +/- 25 basis points from balance date rates with all other variables held constant. In determining
the impact on Distributable Earnings arising from interest rate risk, Waypoint REIT has considered historic and
expected future interest rate movements in order to determine a reasonably possible shift in assumptions.
Foreign exchange rate risk
A portion of Waypoint REIT’s debt is denominated in US dollars and as a result, Waypoint REIT is exposed to
a risk of change in fair value or future cash flows due to changes in foreign exchange rates. Waypoint REIT
economically hedges 100% of its exposure to changes in foreign exchange rates by using cross-currency
derivative financial instruments. By hedging against changes in foreign exchange rates, Waypoint REIT
eliminates its exposure to changes in foreign exchange rates on its outward cash flows so long as the
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
57
counterparties to those cross-currency derivative financial instruments meet their obligations to Waypoint
REIT.
(v) Other material business risks
Waypoint REIT’s operations are also subject to the following other material business risks.
Investment property value risk
The value of Waypoint REIT’s portfolio of investment properties may be adversely affected by a number of
factors, including factors outside the control of Waypoint REIT, including the supply of, and demand for, fuel
and convenience retail properties, general property market conditions, climate risks, the remaining lease term
of individual properties, the availability and cost of credit including sector-specific environmental, sustainability
and governance considerations, the ability to attract and implement economically viable rental arrangements,
Viva Energy’s financial condition deteriorating, occupiers not extending the term of leases, and general
economic factors such as the level of inflation and interest rates, which may adversely impact capitalisation
rates.
A key long-term consideration in the valuation of fuel and convenience properties is an increasing uptake of
vehicles fuelled by alternative energy sources due to factors including changes in consumer behaviour, pro-
emission reduction policies, reduced supply and/or higher pricing of fossil fuels.
As changes in valuations are recorded on the statutory statements of comprehensive income, any decreases
in value will have a negative impact on the statutory statements of comprehensive income and balance sheets
(including the net tangible assets per security) and in turn the market price of Waypoint REIT’s securities may
fall. Waypoint REIT’s financing facilities also contain gearing covenants, and the headroom to these gearing
covenants is affected by changes in the valuation of the portfolio.
The property portfolio is geographically diversified to mitigate the risk of localised valuation impacts and the
majority of assets are located in metropolitan areas, which typically have higher underlying land values and
alternative use potential. Active portfolio management, including the disposal of assets with heightened
vacancy or negative rental reversion risk, and Waypoint REIT’s long-term diversification strategy, also, in part,
can mitigate this risk.
Re-leasing and vacancy risk
Waypoint REIT’s property portfolio is 99.9% occupied with a weighted average lease expiry of 7.1 years. Only
6 leases (representing 0.7% of income) are due to expire before the end of 2025. The majority of the portfolio
(354 of 416 contracted leases) is subject to multiple 10-year options in favour of the tenant, with the rent from
commencement of each option period to either be agreed between the parties or set by independent market
rent determination. However, there is a risk that tenants may not exercise their option, or that the commencing
rent will be lower than passing rent and/or market rent (if agreed between the parties).
Environmental and climate change risk
Waypoint REIT depends on its tenants to perform their obligations under various environmental arrangements
in relation to the properties they lease. Waypoint REIT has an indemnity from Viva Energy in respect of certain
liability for historical environmental contamination across 354 assets acquired at the time of Waypoint REIT’s
initial public offering. Waypoint REIT also carries out environmental due diligence in relation to potential
property acquisitions. If any property in the portfolio is contaminated by a fuel tenant or its invitee during the
term of the lease, the tenant under that lease must remediate it, at their cost, to a standard consistent with
operating the site as a fuel and convenience property or similar commercial use. If the tenants were to fail to
meet their obligations under these arrangements (including due to their insolvency), Waypoint REIT may incur
significant costs to rectify contamination on its properties and also on other properties which may be
consequently impacted.
Waypoint REIT is subject to a range of regulatory regimes (including environmental or climate change-related
regulations) that cover the specific assets of Waypoint REIT and how they are operated. These regulatory
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
58
regimes are subject to ongoing review and change that may increase the cost of compliance, reporting and
maintenance of Waypoint REIT’s assets. There remains a risk that Waypoint REIT, as owner of the properties
in the portfolio, may face liability for breach by others of environmental laws and regulations.
Extreme weather and other climate change-related events have the potential to damage Waypoint REIT’s
assets and disrupt the tenants’ operations. Although 376 of Waypoint REIT’s 400 properties (89.8% of the
portfolio by value) are subject to triple-net leases where the tenant is responsible for maintenance and
insurance costs, such events may result in higher maintenance and insurance costs for Waypoint REIT’s
assets that are not subject to triple-net leases. Such events may also affect the ability to re-lease Waypoint
REIT’s investment properties in the future and the rent levels for which they can be leased, thereby affecting
future investment property valuations and rental cash flows. Insurance premiums and/or deductibles may
change, or insurance may not be able to be obtained at all.
The precise nature of these risks is uncertain as it depends on complex factors such as policy and regulatory
change, technology development, market forces, and the links between these factors and climatic conditions.
The impacts of physical and transition risks on the valuation of Waypoint REIT’s property portfolio are further
considered under ‘Investment property valuation risk’ above.
AFSL compliance risk
VER Limited, a subsidiary of Waypoint REIT Limited, holds an Australian Financial Services Licence (AFSL)
and acts as the Responsible Entity for Waypoint REIT Trust. The AFSL requires, among other matters,
minimum levels of net tangible assets, liquid assets, cash reserves and liquidity, which may restrict Waypoint
REIT in paying distributions that would breach these requirements.
The Directors review and monitor VER Limited’s balance sheet quarterly and the adequacy and ongoing
training of responsible managers annually to ensure compliance with its AFSL requirements.
Personnel risk
Loss of key personnel could potentially have an adverse impact on the management and the financial
performance of Waypoint REIT and in turn may affect the returns to securityholders. To mitigate this risk,
processes and procedures are standardised and automated to the extent practicable, remuneration structures
include components payable on a deferred basis, and employees are subject to market-standard notice
periods to ensure that Waypoint REIT has sufficient time in which to identify and hire replacement employees.
Cyber security risk
Cyber-attacks are becoming increasingly sophisticated and a material data breach, ransom attack or data loss
could have an adverse financial or reputational impact. To help mitigate this risk, Waypoint REIT uses the
services of third-party technology experts, provides regular staff training and performs pre-implementation and
annual reviews over key Software as a Service providers.
(vi) Classification and valuation of financial assets and financial liabilities
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of fair value
hierarchy. The fair value hierarchy has the following levels:
•
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
•
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
•
Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is
determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.
For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
59
a fair value measurement uses observable inputs that require significant adjustment based on unobservable
inputs, that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair
value measurement in its entirety requires judgement, considering factors specific to the asset or liability.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as possible on entity-specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in
level 3.
All derivative financial assets and liabilities were classified as level 2 instruments as at 31 December 2024.
The fair value of derivative financial assets and liabilities was calculated as the present value of the estimated
future cash flows based on observable yield curves, taking into account any material credit risk.
Waypoint REIT’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the
end of the reporting period. There were no transfers between levels during the period.
31 December 2024
Level 1
Level 2
Level 3
Total
$ million
$ million
$ million
$ million
Assets held for sale
-
-
3.8
3.8
Investment properties
-
-
2,793.5
2,793.5
Derivative financial instruments
-
(1.1)
-
(1.1)
Total
-
(1.1)
2,797.3
2,796.2
31 December 2023
Level 1
Level 2
Level 3
Total
$ million
$ million
$ million
$ million
Investment properties
-
-
2,769.3
2,769.3
Derivative financial instruments
-
(19.0)
-
(19.0)
Total
-
(19.0)
2,769.3
2,750.3
Waypoint REIT did not measure any financial assets or financial liabilities at fair value on a non-recurring basis
as at 31 December 2024.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
60
3. (e) Contributed equity
Waypoint REIT and Trust
Group
Waypoint REIT
Trust Group
2024
2023
2024
2023
2024
2023
Number of
securities
Number of
securities
‘000
‘000
$ million
$ million
$ million
$ million
Ordinary securities
671,860
671,817
1,331.7
1,331.7
1,324.6
1,324.6
Less: treasury securities
(194)
(213)
(0.4)
(0.8)
(0.4)
(0.8)
671,666
671,604
1,331.3
1,330.9
1,324.2
1,323.8
Movement in ordinary securities:
Opening balance
671,817
671,817
1,331.7
1,331.7
1,324.6
1,324.6
Vesting of equity-based remuneration
43
-
-
-
-
-
Closing balance
671,860
671,817
1,331.7
1,331.7
1,324.6
1,324.6
In March 2024, 43,188 new securities were awarded to employees upon vesting of the FY21 performance rights
under the long-term incentive (LTI) plan.
Treasury securities
Waypoint REIT and Trust
Group
Waypoint REIT
Trust Group
2024
2023
2024
2023
2024
2023
Number of
securities
Number of
securities
$ million
$ million
$ million
$ million
Movement in treasury securities:
Opening balance
212,972
175,241
0.8
0.5
0.8
0.5
Securities acquired
133,870
123,076
0.3
0.3
0.3
0.3
Securities transferred to employees
on vesting of STI plan
(153,116)
(85,345)
(0.7)
-
(0.7)
-
Closing balance
193,726
212,972
0.4
0.8
0.4
0.8
Waypoint REIT established an equity incentive plan in 2021 under which participating employees are eligible
to receive Waypoint REIT stapled securities on a deferred settlement basis under the short-term incentive
(STI) and general employee offer plans and performance rights under the long-term incentive (LTI) plan.
Waypoint REIT has formed a trust, Waypoint REIT Equity Incentive Plan Trust, to administer the equity
incentive plan. This trust is consolidated for reporting purposes as the trust is controlled by Waypoint REIT.
Stapled securities held by the trust are disclosed as treasury securities, and the acquisition value is deducted
from equity (allocated between the Company and the Trust Group based on their relative net assets).
During the year, 133,870 stapled securities were purchased on market by the Waypoint REIT Equity Incentive
Plan Trust at an average price of $2.43 per security to satisfy obligations under the STI and general employee
offer plans.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
61
3. (f) Non-controlling interests
The financial statements reflect the consolidation of Waypoint REIT. For financial reporting purposes, one
entity in the stapled group must be identified as the acquirer or parent entity of the others. The Company has
been identified as the acquirer of the Trust, resulting in the Trust being disclosed as non-controlling interests.
2024
2023
$ million
$ million
Opening balance
1,823.1
2,019.9
Profit / (loss) for the year
130.9
(79.6)
Effective portion of changes in fair value of cash flow hedges
1.1
(6.2)
Acquisition of treasury securities
(0.3)
(0.3)
Securities vested under incentive plans
0.7
-
Distributions paid or provided for
(110.7)
(110.7)
Closing balance
1,844.8
1,823.1
3. (g) Reserves
Waypoint REIT’s reserves movements were as follows.
Waypoint REIT
Trust Group
2024
2023
2024
2023
$ million
$ million
$ million
$ million
Hedge reserve
Opening hedge reserve
(0.2)
6.0
(0.2)
6.0
Net change in fair value of cash flow hedges
1.3
(6.6)
1.3
(6.6)
Reclassified to profit and loss
(0.2)
0.4
(0.2)
0.4
Closing hedge reserve
0.9
(0.2)
0.9
(0.2)
Share-based payments reserve
Opening share-based payments reserve
1.1
0.6
-
-
Share-based payment expenses*
0.6
0.5
-
-
Securities vested under incentive plans
(0.7)
-
-
-
Closing share-based payments reserve
1.0
1.1
-
-
Total closing reserves
1.9
0.9
0.9
(0.2)
* Refer to Note 3. (h)(i) below for unrounded figures.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
62
3. (h) Security-based benefits expense
Waypoint REIT established an equity incentive plan in 2021 under which participating employees are eligible
to receive Waypoint REIT stapled securities on a deferred settlement basis under the short-term incentive
(STI) and general employee offer plans and performance rights under the long-term incentive (LTI) plan.
(i)
Share-based payment expense
Share-based payment expenses recognised during the year as part of operating expenses were as follows:
Waypoint REIT
Trust Group
31 Dec 2024
31 Dec 2023
31 Dec 2024
31 Dec 2023
$
$
$
$
Deferred stapled securities1
367,044
388,721
367,044
388,721
General employee offer2
6,985
7,354
6,985
7,354
Performance rights
231,332
159,353
231,332
159,353
Total
605,361
555,428
605,361
555,428
1 Granted under Waypoint REIT’s short-term incentive scheme, subject to ongoing service conditions.
2 Cost of stapled securities bought on-market.
(ii) Deferred stapled securities – reconciliation
Reconciliation of the number of deferred stapled securities outstanding during the year is as follows.
Waypoint REIT and Trust Group
2024
2023
Number
Number
Deferred stapled securities
Opening balance
207,331
136,108
Granted during the year
130,924
156,568
Transferred to employees on vesting
(153,116)
(85,345)
Forfeited and lapsed during the year
-
-
Closing balance
185,139
207,331
(iii) General employee offer securities – reconciliation
Reconciliation of the number of general employee offer securities outstanding during the year is as follows.
Waypoint REIT and Trust Group
2024
2023
Number
Number
General employee offer securities
Opening balance
6,482
3,794
Granted during the year
2,877
2,688
Transferred to employees on vesting
(1,580)
-
Forfeited and lapsed during the year
-
-
Closing balance
7,779
6,482
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
63
(iv) Performance rights – reconciliation
Reconciliation of the number of performance rights outstanding during the year is as follows.
Waypoint REIT and Trust Group
2024
2023
Number
Number
Performance rights
Opening balance
856,745
401,583
Granted during the year
535,672
455,162
Vested during the year
(43,188)
-
Forfeited and lapsed during the year
(70,589)
-
Closing balance
1,278,640
856,745
The weighted average remaining contractual life of performance rights outstanding as at 31 December
2024 is 1.4 years.
(v) Performance rights – valuation inputs
The Monte Carlo method is utilised for valuation and accounting purposes. The inputs to assess the fair value
of the performance rights granted during 2024 are as follows.
Grant date1
15 May 2024
Stapled security price at grant date
$2.40
Fair value of right
$1.48
Expected volatility2
20%
Dividend yield
6.7%
Risk-free interest rate
3.93%
1 The grant date is determined in accordance with AASB 2 Share-based Payment. Performance rights have a nil
exercise price, vest on or around 22 March 2027 if vesting conditions are met or otherwise expire on this date and are
subject to DEPS and TSR conditions over a three-year performance period commencing on 1 January 2024.
2 Expected volatility takes into account historical market price volatility.
Accounting policy – share-based compensation expense
Deferred securities (STI plan)
Eligible employees receive a portion of their STI in deferred securities which are subject to ongoing service
conditions between one and two years. The expense is recognised over the vesting period, commencing on
the first day of the service period and ending in March in the year following the end of the service period.
Deferred securities (general employee offer)
Eligible employees receive up to $1,000 in stapled securities which vest immediately on issue but are subject
to a trade lock until the earlier of the completion of three years’ service or termination. The expense is
recognised in the period securities are acquired on market.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
64
Performance rights (LTI plan)
For market-based performance rights, the fair value at grant date is independently valued using a Monte Carlo
simulation pricing model that takes into account the exercise price, the term of the rights, impact of dilution,
stapled security price at grant date, expected price volatility of the underlying stapled security, expected
dividend yield and the risk-free interest rate for the term of the rights and market vesting conditions, but
excludes the impact of any non-market vesting conditions (i.e. Distributable Earnings growth targets). Non-
market vesting conditions are included in assumptions about the number of rights that are expected to vest.
For non-market based performance rights, the fair value at grant date is independently valued using the
binominal tree methodology. At each reporting date, Waypoint REIT revises its estimate of the number of rights
that are expected to vest. The expense is recognised over the vesting period commencing on the first day of
the service period and ending in March in the year following the end of the service period, with the annual
expense recognised taking into account the most recent estimate. Upon the vesting of stapled securities, the
balance of the stapled security-based benefits reserve relating to those stapled securities is transferred to
contributed equity, net of any directly attributable transaction costs.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
65
4.
Additional information
4. (a) Related party information
(i)
Parent entity
The Company has been assessed as the parent entity of Waypoint REIT; the securityholders’ interests in the
Trust are included in equity as non-controlling interests relating to the stapled entity.
(ii) Subsidiaries
Interests in subsidiaries are set out in Note 4. (c).
(iii) Key management personnel compensation
Below are the aggregate amounts paid or payable to Key Management Personnel (including Non-Executive
Directors).
Waypoint REIT
Trust Group
2024
2023
2024
2023
$
$
$
$
Short-term benefits
2,294,997
2,206,498
2,294,997
2,206,498
Post-retirement benefits
152,826
143,594
152,826
143,594
Other long-term benefits
43,417
29,665
43,417
29,665
Share-based payments
510,377
452,065
510,377
452,065
3,001,617
2,831,822
3,001,617
2,831,822
There were no loans made, guaranteed or secured, directly or indirectly, by Waypoint REIT to KMP or their
related parties during the year. There were no other transactions between Waypoint REIT and any KMP or
their related parties during the year.
(iv) Transactions with related parties
Management services are provided to VER Limited by Waypoint Operations Pty Limited, a subsidiary of
Waypoint REIT Limited, on a cost-recovery basis in accordance with a management agreement dated 30
September 2020, as amended from time to time. Responsible entity fees are charged in accordance with
VER Limited’s Constitution.
Waypoint REIT
Trust Group
2024
2023
2024
2023
$ ’000
$ ’000
$ ’000
$ ’000
The following transactions occurred with
related parties:
Payment of Responsible Entity fees and costs
reimbursement to VER Limited
-
-
354
310
Reimbursement of costs to Waypoint REIT
Limited
-
-
4,116
4,452
Reimbursement of costs to Waypoint Operations
Pty Limited
-
-
3,992
3,483
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
66
Waypoint REIT
Trust Group
31 Dec
2024
31 Dec
2023
31 Dec
2024
31 Dec
2023
Amounts receivable:
Receivable from Waypoint REIT Limited
-
-
3,390
3,301
Receivable from VER Custodian Pty Limited
-
-
-
165
Amounts payable:
Payable to Waypoint Operations Pty Limited
-
-
1,212
1,074
Payable to VER Limited
-
-
22
35
4. (b) Parent entity financial information
The individual financial statements for the parent entity of the Waypoint REIT, Waypoint REIT Limited, and
the parent entity of the Trust Group, Waypoint REIT Trust, are below.
Waypoint REIT Ltd
Waypoint REIT Trust
2024
2023
2024
2023
$ million
$ million
$ million
$ million
Balance sheet
Current assets
2.9
2.7
894.4
776.4
Non-current assets
11.1
11.1
1,650.2
1,650.2
Total assets
14.0
13.8
2,544.6
2,426.6
Current liabilities
5.7
5.4
948.2
833.1
Total liabilities
5.7
5.4
948.2
833.1
Shareholders’ equity
Contributed equity
7.1
7.6
1,330.9
1,330.5
Retained profits / (Accumulated losses)
1.2
0.8
265.5
263.0
Total equity
8.3
8.4
1,596.4
1,593.5
Profit / (loss) for the year after tax
0.4
(0.1)
113.2
110.7
Total comprehensive income / (loss)
for the year
0.4
(0.1)
113.2
110.7
The parent entity did not have any guarantees, contingent liabilities or commitments as at 31 December 2024
or 31 December 2023.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
67
4. (c) Investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following material
subsidiaries of the Company and the Trust.
Date of
2024
2023
Name
establishment
%
%
Controlled by the Company
VER Limited
16 December 2015
100
100
VER Custodian Pty Limited
27 May 2016
100
100
Waypoint Operations Pty Limited
5 May 2020
100
100
Waypoint REIT Equity Incentive Plan Trust
1 March 2022
100
100
Controlled by the Trust
VER Trust
10 July 2016
100
100
VER Finco Pty Limited
10 June 2016
100
100
All companies and trusts are incorporated or established in Australia.
4. (d) Remuneration of auditors
During the period the following fees were paid or payable for services provided by the auditor of the parent
entity and its related practices.
2024
2023
$
$
Auditors of Waypoint REIT – PricewaterhouseCoopers
Australia and related network firms
Audit and review of financial statements
Group
233,693
205,301
Trust
16,692
16,137
Total audit and review of financial reports
250,385
221,438
Other statutory assurance services
23,426
20,866
Other assurance services
53,947
45,325
Total audit and assurance services
327,758
287,629
Other services
Tax compliance services
301,672
136,360
Tax advisory services
-
-
Regulatory administration services
-
1,797
Total other non-audit services
301,672
138,157
Total remuneration of auditors
629,430
425,785
4. (e) Subsequent events
No matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may
significantly affect:
•
the operations of Waypoint REIT in future financial years;
•
the results of those operations in future financial years; or
•
the state of affairs of Waypoint REIT in future financial years.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
68
4. (f) Summary of material accounting policies
Significant accounting policies adopted in the preparation of these consolidated financial statements to the
extent they have not already been disclosed in the other notes are listed below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
(i) Basis of preparation
These general-purpose financial statements have been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards (AASB) and interpretations issued by the Australian
Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board. Waypoint REIT and Waypoint REIT Trust Group are for-profit
entities for the purpose of preparing the financial statements.
The financial report has been prepared on an accruals and historical cost basis except for investment
properties, derivative financial instruments and share-based payments which are measured at fair value. Cost
is based on the fair value of consideration given in exchange for assets.
The consolidated financial statements are prepared and presented in Australian dollars (the presentation
currency).
Unless otherwise stated, the accounting policies adopted in the preparation of the financial report are
consistent with those of the previous financial year.
(ii)
Rounding of amounts
Waypoint REIT is an entity of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the
‘rounding off’ of amounts in the financial report. Amounts in the financial report have been rounded to the
nearest hundred thousand dollars in accordance with that instrument, unless otherwise indicated.
(iii)
Comparative information
Where necessary, comparative information has been adjusted to conform to changes in presentation in the
current period.
(iv)
Net current asset deficiency position
At 31 December 2024, Waypoint REIT had a net current asset deficiency of $15.9 million and the Trust Group
had a net current asset deficiency of $26.0 million. Waypoint REIT and the Trust Group use cash at bank to
pay for distributions and expenses (including property purchases), drawing down on revolving debt facilities
when required. Revolving debt facilities are then repaid when there is excess cash available. Waypoint REIT
and the Trust Group have $167.0 million of undrawn debt facilities at 31 December 2024, which can be drawn
upon to fund Waypoint REIT’s cash flow requirements provided that Waypoint REIT and the Trust Group meet
their debt covenants and further borrowing will not cause gearing to exceed 45%.
After taking into account all available information, the Directors have concluded that there are reasonable
grounds to believe:
•
Waypoint REIT and the Trust Group will be able to pay their debts as and when they fall due; and
•
The basis of preparation of the financial report on a going concern basis is appropriate.
(v)
Principles of consolidation
Stapled entities
Waypoint REIT is a stapled group consisting of the Company and the Trust and their wholly owned entities.
The Trust indirectly owns the investment property portfolio through its 100% ownership of the trusts which own
the investment properties and receive rent under operating leases. The Company directly owns all of the
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
69
shares in the Responsible Entity. Each stapled security consists of one share in the Company and one unit in
the Trust. The shares and the units were stapled at allotment in accordance with the constitutions of the
Company and the Trust and the Stapling Deed and trade together on the ASX. The securities in Waypoint
REIT cannot be traded separately and can only be traded as a stapled security.
As permitted by Class Order 13/1050, issued by ASIC, this financial report is a combined financial report that
presents the financial statements and accompanying notes of both Waypoint REIT and the Trust Group as at
and for the year ended 31 December 2024.
AASB 3 Business Combinations requires one of the stapled entities in a stapling structure to be identified as
the parent entity for the purpose of preparing consolidated financial reports. In accordance with this
requirement, the Company has been identified as the parent entity in relation to the stapling with the Trust
under Waypoint REIT.
The consolidated financial statements of Waypoint REIT incorporate the assets and liabilities of the entities
controlled by the Company during the period, including those deemed to be controlled by the Trust, by
identifying the Company as the parent of the Waypoint REIT, and the results of those controlled entities for the
period then ended. The effect of all transactions between entities in Waypoint REIT are eliminated in full.
Non-controlling interests in the results and equity are shown separately in the Consolidated Statement of
Comprehensive Income, Consolidated Balance Sheet and Consolidated Statement of Changes in Equity
respectively. Non-controlling interests are those interests in the Trust which are not held directly or indirectly
by the Company.
Subsidiaries
Subsidiaries are all entities (including trusts) over which Waypoint REIT has control. Waypoint REIT controls
an entity when Waypoint REIT is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to Waypoint REIT. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by Waypoint REIT.
Inter-entity transactions, balances and unrealised gains on transactions between Waypoint REIT entities are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by Waypoint REIT.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated
Statement of Comprehensive Income, Consolidated Balance Sheet and Consolidated Statement of Changes
in Equity respectively.
(vi)
Presentation of members’ interests in the Trust
As the Company has been assessed as the parent entity of Waypoint REIT, the securityholders’ interests in
the Trust are included in equity as non-controlling interests relating to the stapled entity. Securityholders’
interests in the Trust are not presented as attributable to owners of the parent, reflecting the fact that they are
not owned by the Company, but by the securityholders of the stapled group.
(vii) Revenue
Interest income is recognised as it accrues using the effective interest rate method. Interest income is included
in finance income in the Consolidated Statement of Profit or Loss.
All income is stated net of goods and services tax.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
70
(viii) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related service,
are recognised in respect of employees’ service up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
Other long-term employee benefit obligations
The liabilities for long service leave that are not expected to be settled wholly within 12 months after the end
of the period in which the employees render the related service are recognised as the expected future
payments to be made in respect of services provided by employees up to the end of the reporting period.
Consideration is given to expected future wages and salary levels, experience of employee departures, periods
of service and market interest rates.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when
the actual settlement is expected to occur.
(ix)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, unless the GST incurred is not
recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other current assets and trade and other
payables in the Consolidated Balance Sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the taxation authority are presented as operating
cash flows.
(x)
Leases
Waypoint REIT leases office premises. Waypoint REIT assesses at contract inception whether a contract is,
or contains, a lease. This is, if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Waypoint REIT applies a single recognition and measurement
approach for all leases. Waypoint REIT recognises lease liabilities to make lease payments and right of use
assets representing the right to use the underlying assets.
Right of use assets
Waypoint REIT recognises right of use assets at the commencement date of the lease (that is, the date the
underlying asset is available for use). Right of use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right
of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right of use assets
are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the
assets.
Lease liabilities
At the commencement date of the lease, Waypoint REIT recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments less
any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
71
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by Waypoint REIT and payments of penalties for
terminating the lease, if the lease term reflects Waypoint REIT exercising the option to terminate.
In calculating the present value of lease payments, Waypoint REIT uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the lease payments (for example, changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change in
the assessment of an option to purchase the underlying asset.
(xi)
Financial instruments
Classification
Waypoint REIT’s financial instruments are classified at fair value through profit or loss. They comprise:
• Financial instruments held for trading – derivative financial instruments such as interest rate swaps
are included under this classification; and
• Financial instruments designated at fair value through profit or loss upon initial recognition – these
include financial assets that are not held for trading purposes and which may be sold.
Financial assets designated at fair value through profit or loss at inception are those that are managed and
their performance evaluated on a fair value basis in accordance with Waypoint REIT’s documented investment
strategy. Waypoint REIT’s policy is for the Responsible Entity to evaluate the information about these financial
instruments on a fair value basis together with other related financial information.
Recognition / derecognition
Financial assets and financial liabilities are recognised on the date Waypoint REIT becomes party to the
contractual agreement (trade date) and it recognises changes in fair value of the financial assets or financial
liabilities from this date.
Investments are derecognised when the right to receive cash flows from the investments has expired or
Waypoint REIT has transferred substantially all risks and rewards of ownership.
Measurement
Financial assets and liabilities held at fair value through profit or loss
At initial recognition, financial assets are recognised at fair value. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in profit or loss.
The fair value of financial assets and liabilities traded in active markets is subsequently based on their quoted
market prices at the end of the reporting period without any deduction for estimated future selling costs. The
quoted market price used for financial assets held by Waypoint REIT is the current bid price and the quoted
market price for financial liabilities is the current asking price.
The fair value of financial assets and liabilities that are not traded in an active market is determined using
valuation techniques. Accordingly, there may be a difference between the fair value at initial recognition and
amounts determined using a valuation technique. If such a difference exists, Waypoint REIT recognises the
difference in profit or loss to reflect a change in factors, including time that market participants would consider
in setting a price.
Further detail on how the fair values of financial instruments are determined is disclosed in Note 3. (c).
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
72
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the Consolidated Balance Sheet when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis, or realise the asset and settle the liability simultaneously.
(xii) Provisions
A provision is recognised when Waypoint REIT has a legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated. Provisions are measured at the present value of Waypoint REIT’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used to determine
the present value reflects current market assessments of the time value of money and the risks specific to the
liability.
(xiii) New accounting standards and interpretations not yet adopted
Australia’s new climate-related financial disclosure regime (the Treasury Laws Amendment Bill 2024) was
passed by Parliament on 9 September 2024. The Australian Accounting Standards Board ('AASB') has
subsequently approved the following Australian Sustainability Reporting Standards ('ASRS') on 20 September
2024:
•
AASB S1 – General Requirements for Disclosure of Sustainability-related Financial Information is a
voluntary standard covering sustainability-related financial disclosures; and
•
AASB S2 – Climate-related Disclosures is a mandatory standard that requires an entity to disclose
information about climate-related risks and opportunities that could reasonably be expected to affect
the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term.
Waypoint REIT expects its first year of mandatory reporting to be 2028 (Group 3). Waypoint REIT is focused
on progressing its preparedness for mandatory climate-related disclosures in Australia.
There are no other issued standards that are not yet effective and that are expected to have a material impact
on Waypoint REIT in the current or future reporting periods and on foreseeable future transactions.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
73
Consolidated entity disclosure statement
For each consolidated subsidiary that is part of the Waypoint REIT consolidated entity at 31 December 2024,
Waypoint REIT discloses the following in accordance with the Corporations Act 2001 (Cth):
Name of entity
Type of entity
Trustee
% of share
capital /
ownership
Country of
incorporation /
formation and tax
residency
Waypoint REIT Limited
Body corporate
-
100
Australia
VER Limited
Body corporate
Trustee
100
Australia
VER Custodian Pty Limited
Body corporate
-
100
Australia
VER Finco Pty Limited
Body corporate
-
100
Australia
Waypoint Operations Pty Limited
Body corporate
-
100
Australia
Waypoint REIT Equity Incentive Plan Trust
Trust
-
100
Australia
Waypoint REIT Trust
Trust
-
100
Australia
VER Trust
Trust
-
100
Australia
66 McNulty Street Miles Queensland Trust
Trust
-
100
Australia
290 Sand Road Longwarry Victoria Trust
Trust
-
100
Australia
73-75 Chrystal Street Roma Queensland Trust
Trust
-
100
Australia
6776 Cunningham Highway Aratula Queensland Trust
Trust
-
100
Australia
341 Sand Road Longwarry Victoria Trust
Trust
-
100
Australia
127 Youngman Street Kingaroy Queensland Trust
Trust
-
100
Australia
555-557 Albany Highway Albany Western Australia Trust
Trust
-
100
Australia
47 Eric Road Old Noarlunga South Australia Trust
Trust
-
100
Australia
199-205 Charters Towers Road Townsville Queensland Trust
Trust
-
100
Australia
80 Alfred Street Warragul Victoria Trust
Trust
-
100
Australia
7-11 Burnett Highway Biloela Queensland Trust
Trust
-
100
Australia
7-21 Shakespeare Street Traralgon Victoria Trust
Trust
-
100
Australia
233 Myrtle Street Myrtleford Victoria Trust
Trust
-
100
Australia
6-8 Mackay Avenue Griffith New South Wales Trust
Trust
-
100
Australia
5 Princes Highway Moruya New South Wales Trust
Trust
-
100
Australia
120-124 Goldring Street Richmond Queensland Trust
Trust
-
100
Australia
190 Ogilvie Avenue Echuca Victoria Trust
Trust
-
100
Australia
10805 Brand Highway Cataby Western Australia Trust
Trust
-
100
Australia
55 Broad Street Sarina Queensland Trust
Trust
-
100
Australia
112 Shute Harbour Road Cannonvale Queensland Trust
Trust
-
100
Australia
Ranford Road Canning Vale Western Australia Trust
Trust
-
100
Australia
1110 Abernethy Road High Wycombe Western Australia Trust
Trust
-
100
Australia
Crn Great Eastern Highway & Bulong Avenue Redcliffe Western
Australia Trust
Trust
-
100
Australia
825 Mickleham Road Greenvale Victoria Trust
Trust
-
100
Australia
24 Wills Road Emerald Queensland Trust
Trust
-
100
Australia
18316 Warrego Highway Dalby West Queensland Trust
Trust
-
100
Australia
Lot 50 Mandurah Road Meadow Springs Western Australia Trust
Trust
-
100
Australia
62 Flinders Parade North Lakes Queensland Trust
Trust
-
100
Australia
416 Princes Highway Colac West Victoria Trust
Trust
-
100
Australia
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations
Act 2001 and includes information for each entity that was part of the consolidated entity as at the end of the
financial year in accordance with AASB 10 Consolidated Financial Statements.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
74
Determination of tax residency
Section 295 (3A)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income
Tax Assessment Act 1997. The determination of tax residency involves judgement as there are different
interpretations that could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied current legislation and judicial precedent,
including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5.
Partnerships and trusts
Australian tax law does not contain corresponding residency tests for the partnerships and trusts disclosed
above, and these entities are taxed on a flow-through basis.
WAYPOINT REIT
31 DECEMBER 2024 FINANCIAL REPORT
75
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Waypoint REIT Limited, and the Directors of the Responsible Entity of
Waypoint REIT Trust, VER Limited (collectively, the referred to as the Directors):
a.
the financial statements and notes set out on pages 31 to 72 are in accordance with the
Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii) giving a true and fair view of Waypoint REIT’s and Waypoint REIT Trust Group’s financial
positions at 31 December 2024 and of their performance for the year ended on that date; and
b.
there are reasonable grounds to believe that Waypoint REIT and Waypoint REIT Trust Group will
be able to pay their debts as and when they become due and payable.
c.
the consolidated entity disclosure statement on page 73 is true and correct.
2. Note 4.(g)(i) to the financial statements confirms that the financial statements also comply with the
International Financial Reporting Standards as issued by the International Accounting Standards Board.
3. The Directors have been given declarations by the Chief Executive Officer and the Chief Financial Officer
as required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Georgina Lynch
Chair
27 February 2025
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, BARANGAROO, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, PARRAMATTA NSW 2150, PO Box 1155 PARRAMATTA NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the stapled securityholders of Waypoint REIT and the unitholders of Waypoint REIT Trust
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Waypoint REIT, being the consolidated stapled entity which
comprises Waypoint REIT Limited and its controlled entities, and Waypoint REIT Trust and its
controlled entities (together the “Trust Group” or the “Trust”) is in accordance with the Corporations Act
2001, including:
(a)
giving a true and fair view of the financial position of Waypoint REIT and the financial position of
the Trust as at 31 December 2024 and of their financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report of Waypoint REIT and the Trust (collectively referred to as the “financial report”)
comprises:
•
the consolidated balance sheets as at 31 December 2024
•
the consolidated statements of comprehensive income for the year then ended
•
the consolidated statements of changes in equity for the year then ended
•
the consolidated statements of cash flows for the year then ended
•
the notes to the financial statements, including material accounting policy information and other
explanatory information
•
the consolidated entity disclosure statement for Waypoint REIT as at 31 December 2024
•
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of Waypoint REIT and the Trust in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
& Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach for the Group
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of Waypoint REIT and the Trust, its accounting processes and controls and the industry in
which they operate.
Group Audit Scope
•
Our audit focused on where Waypoint REIT and the Trust made subjective judgements; for
example, significant accounting estimates involving assumptions and inherently uncertain future
events.
•
In establishing the overall approach to the audit of Waypoint REIT and the Trust, we determined
the type of work that needed to be performed by us, as the group auditor.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period and were determined separately for Waypoint
REIT and the Trust. The key audit matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. Further, any commentary on the outcomes of a particular audit procedure is made in
that context. We communicated the key audit matters to the Audit and Risk Management Committee.
Key audit matter
How our audit addressed the key audit matter
Valuation of Investment Properties
(Refer to note 2(a))
Waypoint REIT and the Trust
Waypoint REIT and the Trust’s investment property
portfolio comprised fuel and convenience retail
properties in Australia (“Investment Properties”) at
31 December 2024.
Investment Properties were valued at fair value as
at balance sheet date primarily using a combination
of the income capitalisation and the direct
comparison methods.
To assess the valuation of Investment
Properties we performed the following
procedures, amongst others:
•
We developed an understanding of Waypoint
REIT and the Trust’s processes and controls
for determining the valuation of Investment
Property;
•
We assessed the scope, competence and
objectivity of the valuation expert engaged by
Waypoint REIT and the Trust to provide
external valuations at reporting date;
Key audit matter
How our audit addressed the key audit matter
The following inputs and assumptions, amongst
others, were key in establishing the fair value of
Investment Properties:
● annual market rent
● capitalisation rates
● lease terms
At each balance sheet date, the directors determine
the fair value of the Investment Properties in
accordance with Waypoint REIT and the Trust’s
valuation policy as described in note 2(a).
This was a key audit matter because of the:
● relative size of the Investment Property portfolio
to net assets and related valuation movements, and
● the inherent subjectivity of the significant
assumptions that underpin the valuations.
•
We met with the valuation expert used by
Waypoint REIT and the Trust to develop an
understanding of their processes,
judgements and observations;
•
We compared the valuation methodology
adopted by Waypoint REIT and the Trust
with commonly accepted valuation
approaches used in the real estate industry
for investment properties;
•
We agreed the rental income used in a
sample of Investment Property valuations to
relevant lease agreements and assessed the
appropriateness of a sample of income
related assumptions;
•
We assessed the appropriateness of
adopted capitalisation rates for a sample of
Investment Properties with reference to
market data and comparable transactions,
where possible;
•
We tested the mathematical accuracy of a
sample of the Investment Property
valuations;
•
We agreed the fair value of each Investment
Property to the valuation determined by the
valuation expert engaged by Waypoint REIT
and the Trust or the Directors, as applicable;
•
We assessed the reasonableness of the
disclosures made in the Waypoint REIT and
Trust’s financial report against the
requirements of Australian Accounting
Standards.
Other information
The directors of Waypoint REIT and VER limited, the Responsible Entity of Waypoint REIT Trust
(collectively referred to as the “directors”) are responsible for the other information. The other
information comprises the information included in the financial report for the year ended 31 December
2024, but does not include the financial report and our auditor’s report thereon. Prior to the date of this
auditor's report, the other information we obtained included the Directors' Report. We expect the
remaining other information to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon through our opinion on the financial
report. We have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the directors for the financial report
The directors are responsible for the preparation of the financial report in accordance with Australian
Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of Waypoint
REIT and the Trust to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
Waypoint REIT or the Trust or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at: https://auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This
description forms part of our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 31
December 2024.
In our opinion, the remuneration report of Waypoint REIT for the year ended 31 December 2024
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion
on the remuneration report, based on our audit conducted in accordance with Australian Auditing
Standards.
PricewaterhouseCoopers
JDP Wills
Sydney
Partner
27 February 2025