Vicinity Centres : Trust half year financial report

For personal use only

Vicinity Centres Trust

ARSN 104 931 928 comprising

Vicinity Centres Trust and its Controlled Entities

Responsible Entity of Vicinity Centres Trust

Vicinity Centres RE Ltd

ABN 88 149 781 322

Vicinity Centres Trust

Financial Report for the half year ended 31 December 2021

Vicinity Centres Trust | Financial report for the half year ended 31 December 2021

Contents

onlyDirectors' Report

Auditor's Independence Declaration

Statement of Comprehensive Income

Balance Sheet

Statement of Changes in Equity

Cash Flow Statement

About This Report

Operations
use	1.	Segment information
2.	Revenue and income
3.	Investment properties
4.	Equity accounted investments
Capital structure and financial risk management
personalFor	5.	Interest bearing liabilities and derivatives
	6.	Contributed equity
	7.	Distributions
Working capital
	8.	Trade receivables and other assets
Other disclosures
	9.	Operating cash flow reconciliation
	10.	Other accounting matters
	11.	Events occurring after the end of the reporting period

Directors' Declaration

Independent Auditor's Report

3

6

7

8

9

10

11

13

13

13

15

21

22

22

25

26

27

27

30

30

30

30

31

32

2

Vicinity Centres Trust | Financial report for the half year ended 31 December 2021

Directors' Report

onlyThe Directors of Vicinity Centres RE Ltd, the responsible entity (RE) of Vicinity Centres Trust (the Trust or VCT), present the financial report of Vicinity Centres Trust and its controlled entities (VCT Group or the Trust Group) for the half year ended 31 December 2021.

The Trust is stapled to Vicinity Limited to form the stapled Group, Vicinity Centres (the Vicinity Centres Group), which is traded collectively on the Australian Securities Exchange (ASX) under the code 'VCX'. Accordingly, the financial report for Vicinity Centres Trust should be read in conjunction with the financial report of Vicinity Centres Group available at vicinity.com.au.

Directors

use
The following persons were members of the Vicinity Centres RE Ltd Board from 1 July 2021 and up to the date of this report
unless otherwise stated:
(i)	Chairman
	Trevor Gerber (Independent)
(ii)	Non-executive Directors
personal	Clive Appleton
David Thurin AM
	Janette Kendall (Independent)
	Karen Penrose (Independent)
	Peter Kahan (Independent)
	Tim Hammon (Independent)
(iii)	Executive Director
	Grant Kelley (CEO and Managing Director)

Company Secretaries

Carolyn Reynolds

Rohan Abeyewardene

Principal activities

ForThe principal activity of the Trust Group during the period continued to be investment in a portfolio of retail investment properties. The principal place of business of the Trust and the RE of the Trust is Level 4, Chadstone Tower One, 1341 Dandenong Road, Chadstone, Victoria 3148.

Distributions

On 16 February 2022, the Directors declared a distribution for the half year ended 31 December 2021 of 4.7 cents per VCX stapled security, payable wholly by the Trust. This equates to total interim distributions of $214.0 million.

The interim distribution will be paid on 8 March 2022. The record date for determining entitlement to the interim distribution is 5pm, 22 February 2022.

3

The extended lockdowns with mandated closure of non-essentialretail in New South Wales (NSW) and Victoria (VIC) from July up to late October 2021. These locations account for approximately 68% of the Group's portfolio by value.

Central business district (CBD) assets continued to experience reduced foot traffic as many CBD-basedoffice workers continued to work from home, day-tripperscontinued to shop locally, and Australia's state and international borders remained closed for the majority of the period.

The Trust Group continued to provide rental assistance in the form of rental waivers, payment deferrals and other temporary modifications to the underlying leases agreements to eligible SME tenants and other tenants in categories and locations that continue to experience financial hardship and distress. These negotiations were undertaken in accordance with the general principles of the Australian Government's SME Commercial Code of Conduct and Leasing Principles During COVID-19 or with the applicable regulations in Victoria and NSW (collectively referred to as the 'SME Codes').

Ongoing uncertainty in communities within which the Trust Group operate in due to the rapid increase and high number of Omicron cases since December 2021.

The Trust Group was eligible for land tax relief for calendar years 2020 and 2021 in accordance to the respective state government land tax relief measures.

Vicinity Centres Trust | Financial report for the half year ended 31 December 2021

Significant changes in state of affairs

COVID-19 pandemic

The Trust Group's performance continued to be adversely impacted by the COVID-19 pandemic ('COVID-19' or 'the pandemic')

related disruptions during the six-month period. Key factors impacting VCT's financial and operational performance included:

only•

•

•

use•

•

The duration and full extent of the pandemic and its impacts on the economy, consumers and investment markets remain personaluncertain. As a result, certain significant judgements, estimates and assumptions have been made in determining the carrying value of certain assets and liabilities at 31 December 2021. These are further discussed in the 'About this Report' section of the

financial report.

Further information on the impact of the pandemic and the Vicinity Centres Group's response can be found in the 'Review of results and operations' in the Vicinity Centres Group 31 December 2021 half year financial report available at vicinity.com.au.

Review of results and operations

The review of the results and operations for the Vicinity Centres Group including further information on strategy, operations, and risks is contained in the Directors' Report in the Vicinity Centres Group financial report which is available at vicinity.com.au. The following sections relate to the results and operations of the Trust Group only and therefore do not include items and amounts relating to Vicinity Limited.

(a) Financial performance

The statutory net profit after tax of the Trust Group for the half year ended 31 December 2021 was $639.3 million, an increase of $1,023.4 million on the prior period (31 December 2020: net loss after tax of $384.1 million). This result mainly comprised:

• Higher non-cash property revaluation increment on directly owned properties of $359.5 million (31 December 2020: decrement of $508.6 million);

For• Net profits1 contributed from investment properties of $333.3 million (31 December 2020: $311.0 million);

• Share of profits from equity accounted investments of $15.5 million, driven by net profits and property revaluation increment (31 December 2020: loss of $31.6 million); and

• Net mark to market gains on derivatives $81.2 million (31 December 2020: loss of $187.7 million); partly offset by

• Net foreign exchange losses of $25.6 million (31 December 2020: gain of $118.2 million); and

• Borrowing costs of $92.2 million (31 December 2020: $67.7 million).

Cash flows from operating activities for the half year were $237.3 million (31 December 2020: $293.3 million).

1 Property ownership revenue and income less direct property expenses and allowance for expected credit losses.

4

Vicinity Centres Trust | Financial report for the half year ended 31 December 2021

Review of results and operations (continued)

(b)	Financial position
At 31 December 2021 the Trust Group's net assets were $10,653.0 million, up $639.3 million from $10,013.7 million at 30 June
only
2021. This increase was due to the aforementioned net profits contributed from investment properties and property
revaluation increments recorded on directly owned investment properties and equity accounted investments.
(c)	Capital management

During the half year, net drawdowns of $573.0 million of bank debt were made throughout the period to fund the acquisition of Harbour Town and capital expenditure requirements.

Apart from the activities noted above, no other significant financing activities occurred during the six months to 31 December 2021.

useAuditor's independence declaration

A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 (Cth) is included immediately following the Directors' Report.

Events occurring after the end of the reporting period

COVID-19 pandemic

personalThe duration, frequency and extent of restrictions and the financial, social, and public health impacts of the COVID-19 pandemic remain uncertain and therefore the Trust Group cannot quantify the impact that COVID-19 may have on future periods. The

financial report includes disclosures on the potential impact of the prevailing uncertainty on the reported amounts of relevant revenues, expenses, assets, and liabilities for the half year ended 31 December 2021 and future periods where relevant.

Extension of SME Codes

The New South Wales and Victorian state governments announced the extension of the SME Codes on 14 and 15 January 2022 respectively. The extensions are for a period of two months and will expire by 15 March 2022. The Trust Group will continue to provide rental assistance in the form of rental waivers, payment deferrals and other temporary modifications to the underlying lease agreements to eligible SME tenants and other tenants that operate in categories and locations that continue to experience financial hardship and distress.

Other than the matters described above, no other matters have arisen since the end of the period which have significantly affected, or may significantly affect, the operations of the Trust Group, the results of those operations, or the state of affairs of the Trust Group in future financial periods.

Rounding of amounts

The Trust Group is an entity of a kind referred to in Legislative Instrument 2016/191, issued by the Australian Securities and ForInvestments Commission (ASIC), relating to the "rounding off" of amounts in the Directors' Report. Accordingly, amounts in the Directors' Report have been rounded off to the nearest tenth of a million dollars ($m) in accordance with that Legislative

Instrument, unless stated otherwise.

Signed in accordance with a resolution of Directors.

Trevor Gerber

Chairman

16 February 2022

5