October 11

Waypoint REIT Limited (WPR): A marriage of convenience

Waypoint REIT (WPR, formerly Viva Energy REIT) is an investment in service station property. Waypoint REIT owns a portfolio of 402 service stations and convenience retail properties located in all Australian states and mainland territories. Waypoint’s interim result was in line with our expectations, while the company re-affirmed full year guidance. Its short and medium strategy is largely dependent on the ACCC’s findings on the VEA and OTR transaction. While distributable earnings for the half of 8.3cps were down 4% against the previous corresponding period, that was expected with rising debt costs and asset sales. For the current half, debt costs should settle and no further transactions or capital management initiatives are envisaged.

That said, management indicated it is receptive to opportunities for further non-core asset sales, with WPR still targeting to sell around 5% of its portfolio over the medium term. WPR will explore further redevelopment opportunities in its core portfolio. We retain an Accumulate recommendation on WPR, which trades at a discount to its not tangible asset value and offers a full-year distribution yield of 6.5%.


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