Waypoint REIT’s FY25: $200M Profit Surge and 12% Rent Hike from Viva Energy

Financial Performance Overview

Waypoint REIT Limited, Australia’s largest listed REIT focused exclusively on fuel and convenience retail properties, released its FY25 financial results showing a largely stable operational performance. Distributable Earnings, a key non-statutory profit measure, edged down marginally by 0.4% to $110.3 million compared to FY24. However, distributable earnings per security increased by 1.0% to 16.64 cents, reflecting a successful on-market buyback of 19.1 million securities during the year.

Statutory net profit after tax experienced a robust 52.2% increase to $200.1 million, primarily driven by a substantial $102.2 million net gain from investment property revaluations, up from $28.4 million in the prior year. This uplift underscores the strength of Waypoint’s property portfolio amid prevailing market conditions.

Portfolio and Tenant Highlights

Waypoint REIT’s portfolio remains highly occupied at 99.9%, with a weighted average lease expiry (WALE) of 6.4 years, slightly down from 7.1 years in FY24. The portfolio comprises 394 properties valued at $2.85 billion, with 155 independently valued during the year.

A significant highlight was the formal exercise by Viva Energy Australia, the REIT’s major tenant accounting for 94.1% of rental income, of its ten-year lease options on 21 sites. This action extends lease terms to August 2036 and increases aggregate rental income from these leases by 12.3%, effective from the option commencement date. This lease extension provides enhanced income security and underpins the portfolio’s long-term value.

Capital Management and Refinancing

Waypoint REIT maintained a conservative capital structure with gearing at 32.7%, comfortably within its 30-40% target range. The REIT refinanced and extended $409 million of debt facilities, including extending terms on several bilateral and syndicated facilities and establishing a new $70 million bilateral facility. Notably, the REIT repaid US$78 million of US Private Placement notes ahead of their scheduled maturity, replacing them with lower-cost, longer-term funding.

Interest rate risk management remains a priority, with 90% of drawn debt hedged and a weighted average maturity of fixed-rate debt and hedges at 2.5 years. The REIT also completed a $50 million on-market buyback at an average price representing a 9.7% discount to net tangible assets per security, reflecting prudent capital allocation and confidence in intrinsic value.

Executive Remuneration and Governance

The FY25 remuneration report details adjustments to incentive structures aimed at better aligning executive rewards with securityholder interests. Short-term incentives now balance financial and non-financial KPIs, while long-term incentives emphasize relative total shareholder return (TSR) performance and strategic outcomes. The Board awarded 84% of maximum STI to executive key management personnel, reflecting solid delivery against targets including distributable earnings growth and capital management achievements.

Outlook and Risks

Looking ahead, Waypoint REIT projects distributable earnings per security growth of 3% to 17.14 cents in FY26, assuming stable operating conditions. The REIT continues to monitor key risks such as tenant concentration, given Viva Energy’s dominant rental contribution, market rent fluctuations, and environmental and climate-related factors. Active portfolio management and strategic lease renewals remain central to mitigating these risks.

Audited by PricewaterhouseCoopers with an unqualified opinion, the FY25 results reinforce Waypoint REIT’s position as a resilient player in the fuel and convenience retail property sector, balancing steady income streams with disciplined capital and risk management.