QIC Property Fund

Overview Key strengths Key risks Geographically diverse and high-quality portfolio of retail assets primarily across Australia's east coast. Diminishing credit metric headroom, with gearing at the top of its target range (30%-40%). Disciplined management of development and enhancement projects consistent with the fund's growth strategy and financial policies. Elevated borrowing costs from higher interest rates to affect funds from operations. Long-term investment mandate that supports income stability and growth. Soft consumer sentiment because of inflationary and cost-of-living pressures. Management links with Queensland Investment Corp. The fund benefits from its sizable and diversified retail portfolio, which is strategically located in growth corridors with defined catchment areas. The shopping centers are prominent in their respective markets and have the potential to increase

...QIC Property Fund's (QPF) business risk profile is underpinned by high-quality and geographically diverse retail assets, which support its earnings resilience. The fund benefits from its sizable and diversified retail portfolio, which is strategically located in growth corridors with defined catchment areas. The shopping centers are prominent in their respective markets and have the potential to increase market share through targeted development, in our view. QPF's A$7.1 billion (its share of interests) portfolio as of March 31, 2024, was weighted toward super-regional (59.9%) and major regional shopping centers (28.1%). Capital expenditure (capex) commitments are elevated due to new leasing deals and ongoing mixed-use developments. About one-third of QPF's leases will expire over the 12 months to March 2025. The fund will increase capex spending, given refitting for new or renewed leases and its mixed-use development pipeline. QPF has completed 940 rental deals over the 12 months to March...

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