Waypoint REIT share price gets a boost from financial guidance upgrade

Investors took note of Waypoint's financial guidance upgrade today, driving the Waypoint REIT share price higher.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published August 14, 2020 2:30 pm AEST

The Waypoint REIT Ltd (ASX: WPR) share price is up by 3.98% today following a market update. The company has upgraded its 2020 financial year guidance for distributable earnings growth over the 2019 financial year from 3–3.75% to 4–4.25%.

Waypoint reported its US Private Placement (USPP) has been priced with US$178 million (AU$245 million) of notes to be issued, split across 7, 10- and 12-year tranches with a weighted average maturity of 9.2 years.

Waypoint will use the USPP proceeds to pay down a combination of term and revolving credit facilities. The transaction is expected to be funded on 29 October 2020

Hadyn Stephens, CEO of VER Manager (which manages the Waypoint REIT), said:

With the USPP transaction now priced, we are very pleased to be able to upgrade our FY20 guidance. We look forward to sharing further details on our half year performance and outlook at our half year results presentation on 20 August 2020.

Kerri Leech, CFO of VER Manager, added:

Following Moody's assignment of a Baa1 credit rating in December 2019, we are pleased to have executed on our strategy of extending our debt maturity to more closely align to the weighted average lease expiry of our portfolio and diversifying our debt platform, particularly in the current economic environment.

Green dollar sign rocket on the back of a man. — Image source: Getty Images

What does Waypoint REIT do?

Waypoint REIT (formerly Viva Energy REIT Ltd) is Australia's largest listed real estate investment trust (REIT) with a market cap of $2 billion. It owns a portfolio of service stations around Australia, with more than 400 Shell-branded service station properties around Australia. Waypoint REIT's properties are typically operated by Coles Group Ltd (ASX: COL) as Coles Express service stations.

Buying shares in a company like Waypoint REIT provides investors with exposure to commercial property without the complications that come with direct property ownership.

Waypoint REIT shares first listed in 2016. Since then it has grown to sit comfortably within the S&P/ASX 200 Index (ASX: XJO).

How has the Waypoint REIT share price performed?

With a portfolio of service stations, the Waypoint REIT share price took a hard hit from the lockdowns and state border closings put in place to eliminate the spread of COVID-19.

From 6 March to 19 June, Waypoint shares fell 28%. The share price has since gained 29%. Year-to-date, the Waypoint REIT share price is almost back to where it started, down just 1.8% despite the huge hit to travel and petrol use.

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