Centuria Office Reit · ASX:COF
Centuria Office Reit — Centuria Metropolitan REIT — Investor Presentation (July 2017)
34 slides from Centuria Office Reit's investor presentation, Jul 13, 2017
Slide 1: Acquisitions, $90 Million Capital Raising and Market Update
Centuria Metropolitan REIT ACQUISITIONS, $90 MILLION CAPITAL RAISING AND MARKET UPDATE 13 JULY 2017 Hatch Building, Perth, WA 13 JULY 2017 PAGE 1
Slide 2: Section One: Executive Summary
Section One: Executive Summary 13 JULY 2017 PAGE 2 60 Marcus Clarke St, Canberra, ACT
Slide 3: Acquisitions and Capital Raising Overview
ACQUISITIONS AND CAPITAL RAISING OVERVIEW • Centuria Metropolitan REIT (CMA or the REIT) has entered into agreements to acquire the following three properties from separate vendors for a total of $150 million (on completion) with an initial funding obligation of $95 million 1 (the Acquisitions): – H
Slide 4: Strategic Rationale
STRATEGIC RATIONALE Properties are complementary to CMA's existing portfolio and investment strategy Long leases to quality tenants with an average WALE of 6.5 years Acquired on an attractive average capitalisation rate of 7.1% with fixed rental reviews of between 3.25 – 3.75% p.a. improving t
Slide 5: Section Two: Market Update
Section Two: Market Update 13 JULY 2017 PAGE 5 203 Pacific Highway, St Leonards, NSW
Slide 6: CMA Milestones and Achievements
CMA MILESTONES AND ACHIEVEMENTS CMA continues to actively manage its portfolio and has achieved a number of key milestones Implementation of the merger of CMA with Centuria Urban REIT, increasing the number and value of investment properties along with increasing the REIT's market capitalisation by
Slide 7: Market Update – Leasing
MARKET UPDATE – LEASING Significant leasing success throughout FY17 • 41 leasing transactions across 20,321 sqm representing 15.5% of portfolio NLA1 – 22 new leases across 9,979 sqm – 19 renewals across 10,342 sqm • 14,885 sqm of FY17 expiries and vacancies have been de-risked (representing 81.2% of
Slide 8: Market Update – Valuations
MARKET UPDATE – VALUATIONS1 30 June 2017 revaluations increase property values by $8.1 million (1.3% over prior valuations) • This includes valuation increases at: – 9 Help Street, Chatswood, NSW: increasing from $62.2 million to $65.0 million (4.5% increase) due to improved market rent and a tighte
Slide 9: Section Three: The Transaction
Section Three: The Transaction 13 JULY 2017 PAGE 9 Hatch Building, Perth, WA
Slide 10: Transaction Overview
TRANSACTION OVERVIEW The Acquisitions are complementary to CMA’s existing portfolio and investment strategy • CMA has entered into agreements to acquire three new properties from separate vendors for an initial investment of $95 million1 and an additional $55 million final payment on completion of c
Slide 11: Portfolio Impact
PORTFOLIO IMPACT The Acquisitions increase CMA's portfolio occupancy, WALE and geographic diversity Geographic diversification4 Prior to Post acquisitions1 acquisitions2 VIC WA 10% 12% ACT QLD Number of properties 15 18 QLD 12% 34% VIC 43% 16% Portfolio valuation $610.0m $760.0m NSW ACT 27% SA 10% S
Slide 12: Tenant Diversification
TENANT DIVERSIFICATION The Acquisitions will introduce two S&P/ASX201 companies (IAG and Wesfarmers) and WA State Government as tenants for the REIT Top 10 tenants % of income Insurance Australia Group 8.4% Target Australia (Wesfarmers) 6.3% Austar Entertainment 6.0% Bluescope Steel 5.0% Hatch & Ass
Slide 13: Improved Trading Liquidity and Increased Market Capitalisation
IMPROVED TRADING LIQUIDITY AND INCREASED MARKET CAPITALISATION Post the Equity Raising CMA will have a market capitalisation of approximately $520m1 and is a strong candidate for S&P/ASX 300 A-REIT index inclusion Market Capitalisation of S&P/ASX 300 A-REIT Index Constituents < A$1.5bn (A$m)1 775 65
Slide 14: Property Details: Hatch Building, Perth, WA
PROPERTY DETAILS: HATCH BUILDING, PERTH, WA • Multi-level, A-Grade Perth city fringe office building with a net lettable area of 11,042 sqm and 240 carparks • Warehouse which allows for secure drop off and parking for service vehicles • 100% leased to two institutional quality tenants, WA Police (54
Slide 15: Property Details: 42–46 Colin Street, West Perth, WA
PROPERTY DETAILS: 42 – 46 COLIN STREET, WEST PERTH, WA • Modern, A-grade commercial office building close to the WA parliamentary precinct • 8,439 sqm of NLA over five levels with major tenant Insurance Australia Group (IAG:ASX), an S&P/ASX20 company occupying four levels on recently reset market le
Slide 16: Property Details: Target Head Office, Williams Landing, VIC
PROPERTY DETAILS: TARGET HEAD OFFICE, WILLIAMS LANDING, VIC • Multi-level, A-Grade suburban office building with net lettable area of 12,919 sqm • The land has been acquired for an initial payment of $2.9 million with a $55.3 million final payment on completion of construction, expected 1QCY19 • Loc
Slide 17: Further Acquisition Opportunities
FURTHER ACQUISITION OPPORTUNITIES Continued focus on quality metropolitan acquisition opportunities • CMA has entered exclusive due diligence to acquire a development site for the construction of an A-Grade, 10,000sqm commercial office building in South West Sydney, NSW • The property is 50% pre-com
Slide 18: Section Four: Equity Raising
Section Four: Equity Raising 13 JULY 2017 PAGE 18 576 Swan Street, Richmond, VIC
Slide 19: Equity Raising Overview
EQUITY RAISING OVERVIEW $90 million underwritten Equity Raising at an Issue Price of $2.35 per security • The Equity Raising comprises a: – $25 million institutional placement; and – 1 for 6.4 accelerated pro-rata non-renounceable entitlement offer to raise approximately $65 million Sources of funds
Slide 20: Details of the Equity Raising
DETAILS OF THE EQUITY RAISING Equity Raising Details • An Equity Raising of 38.5 million securities to raise approximately $90 million • 1 for 6.4 accelerated non-renounceable entitlement offer to raise approximately $65 million • Record date is 17 July 2016 • Entitlement Offer will comprise an acce
Slide 21: Indicative Timetable
INDICATIVE TIMETABLE Key event Date1 Trading halt, Institutional Placement, Institutional Entitlement Offer and Bookbuild opens Thursday, 13 July 2017 Institutional Placement, Institutional Entitlement Offer and Bookbuild closes Thursday, 13 July 2017 Trading of securities recommences on ASX on an '
Slide 22: Appendix A: Pro Forma Balance Sheet
Appendix A: Pro Forma Balance Sheet 13 JULY 2017 PAGE 22 9 Help Street, Chatswood, NSW
Slide 23: Pro Forma Balance Sheet
PRO FORMA BALANCE SHEET 31 December 2016 Acquisitions and Pro forma 31 ($m) pro forma for the Revaluations2 equity raising December 2016 merger with CUA1 Assets Cash and cash equivalents 10.9 10.9 Investment properties 601.9 8.1 91.8 701.7 Other assets 1.3 2.9 4.2 Total assets 614.1 8.1 94.7 716.8 L
Slide 24: Appendix B: Property Portfolio
Appendix B: Property Portfolio 13 JULY 2017 PAGE 24 60 Marcus Clarke St, Canberra, ACT
Slide 25: Property Portfolio
PROPERTY PORTFOLIO Property Ownership Type Valuation ($m)1 Cap Rate NLA (sqm) WALE2 Occupancy2 9 Help Street, Chatswood, NSW 100% Office 65.0 6.50% 9,394 3.0 100.0% 203 Pacific Highway St Leonards, NSW 50% Office 47.5 7.00% 11,734 3.5 100.0% 3 Carlingford Road, Epping, NSW 100% Office 27.0 6.25% 4,7
Slide 26: Lease Expiry Profile
LEASE EXPIRY PROFILE1 Significant improvement in lease expiry profile with CMA's portfolio WALE increasing to 4.5 years (from 4.0 years) 49% 42% 25% 20% 15% 13% 12% 10% 5% 4% 3% 2% Vacant FY18 FY19 FY20 FY21 FY22+ Pre Transaction Post Transaction 1. Weighted by net lettable area. 13 JULY 2017 PAGE 2
Slide 27: Appendix C: Key Risks
Appendix C: Key Risks 13 JULY 2017 PAGE 27 203 Pacific Highway, St Leonards, NSW
Slide 28: Key Risks
KEY RISKS General economic conditions CMA’s financial performance, and the market price of CMA Securities, is influenced by a variety of general economic and business conditions, including the level of inflation, interest rates, exchange rates, commodity prices, ability to access funding, oversupply
Slide 29: Key Risks
KEY RISKS Liquidity of property investments The nature of investments in property assets may make it difficult to generate liquidity in the short term if there is a need to respond to changes in economic or other conditions. Asset values Asset values are affected by many factors including prevailing
Slide 30: Key Risks
KEY RISKS Environmental A-REITs are exposed to a range of environmental risks, which may result in project delays or additional expenditure. In such situations, they may be required to undertake remedial works and potentially be exposed to third party liability claims and/or environmental liabilitie
Slide 31: Appendix D: Offer Jurisdictions
Appendix D: Offer Jurisdictions 13 JULY 2017 PAGE 31 9 Help Street, Chatswood, NSW
Slide 32: Offer Jurisdictions
OFFER JURISDICTIONS International Offer Restrictions This document does not constitute an offer of new securities ("New Securities") of Centuria in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Securities may not be off
Slide 33: Disclaimer
DISCLAIMER This presentation has been prepared by Centuria Property Funds Limited (ABN 11 086 553 639) (CPFL or Responsible Entity) as responsible entity of Centuria Metropolitan REIT (ARSN 124 364 718) (CMA or REIT). All information and statistics in this presentation are current as at 31 December
Slide 34: Disclaimer
DISCLAIMER An investment in CMA units is subject to investment and other known and unknown risks, some of which are beyond the control of CPFL. CPFL does not guarantee any particular rate of return on the performance of CMA nor does it guarantee any particular tax treatment. Prospective investors sh
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