Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — 360 Capital Industrial Fund — Investor Presentation (July 2014)
47 slides from Centuria Industrial Reit's investor presentation, Jul 15, 2014
Slide 1: 360 Capital Industrial Fund (ASX:TIX) Property Acquisition and Capital Raising
2 Woolworths Way, Warnervale , NSW (Woolworths) 21 Jay Street, Townsville, QLD (Woolworths) 360 Capital Industrial Fund (ASX:TIX) Property Acquisition and Capital Raising of up to $61.0m Investor Presentation | 15 July 2014 NOT FOR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by 360 Capital Investment Management Limited ABN 38 133 363 185, AFSL 340304 (‘Responsible Entity’) in its capacity as responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252 (‘Fund’). The opportunities to participate in the Institutional
Slide 3: Disclaimer
Disclaimer Forward Statements are by their nature subject to significant known and unknown risk, uncertainties and contingencies and other factors which are outside the control of 360 Capital Group, that may cause actual future results to differ materially from those expressed or implied in such sta
Slide 4: Table of Contents
Table of Contents Section 1 Transaction Overview 2 Portfolio Information 3 Capital Raising 4 Financial Information 5 Key Risks Appendix 54 Sawmill Circuit, Hume, ACT (Grace Group) A Fund Background B 360 Capital Group - Manager C Board and Management Team D Glossary 9-13 Caribou Drive, Direk, SA (Ki
Slide 5: Section 1: Transaction Overview
Section 1: Transaction Overview 22 Hawkins Crescent, Bundamba, QLD (Australian Pharmaceutical Industries) 5
Slide 6: Transaction Overview
Transaction Overview • 360 Capital Industrial Fund (the ‘Fund’) has entered into property acquisition agreements1 to acquire two properties for a combined purchase price of $79.4m2 (the ‘Property Acquisitions’) representing a blended passing yield of 8.3% • The Property Acquisitions will be partiall
Slide 7: Offer Highlights
Offer Highlights P Quality assets with long-term Woolworths tenancies (WALE1 of 7.5 years) P Increased liquidity with pro forma market capitalisation increasing to $259m2 P Portfolio WALE1 increased from 5.3 years to 5.7 years P Forecast FY15 DPU up 3.2% to 19.2 cents equating to a 8.9% yield3 P Red
Slide 8: Key Offer Metrics
Key Offer Metrics Bookbuild Range $2.16 to $2.17 per New Unit Total Offer amount $61.0m Institutional Placement $33.7m 1 for 7.25 Entitlement Offer and General Offer $27.3m Forecast FY15 EPU / operating earnings yield1 20.2 cents / 9.4% Forecast FY15 DPU / distribution yield1 19.2 cents / 8.9% Capit
Slide 9: Property Acquisitions
Property Acquisitions Wyong Regional Distribution Centre, Warnervale NSW • Modern logistics facility completed in 2006 • First generation lease to Woolworths Limited with following lease terms; – 15 year lease expiring 29 July 2021 – Fixed annual rent increases of 2.5% – Net lease with minimal capex
Slide 10: Property Acquisitions (cont'd)
Property Acquisitions (cont’d) Townsville Distribution Centre, Townsville QLD • Modern logistics facility completed in 2005 • First generation lease to Woolworths Limited with following lease terms; – 15 year lease expiring 27 June 2025 – Fixed annual rent increases of 2.5% – Net lease with minimal
Slide 11: Transaction Rationale
Transaction Rationale • Increases portfolio WALE1 from 5.3 years to 5.7 years on a pro forma basis • Consistent rental growth from 99% of the Fund’s leases with annual fixed or CPI reviews and no mid- term market reviews (Woolworths leases structured with fixed 2.5% annual rental increases) Improved
Slide 12: Section 2: Portfolio Information
Section 2: Portfolio Information 12 310 Spearwood Avenue, Bibra Lake, Western Australia (AWH)
Slide 13: Portfolio Metrics & Composition
Portfolio Metrics & Composition Portfolio Metrics Pre Transaction Post Transaction 1 2 3 Number of assets 18 20 Portfolio value ($m) 358.8 438.2 NLA (sqm) 334,760 394,019 4 5 6 WACR (by value) 8.5% 8.5% Occupancy (by area) 96.1% 96.7% 7 8 9 WALE (by income) 5.3 5.7 Geographic diversification1 Proper
Slide 14: Geographic Location
Geographic Location Well diversified $438.2m portfolio Queensland (18% by income) • 1 Ashburn Road, Bundamba (The Reject Shop) • 22 Hawkins Crescent, Bundamba (Australian Pharmaceutical Industries) • 21 Jay Street, Mount St John Townsville (Woolworths) New South Wales (35% by income) • 60 Marple Ave
Slide 15: Portfolio overview
Portfolio overview Last WACR NLA WALE Property State Valuation Valued Occupancy ($m) (date) (%) (sqm) (%) (years) 1 2 Woolworths Way, Warnervale NSW 69.8 May 2014 8.25 54,533 100.0 7.1 2 Lot 69 Jay Street, Mount St John, Townsville QLD 9.6 May 2014 8.75 4,726 100.0 10.5 3 457 Waterloo Road, Chullora
Slide 16: Tenant Composition and Lease Expiry Profile
Tenant Composition and Lease Expiry Profile Portfolio lease expiry profile (by income) • Portfolio WALE1 of 5.7 years 39.8% 40% • Predictable future cashflow and distributions – 99% of leases have annual fixed or CPI reviews 30% – no mid-term market reviews 20% 18.2% • Tenant retention has been high
Slide 17: Tenant Base – Top Tenants
Tenant Base – Top 20 Tenants 17
Slide 18: Section 3: Capital Raising
Section 3: Capital Raising 1 Ashburn Road, Bundamba Queensland (The Reject Shop) 18
Slide 19: Sources and Applications
Sources and Applications • Property Acquisitions to be funded via a combination of equity (Institutional Placement, Entitlement Offer and General Offer) and debt utilising the Fund’s existing debt facility: • Fully underwritten Institutional Placement of $33.7m1 • Fully underwritten 1 for 7.25 Entit
Slide 20: Offer Summary
Offer Summary Offer metrics • Fully underwritten Capital Raising for $61.0m1 (28.2m New Units to be issued1) comprising: Bookbuild Range $2.16 - $2.17 – an Institutional Placement to raise $33.7m1; FY15 forecast operating earnings yield1 9.4% and FY15 forecast distribution yield1 8.9% – Entitlement
Slide 21: Entitlement Offer Details
Entitlement Offer Details • 1 for 7.25 Entitlement Offer resulting in the issuance of 12.6m1 New Units to Eligible Unitholders, raising $27.3m. The Entitlement Offer is comprised of the following components: Entitlement • an Institutional Entitlement Offer to existing Institutional Investors; and Of
Slide 22: Pricing Comparison
Pricing Comparison • Based on the low-end of the Bookbuild range of $2.161 per Unit, forecast FY15 operating earnings yields and distribution yields are higher than trading peers in the A-REIT sector FY15 earnings yield2 FY15 distribution yield2 Average 7.8% (excl. TIX) Average 7.6% (excl. TIX) 9.1%
Slide 23: Indicative Capital Raising Timetable
Indicative Capital Raising Timetable Trading halt Tuesday 15 July 2014 Institutional Placement and Institutional Entitlement Offer opens Tuesday 15 July 2014 Institutional Placement and Institutional Entitlement Offer closes Wednesday 16 July 2014 Trading recommences (on an ex entitlement basis) Thu
Slide 24: Section 4: Financial Information
Section 4: Financial Information 457 Waterloo Road, Chullora, New South Wales (Elite Logistics) 24
Slide 25: Pro-forma Balance Sheet
Pro-forma Balance Sheet Pro forma Transaction Pro forma Actual Post balance date 31 Dec 2013 ($m) adjustments 31 Dec 2013 31-Dec-13 adjustments (post balance date (post Transaction) adjustments) Cash 7.9 (4.1)1 3.8 3.8 Receivables 1.5 1.5 1.5 Investment properties 333.5 25.32 358.8 79.45 438.2 Total
Slide 26: Forecast Income Statement
Forecast Income Statement Full year to • Forecast FY15 operating earnings yield of 9.4% 30 Jun 2015 on the Offer Price1 ($m) • Forecast FY15 distribution yield of 8.9% on the Gross property rental income 43.1 Offer Price1 Outgoings (7.6) • FY15 payout ratio of 95% Other 0.6 • increase on prior year
Slide 27: Sustainable Capital Structure
Sustainable Capital Structure Debt facility summary Capital management policy • Existing NAB debt facility will be extended to 31 Gearing2 July 2017 • 40.9% post raising • Facility limit to increase to $230.0m • Target gearing range of 35%-50% • Facility drawn to $183.6m1 post transaction • Signific
Slide 28: Section 5: Key risks
Section 5: Key risks 69 Studley Court, Derrimut, Victoria (Deliver Australia) 28
Slide 29: Key Risks
Key Risks • As with all investments, an investment in the Fund will be subject to risks, many of which are outside the control of the Responsible Entity. If they eventuate, these risks may adversely affect the value and the return of an investment in the Fund • It is the Responsible Entity’s current
Slide 30: Key Risks (cont.)
Key Risks (cont.) • Property values: The ongoing value of a Property is influenced by changes in property market conditions including supply, demand, capitalisation rates and rentals. There is no guarantee that a Property will achieve a capital gain on its sale or that the value of the Property will
Slide 31: Key Risks (cont.)
Key Risks (cont.) • Trading price of Units: The market price of Units will fluctuate due to numerous factors including general movements in interest rates, the Australian and international general investment markets, economic conditions, global geo-political events and hostilities, investor percepti
Slide 32: Key Risks (cont.)
Key Risks (cont.) • Breach of debt covenants: As at the date of this Presentation, the Fund is in compliance with all covenants under its debt facilities. The Fund’s debt covenants have income and asset value tests and falling asset values, declining rental income or other unforeseen circumstances m
Slide 33: Key Risks (cont.)
Key Risks (cont.) • Distributions may vary: The ability of the Fund to pay quarterly distributions is dependent upon the Fund having sufficient cash resources and distributable income. Whilst the level of income derived by the Fund from year to year is expected to be relatively certain, default in p
Slide 34: Key Risks (cont.)
Key Risks (cont.) • Economy and market conditions: There is the risk that changes in economic and market conditions may affect asset returns and values and may decrease the Unit price. The overall performance of Units may be affected by changing economic or property market conditions. These may incl
Slide 35: Appendices
Appendices A Fund Background B 360 Capital Group - Manager C Board and Management Team D Glossary 35
Slide 36: Appendix A Fund Background
Appendix A Fund Background 36
Slide 37: Capital Industrial Fund background
360 Capital Industrial Fund background • 360 Capital Industrial Fund owns a quality $438.2m1 portfolio of industrial assets well diversified across mainland Australia • Fund focused on providing investors with reliable income through quarterly distributions and potential capital gains via demonstrat
Slide 38: Appendix B 360 Capital Group - Manager
Appendix B 360 Capital Group - Manager 38
Slide 39: 360 Capital Group – Fund Manager
360 Capital Group – Fund Manager Overview • An ASX-listed (ASX:TGP) real estate investment and funds management group with a market capitalisation of approximately $1951m. • Co-invests in its managed funds for alignment of interests with fund investors • Takes a disciplined and responsible approach
Slide 40: 360 Capital Group – creating value for investors
360 Capital Group – creating value for investors 360 Capital listed IPO’s and subsequent raisings structured and priced to continue to outperform 360 Capital Group (TGP.ASX)1,2 360 Capital Office Fund (TOF.ASX)1,2 $0.80 $2.10 2.25 $0.70 $2.05 2.13 $2.00 2.00 $0.60 $1.95 1.88 $0.50 $1.90 1.75 08-Jun-
Slide 41: Appendix C Board and Management Team
Appendix C Board and Management Team 41
Slide 42: 360 Capital Investment Management Limited Board of Directors
360 Capital Investment Management Limited Board of Directors David van • David has over 25 years’ experience in the real estate funds management industry Aanholt • David’s previous roles have included Chief Executive Officer (Asia Pacific) of the Goodman Group (previously known as Macquarie Goodman)
Slide 43: 360 Capital Group - key management
360 Capital Group - key management Ben James • Ben is responsible for all fund investment activities within 360 Capital • Ben has over 19 years experience in real estate funds management Chief • Ben joined 360 Capital in September 2010 Investment • Prior to joining the group, Ben was the Trust Manag
Slide 44: 360 Capital Group - key management (cont.)
360 Capital Group - key management (cont.) • Glenn is responsible for all 360 Capital’s financial management activities Glenn • Glenn joined 360 capital in December 2013 from Mirvac where he has spent the last 11 years, most recently as Financial Controller Butterworth of the Mirvac's Investment Div
Slide 45: Appendix D Glossary
360 /~ Grou Appendix B Glossary 45
Slide 46: Glossary
Glossary Term Definition A-REIT Australian real estate investment trust $ or cents Australian currency 360 Capital 360 Capital Group Limited. Ultimate owner of Fund’s responsible entity The Responsible Entity and its related bodies corporate and other affiliates and their respective 360 Capital Grou
Slide 47: Glossary (cont.)
Glossary (cont.) Term Definition Offer/Capital Raising Comprises the Institutional Placement, Entitlement Offer and General Offer Offer Price To be determined via a bookbuild under a Bookbuild Range Net profit after tax, excluding specific non-cash adjustments, such as fair value adjustments of inve
360 Capital Industrial Fund — Investor Presentation (July 2014) on 6ix