Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — 360 Capital Industrial Fund — H1 FY2016 Earnings Presentation
38 slides from Centuria Industrial Reit's earnings presentation, Feb 24, 2016
Slide 1: 2016 Half Year Results Presentation
2016 HALF YEAR RESULTS PRESENTATION ASX: TIX 24 FEBRUARY 2016 360 Capital Investment Management Limited (ACN 133 363 185) as responsible entity for the 360 Capital Industrial Fund (ARSN 099 680 252) 1
Slide 2: Table of contents
Table of contents 2016 HALF YEAR RESULTS PRESENTATION APPENDICES 1 At a glance A Balance sheet 2 Key achievements B Profit and loss 3 Earnings & distributions C Operating earnings reconciliation 4 Assets & liabilities D Portfolio metrics 5 Strategy E Property details 6 Portfolio management 7 Capital
Slide 3: At a glance
1 At a glance $867.0m 4.9 years 99.4% 37 PORTFOLIO VALUE WALE OCCUPANCY ASSETS 11.7 cpu 10.8 cpu 43.4% $517m HY FY16 HY FY16 GEARING MARKET OPERATING DISTRIBUTIONS CAPITALISTION EARNINGS 3
Slide 4: Key achievements
2 Key achievements • Statutory Earnings of $1.6m FINANCIAL • Operating Earnings of $24.9m or 11.7cpu PERFORMANCE • Distributions of $21.6m or 10.75cpu and in line with guidance • NTA per Unit of $2.20 • Compulsory acquisition of ANI completed 1 December 2015 ANI • 16 additional properties integrated
Slide 5: Key achievements (cont.)
2 Key achievements (cont.) • $140.4m of new equity raised via scrip component of ANI transaction CAPITAL • ANI debt fully repaid - NAB and Bankwest facility increased to $420.0m with existing hedges MANAGEMENT assigned to TIX • Gearing to be reduced through potential asset sales and anticipated pote
Slide 6: Earnings & distributions
3 Earnings & distributions • Decrease in Statutory Net Profit primarily driven by one-off 31 DEC 15 31 DEC 14 CHANGE ($000) ($000) transaction costs and other costs associated with the ANI transaction: OPERATING INCOME2 39,101 21,419 • ANI transaction costs1 of $8.1m Property expenses 5,086 3,806 •
Slide 7: Assets & liabilities
4 Assets & liabilities 31 DEC 15 30 JUN 15 CHANGE • Total assets up 41.7% to $882.8m primarily driven by the ($000) ($000) ANI acquisition. Cash 5,743 6,329 • Approximately $30.0m1 of available debt capacity Receivables 2,433 4,164 • LVR is 44.5% and gearing of 43.4% and trending down Property held
Slide 8: Strategy
5 Strategy TIX’s focus is on the consolidation of the ANI acquisition and delivering on our strategy STRATEGY FOCUS • Address near term expires in FY16 & FY17 LEASING • Progress on over 66,948sqm of ANI portfolio - certainty of cashflow • Improved leasing likely to deliver positive revaluations • Ta
Slide 9: Portfolio management
6 Portfolio management PORTFOLIO LEASING • Occupancy of 99.4% with vacancy limited to 4,485sqm across two buildings – Noble Park VIC the immediate focus • WALE of 4.9 years • Like-for-like net income growth of 4.9% • 30,706sqm leased in the period representing 4.3% of the portfolio by income: AREA T
Slide 10: Portfolio management (cont): lease expiry and top tenants
6 Portfolio management (cont) LEASE EXPIRY PROFILE (by income) TOP 10 TENANTS (by income) Woolworths 8.35% 40% 37.2% Greens 6.38% 35% Orora 5.45% 30% Refer to table on the following slide for % of gross income status update on major pending expiries Visy Industries 5.33% 25% AWH 4.64% 20% 18.5% 17.1
Slide 11: Portfolio management (cont): major lease expiries
6 Portfolio management (cont) FY16 & FY17 - MAJOR LEASE EXPIRIES PROPERTY TENANT AREA (sqm) INCOME (%) EXPIRY STATUS Marketing through CBRE & Savills. Interest from large scale users 79-94 Newton Road, Wetherill Park NSW Australia Post 18,434 3.5 Jun-16 with sitting office sub-tenant keen to remain
Slide 12: Portfolio management (cont): asset sales and valuations
6 Portfolio management (cont) ASSET SALES • Disposed of Oakleigh South VIC asset for $10.5m in December 2015 just prior to lease expiry • Approx $50.0m targeted to be sold in FY17 with assets to be identified after leasing activities are complete • Asset disposals provide the Fund an opportunity to
Slide 13: Capital management
7 Capital management • ANI debt has been fully repaid (Bankwest increased facility DEBT FACILITIES limit to accommodate ANI debt with existing hedges FACILITY assigned to TIX) DRAWN1 BANK AMOUNT EXPIRY ($m) ($m) • Overall facility limit adjusted to $420.0m incorporating a NAB 230.0 222.0 Dec-17 new
Slide 14: Peer comparison
8 Peer comparison Compelling investment proposition FY16 FORECAST EARNINGS YIELD FY16 FORECAST DISTRIBUTION YIELD Average 7.5% (excl. TIX) Average 7.1% (excl. TIX) 8.9% 9.0% 9.3% 8.5% 8.2% 8.6% 8.1% 7.2% 7.3% 7.7% 6.8% 6.6% 6.3% 6.0% 6.1% 6.0% ARF FET GOZ GMF IDR CMA TOF TIX ARF FET GOZ IDR GMF CMA
Slide 15: Management team
9 Management team MANAGEMENT CHANGES • Fund Manager, Ben Butler, to resign in his role as Fund Manager • Very active 3 years for TIX • Significant Fund growth through acquisitions and takeover • James Storey to become Fund Manager of TIX in addition to TOF • Many common investors • Clear sector focu
Slide 16: Key focus and guidance
10 Key focus and guidance KEY FOCUS • Integrating the new portfolio and delivering on FY16 and FY17 earnings • Reduce gearing below 40% in short to medium term towards 35% • Maximise leasing opportunities to secure cash flow and capitalise on expected market transactions to provide NTA growth • Oppo
Slide 17: Questions
QUESTIONS 310 Spearwood Avenue, Bibre Lake, WA (AWH) 17
Slide 18: Appendices
APPENDICES 52-74 Quarry Road, Erskine Park NSW (Dutt Transport) 18
Slide 19: Balance sheet
A Balance sheet 31 DEC 15 30 JUN 15 BALANCE SHEET 1 ($’000) ($’000) ASSETS Cash and cash equivalents 5,743 6,329 Trade and other receivables 2,433 4,164 Properties held for sale - 10,500 Investment properties 867,000 533,400 Goodwill 7,613 - ANI investment - 68,807 TOTAL ASSETS 882,789 623,200 LIABI
Slide 20: Profit and loss
B Profit and loss 31 DEC 15 31 DEC 14 STATUTORY PROFIT & LOSS STATEMENT 1 ($’000) ($’000) Rental income 32,682 21,584 Finance revenue 87 64 Net gain on fair value of investment properties - 6,916 TOTAL INCOME 32,769 28,564 Investment property expenses 5,086 3,807 Management fees 2,612 1,528 Other ex
Slide 21: Operating earnings reconciliation
C Operating earnings reconciliation 31 DEC 15 31 DEC 14 OPERATING EARNINGS RECONCILIATION 1 ($’000) ($’000) STATUTORY NET PROFIT 1,621 14,743 Net loss/(gain) on fair value of investment properties 724 (6,916) Net loss on fair value of derivative financial instruments 1,864 2,999 Amortisation of borr
Slide 22: Portfolio metrics
D Portfolio metrics PROPERTY ADDRESS STATE VALUE ($m) LAST VALUED CAP % AREA (sqm) OCCUPANCY% WALE(yrs) 1 2 Woolworths Way, Warnervale NSW 76.5 Mar-15 7.50 54,533 100 5.6 2 457 Waterloo Road, Chullora NSW 24.3 Mar-15 7.00 16,051 100 12.2 3 37-51 Scrivener Street, Warwick Farm NSW 24.7 Mar-15 8.50 27
Slide 23: Portfolio metrics
D Portfolio metrics PROPERTY ADDRESS STATE VALUE ($m) LAST VALUED CAP % AREA (sqm) OCCUPANCY% WALE(yrs) 22 9 Fellowes Court, Tullamarine VIC 3.4 Dec-14 8.00 4,072 100 1.0 23 324-332 Frankston-Dandenong Road, Dandenong South VIC 26.5 Jun-15 7.75 28,316 100 3.2 24 49 Temple Drive, Thomastown VIC 13.0
Slide 24: Portfolio metrics
D Portfolio metrics TOP 10 TENANTS GEOGRAPHIC DIVERSIFICATION (by value) SA ACT RENT TOTAL WA 1% 2% COMPANY EXPIRY ($m) (%) 10% Woolworths 6.8 8.3 Jul 21, Jun 25 Greens 5.2 6.4 Nov 28, Sep 29 NSW Jun 16, Jun 17, 44% Orora 4.4 5.5 QLD Jun 28 19% Visy Industries 4.3 5.3 Jun 18 AWH 3.8 4.6 Jul 19 Austr
Slide 25: Property details
E Property details 2 WOOLWORTHS WAY, WARNERVALE NSW 92-98 COSGROVE ROAD, ENFIELD, NSW 10 WILLIAMSON ROAD, INGLEBURN, NSW The property is located within the Warnervale Enfield is an established industrial and logistics Ingleburn is located approximately 47km south Business Park next to the M1 Freeway
Slide 26: Property details
E Property details 29 GLENDENNING ROAD, GLENDENNING, NSW 12 WILLIAMSON ROAD, INGLEBURN, NSW 37–51 SCRIVENER ST, WARWICK FARM NSW Glendenning is an established industrial precinct in Ingleburn is an established industrial and logistics The property is located at Warwick Farm, 31 north western Sydney
Slide 27: Property details
E Property details 457 WATERLOO ROAD, CHULLORA NSW 74-94 NEWTON ROAD, WETHERILL PARK, NSW 60 MARPLE AVENUE, VILLAWOOD NSW The property comprises a recently refurbished Wetherill Park is strategically situated in Sydney’s traditional freestanding office and warehouse outer central west industrial reg
Slide 28: Property details
E Property details 6 MACDONALD ROAD, INGLEBURN, NSW 30 CLAY PLACE, EASTERN CREEK, NSW 8 PENELOPE CRESCENT, ARNDELL PARK NSW Ingleburn is an established industrial and logistics The property is situated in the M7 Business Hub at area in south western Sydney with access to the Eastern Creek, near the
Slide 29: Property details
E Property details 52-74 QUARRY ROAD, ERSKINE PARK, NSW 75 OWEN STREET, GLENDENNING, NSW 102–128 BRIDGE ROAD, KEYSBOROUGH VIC Erskine Park is an established industrial suburb Glendenning is an established industrial precinct The property is located in the south-eastern approximately 45km west of the
Slide 30: Property details
E Property details 324-332 FRANKSTON-DANDENONG ROAD, 24-32 STANLEY DRIVE, SOMERTON, VIC 6 ALBERT STREET, PRESTON VIC DANDENONG SOUTH, VIC Somerton is a more recently established industrial Dandenong South is a well-established industrial The property is located in the traditional industrial area app
Slide 31: Property details
E Property details 69 STUDLEY COURT, DERRIMUT VIC 500 PRINCES HIGHWAY, NOBLE PARK VIC 14-17 DANSU COURT, HALLAM VIC The property is a modern freestanding office and warehouse facility completed in 2009 comprising The property is situated within the established office accommodation positioned over tw
Slide 32: Property details
E Property details 12–13 DANSU COURT, HALLAM VIC 49 TEMPLE DRIVE, THOMASTOWN, VIC 2 KEON PARADE, KEON PARK, VIC Thomastown is situated in a well-established Keon Park is situated in a well-established The property is situated within the established industrial location, approximately 17km north of in
Slide 33: Property details
E Property details 39–45 WEDGEWOOD ROAD, HALLAM VIC 9 FELLOWES COURT, TULLAMARINE, VIC 22 HAWKINS CRESCENT, BUNDAMBA QLD Tullamarine is an established industrial precinct, The property was completed in 2009 and is The property is situated within the established approximately 16km north west of Melbo
Slide 34: Property details
E Property details 1 ASHBURN ROAD, BUNDAMBA QLD 69 RIVERGATE PLACE, MURARRIE, QLD 136 ZILLMERE ROAD, BOONDALL, QLD The property was completed in 2010 and is The property is located approximately 12 The property is situated within the Australia Trade situated approximately 33 kilometres south west ki
Slide 35: Property details
E Property details 33-37 MICA STREET, CAROLE PARK QLD 21 JAY STREET, TOWNSVILLE QLD 310 SPEARWOOD AVENUE, BIBRA LAKE WA The property is located within the Webb Industrial The property is located in Carole Park near the Estate in Mount St John approximately 11 The property is located within the estab
Slide 36: Property details
E Property details 23 SELKIS ROAD, BIBRA LAKE, WA 99 QUILL WAY, HENDERSON, WA 54 SAWMILL CIRCUIT, HUME ACT Bibra Lake is a newly established industrial precinct Henderson is an established marine port and south west of the Perth CBD. related logistics precinct, south west of the Perth Completed in 2
Slide 37: Property details
E Property details 9-13 CARIBOU DRIVE, DIREK SA Completed in 2009, the property is located 25 kilometres north of Adelaide, 3 kilometres from the Northern expressway and proposed new off ramp and is the state distribution facility for Kimberley Clarke. The building comprises 6,612 sqm of warehouse w
Slide 38: Disclaimer
Disclaimer This presentation has been prepared by 360 Capital Investment Management Limited (ACN 133 363 185, AFSL 340304) as responsible entity of the 360 Capital Industrial Fund (ARSN 099 680 252) (‘TIX’ or the ‘Fund’) . All information and statistics in this presentation are current as at 23 Febr
360 Capital Industrial Fund — H1 FY2016 Earnings Presentation on 6ix