Centuria Office Reit · ASX:COF
Centuria Office Reit — FY2021 Earnings Presentation
34 slides from Centuria Office Reit's earnings presentation, Aug 3, 2021
Slide 1: Centuria Office REIT FY21 Results
Centuria Office REIT FY21 RESULTS A S X: COF | 0 3 AUG 2021 CENTURIA OFFICE REIT ASX:COF 1 100 BROOKES STREET, FORTITUDE VALLEY, QLD
Slide 2: Agenda
A QUALITY PORTFOLIO OF HIGHLY CONNECTED AND COF: NISHI, 2 PHILIP LAW STREET, CANBERRA, ACT AFFORDABLE OFFICE SPACE WITHOUT SINGLE MARKET CONCENTRATION Agenda 1. Vision, Strategy and Objectives COF: 54 MARCUS CLARKE STREET, CANBERRA, ACT 2. Overview COF: 60 MARCUS CLARKE STREET, CANBERRA, ACT 3. Fina
Slide 3: COF: Vision, strategy and objectives
COF: Vision, strategy and objectives VISION To be Australia’s Australia’s largest ASX-listed pure play office REIT. leading pure play COF Overseen by an active management team with deep real estate expertise. Strongly supported by Centuria Group. office REIT A CLEAR AND SIMPLE STRATEGY KEY OBJECTIVE
Slide 4: COF provides quality, highly connected and affordable office space
ASSET QUALITY COF provides quality, highly connected and affordable office space With exposure to Australia’s better performing office markets Balanced geographic Portfolio of Access to recreational Connectivity with key COF exposed market diversification without young assets amenity, essential reta
Slide 5: Overview
A PORTFOLIO WITHOUT SINGLE MARKET CONCENTRATION SECTION TW O Overview A S X:COF CENTURIA OFFICE REIT ASX:COF 5 77 MARKET STREET, WOLLONGONG, NSW
Slide 6: A leading Australasian real estate funds manager
A leading Australasian real estate funds manager CNI is the manager of COF and is included in the S&P/ASX200 Index $17.4bn GROUP AUM $16.5bn REAL ESTATE AUM 1 $5.5bn $11.0bn $0.9bn INVESTMENT BONDS LISTED REAL ESTATE UNLISTED REAL ESTATE CENTURIA LIFE $3.1bn $2.1bn $0.3bn $7.9bn $1.6bn $1.5bn CENTUR
Slide 7: COF is aligned to a highly experienced real estate funds manager
COF is aligned to a highly experienced real estate funds manager CNI manages COF as part of its Australasian real estate platform CENTURI A CAPI TAL GROUP CENTURI A OFFICE REIT (ASX : CNI) (ASX : CO F) STRONG TRACK RECORD Managing real estate funds Australia’s largest ASX listed for over 20 years, m
Slide 8: Key metrics – Australia's largest ASX listed pure play office REIT
CENTURIA MANAGEMENT Key metrics – Australia’s largest ASX listed pure play office REIT PORTFOLI O FI NANCI AL 22 $2.0bn 19.9cpu 16.5cpu 6.7% 25.0% High quality Portfolio book value FY21 FFO FY21 DPU Forecast FY22 Twelve month assets DPU yield2 TSR3 93.1% 4.3yrs 98.3% 33.5% $2.48 $16.3m Portfolio occ
Slide 9: FY21 Summary
FY21 Summary • Consistently achieved substantial leasing success since IPO • Leases agreed1 for over 52,077 sqm, representing 18.1% of the portfolio’s NLA Active management 1 • 93.1% occupancy2, over 80% of income derived from multinational, ASX and government tenants • WALE2 of 4.3 years • Refinanc
Slide 10: Financial Results
CONNECTIVITY TO KEY TRANSPORT SECTION THREE Financial Results A S X:COF CENTURIA OFFICE REIT ASX:COF 10 818 BOURKE STREET, DOCKLANDS, VIC
Slide 11: Funds from operations (FFO)
Funds from operations (FFO) REVENUE FY21 FY20 VARIANCE Gross property income $m 170.6 149.2 21.4 Interest income $m - 0.1 (0.1) FY21 benefited from the Total revenue $m 170.6 149.3 21.3 Foxtel surrender payment at 35 Robina Town Centre EXPENSES Drive Direct property expenses $m 35.0 31.6 3.4 Respons
Slide 12: $405m of debt refinanced in 2H21
$405m of debt refinanced in 2H21 DEBT MATURITY PROFILE ($M) (A$m) $812.5m $812.5m $812.5m Drawn 2.4% • Five major lenders provides ALL IN COST OF DEBT2 Undrawn $580.0m Swap 4 diversification to high quality $480.0m $380.0m financiers • Weighted average debt expiry $75.0m $0.0m $106.7m CURRENT FACILI
Slide 13: Portfolio Metrics
A YOUNG PORTFOLIO OF QUALITY ASSETS SECTION FOUR Portfolio Metrics A S X:COF CENTURIA OFFICE REIT ASX:COF 13 825 ANN STREET, FORTITUDE VALLEY, QLD
Slide 14: A record year of leasing for COF
A record year of leasing for COF Leveraging Centuria’s leasing capability as part of COF’s active management approach 235 WILLIAM STREET, NORTHBRIDGE, WA CURRENT VACANCY (>1,000 SQM) NLA (SQM) 818 Bourke Street, Docklands 10,740 VAC 576 Swan Street, Richmond 3,512 60 Marcus Clarke Street, Canberra 3
Slide 15: A high-quality geographically diversified portfolio
A high-quality geographically diversified portfolio Over 52,000sqm of completed leasing representing 18% of COF’s portfolio PORTFOLIO SNAPSHOT FY21 FY20 WEIGHTED AVERAGE LEASE EXPIRY Number of assets # 22 23 Book value1 $m 2,014.3 2,053.3 WACR1 % 5.81 5.93 NLA sqm 287,007 304,586 Income WALE (Jun-20
Slide 16: Case study – active management across COF's QLD portfolio
Case study – active management across COF’s QLD portfolio 100 BROOKES STREET 35 ROBINA TOWN CENTRE DRIVE 825 ANN STREET 555 CORONATION DRIVE Four new tenants Occupancy increased to 88.6%1 following Occupancy maintained at 100%1 Increased occupancy to 100%1 Occupancy increased from 97% to 100%1 Foxte
Slide 17: Portfolio income underpinned by diverse, quality tenants
Portfolio income underpinned by diverse, quality tenants ASX Listed TENANT MIX <500sqm TENANT PROFILE NSW GEOGRAPHIC (Income)1 BY SIZE (Area) DIVERSIFICATION Government 500-1,000sqm QLD (Value) Listed Multinational 1,000-2,000sqm VIC ACT • COF has no single market Multinational 12% >2,000sqm 9% 3% 7
Slide 18: Valuation summary
Valuation summary 2H21 like for like valuation uplift of $16.3m1 PORTFOLIO VALUATION SUMMARY 1 Leasing success and market fundamentals drive FY21 HY21 VALUATION FY21 HY21 MOVEMENT STATE like for like valuation gain of $16.3m1 in 2HY21 VALUATION VALUATION MOVEMENT WACR2 WACR2 WACR (BPS)2 LIKE FOR LIK
Slide 19: Sustainability at Centuria Capital
Sustainability at Centuria Capital Developing a flexible and relevant sustainability framework Centuria Office REIT is externally managed by Centuria Capital (ASX:CNI) and benefits from Centuria Capital’s sustainability approach. Centuria Capital will be releasing its first Sustainability Report lat
Slide 20: Sustainability – Centuria Office REIT
Sustainability – Centuria Office REIT Operational Efficiency and NABERS ratings CASE STUDY | 1 RICHMOND ROAD, KESWICK, SA CONSUMPTION/EMISSIONS INTENSITY CY2020 CY2019 Increased NABERS energy rating from 3 Stars to Energy consumption intensity MJ/sqm 263 329 5 Stars over three years through smart de
Slide 21: Market Overview & Guidance
CLOSE PROXIMITY TO KEY AMENITY SECTION FIVE Market Overview & Guidance A S X:COF CENTURIA OFFICE REIT ASX:COF 21 NISHI, 2 PHILIP LAW STREET, CANBERRA, ACT
Slide 22: Lead indicators for office demand are positive
Lead indicators for office demand are positive Positive job creation across office-based industries AUSTRALIAN JOB CREATION (‘000 job growth YoY) Continued job creation across those industries Accommodation and Food Services 235.9 which traditionally consume office space is a lead Professional, Scie
Slide 23: COF is exposed to Australia's better performing office markets
COF is exposed to Australia’s better performing office markets 6 MTH NET 12 MTHS NET RENTAL COF VACANCY UPCOMING MARKET 1 ABSORPTION ABSORPTION DISCOUNT TO EXPOSURE (%) SUPPLY (SQM) (SQM) (SQM) SYDNEY CBD (%) (%) SYDNEY CBD 13.2 (5,744) (157,554) n.a 199,109 0.0% • Positive net absorption evident in
Slide 24: Strong investment demand for metropolitan office assets
Strong investment demand for metropolitan office assets Transaction evidence underpins COF NTA PRICE CAP RATE RATE OCCUPANCY WALE • A basket of comparable property transactions strongly PROPERTY Pinnacle, 4 Drake Street, Macquarie Park STATE NSW DATE Sep-20 ($M) 306.0 (%) 5.25% ($PSQM) 8,777 (%) 96.
Slide 25: FY22 Guidance
FY22 Guidance 16.6c DISTRIBUTION 6.7% FORECAST FY22 2 PER UNIT1 DISTRIBUTION 42-46 COLIN STREET, WEST PERTH, WA YIELD 203 PACIFIC HIGHWAY, ST LEONARDS, NSW DISTRIBUTIONS PAID IN EQUAL QUARTERLY INSTALMENTS 18.0c FFO PER UNIT1 1. Guidance remains subject to unforeseen circumstances and material chang
Slide 26: Appendices
A PORTFOLIO EXPOSED TO AFFORDABLE MARKETS SECTION SIX Appendices A S X : C O F A – Income statement Appendix Appendix B – FFO reconciliation Appendix C – Balance sheet Appendix D – Portfolio valuation summary Appendix E – Environmental data Appendix F – Investment portfolio CENTURIA OFFICE REIT ASX:
Slide 27: Appendix A – Income statement
Appendix A – Income statement $'000 FY21 FY20 Gross property income 170,617 149,240 Interest income 7 106 Total revenue 170,624 149,346 Direct property expenses 35,001 31,573 Responsible entity fees 11,543 10,421 Finance costs 18,418 16,777 Management and other administrative expenses 2,251 1,975 Ex
Slide 28: Appendix B – FFO reconciliation
Appendix B – FFO reconciliation $'000 FY21 FY20 Statutory net profit 76,936 23,053 Loss/(gain) on fair value of investment properties 15,137 38,102 Realised/unrealised loss on fair value of derivatives (4,816) 4,876 Straight-lining of rental income and amortisation of leasing commissions and tenant
Slide 29: Appendix C – Balance sheet
Appendix C – Balance sheet $'000 31-Dec-20 30-Jun-20 Cash 15,644 28,809 1 Investment properties 2,046,221 2,085,650 Trade and other receivables 5,369 3,263 Other assets 1,625 1,536 Total assets 2,068,859 2,119,258 2 Interest bearing liabilities 700,800 746,372 Trade and other liabilities 31,943 22,2
Slide 30: Appendix D – Portfolio valuation summary
Appendix D – Portfolio valuation summary1 BOOK VALUE ($M) CAP RATE (%) STATE FY21 BOOK VALUE HY21 VAR % FY21 HY21 BPS NSW 503.5 488.0 15.5 3.2 5.48 5.67 (19) PORTFOLIO QLD 475.5 471.8 3.8 0.8 6.23 6.27 (4) VALUATION VIC 58.2 53.3 5.0 9.2 7.00 7.25 (25) SUMMARY1 ACT 335.8 333.7 2.1 0.6 5.47 5.62 (15)
Slide 31: Appendix E – Environmental Data
Appendix E – Environmental Data UNIT OF MEASURE CY20 CY19 NLA (annual weighted average) sqm 300,537 224,012 Environmental Data reported is for calendar years 2019 and 2020. Reported figures only represent data for assets within the Centuria Office REIT. RESOURCE CONSUMPTION (OPERATIONALLY CONTROLLED
Slide 32: Appendix F – Investment portfolio
Appendix F – Investment portfolio PROPERTY STATE OWNERSHIP (%) BOOK VALUE ($M) CAPITALISATION RATE (%) AREA (SQM) AREA ($/SQM) WALE (YRS)1 OCCUPANCY (%)1 8 Central Avenue, Eveleigh NSW 50% $200.0m 5.13% 36,619 10,923 9.4 99.4% 201 Pacific Highway, St Leonards NSW 50% $107.0m 5.63% 16,498 12,971 2.9
Slide 33: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds Limited (ABN 11 086 553 639, AFSL 231 The information in this presentation has been obtained from and based on sources believed by CPFL 149) (CPFL) as responsible entity of Centuria Office REIT (ARSN 124 364 718) (‘COF’ or the
Slide 34: CENTURIA OFFICE REIT ASX:COF
CENTURIA OFFICE REIT ASX:COF 34