Slide 1: Centuria Office REIT HY24 results
16 FEBRUARY 2024 | ASX:COF Centuria Office REIT HY24 results 57 WYATT STREET, ADELAIDE SA
Slide 2: Speakers
Speakers Ross Lees Grant Nichols Belinda Cheung Head of Funds Management – Head of Office & Fund Manager – Assistant Fund Manager – Centuria Capital Group Centuria Office REIT Centuria Office REIT Centuria ASX:COF 2
Slide 3: Agenda
Acknowledgement of Country Our group manages property throughout Australia and New Zealand. Centuria pays its respects to the traditional owners of the land in each country, to their unique cultures and to their Elders past and present. AGENDA 1. Overview 2. Financial results 3. Portfolio 4. Market
Slide 4: Centuria Capital Group: A leading Australasian real estate funds manager
Centuria Capital Group: A leading Australasian real estate funds manager CNI is the manager of COF and is included in the S&P/ASX200 Index $21.1bn GROUP AUM1 $20.3bn REAL ESTATE AUM $6.2bn $14.1bn $0.8bn LISTED REAL ESTATE UNLISTED REAL ESTATE INVESTMENT BONDS $3.9bn $2.1bn $0.2bn $8.3bn $2.7bn $3.1
Slide 5: COF: Vision, strategy and objectives
COF: Vision, strategy and objectives VISION Australia’s largest ASX-listed pure play office To be Australia’s Centuria Office REIT. Overseen by an active management team leading pure play REIT (COF) with deep real estate expertise. Strongly supported by Centuria Capital Group office REIT Key objecti
Slide 6: Overview
Overview SECTION ONE 101 MORAY STREET, SOUTH MELBOURNE VIC
Slide 7: COF at a glance
COF at a glance A high-quality, geographically diversified portfolio FINANCIAL 13.8cpu 12.0cpu FY24 FFO guidance reaffirmed FY24 DPU guidance reaffirmed 9.6% (36.9%) FY24 DPU Yield1 Trading discount to NTA1,2 PORTFOLIO 96.2% 4.4 yrs Portfolio occupancy3,4 Portfolio WALE 4,5 9.7% $5,637 Portfolio lea
Slide 8: HY24 summary – executing FY24 priorities
HY24 summary – executing FY24 priorities 1 2 3 FY24 Maintain high portfolio occupancy Proactive capital management High portfolio quality priorities 96.2% occupancy1,2 $63m of disposals 90% A-grade HY24 28,659 sqm of leasing1 (9.7% portfolio NLA) Total disposals of $63m in 1H24, proceeds 17.7-year a
Slide 9: COF provides quality, highly connected and affordable office space
COF provides quality, highly connected and affordable COF portfolio office space strategic metrics Included in the S&P/ASX 300 Index and FTSE/EPRA NAREIT Global Developed Index 17.7 years Average asset age1 90% Young portfolio Accessible price point A-grade assets2 Prime assets are generating Deeper
Slide 10: Metropolitan office demand continues to outstrip Sydney and Melbourne CBDs
Metropolitan office demand continues to outstrip Most Australian office Sydney and Melbourne CBDs markets have seen positive net absorption tro et absor tio i etro ar ets Non-CBD markets incurred e ose ar ets e ose ar ets strong positive net absorption Flight to quality has not meant flight to CBD B
Slide 11: More tenants are increasing their office footprint
More tenants are increasing their office footprint More tenants have increased their footprint in metropolitan markets during the past 3 years1 Metropolitan office leasing market relocations (>1,000sqm) 2021-20231 Perception that all tenant footprints are shrinking is not supported by data1 More ten
Slide 12: Financial results
Financial results SECTION TWO 100 BROOKES STREET, FORTITUDE VALLEY QLD
Slide 13: Funds from operations (FFO)
Funds from operations (FFO) Revenue HY24 HY23 Variance c.4% like for like property Gross property income $m 93.7 92.0 1.7 income growth also impacted by divestment of Robina Total revenue $m 93.7 92.0 1.7 asset Expenses Direct property expenses $m (21.9) (19.9) (2.0) General portfolio outgoings incr
Slide 14: Capital management
Capital management Pro forma debt maturity profile ($m)1 . 6 Substantial undrawn debt, Quality lenders . . comfortable debt covenant headroom and no debt expiry . until FY26 o ear ter e ir $63m of disposals (within 5% of book value) in F F F F F F $88.2m HY24, proceeds used to Pro forma facility rep
Slide 15: Portfolio
Portfolio SECTION THREE 235 WILLIAM STREET, NORTHBRIDGE WA
Slide 16: Portfolio overview
Portfolio overview Tenant mix (income) High quality portfolio underpinned by excellent A isted 78% tenant covenants overnment of income derived from isted multinational government, ASX Portfolio snapshot HY24 FY23 ultinational listed and multinational tenants ational Number of assets # 221 23 Ot er
Slide 17: Staggered lease expiry: c.92% of leases expiring at or beyond FY25
Staggered lease expiry: c.92% of leases expiring at or beyond FY25 Sustained strong leasing has led to high occupancy of 96.2%1,2 Current vacancy (>1,500 sqm) NLA (sqm) Weighted average lease expiry1,2 201 Pacific Highway, St Leonards (50% ownership) 6,097 818 Bourke Street, Docklands 3,308 . Other
Slide 18: Valuation summary
Valuation summary COF portfolio valuation summary2,3 $2,087.1m $2,237.4m ($150.4)m (6.7%) HY24 valuation FY23 valuation Valuation movement2,3 Valuation movement2,3 12 of 22 6.26% 6.00% 26bps assets externally revalued in December 2023; HY24 WACR4 FY23 WACR4 Movement WACR4 all assets externally reval
Slide 19: Implementing a flexible and relevant sustainability framework
Implementing a flexible and relevant sustainability framework Conscious of climate change (environment), valued stakeholders (social) and responsible business principles (governance) Select initiatives New sustainability targets: Strong 4-star GRESB rating 1. Targeting Zero Scope 2 emissions1 by 202
Slide 20: Market overview and guidance
Nishi 5.jpg Market overview and guidance SECTION FOUR 154 MELBOURNE 2 PHILLIP STREET, LAW STREET, SOUTH BRISBANE CANBERRA ACT QLD
Slide 21: Market overview
Market overview Strong net absorption evident in COF exposed markets Brisbane fringe had Under construction Some markets have Sydney and Melbourne the strongest net supply is mainly incurred face and CBDs demonstrated the absorption in 2023 concentrated in effective rental growth weakest net absorpt
Slide 22: Rising population in Australia supports office demand
Rising population in Australia supports office demand While future supply is likely to diminish over the medium term Relationship between population growth and office demand1 Australian metropolitan office market development pipeline4 . Completions nder construction . Inflation impacts likely to cut
Slide 23: Reaffirmed FY24 guidance
Reaffirmed FY24 guidance1 FFO per unit1 13.8c Distribution per unit1 12.0c Forecast FY24 distribution yield1,2 9.6% Distributions expected to be paid in equal quarterly instalments NISHI, 2 PHILIP LAW STREET, CANBERRA ACT 1. Guidance remains subject to unforeseen circumstances and material changes i
Slide 24: Appendices
Appendices SECTION FIVE Appendix A: Income statement Appendix B: FFO reconciliation Appendix C: Balance sheet Appendix D: Australian office market metrics Appendix E: COF leasing history Appendix F: Geographic breakdown Appendix G: Portfolio valuation summary Appendix H: Investment property portfoli
Slide 25: Appendix A: Income statement
Appendix A: Income statement $’ HY24 HY23 Revenue Gross property income 93,693 91,977 Total revenue 93,693 91,977 Expenses Direct property expenses (21,820) (19,929) Responsible entity fees (6,332) (6,648) Finance costs (23,044) (15,660) Management and other administrative expenses (708) (1,185) Tot
Slide 26: Appendix B: FFO reconciliation
Appendix B: FFO reconciliation #039;000 HY24 HY23 Statutory net profit (99,388) (17,363) (Gain)/loss on fair value of investment properties 118,879 51,367 (Gain)/loss on fair value of derivatives 8,751 1,540 Straight-lining of rental income and amortisation of leasing 13,578 13,027 commissions and tena
Slide 27: Appendix C: Balance sheet
Appendix C: Balance sheet #039;000 HY24 FY23 Cash 19,898 17,287 Investment properties1 2,119,566 2,268,554 Trade and other receivables 8,165 9,000 Derivative financial instruments 6,050 13,336 Other assets 5,416 2,840 Total assets 2,159,095 2,311,017 Interest bearing liabilities2 891,353 893,576 Trade
Slide 28: Appendix D: Australian office market metrics
Appendix D: Australian office market metrics Proportion of 12 month net 12 month face Rental discount market under Vacancy absorption rental growth to Sydney CBD construction Market (%) (SQM) (%) (%) (%) Adelaide 18.0 45,961 5.6 (63.4) 2.4 Melbourne CBD 18.2 (71,165) 3.8 (48.3) 4.8 Melbourne fringe
Slide 29: Appendix E: COF leasing history
Appendix E: COF leasing history Centuria continued to deliver a strong track record of maintaining high occupancy A T T O T A easi olu e s s s s s s s s s s ort olio A lease ort olio o u a CO 1. Past performance is not a reliable indicator of future performance 2. By area 3. By income Centuria ASX:C
Slide 30: Appendix F: Geographic breakdown
Appendix F: Geographic breakdown WA 12% total COF portfolio 99.7% occupancy 1,2 QLD 20% total COF portfolio 98.0% occupancy 1,2 7.4yr WALE1,2 3.4yr WALE1,2 33,708sqm leased since 2020 61,963sqm leased since 2020 ’s atio al ort olio 96.2% NSW 25% total COF portfolio 91.9% occupancy 1,2 occupancy1,2 4
Slide 31: Appendix G: Portfolio valuation summary
Appendix G: Portfolio valuation summary HY24 FY23 Movement valuation1 valuation1 Valuation movement2,4 HY24 WACR1,3 FY23 WACR1,3 WACR3 State ($M) ($M) ($M) (%) (%) (%) (BPS) NSW 527.5 556.2 (28.7) (5.2) 6.08 5.81 27 QLD 417.7 479.8 (62.1) (12.9) 6.79 6.43 36 VIC 497.0 532.5 (35.5) (6.7) 5.93 5.53 40
Slide 32: Appendix H: Investment property portfolio
Appendix H: Investment property portfolio Property State Ownership (%) Book value ($M) Capitalisation rate (%) Area (SQM) Area ($/SQM) WALE (years)1 Occupancy (%)1 8 Central Avenue, Eveleigh NSW 50% 190.0 5.75% 36,570 10,391 7.3 100.0% 203 Pacific Highway, St Leonards NSW 100% 124.0 6.25% 11,731 10,
Slide 33: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds Limited (ABN 11 086 553 639, AFSL 231 149) (CPFL) as responsible entity of Centuria Office T (A ) (‘COF’ or t e ‘Trust’). This presentation contains selected in summary information and does not purport to be all-inclusive or t
Slide 34: Australia and New Zealand offices
AUSTRALIA Sydney (head office) Melbourne (02) 8923 8923 (03) 9616 6500 Level 41, Chifley Tower Level 47 2 Chifley Square 101 Collins Street Sydney NSW 2000 Melbourne VIC 3000 Brisbane Perth (07) 3905 7000 (08) 9321 7133 Level 2 Level 27 348 Edward Street 140 St Georges Terrace Brisbane QLD 4000 Pert