Centuria Office Reit · ASX:COF
Centuria Office Reit — FY2022 Earnings Presentation
31 slides from Centuria Office Reit's earnings presentation, Aug 2, 2022
Slide 1: Centuria Office REIT FY22 Results
2 AUGUST 2022 ASX:COF Centuria Office REIT FY22 RESULTS 8 57 CENTRAL WYATT AVENUE, SOUTH EVELEIGH STREET, ADELAIDE SA NSW
Slide 2: Acknowledgement of Country and agenda
ACKNOWLEDGEMENT OF COUNTRY Our group manages property throughout Australia and New Zealand. Accordingly, Centuria pays its respects to the traditional owners of the land in each country, to their unique cultures and to their elders past, present and emerging. 1. Overview 2. Financial results 3. Port
Slide 3: Overview
ASX:COF COF A PORTFOLIO WITHOUT SINGLE MARKET CONCENTRATION Overview SECTION ONE 818 BOURKE STREET, MELBOURNE VIC
Slide 4: Key metrics
Key metrics A high-quality, geographically diversified portfolio Portfolio $2.3bn 94.7% 4.2 yrs 4.8 Portfolio book value Portfolio occupancy1 Portfolio WALE1 Avg. NABERS across 23 assets energy rating2 Financial 18.2cpu 16.6cpu 33.8% $2.50 FY22 FFO FY22 DPU Gearing3 Net tangible assets per unit4 1.
Slide 5: FY22 summary and FY23 outlook
FY22 summary and FY23 outlook NISHI, 2 PHILLIP LAW STREET, CANBERA ACT • Executed three quality acquisitions and one disposal during FY22 • Average building age of 16 years1, 90% A-grade assets in COF portfolio • 94.7% occupancy2, WALE2 of 4.2 years Portfolio 1 • Improved portfolio sustainability, a
Slide 6: 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 Capital Group. office REIT A clear and simple strategy Key o
Slide 7: COF provides quality, highly connected and affordable office space
COF provides quality, highly connected and affordable office space COF portfolio strategic metrics 16yrs Average asset age1 90% A-grade assets2 57 WYATT STREET, 100 BROOKES STREET, 101 MORAY STREET, 2 KENDALL STREET, ADELAIDE SA FORTITUDE VALLEY QLD SOUTH MELBOURNE VIC WILLIAMS LANDING VIC 4.8stars
Slide 8: 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 $20.6bn Group AUM1 $19.8bn Real estate AUM $6.8bn $13.0bn $0.8bn Listed real estate Unlisted real estate Investment bonds Centuria Life $4.1bn $2.4bn $0.3bn $8.3
Slide 9: Financial results
ASX:COF CONNECTIVITY WITH KEY TRANSPORT NODES AND REDUCED COMMUTE TIMES Financial results SECTION TWO 825 ANN STREET, FORTITUDE VALLEY QLD 555 CORONATION DRIVE, TOOWONG QLD
Slide 10: Funds from operations (FFO)
Funds from operations (FFO) 35 ROBINA TOWN CENTRE DRIVE, ROBINA QLD REVENUE FY22 FY21 VARIANCE Gross property income $m 176.6 170.6 6.0 Primarily driven by acquisitions Interest income $m 0 0 0 Total revenue $m 176.6 170.6 6.0 EXPENSES Direct property expenses $m (36.1) (35.0) (1.1) Responsible enti
Slide 11: Capital management overview
Capital management overview Debt maturity profile ($m) 390 273 6 Quality debt lenders • Refinanced $257.5m5 of debt 175 book 125 • No debt tranche expiring until FY25 FY23 FY24 FY25 FY26 FY27 FY28 $130.5m Debt expiry Pro forma facility headroom2,5 • Significant covenant headroom ICR 6.3x (covenant 2
Slide 12: Portfolio metrics
ASX:COF A YOUNG PORTFOLIO OF QUALITY ASSETS Portfolio metrics SECTION THREE 57 WYATT 825 STREET,FORTITUDE ANN STREET, ADELAIDE SA VALLEY QLD
Slide 13: A high-quality, geographically diversified portfolio
A high-quality, geographically diversified portfolio Included in the S&P/ASX 300 Index and FTSE/EPRA Nareit Global Developed Index PORTFOLIO SNAPSHOT FY221 FY21 WA SA 12.2% total portfolio 2.4% total portfolio Number of assets # 23 22 97.2% occupancy 100.0% occupancy Book value $m 2,335.2 2,014.3 NT
Slide 14: Staggered lease expiry with 77% of leases expiring at or beyond FY25
Staggered lease expiry with 77% of leases expiring at or beyond FY25 FY22 was another strong leasing year with 13.6% of the portfolio leased, increasing occupancy to 94.7%1 CURRENT VACANCY (>1,500 SQM) NLA (SQM) Weighted average lease expiry 818 Bourke Street, Docklands 10,190 50% 9 Help Street, Cha
Slide 15: Since the COVID-19 outbreak, COF has leased over 120,000 sqm of NLA
Since the COVID-19 outbreak, COF has leased over 120,000 sqm of NLA FY22 was another strong leasing year with 13.6% of the portfolio leased 77 MARKET STREEET, WOLLONGONG NSW FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Leasing executed Leasing executed Leasing executed Leasing executed Leasing executed L
Slide 16: Valuation summary
Valuation summary Portfolio valuation summary1 Leasing success and market FY22 FY21 VALUATION FY22 FY21 MOVEMENT fundamentals drive like-for-like valuation STATE VALUATION VALUATION MOVEMENT3 WACR 2 WACR2 WACR2 ($M) ($M) ($M) (%) (%) (bps) gain of $37.9m1 in FY22 Portfolio weighted 2,050.4 1,995.3 5
Slide 17: FY22 select initiatives
Sustainability at Centuria Capital Group Developing a flexible and relevant sustainability framework Conscious of climate change Environment Green Building Membership Climate Resilience Climate Action COF 4.81 Star NABERS Members the Australian Green Implementation of climate adaptation Ongoing sola
Slide 18: Sustainability integrated
Centuria Office REIT Sustainability integrated ESG value added Climate action ongoing action to reduce emissions has integrated sustainability into its approach to asset management and value creation Updated emissions data for COF’s 818 Bourke Street, Docklands 8 Central Avenue, Redfern portfolio wi
Slide 19: Market outlook and guidance
ASX:COF CLOSE PROXIMITY TO KEY AMENITY Market outlook and guidance SECTION FOUR 203 PACIFIC HIGHWAY, ST LEONARDS NSW
Slide 20: Key themes for COF markets
Key themes for COF markets COF Increased Robust tenant demand for Inflation Strong employment growth leasing activity metropolitan locations impacts • Record demand recorded for office • Melbourne fringe had the strongest • Increased fitout costs are evident, • 390,000 new jobs created in the 12 lea
Slide 21: Strong investment demand for metropolitan office assets
Strong investment demand for metropolitan office assets Transaction evidence underpins COF NTA PRICE CAP RATE RATE OCCUPANCY WALE PROPERTY STATE DATE ($M) (%) ($PSQM) (%) (yrs) • A basket of comparable property 15 Talavera Road, Macquarie Park NSW Jul-22 111.5 5.45% 8,813 100% 2.31 transactions1,3 s
Slide 22: FY23 guidance
FY23 guidance 101 MORAY STREET, SOUTH MELBOURNE VIC Distribution per unit1 14.1c Forecast FY23 distribution yield 7.7%1,2 FFO per unit1 15.8c Distributions paid in equal quarterly instalments 1. Guidance remains subject to unforeseen circumstances and material changes in operating conditions 2. Base
Slide 23: Appendices
ASX:COF A PORTFOLIO PROVIDING AFFORDABLE ACCOMODATION SOLUTIONS Appendices SECTION FIVE Appendix A: Australian office market metrics Appendix B: Income statement Appendix C: FFO reconciliation Appendix D: Balance sheet Appendix E: Portfolio valuation summary Appendix F: Investment portfolio 483 KING
Slide 24: Appendix A: Australian office market metrics
Appendix A: Australian office market metrics 3 MTH NET 6 MTHS NET RENTAL DISCOUNT UPCOMING VACANCY MARKET1 ABSORPTION ABSORPTION TO SYDNEY CBD SUPPLY (%) (SQM) (SQM) (%) (SQM) Adelaide 15.4 (10,336) (26,188) (66.4) 133,243 Melbourne CBD 15.0 (10,652) (15,442) (49.4) 108,252 Melbourne fringe 15.9 10,
Slide 25: Appendix B: Income statement
Appendix B: Income statement 201 PACIFIC HIGHWAY, ST LEONARDS NSW $'000 FY22 FY21 Gross property income 176,575 170,617 Interest income 14 7 Total revenue 176,589 170,624 Direct property expenses (36,075) (35,001) Responsible entity fees (12,668) (11,543) Finance costs (19,277) (18,418) Management a
Slide 26: Appendix C: FFO reconciliation
Appendix C: FFO reconciliation 144 STIRLING STREET, PERTH WA $'000 FY22 FY21 Statutory net profit 115,019 76,936 (Gain)/loss on fair value of investment properties (14,697) 15,137 (Gain)/loss on fair value of derivatives (14,144) (4,816) Straight-lining of rental income and amortisation of leasing 1
Slide 27: Appendix D: Balance sheet
Appendix D: Balance sheet NISHI 2 PHILLIP LAW STREET, CANBERRA ACT $'000 30-Jun-22 30-Jun-21 Cash 26,558 15,644 Investment properties1 2,366,770 2,046,221 Trade and other receivables 7,450 5,369 Derivative financial instruments 7,133 - Other assets 2,862 1,625 Total assets 2,410,773 2,068,859 2 Inte
Slide 28: Appendix E: Portfolio valuation summary
Appendix E: Portfolio valuation summary FY22 FY21 STATE VALUATION1 VALUATION1 VALUATION MOVEMENT2 FY22 WACR1,3 FY21 WACR1,3 MOVEMENT WACR3 ($M) ($M) ($M) (%) (%) (%) (BPS) NSW 520.6 503.5 17.1 3.4 5.34 5.48 (14) QLD 501.6 475.5 26.1 5.5 5.96 6.23 (27) VIC 358.5 354.5 4.0 1.1 5.25 5.32 (6) ACT 341.4
Slide 29: Appendix F: Investment portfolio
Appendix F: Investment portfolio CAPITALISATION AREA AREA WALE PROPERTY STATE OWNERSHIP (%) BOOK VALUE ($M) OCCUPANCY (%)1 RATE (%) (SQM) ($/SQM) (YRS)1 8 Central Avenue, Eveleigh NSW 50% 210.0 5.00% 36,619 11,469 8.3 95.5% 201 Pacific Highway, St Leonards NSW 50% 107.5 5.50% 16,499 13,031 2.2 94.2%
Slide 30: 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 REIT (ARSN 124 364 718) (‘COF’ or the ‘Trust’). This presentation contains selected in summary information and does not purport to be a
Slide 31: Office contacts
AUSTRALIA Sydney Head Office Melbourne Office (02) 8923 8923 (03) 9616 6500 Level 41, Chifley Tower Level 32 2 Chifley Square 120 Collins Street Sydney NSW 2000 Melbourne VIC 3000 Brisbane Office Perth Office (07) 3905 7000 (08) 9321 7133 Level 2 Level 1 348 Edward Street 307 Murray Street Brisbane