Australian Unity Office Fund · ASX:AOF
Australian Unity Office Fund — FY2019 Earnings Presentation
28 slides from Australian Unity Office Fund's earnings presentation, Aug 26, 2019
Slide 1: Australian Unity Office Fund 2019 Full Year Results Presentation
Australian Unity Office Fund (ASX: AOF) 2019 Full Year Results Presentation – 26 August 2019 Webcast: https://webcasting.boardroom.media/broadcast/5d196f0b12d7e6343766c9ab Teleconference: https://services.choruscall.com.au/diamondpass/australianunity-10000804-invite.html to register for the teleconf
Slide 2: Important notice and disclaimer
Important notice and disclaimer The information provided in this presentation has been prepared by Australian Unity Investment Real Estate Limited ABN 86 606 414 368 AFS Licence 477434 (AUIREL), as responsible entity of the Australian Unity Office Fund ARSN 113 369 627 (Fund). The information provid
Slide 3: AOF's results
AOF’s results 468 St Kilda Road, Melbourne, VIC
Slide 4: AOF's 2019 full year result highlights
AOF’s 2019 full year result highlights Delivered on key objectives Vision To be Australia’s leading income focused office A-REIT Portfolio Construction Capital Management Investment Return Key A portfolio of Australian metropolitan A robust capital structure, with Deliver stable, sustainable income
Slide 5: Financial results
Financial results 30 Pirie Street, Adelaide, SA
Slide 6: Full year 2019 – key financial metrics
Financial results Full year 2019 – key financial metrics Key metric FY19 FY18 Change Statutory net profit down $52.5 million as growth in asset Statutory net profit $44.8m $97.3m -$52.5m valuations was stronger in FY18 compared to FY19. FFO1 $28.2m $27.0m +$1.2m FFO and distribution up by FFO pe
Slide 7: Full year 2019 – capital management
Financial results Full year 2019 – capital management 30 June 30 June Debt diversified by three Change separate tranches and two 2019 2018 major banks (CBA and NAB) Total borrowings1 $204.8m $198.3m +$6.5m New interest rate swaps with a Total debt facilities $220.0m $220.0m2 - total nominal valu
Slide 8: Portfolio management
Portfolio management 32 Phillip Street, Parramatta, NSW
Slide 9: Portfolio highlights
Portfolio highlights Strong leasing activity and further progress of development opportunity Strong leasing activity has increased portfolio occupancy to 95.3% 1 (95.0% at 30 June 2018) 2 Further leasing since 30 June 2019 across ~2.1% by NLA1 Portfolio value increased by $32.9 million to $668.4 mil
Slide 10: Leasing summary
Leasing summary Strong leasing conditions continue in metropolitan markets • Leasing activity of ~12,200 sqm during the 12 months to 30 June 2019: comprising ~9,000 sqm (or ~8.4% NLA1) of completed leases (30 transactions) and a further ~3,200 sqm (or ~3.0 % NLA1) of leasing deals under a non-bi
Slide 11: Valuation summary
Valuation summary Uplift driven mainly by cap rate compression and market rent growth Market 30 June Current Cap rate Change in All assets were Property rental 2019 cap rate change1 valuation2 independently revalued as change valuation at 30 June 2019 30 Pirie St, No 7.25% -25bps $124.5m $3.0m Ade
Slide 12: Portfolio update
Portfolio update Further progress of development opportunity Development opportunity at 2 Valentine Ave, Parramatta (adjacent to existing 10 Valentine Ave building) In April 2018, we received development consent for a ~8,000 sqm office building with the intention of lodging a further development a
Slide 13: CHAB Proposal
CHAB Proposal 5 Eden Park Drive, North Ryde, NSW
Slide 14: CHAB Proposal – Terms of SIA nearly finalised
CHAB Proposal Terms of SIA nearly finalised • AUIREL received an unsolicited, indicative and non-binding proposal from an entity associated with Abacus Property Group (ASX: ABP) and Charter Hall Group (ASX: CHC) (together, the Consortium) to acquire, by way of a trust scheme all of the issued units
Slide 15: Summary and outlook
Summary and outlook 10 Valentine Avenue, Parramatta, NSW
Slide 16: Outlook
Outlook Guidance • FY20 FFO guidance of 17.3 – 17.7 cpu1 • FY20 distribution guidance of 16.0 cpu1,2 Immediate focus • Address current vacancy and pending lease expiry risk • Where possible, take advantage of improving leasing conditions to grow AOF’s earnings • Further progress the development oppo
Slide 17: AOF total unitholder return
AOF total unitholder return Exceptional performance compared to A-REIT index $3.80 83% $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 33% $2.40 $2.20 $2.00 $1.80 $1.60 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 1 AOF (accumulation basis) S&P/ASX 300 A-REIT Accumulation Index (re-based) 2 Notes: 1. Assume
Slide 18: Appendices
Appendices 241 Adelaide Street, Brisbane, QLD
Slide 19: Income statement
Income statement FY19 FY18 Change 12 months to 30 June 2019 ($’000) ($’000) ($’000) Income Statement Rental income 58,896 53,375 5,521 Property expenses (19,542) (18,250) (1,292) Interest income 28 27 1 Net losses on financial instruments held at fair (5,847) (529) (5,318) value Net fair value incre
Slide 20: Reconciliation of statutory profit to Property Council FFO
Reconciliation of statutory profit to Property Council FFO FY19 FY18 Change 12 months to 30 June 2019 ($’000) ($’000) ($’000) Profit for the year 44,828 97,293 (52,465) Adjusted for: Straight lining of rental income and amortisation of 1,562 2,918 (1,356) leasing commissions and tenant incentives Ne
Slide 21: Balance sheet
Balance sheet 30 June 2019 30 June 2018 Change ($’000) ($’000) ($’000) Assets Cash and cash equivalents 7,481 7,851 (370) Receivables 1,117 641 476 Other assets 458 586 (128) Investment properties 668,400 635,550 32,850 Total Assets 677,456 644,628 32,828 Liabilities Distributions payable 6,432 6,35
Slide 22: Capital management
Capital management Debt facility expiry profile1 $100 m $80 m $60 m $40 m $20 m $0 m Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 1. As at 30 June 2019 Interest rate hedging & average hedged interest rate1 $200 m 4.00% $150 m 3.00% $100 m 2.00% $50 m 1.00% $0 m 0.00% Jun-19 Dec-19 Jun-20
Slide 23: Property market metrics
Property market metrics Net Net face Vacancy rate Incentives effective Net supply Yield rent rent 12 month 12 months Y-o-Y % Previous Next 12 historic Current Current Current Current ago change 12 months months change (bps) Parramatta 3.0% 3.0% $545 15% 12.3% (14,131) 58,184 5.25% -37.5 Macquarie Pa
Slide 24: Key portfolio metrics
Key portfolio metrics As at 30 June 2019 Geographic diversification2 Key portfolio metrics 64 North- Number of properties 9 468 St bourne Ave 10 NSW Kilda Road 4% Valentine (45%) Occupancy1 95.3% Avenue 12% Portfolio Value $668.40m 18% QLD 30 Pirie 5 Eden (21%) Weighted Average Capitalisation Rate 6
Slide 25: AOF's NTA and unit price performance
AOF’s NTA and unit price performance Steady capital growth and generally trading above NTA per unit $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 AOF trading price NTA per unit Source: IRESS as at 19 August 2019 25
Slide 26: Investment portfolio
Investment portfolio As at 30 June 2019 NLA WALE1 Occupancy Property State Book value Cap rate (sqm) (years) (by NLA) Single or 30 Pirie St, Adelaide SA $124.50m 7.25% 24,749 3.7 94.0% Dominant Tenant 10 Valentine Ave, Parramatta NSW $120.00m 5.75% 16,020 2.9 100.0% Assets 150 Charlotte St, Brisbane
Slide 27: 10 Valentine Avenue, Parramatta, NSW
10 Valentine Avenue, Parramatta, NSW
Slide 28: Australian Unity Health | Wealth | Living
Australian 7 Health | Wealth | Living
Australian Unity Office Fund — FY2019 Earnings Presentation on 6ix