Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — 360 Capital Industrial Fund — HY2013 Earnings Presentation
46 slides from Centuria Industrial Reit's earnings presentation, February 2013
Slide 1: 360 Capital Industrial Fund 2013 Half Year Financial Results Presentation
360 CAPITAL INDUSTRIAL FUND ARSN 099 680 252 2013 Half Year Financial Results Presentation | February 2013 22 Hawkins Crescent, Bundamba, Queensland (API) 1
Slide 2: Table of Contents
Table of Contents Section Appendices 1 Fund Overview and Strategy A Portfolio Details 2 HY 2013 Financial Results Overview B Balance Sheet as at 31 December 2012 3 Capital Management Profit and Loss for half year ended 31 C December 2012 4 Portfolio Performance D Industrial Market Outlook 5 Summary
Slide 3: Section 1: Fund Overview and Strategy
Section 1: Fund Overview and Strategy 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 3
Slide 4: Fund Overview
Fund Overview • 360 Capital Property Group took over management of the Fund in December 2010 • Unlisted, frozen distributions, no liquidity, high refinancing risk • Since then 360 Capital refinanced & stabilised the Fund, reinstated distributions, repositioned & significantly strengthened the portfo
Slide 5: Delivering Defined Strategy
Delivering Defined Strategy Repositioning Fund has significant momentum • Recruitment process underway to appoint a dedicated Fund Manager 360 Capital acquires Walker Becton Investment ASX listing Fund Stabilisation Transaction Management Limited (Dec 2012) (Jun 2012) (Dec 2010) Assets 24 23 26 18 W
Slide 6: Section 2: HY13 Financial Results Overview
Section 2: HY13 Financial Results Overview 9-13 Caribou Drive, Direk, South Australia (Kimberly Clark) 6
Slide 7: HY 2013 Key Financials
HY 2013 Key Financials HY 2013 PCP Change Statutory net profit/(loss) $7.7m $(3.7)m 304.9% Statutory EPU 4.23cpu (2.10)cpu 301.4% Operating earnings2 $4.2m $3.7 m 13.2% Operating EPU 2.31cpu 2.05 cpu 12.6% DPU 2.25cpu 2.00 cpu 12.5% Total assets $302.4m $355.5m (14.9)% Net assets $96.8m $92.2m 5.0%
Slide 8: HY 2013 Statutory Net Profit per Unit to Operating Earnings per Unit Reconciliation
HY 2013 Statutory Net Profit per Unit to Operating Earnings per Unit Reconciliation Amortisation Listing, Notes Amortisation Statutory net of incentives, FV gain on FV gain on Loss on sale of Initial and and Denison of borrowing Operating profit leasing fees properties derivatives property deferred
Slide 9: Operating Earnings and Distributions
Operating Earnings and Distributions HY 2013 HY 2012 Statutory net profit $7.7m $(3.7)m Amortisation of incentives, leasing fees $0.4m $0.2m Fair value gain / (loss) on properties $(0.1)m $2.5m Fair value gain / (loss) on derivatives $(0.6)m $4.5m Loss / (gain) on sale of property $1.0m $(0.0)m Reli
Slide 10: NTA per Unit Reconciliation: Jun to Dec
NTA per Unit Reconciliation: Jun 12 to Dec 12 NTA per Unit 30 1 NTA per Unit 31 2 3 Jun 12 Disposals Revaluations Fee liabilities Senior debt Other Dec 12 0.70 0.29 -0.06 0.60 0.53 0.51 -0.25 0.50 Dollars per Unit 0.40 0.04 0.30 0.00 0.20 0.10 0.00 Notes 1. $7.1m in provisions relating to initial an
Slide 11: Section 3: Capital Management
Section 3: Capital Management 54 Sawmill Circuit, Hume, Australian Capital Territory (Grace Group) 11
Slide 12: Key Debt Indicators
Key Debt Indicators HY 2013 FY 2012 Drawn senior debt $172.1m $222.6m LVR1 57.4% 61.5% Weighted average debt duration 3.0 years 0.3 years “All-in” debt cost2 7.3% 7.0% Hedged 90.1% 72.0% Hedge duration 1.5 years 1.9 years • Decrease in senior debt reflects reduction of debt via proceeds of asset sal
Slide 13: Debt Facility
Debt Facility Summary of Facility Drawn senior debt maturity profile Lender NAB Facility limit $210.0m Drawn debt $172.1m Maturity December 2015 First ranking mortgages Security over portfolio LVR < 60.0%1 Covenant limits ICR > 1.6 x Covenant metrics as at 31 LVR 57.4%1 December 2012 ICR 1.9 x • Sin
Slide 14: 360 Notes Strategy
360 Notes Strategy 360 Notes Drawn senior debt and 360 Notes maturity profile Value of 360 Notes $26.0m 360 Notes on issue 64,890,000 Coupon rate 12.0% Expiry date June 2015 Par value $0.40 per 360 Note 360 Notes Strategy • 360 Notes issued to acquire the Walker portfolio • Considering options to re
Slide 15: Section 4: Portfolio Performance
Section 4: Portfolio Performance 310 Spearwood Avenue, Bibra Lake, Western Australia 15
Slide 16: Portfolio Overview
Portfolio Overview Well diversified $299.9m portfolio Queensland (21% by income) Citiswich Business Park – Australian Pharmaceutical Industries Limited Citiswich Business Park – Reject Shop New South Wales (17% by income) 60 Marple Avenue, Villawood 37-51 Scrivener Street, Warwick Farm 8 Penelope Cr
Slide 17: Diversified, Core, Industrial Portfolio
Diversified, Core, Industrial Portfolio • Core industrial properties in established industrial areas Portfolio summary Number of assets 18 • Maintained high occupancy of 97.7% Net lettable area (sqm) 316,940 • Geographically diversified across mainland Australia Property valuation ($m) 299.9 • Attra
Slide 18: Proven Asset Management and In-built Growth
Proven Asset Management and In-built Growth Significant re-leasing success continues Portfolio lease expiry profile • 10,735sqm (3.3% of NLA) re-leased in last 6 months • Since 31 December 2012: Heads of Agreement (HoA) over 38,229sqm (12.1% of portfolio) • Eliminates FY2013 expiry and reduces FY201
Slide 19: Portfolio Repositioning – Improving Portfolio Quality
Portfolio Repositioning – Improving Portfolio Quality • Higher quality assets improving Fund cashflow, reducing risk and maximising capital growth potential Disposals Acquisitions Properties 6 4 Total price $46.0m $80.4m Average Value $7.7m $20.1m Running yield1 9.7% 8.6% WALE 2.6 years 9.7 years Va
Slide 20: Asset Pipeline
Asset Pipeline Walker Corporation Partnership Citiswich Business Park (Qld)—Australian Pharmaceutical • Exclusive First Right of Refusal over industrial properties developed by Walker Corporation for five years • Walker Corporation has: • National industrial development capabilities • Circa 500ha of
Slide 21: Section 5: Summary and Outlook
Section 5: Summary and Outlook 21
Slide 22: Summary & Outlook
Summary & Outlook Solid HY 2013 performance • Fund refinanced, stabilised, repositioned and listed on ASX • Fund portfolio significantly strengthened • Asset management success in maximising rental income • NTA per Unit increased 3.9% to $0.53 per Unit • Distributions increased 12.5% to 4.5cpu • rep
Slide 23: FY2013 Operating Earnings and Distribution
FY2013 Operating Earnings and Distribution Actual Forecast FY 2013 1HY 2013 2HY 2013 Net operating earnings $4.2m $6.6m $10.8m Weighted average Units 181.6m 182.1m 182.1m Operating EPU 2.31cpu 3.60cpu 5.91cpu DPU 2.25cpu 2.25cpu 4.50cpu Payout ratio 98% 63% 76% Forecast FY2013 Operating EPU and DPU
Slide 24: Appendices
Appendices A Portfolio Details B Balance Sheet as at 31 December 2012 C Profit and Loss for the half year ended 31 December 2012 D Industrial Market Outlook E Fund Strategy and Structure F Important Information 24
Slide 25: Appendix A Portfolio Details
Appendix A Portfolio Details 25
Slide 26: Portfolio Overview as at 31 December 2012
Portfolio Overview as at 31 December 2012 Capitalisation Net lettable Valuation Last rate area Occupancy WALE Property State ($ m) Valued (%) (years) (%) (sqm) 60 Marple Avenue, Villawood NSW 19.70 Jun 2012 9.00 18,529 100.0 4.0 37-51 Scrivener Street, Warwick Farm NSW 17.60 Jun 2012 10.25 27,599 10
Slide 27: Property Details
Property Details 60 Marple Avenue 37–51 Scrivener Street 8 Penelope Crescent The Property is located approximately 40 kilometres west of The property is located in the traditional industrial precinct The property is located at Warwick Farm, 31 kilometres the Sydney CBD in the suburb of Arndell Park.
Slide 28: Property Details
Property Details Monaro Industrial Park—Grace Group Citiswich Business Park—API Citiswich Business Park—The Reject Shop The property was completed in 2009 and is situated The property was completed in 2010 and is situated Completed in 2010, the property is located in the industrial approximately 33
Slide 29: Property Details
Property Details Vicinity Industrial Base—Kimberly Clark 5-9 Woomera Avenue 102–128 Bridge Road Completed in 2009, the property is located 25 kilometres The property is located within the suburb of Edinburgh, The property is located in the south-eastern suburb of north of Adelaide, 3 kilometres from
Slide 30: Property Details
Property Details 500 Princes Highway 6 Albert Street 14-17 Dansu Court The property is located on the north side of Princes Highway The property is located in the traditional industrial precinct The property is situated within the established south eastern approximately 30 kilometres south east of t
Slide 31: Property Details
Property Details 12–13 Dansu Court 33-59 Clarinda Road 40–48 Howleys Road The property is situated within the established south The property is situated approximately 17 kilometres south- The Notting Hill/Mulgrave area is an office and industrial eastern industrial precinct of Hallam, approximately
Slide 32: Property Details
Property Details 39–45 Wedgewood Road 223-235 Barry Road 310 Spearwood Avenue The property is situated within the established south eastern The property is located within the established Bibra Lake industrial precinct of Hallam, approximately 30 kilometres The property is located within the establis
Slide 33: Appendix B Balance Sheet as at 31 December 2012
Appendix B Balance Sheet as at 31 December 2012 33
Slide 34: Balance Sheet as at 31 December 2012
Balance Sheet as at 31 December 2012 31 Dec 2012 30 Jun 2012 ($m) ($m) Cash and current assets 1.6 9.1 Trade and other receivables 0.9 1.6 Properties held for sale - 46.5 Properties at fair value 299.9 298.3 Total assets 302.4 355.5 Trade and other payables 5.8 4.4 Fee Provisions - 7.1 Interest bear
Slide 35: Appendix C Profit and Loss for the Half Year Ended December
Appendix C Profit and Loss for the Half Year Ended 31 December 2013 35
Slide 36: Profit and Loss for Half Year Ended 31 December 2012
Profit and Loss for Half Year Ended 31 December 2012 31 Dec 2012 ($m) 31 Dec 2011 ($m) Property rental 18.2 15.9 Other income 0.1 - Total revenue 18.3 15.9 Direct property expenses (4.1) (3.5) Responsible Entity fees (1.1) (0.9) Initial and deferred establishment fees 7.1 (0.3) Custodian fees (0.2)
Slide 37: Appendix D Industrial Market Outlook
Appendix D Industrial Market Outlook 37
Slide 38: Industrial Market Outlook
Industrial Market Outlook Past 6 Months Next 12 Months Market Comment Market Comment Direction Direction • Demand stable across all markets • Demand is expected to modestly • Some increased interest in pre- increase upon a stabilised Tenant Demand commitments economy • Increasing primarily due to pr
Slide 39: Appendix E Fund Strategy and Structure
Appendix E Fund Strategy and Structure 39
Slide 40: Fund Strategy
Fund Strategy Low risk, core industrial real estate investment trust with readily available growth opportunities Simple and transparent structure Fund Growth opportunities • Direct property ownership (no cross strategy • Contracted rental increases holdings); all properties owned 100% by the Fund •
Slide 41: Fund Structure
Fund Structure Fund structure Fees 360 Capital Fee type Fee regime Property Unitholders Group (360 Capital) Base Management Fee Up to 0.65%1 pa of the gross asset value of the Fund 100% 0.22% pa of the gross asset value of the Fund Recoverable Expenses2 360 Capital 360 Capital (estimate for a normal
Slide 42: Fund Organisational Chart
Fund Organisational Chart 360 Capital Industrial Fund 360 Capital RE Limited Fund Investment Senior Management (Responsible Entity) Committee (360 Capital) Andrew Moffat David van Aanholt Tony Pitt Ben James Independent Non- Chairman Managing Director Head of Property Executive Chairman John Ballhau
Slide 43: Appendix F Important Information
Appendix F Important Information 43
Slide 44: Glossary
Glossary Term Definition $ or cents Australian currency 360 Capital 360 Capital Property Group (stapled entity comprising 360 Capital Investment Trust and 360 Capital Property Limited) 360 Capital Investment Trust The managed investment trust (ARSN 099 680 252) that represents part of the stapled en
Slide 45: Disclaimer
Disclaimer This presentation has been prepared by 360 Capital RE Limited ACN 090 939 192, AFSL 223 739 (360 Capital) in its capacity as responsible entity of the 360 Capital Industrial Fund ARSN 099 680 252 (Fund). National Australia Bank Ltd (NAB) is referred to in this presentation in its capacity
Slide 46: 360 Capital Industrial Fund
360 CAPITAL INDUSTRIAL FUND ARSN 099 680 252 22 Hawkins Crescent, Bundamba, Queensland (API) 46
360 Capital Industrial Fund — HY2013 Earnings Presentation on 6ix