Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — FY2024 Earnings Presentation
44 slides from Centuria Industrial Reit's earnings presentation, Jul 31, 2024
Slide 1: Centuria Industrial REIT FY24 results
31 July 2024 | ASX:CIP Centuria Industrial REIT FY24 results 204-208 BANNISTER ROAD, CANNING VALE WA
Slide 2: Speakers
Speakers Jesse Curtis Grant Nichols Michael Ching Head of Funds Management – Head of Listed Funds & Fund Manager – Assistant Fund Manager – Centuria Capital Limited Centuria Industrial REIT Centuria Industrial REIT Centuria ASX:CIP 2
Slide 3: 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 and present. AGENDA 1. Overview 2. Financial results 3. Operati
Slide 4: Overview
Overview Section one 12-13 AND 14-17 DANSU COURT, HALLAM VIC
Slide 5: 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 CIP and is included in the S&P/ASX200 Index Group AUM1 $21.1bn Centuria Real estate $20.2bn Life Limited Investment Listed (30%2) $6.0bn Unlisted (70%2) $14.2bn bonds $3.9bn $2.0bn $0.2bn $8.0bn $3.2bn $3.
Slide 6: CIP: Vision, strategy and objectives
CIP: Vision, strategy and objectives VISION A clear and simple strategy To be Australia’s Deliver income and capital growth to investors from a portfolio of high leading domestic pure quality Australian industrial assets play industrial REIT Key objectives Centuria Industrial REIT (CIP) Australia’s
Slide 7: Results highlights
Results highlights Delivering earnings growth despite a rising debt cost environment Delivered FY24 FY25 FFO guidance 43%+ re-leasing upgraded FFO of 17.5cpu1 spreads2 guidance Increased YoY FFO and Achieved +300,000sqm of leasing distribution guidance (22% portfolio GLA)3 FY24 FFO of 17.2cpu. Initi
Slide 8: FY24 strategy execution
FY24 strategy execution Leveraging market fundamentals, delivering income growth and prudent capital management • Delivered 17.2cpu of earnings in FY24, outperforming initial guidance of 17.0cpu driven by strong 6.5% like for like NOI growth. Active • Average FY24 re-leasing spreads of 43%1 across 3
Slide 9: Key metrics
Key metrics Australia’s largest listed domestic pure-play industrial REIT PORTFOLIO FINANCIAL FY25 FFO guidance7 of 89 $3.8bn 3% $3.86 17.5 cpu High-quality assets Portfolio book value1 FFO growth in FY254 Net tangible assets per unit6 97.1% 7.6yrs 34.0% 93% FY24 average re-leasing spreads8 of Hedge
Slide 10: Growth drivers for industrial real estate
Growth drivers for industrial real estate Key themes providing market tailwinds Increased ecommerce Population growth2 Onshoring of production adoption1 and assembly • Each additional c.$1bn of online sales requires • c.4.5sqm of Australian industrial space required per • Organisations continue to b
Slide 11: CIP's portfolio benefits from industry growth drivers
CIP’s portfolio benefits from industry growth drivers CIP portfolio strategic metrics Access to end customers Exposure to growth sub-sectors 83% and labour Significant portfolio exposure to ecommerce, data centres Located in strategic infill Infill portfolio provides tenants with proximity to and co
Slide 12: Financial results
Financial results Section two 56-88 LISBON STREET, FAIRFIELD NSW
Slide 13: Funds From Operations (FFO)
Funds From Revenue FY24 FY23 Variance Operations (FFO)1 Gross property income $m 227.2 220.0 7.2 Strong re-leasing spreads driving 6.5% like for like Other income $m 2.2 2.2 0.0 NOI growth Strong re-leasing spreads have more than offset an increase in Share of net profit of equity accounted investme
Slide 14: Capital management
Capital management Strong balance sheet maintained with conservative gearing 34.0% Proforma gearing6,7 at the lower end of target Debt maturity profile ($m) range of 30%-40% (covenant of 50%) Domestic and International banks 300 A$MTN Exchangeable Note1,2 425 93% 350 Hedging as at 30 June 2024 230 1
Slide 15: Operational performance
Operational performance Section three 5, 243 BRADMAN STREET, ARCHERFIELD QLD
Slide 16: Australia's largest listed domestic pure-play industrial REIT
Australia’s largest listed domestic 100% exposure to Australian industrial property pure-play industrial REIT Portfolio snapshot FY241 Number of assets # 89 WA 9% QLD 21% Book value $m 3,834 total portfolio total portfolio WACR % 5.81 5.3 yrs 9.2 yrs GLA sqm 1,325,318 WALE WALE Average asset size sq
Slide 17: Accelerating re-leasing spreads achieved over the past three years
Accelerating re-leasing spreads achieved over the past three years Over 300,000sqm of leasing (22% of portfolio) secured2 Select FY24 leasing outcomes CIP re-leasing spreads1 Re-leasing CIP RE-LEASING SPREADS 1 Ashburn Road, Bundamba QLD 47% spreads of • Renewal secured across 26,628sqm • 7% valuati
Slide 18: WA case study
WA case study 310 Spearwood Ave & Lot 16 Sudlow Rd, Bibra Lake • Renewal and expansion of AWH across 92,421sqm • Largest WA industrial c.120,000 sqm leasing transaction in 2024 YTD of leasing secured in FY241 • 9% valuation uplift in 2HFY24 65% WA portfolio leased in FY24 204-208 Bannister Road, 8%
Slide 19: High quality tenant customers
High quality tenant customers Secure income backed by 93% blue chip tenant customers Leveraging CIP’s scale to generate a ‘networking effect’ Tenant industry sector diversifications1 to grow and service customers across multiple locations 93% Listed, Strong relationships providing multinational or i
Slide 20: Strategic transactions in FY24
Strategic transactions in FY24 CIP continued to optimise portfolio construction Divestments Acquisitions 16 Mulgul Road, Malaga WA $120m of divestments • 5 MW Data Centre at 4% premium to prior • Fully leased to Fujitsu book values1 • $39m acquisition 1 International Drive, 9 Fellowes Court, 11 Hexh
Slide 21: Portfolio valuations
Portfolio valuations FY24 FY23 Valuation c.67% of the portfolio by value Valuation Valuation Movement1 FY24 FY23 Movement externally revalued in June ($’000) ($’000) ($’000) WACR2 WACR2 WACR2 2024. Like for like portfolio/ 3,615 3,630 (15) 5.81% 5.24% 0.57% weighted average summary3,4 Acquisitions 6
Slide 22: FY24 ESG highlights: CIP
FY24 ESG highlights: CIP 90-118 BOLINDA ROAD, CAMPBELLFIELD VIC Our memberships and industry participation Member of the Diversity Council of Australia8 Responsible business Conscious of climate change Valued stakeholders practices Supporting partner of c.296kW of solar installed during FY241 452 ho
Slide 23: Development, outlook and guidance
Development, outlook and guidance Section four 90 BOLINDA ROAD, CAMPBELLFIELD VIC
Slide 24: Development capability
Development capability CIP has established a track record unlocking embedded value from infill sites FY23 completions FY24 completions Committed Future pipeline $m GLA $m GLA $m GLA $m GLA 103 40,544 147 57,722 - - c.1,031 c.197,000 Est. value on completion1 $1bn 94% expected end value of developmen
Slide 25: Unlocking embedded value within CIP's portfolio
Unlocking embedded value within CIP’s portfolio $1bn+ development pipeline1 providing short to medium term value-add opportunities Existing landholdings in core Progressed development projects urban infill markets with limited 74-94 Newton Road, Wetherill 50-64 Mirage Road, Direk SA supply which hav
Slide 26: Fundamentals support strong market rental growth in Australia
Fundamentals support strong market rental growth in Australia CIP’s pure play infill industrial portfolio is well positioned to benefit from supply-demand imbalance Industrial spaces supply-demand forecast BRISBANE VACANCY RATE (%)2 2.7% 17% (‘000 sqm) Historical take up 3 forecast take up 3 Uncommi
Slide 27: FY25 priorities
FY25 priorities Harnessing strong market fundamentals and sub-sector tailwinds • Drive leasing outcomes to capture embedded portfolio leasing spreads, to deliver fund earnings growth • Leverage tenant relationships and network effect to enhance the quality of CIP’s customer base Maximising value-add
Slide 28: FY25 guidance
FY25 guidance1 Delivering earnings growth despite a rising debt cost environment FFO per unit1 Forecast third consecutive 17.5c year of earnings growth1 Distribution per unit1 16.3c Distributions expected to be paid in quarterly instalments. 8 LEXINGTON DRIVE, BELLA VISTA NSW 1. Guidance remains sub
Slide 29: Appendices
Appendices Section five Appendix A: Exposure to the major industrial sub-sectors Appendix B: CIP Development pipeline Appendix C: Global Industrial rent comparison Appendix D: Sydney and Melbourne land supply Appendix E: CIP portfolio Appendix F: Lease expiry by state Appendix G: Key vacancies and u
Slide 30: Appendix A: Exposure to the major industrial sub-sectors
Appendix A: Exposure to the major industrial sub-sectors1 A well-balanced portfolio across the major industrial sub-sectors Manufacturing and Distribution centres Transport logistics Data centres Cold storage production 24% portfolio 42% portfolio 14% portfolio 12% portfolio 7% portfolio value value
Slide 31: Appendix B: CIP development pipeline
Appendix B: CIP development pipeline Optionality to activate $1bn1 embedded development pipeline Developments focused on key growth areas capitalising on long-standing industrial trends Multi-level industrial Cold storage/food logistics Data centres Distribution centres • Industrial tenant customers
Slide 32: Appendix C - Australian industrial vacancy rates are one of the lowest in the world
Appendix C - Australian industrial vacancy rates are one of the lowest in the world Australian rents remain affordable in a global context Avg. global rents (AU$ equivalent/per square metre) and vacancy (%) Australian National Industrial market vacancy rate of 1.9%, one of the lowest globally Vancou
Slide 33: Appendix D Sydney industrial land supply
Appendix D Sydney industrial land supply • New land supply concentrated around the new Badgerys Creek Airport precinct, Kemps Creek and Eastern Creek • Current planning delays and increased infrastructure costs delaying new supply coming to market CIP’s portfolio is well positioned in supply constra
Slide 34: Appendix E: CIP portfolio
Appendix E: CIP portfolio An active portfolio providing exposure to strong market rental growth and value-add opportunities Active portfolio1,2 Long WALE portfolio Active portfolio 87 2 • An active portfolio providing exposure to strong market assets assets rental growth and value-add opportunities
Slide 35: Appendix F: Leasing expiry by state
Appendix F: Leasing expiry by state Sub portfolio expiry profile (% by income) WALE OCCUPANCY GLA WALE OCCUPANCY GLA NSW VIC 4.7yrs 98.9% 393,378 sqm 10.0yrs 94.6% 441,496 sqm 62.0 61.0 13.6 13.8 13.0 9.8 5.4 6.0 8.0 4.8 1.1 1.4 Vacant FY25 FY26 FY27 FY28 FY29+ Vacant FY25 FY26 FY27 FY28 FY29+ WALE
Slide 36: Appendix G: Key vacancies and upcoming expiries
Appendix G: Key vacancies and upcoming expiries Current key vacancies1 GLA (SQM) % of portfolio area 90 Bolinda Road, Campbellfield 19,848 1.5 102-128 Bridge Road, Keysborough 8,452 0.6 48-54 Kewdale Road, Welshpool 6,373 0.5 207-219 Browns Road, Noble Park 4,680 0.4 51 Musgrave Road, Coopers Plains
Slide 37: Appendix H: Income statement
Appendix H: Income statement FY24 FY23 Revenue Gross property income $’000 227,157 219,976 Other income $’000 2,231 2,217 Share of net profit of equity accounted investments $’000 3,117 3,179 Interest income $’000 1,436 1,139 Total revenue $'000 233,941 226,511 Expenses Direct property expenses $’00
Slide 38: Appendix I: Balance sheet and NTA movement
Appendix I: Balance sheet and NTA movement FY24 FY23 NTA movement2 Cash $’000 16,536 20,868 Investment properties $’000 3,764,000 3,769,050 Equity accounted investments $’000 71,015 70,101 Other assets $’000 - 538 Trade & other receivables $’000 19,488 16,366 Derivative financial instruments $’000 1
Slide 39: Appendix J: Portfolio valuation summary
Appendix J: Portfolio valuation summary1,2 FY24 valuation FY23 valuation Valuation movement3 FY24 WACR4 FY23 WACR4 Movement WACR4 State ($M) ($M) ($M) (%) (%) (%) (BPS) NSW 1,155 1,150 5 0.9% 5.73% 5.06% 0.67% VIC 1,266 1,295 (29) (2.2%) 5.54% 5.06% 0.48% QLD 789 800 (11) (1.4%) 6.00% 5.41% 0.59% WA
Slide 40: Appendix K: Investment portfolio
Appendix K: Investment portfolio Property Ownership Book value ($m) Cap rate GLA (SQM) WALE (YRS)1 Occupancy %1 Sub sector NSW 56-88 Lisbon Street, Fairfield East 100% 197.5 5.50% 60,224 1.4 100.0% Distribution Centre 2 Woolworths Way, Warnervale 100% 105.0 6.25% 54,196 7.1 100.0% Distribution Centr
Slide 41: Appendix K: Investment portfolio
Appendix K: Investment portfolio Property Ownership Book value ($m) Cap rate GLA (SQM) WALE (YRS)1 Occupancy %1 Sub sector VIC (continued) 14-17 Dansu Court, Hallam 100% 35.0 5.75% 17,070 5.3 100.0% Transport Logistics 75-95 & 105 Corior Quay Road, North Geelong 100% 33.5 6.75% 21,302 7.1 100.0% Dis
Slide 42: Appendix K: Investment portfolio
Appendix K: Investment portfolio Property Ownership Book value ($m) Cap rate GLA (SQM) WALE (YRS)1 Occupancy %1 Sub sector QLD (continued) 680 Boundary Road, Richlands 100% 31.0 5.75% 12,633 1.3 100.0% Distribution Centre 21 Jay Street, Townsville 100% 28.3 7.25% 10,291 7.9 100.0% Distribution Centr
Slide 43: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds No.2 Limited (ABN 38 133 363 185, AFSL 340304) (CPF2L) as responsible entity of Centuria Industrial REIT (ARSN 099 680 252) (‘CIP’ or the ‘Trust’). This presentation contains selected summary information and does not purport t
Slide 44: Australia
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
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