Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — FY2019 Earnings Presentation
41 slides from Centuria Industrial Reit's earnings presentation, Aug 6, 2019
Slide 1: Centuria Industrial REIT FY19 Results
Centuria Industrial REIT FY19 RESULTS A S X:CIP 6 AUGUST 2019 CENTURIA INDUSTRIAL REIT ASX:CIP 1 75-95 & 105 CORIO QUAY ROAD, NORTH GEELONG, VIC
Slide 2: Agenda
Agenda 1. Introduction 2. Financial Results 3. Portfolio Overview 4. Guidance & Strategy 5. Appendices CENTURIA INDUSTRIAL REIT ASX:CIP 2
Slide 3: Introduction
SECTION ONE Introduction A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 3 680 BOUNDARY RD, RICHLANDS, QLD
Slide 4: Centuria Platform
CENTURIA PLATFORM Centuria is an established ASX-listed specialist investment manager $6.2bn ASX:CNI Group AUM1 Market Capitalisation $746m2 $5.3bn $0.9bn $0.4bn Real Estate AUM Investment Bonds AUM CNI Co-Investments $2.7bn $2.6bn Centuria Life Listed Property AUM Unlisted Property AUM Centuria Lif
Slide 5: Key metrics – a quality pure play industrial platform
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Key metrics – a quality pure play industrial platform PORTFOLIO1 43 $1.2bn 95.9% 4.3yrs High quality assets Portfolio value Portfolio occupancy2 Portfolio WALE2 FINANCIAL $934m 13.8% 37.4% 27.0% Market capitalisation3 12 month return on equity4
Slide 6: Centuria management creating unitholder value
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Centuria management creating unitholder value Market Included Australia’s Capitalisation in the S&P largest domestic Total unitholder return 45.3% under Centuria’s management1,2,3 $934 ASX300 pure-play million 4 Index Industrial REIT TOTAL UNITH
Slide 7: Delivered on FY19 priorities
HIGHLIGHTS Delivered on FY19 priorities • Occupancy improved to 95.9%1 (94.5% at FY18) 1 Maintain leasing momentum • Leases agreed for 113,932sqm (14% of the portfolio) • 100% FY19 expiries renewed or leased • Over 80,000sqm leased in FY19 2 Improve Victoria portfolio • Occupancy now at 96.7%1 • Tra
Slide 8: Financial Results
SECTION TW O Financial Results A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 8 6 MACDONALD ROAD, INGLEBURN, NSW
Slide 9: Delivered on FY19 guidance and focused on maximising return on equity
FINANCIAL OVERVIEW – INCOME STATEMENT Delivered on FY19 guidance and focused on maximising return on equity FY19 FY18 VARIANCE Reflects acquisitions through FY19 Gross property income ($’000) 91.6 84.0 7.6 Other income ($’000) 0.6 3.4 (2.8) 2.4% Like-for-like income growth Interest income ($’000) 0.
Slide 10: Continuing to strengthen CIP's balance sheet
CAPITAL MANAGEMENT Continuing to strengthen CIP’s balance sheet DEBT AND HEDGE MATURITY PROFILES ($m) DEBT HEADROOM ($m) Hedging maturity profile 50 84 No maturities until FY22 Debt expiry profile 310 $50m of debt headroom Refinanced $310 million short term facilities 470 436 295 Diversified lender
Slide 11: Portfolio Overview
SECTION THREE Portfolio Overview A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 11 52 - 74 QUARRY ROAD, ERSKINE PARK, NSW
Slide 12: 100% exposure to high quality Australian industrial assets
PORTFOLIO COMPOSITION 100% exposure to high quality Australian industrial assets PORTFOLIO SNAPSHOT FY191 FY182 Number of assets # 43 37 WA QLD Book value $m 1,221.3 999.0 14% 3.8yrs 21% 5.1yrs WACR % 6.46 6.76 GLA sqm 821,823 735,384 NT Average asset size sqm 19,112 19,352 QLD NSW Occupancy by inco
Slide 13: Strong leasing success over more than 113,000sqm in FY19
PORTFOLIO OVERVIEW 1 Strong leasing success over more than 113,000sqm in FY19 • Vacancy reduced to 4.1% WEIGHTED AVERAGE LEASE EXPIRY (% BY INCOME) 55.3 FY18 FY19 52.5 ▪ 2.5% excluding 46 Gosport St, Hemmant QLD which was acquired as Portfolio well positioned with just 15.4% expiring vacant possessi
Slide 14: NTA uplift of 6.6% in FY19
VALUATIONS AND LEASING NTA uplift of 6.6% in FY19 PORTFOLIO VALUATION SUMMARY FY19 FY18 VALUATION FY19 FY18 MOVEMENT STATE VALUATION VALUATION MOVEMENT WACR WACR WACR NSW 460.1 418.5 41.6 6.01% 6.51% (0.51%) • 100% of portfolio externally revalued in VIC 265.0 239.4 25.6 6.38% 6.70% (0.32%) Septembe
Slide 15: Selective acquisitions complement existing portfolio
CAPITAL TRANSACTIONS – ACQUISITIONS AND DIVESTMENTS Selective acquisitions complement existing portfolio 207-219 Browns Rd, Noble Park, VIC - $37.0m • Average acquisition asset value $24.2m4 (CIP portfolio average asset value $28.4m) FY18 Lot 14 Sudlow Rd, Bibra Lake, WA - $28.0m 92 Robinson Ave, Be
Slide 16: Guidance & Strategy
SECTION FOUR Guidance & Strategy A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 16 14 – 17 DANSU COURT, HALLAM, VIC
Slide 17: Commencing FY20 in a strong position
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Commencing FY20 in a strong position PORTFOLIO CIP settled the following transactions post 30 June 2019: 45 High quality assets • Acquisition of 680 Boundary Road, Richlands QLD A high-quality asset in the well established industrial market of $
Slide 18: Increasing investor relevance and scale
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Increasing investor relevance and scale CIP MARKET CAPITALISATION ($m) • $154m equity raised in FY193 to further strengthen $3.18 31 Jul 19 balance sheet and support select acquisitions to CIP unit price expand CIP 13% ✓ Pro-forma gearing reduce
Slide 19: Strategic Vision and Objectives
STRATEGY & GUIDANCE Strategic Vision and Objectives Vision Continue to build Australia’s leading domestic pure play industrial REIT A clear and simple Deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets strategy Overseen by an active Prudently
Slide 20: FY20 Guidance – Transitioning to FFO
STRATEGY & GUIDANCE FY20 Guidance – Transitioning to FFO CIP will report Funds From Operations (FFO) as its primary earnings measure from FY20 onwards FY20 • Equivalent FY19 FFO per unit of 19.3 cents per FFO unit Guidance • Forecast FY20 FFO per unit growth of 2%-3% from FY19 CIP intends to distrib
Slide 21: Appendices
SECTION FIVE Appendices Appendix A – Leasing Expiry by State Appendix B – Market Research Appendix C – Income Statement A S X:CIP Appendix D – Distribution Statement Appendix E – FFO Reconciliation Appendix F – Balance Sheet and NTA Movement Appendix G – Key Vacancies and Upcoming Expiries Appendix
Slide 22: Appendix A - Leasing Expiry by State
APPENDIX A - LEASING EXPIRY BY STATE NSW SUBPORTFOLIO EXPIRY PROFILE (% BY INCOME) VIC SUBPORTFOLIO EXPIRY PROFILE (% BY INCOME) 53.5 WALE OCCUPANCY GLA WALE OCCUPANCY GLA 49.5 4.2years 99.3% 265,811sqm 4.4years 96.7% 240,342sqm 38.5 20.4 13.3 7.3 7.5 5.9 3.3 0.7 Vacant FY20 FY21 FY22 FY23 FY24+ Vac
Slide 23: Appendix B – Market Research: Market Supply
0 100 200 300 400 600 700 800 900 500 SQM Apr-11 Aug-11 Dec-11 Apr-12 PRIME Aug-12 SYDNEY Dec-12 Apr-13 Aug-13 Dec-13 1. Source: Knight Frank Research Apr-14 SECONDARY Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 AVAILABLE SPACE Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 APPENDIX B
Slide 24: Income Statement
APPENDIX C Income Statement FY19 FY18 REVENUE Gross property income ($’000) 91,582 83,998 Other income ($’000) 602 3,398 Interest income ($’000) 195 132 Total revenue ($'000) 92,379 87,528 EXPENSES Direct property expenses ($’000) (18,108) (15,669) Responsible entity fees ($’000) (6,812) (6,233) Fin
Slide 25: Distribution Statement
APPENDIX D Distribution Statement FY19 FY18 Statutory net profit ($’000) 88,828 98,895 Straight lining of rental income ($’000) (2,281) 438 Amortisation of leasing commissions and tenant incentives ($’000) 4,185 2,499 Net gain on fair value of investment properties (gain) / loss ($’000) (53,808) (50
Slide 26: FFO Reconciliation
APPENDIX E FFO Reconciliation DISTRIBUTABLE EARNINGS FUNDS FROM OPERATIONS VARIANCE Statutory net profit ($’000) 88,828 88,828 - Straight lining of rental income ($’000) (2,281) (2,281) - Amortisation of leasing commissions and tenant incentives ($’000) 4,185 6,157 1,972 Net gain on fair value of in
Slide 27: Balance Sheet and NTA Movement
APPENDIX F Balance Sheet and NTA Movement FY19 FY18 NTA GROWTH3 Cash ($’000) 9,348 21,177 Investment properties ($’000) 1,221,250 1,009,000 Trade & other receivables ($’000) 9,144 6,833 1 Other assets ($’000) - 49,337 Goodwill ($’000) 10,501 10,501 Derivative financial instruments ($’000) - 51 Total
Slide 28: Key vacancies and upcoming expiries
APPENDIX G Key vacancies and upcoming expiries CURRENT KEY VACANCIES PROPERTY GLA (SQM) % OF PORTFOLIO AREA VACANT SINCE STATUS 49 Temple Drive, Thomastown VIC 8,045 1.0 20-Jun-16 Terms issued to multiple parties 99 Quill Way, Henderson WA 16,419 2.0 28-Feb-18 Being marketed suited to users in oil a
Slide 29: Boundary Road, Richlands QLD
APPENDIX H – FY19 ACQUISITION PROFILES 616 Boundary Road, Richlands QLD Key characteristics The 13,763sqm warehouse facility on a 3.1 hectare site has dual street frontages is located in the prime Richlands market with surrounding occupiers including Coca-Cola and Target. The property was acquired t
Slide 30: International Drive, Westmeadows VIC
APPENDIX H – FY19 ACQUISITION PROFILES 1 International Drive, Westmeadows VIC Key characteristics Cargo park is a high quality industrial unit estate with an overall GLA of 25,866sqm on a prime 5.6ha site. The property is located on the first exit ramp on the Tullamarine Freeway from Melbourne Airpo
Slide 31: Kerry Road, Archerfield, QLD
APPENDIX H – FY19 ACQUISITION PROFILES 149 Kerry Road, Archerfield, QLD Key characteristics Stable asset with high quality tenant in Bluescope Steel Limited with a long term lease commitment • Strategic location with access to infrastructure connections including the Acacia Ridge Rail Terminal • Low
Slide 32: Lakes Road & Stirling Crescent, Hazelmere, WA
APPENDIX H – FY19 ACQUISITION PROFILES 155 Lakes Road & 103 Stirling Crescent, Hazelmere, WA Key characteristics High quality Perth metropolitan asset occupying a site area of 6.0 hectares across 2 freehold titles • Both assets are occupied by subsidiaries of ASX listed entities (CIMIC and NRW Holdi
Slide 33: Baile Road, Canning Vale, WA
APPENDIX H – FY19 ACQUISITION PROFILES 16-18 Baile Road, Canning Vale, WA Key characteristics • High quality, modern, freestanding logistics warehouse located in one of Perth’s core industrial markets • Leased to DHL on a 5year term and recently undergone expansion and significant refurbishment to m
Slide 34: Gosport Street, Hemmant, QLD
APPENDIX H – FY19 ACQUISITION PROFILES 46 Gosport Street, Hemmant, QLD Key characteristics • Acquired as vacant possession with an opportunity to immediately reposition through capital works and leasing • CIP has commenced marketing the site to prospective tenants ahead of settlement and expects low
Slide 35: Corio Quay Road, North Geelong, VIC
APPENDIX H – FY19 ACQUISITION PROFILES 75-95 Corio Quay Road, North Geelong, VIC Key characteristics • Asset comprises two buildings on a 3.8 hectare site • Leased to a subsidiary of Boardriders Inc. • Strategic location for Boardriders, which has occupied the property since the early 1990s and has
Slide 36: Boundary Road, Richlands, QLD
APPENDIX H – FY19 ACQUISITION PROFILES 680 Boundary Road, Richlands, QLD Key characteristics • High quality asset completed in 2008, occupying a total area of 2.2 hectares • Fully leased to MDI, a specialist developer and distributor of gifts, toys and homewares, and Independent Liquor Group, Austra
Slide 37: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 2 Woolworths Way, Warnervale NSW 81.3 1,490 7.00% 54,533 2.1 100.0% 92-98 Cosgrove Road, Enfield NSW 50.0 1,477 5.75% 33,863 5.0 100.0% 10 Williamson Road, Ingleburn NSW 49.0 1,798 5.75% 27,26
Slide 38: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 102–128 Bridge Road, Keysborough VIC 30.7 1,247 7.00% 24,627 1.5 100.0% 2 Keon Parade, Keon Park VIC 25.5 1,306 5.75% 19,527 12.1 100.0% 69 Studley Court, Derrimut VIC 21.5 1,497 6.50% 14,365
Slide 39: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 21 Jay Street, Townsville QLD 11.0 2,328 7.50% 4,726 6.0 100.0% 310 Spearwood Avenue, Bibra Lake WA 54.8 920 7.50% 59,501 4.6 100.0% Lot 14 Sudlow Road, Bibra Lake WA 33.8 856 7.50% 39,485 6.1
Slide 40: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds No. 2 Limited (ABN 38 133 363 185, The information in this presentation has been obtained from and based on sources believed by CPF2L to AFSL 340 304) (‘CPF2L’) as responsible entity of the Centuria Industrial REIT (ARSN 099 6
Slide 41: Centuria Industrial REIT ASX:CIP
CENTURIA INDUSTRIAL REIT ASX:CIP 41
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