Australian Unity Office Fund · ASX:AOF
Australian Unity Office Fund — FY2018 Earnings Presentation
32 slides from Australian Unity Office Fund's earnings presentation, Aug 24, 2018
Slide 1: Australian Unity Office Fund 2018 Full Year Results Presentation
Australian Unity Office Fund (ASX: AOF) 2018 Full Year Results Presentation – 24 August 2018 Webcast: https://fnn.webex.com/fnn/onstage/g.php?MTID=e0f48b0535622fe807610ffb3ef1ac4ab Teleconference details: Number: +61 2 9037 0069 Access Code: 574 084 483 5 Eden Park Drive, North Ryde, NSW
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 (AUIRE), as responsible entity of the Australian Unity Office Fund ARSN 113 369 627 (Fund). The information provide
Slide 3: Introduction
Introduction 2 Eden Park Drive, North Ryde, NSW
Slide 4: Australian Unity at a glance
Australian Unity at a glance AOF’s investment manager – reputable and a strong track record More than 175 years as an Australian mutual 280,000 members; almost 1 million customers; 7,500 employees Profits reinvested into programs and services that benefit members Trusted mutual and customers,
Slide 5: AOF's results
AOF’s results 468 St Kilda Road, Melbourne, VIC
Slide 6: AOF's 2018 full year result highlights
AOF’s 2018 full year result highlights Delivered on guidance, strong NTA growth 1 Statutory Net Profit of $97.3 million NTA increased 20% to $2.67 per unit1 2 (30 June 2017 $2.23) Fund From Operations (FFO) 17.2 cpu2 3 (guidance 17.1 -17.3 cpu) 4 Portfolio value increased by $194.5 million to $635.6
Slide 7: Delivered on key objectives
AOF’s 2018 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 8: Financial results
Financial results 30 Pirie Street, Adelaide, SA
Slide 9: Full year 2018 – key financial metrics
Financial results Full year 2018 – key financial metrics Key metric FY18 FY17 Change Statutory net profit up $36.7 million, largely due to increase in Statutory net profit $97.3m $60.6m +$36.7m asset valuations as a result of lower cap rates and higher market FFO1 $27.0m $24.0m +$3.0m income. FFO
Slide 10: Full year 2018 – capital management
Financial results Full year 2018 – capital management 30 June 30 June Debt diversified by three Change separate tranches and two 2018 2017 major banks (CBA and NAB) Total borrowings1 $198.3m $123.5m +$74.8m $70 million new debt facility with Total debt facilities $220.0m2 $140.0m +$80.0m an Octo
Slide 11: Portfolio management
Portfolio management 32 Phillip Street, Parramatta, NSW
Slide 12: Portfolio highlights
Portfolio highlights Strong portfolio growth with solid leasing activity 1 Portfolio value increased by $194.5 million to $635.6 million Acquisition of 150 Charlotte St, Brisbane for 2 $105.75 million 3 81% exposure (by value) to the eastern seaboard ~8,200 sqm of new leases completed (28 transactio
Slide 13: Leasing summary
Leasing summary Leasing conditions and enquiry continue to improve • ~5,600 sqm of completed leases related to previously vacant space, increasing portfolio occupancy to 95.0% (93.5% as at 30 June 2017) • ~2,700 sqm of executed leases or signed heads of agreement not included in 30 June 2018 portfol
Slide 14: Valuation summary
Valuation summary Uplift driven by improving market parameters Current Cap rate Change in 30 June 18 All assets were independently cap rate change1 valuation2 valuation revalued as at 30 June 2018 reflecting strong investment 30 Pirie St, Adelaide 7.50% No change $2.5m $121.5m market conditions 10
Slide 15: Portfolio update
Portfolio update Activity in Parramatta Development opportunity at 10 Valentine Ave, Parramatta (adjacent to existing building) • Approval has been received for a new ~8,000 sqm commercial office development • A site specific planning proposal has been submitted to increase the FSR, permitting a fut
Slide 16: Market overview
Market overview 5 Eden Park Drive, North Ryde, NSW
Slide 17: Positive leasing activity is a feature of most Australian office markets
Market overview Positive leasing activity is a feature of most Australian office markets • Sydney and Melbourne continue to 12 Month Net Effective 12 experience solid net absorption and falling Vacancy 12 Month Month Rental Market Absorption vacancy rates, which is generating effective June 2018 Cha
Slide 18: Metropolitan markets are becoming a more prominent investment and tenant choice
Market overview Metropolitan markets are becoming a more prominent investment and tenant choice • Very high levels of office investment demand is causing buyers to look beyond CBD office markets • The rental spread between CBD and metropolitan markets is encouraging tenants to explore decentralisati
Slide 19: Summary and outlook
Summary and outlook 10 Valentine Avenue, Parramatta, NSW
Slide 20: Outlook
Outlook AOF remains well positioned to deliver on its objectives Guidance • FY19 FFO guidance of 17.2 – 17.4 cpu1 • FY19 distribution guidance of 15.8 cpu1 Immediate focus • Address current vacancy and pending lease expiry risk • Where possible, take advantage of improving leasing conditions to grow
Slide 21: Appendices
Appendices 241 Adelaide Street, Brisbane, QLD
Slide 22: Income statement
Income statement FY18 FY17 Change 12 months to 30 June 2018 ($’000) ($’000) ($’000) Income Statement Rental income 53,375 44,009 9,366 Property expenses (18,250) (15,753) (2,497) Interest income 27 14 13 Net (losses)/gains on financial instruments held (529) 1,176 (1,705) at fair value Net fair valu
Slide 23: Reconciliation of statutory profit to Property Council FFO
Reconciliation of statutory profit to Property Council FFO FY18 FY17 Change 12 months to 30 June 2018 ($’000) ($’000) ($’000) Statutory Net Profit 97,293 60,637 36,656 Adjusted for: Straight lining of rental income and amortisation of 2,918 3,529 (611) leasing commissions and tenant incentives Net l
Slide 24: Balance sheet
Balance sheet 30 June 2018 30 June 2017 Change ($’000) ($’000) ($’000) Assets Cash and cash equivalents 6,177 4,118 2,059 Receivables 820 432 388 Financial assets held at fair value 0 232 (232) Other assets 586 361 225 Investment properties 635,550 441,067 194,483 Total Assets 643,133 446,210 196,92
Slide 25: Capital management
Capital management Debt facility expiry profile1 $100 m $80 m Refinanced $60 m $40 m $20 m $0 m Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 1. As at 30 June 2018 and adjusted to reflect the $35 million paid on or before 8 August 2018 as part of the refinancing arrangement a
Slide 26: Key portfolio metrics
Key portfolio metrics As at 30 June 2018 Geographic diversification2 Key portfolio metrics 64 Northbourne Number of properties 9 468 St Kilda Ave NSW Road 10 Valentine Occupancy1 95.0% 11% 3% Avenue 17% Portfolio Value $635.55m QLD 5 Eden Park Weighted Average Capitalisation Rate 6.5% 30 Pirie Stree
Slide 27: Investment portfolio
Investment portfolio As at 30 June 2018 NLA WALE1 Occupancy Property State Book value Cap rate (sqm) (years) (by NLA) Single or 30 Pirie St, Adelaide SA $121.50m 7.50% 24,781 4.7 91.7% Dominant Tenant 10 Valentine Ave, Parramatta NSW $115.00m 6.25% 15,995 3.8 100.0% Assets 150 Charlotte St, Brisbane
Slide 28: Sustainability
Sustainability Energy Increase Daily Consumption Performance 15% • Indicates energy savings compared to ‘Baseline’ 10% • ‘Baseline’ is the electricity consumption 5% for 2014 adjusted for weather patterns and 0% seasonality Jul-16 Jul-17 Jun-16 Aug-16 Sep-16 Nov-16 Dec-16 Jan-17 Jun-17 Aug-17 Sep-17
Slide 29: Total shareholder return
Total shareholder return 160 AOF - Total Return - 50% 50% S&P/ASX 200 A-REIT Accumulation Index - 12% 140 S&P/ASX 300 A-REIT Accumulation Index - 13% 33% All Ordinaries Accumulation Index - 33% 120 13% 12% 100 80 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Source: UBS, Company fil
Slide 30: Australian Unity's portfolio as at 30 June 2018
Australian Unity’s portfolio as at 30 June 2018 Commercial Healthcare Social Australian Unity Property Property Property Infrastructure Mortgages Portfolio (incl AOF) Gross Assets $1.45b $1.51b $239m1 $141m $3.34b Net lettable area (sqm) 327,188 174,171 87,4322 n/a 588,791 Assets/loans 27 51 153 18
Slide 31: Management team
Australian Unity Office Fund Management team From left: Mark Pratt, Executive General Manager, Property; Simon Beake, Portfolio Manager; Grant Nichols, Fund Manager; Giovanna Reale, Asset Manager 31
Slide 32: Australian Unity Health | Wealth | Living
Australian 7 Health | Wealth | Living
Australian Unity Office Fund — FY2018 Earnings Presentation on 6ix