Australian Unity Office Fund · ASX:AOF
Australian Unity Office Fund — Shareholder Meeting (December 2020)
37 slides from Australian Unity Office Fund's shareholder meeting presentation, Dec 4, 2020
Slide 1: ASX Announcement – Australian Unity Office Fund
ASX Announcement – Australian Unity Office Fund 4 December 2020 General Meeting Presentations Australian Unity Investment Real Estate Limited (AUIREL), as Responsible Entity of Australian Unity Office Fund (ASX: AOF) is pleased to provide the following as part of the General Meeting of AOF to be hel
Slide 2: Australian Unity Office Fund 2020 General Meeting
4 December 2020 AUSTRALIAN UNITY OFFICE FUND 2020 GENERAL MEETING Webcast: https://web.lumiagm.com/383799988 32 Phillip St, Parramatta
Slide 3: 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 (AOF). The information provide
Slide 4: Online Attendees – Question Process
ONLINE ATTENDEES – QUESTION PROCESS • When the Question function is available, the Q&A icon will appear at the top of the app. • To send in a question, simply click in the ‘Ask a question’ box, type your question and the press the send arrow • Your question will be sent immediately for review 3
Slide 5: AUIREL Directors & AOF Management Team
AUIREL DIRECTORS & AOF MANAGEMENT TEAM AURIEL directors (William) Peter Day Don Marples Eve Crestani Greg Willcock Erle Spratt Independent Non-Executive Independent Non-Executive Independent Non-Executive Non-Executive Director Non-Executive Director Director and Chairman, Director, Chairman of the
Slide 6: Agenda
AGENDA Presenters: 1. Chairman’s welcome (William) Peter Day Independent Non- 2. Chairman’s address Executive Director and 3. Fund Manager’s address Chairman 4. Questions James Freeman Fund Manager 5
Slide 7: Chairman's Address
CHAIRMAN’S ADDRESS PETER DAY 64 Northbourne Ave, Canberra 6
Slide 8: Chairman's Address
CHAIRMAN’S ADDRESS • AOF portfolio has demonstrated strength and resilience during the COVID-19 pandemic • FY20 distribution of 15.0 cents per unit paid to AOF unitholders • FY21 distribution guidance of 15.0 cents to be paid to AOF unitholders in quarterly instalments • Board and management continu
Slide 9: Fund Manager's Address
FUND MANAGER’S ADDRESS JAMES FREEMAN 468 St Kilda Rd, Melbourne 8
Slide 10: Financial Results
FINANCIAL RESULTS Maintaining collections and strong capital structure • FY21 distribution guidance maintained at 15.0 cents per unit; Key financial metric FY20 FY19 representing a 7.0% yield on the 30 November 2020 closing price Distribution per unit 15.0 cents 15.8 cents • Rent collections (includ
Slide 11: Strong Leasing Results
STRONG LEASING RESULTS Increasing occupancy and limited FY21 expiries • Leasing activity of ~18,300 sqm since July 2019: - comprising ~16,500 sqm (or ~15.3% of the portfolio(1)) of completed leases across FY20 & Q1 FY21 (32 transactions) - and a further ~1,800 sqm (or ~1.6 % of the portfolio(1)) und
Slide 12: COVID-19
COVID-19 Tenant Interactions • Ensuring safe working environment for tenants, visitors, contractors and staff is the priority • Actively assisting tenants through this period; including establishing rent relief entitlements under the relevant State Governments’ mandatory code of conduct legislation
Slide 13: Major Lease Expiries (FY22+)
MAJOR LEASE EXPIRIES (FY22+) Focus on de-risking major lease expiries well in advance with regular discussions with major tenants regarding their future occupancy requirements and solutions AOF can provide Lease expiry profile (1) • 10 Valentine Ave, Parramatta (14% of NLA, June 2022) GE - Property
Slide 14: Portfolio Well Positioned
PORTFOLIO WELL POSITIONED AOF markets: • 9 assets weighted 59% by book value to metro markets and 41% Market Prime Gross Effective Rent Market Gross Effective Rent % to capital city CBDs (excluding Sydney and Melbourne CBDs)(1) ($/sqm) of Sydney CBD • Expected to outperform major CBDs due to tenants
Slide 15: Value Add Opportunities
VALUE ADD OPPORTUNITIES Development opportunity well advanced 2 Valentine Avenue: Progress • Site Specific Planning Approval obtained & Development Approval received for ~28,000 sqm • Construction tender process completed – Buildcorp appointed with early works commenced • 2-10 Valentine Avenue: valu
Slide 16: Value Add Opportunities
VALUE ADD OPPORTUNITIES Investigating opportunities 32 Phillip St, Parramatta • Area transforming with proposed Powerhouse Museum, Light Rail and Civic Walk (pedestrian access to Parramatta Station) • Investigating options to improve amenity and integrate with Powerhouse Museum precinct 2 Eden Park
Slide 17: Outlook
OUTLOOK Economic indicators improving NAB business survey – positive outlook: • confidence and conditions bounced back strongly and now both positive • subsequent positive news that three COVID vaccines have claimed efficiency rates of around 90% during trials further increasing positive sentiment R
Slide 18: Outlook
OUTLOOK Guidance • FY21 distribution guidance of 15.0 cpu(1) reconfirmed (FY20: 15.0 cpu) • FFO guidance not provided due to uncertainty arising from COVID-19 and the potential impact on business operating conditions Immediate focus and outlook • COVID-19 – tenant, visitors contractors and staff saf
Slide 19: Questions?
QUESTIONS? 180 *ustgiics YEARS Real Wellbeing >
Slide 20: Appendices
APPENDICES 5 Eden Park Drive, Macquarie Park 19
Slide 21: Office Markets @ 30 September 2020
OFFICE MARKETS @ 30 SEPTEMBER 2020 Key market statistics Under Size of Total Vacancy Total Vacancy Net Absorption Prime Gross Face Rent Prime Gross Effective Rent Under Construction to market (%) (%) (sqm) Face Rent Change from Effective Rent Change from 30 Construction to 2022 (sqm) 30 Sep 20 30 Se
Slide 22: Metro Markets @ 30 September 2020
METRO MARKETS @ 30 SEPTEMBER 2020 Major metro markets competitively priced vs Sydney CBD Growth in Market Prime Gross Market Gross Gross Effect. Rent Market Effective Rent Effective Rent % of (from Sep 2015 to • Metro markets and other capital cities ($/sqm) Sydney CBD Sep 2020) CBDs rentals at sign
Slide 23: Market Yields
MARKET YIELDS Commercial office yields well above bond yields Market yields vs OCR & 10 year bonds Parramatta Prime Yield vs 10 Year Government Bonds 7% 9% 8% 6% 7% 5% 6% 4% 5% 4% 3% 3% 2% 2% 1% 1% 0% 0% Dec 11 Dec 12 Dec 13 Dec 10 Dec 14 Dec 18 Dec 19 Dec 15 Dec 16 Dec 17 Mar 20 Sep 11 Sep 12 Sep 1
Slide 24: Years Real Wellbeing
180 "Gn >= YEARS Real Wellbeing
Slide 25: Peter Day: Chairman's Address
Australian Unity Office Fund General Meeting 4 December 2020 Peter Day: Chairman’s Address Good morning everyone and welcome to the General Meeting of unitholders of the Australian Unity Office Fund. My name is Peter Day and I am the Chairman of Australian Unity Real Estate Investment Limited which
Slide 26: Introduction of directors and management
year is an important opportunity for unitholders to hear from and speak with directors and management. I will begin by introducing you to the Board of Directors and the management team of AOF. My fellow directors are Non-Executive and independent Directors Eve Crestani and Don Marples who are also b
Slide 27: Chairman's address: FY20 distribution
James Freeman, AOF’s Fund Manager will then provide you with further details on the FY20 performance, along with an update on activities that have occurred since 30 June 2020 and AOF’s outlook. After the formal presentation, we will respond to any questions received from unitholders during the meeti
Slide 28: Chairman's address: key achievements
These include: obtaining development approval for a commercial office building of approximately 28,000 square metres at 2-10 Valentine Avenue Parramatta. This drove a $14.5m increase in the independent valuation as at 30 June 2020 to $134.5 million. A suitable tenant pre- commitment is currently b
Slide 29: Board changes and ownership
Australian and Asia. My fellow directors and I look forward to working with Erle on the board and I feel sure that AOF will benefit from Erle’s extensive property experience and insights. At the same time Kirsty Dullahide, a director appointed by Australian Unity resigned from the AUIREL board and I
Slide 30: James Freeman: Fund Manager's Address
I would now like to invite James Freeman, the Fund Manager of AOF, to provide an update on the Fund’s performance for Financial Year 2020 and provide an update on activities that have occurred since 30 June 2020. James was appointed AOF’s Fund Manager in February 2020 and he and the rest of the mana
Slide 31: Macquarie Park and leasing
One market which has performed particularly well is Macquarie Park which has: 1) An attractive price point, with gross effective rents of approximately 40% of Sydney CBD, and 2) A high concentration of firms in the pharmaceutical, logistics and technology industries which are typically performing we
Slide 32: Tenant rent relief and valuations
Management is working with each tenant on a case by case basis to assess their entitlement under the Code and will provide further information at the half year results. Positively, throughout the period, collections have remained strong, sitting at 92% for the June quarter and are beginning to impro
Slide 33: 30 Pirie Street and 32 Phillip Street
At 30 Pirie Street, Adelaide, Telstra’s lease expires in February 2023. Like most major corporates, Telstra is reviewing their business and its office space requirements going forward. We believe that 30 Pirie Street provides attractive accommodation for Telstra as it: 1) Is a well located, A grade
Slide 34: Market outperformance and infrastructure
We expect these markets to outperform the major CBDs as tenants focus on accommodation that is affordable, provides solid amenity and is highly accessible to their workforce. Nationally there has been some major infrastructure spending with AOF’s markets benefitting. Be it Macquarie Park with the re
Slide 35: Value add opportunities
and options as we seek pre-commitments for 2 Valentine and a renewal at 10 Valentine Avenue. Overall, the asset is forecast to deliver a yield on cost of over 7% and would significantly enhance the overall portfolio quality and metrics. Management have an active asset management approach and seek to
Slide 36: Interest rates and guidance
The Reserve Bank of Australia recently cut the cash rate by a further 0.15% to 0.1%, a record low, driving bond yields lower and making property yields even more attractive on a relative basis. Across AOF’s markets, the prime yield mid-point ranges from approximately 5.26% to 6.25%, a large premiu
Slide 37: That concludes the formal part of the presentation and I would like to thank
That concludes the formal part of the presentation and I would like to thank you for your continued support. I look forward to continuing to work with the Board and the Australian Unity management team in delivering strong performance to AOF unitholders. Page 13 of 13
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