Centuria Capital Group · ASX:CNI
Centuria Capital — FY2023 Earnings Presentation
45 slides from Centuria Capital's earnings presentation, Aug 18, 2023
Slide 1: Centuria Capital Group FY23 Results
18 AUGUST 2023 | ASX: CNI Centuria Capital Group FY23 Results LISTED: 95-105 SOUTH GIPPSLAND HWY, DANDENONG SOUTH VIC Intelligent investing for 25 years
Slide 2: Agenda
AGENDA 1. Group overview 2. Financial results 3. Divisional overview 4. Appendices 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 UNLISTED: FLAVORITE GLASSHOUSE, WARRAGUL VIC
Slide 3: Group overview
Group overview SECTION ONE UNLISTED: WESTSIDE PRIVATE HOSPITAL, TARINGA QLD
Slide 4: Centuria Capital Group: A leading Australasian ASX funds manager
Centuria Capital Group: A leading Australasian ASX 200 funds manager $21.0bn GROUP AUM1 $20.2bn REAL ESTATE AUM $6.4bn $13.8bn $0.8bn LISTED REAL ESTATE UNLISTED REAL ESTATE INVESTMENT BONDS $3.9bn $2.3bn $0.2bn $8.4bn $2.6bn $2.8bn $0.8bn CENTURIA CENTURIA ASSET PLUS SINGLE MULTI-ASSET MULTI-ASSET
Slide 5: Active management and diversity delivers solid FY23 result
Active management and diversity delivers solid FY23 result Operating and funds • FY23 Group AUM $21.0bn (FY22 $20.6bn) management • Unlisted AUM $13.8bn (68% total real estate AUM) • Expanded alternative sectors - Agriculture AUM: $0.5bn (+33% y.o.y) - Credit AUM: $1.3bn (+59% y.o.y) • Institutional
Slide 6: Delivering growth and creating value
Delivering growth and creating value A $20.2bn leading Australasian real estate Execution of diversity strategy platform4 WA 22% QLD 17% 95 properties valued at $21.0bn $1.4bn $4,444m 94 properties valued at $3,385m Group AUM FY23 gross real estate activity1 $1.6bn 91% Development Recurring revenues
Slide 7: $20.2bn real estate platform
$20.2bn real estate platform Diverse sectors and capital sources to unlock emerging opportunities • Expansion into alternatives - Sectors1 ($bn) Capital ($bn) In-bound capital to APAC2 healthcare, real estate credit and agriculture 12 months to June 2023 • Alignment to de-centralised 1.8 APAC office
Slide 8: Solid real estate platform metrics
Solid real estate platform metrics1,2 ~420 properties and 2,500 tenants $20.2bn 5.81% 97.0% 6.1yrs Real estate AUM3 Like for like weighted Avg. Occupancy Avg. WALE ~1/3 listed, 2/3 unlisted avg. capitalisation rate $42.5m 99% 548,000sqm+ Avg. asset value FY23 Avg. rent FY23 leasing terms agreed coll
Slide 9: Developing a relevant and adaptable sustainability framework
Developing a relevant and adaptable sustainability framework Conscious of climate change (environment), valued stakeholders (social) and responsible business principles (governance) Select initiatives Launched new sustainability targets: - Targeting Zero Scope 2 45%3 female representation at emissio
Slide 10: Strategy
Strategy Adapt to market changes by Strong focus on alternative - Maintain sector / revenue Vision unlocking innovative, new sectors e.g. agriculture, diversity as a Centuria products healthcare, real estate credit “point of difference” A leading Australasian where we can generate platform - Industr
Slide 11: FY24 guidance
FY24 guidance Operating earnings per security 11.5-12.0c FY24 guidance anticipates lower performance fees and development profits, restrained Distribution per security transaction volumes and increased finance costs 10.0c UNLISTED: GUYRA GLASSHOUSE, GUYRA NSW Centuria ASX:CNI 11 Centuria ASX:CNI 11
Slide 12: Financial results
Financial results Section two LISTED: 56-88 LISBON STREET, FAIRFIELD NSW
Slide 13: Operating earnings and distributions
Operating earnings and distributions FY23 FY22 Statutory NPAT1 $m 105.9 (37.9) Statutory EPS1 cps 13.3 (4.8) Operating NPAT2 $m 115.6 114.5 Operating EPS3 (OEPS) cps 14.5 14.5 DPS cps 11.6 11.0 FY24 guidance OEPS cps 11.5-12.0 DPS cps 10.0 1. Attributable to CNI securityholders 2. Operating NPAT of
Slide 14: Resilient platform supporting profitability
Resilient platform supporting profitability Operating EBIT up 7.5% FY23 FY22 Operating profit by segment ($m) ($m) 1 Property funds management1 84.1 79.4 1 Property funds management up 6% due to platform scale Performance fees 28.5 33.0 2 Co-investment earnings 52.4 48.4 2 8% increase due to higher
Slide 15: Transaction fee income from $2.4bn of total transaction activity
Transaction fee income from $2.4bn of total transaction activity $1.4bn FY23 gross real estate activity1 Transaction fee income2 from $2.4bn Real estate finance $542m 29 real estate of total transaction activity finance loans $403m $280m Acquisitions exchanged in FY22 Industrial that have since sett
Slide 16: Balance sheet positioned to fund organic growth
Balance sheet positioned to fund organic growth $1.77 10.6% $237m Operating balance sheet Assets FY23 ($m) FY22 ($m) Cash and cash equivalents 179.4 185.0 Net asset value per security1,2 Operating gearing ratio3 Cash realised from the sale and (FY22: $1.73) recycling of balance sheet assets Receivab
Slide 17: Actively managing platform debt
Actively managing platform debt • Continued diversification of debt capital sources through 24 $8.2bn the introduction of new lenders Total lending facilities across Lenders Australasian platform • Recycling of existing exposures amongst financiers and accessing new debt capital markets 2.2yrs 1.8yr
Slide 18: Enhancing systems and processes generates business efficiencies
Enhancing systems and processes generates business efficiencies DELIVERED CURRENT FOCUS Transition of Primewest funds into Integration of platform-wide Treasury Centuria’s property and financial Management Systems management systems Internalisation of Commercial Property Implementing enhanced sustai
Slide 19: Divisional overview
Divisional overview Section three LISTED: 101 MORAY STREET, SOUTH MELBOURNE VIC
Slide 20: $20.2bn diversified real estate platform
$20.2bn diversified real estate platform1,2 Daily needs Large format Real estate Office Industrial Healthcare Agriculture retail (“DNR”) retail (“LFR”) finance $7.26bn $5.96bn $1.68bn $1.67bn $1.54bn $1.27bn $0.53bn AUM AUM AUM AUM AUM AUM AUM (FY22: $7.37bn) (FY22: $5.97bn) (FY22: $1.88bn) (FY22: $
Slide 21: Differentiated office platform
Differentiated office platform1 $7.3bn 95% 2023 Centuria office tenant survey (150+ respondents) AUM (32% listed, 68% unlisted) of portfolio (by NLA) situated outside Sydney and Melbourne CBDs c.75% anticipate retaining or increasing $93.5m 292,325sqm space requirements over the leasing since COVID-
Slide 22: $6.0bn industrial portfolio enjoying significant tailwinds
$6bn industrial portfolio enjoying significant tailwinds1 $6.0bn 37.3% avg. re-leasing spreads across Centuria’s AUM (65% listed, 35% unlisted) Australian industrial properties in 2HFY23 20% $35.9m of industrial leases expiring in next two years, Avg. asset size aids liquidity strong opportunity to
Slide 23: DNR / LFR portfolio's performing strongly through cycle
DNR / LFR portfolio’s performing strongly through cycle1 $3.2bn Portfolios concentrated on 47% AUM (53% Daily Needs ‘DNR’, convenience based daily needs Avg. site coverage of large format 47% Large format ‘LFR’ retail) and land rich large format centres centres across Australian platform $39m 43.9%
Slide 24: Alternative real estate sectors are engine room for growth
Alternative real estate sectors are engine room for growth1 Providing attractive investment themes and natural inflationary hedges Healthcare Real estate finance Agriculture $1.7bn AUM $1.3bn AUM $0.5bn AUM UNLISTED: THE BOND MEDICAL CENTRE, BELLA VISTA NSW UNLISTED: CRISP STREET, HAMPTON VIC UNLIST
Slide 25: $1.6bn development pipeline to seed funds
$1.6bn development pipeline to seed funds $0.4bn $1.6bn pipeline1 Development fees and profits CNI strategically uses its balance FY23 gross development Est. value on completion provide growing income sheet to seed and expand its completions Committed: $0.8bn2 property funds Future: 0.8bn3 ($43.6m c
Slide 26: Unlisted property AUM to $13.8bn
Unlisted property Market leading unlisted real estate funds manager AUM to $13.8bn (+6% above FY22) ~12,000 Australasian investors FY23 unlisted capital $0.6bn raising inflows Between 2-7 Funds in the $324m $223m $76m $16m 2-7 top 10 index4 each quarter for the last 30 quarters CENTURIA AGRICULTURE
Slide 27: CIP and COF – Australia's largest ASX-listed pure play REITs
Listed property AUM of $6.4bn CIP and COF – Australia’s largest ASX-listed pure play industrial and office REITs CNI co-investment CNI co-investment6 Index inclusions: ASX: S&P/ASX 200 Index and 16.1% ASX: Index inclusions: S&P/ASX 300 Index and 18.9% CIP FTSE EPRA Nareit highly aligned to an COF FT
Slide 28: Institutional AUM grows 11% to $2.1bn
Institutional AUM grows 11% to $2.1bn Unlisted mandates and partnerships support new investment opportunities $2.1bn WESTSIDE PRIVATE HOSPITAL, PROGRESS PHOTO - ADENEY PRIVATE $1.9bn TARINGA QLD HOSPITAL, KEW VIC 0.5 $1.7bn FY23 AUM 0.2 $2.1bn1 1.2 0.2 52-74 QUARRY RD, 1 WILLIAM SQUARE, ERSKINE PARK
Slide 29: Appendices
Appendices Section four CENTURIA BASS UNLISTED: ONE UNLISTED: VARSITY RICHARDSON, SOUTHLAKES PERTHDAY WA HOSPITAL, (ARTIST VARSITY LAKES QLD IMPRESION)
Slide 30: Centuria Life $0.8bn
Centuria Life $0.8bn Flows FY23 FY23 FY22 FY23 change Applications Redemptions AUM Assets under management ($m) ($m) (%) ($M) ($M) Prepaid funeral plans (Guardian)2 539.7 536.6 0.58% 31.0 -45.6 Unitised bonds (Centuria Life) 222.4 230.7 -4.59% 3.7 -20.8 Centuria LifeGoals 58.1 39.6 48.74% 17.8 -2.8
Slide 31: Centuria Capital Group
Centuria Capital Group A leading Australasian real estate funds manager Integrated platform Active management Generating investment opportunities Geography Sectors Fund types Capital sources Integrated in-house capability Balance sheet Platform support Australia Office Listed REITS Listed Funds mana
Slide 32: AUM momentum from organic growth and select mergers
AUM momentum from organic growth and select mergers AUM CAGR1 34% $21.0bn Total CAGR $20.6bn 49% Unlisted real estate $17.4bn 28% Unlisted ex. corporate initiatives $8.8bn 25% Listed real estate $6.2bn 13.0 13.8 $4.9bn Unlisted real estate 11.0 4.0 2.6 1.9 6.8 6.4 Listed real estate 5.5 4.0 2.1 2.7
Slide 33: Group AUM movement ($bn)
Group AUM movement ($bn)1 0.5 0.2 0.8 21.0 20.6 -0.5 -0.6 2 FY22 Property Centuria Development capex Property Valuations FY23 Acquisitions Bass Credit spent during the Divestments period UNLISTED: 208 FORDYCE ROAD, HELENSVILLE AUCKLAND Note: Assets under management (AUM) as at 30 June 2023. All figu
Slide 34: Fund and capital allocation across Centuria's platform
Fund and capital allocation across Centuria’s platform Diversified funds, capital sources and investor profiles across all sectors Daily needs Large format Real estate Sector Office Industrial Healthcare Agriculture retail retail finance Fund type / AUM $7.3 $6.0 $1.7 $1.7 $1.5 $1.3 $0.5 capital sou
Slide 35: Platform diversification reduces concentration risk
Platform1 diversification reduces concentration risk Daily needs Large format Total Office Industrial Healthcare Agriculture retail retail avg. Aids platform liquidity through Avg. asset $m 93.5 35.9 15.2 40.8 38.8 47.0 42.5 exposure to a wider transaction pool Like for like Relatively wider cap rat
Slide 36: Like for like portfolio valuation summary
Like for like portfolio valuation summary1 Value Cap Value Cap movement movement movement movement Jun-23 12 months to 12 months to 6 months to 6 months to cap rate 30 June 2023 30 June 2023 30 June 2023 30 June 2023 Office (4.48)% 38 bps (3.91)% 27 bps 6.08% Industrial (3.12)% 97 bps (2.30)% 64 bps
Slide 37: High quality long-term income streams
High quality long-term income streams Integrated management capabilities lead to strong asset management success Top tenants by income (%)1,2 6.1 year weighted avg. lease expiry (WALE) by income1,2 ~420 Government 13.0% assets1,2 14.5 Woolworths Limited ~2,500 ASX/NZX Listed 2.9% 10.8 tenants1,2 Tel
Slide 38: $1.6bn development pipeline to seed funds
$1.6bn development pipeline to seed funds Committed pipeline Future pipeline FY23 gross Total (est. value on (est. value on completions pipeline completion)1,2 completion)1,3,4 • Development fees and Sector $M GLA $M GLA $M GLA $M GLA profits provide growing income Office 65 9,700 116 15,900 - - 116
Slide 39: COF, CIP and APL portfolio snapshots
COF: Australia’s largest pure play CIP: Australia’s largest domestic APL: Asset Plus office REIT pure play industrial REIT • Delivered FY23 FFO of 15.6 cents per unit • Delivered FY23 FFO of 17.0 cents per unit • Delivered FY23 Distributions of 14.1 cents per unit • Delivered FY23 Distributions of 1
Slide 40: Reconciliation of statutory profit to operating profit
Reconciliation of statutory profit to operating profit FY23 ($m) FY22 ($m) Statutory net (loss)/profit after tax 105.9 (37.4) Statutory EPS (cents)1 13.3 (4.8) ADJUSTED FOR NON-OPERATING ITEMS (Loss) on fair value movements in derivatives and investments 0.3 167.1 Transaction and other costs 3.9 4.4
Slide 41: Diverse recurring revenues contribute to Group profits
Diverse recurring Group revenues ($m) revenues contribute to 350 91% Group profits 89% Recurring revenues3 Recurring revenues3 FY23 recurring revenues of 91% 300 Performance fees Other income 250 $28.4m Distribution income Development management fees FY23 recognised performance fees1 200 Development
Slide 42: Co-investments reconciliation
Co-investments reconciliation Carrying value Distribution Carrying value Distribution Strong alignment to Centuria’s 30 JUN 23 income FY23 30 JUN 22 income FY22 Co-investments Fund type ($m) ($m) ($m) ($m) listed REITs Centuria Industrial REIT (ASX: CIP)1 Listed 313.4 16.2 284.1 17.4 CNI is the larg
Slide 43: Definitions
Definitions Operating Segments: Group has six reportable operating segments. AUM: Assets under management EPS: Earnings per stapled security These reportable operating segments are the divisions which report to CAGR: Compound annual growth rate IRR: Internal Rate of Return the Group’s Chief Executiv
Slide 44: Disclaimer
Disclaimer This presentation has been prepared by Centuria Capital Limited and Centuria Funds Management Limited (‘CFML’) as responsible entity of Centuria Capital Fund (together the stapled listed entity CNI). Centuria Property Funds Limited (ABN 11 086 553 639, AFSL 231 149) ('CPFL') and Centuria
Slide 45: Australia and New Zealand offices
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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