Cromwell Property Group · ASX:CMW
Cromwell Property — HY20 Earnings Presentation
49 slides from Cromwell Property's earnings presentation, Feb 27, 2020
Slide 1: ASX cover letter for HY20 Results Presentation
Thursday 27 February 2020 For personal use only ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Cromwell Property Group (ASX:CMW) HY20 Results Presentation Attached is a copy of Cromwell Property Group’s HY20 Results Presentation. Yours faithfully CROM
Slide 2: HY20 Results Presentation
For personal use only HY20 Results Presentation 27 February 2020 CROMWELL PROPERTY GROUP
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer For personal use only This presentation including its appendices advice as they deem necessary or consider 777 AFSL 333214 (CFM) is the responsible entity of, (Presentation) is dated 27 February 2020 and has appropriate for their particular jurisdiction. and the is
Slide 4: Cromwell Property Group Overview
Cromwell Property Group Overview Cromwell is a real estate investor and manager operating on three continents with a global investor base For personal use only Cromwell maintains a strong and secure balance sheet and long-dated direct property portfolio which enables it to recycle assets and reinv
Slide 5: HY20 Summary Results & Strategy Update
For personal use only HY20 Summary Results & Strategy Update CROMWELL PROPERTY GROUP
Slide 6: HY20 Summary Results & Strategy Update
HY20 Summary Results & Strategy Update For personal use only Statutory profit Statutory profit per security 59% $227.3 million 8.78 cps increase in statutory up 105% compared to prior up 59% on prior comparable profit per security corresponding period period (HY19 5.52 cps) (HY19 $111.1 million) 26%
Slide 7: George Street Brisbane Property Overview
HY20 Summary Results & Strategy Update For personal use only 400 George Street Brisbane Property Overview Site Area 2,902 sqm Acquired for $524.75 million, currently NLA 43,978 sqm investigating a range of future options for asset Occupancy 99.6% Occupancy rate of 99.6% underpinned by blue- WALE
Slide 8: Cromwell Polish Retail Fund Restructure Underway
HY20 Summary Results & Strategy Update For personal use only Current Value Cap Occupancy Cromwell Polish Retail Fund Restructure Underway City Class ($M) Rate % by NLA WALE Centre Janki Warsaw Retail 389.6 5.50% 91.6% 5.7 years Cromwell is temporarily warehousing assets acquired as part of ‘Invest
Slide 9: Victoria Avenue, Chatswood Property Overview
HY20 Results & Strategy Update For personal use only 475 Victoria Avenue, Chatswood Property Overview A private fund managed by BlackRock Real Site Area 6,030 sqm Estate will acquire a 50% stake in the asset for NLA 24,812 sqm $120 million Occupancy 92.2% WALE 3.0 years Cromwell will enter into
Slide 10: Financial and Capital Management Update
For personal use only Financial and Capital Management Update CROMWELL PROPERTY GROUP
Slide 11: HY20 Headline Results
HY20 Headline Results1 Financial and Capital Management Update For personal use only HY20 Commentary HY20 Performance Versus PCP Statutory profit was $227.3 million, up 105% HY20 HY19 Change compared to prior corresponding period (HY19 $111.1 million) Statutory profit ($M) 227.3 111.1 104.6% Sta
Slide 12: HY20 Segment Results
HY20 Segment Results1 Financial and Capital Management Update For personal use only HY20 Commentary HY20 Segment Profit Versus PCP Direct property investment segment profit was HY20 HY19 $105.7 million, strongly up 68.6% on the prior ($M) ($M) Change period, driven by strong like-for-like NOI grow
Slide 13: Balance Sheet
Balance Sheet Financial and Capital Management Update For personal use only HY20 FY19 Balance Sheet Liquid and Well Positioned ($M) ($M) Cash and cash equivalents 186.8 101.6 Cash and cash equivalents of $186.8 million, up Investment property 3,926.7 2,520.9 83.9% or $85.2 million from 30 June 201
Slide 14: Capital Position
Capital Position Financial and Capital Management Update For personal use only Strong Debt Profile, Gearing1 Within Target Range Group Gearing (2009 to 2019) 55.00 Target ‘through the cycle’ gearing of 30% – 40% with leverage capacity to be used on a short term 50.00 basis to execute the ‘Invest t
Slide 15: Direct Property Investment Segment
For personal use only Direct Property Investment Segment CROMWELL PROPERTY GROUP
Slide 16: Property Portfolio Snapshot (DPT properties only)
Property Portfolio Snapshot (DPT properties only) Direct Property Investment Segment For personal use only 75% 23% 2% Core Portfolio Core+ Portfolio Active Portfolio Wale: 7.9 years Wale: 3.2 years Wale: 0.1 years Occupancy: 99.7% Occupancy: 96.2% Occupancy: 48.8% NOI growth: 3.4% NOI growth: 2.1% N
Slide 17: Portfolio Valuation Continues to Improve
Portfolio Valuation Continues to Improve Direct Property Investment Segment For personal use only Eleven assets were externally revalued in the period representing approximately half of the portfolio by value Fair value increase in investment property of $110.1 million net of property improvemen
Slide 18: Tenant Customer Profile Remains Robust
Tenant Customer Profile Remains Robust Direct Property Investment Segment For personal use only Geographic Diversification1 Sector Diversification1 Tenant Classification1 7.2% 1.4% 13.9% ACT 9.0% 7.2% 26.7% NSW Government Authority 2 Office 40.2% QLD Healthcare Listed Company/Subsidary 29.0% VIC Ret
Slide 19: Favourable Lease Expiry Profile
Favourable Lease Expiry Profile Direct Property Investment Segment For personal use only The majority of vacancy is contained in the active portfolio Lease Expiry Profile % Gross Income3 within properties which are earmarked for redevelopment Average fixed review in next three years 70.0% 3.50
Slide 20: Core and Core+ portfolio 98.75% Occupied
Core and Core+ portfolio 98.75% Occupied For personal use only Direct Property Investment Segment Leasing update 64 lease transactions, for a total of 83,775 sqm, in HY20 Core portfolio is 99.7% leased with the Core+ portfolio at 96.2% which equates to a 98.75% occupancy rate by NLA Major transa
Slide 21: Development Pipeline Grows to >$1.2 billion
Development Pipeline Grows to >$1.2 billion Direct Property Investment Segment For personal use only Asset recycling strategy ongoing since 2010 with over $488 million of assets sold in 24 months to 31 December 2019 Proceeds have facilitated creation of a >$1.2 billion pipeline of value add deve
Slide 22: Masterplan of Wakefield Street, Adelaide
Masterplan of 300 Wakefield Street, Adelaide Direct Property Investment Segment For personal use only Asset became vacant in February 2020 Site covers 8,725 sqm located on the western edge of the Adelaide CBD near Hutt Street dining precinct The current masterplan concept integrates a number o
Slide 23: Indirect Property Investment Segment
For personal use only Indirect Property Investment Segment CROMWELL PROPERTY GROUP
Slide 24: Segment Results Driven by CEREIT Success
Segment Results Driven by CEREIT Success Indirect Property Investment Segment For personal use only Operating profit for the segment was $25.8 million up 33% from $19.4 million in the prior comparable period (HY19) This was mostly due to CEREIT, which announced 2019 results to the Singapore Exch
Slide 25: CEREIT Portfolio Now Properties
CEREIT Portfolio Now 103 Properties Indirect Property Investment Segment For personal use only Properties 103 Finland Occupancy Rate (by lettable area) 93.2% Properties 11 Lettable Area (sq m) 61,977 Valuation (€)1 2,103 million Valuation (€ million) 115.5 WALE / WALB2 4.4 years / 3.5 years % of Por
Slide 26: LDK Apartments Operational End April
430 LDK Apartments Operational End April Indirect Property Investment Segment For personal use only Seniors Living opportunity Cromwell has a 50% ownership interest in LDK Healthcare (LDK) LDK has one operational village in North Sydney and one in Greenway, ACT which accepted its first residents
Slide 27: Funds and Asset Management Segment
For personal use only Funds and Asset Management Segment CROMWELL PROPERTY GROUP
Slide 28: Foundations For Growth Locked In
Foundations For Growth Locked In For personal use only Funds and Asset Management Segment Overview Cromwell Funds Under Management Total Funds and Asset management segment profit was up 67% to $31.1 million (HY19 $18.6 million) Total segment FUM was $8.3 billion split between $2.2 billion of ret
Slide 29: High Level of Activity To Peak 2019/20
High Level of Activity To Peak 2019/20 Funds and Asset Management For personal use only Key activity in Europe European FUM by Region € 1.2 € 1.1 449,712 sqm of leases signed in 602 transactions, 12 leases per week, every week, for the year € 1.0 € 0.9 Czech Republic: Sold Galerie Butovice shopp
Slide 30: DPF Inflows Strengthen
DPF Inflows Strengthen Funds and Asset Management For personal use only Cromwell Direct Property Fund (DPF) Phoenix Portfolios – Property Securities Fund (PSF) DPF purchased its seventh direct asset, located at 11 Farrer The Fund is the only property securities fund in Australia Place, Queanbeya
Slide 31: Oyster Continues Growth
Oyster Continues Growth Funds and Asset Management For personal use only AUM at Oyster Group in New Zealand (50% interest) was up slightly to NZ$1.8 billion (FY19 NZ$1.7 billion) Key activity during the half Oyster formed a limited partnership to acquire a 60% ownership share in Tauranga Crossing
Slide 32: Outlook and Guidance
For personal use only Outlook and Guidance CROMWELL PROPERTY GROUP
Slide 33: Economic Growth To Slow
Economic Growth To Slow Outlook and Guidance For personal use only 2020 was seen as a ‘go slow’ year with global GDP 2020 Forecast (Select) Global GDP Growth Rates growth, before the Coronavirus, forecast to be 2.5% 6.00% G7 major economies at 1.2%, China and India at 6.0% 5.00% Australian GDP
Slide 34: Australian Real Estate Snapshot
Australian Real Estate Snapshot Outlook and Guidance For personal use only Australian CBD vacancy is essentially unchanged during Total Australian CBD Office Vacancy (%) the half at 8.0% (7.9% FY19), with non-CBD vacancy 20.0% 17.6% slightly higher at 9.1% 14.0% 15.0% 12.7% Sydney and Melbourne
Slide 35: European Real Estate Snapshot
European Real Estate Snapshot Outlook and Guidance For personal use only Europe’s commercial real estate markets are in relatively good Investment by Sector1 health despite a slowing economy and investment volumes which are slightly below the peak in 2018 Office 2%4% Capital inflows are still ro
Slide 36: Guidance Affirmed, Strategic Review Underway
Guidance Affirmed, Strategic Review Underway Outlook and Guidance For personal use only FY20 Guidance Affirmed For further information please contact: Business well-positioned to meet possible risks, strong balance sheet with liquidity, proforma gearing in target range, long debt tenor and long WA
Slide 37: Additional Information
For personal use only Additional Information CROMWELL PROPERTY GROUP
Slide 38: Appendices Contents
Appendices Contents For personal use only 38 Cromwell Property Group Statistics 39 Local European Footprint 40 HY20 Operating and Statutory Profit - Reconciliation 41 Segment Result - Operating Earnings Detail 42 Property Portfolio - Top 10 Assets 43 Property Portfolio - Top 20 Leases 44-46 Property
Slide 39: Cromwell Property Group Statistics
Cromwell Property Group Statistics All group statistics as at 31 December 2019 For personal use only Portfolio Broad and Deep Property Platform Geographic and Culturally Diverse Team Global Portfolio by Sector and Geography AUM by Sector $ 11.9bn 3.4% AUM 420+ 3.4% 12.7% Office people Retail $11.9bn
Slide 40: Local European Footprint
Local European Footprint 19 regional offices providing on the ground local market knowledge and expertise For personal use only Office Locations European Portfolio by Geography 5% 5% UK 30% 10% Germany Nordics €3.8bn 12% France Italy Benelux 23% 15% CEE European Portfolio by Sector 5% 22% Office €3.
Slide 41: HY20 Operating and Statutory Profit Reconciliation
HY20 Operating and Statutory Profit Reconciliation For personal use only HY20 ($M) HY19 ($M) Profit from operations 134.1 82.6 Operating EPS (cents per security) 5.18 cps 4.10 cps Gain on sale of investment properties 2.9 - Loss on disposal of other assets (2.8) - Operating lease costs 1.8 - Other t
Slide 42: Segment Result – Operating Earnings Detail
Segment Result – Operating Earnings Detail For personal use only Direct Property Indirect Property Funds And Asset Full Year ending 31 December 2019 Investment Investment Management ($M) ($M) ($M) HY20 Segment revenue Rental income and recoverable outgoings 114.1 11.5 - 125.6 Operating profits of eq
Slide 43: Top Assets
Top 10 Assets1 Property Portfolio For personal use only Current Market Value Occupancy % Asset State Class ($M) Cap Rate by NLA WALE Major Tenants Qantas HQ NSW Office 535.0 5.00% 100.0% 11.8 years Qantas Airways Limited 400 George Street QLD Office 524.8 5.50% 99.6% 4.8 years QLD Government, Federa
Slide 44: Top Leases
Top 20 Leases1 Property Portfolio For personal use only Tenant Tenant Classification Expiry Date % of Portfolio Rental Income Qantas Airways Limited Listed Company/Subsidiary Dec-32 13.7% Commonwealth of Australia (Dept of Social Services) Government Authority Sep-32 7.6% Calvary Healthcare Adelaide
Slide 45: Net Property Income
Net Property Income1 Property Portfolio For personal use only HY20 ($M) HY19 ($M) Variance ($M) Variance (%) Station Street, Penrith 1,521,197 1,272,650 248,547 19.5% McKell Building 6,898,711 5,840,275 1,058,436 18.1% Crown Street, Wollongong 1,472,851 1,374,103 98,748 7.2% Bull Street, Newcastle 9
Slide 46: Net Property Income
Net Property Income1 Property Portfolio For personal use only HY20 ($M) HY19 ($M) Variance ($M) Variance (%) Wakefield St, Adelaide 8,699,613 3,526,674 5,172,939 146.7% Borrowdale House (50,056) (51,945) 1,889 (3.6%) Tuggeranong Office Park - Car Park (347,973) (389,434) 41,461 (10.6%) 19 National C
Slide 47: Movement In Book Value
Movement In Book Value Property Portfolio For personal use only Strategy of continuously improving portfolio through acquisitions since 2010 Recycling of capital means disposing of assets before asset has large capex requirements In-sourced facilities management model also lowers lifecycle cap
Slide 48: Balance Sheet Debt Details
Balance Sheet Debt Details Property Portfolio For personal use only Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $M) (AUD $M) Date Expiry Remaining Jun-2023 Bank 1 - 5 Year Facility 100.0 100.0 2023 3.5 Bank 2 - 5 Year Facility 250.0 250.0 Jun-2023 2023 3.5 Bank 3 - 5 Year Facility
Slide 49: For personal use only
For personal use only CROMWELL PROPERTY GROUP