Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — FY2021 Earnings Presentation
42 slides from Centuria Industrial Reit's earnings presentation, Aug 5, 2021
Slide 1: Centuria Industrial REIT FY21 Results
For personal use only Centuria Industrial REIT FY21 RESULTS A S X: CIP | 0 5 A U G 2021 CENTURIA OFFICE REIT ASX:COF 1 67-69 42 HOEPNER MANDOON ROAD, RD, BUNDAMBA, GIRRAWEEN,QLD NSW
Slide 2: Agenda
Australia’s largest For personal use only domestic pure play industrial REIT Agenda 1. Introduction 2. Financial Results 3. Portfolio Metrics 4. Outlook & Guidance 5. Appendices CENTURIA INDUSTRIAL REIT ASX: CIP 2 8 LEXINGTON DRIVE, BELLA VISTA, NSW
Slide 3: Section One: Introduction
For personal use only DISTRIBUTION CENTRES SECTION ONE Introduction A S X: CIP CENTURIA INDUSTRIAL REIT ASX: CIP 3 2 WOOLWORTHS WAY, WARNERVALE, NSW
Slide 4: A leading Australasian real estate funds manager
A leading Australasian real estate funds manager CNI is the manager of CIP and is included in the S&P/ASX200 Index For personal use only $17.4bn GROUP AUM $16.5bn REAL ESTATE AUM 1 $5.5bn $11.0bn $0.9bn INVESTMENT BONDS LISTED REAL ESTATE UNLISTED REAL ESTATE CENTURIA LIFE $3.1bn $2.1bn $0.3bn $7.9b
Slide 5: CIP is aligned with a highly experienced real estate funds manager
CENTURIA MANAGEMENT CIP is aligned with a highly experienced real estate funds manager CNI manages CIP as part of its Australasian real estate funds management focus For personal use only CENTURI A CAPI TAL GROUP CENTURI A INDUSTRI AL REIT (ASX : CNI) (ASX : CIP) CAPITAL TRANSACTIONS PIPELINE Austra
Slide 6: Track record of value creation
CENTURIA MANAGEMENT Track record of value creation Significant transformation since Centuria Capital assumed management of CIP in January 2017 For personal use only Increased scale and Unitholder value created Balance sheet strengthened Delivered strong investor relevance through increased NTA1 thro
Slide 7: CIP: Vision, strategy and objectives
CIP: Vision, strategy and objectives For personal use only VISION To be Australia’s Australia’s largest domestic ASX-listed pure play industrial REIT. Overseen by an active management team with deep real estate leading domestic pure CIP expertise. play industrial REIT Strongly supported by Centuria
Slide 8: Exposure to the major Industrial sub-sectors
Exposure to the major Industrial sub-sectors Introduced Data Centres and Cold Storage sub-sectors in FY21 For personal use only MANUFACTURING DISTRIBUTION CENTRES TRANSPORT LOGISTICS DATA CENTRES COLD STORAGE 29% PORTFOLIO VALUE 29% PORTFOLIO VALUE 16% PORTFOLIO VALUE 17% PORTFOLIO VALUE 9% PORTFOLI
Slide 9: Executed FY21 strategy
Executed FY21 strategy For personal use only • Growing portfolio scale to increase portfolio quality with the acquisition of 18 industrial assets for $966m1 and recycling capital through a $40m divestment 1 Portfolio profile • Balanced geographic diversification, 90%2 of portfolio weighted to easter
Slide 10: Key metrics – Australia's largest domestic pure play industrial REIT
Key metrics – Australia’s largest domestic pure play industrial REIT For personal use only PORTFOLI O FI NANCI AL 62 $2.9bn $3.83 41.8% 99% High quality Portfolio Net Tangible 12-month Return Average rent assets value Assets per unit On Equity2 collections July 2020 to June 2021 96.9% 9.6yrs 27.8% 2
Slide 11: Section Two: Financial Results
For personal use only MANUFACTURING FACILITIES SECTION TW O Financial Results A S X: CIP CENTURIA INDUSTRIAL REIT ASX: CIP 11 35 CAMBRIDGE ST, COORPAROO, QLD
Slide 12: Funds from operations (FFO)
Funds from operations (FFO)1 For personal use only Reflects acquisitions REVENUE FY21 FY20 VARIANCE through FY21 Gross property income ($m) 157.0 116.1 40.9 Other income ($m) 0.0 - 0.0 Interest income ($m) - 0.1 (0.1) Total revenue ($m) 157.0 116.2 40.8 3.5% like-for-like income growth EXPENSES Dire
Slide 13: Strengthened balance sheet provides opportunities for growth
Strengthened balance sheet provides opportunities for growth For personal use only DEBT AND HEDGE MATURITY PROFILES ($m) 1 Hedge maturity profile KEY DEBT METRICS FY21 FY20 $270m of FY22 maturities Debt expiry profile Facility Limit $m 1,210 650 extended into FY23 Drawn amount $m 937 454 Weighted av
Slide 14: Section Three: Portfolio Metrics
For personal use only DATA CENTRES SECTION THREE Portfolio Metrics A S X: CIP CENTURIA INDUSTRIAL REIT ASX: CIP 14 TELSTRA DATA CENTRE COMPLEX, CLAYTON VIC
Slide 15: Australia's largest domestic pure play industrial REIT
Australia’s largest domestic pure play industrial REIT For personal use only TOTAL PORTFOLIO SNAPSHOT FY21 FY20 AUSTRALIAN LISTED PEERS 2,3 Number of assets # 621 50 Book value $m 2,945 1,602 3.2 PORTFOLIO VALUE – EXCL. BUSINESS PARKS ($BN) 100% WACR % 4.54 6.05 3.0 INDUSTRIAL % OF GROUP GLA sqm 1,0
Slide 16: $966 million of transformative industrial acquisitions
$966 million of transformative industrial acquisitions1 100% of acquisitions in tightly held eastern seaboard industrial markets For personal use only ASSETS NOT SHOWN $16.5m 179 STUDLEY COURT $335m DERRIMUT, VIC $20.8m 513 MOUNT DERRIMUT $26.3m 8 LEXINGTON DR, BELLA $12.5m 35 CAMBRIDGE ST, $88.8m 9
Slide 17: High quality tenants and strong cash flow visibility
High quality tenants and strong cash flow visibility Reliable growing cashflow with 51% of gross income from top 10 tenant customers For personal use only TENANT INDUSTRY SECTOR DIVERSIFICATIONS 1 28% ASX Listed 4% Listed Multinational 75% 92% 25% 22% Multinational OF INCOME FROM OF LEASES ARE NET O
Slide 18: Leasing outcomes delivered across 22% of CIP's portfolio
Leasing outcomes delivered across 22% of CIP’s portfolio Leveraging Centuria’s leasing capability as part of CIP’s active management approach For personal use only WEIGHTED AVERAGE LEASE EXPIRY (% BY INCOME) 2 WOOWORTHS WAY, WARNERVALE NSW FY21 FY20 54k sqm renewal to Woolworths, L I MI TE D S H O R
Slide 19: Asset repositioning initiatives
Asset repositioning initiatives Leveraging Centuria’s capital works capability as part of CIP’s active management approach For personal use only 160 NEWTON ROAD, WETHERILL PARK NSW ✓ July 2021 acquisition ✓ Short 0.9year WALE provided strategic leasing opportunity ✓ Engaged with existing customer to
Slide 20: Selective developments to unlock embedded value
Selective developments to unlock embedded value Leveraging Centuria’s development capability as part of CIP’s active management approach For personal use only Deployment of Ability to introduce Prudent management brand new, high Developing sustainable, of development risk. Centuria’s extensive quali
Slide 21: $587m valuation uplift driven by active leasing & targeted acquisitions
$587m valuation uplift driven by active leasing & targeted acquisitions and strong sector tailwinds1,2 For personal use only PORTFOLIO VALUATION SUMMARY 1,2 AUSTRALIA REMAINS ATTRACTIVE COMPARED 3.5% FY21 FY20 VALUATION FY21 FY20 MOVEMENT TO GLOBAL PRIME INDUSTRIAL YIELDS3 LONDON 3.6% STATE VALUATIO
Slide 22: Sustainability at Centuria Capital
Sustainability at Centuria Capital Developing a flexible and relevant sustainability framework Centuria Industrial REIT is externally managed by Centuria Capital (ASX:CNI) and benefits from Centuria Capital’s sustainability approach. For personal use only Centuria Capital will be releasing its first
Slide 23: Centuria Industrial REIT – Environmental initiatives
Centuria Industrial REIT – Environmental initiatives For personal use only 42 HOEPNER ROAD, BUNDAMBA, QLD ONE OF AUSTRALIA'S FIRST FIVE-STAR GREEN STAR INDUSTRIAL BUILDINGS ✓ Under the GBCA new V1.3 rating guidelines ✓ Leveraged Centuria’s internal development capability ✓ Creating new development p
Slide 24: Section Four: Outlook & Guidance
For personal use only COLD STORE FACILITIES SECTION FOUR Outlook & Guidance A S X: CIP 1 LAHRS RD, ORMEAU, QLD CENTURIA INDUSTRIAL REIT ASX: CIP 24
Slide 25: Commencing FY22 in a strong position
Commencing FY22 in a strong position $178m of acquisition and development initiatives PRO-FORMA PORTFOLIO METRICS For personal use only 160 NEWTON ROAD, WETHERILL PARK, NSW • Exchanged June 2021, settled July 2021 1 • Purchase price $33.5m, initial yield 4.9% • High-quality asset, increases CIP’s sc
Slide 26: Providing FY22 guidance
Providing FY22 guidance1 For personal use only No less than 18.1c FFO per unit1 45 FULTON DR, DERRIMUT, VIC 40 SCANLON DRIVE, EPPING, VIC 17.3c Distribution per unit1 DPU PAID IN QUARTERLY INSTALMENTS 4.5% DISTRIBUTION YIELD2 1. Guidance remains subject to unforeseen circumstances and material chang
Slide 27: Section Five: Appendices
For personal use only TRANSPORT LOGISTICS SECTION FIVE Appendices Appendix A – Market research: E-Commerce tailwinds A S X: CIP Appendix B – Market research: Increased occupier demand Appendix C – Lease expiry by state Appendix D – CIP active portfolio Appendix E – Key vacancies and upcoming expirie
Slide 28: Appendix A - Increasing E-commerce adoption
CENTURIA MANAGEMENT Appendix A -Increasing E-commerce adoption1 For personal use only AUSTRALIAN ONLINE RETAIL FORECAST RELATIVE ONLINE PENETRATION RATES 35 30 25 20 15 10 5 0 Australia USA Global Average UK China 2010 2015 2019 2020 • Online penetration expected to grow from 13% in 2020 to 18% in 2
Slide 29: Appendix B - Low vacancy and accelerating occupier demand
Appendix B - Low vacancy and accelerating occupier demand For personal use only NATIONAL INDUSTRIAL VACANCY LEVELS2 NATIONAL INDUSTRIAL GROSS SQM TAKE UP 2010 to 20251 ,000 4,500 4,000 PERTH 3,500 4.3% Brisbane 3,000 2.9% 10-yr Average 2,500 2,000 1,500 SYDNEY 1,000 1.4% 500 ADELAIDE 0 MELBOURNE 201
Slide 30: Appendix C – Leasing expiry by state
Appendix C – Leasing expiry by state SUBPORTFOLIO EXPIRY PROFILE (% BY INCOME) For personal use only WALE OCCUPANCY GLA WALE OCCUPANCY GLA NSW VIC 69.8 5.7yrs 100% 296,478sqm 13.0yrs 98.2% 350,858sqm 66.4 19.0 11.4 9.2 5.1 8.0 5.4 1.8 3.9 Vacant FY22 FY23 FY24 FY25 FY26+ Vacant FY22 FY23 FY24 FY25 F
Slide 31: Appendix D - A well-balanced active portfolio with growth opportunities
Appendix D - A well-balanced active portfolio with growth opportunities For personal use only CIP ACTIVE SUB-PORTFOLIO TOTAL PORTFOLIO SNAPSHOT FY21 FY21 (EXCLUDING ULTRA LONG WALE ASSETS)1 Number of assets # 62 Number of assets # 60 Book value $m 2,945 Book value $m 2,151 WACR % 4.54 WACR % 4.90 GL
Slide 32: Appendix E - Key vacancies and upcoming expiries
Appendix E - Key vacancies and upcoming expiries % OF VACANT For personal use only CURRENT KEY PROPERTY GLA (SQM) PORTFOLIO STATUS VACANCIES SINCE AREA 32-54 Kaurna Avenue, Edinburgh Park 13,007 1.3 May-21 Actively marketed for lease 99 Quill Way, Henderson WA 12,451 1.2 Feb-18 Part leased on a shor
Slide 33: Appendix F – Income statement
Appendix F – Income statement For personal use only FY21 FY20 REVENUE Gross property income ($’000) 157,036 116,086 Other income ($’000) 0 0 Interest income ($’000) 13 70 Total revenue ($'000) 157,049 116,156 EXPENSES Direct property expenses ($’000) (28,056) (24,454) Responsible entity fees ($’000)
Slide 34: Appendix G – Balance sheet and NTA movement
Appendix G – Balance sheet and NTA movement For personal use only FY21 FY20 NTA GROWTH2 Cash ($’000) 105,543 17,078 Investment properties ($’000) 2,945,057 1,602,400 Other assets ($’000) 37,923 Trade & other receivables ($’000) 6,835 5,805 Goodwill ($’000) 10,501 10,501 Total assets ($'000) 3,105,85
Slide 35: Appendix H – Portfolio valuation summary
Appendix H – Portfolio valuation summary1 For personal use only STATE FY21 VALUATION FY20 VALUATION VALUATION MOVEMENT2 HY21 WACR3 FY20 WACR3 MOVEMENT WACR3 NSW 620.0 470.7 149.3 4.48% 5.80% (1.32%) VIC 459.4 361.3 98.1 4.90% 6.17% (1.27%) QLD 628.9 489.1 139.8 4.55% 5.76% (1.21%) WA 193.3 172.8 20.
Slide 36: Appendix I - Transformative FY21 acquisitions
Appendix I - Transformative FY21 acquisitions building on portfolio quality For personal use only Targeted acquisitions improving portfolio quality 78% of acquisitions sourced off-market leveraging deep market relationships $416.7m | TELSTRA DATA $14.0m | 51-73 LAMBECK $20.0m | 140 FULTON DRIVE, $12
Slide 37: Appendix J - Recent Market Transactions
Appendix J - Recent Market Transactions For personal use only RECENT SALES TRANSACTIONS MILESTONE PORTFOLIO1 – 45 Assets ASSET: 1 Eucalyptus Pl, Eastern Creek NSW 1 DATE: April 2021 DATE: May 2021 PRICE: $3.8bn PRICE: $130.1m INITIAL YIELD: 3.96% INITIAL YIELD: 3.62% WALE: 6.9yrs WALE: 13.8yrs PATTI
Slide 38: Appendix K – Investment portfolio
Appendix K – Investment portfolio BOOK VALUE CAP GLA WALE OCCUPANCY SUB PROPERTY STATE $/SQM For personal use only ($ MILLION) RATE (SQM) (YRS)1 %1 SECTOR 2 Woolworths Way, Warnervale 112.0 2,067 5.00% 54,196 10.1 100.0% Distribution Centre 67-69 Mandoon Road, Girraween 90.3 3,596 4.50% 25,097 6.4 1
Slide 39: Appendix K – Investment portfolio
Appendix K – Investment portfolio BOOK VALUE CAP GLA WALE OCCUPANCY SUB PROPERTY STATE $/SQM For personal use only ($ MILLION) RATE (SQM) (YRS)1 %1 SECTOR 46 Robinson Road East, Virginia 289.0 6,453 3.88% 44,785 28.5 100.0% Manufacturing 60-80 Southlink Road, Parkinson 56.2 6,667 4.63% 8,430 5.4 100
Slide 40: Appendix K – Investment portfolio
Appendix K – Investment portfolio For personal use only BOOK VALUE CAP GLA WALE OCCUPANCY SUB PROPERTY STATE $/SQM ($ MILLION) RATE (SQM) (YRS)1 %1 SECTOR Transactions yet to settle 160 Newton Road, Wetherill Park NSW 33.5 2,532 4.50% 13,233 7.2 100.0% Distribution Centre 29 Penelope Crescent, Arnde
Slide 41: Disclaimer
For personal use only 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 AFSL 340304) (CPF2L) as responsible entity of Centuria Industrial REIT
Slide 42: For personal use only
For personal use only CENTURIA INDUSTRIAL REIT ASX: CIP 42
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