Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — H1 FY2020 Earnings Presentation
34 slides from Centuria Industrial Reit's earnings presentation, Feb 5, 2020
Slide 1: HY20 Results – Centuria Industrial REIT
HY20 RESULTS A S X:CIP 5 Feb 2020 CIP HY20 WEBCAST Centuria Industrial REIT CENTURIA INDUSTRIAL REIT ASX:CIP 1 69 STUDLEY COURT, DERRIMUT, VIC
Slide 2: Agenda
Agenda 1. Introduction 2. Financial Results 3. Portfolio Overview 4. Guidance & Strategy 5. Appendices CENTURIA INDUSTRIAL REIT ASX:CIP 2 23 – 41 GALWAY AVENUE, MARLESTON SA
Slide 3: Introduction
SECTION ONE Introduction A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 3 32 – 54 KAURNA AVENUE, EDINBURGH PARK, SA
Slide 4: Centuria Capital Group
CENTURIA CAPITAL GROUP Centuria is an established ASX-listed specialist investment manager $7.3bn Group AUM1 ASX:CNI – Market capitalisation of $1.1bn2 $0.6bn $6.4bn Real Estate AUM $0.9bn Investment Bonds AUM CNI Co-Investments on balance sheet Listed Real Estate AUM Unlisted Real Estate AUM Centur
Slide 5: Total unitholder return 63% under Centuria’s management
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Centuria management creating unitholder value Market Included Australia’s in the S&P Total unitholder return 63% under Centuria’s management 1 Capitalisation ASX300 largest domestic pure-play $1.3bn2 Index Industrial REIT TOTAL UNITHOLDER RETURN
Slide 6: Key metrics – a quality pure play industrial platform
AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Key metrics – a quality pure play industrial platform PORTFOLI O FI NANCI AL 48 $1.6bn $1.3bn 35.5% High quality assets Portfolio value Market capitalisation2 Gearing3 95.8% 7.1yrs 29.1% 13.4% Portfolio occupancy1 Portfolio WALE1 12 month total
Slide 7: Executing on fund objectives
HIGHLIGHTS Executing on fund objectives • Growing portfolio scale with acquisition of ~$300m settled in in the half 1 1 Increasing portfolio scale • Transforming portfolio metrics, extending WALE to 7.1yrs • Demonstrated ability to identify and execute off-market transactions • Occupancy maintained
Slide 8: Financial Results
SECTION TW O Financial Results A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 8 79 – 95 & 105 CORIO QUAY ROAD, GEELONG, VIC
Slide 9: Financial overview – income statement
FINANCIAL OVERVIEW – INCOME STATEMENT On track to deliver FY20 guidance REVENUE Gross property income ($m) HY20 54.0 HY19 44.3 VARIANCE 9.7 • Reflects acquisitions through CY19 Other income ($m) 0.0 0.4 (0.4) • 4.5% Like-for-like income growth Interest income ($m) 0.0 0.1 (0.1) Total revenue ($m) 54
Slide 10: Capital management
CAPITAL MANAGEMENT Strengthened balance sheet provides opportunity for growth DEBT AND HEDGE MATURITY PROFILES ($m) DEBT HEADROOM ($m) WADM of 3.8yrs with No maturities until FY22 65 Hedging maturity profile Debt expiry profile 310 50 $65m Additional $130m 585 of debt headroom long term facilities s
Slide 11: Portfolio Overview
SECTION THREE Portfolio Overview A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 11 457 WATERLOO ROAD, CHULLORA, NSW
Slide 12: Portfolio composition
PORTFOLIO COMPOSITION Australia’s largest domestic pure play industrial REIT PORTFOLIO SNAPSHOT HY201 FY192 PORTFOLIO WEIGHTING Number of assets # 48 43 QLD 32% WA 11% Book value $m 1,552.3 1,221.3 95.7 13.0 WACR % 6.19 6.46 89.8 3.5 OCCUPANCY(%) WALE(YRS) OCCUPANCY(%) WALE(YRS) GLA sqm 936,492 821,
Slide 13: Portfolio overview – lease expiry
PORTFOLIO OVERVIEW Transforming lease expiry profile WEIGHTED AVERAGE LEASE EXPIRY (% BY INCOME) • Strategic acquisitions increasing portfolio WALE1 from 4.3yrs to 7.1yrs FY19 HY20 • High quality, diversified tenant base of 121 tenant customers Portfolio well 66.2 • 71% of income derived from growth
Slide 14: Portfolio valuations
PORTFOLIO VALUATIONS Valuation uplift driven by active leasing and strong market fundamentals PORTFOLIO VALUATION SUMMARY Like for like revaluation HY20 FY19 VALUATION HY20 FY19 MOVEMENT STATE gain of $28.1million1 in WACR VALUATION VALUATION MOVEMENT WACR WACR WACR HY20 driven by market NSW 474.1 4
Slide 15: $300m of acquisitions executed to transform portfolio
TRANSACTIONS $300m of acquisitions executed to transform portfolio Acquisitions 84% of acquisitions secured Majority of acquisitions strengthen portfolio under triple net lease structures, transacted off market WALE by 2.9yrs1 reducing future capex obligations PORTFOLIO VALUE ($BN) 1.6 1.2 $19.5m (J
Slide 16: Executing ~47,000sqm of value-add initiatives
PORTFOLIO Executing ~47,000sqm of value-add initiatives DEVELOPMENT LEASING REFURBISHMENT REPOSITIONING 21 JAY STREET, 75-95 & 105 CORIO QUARY ROAD, 46 GOSPORT STREET, 9-13 CARIBOUR DRIVE, TOWNSVILLE, QLD NORTH GEELONG, VIC HEMMANT, QLD DIREK, SA • Development underway to expand facility by ~5,500sq
Slide 17: Guidance & Strategy
SECTION FOUR Guidance & Strategy A S X:CIP CENTURIA INDUSTRIAL REIT ASX:CIP 17 1 INTERNATIONAL DRIVE, WEST MEADOWS, VIC
Slide 18: Strategic vision and objectives
STRATEGY & GUIDANCE Strategic vision and objectives VISION To build Australia’s leading domestic pure play industrial REIT A CLEAR AND SIMPLE Deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets STRATEGY Overseen by an active Prudently managing
Slide 19: On track to deliver FY20 guidance
STRATEGY & GUIDANCE On track to deliver FY20 guidance 14 – 17 DANSUCOURT, HALLAM, VIC 19.6c – 19.9c FFO per unit reflecting 2-3% 18.7c 5.6%1 growth over FY19 DPU paid in quarterly instalments Distribution yield CENTURIA INDUSTRIAL REIT ASX:CIP 19 1. Based on FY20 distribution guidance and CIP closin
Slide 20: Appendices
Insert image SECTION FIVE Appendices Appendix A – Investor Relevance A S X:CIP Appendix B – Leasing Expiry by State Appendix C – Market Research Appendix D – Income Statement Appendix E – Balance Sheet Appendix F – Key Vacancies and Upcoming Expiries Appendix G – HY20 Acquisition Profiles Appendix H
Slide 21: Increasing investor relevance and scale
ANNEXURE A – INVESTOR RELEVANCE Increasing investor relevance and scale CIP MARKET CAPITALISATION ($m) $3.65 • $246m equity raised in HY20 to fund select CIP unit price 31 Jan 20 acquisitions, adding to overall scale and relevance, while transforming CIP portfolio 16% CAGR $2.46 3 Jul 17 • Unit pric
Slide 22: Leasing expiry by state
APPENDIX B - LEASING EXPIRY BY STATE SUBPORTFOLIO EXPIRY PROFILE (% BY INCOME) SUBPORTFOLIO EXPIRY PROFILE (% BY INCOME) NSW WALE OCCUPANCY GLA VIC WALE OCCUPANCY GLA 4.0years 97.9% 265,474sqm 5.4years 96.3% 261,335sqm 65.1 59.1 38.9 15.5 7.1 6.9 2.1 3.7 1.8 Vacant FY20 FY21 FY22 FY23 FY24+ Vacant F
Slide 23: Market supply
0 100 200 300 400 500 600 700 800 900 SQM Apr-11 Aug-11 Dec-11 Apr-12 PRIME Aug-12 Dec-12 Apr-13 SYDNEY Aug-13 1. Source: Knight Frank Research Dec-13 Apr-14 Aug-14 SECONDARY Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 AVAILABLE SPACE APPE
Slide 24: Income Statement
APPENDIX D – INCOME STATEMENT Income Statement HY20 HY19 REVENUE Gross property income ($’000) 53,966 44,275 Other income ($’000) 0 397 Interest income ($’000) 50 112 Total revenue ($'000) 54,016 44,784 EXPENSES Direct property expenses ($’000) (10,741) (8,161) Responsible entity fees ($’000) (3,869
Slide 25: Balance Sheet and NTA Movement
APPENDIX E – BALANCE SHEET Balance Sheet and NTA Movement HY20 FY19 NTA GROWTH3 Cash ($’000) 23,002 9,348 Investment properties ($’000) 1,552,284 1,221,250 Trade & other receivables ($’000) 30,324 9,144 Goodwill ($’000) 10,501 10,501 Total assets ($'000) 1,616,111 1,250,243 Interest bearing liabilit
Slide 26: Key vacancies and upcoming expiries
APPENDIX F – KEY VACANCIES AND UPCOMING EXPIRIES Key vacancies and upcoming expiries CURRENT KEY VACANCIES PROPERTY GLA (SQM) % OF PORTFOLIO AREA VACANT SINCE STATUS 99 Quill Way, Henderson WA 16,419 1.8 28-Feb-18 Being marketed suited to users in oil and gas industry 46 Gosport Street, Hemmant QLD
Slide 27: 46 Robinson Road East, Virginia QLD
APPENDIX G –HY20 ACQUISITION PROFILES 46 Robinson Road East, Virginia QLD • Asset is a modern, purpose-built manufacturing facility SNAPSHOT with warehouse and office improvements, multi-level Title Freehold car park, driveways and vehicle maneuvering areas Ownership 100% • Strategic asset for Arnot
Slide 28: 23 - 41 Galway Avenue, Marleston SA
APPENDIX G –HY20 ACQUISITION PROFILES 23 - 41 Galway Avenue, Marleston SA • The asset comprises an extensive factory, workshop, SNAPSHOT administration area, staff canteen, storage and silo Title Freehold • Located strategically between the Adelaide Airport Ownership 100% and CBD with immediate acce
Slide 29: 32 - 54 Kaurna Avenue, Edinburgh Park SA
APPENDIX G –HY20 ACQUISITION PROFILES 32 - 54 Kaurna Avenue, Edinburgh Park SA • Quality 13,007sqm asset is on a 6.5ha site, providing SNAPSHOT expansive hardstand areas and a low site cover of 20% Title Freehold • Accessibility to all major transport corridors including Ownership 100% Salisbury Hig
Slide 30: 24 West Link Place, Richlands QLD
APPENDIX G –HY20 ACQUISITION PROFILES 24 West Link Place, Richlands QLD1 • Adjoining CIP asset and providing increased scale SNAPSHOT within the established Richlands industrial market Title Freehold • Leased to Spectrum Transport with a 1.5yr WALE, Ownership 100% providing CIP the opportunity to ad
Slide 31: Investment Portfolio
APPENDIX J Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 2 Woolworths Way, Warnervale NSW 81.5 1,504 7.00% 54,196 1.6 100.0% 10 Williamson Road, Ingleburn NSW 53.4 1,959 5.50% 27,260 3.6 100.0% 92-98 Cosgrove Road, Enfield NSW 50.3 1,485 5.75% 33,86
Slide 32: Investment Portfolio
APPENDIX J Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 46 Robinson Road East, Virginia QLD 211.8 4,729 5.00% 44,785 30.0 100.0% 22 Hawkins Crescent, Bundamba QLD 47.3 2,493 6.50% 18,956 4.9 100.0% 1 Ashburn Road, Bundamba QLD 38.5 1,446 6.50% 26,6
Slide 33: Disclaimer
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 to AFSL 340 304) (‘CPF2L’) as responsible entity of the Centuria Industrial REIT (ARSN 099 6
Slide 34: CENTURIA INDUSTRIAL REIT ASX:CIP
CENTURIA INDUSTRIAL REIT ASX:CIP 34
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