Centuria Capital Group · ASX:CNI
Centuria Capital — Centuria Urban REIT — H1 2017 Earnings Presentation
29 slides from Centuria Capital's earnings presentation, Feb 9, 2017
Slide 1: Centuria Urban REIT 1H17 Interim Results
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Centuria Urban REIT 576 SWAN STREET, RICHMOND VIC PAGE 01
Slide 2: Agenda
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 01. Results Overview 02. Porfolio Overview 03. Capital Mangement 04. Strategy & Guidance 05. Appendices Results Overview
Slide 3: Results Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 1 Results Overview
Slide 4: Financial Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Financial Overview Financial Snapshot 1H17 1H16 Balance Sheet Metrics 1H17 1H16 Statutory profit/(loss) $m 7.8 4.4 Total assets $m 213.3 200.2 Distributable earnings 1 $m 5.8 7.2 NTA per stapled security $ 2.27 2.11 Distributabl
Slide 5: Financial Highlights
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Financial Highlights Earnings generated by quality office assets 7.9 cps Distributable earnings 2 • Statutory net profit of $7.8m • Conservative balance sheet, gearing of 19.7% 1 8.5 cps Distributions paid • 1H17 Distributable e
Slide 6: Operating Highlights
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Operating Highlights Asset quality and location drive leasing success 99.2% Portfolio occupancy • Substantial leasing success – 6,712 sqm across portfolio 1 (new leases and renewals), including; – Agents appointed to market SMEC
Slide 7: NTA Movement
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 NTA Movement Positive investment sentiment for quality metropolitan office stock driving NTA uplift Movements in NTA Per Stapled Security 2.30 ($) 0.02 0.03 (0.03) 2.20 2.25 2.27 2.10 NTA 2.00 2cps 1.90 1.80 FY16 Revaluation MTM
Slide 8: Portfolio Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 2 Portfolio Overview
Slide 9: Portfolio Metrics
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Portfolio Metrics High quality investment portfolio underpinned by strong rental covenants Portfolio Snapshot 1H17 1H16 Geographic Weighted Average Lease Expiry 1,2 Number of assets # 3 3 Diversification (by value) Book value $m
Slide 10: Valuations
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Valuations Valuations supported by continued investment appetite for quality metropolitan office assets 483 KINGSFORD SMITH DRIVE, BRISBANE QLD Key Valuation Metrics 1H17 FY16 Change 154 Melbourne Street, South Brisbane QLD 77.5
Slide 11: Leasing Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Leasing Overview Focus on proactive management strategies to generate predictable income • Material transactions completed Property Tenant / Transaction Level sqm in 1H17 across 6,712 sqm 1 – 3,699 sqm relating to FY17 expiries
Slide 12: Tenancy Profile
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Tenancy Profile A-grade assets attracting quality tenants with strong leasing covenants • Top 10 tenants account for Tenancy Profile by Size Rental Reviews Tenant Diversification 92% of gross rental income Cohort (by no. tenant)
Slide 13: Capital Management
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 3 Capital Management
Slide 14: Debt Management
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Debt Management Conservative gearing position with intention to reinvest 19.7% 4.7% Gearing All in cost of debt 1 • Advanced negotiations for a multi-bank Key Debt Metrics 1H17 syndicated facility, expect to conclude refinancing
Slide 15: Transfer of Management Rights from 360 Capital Group to Centuria
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Transfer of Management Rights from 360 Capital Group Limited to Centuria Capital Group • On 9 January 2017, Centuria Capital Group (CNI) acquired 360 Capital Investment Management Limited (CIML), the Responsible Entity of 360 Ca
Slide 16: Strategy & Guidance
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 4 Strategy & Guidance
Slide 17: Strategy
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Strategy CUA’s strategy and ongoing focus remains unchanged Fund Strategy Portfolio Strategy • Acquire Australian A grade suburban and B grade • Where appropriate, respond to demographic CBD office properties with a focus on yie
Slide 18: Guidance
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Guidance 154 MELBOURNE STREET, SOUTH BRISBANE QLD • Previous FY17 earnings guidance remains at 16.0 cps (assumes no acquisitions) • FY17 distribution will represent 100% payout ratio expected to be 16.0 cps (assumes no acquisiti
Slide 19: Closing
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Closing Centuria Urban REIT’s portfolio is in excellent shape in regard to the quality of investment properties and their ability to deliver sustainable earnings for distribution to investors. The REIT’s ability to either acquir
Slide 20: Appendices
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendices
Slide 21: Appendix A – Market Outlook
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix A – Market Outlook Supply and demand fundamentals for metropolitan office markets remain strong • Constrained supply side fundamentals CBD Office vs Metro Office 5 Year Net Effective Rental Growth – Continued withdrawal
Slide 22: Capital market inflows to metropolitan office assets
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix A – Market Outlook Capital market inflows to metropolitan office assets continuing to strengthen • Investor demand for quality, well leased metropolitan assets continues to strengthen Office Sector A Grade Yield vs 10 Y
Slide 23: Brisbane Office Outlook
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix A – Market Outlook Brisbane Office Outlook 1 • Ongoing demand for quality investment stock offering secure • In the short term, the vacancy performance between income streams suggests that when such assets become the CB
Slide 24: Melbourne Office Outlook
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix A – Market Outlook Melbourne Office Outlook 1 • Drivers that impact vacancy through tenant demand, Melbourne City Fringe vs Total Surburbs – Vacancy % such as business confidence and funding costs, have continued to imp
Slide 25: Equity Markets Outlook
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix A – Market Outlook Equity Markets Outlook • World economic and political uncertainty is driving domestic and international investors towards defensive investments • Capital inflows into the A-REIT sector remain strong d
Slide 26: Appendix B – Income Statement
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix B – Income Statement 31 Dec 2016 Revenue Gross property income ($’000) 8,958 Straight lining of rental income 1 ($’000) (34) Interest income ($’000) 19 Total revenue ($’000) 8,943 Expenses Direct property expenses ($’00
Slide 27: Appendix C – Distribution Statement
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix C – Distribution Statement $m 31 Dec 2016 Statutory net profit ($’000) 7,811 Straight lining of rental income 1 ($’000) 34 Investment properties revaluation gain / (loss) ($’000) (2,596) Loss on fair value of derivative
Slide 28: Appendix D – Balance Sheet
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Appendix D – Balance Sheet $m 31 Dec 2016 Cash ($’000) 2,251 Investment properties ($’000) 210,400 Other assets ($’000) 639 Total assets ($’000) 213,290 Interest bearing liabilities ($’000) 41,389 Derivative financial instrument
Slide 29: Disclaimer
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Disclaimer This presentation has been prepared by Centuria Property Funds No. 2 Limited (ABN 38 133 363 185, AFSL 340 304) (‘CPF2L’) as responsible entity of the Centuria Urban REIT (ARSN 106 453 196 (‘CUA’ or the ‘Trust’). All