Slide 1: Centuria Office REIT HY25 results
5 FEBRUARY 2025 | ASX:COF Centuria Office REIT HY25 results 101 MORAY STREET, SOUTH MELBOURNE VIC
Slide 2: Speakers
Speakers Jesse Curtis Belinda Cheung Grant Nichols Head of Funds Management – Fund Manager – Head of Listed Funds – Centuria Capital Group Centuria Office REIT Centuria Capital Group Centuria ASX:COF 2
Slide 3: Acknowledgement of Country and Agenda
Acknowledgement of Country Our Group manages property throughout Australia and New Zealand. Centuria pays its respects to the traditional owners of the land in each country, to their unique cultures and to their Elders past and present. AGENDA 1. Overview 2. Financial results 3. Portfolio 4. Market
Slide 4: Centuria Capital Group: A leading Australasian ASX funds manager
Centuria Capital Group: A leading Australasian ASX 200 funds manager CNI is the manager of COF and is included in the S&P/ASX200 Index Group AUM1 $20.5bn Centuria Real estate $19.6bn Life Limited Investment Listed (30%2) $5.9bn Unlisted (70%2) $13.7bn bonds $3.9bn $1.9bn $0.1bn $6.1bn $2.8bn $2.5bn
Slide 5: Overview
ASX:COF Overview SECTION ONE 100 BROOKES STREET, FORTITUDE VALLEY QLD
Slide 6: COF: Vision, strategy and objectives
COF: Vision, strategy and objectives VISION A clear and simple strategy To be Australia’s Focused on generating sustainable and quality income streams and leading pure play executing initiatives to create value across a portfolio of quality Australian office assets. office REIT. Centuria Office Key
Slide 7: HY25 strategic highlights
HY25 strategic highlights PORTFOLIO Active management 12,611 sqm of leasing terms agreed across 23 deals1 (4.6% of portfolio NLA), 92.2% occupancy well above $1.9bn 6.77% Portfolio book value Weighted average market average of 83.9%.2 across 19 assets capitalisation rate Proactive capital $862m refi
Slide 8: COF implied valuations well below replacement cost
COF implied valuations well below replacement cost The estimated replacement 16,000 cost is double COF's 14,000 $15,127 current valuation and almost 12,000 3 times COF's implied Value per sqm 10,000 8,000 valuation.1 6,000 $6,858 4,000 $5,674 2,000 0 Replacement cost cost Replacement COF valuation C
Slide 9: Sector fundamentals support outlook for office markets
Sector fundamentals support outlook for office markets Dramatic escalation in required economic rents Construction costs (PPI) vs CPI1 160 Bigger surge in required economic rents in metro vs CBD markets3 Developer margins diminish as 150 construction costs outpace CPI $2,000 140 growth +51% $1,800 1
Slide 10: Return to office gaining momentum
Return to office gaining momentum Spurred by office mandates and population growth Large employers of white-collar workers across tech and financial services have introduced office mandates, overseas and in Australia. Fortune 100 companies that mandated attendance experienced greater equity growth c
Slide 11: Transaction volumes demonstrate improving office sector sentiment
Transaction volumes demonstrate improving office sector sentiment Australian office sale volumes1 illi ns A • Value has emerged within the office sector, with the gap driven by asset value moderation and significant increases in replacement costs. • Stabilisation in occupier market more occupiers ma
Slide 12: Financial results
ASX:COF Financial results SECTION TWO 825 ANN STREET, FORTITUDE VALLEY QLD
Slide 13: Funds from operations (FFO)
Funds from operations (FFO) Revenue HY25 HY24 Variance Gross property income $m 84.5 93.4 (8.9) Interest income $m 0.4 0.3 0.1 Predominantly impacted Total revenue $m 84.9 93.7 (8.8) by divestments Expenses Direct property expenses $m 21.1 21.8 0.7 Impacted by Responsible entity fees $m 5.4 6.3 0.9
Slide 14: Capital management
Capital management Pro forma debt maturity profile ($m) 335.0 COF debt covenants 295.0 282.5 LVR 60% ICR 1.75x Ample headroom to No debt expiry covenants before FY28 FY25 FY26 FY27 FY28 FY29 FY30 2 $65.5m Key debt metrics HY25 FY24 Facility headroom1 Facility limit $m 912.5 912.5 Drawn amount $m 847
Slide 15: Portfolio
ASX:COF Portfolio SECTION THREE 8 CENTRAL AVENUE, EVELEIGH NSW
Slide 16: COF provides exposure to a differentiated office portfolio
COF provides exposure to a differentiated office portfolio COF portfolio strategic metrics Included in the S&P/ASX 300 Index and FTSE/EPRA NAREIT Global Developed Index 17.8 years Average asset age1 Young portfolio Accessible price point 93% Prime assets are generating greater Deeper investment dema
Slide 17: Portfolio overview
Portfolio overview Tenant mix (income) 12% 11% 26% ASX Listed Government 77% Portfolio snapshot HY25 of income derived from Listed multinational government, ASX Number of assets # 19 13% Multinational listed and multinational National tenants Book value1 $m 1,885.5 12% 26% Other WACR % 6.77 NLA sqm
Slide 18: COF adopts a long-term and active approach towards leasing
COF adopts a long-term and active approach towards leasing Strong track record of 223,757sqm leased since 2020 (81% of portfolio NLA)1 Enhanced tenant amenity providing Regular review of asset strategies Dedicated leasing specialists modern facilities to improve tenant to align with market condition
Slide 19: Delivering one of Australia's first enterprise AI edge data centres
Delivering one of Australia’s first enterprise AI Inferencing and ultra-high density liquid cooled edge data centres Edge data centre designed to Construction commenced with 1.1MW IT load. estimated completion in Q4 FY25. Expected to contribute 19% of fully Docklands asset valuation uplift leased bu
Slide 20: Staggered lease expiry
Staggered lease expiry: c.75% of leases expire at or beyond FY27 Current vacancy (>1,200 sqm) NLA (sqm) Weighted average lease expiry1,2 201 Pacific Highway, St Leonards (50% ownership) 4 8,405 (%) 818 Bourke Street, Docklands4 7,373 45% 2 Kendall Street, Williams Landing4 3,009 40% 38.3% 203 Pacifi
Slide 21: Portfolio valuations
Portfolio valuations1 HY25 FY24 Valuation Valuation valuation valuation movement 2,3 movement2,3 HY25 FY24 Movement 80% of the portfolio by value ($’000) ($’000) ($’000) (%) WACR4 WACR4 WACR4 externally revalued in Portfolio/ weighted December 2024. average summary5 1,885.5 1,913.1 (27.6) (1.4) 6.77
Slide 22: COF ESG highlights
COF ESG highlights Centuria Climate change nerg and memberships emissi ns • FY24 Centuria voluntary climate-related disclosures published. Climate es urce and • Targeting zero scope 2 emissions by 20281: resilience waste c.1,400 kW solar across COF portfolio.2 • 5-star NABERS Energy Sustainable Port
Slide 23: Market overview and guidance
ASX:COF Market overview and guidance SECTION FOUR 8 CENTRAL AVENUE, SOUTH EVELEIGH NSW
Slide 24: Growth drivers remain strong for Australian office real estate
Growth drivers remain strong for Australian office real estate Key themes contributing to medium term sector tailwinds Current development feasibilities Work from office gaining Transaction volumes are expected to restrict future supply momentum increasing • Higher construction costs have driven eco
Slide 25: FY25 strategy and priorities
FY25 strategy and priorities 1. Maintain high 2. High portfolio 3. Proactive capital occupancy quality management • Continue delivering • Assess asset allocation to • Preserve diverse lender occupancy above national improve portfolio quality. pool and expiry profile. average. • Lease to enhance tena
Slide 26: FY25 guidance reiterated
FY25 guidance reiterated1 FFO1 11.8cpu Distribution1 10.1cpu Forecast FY25 distribution yield1,2 8.6% Distributions expected to be paid in quarterly instalments. 203 PACIFIC HIGHWAY, ST LEONARDS NSW 1. Guidance remains subject to unforeseen circumstances and material changes in operating conditions.
Slide 27: Appendices
ASX:COF Appendices SECTION FIVE Appendix A: Income statement Appendix B: FFO reconciliation Appendix C: Balance sheet Appendix D: Australian office market metrics Appendix E: Geographic breakdown Appendix F: Like for like portfolio valuation summary Appendix G: Investment property portfolio 235 WILL
Slide 28: Appendix A: Income statement
Appendix A: Income statement $’000 HY25 HY24 Revenue Gross property income 84,529 93,376 Interest Income 400 317 Total revenue 84,929 93,693 Expenses Direct property expenses (21,109) (21,820) Responsible entity fees (5,365) (6,332) Finance costs (22,901) (23,044) Management and other administrative
Slide 29: Appendix B: FFO reconciliation
Appendix B: FFO reconciliation #039;000 HY25 HY24 Statutory net profit (21,204) (99,388) (Gain)/loss on fair value of investment properties 36,167 118,879 (Gain)/loss on fair value of derivatives 4,554 8,751 Straight-lining of rental income and amortisation of leasing 12,738 13,578 commissions and tena
Slide 30: Appendix C: Balance sheet
Appendix C: Balance sheet #039;000 HY25 FY24 Cash 19,342 17,495 Investment properties1 1,917,951 1,945,584 Trade and other receivables 3,500 7,302 Derivative financial instruments 1,043 4,288 Other assets 5,150 3,177 Total assets 1,946,986 1,977,846 Interest bearing liabilities2 845,333 824,551 Trade a
Slide 31: Appendix D: Australian office market metrics
Appendix D: Australian office market metrics Proportion of 12 month net 12 month face Rental discount market under Vacancy absorption rental growth to Sydney CBD construction Market (%) (SQM) (%) (%) (%) Adelaide 18.0 41,621 3.3 (63.4) 2.7 Melbourne CBD 18.2 (28,798) (2.4) (48.5) 3.8 Melbourne fring
Slide 32: Appendix E: Geographic breakdown
Appendix E: Geographic breakdown WA 14% total COF portfolio 99.7% occupancy 1,2 Qld 20% total COF portfolio 99.1% occupancy 1,2 6.4yr WALE2,3 3.2yr WALE2,3 34,880sqm leased since 20202 68,750sqm leased since 20202 COF’s national portfolio 92.2% NSW 26% total COF portfolio 87.0% occupancy 1,2 occupan
Slide 33: Appendix F: Like for like portfolio valuation summary
Appendix F: Like for like portfolio valuation summary1,2 Movement HY25 valuation FY24 valuation Valuation movement3 HY25 WACR4 FY24 WACR4 WACR4 State ($M) ($M) ($M) (%) (%) (%) (BPS) NSW 486.0 502.0 (16.0) (3.2) 6.82 6.52 30 Qld 374.0 384.5 (10.5) (2.7) 7.10 7.00 10 Vic 483.5 472.0 11.5 2.4 6.52 6.3
Slide 34: Appendix G: Investment property portfolio
Appendix G: Investment property portfolio Property State Ownership (%) Book value ($m) Capitalisation rate (%) Area (sqm) Area ($/sqm) WALE (yrs)1 Occupancy (%)2 8 Central Avenue, Eveleigh NSW 50% 178.5 6.38% 36,570 9,762 6.4 99.7% 203 Pacific Highway, St Leonards NSW 100% 115.0 7.00% 11,727 9,806 3
Slide 35: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds Limited (ABN 11 086 553 639, AFSL 231 149) (CPFL) as responsible entit f Centuria Office A S ‘COF’ r t e ‘ rust’ . This presentation contains selected in summary information and does not purport to be all-inclusive or to conta
Slide 36: Australia
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