Slide 1: 1H17 Results Presentation
For personal use only 1H17 RESULTS PRESENTATION 24 February 2017 CMW – 1H17 Results 1
Slide 2: Important Information & Disclaimer
Important Information & Disclaimer This presentation including its appendices Cromwell Property Group does not guarantee any ARSN 604 286 071 (PCF), Cromwell Phoenix For personal use only (Presentation) is dated 24 February 2017 and has particular rate of return or the performance of Opportunities F
Slide 3: Section 1: 1H17 Overview
For personal use only SECTION 1 1H17 Overview
Slide 4: Cromwell Property Group Strategy
Cromwell Property Group Strategy Our goal is to provide securityholders with stable, secure and For personal use only increasing distributions per security Targeting an 80:20 Operating Profit Split between direct property investment and funds management. Direct Property Investment Funds Management F
Slide 5: Cromwell Property Group Statistics 1H17
Cromwell Property Group Statistics 1H17 Global platform offering diverse product range across key property sectors For personal use only Diverse Product Range Track Record of Successful Partnerships Extensive and Broad Skill Set Portfolio Platform AUM by Sector $ 9.8 bn1 350+ 3.0% 6.7% Office AUM 14
Slide 6: Cromwell Property Group 1H17 Headline Results
Cromwell Property Group 1H17 Headline Results For personal use only 1H17 Results 1H17 Performance Versus Guidance Segment Results Operating Profit (cps) Distributions (cps) 1H17 operating profit of Direct Property Investment FY17 Guidance FY17 Guidance $78.7 million ($88.8 million 8.40 cps 8.34
Slide 7: Property Portfolio And Lease Renewal Programme
For personal use only SECTION 2 Property Portfolio And Lease Renewal Programme
Slide 8: Property Portfolio – Valuations Continue To Rise
Property Portfolio – Valuations Continue To Rise For personal use only Fair value increase in investment property of $41.4 million net of property improvements, lease costs and incentives Weighted Average Cap rate tightened by 0.09% to 6.96% (7.05% FY16, 7.52% 1H16) Weight of money, low bond r
Slide 9: Property Portfolio – Tenant Profile Remains Robust
Property Portfolio – Tenant Profile Remains Robust Geographic Diversification1 Sector Diversification1 Tenant Classification1 For personal use only 0.2% 0.1% ACT 1.5% 10.1% 14.6% 2 NSW 22.4% Government Authority 20.4% QLD Office 41.5% Listed VIC Other Company/Subsidary TAS Private Company 54.6% 36.1
Slide 10: Property Portfolio – Lease Expiry Profile Favourable
Property Portfolio – Lease Expiry Profile Favourable WALE of 6.35 years (6.34 years FY16) For personal use only Lease Expiry Profile % Gross Income Average fixed review over next 3 years 60% 56.8% 3.9% over 50% of portfolio in FY17 3.89% over 53% of portfolio in FY18 50% 3.85% over 48% of
Slide 11: Property Portfolio – Leasing Success In Key Assets
Property Portfolio – Leasing Success In Key Assets For personal use only 65,000 sqm leased in six months to 31 December 2016 NSW and VIC office assets are >98% leased bar Northpoint which is under development. Northpoint has seen c5,000 sqm of recent lease transactions and once completed will be
Slide 12: Property Portfolio – Future Lease Expiries
Property Portfolio – Future Lease Expiries For personal use only Lease Expiries representing >1% income (FY17-FY19) % of Total Portfolio Property Tenant Area (sqm) Expiry Date Rental Income FY17 Health House * The State of Queensland Department of Public Works 13,326 30-Jun-17 2.68% FY18 Tuggeranong
Slide 13: Property Portfolio – $300 Million Invested For Future
Property Portfolio – $300 Million Invested For Future Tuggeranong Office Park, ACT For personal use only Building topped out. Integrated fitout to commence in March Federal Government signed on 15 year lease over 30,000+ sqm and is expected to move in final quarter of 2017 5 star Green Star ra
Slide 14: Funds Management
For personal use only SECTION 3 Funds Management
Slide 15: Funds Management - High Levels of Trading Activity
Funds Management - High Levels of Trading Activity For personal use only Operating Profit of $16.4 million ($18.5 million 1H16) Change in AUM ($bn)1 Wholesale Funds operating profit of $9.8 million ($10.7 million 1H16) Retail Funds operating profit of $6.0 million ($8.8 million 1H16) Interna
Slide 16: Funds Management – Statement on IOF
Funds Management – Statement on IOF For personal use only During the presentation of Investa Office Fund’s (IOF) HY17 results yesterday, a number of matters were raised regarding Cromwell’s written proposal to IOF in November and its interest in pursuing a transaction with IOF. Investa Listed Funds
Slide 17: Wholesale Funds – Connecting Capital to Opportunity
Wholesale Funds – Connecting Capital to Opportunity Focus on broadening investor base for European business to include a For personal use only better cyclical balance between Private Equity and LP relationships Substantial projected near term closed ended fund maturities provides an opportunity
Slide 18: Retail Funds – Strong Result As Cycle Peaks
Retail Funds – Strong Result As Cycle Peaks Operating profit of $6.0 million (1H16 $8.8 million) For personal use only Unitholders in Cromwell’s unlisted fund, the Cromwell Riverpark Trust voted overwhelmingly in favour to extend the Trust term for a further five years in July resulting in a per
Slide 19: Retail Funds - Continued Strong Growth in New Zealand
Retail Funds - Continued Strong Growth in New Zealand AUM at Oyster Group grew to NZD $977 million (30% growth in calendar year) For personal use only Ongoing wholesale offer for the NZD $210 million, 43,500 sqm Millennium Centre Oyster Direct Property Fund reopened providing investors with ex
Slide 20: Capital Management
For personal use only SECTION 4 Capital Management
Slide 21: Capital Management – Manage To Cycle & Opportunity
Capital Management – Manage To Cycle & Opportunity Cromwell continues to source complementary capital to meet Dec-16 Jun-16 For personal use only (Actual $M) (Actual $m) the personalised needs of each opportunity Assets Cash and Cash Equivalents 80.2 95.6 Current Cash and Cash Equivalents of $80
Slide 22: Capital Management – Diversified Debt Profile
Capital Management –Diversified Debt Profile1 Facilities diversified across eight lenders + CB issue with varying maturity dates For personal use only Initial engagement with foreign and domestic capital markets investors sees strong appetite for longer tenor lending Weighted average debt expi
Slide 23: Capital Management – Interest Rate Hedging
Capital Management – Interest Rate Hedging Accreting interest rate cap entered into in August 2014 will cover $1bn by December 2017 For personal use only Cap allows Cromwell to benefit when variable interest rates are below 3.39% Existing swaps remain in place and will be replaced by the inter
Slide 24: Outlook
For personal use only SECTION 5 Outlook
Slide 25: Outlook – Economy Transitioning, Property Demand High
Outlook – Economy Transitioning, Property Demand High NAB Business Conditions For personal use only Australian economic growth is moderate due to end of mining Finance, Business & Property Services Employment Sqm investment boom and forecast fall in residential construction Index 50 280,000 230,00
Slide 26: Outlook – Market Disruption and Economic Recovery
Outlook – Market Disruption and Economic Recovery 2016 European Transaction Volume Retreats from Record Levels For personal use only Brexit slowed transaction volumes and deal activity mid year but the market corrected itself and normal trading activity resumed by end of 2016 European transactio
Slide 27: FY17 Earnings and Distributions Guidance Maintained
FY17 Earnings and Distributions Guidance Maintained FY17 Operating Earnings Guidance: 8.40 cps For personal use only FY17 Distributions Guidance: 8.34 cps For further information please contact: Paul Weightman Cromwell Property Group 1H17 Snapshot1 CEO / Managing Director Market Cap: $1.8 bn2 paul.w
Slide 28: Appendices – Additional Information
For personal use only APPENDICES Additional Information
Slide 29: Appendices - Contents
Appendices - Contents For personal use only 1H17 Operating and Statutory Profit – By Segment 30 1H17 Operating and Statutory Profit – Reconciliation 31 Segment Result – Operating Earnings Detail 32 Property Portfolio – Top 10 Assets 33 Property Portfolio – Top 20 Leases 34 Property Portf
Slide 30: 1H17 Operating and Statutory Profit – By Segment
1H17 Operating and Statutory Profit – By Segment 1H17 1H16 Change For personal use only Statutory profit ($M) 153.2 195.5 (22%) Statutory profit (cents per security) 8.7 11.2 (22%) Property Investment ($M) 62.5 70.4 (11%) Funds Management Internal ($M) 0.6 (1.0) 160% Funds Management Retail ($M) 6.0
Slide 31: 1H17 Operating and Statutory Profit Reconciliation
1H17 Operating and Statutory Profit Reconciliation 1H17 ($M) 1H16 ($M) For personal use only Profit from operations 78.7 88.8 Operating EPS (cents per security) 4.5 cps 5.1 cps Gain on sale of investment properties - 19.4 Loss on disposal of other assets - (0.2) Other transaction costs (1.4) Fair va
Slide 32: Segment Result – Operating Earnings Detail
Segment Result – Operating Earnings Detail1 For personal use only Property Property / Funds Management Funds Management Property Half Year ending 31 December 2016 (in $M) HY Dec-16 Investment Funds Mgt Internal External Retail External Wholesale Development Segment revenue Sales to external customer
Slide 33: Property Portfolio – Top Assets
Property Portfolio – Top 10 Assets For personal use only Asset State Class Book Value Cap Rate Occupancy WALE Major Tenants Qantas HQ NSW Office 450,900,000 5.50% 100.00% 14.7 years Qantas 700 Collins Street VIC Office 240,000,000 5.88% 99.72% 8.8 years Bureau of Meteorology, Metro Trains Kent Stree
Slide 34: Property Portfolio – Top Leases
Property Portfolio – Top 20 Leases For personal use only Tenant Tenant Classification Expiry Date % of Portfolio Rental Income Qantas Airways Limited Listed Company/Subsidiary Dec-32 14.3% Government Property NSW Government Authority Jun-28 7.7% Commonwealth of Aust. Dept of FaHCSIA Government Autho
Slide 35: Property Portfolio – Net Property Income
Property Portfolio – Net Property Income1 1HY17 ($) 1HY16 ($) Variance ($) Variance (%) Comments For personal use only Bundall Corporate Centre 3,895,466 2,995,649 899,817 30.0% 6 new lease deals and renewals signed in CY16 Victoria Avenue 7,456,438 6,288,906 1,167,532 18.6% 13 new lease deals and r
Slide 36: Property Portfolio – Net Property Income
Property Portfolio – Net Property Income1 For personal use only 1HY17 ($) 1HY16 ($) Variance ($) Variance (%) Comments Village Cinema Geelong 629,033 619,640 9,393 1.5% Regent Cinema Centre 657,382 662,270 (4,888) (0.7%) Retail Total 1,286,415 1,281,910 4,505 0.4% TOTAL HELD PROPERTIES 87,204,910 92
Slide 37: Property Portfolio – Movement In Book Value
Property Portfolio – Movement In Book Value Portfolio continuously improved through acquisitions since 2010 For personal use only Frequent re-cycling of capital means disposing of assets before asset has large capex requirements In-sourced facilities management model also lowers lifecycle cape
Slide 38: Property Portfolio - Debt Platform Facility Details
Property Portfolio - Debt Platform Facility Details For personal use only Maturity Fin Yr Years Facility Am ount Covenants Date Expiry Rem aining Bank 1 - 5 Year Facility 123,500,000 Mar-2021 2021 4.2 yrs Bank 2 - 5 Year Facility 100,000,000 Mar-2021 2021 4.2 yrs Bank 3 - 5 Year Facility 123,500,000
Slide 39: For personal use only
For personal use only CMW – 1H17 Results 39