Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — FY2018 Earnings Presentation
32 slides from Centuria Industrial Reit's earnings presentation, Aug 21, 2018
Slide 1: Centuria Industrial REIT FY18 Results
Centuria Industrial REIT F Y 1 8 R E S U LT S | A S X : C I P | 2 1 A U G U S T 2 0 1 8
Slide 2: Contents
Contents 1 Introduction 2 Financial Results 3 Portfolio Overview 4 Guidance & Strategy 5 Appendices C E N T U R I A I N D U S T R I A L R E I T | A S X : C I P | F Y 1 8 R E S U LT S 2
Slide 3: Introduction
SECTION ONE Introduction WOOLWORTHS WAY, WARNERVALE, NSW C E N T U R I A I N D U S T R I A L R E I T | A S X : C I P | F Y 1 8 R E S U LT S 3
Slide 4: Centuria Profile
ASX-LISTED SPECIALIST INVESTMENT MANAGER Centuria Profile Centuria Capital Group $428m Market Capitalisation1 $4.9bn 2 $0.3bn Assets Under Management (AUM) Co-Investments $4.0bn $0.9bn CENTURIA CENTURIA PROPERTYLINK METROPOLITAN INDUSTRIAL REIT 2 REIT (CMA)3 (CIP)3 GROUP Property Funds Management AU
Slide 5: Underlying conditions remain positive for industrial occupiers
ECONOMIC INDICATORS Underlying conditions remain positive for industrial occupiers AUSTRALIAN MANUFACTURING PURCHASING MANAGERS INDEX1 (3 MONTHS AVERAGE) DRIVERS TRANSFORMING DEMAND REQUIREMENTS 65 60 55 Manufacturing has experienced 50 POSITIVE CLIMATE sustained positive momentum, 45 driven by lowe
Slide 6: Key metrics
CIP, AUSTRALIA’S LARGEST ASX LISTED INCOME FOCUSED INDUSTRIAL REIT Key metrics 37 $1.0bn 94.5% 5.1yrs High quality assets Portfolio value Portfolio occupancy1 Portfolio wale1 $638m 38.4% 17.2% 12.3% Market capitalisation2 Gearing3 Return on equity4 12 month total return5 1 By income, excludes 39-45
Slide 7: Delivered on FY18 priorities
HIGHLIGHTS Delivered on FY18 priorities Improve •Record • Occupancy increased to 94.5% (92.1% June 2017) leasing volumes, 1 •particular • Record leasing of 238,000sqm in FY18 occupancy •• FY19 focus lease on improving expiries < 7% Victoria’s sub-portfolio •• Occupancy increased 10% since 31 March 2
Slide 8: Financial Results
SECTION TWO Financial Results ASHBURN ROAD, BUNDAMBA, QLD C E N T U R I A I N D U S T R I A L R E I T | A S X : C I P | F Y 1 8 R E S U LT S 8
Slide 9: Delivered on FY18 guidance and focused on maximising return on equity
FINANCIAL OVERVIEW – INCOME STATEMENT Delivered on FY18 guidance and focused on maximising return on equity REVENUE 30 JUN 2018 30 JUN 2017 VARIANCE Gross property income ($’000) 83,998 78,127 5,871 Other income ($’000) 3,398 320 3,078 Interest income ($’000) 132 117 15 Reflects acquisitions through
Slide 10: Accelerated de-leveraging and NTA uplift strengthens balance sheet
CAPITAL MANAGEMENT Accelerated de-leveraging and NTA uplift strengthens balance sheet 150 GEARING AND HEDGING PROFILES 1 110% •• First time gearing has reduced below 40% since HEDGING CIP became a Centuria managed REIT IPO. Significant reduction driven by equity funded 100%80 acquisitions, revaluati
Slide 11: Portfolio Overview
SECTION THREE Portfolio Overview ASHBURN ROAD, BUNDAMBA, QLD C E N T U R I A I N D U S T R I A L R E I T | A S X : C I P | F Y 1 8 R E S U LT S 11
Slide 12: 100% exposure to high quality Australian industrial assets
PORTFOLIO COMPOSITION 100% exposure to high quality Australian industrial assets PORTFOLIO SNAPSHOT FY181 FY172 GEOGRAPHIC DIVERSIFICATION (BY VALUE) Number of assets 37 38 Book value $m 999.0 961.2 WACR % 6.76 7.33 WA GLA sqm 735,384 757,944 QLD 13% 4.7yrs Average asset size sqm 19,352 19,945 19% 6
Slide 13: Active management generates record leasing volume
PORTFOLIO OVERVIEW Active management generates record leasing volume WEIGHTED AVERAGE LEASE EXPIRY (BY INCOME) 30 JUNE 2017 30 JUNE 2018 •• Record leasing volumes of 238,189sqm 0% (WALE 4.4YRS) (WALE 5.1YRS) 57.5 achieved (32.4% of portfolio GLA) Leased sqm AWH (WA) 83,781 0% Reject Shop (QLD) 26,62
Slide 14: NTA uplift driven by leasing success
VALUATIONS AND LEASING NTA uplift driven by leasing success PORTFOLIO VALUATION SUMMARY FY18 FY17 VALUATION FY18 FY17 MOVEMENT •• 100% of portfolio revalued in October 2017 STATE VALUATION VALUATION2 MOVEMENT WACR2 WACR WACR NSW 418.5 381.2 37.3 6.51% 7.03% (0.52%) VIC 239.4 231.3 8.1 6.70% 7.45% (0
Slide 15: Over $160million transacted to improve portfolio quality
CAPITAL TRANSACTIONS - ACQUISITIONS AND DIVESTMENTS Over $160million transacted to improve portfolio quality Acquisitions – $122.6m1 Divestments – $40.1m 207-219 BROWNS ROAD LOT 14 SUDLOW ROAD 92 ROBINSON AVENUE 39-45 WEDGEWOOD DRIVE 6 ALBERT STREET NOBLE PARK, VIC BIBRA LAKE, WA BELMONT, WA HALLAM,
Slide 16: Guidance & Strategy
SECTION FOUR Guidance & Strategy 6 MACDONALD ROAD, INGELBURN, NSW C E N T U R I A I N D U S T R I A L R E I T | A S X : C I P | F Y 1 8 R E S U LT S 16
Slide 17: FY19 priorities
FY19 PRIORITIES Continue to build Australia’s dominant income focused industrial REIT 1 Maintain leasing momentum through FY19 2 Maintain Victoria leasing momentum engaging known upcoming expiries 3 Prudently manage debt book including renegotiation of FY19 debt maturity 4 Continue to maximise retur
Slide 18: Strategy & Guidance
STRATEGY & GUIDANCE Continue to build Australia’s dominant income focused industrial REIT CIP has a simple Strategy – to deliver income and capital growth to investors from a portfolio of high quality Australian industrial assets; by STRATEGY ••Focusing on ‘fit for purpose’ assets that are relevant
Slide 19: Appendices
SECTION FIVE Appendices Appendix A – Leasing Expiry by State Appendix B – Market Research Appendix C – Income statement Appendix D – Distribution statement Appendix E – Balance sheet and NTA movement Appendix F – FFO reconciliation Appendix G – Key vacancies Appendix H – Upcoming expiries Appendix I
Slide 20: Appendix A - Leasing Expiry by State
APPENDIX A - LEASING EXPIRY BY STATE1 NSW SUBPORTFOLIO EXPIRY PROFILE (BY INCOME) VIC SUBPORTFOLIO EXPIRY PROFILE (BY INCOME) 100% 100% 100% 100% WALE OCCUPANCY GLA WALE OCCUPANCY GLA 100% 100% 100% 100% 80% 80% 5.1years 99.4% 266,505sqm 80% 80% 4.4years 91.8% 214,427sqm 80% 80% 80% 80% 60% 60% 60%
Slide 21: Appendix B – Market Research: Availability reducing across all key markets
0 0 APR-11 0 200 200 200 400 400 400 600 600 600 800 800 800 JUL-11 10001000 1000 12001200 1200 APR-11 OCT-11 JUL-11 JAN-12 APR-11 PRIME OCT-11 APR-12 JUL-11 JAN-12 SYDNEY JUL-12 OCT-11 APR-12 OCT-12 JAN-12 JUL-12 JAN-13 APR-12 OCT-12 APR-13 JUL-12 JAN-13 JUL-13 OCT-12 APR-13 1 Source: Knight Frank
Slide 22: Income Statement
APPENDIX C Income Statement REVENUE 30 JUN 2018 30 JUN 2017 Gross property income ($’000) 83,998 78,127 Other income ($’000) 3,398 320 Interest income ($’000) 132 117 Total revenue ($'000) 87,528 78,564 EXPENSES 30 JUN 2018 30 JUN 2017 Direct property expenses ($’000) (15,669) (12,585) Responsible e
Slide 23: Distribution Statement
APPENDIX D Distribution Statement 30 JUN 2018 30 JUN 2017 Statutory net profit ($’000) 98,895 50,817 Straight lining of rental income ($’000) 438 (2,298) Amortisation of leasing commissions and tenant incentives ($’000) 2,499 1,219 Investment properties revaluation (gain) / loss ($’000) (50,416) (3,
Slide 24: Balance Sheet and NTA Movement
APPENDIX E Balance Sheet and NTA Movement 30 JUN 2018 30 JUN 2017 NTA GROWTH Cash ($’000) 21,177 8,189 Investment properties ($’000) 1,009,000 896,150 0.20 2.56 Trade & other receivables ($’000) 3,606 3,391 Other assets1 ($’000) 52,615 3,250 Goodwill ($’000) 10,501 10,501 0.01 2.35 0.01 Derivative f
Slide 25: FFO Reconciliation
APPENDIX F FFO Reconciliation FY18 DISTRIBUTE EARNINGS AND FFO RECONCILIATION CIP DISTRIBUTABLE EARNINGS ($’000) PCA FFO ($’000) DIFFERENCE ($’000) Statutory net profit 98,895 98,895 0 Straight lining of rental income 438 438 0 Amortisation of leasing fees & tenant incentive 2,499 2,499 0 Gain / (lo
Slide 26: Key vacancies
APPENDIX G Key vacancies GLA PROPERTY (SQM) % OF PORTFOLIO AREA VACANT SINCE STATUS W4, 310 Spearwood Avenue, Bibra Lake, WA 15,212 2.1 28 Feb 17 Terms agreed for 4,400sqm post 30 June 2018 49 Temple Drive, Thomastown, VIC 13,438 1.8 20 Jun 16 Commencing a leasing strategy to split into smaller tena
Slide 27: Upcoming Expiries (FY19)
APPENDIX H Upcoming Expiries (FY19) GLA EXPIRY EXPIRY PROPERTY TENANT (SQM) DATE PERIOD STATUS 24-32 Stanley Drive, Somerton, VIC Bluestar Logistics 10,099 15-Jul-18 1HFY19 Tenant vacated 24,350sqm in July 2018. 14,251sqm has since been leased, balance actively being marketed to transport and logist
Slide 28: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 2 Woolworths Way, Warnervale, NSW NSW 81.0 1,485 7.50% 54,533 3.1 100.0% 10 Williamson Road, Ingleburn, NSW NSW 46.0 1,687 6.00% 27,260 4.2 100.0% 92-98 Cosgrove Road, Enfield, NSW NSW 42.3 1,
Slide 29: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 24-32 Stanley Drive, Somerton, VIC VIC 27.0 1,109 6.50% 24,350 2.7 100.0% 2 Keon Parade, Keon Park, VIC VIC 25.0 1,280 6.00% 19,527 12.1 100.0% 500 Princes Highway, Noble Park, VIC VIC 20.0 1,
Slide 30: Investment Portfolio
APPENDIX I Investment Portfolio PROPERTY STATE BOOK VALUE $/SQM CAP RATE GLA (SQM) WALE (YRS)1 OCCUPANCY %1 136 Zillmere Road, Boondall, QLD QLD 30.5 1,900 6.75% 16,053 5.2 100.0% 69 Rivergate Place, Murarrie, QLD QLD 30.0 2,604 6.50% 11,522 4.9 100.0% 21 Jay Street, Townsville, QLD QLD 10.5 2,222 7
Slide 31: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds No. 2 Limited (ABN 38 133 363 185, AFSL 340 This presentation may contain forward-looking statements, guidance, forecasts, estimates , prospects, projections 304) (‘CPF2L’) as responsible entity of the Centuria Industrial REIT
Slide 32: Thank you
Centuric a Thank you
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