Australian Unity Office Fund · ASX:AOF
Australian Unity Office Fund — FY2021 Earnings Presentation
32 slides from Australian Unity Office Fund's earnings presentation, Aug 25, 2021
Slide 1: Australian Unity Office Fund 2021 Full Year Results
5 Eden Park Drive, Macquarie Park Australian Unity Office Fund 2021 Full Year Results August 2021 (ASX: AOF) Webcast | Teleconference 1
Slide 2: AOF Overview / Agenda
A quality, diversified metropolitan and CBD portfolio offering affordable accommodation with excellent amenity and accessibility 2 Eden Park Drive, Macquarie Park Agenda 1. Portfolio Highlights AOF Overview 2. Strategic Assessment 3. Financial Results 4. Property Update 5. Appendices 2
Slide 3: Acknowledgement of Country
Acknowledgement of Country Let’s reflect the meaning of place and in doing so recognise the various traditional lands on which we meet. We acknowledge the traditional custodians of the people of the Kulin nations and the traditional owners of the lands on which each of you are living and working fro
Slide 4: Portfolio Highlights
10 Valentine Avenue, Parramatta Portfolio Strategic Highlights Review Australian Unity 4
Slide 5: Portfolio Highlights
Portfolio Highlights 1 2 3 18.7 cpu FFO1 95.7% occupancy2 15.3%, 16,449sqm3 Top end of guidance +2.0% from 93.7% as at June leased 2020 4 5 ~$0.5 million4 Strategic Assessment COVID Rent Relief ~1% of rental income Development of refined strategy 1. For the year ended 30 June 2021. FFO means Directo
Slide 6: AOF Objectives and Strategy
AOF Objectives and Strategy Key Objectives Strategy To provide sustainable income returns via Focus on owning Australian office properties in metropolitan and CBD markets, quarterly distributions and the potential for complemented by a targeted and diversified portfolio of Australian real estate cap
Slide 7: Active Management
Active Management Leasing - 95.7% occupancy1 reflecting a 2.0% increase driven by leasing 15.3% of the portfolio. Achievements 5 Eden Park Drive – significant leasing of ~7,300sqm, ~63% of the property, driving a 3.5% increase in occupancy to 96.3%, longer WALE and valuation growth 468 St Kilda Road
Slide 8: Active Management
Active Management Acquisition 96 York Street, Beenleigh – Acquired July 2021 for $33.52 million, settlement expected December 2021 Beenleigh is in the heart of Logan, an affordable southeast location in Queensland with significant growth opportunity and improved transportation, benefiting from a fas
Slide 9: Strategic Assessment Review
64 Northbourne Avenue, Canberra Strategic Strategic Assessment Review Australian Unity 9
Slide 10: Strategic Assessment Overview
Can leave this slide in but just brush Strategic Assessment Overview over it in the speech as talk about it in slide 4 The strategic assessment was conducted to examine options to maximise returns and realise value for unitholders Three broad categories were identified to assess a range of scenarios
Slide 11: Strategic Assessment Considerations
Strategic Assessment Considerations Growing and enhancing the portfolio achieves the strategic priorities Growing and enhancing the portfolio achieves the strategic priorities Grow and • Provides sustainable distributions, enhances liquidity and allows for delivery of value-add initiatives maximisin
Slide 12: Financial Results
Financial Results Australian Unity 12 468 St Kilda Road, Melbourne
Slide 13: Financial Results 2021
Financial Results 2021 FFO at top end of guidance FFO1 Per Unit 18.7cpu +0.5cpu, or +2.7%, increase from FY20 driven by strong leasing results and lower borrowing costs. Distribution Per Unit 15.0cpu In line with guidance and consistent with FY20 Profit attributable to unitholders $23.3m $10.0m, or
Slide 14: Property Portfolio
Property Portfolio1 Independent Change in Current Change in All properties were independently revalued at Property Valuation valuation2 capitalisation capitalisation 30 June 2020 and 30 June 2021 ($’m) ($’m) rate2 (%) rate (%) Overall increase of $5.95m, ~1% 2-10 Valentine Avenue, Parramatta 147.80
Slide 15: Capital Management
Capital Management1 Conservative gearing with reducing cost of debt Gearing2 28.4% Gearing reduced and the headroom increased following the sale of 241 Adelaide Street, Brisbane $33.52 million of undrawn debt capacity allocated to the purchase of 96 York Street, Beenleigh Drawn Debt3 $190.8m Conside
Slide 16: Property Metrics Update
Property Property Metrics Update Australian Unity 16 150 Charlotte Street, Brisbane
Slide 17: Focused on affordability, amenity and accessibility
Focused on affordability, amenity and accessibility With exposure to Australia’s metropolitan and CBD markets Amenity Accessibility Affordability Well located assets with connectivity to retail Connectivity with key transport nodes & AOF invested in metropolitan markets with and open spaces reduced
Slide 18: Metro Markets
Metro Markets Major metro markets remain competitively priced Prime Gross Effective Rent Prime Gross Prime Equivalent Market Effective Market Discount to Effective Rent Yields (%) Metro markets and other capital cities CBDs Rent ($/sqm)1 Sydney CBD Growth2 rentals at significant discount to Sydney C
Slide 19: Environmental, Social & Governance Framework
Environmental, Social & Governance Framework AOF will invest, develop and manage assets to maximise unitholder value, with a focus on environmental, social & governance principles Transparent Environmental Collaborate with Invest in long term Impacts Tenants sustainability NABERS – Water and Reposit
Slide 20: Outlook and Guidance
Outlook and Guidance Guidance 18.0 – 18.5 cpu 1 FY22 FFO Guidance FY22 Distribution Guidance 15.2 cpu1 Outlook Drive the active management strategy and deliver leasing outcomes to maintain and improve sustainable distributions Execute on the asset refurbishment initiatives to improve occupancy level
Slide 21: Appendices
Appendices Appendices Australian Unity 21 150 Charlotte Street, Brisbane
Slide 22: Income Statement
Income Statement 2021 2020 Change AOF provided rent waivers of $347,000 relating to ($’000) ($’000) ($’000) financial year 2021 in accordance with the Mandatory Code of Conduct introduced by the National Cabinet Rental income1 56,822 57,844 (1,022) on 7 April 2020 and relevant State regulations Prop
Slide 23: Balance Sheet
Balance Sheet 30 June 2021 30 June 2020 Change ($’000) ($’000) ($’000) Reduction in receivables reflects strong collections during the year. Assets Receivables include a doubtful debt provision of Cash and cash equivalents 8,935 5,798 3,137 $0.933 million (2020: $1.198 million) Receivables 592 1,818
Slide 24: Property Portfolio
Property Portfolio Valuation change from 31 December 2020 to 30 June 2021 Independent Change in Current Change in Property Valuation1 valuation2 capitalisation capitalisation ($’m) ($’m) rate1 (%) rate2 (%) All properties were independently revalued at 31 December 2020 and 30 June 2021 2-10 Valentin
Slide 25: Property Portfolio
Property Portfolio As at 30 June 2021 Key Portfolio Metrics Lease expiry profile1 GE Number of properties 8 40% 32 Phillip St 35% 6.9% Occupancy1 95.7% 30% PNSW 25% 10 Valentine Ave Portfolio Value $638.85m Telstra Boeing 20% 30 Pirie St 150 Charlotte St 15% Weighted Average Capitalisation Rate 5.84
Slide 26: Market Outlook Positive
Market Outlook Positive Steady economic outlook driven by positive consumer and business confidence Consumer Confidence • Consumer confidence rebounded strongly post easing of lockdowns • This translated to improvement in household consumption and reduction of household savings ratio from a peak of
Slide 27: Office Demand
Office Demand Office demand expected to improve once restrictions ease with working from home attraction waning CBD Office Markets Net Absorption, year to July 2021 How often will we work from home? (JLL survey) • Sydney, Canberra and Perth office CBD markets have experienced positive net absorption
Slide 28: Market Yields
Market Yields Commercial office yields well above bond yields Australian Property Yields vs Real Bond Rates • Short term headline inflation spiked at 3.8% in June 2021 due to short term supply chain issues and rising fuel prices • Industrial yields have firmed to 4.53% while retail and office have s
Slide 29: Sustainability Case Studies
Sustainability Case Studies Case Study: 2 & 5 Eden Park Drive Electricity Usage2 reduced by an average 11% across 5 properties between 2019 and 2020 338 Electricity Consumption (Kwh) 2017 - 2021 solar panels 7,000,000 installed across two properties 6,000,000 155,549 kg1 5,000,000 Greenhouse gas emi
Slide 30: Strategic Assessment
Strategic Assessment As part of the strategic assessment a full portfolio divestment was considered with the conclusion being this would present significant uncertainty around net proceeds to be returned to unitholders given unrealised capital gain, value and timing risks. The unrealised capital gai
Slide 31: Important notice and disclaimer
Important notice and disclaimer This information provided in this presentation is issued by Australian Unity Investment Real Estate Limited ABN 86 606 414 368 AFSL 477434 (AUIREL), as responsible entity for the Australian Unity Office Fund (AOF). AUIREL is owned equally by subsidiaries of Australian
Slide 32: YEARS
180 YEARS Australian Unity Real Wellbeing St
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