Centuria Industrial Reit · ASX:CIP
Centuria Industrial Reit — 360 Capital Industrial Fund — FY2013 Earnings Presentation
42 slides from Centuria Industrial Reit's earnings presentation, Aug 12, 2013
Slide 1: 360 Capital Industrial Fund 2013 Full Year Financial Results Presentation
69 Studley Court, Derrimut, VIC (Deliver Australia) 360 CAPITAL INDUSTRIAL FUND ARSN 099 680 252 2013 Full Year Financial Results Presentation | 12 August 2013 1
Slide 2: Table of Contents
Table of Contents Section Appendices 1 Key Achievements A Balance Sheet as at 30 June 2013 2 Price Performance B Profit & Loss for year ended 30 June 2013 3 Financial Results Overview C Operating Earnings Reconciliation 4 Capital Management D Movements in Issued Capital 5 Property Portfolio E Portfo
Slide 3: Section 1: Key Achievements
Section 1: Key Achievements 22 Hawkins Crescent, Bundamba, QLD (API) 3
Slide 4: Key FY13 Achievements
Key FY13 Achievements 4 for 1 consolidated basis Fund repositioned for growth • Statutory net profit of $13.6m significantly above a FY12 statutory net loss of $11.2 • Operating EPU of 21.48cpu2, 9.7% above guidance Financial metrics1 • DPU of 18.00cpu3 in line with guidance and 88.2% tax advantaged
Slide 5: Section 2: Price Performance
310 Spearwood Avenue, Bibra Lake, WA (AWH) Section 2: Price Performance 5
Slide 6: Price Performance
Price Performance Index outperformance since listing in December 2012 • Strong market support for capital raisings June 2013 capital raise to acquire $37.2m of assets March 2013 capital raise to reduce debt +15.7% +5.9% 6
Slide 7: Peer comparison
Peer comparison Attractive pricing relative to trading peers • TIX’s FY14 EPU yield and DPU yield are substantially higher than the average across A-REIT trading peers FY14 earnings yield1 FY14 distribution yield1 9.8% 8.6% 9.1% 7.9% 8.0% 8.5% 8.6% 7.7% 8.0% 8.1% 8.3% 7.3% 7.8% 7.8% 6.8% 6.7% 6.3% 6
Slide 8: Section 3: Financial Results Overview
Section 3: Financial Results Overview 22 Hawkins Crescent, Bundamba, QLD (API) 8
Slide 9: Key Financials
Key Financials1 Results ahead of guidance FY13 FY12 Change • FY13 statutory net profit impacted by significant one-off Statutory net profit/(loss) $13.6m $(11.2)m 221% costs associated with ASX listing and defence of management challenge Statutory EPU 26.4cpu (24.8)cpu 206% • FY13 operating earnings
Slide 10: Operating Earnings Reconciliation
Operating Earnings Reconciliation Amortisation of Listing, Notes Statutory net incentives, FV gain on FV gain on Loss on sale of Initial and and Denison Amortisation of Derivative Rent Straight Operating profit leasing fees properties derivatives property deferred fees defence costs borrowing costs
Slide 11: NTA per Unit reconciliation
NTA per Unit reconciliation 2.20 2.10 0.08 (0.14) 2.04 (0.06) 0.01 0.01 2.00 1.94 $ per Unit 1.90 1.80 1.70 1.60 1.50 2 3 NTA per Unit Acquisitions & Profit & Revaluations Exit Fee waiver Capital Raise NTA per Unit 1 30 Jun 12 Disposals Distributions 30 Jun 13 Notes 1. Disposal costs and stamp duty
Slide 12: Section 4: Capital Management
Section 4: Capital Management 457 Waterloo Rd, Chullora, NSW (Elite Logistics) 12
Slide 13: Key Debt Indicators
Key Debt Indicators Significant reduction of debt and finance costs FY13 FY12 Change Drawn senior debt $160.4m $222.6m -28% LVR1 46.9% 61.5% -24% Weighted average debt duration 2.5 years 3.5 years -29% “All-in” debt cost2 5.63% 7.0% -20% Hedged 96.6% 72.0% 34% Hedge duration 2.7 years 1.9 years 42%
Slide 14: Debt Facility
Debt Facility Simplified debt facility Lender National Australia Bank Facility limit $180.01m Drawn debt $160.4m Maturity December 2015 Security First ranking mortgages over portfolio LVR 46.9% Covenant metrics ICR 2.2 times LVR < 55.0% Covenant limits ICR > 1.6 times • TIX remains well within debt
Slide 15: Section 5: Property Portfolio
Section 5: Property Portfolio 9-13 Caribou Drive, Direk, SA (Kimberly Clark) 15
Slide 16: Portfolio overview
Portfolio overview Pure-play industrial with strong and stable metrics Number of assets 20 • Maintained high occupancy of 98.4% • 100% tenant retention Net lettable area (sqm) 353,722 • Increased WALE from 4.9 years to 5.1 years via Property valuation ($m) 340.7 • Lease extensions to Visy Industries
Slide 17: Leasing activity
Leasing activity Maintaining outstanding asset management performance Leasing activity Portfolio lease expiry profile (by income) • Leased 51,864sqm or 15% of the total portfolio including: 80% • Visy Industries 27,599sqm • Dana Australia 10,631sqm 60% • Break clause for CTI Freight Systems at Bibra
Slide 18: Leasing activity (cont.)
Leasing activity (cont.) Manageable FY14 and FY15 lease expiry profile with strong earnings visibility Major lease expiries for FY14 and FY15 Area Income Tenant Address % income Expiry (sqm) ($m) Plexicor Australia 5-9 Woomera Avenue, Edinburgh Parks, SA 10,580 1.02 3.1% Sep-2013 Linfox Australia 40
Slide 19: Acquisitions & Disposals
Acquisitions & Disposals Executing repositioning strategy • Repositioning strategy enhancing portfolio quality Acquisitions enhance portfolio quality • Single asset opportunities exist 69 Studley Court, Derrimut VIC 457 Waterloo Road, Chullora NSW Deliver Australia Elite Logistics • quality portfoli
Slide 20: Acquisitions & Disposals (cont.)
Acquisitions & Disposals (cont.) Measured approach to disposals • 3 assets considered non-core are held for sale at $28.7m showing a passing yield of circa 8.53%. • Characterised by: • non-core locations • short WALE of 2.8 years • higher capital expenditure requirements • Disposals program based on
Slide 21: Section 6: 360 Capital as Responsible Entity
Section 6: 360 Capital as Responsible Entity 1 Ashburn Road, Bundamba, QLD (The Reject Shop) 21
Slide 22: 360 Capital as Responsible Entity
360 Capital as Responsible Entity Co-investment aligns manager’s interest • Major co-investment aligns managers interest • 360 Capital Property Group holds 58.9% of 360 Capital Diversified Property Fund (360CDPF) • 360CDPF holds 15.1% of TIX following the June 2013 DRP • has a strategy to maintain a
Slide 23: Section 7: Post 30 June Activity
Section 7: Post 30 June Activity 54 Sawmill Circuit, Hume, ACT (Grace Group) 23
Slide 24: Post 30 June 2013 activity
Post 30 June 2013 activity 54 Sawmill Circuit, Hume ACT Active asset management and opportunities for growth Grace Group • Grace Records expansion at Hume ACT • Total investment of $4.0m including land purchase of $1.6m • 8.5% pre-agreed yield on acquisition of land and completed product • New 4 yea
Slide 25: Section 8: Summary and Outlook
Section 8: Summary and Outlook 22 Hawkins Crescent, Bundamba, QLD (API) 25
Slide 26: Summary & Outlook
Summary & Outlook Achievable, clear and proven strategy 69 Studley Court, Derrimut VIC Summary Deliver Australia • Only A-REIT invested exclusively on Australian, passive, institutional grade industrial property • FY13 operating EPU of 21.48cpu ahead of guidance • FY13 DPU of 18.00cpu in line with g
Slide 27: Forecast FY14 Earnings and Distribution
Forecast FY14 Earnings and Distribution Delivering sustainable distributions Forecast FY14 guidance • Operating EPU 20.0cpu • Assumes no further acquisitions and includes non-core asset sales of $28.7m with proceeds conservatively applied to reduce debt rather than recycling capital into acquisition
Slide 28: Appendices
Appendices A Balance Sheet as at 30 June 2013 B Profit and Loss for the year ended 30 June 2013 C Operating earnings reconciliation D Movements in issued capital E Portfolio details F Industrial market outlook 28
Slide 29: A Balance Sheet as at 30 June 2013
A Balance Sheet as at 30 June 2013 30 Jun 2013 ($m) 30 Jun 2012 ($m) Cash and current assets 4.8 9.1 Trade and other receivables 1.5 1.6 Properties held for sale 28.7 46.5 Properties at fair value 312.0 298.3 Total assets 347.0 355.5 Trade and other payables 7.5 4.4 Fee Provisions - 7.1 Interest bea
Slide 30: B Profit and Loss for June 2013
B Profit and Loss for 30 June 2013 FY2013 ($m) FY2012 ($m) Property rental 35.6 32.6 Total revenue 35.6 32.6 Direct property expenses (7.8) (6.7) Responsible Entity fees (2.0) (2.0) Initial and deferred establishment fees 7.1 (3.4) Custodian fees (0.2) (0.1) Other expenses (2.6) (2.2) Finance costs
Slide 31: C Operating Earnings Reconciliation
C Operating Earnings Reconciliation FY2013 ($m) FY2012 ($m) Change Statutory net profit 13.6 (11.2) 222% Rent straight lining adjustment 0.0 (0.8) (95)% Amortisation of incentives, leasing fees 0.7 0.5 47% Amortisation of borrowing costs 2.1 0.1 1,650% Performance fees & exit fees (7.1) 3.4 (309)% F
Slide 32: D Movements in Issued Capital
D Movements in Issued Capital FY2013 FY2012 Issued capital $’000 $’000 372,886,4351 ordinary units fully paid (2012: 180,554,382) 264,235 179,145 Movements in issued equity during year to 30 June 2013 $’000 Units # Opening balance @ 1 July 2012 179,145 45,138,596 Notes conversion 1,044 530,164 Insti
Slide 33: E Portfolio Overview
E Portfolio Overview Well diversified $340.7m portfolio Queensland (17% by income) • 1 Ashburn Road, Bundamba (The Reject Shop) • 22 Hawkins Crescent, Bundamba (Australian Pharmaceutical Industries) New South Wales (20% by income) • 60 Marple Avenue, Villawood (Kent Transport) • 37-51 Scrivener Stre
Slide 34: E Portfolio Overview as at 30 June 2013
E Portfolio Overview as at 30 June 2013 Last Capitalisation Net Property State Valuation1 Valued rate lettable area Occupancy1 WALE2 ($m) (date) (%) (sqm) (%) (years) 60 Marple Avenue, Villawood NSW 18.7 Jun 2013 9.50 18,529 100.0 3.4 37-51 Scrivener Street, Warwick Farm NSW 20.9 Jun 2013 9.75 27,59
Slide 35: E Property Details
E Property Details 60 Marple Avenue, Villawood NSW 37–51 Scrivener Street, Warwick Farm NSW 8 Penelope Crescent, Arndell Park NSW The Property is located approximately 40 kilometres west of The property is located in the traditional industrial precinct The property is located at Warwick Farm, 31 kil
Slide 36: E Property Details
E Property Details 54 Sawmill Circuit, Hume ACT 22 Hawkins Crescent, Bundamba QLD 1 Ashburn Road, Bundamba QLD The property was completed in 2009 and is situated The property was completed in 2010 and is situated Completed in 2010, the property is located in the industrial approximately 33 kilometre
Slide 37: E Property Details
E Property Details 9-13 Caribou Drive, Direk SA 5-9 Woomera Avenue, Edinburgh Parks SA 102–128 Bridge Road, Keysborough VIC Completed in 2009, the property is located 25 kilometres The property is located within the suburb of Edinburgh, The property is located in the south-eastern suburb of north of
Slide 38: E Property Details
E Property Details 500 Princes Highway, Noble Park VIC 6 Albert Street, Preston VIC 14-17 Dansu Court, Hallam VIC The property is located on the north side of Princes Highway The property is located in the traditional industrial precinct The property is situated within the established south eastern
Slide 39: E Property Details
E Property Details 12–13 Dansu Court, Hallam VIC 33-59 Clarinda Road, Oakleigh South VIC 40–48 Howleys Road, Notting Hill VIC The property is situated within the established south The property is situated approximately 17 kilometres south- The Notting Hill/Mulgrave area is an office and industrial e
Slide 40: E Property Details
E Property Details 39–45 Wedgewood Road, Hallam VIC 223-235 Barry Road, Campbellfield VIC 310 Spearwood Avenue, Bibra Lake WA The property is situated within the established south eastern The property is located within the established Bibra Lake industrial precinct of Hallam, approximately 30 kilome
Slide 41: E Property Details
E Property Details 457 Waterloo Road, Chullora NSW 69 Studley Court, Derrimut VIC The property comprises a recently refurbished traditional The property is a modern freestanding office and warehouse freestanding office and warehouse facility. Access to the facility completed in 2009 comprising offic
Slide 42: F Industrial Market Outlook
F Industrial Market Outlook Past 6 Months Next 12 Months Market Comment Market Comment Direction Direction • Demand stable across all markets • Demand is expected to modestly • Some increased interest in pre- increase upon a stabilised Tenant Demand commitments economy • Increasing primarily due to
360 Capital Industrial Fund — FY2013 Earnings Presentation on 6ix