Centuria Capital Group · ASX:CNI
Centuria Capital — Centuria Metropolitan REIT — FY2018 Earnings Presentation
29 slides from Centuria Capital's earnings presentation, Aug 21, 2018
Slide 1: Centuria Metropolitan REIT FY18 Results
Centuria Metropolitan REIT F Y 1 8 R E S U LT S | A S X : C M A | 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 M E T R O P O L I TA N R E I T | A S X : C M A | F Y 1 8 R E S U LT S 2
Slide 3: Introduction
MELBOURNE CBD - 20KM SECTION ONE 2 KENDALL STREET Introduction WILLIAMS LANDING PRINCES FWY WILLIAMS LANDING TRAIN STATION ARTIST IMPRESSION C E N T U R I A M E T R O P O L I TA N R E I T | A S X : C M A | 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: Creating shareholder value since inception
AUSTRALIA’S LARGEST ASX LISTED METROPOLITAN OFFICE REIT Creating shareholder value since inception 7.9% CAGR3 2.6 $2.49 7.9% 2.4 2.6 $2.32 CAGR3 $2.49 2.2 2.4 $2.18 $2.32 2.0 $1.91 $1.97 2.2 $2.18 1.8 1.6 $1.91 $1.97 Annual total unit holder return 2.0 1.8 14.8% since IPO1 1.6 1.4 1.4 1.2 1.2 1.0 TO
Slide 6: Key metrics
AUSTRALIA’S LARGEST ASX LISTED INCOME FOCUSED OFFICE REIT Key metrics 14.9% 19 $601m $930.5m Return on equity1 High quality assets2 Market capitalisation3 Portfolio value2 98.9% 4.0yrs 28.3% 7.2% Portfolio occupancy4 Portfolio WALE5 Gearing6 12 month total return7 1 Return on equity calculated as (c
Slide 7: Australia's pre-eminent metropolitan office REIT
HIGHLIGHTS Australia’s pre-eminent metropolitan office REIT 1 2 3 Earnings delivery Active management Portfolio enhancement Guidance achieved Over $256m of transactions $1.0 billion5 of total assets underpinned distributable earnings of 18.6 cpu1 leveraging Centuria’s extensive experience by high qu
Slide 8: Financial Results
SECTION TWO Financial Results 77 MARKET STREET WOLLONGONG, NSW C E N T U R I A M E T R O P O L I TA N R E I T | A S X : C M A | F Y 1 8 R E S U LT S 8
Slide 9: Delivered FY18 guidance and focused on maximising return on equity
FINANCIAL OVERVIEW INCOME STATEMENT Delivered FY18 guidance and focused on maximising return on equity $'000 – REVENUE 30 JUN 2018 30 JUN 2017 VARIANCE Gross property income $m 73.1 40.0 33.1 Other income $m - 0.6 (0.6) Revenue increase driven by Interest income $m 0.2 0.1 0.1 acquisitions and leasi
Slide 10: Balance sheet headroom
CAPITAL MANAGEMENT Balance sheet headroom DEBT MATURITY PROFILE $145m ––Conservatively structured debt book, well supported by major domestic lenders $105m $70m ––Staggered debt tranches reduce 3.6% refinancing risk All in cost of debt2 °° No near term maturities ––Well positioned to access equity F
Slide 11: Portfolio Overview
SECTION THREE Portfolio Overview 201 PACIFIC HIGHWAY, ST LEONARDS, NSW C E N T U R I A M E T R O P O L I TA N R E I T | A S X : C M A | F Y 1 8 R E S U LT S 11
Slide 12: Geographically diversified portfolio weighted to eastern seaboard markets
PORTFOLIO COMPOSITION Geographically diversified portfolio weighted to eastern seaboard markets WA 10% QLD 31% 144 Stirling St, Perth 35 Robina Town Centre Drive, Robina PORTFOLIO SNAPSHOT FY18 1 FY17 555 Coronation Drive, Brisbane 42-46 Collins Street, West Perth 438-517 Kingsford Smith Drive, Hami
Slide 13: Demonstrating proactive asset management, providing income continuity
LEASING OVERVIEW Demonstrating proactive asset management, providing income continuity Highest portfolio occupancy since inception NO. OF ––Four of six sub markets fully occupied, KEY LEASE TRANSACTIONS 203 Pacific Highway, St Leonards, NSW TRANSACTIONS 1 SQM 3,503 9.75% remainder at near maximum oc
Slide 14: Mature portfolio with quality tenants
PORTFOLIO METRICS Mature portfolio with quality tenants WEIGHTED AVERAGE LEASE EXPIRY1,3 ––43% of portfolio income underpinned 60% 50% 7% CH2M Hill by high credit worthy and government 47.0 40% 16% CSC Australia tenants 39% Department housing 39.6 30 JUNE 2018 & public works (DOJ) (WALE 4.0YRS) 30%
Slide 15: Valuation growth underpinned by market drivers and active management initiatives
PORTFOLIO VALUATIONS Valuation growth underpinned by market drivers and active management initiatives BOOK VALUE CAPITALISATION RATE ––Total portfolio value increased year on year by 52.6% to $930.5million2 FY18 $m FY17 $m INCREASE $m % FY18 % FY17 % BPS Like for like portfolio1 °° Like for like1 po
Slide 16: Over $256 million transacted to improve portfolio quality
CAPITAL TRANSACTIONS - ACQUISITIONS AND DIVESTMENTS Over $256 million transacted to improve portfolio quality Acquisitions $210.9m Divestments $46.3m 201 PACIFIC HIGHWAY 77 MARKET STREET 144 STIRLING STREET 42-46 COLIN STREET 3 CARLINGFORD ROAD 44 HAMPDEN ROAD ST LEONARDS, NSW (50%) WOLLONGONG, NSW4
Slide 17: Guidance & Strategy
SECTION FOUR Guidance & Strategy 203 PACIFIC HIGHWAY, ST LEONARDS, NSW C E N T U R I A M E T R O P O L I TA N R E I T | A S X : C M A | F Y 1 8 R E S U LT S 17
Slide 18: Continue to build Australia's pre-eminent metropolitan office REIT
FY19 PRIORITIES Continue to build Australia’s pre-eminent metropolitan office REIT 1 Become pure play, high quality office portfolio 1a Complete acquisition of 2 Kendall Street, Williams Landing, VIC CMA is well positioned 1b Settle disposal of 3 Carlingford Road, NSW, and non-core industrial assets
Slide 19: Strategy & Guidance
STRATEGY & GUIDANCE Continue to build Australia’s pre-eminent metropolitan office REIT CMA remains focused on generating predictable and quality income streams and executing initiatives to create value. –– Deliver secure income streams through a diversified, STRATEGY national tenant base with a focu
Slide 20: Appendices
SECTION FIVE Appendices Appendix A – Market Outlook Appendix B – Income Statement Appendix C – Distribution Statement Appendix D – Balance Sheet and NTA Movement Appendix E – FFO Reconciliation Appendix F – Key Vacancies Appendix G – Investment Portfolio 9 HELP STREET, CHATSWOOD, NSW C E N T U R I A
Slide 21: Robust supply and demand fundamentals in metropolitan office markets
APPENDIX A – MARKET OUTLOOK Robust supply and demand fundamentals in metropolitan office markets YIELD SPREAD – A-GRADE METRO VS CBD A-GRADE1 ––Non-CBD supply continues to trend below 10% 1.40% historic averages in several markets 1.20 ––Australian metro market total vacancy (9.0%), 1.00 6.56% lower
Slide 22: Income Statement
APPENDIX B Income Statement $'000 – REVENUE 30 JUN 18 30 JUN 17 Gross property income 73,098 40,019 Other income 27 14 Interest income 195 115 Total revenue 73,320 40,148 EXPENSES Direct property expenses (16,685) (8,408) Responsible entity fees (4,192) (2,385) Finance costs (8,450) (5,496) Manageme
Slide 23: Distribution Statement
APPENDIX C Distribution Statement $'000 30 JUNE 2018 30 JUNE 2017 Statutory net profit 85,082 37,689 Net (gain) on fair value of investment properties (41,957) (17,180) Loss/(gain) on fair value of derivative financial instruments 646 (1,420) Straight-lining of rental income1 (3,927) (1,366) Amortis
Slide 24: Balance Sheet and NTA Movement
APPENDIX D Balance Sheet and NTA Movement $'000 30 JUNE 2018 30 JUNE 2017 NTA MOVEMENT Cash 18,978 8,187 $2.49 Investment properties 872,300 609,950 (0.24) (0.01) / UNIT Goodwill 6,356 6,356 $2.32 / UNIT (0.00) (0.06) (0.00) Trade and other receivables 1,325 1,127 Other assets 3,852 3,402 Total asse
Slide 25: FFO Reconciliation
APPENDIX E FFO Reconciliation CMA DISTRIBUTABLE PCA FFO DIFFERENCE PROPERTY EARNINGS ($’000) ($’000) Statutory net profit for the year 85,082 85,082 0 Net (gain) on fair value of investment properties (41,957) (41,957) 0 Loss/(gain) on fair value of derivative financial instruments 646 646 0 Straigh
Slide 26: Key vacancies
APPENDIX F Key vacancies NLA PORTFOLIO AREA PROPERTY (SQM) % VACANT SINCE STATUS Comprises a ground floor commercial suite (230sqm), Gym: Jul-17 plus 1,086sqm of former SMEC space on the second 154 Melbourne Street, South Brisbane, QLD 1,316 0.7% L2: Nov-17 level. Negotiations currently underway on
Slide 27: Investment Portfolio
APPENDIX G Investment Portfolio ASSET STATE OWNERSHIP BOOK VALUE CAP RATE NLA WALE3 OCCUPANCY4 Office 201 Pacific Highway, St Leonards NSW 50% 85.0 6.50% 16,488 2.9 99.8% 9 Help Street, Chatswood NSW 100% 76.0 6.00% 9,394 3.0 100.0% 203 Pacific Highway, St Leonards NSW 50% 57.0 6.50% 11,734 5.4 100.
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Centuria Property Funds Limited Limited (ABN 11 The information in this presentation has been obtained from and based on sources believed 086 553 639, AFSL 231 149) (CPFL) as responsible entity of Centuria Metropolitan REIT by CPFL to be reliable. (‘
Slide 29: Thank you
Thank you
Centuria Metropolitan REIT — FY2018 Earnings Presentation on 6ix