Centuria Industrial REIT FY19 RESULTS ASX:CIP 6 AUGUST 2019 C E - PowerPoint PPT Presentation

Centuria Industrial REIT FY19 RESULTS ASX:CIP 6 AUGUST 2019 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 1 75-95 & 105 CORIO QUAY ROAD, NORTH GEELONG, VIC

Agenda 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 2

SECTION ONE Introduction ASX:CIP 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 3 680 BOUNDARY RD, RICHLANDS, QLD

CENTURIA PLATFORM Centuria is an established ASX-listed specialist investment manager $6.2bn ASX:CNI Group AUM 1 Market Capitalisation $746m 2 $5.3bn $0.9bn $0.4bn Real Estate AUM Investment Bonds AUM CNI Co-Investments $2.7bn $2.6bn Centuria Life Listed Property AUM Unlisted Property AUM Centuria LifeGoals Centuria Centuria Centuria Centuria Guardian Friendly Society Centuria Centuria Heathley Metropolitan REIT Industrial REIT Metropolitan REIT Industrial REIT Capital Guaranteed Funds Unlisted Healthcare real estate (CMA) (CIP) (CMA) (CIP) Existing Funds $251m 3 $208m 4 $1.4bn $1.3bn $2.0bn $0.6bn • 14 fixed term funds Australia’s largest domestic Australia’s largest domestic CNI economic interest 24.9% 3 22.3% 4 • Wholesale relationships 63.06% pure play office REIT pure play industrial REIT • CDPF 1. AUM as at 31 July 2019 with pro forma adjustments to reflect Centuria Heathley Transaction 3. Based on CMA closing price of $2.83 on 31 July 2019. Includes ownership by associates of Centuria Capital Group and assets held for settlement 4. Based on CIP closing price of $3.18 on 31 July 2019. Includes ownership by associates of Centuria Capital Group 2. Based on CNI closing price of $1.95 on 31 July 2019 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 4

AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Key metrics – a quality pure play industrial platform PORTFOLIO 1 43 $1.2bn 95.9% 4.3yrs Portfolio occupancy 2 Portfolio WALE 2 High quality assets Portfolio value FINANCIAL $934m 13.8% 37.4% 27.0% 12 month return on equity 4 Gearing 5 Market capitalisation 3 12 month total unitholder return 6 S&P/ASX300 A-REIT accumulation index 19.4% 1. Excludes 75-95 & 105 Corio Quay Road, North Geelong and 680 Boundary Road, Richlands which were exchanged, but not settled by 30 4. Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA June 2019 5. Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill 2. By income. Assumes 12 month rental guarantee for Cargo Business Park, 1 International Drive, Westmeadows, VIC 6. Source: Moelis Australia 3. Based on CIP closing price of $3.18 on 31 July 2019 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 5

AUSTRALIA’S LARGEST DOMESTIC PURE PLAY INDUSTRIAL REIT Centuria management creating unitholder value Market Australia’s Included Capitalisation in the S&P largest domestic Total unitholder return 45.3% under Centuria’s management 1,2,3 $934 ASX300 pure-play 4 million Index Industrial REIT TOTAL UNITHOLDER RETURN (%) 1,2 PORTFOLIO VALUE ($BN) NTA PER UNIT ($) 6 CIP ASX 300 A-REIT ACCUMULATION INDEX 22% 5.6% 5 5 2.73 1.2 FY16-FY19 FY15-FY19 45.3% CAGR CAGR 1.0 0.9 2.56 0.9 30.3% 27.0% 2.35 2.32 0.5 19.4% 22 37 36 37 43 ASSETS ASSETS ASSETS ASSETS ASSETS 3 12 month Under Centuria FY15 FY16 FY17 FY18 FY19 JUN 16 JUN 17 JUN 18 JUN 19 Management 1. Source: Moelis Australia; as at 30 June 2019 5. Excludes 75-95 & 105 Corio Quay Road, North Geelong and 680 Boundary Road, Richlands which were exchanged, but not settled by 30 June 2019 2. Past performance is not indicative of future performance 6. NTA per unit is calculated as net assets less goodwill divided by closing units on issue 3. Centuria management of CIP since 7 January 2017 4. Based on CIP closing price of $3.18 on 31 July 2019 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 6

HIGHLIGHTS Delivered on FY19 priorities • Occupancy improved to 95.9% 1 (94.5% at FY18) 1 • Leases agreed for 113,932sqm (14% of the portfolio) Maintain leasing momentum • 100% FY19 expiries renewed or leased • Over 80,000sqm leased in FY19 2 • Occupancy now at 96.7% 1 Improve Victoria portfolio • Transacted $52 million 2 of assets to improve portfolio quality • Reduced gearing to 37.4% 3 , pro forma 33.3% following Placement and UPP 3 • Refinanced $310 million of short-term debt, additional $60m debt facilities secured Prudently manage debt • No debt maturing until FY22 • 12 month return on equity of 13.8% 4 4 Continue to maximise ROE • Revaluations driving NTA 5 increase of 6.6% to $2.73 per unit • Delivered Distributable Earnings 6 per unit of 18.8 cents, above the mid point of guidance 7 5 Deliver FY19 earnings guidance • Delivered distribution per unit of 18.4 cents, in line with guidance Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standard (“AAS”) represents th e profit under 1. By income. Assumes 12 month rental guarantee for Cargo Business Park, 1 International Drive, Westmeadows, VIC 6. 2. Before transaction costs AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect the core earnings of CIP Distributable earnings guidance of 18.5 – 19.0 cents per unit 3. Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill 7. 4. Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA 5. NTA per unit is calculated as net assets less goodwill divided by closing units on issue 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 7

SECTION TWO Financial Results ASX:CIP 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 8 6 MACDONALD ROAD, INGLEBURN, NSW

FINANCIAL OVERVIEW – INCOME STATEMENT Delivered on FY19 guidance and focused on maximising return on equity FY19 FY18 VARIANCE Reflects acquisitions through FY19 ($’000) Gross property income 91.6 84.0 7.6 ($’000) Other income 0.6 3.4 (2.8) 2.4% Like-for-like income growth ($’000) Interest income 0.2 0.1 0.1 Total revenue ($'000) 92.4 87.5 4.9 FY18 included distributions from ($’000) Direct property expenses (18.1) (15.7) (2.4) PLG investment, since divested ($’000) Responsible entity fees (6.8) (6.2) (0.6) ($’000) Finance costs (16.9) (16.8) (0.1) ($’000) Management and other administrative expenses (1.9) (1.3) (0.6) Distributable earnings per unit Total expenses ($'000) (43.7) (39.9) (3.8) above the mid point of FY19 Distributable earnings 1 ($'000) 48.7 47.6 1.1 guidance range 4 258.7 243.8 14.9 Weighted average units on issue M Distributable earnings per unit 1 cpu 18.8 19.5 (0.7) Distribution $m 48.4 48.1 0.3 Return on equity driven by leasing success and positive market Distribution per unit cpu 18.4 19.4 (1.0) fundamentals Distribution yield 2 % 6.0 7.5 (1.5) Return on equity 3 13.8 17.3 (3.5) % 98 99 (1) Payout ratio % Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standard (“AAS”) represents the profit under 1. 3. Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect the core earnings of CIP Distributable earnings guidance of 18.5 – 19.0 cents per unit 4. 2. Based on CIP closing price of $3.06 on 30 June 2019 and $2.57 on 30 June 2018 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 9

CAPITAL MANAGEMENT Continuing to strengthen CIP’s balance sheet DEBT AND HEDGE MATURITY PROFILES ($m) DEBT HEADROOM ($m) 50 84 Hedging maturity profile No maturities until FY22 310 $50m of debt Debt expiry profile headroom Refinanced $310 million short term facilities 470 436 Diversified lender pool 295 225 through introduction of a Additional $60 million 50 new lender of facilities secured FY20 FY21 FY22 FY23 FY24 JUN 19 PRO FORMA KEY DEBT METRICS FY19 FY18 GEARING 1 PROFILE (%) PRO FORMA GEARING 1 (%) Facility Limit $m 520.0 460.0 Reduced gearing Drawn amount $m 469.9 429.8 570bps under 43.1 42.6 Centuria Weighted average debt expiry Year 3.6 2.5 management Proportion hedged % 76.6 79.1 Weighted average hedge maturity Year 3.1 2.9 38.4 37.4 2 Cost of debt % 3.9 3.9 Interest cover ratio Times 4.2 4.0 Gearing 1 % 37.4 38.4 JUN 16 JUN 17 JUN 18 JUN 19 1. Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill 2. Weighted average cost of debt for FY18 & FY19 including swap rate, facility establishment fees and all-in margins (base & line fees) 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 1 0

SECTION THREE Portfolio Overview ASX:CIP 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 1 1 52 - 74 QUARRY ROAD, ERSKINE PARK, NSW