CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Centuria Urban REIT 576 SWAN STREET, RICHMOND VIC PAGE 01
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 1 Results Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Financial Overview Financial Snapshot 1H17 1H16 Balance Sheet Metrics 1H17 1H16 Statutory profit/(loss) $m 7.8 4.4 Total assets $m 213.3 200.2 Distributable earnings 1 $m 5.8 7.2 NTA per stapled security $ 2.27 2.11 Distributable earnings per security cps 7.9 9.9 Gearing % 19.7 2 18.3 Distribution $m 6.2 6.2 Distribution per security cps 8.5 8.5 1) Distributable earnings is a fjnancial measure which is not prescribed by Australian Accounting Standard (“AAS”) represents the profjt under AAS adjusted for specifjc non-cash and signifjcant items. The Directors consider that distributable earnings refmect the core earnings of the Fund 2) Gearing, is defjned as per loan to value ratio PAGE 04
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Financial Highlights 7 .9 Earnings generated by quality offjce assets cps Distributable earnings 2 8.5 cps • Statutory net profjt of $7.8m • Conservative balance sheet, gearing of 19.7% 1 Distributions paid • 1H17 Distributable earnings 2 of 7.9 cps in line with previous base case guidance – 1H17 Distributions of 8.5 cps paid in line with previous manager statements 19.7 % • Market capitalisation increased to $156.8m 3 Gearing 1 • NTA increased 2 cps to $2.27 per security $ 2.27 cps Net Tangible Assets 1) Gearing, is defjned as per loan to value ratio 2) Distributable earnings is a fjnancial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profjt under AAS adjusted for specifjc non-cash and signifjcant items. The Directors consider that distributable earnings refmect the core earnings of CUA 3) Based on CUA’s closing price of $2.14 per security as at 30 December 2016 PAGE 05
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Operating Highlights 99.2 % Asset quality and location drive leasing success Portfolio occupancy 4.6 yrs • Substantial leasing success – Agents appointed to market SMEC – 6,712 sqm across portfolio 1 Portfolio WALE 2 Australia space (expiry Oct 2017). (new leases and renewals), including; SMEC Australia will continue to – Two year lease extension of 3,699 sqm of pay rent until expiry $ 210.4 m expiring space to Queensland Government – Dominos Pizza Enterprises expansion (QCAA) at 154 Melbourne Street, into the Devine Developments tenancy South Brisbane Book valuation on level 1 (1,216 sqm) at Kingsford Smith – Five year lease renewal of 1,086 sqm to Drive for a four year term Frasers Property at at 154 Melbourne 6.86 % • Portfolio valuations increased Street, South Brisbane by 1.2 per cent – Surrender of Pradella Developments lease Portfolio WACR • Portfolio WACR fjrmed 26 basis points at 154 Melbourne Street, South Brisbane (534 sqm), allowing for expansion from adjoining tenant QCAA with zero downtime 1) Includes one transaction with terms agreed and subject to lease fjnalisation 2) By Net Lettable Area (“NLA”) as at 31 December 2016 PAGE 06
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 NTA Movement Positive investment sentiment for quality metropolitan offjce stock driving NTA uplift Movements in NTA Per Stapled Security 0.02 2.30 ($) 0.03 (0.03) 2.20 2.25 2.27 2.10 NTA 2cps 2.00 1.90 1.80 FY16 Revaluation MTM Hedge Other 1 1H17 1) Other include movements in cash, payables, receivables and increase in drawn debt PAGE 07
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 2 Portfolio Overview
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Portfolio Metrics High quality investment portfolio underpinned by strong rental covenants Portfolio Snapshot 1H17 1H16 Geographic Weighted Average Lease Expiry 1,2 Number of assets # 3 3 Diversification (by value) Book value $m 210.4 196.1 70% WACR % 6.86 7.41 60 61.4 59.4 NOI $m 7.6 8.9 50 Occupancy 1 % 99.2 98.7 40 FY17 expiries % 0.0 12.8 30 29.1 WALE 1,2 years 4.6 5.3 20 14.6 12.8 10 11.7 8.0 0 0.8 0.8 0.8 0.8 0.0 Vacant FY17 FY18 FY19 FY20 FY21+ 1) Includes one transaction with terms agreed and subject to lease fjnalisation 28% VIC 72% QLD FY16 1H17 2) By Net Lettable Area (“NLA”) as at 31 December 2016 PAGE 09
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Valuations Valuations supported by continued investment appetite for quality metropolitan offjce assets 483 KINGSFORD SMITH DRIVE, BRISBANE QLD Key Valuation Metrics 1H17 FY16 Change 154 Melbourne Street, South Brisbane QLD 77.5 77.5 — 438-517 Kingsford Smith Drive, Brisbane QLD 74.4 74.4 — 576 Swan Street, Richmond VIC 58.5 56.0 2.5 Book value ($m) 210.4 207.9 2.5 Average Capital Value ($psm) 7,267 7,181 87 Portfolio WACR (%) 6.86 7.12 (0.26) $ 210.4 m 1.2 % Book value Increase in Portfolio Valuation PAGE 10
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Leasing Overview Focus on proactive management strategies to generate predictable income • Material transactions completed Property Tenant / Transaction Level sqm in 1H17 across 6,712 sqm 1 154 Melbourne Street Queensland Government 7-9 & 3,699 – 3,699 sqm relating to FY17 expiries (QCAA) / Lease extension Pt 10 – 1,086 sqm relating to FY18 expiries 154 Melbourne Street Queensland Government (QCAA) / Pt 10 534 – Transactions represent 23.2% Pradella Developments surrender of property portfolio, signifjcantly 154 Melbourne Street Frasers Property / New lease 3 1,086 mitigating short term lease expiry risk 154 Melbourne Street Soccarrat / New lease Retail 177 • As a result of these transactions CUA’s 438-517 Kingsford Smith Drive Dominos / Replacement 1 1,216 occupancy and WALE 2 have improved of Devine’s L1 tenancy to 99.2% and 4.6 years, respectively Portfolio NLA leased 1 6,712 sqm 23.2 % 1) Includes one transaction with terms agreed subject to lease fjnalisation and execution Portfolio NLA leased 1 2) By Net Lettable Area as at 31 December 2016 PAGE 11
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Tenancy Profile A-grade assets attracting quality tenants with strong leasing covenants • Top 10 tenants account for Tenancy Profile by Size Rental Reviews Tenant Diversification 92% of gross rental income Cohort (by no. tenant) (top 10 tenants by gross income) • Approximately 93 per cent Department Housing & Public Works (QCAA) 14.9% of gross rental revenue GE Capital Finance Australasia 14.9% derived from ASX listed, Department Housing & Public Works (DOJ) 11.9% multinational, national and Domino's Pizza Ltd 10.1% Forever New Clothing Pty Ltd 9.6% government tenants 3.8% Devine Ltd 9.3% Fixed review SMEC Australia Pty Ltd 8.2% • 78% of rental revenue is average Frasers Property Limited 4.8% subject to fjxed annual Collins Restaurants Management Pty Ltd 4.7% reviews averaging 3.8% Woolworths Ltd 3.5% 52% < 500sqm 78% Fixed 4% 500 to 1,000sqm 18% CPI 13% 1,000 to 2,000sqm 3% Other 30% > 2,000sqm PAGE 12
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 3 Capital Management
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Debt Management 19.7 4.7 Conservative gearing position % % with intention to reinvest Gearing All in cost of debt 1 • Advanced negotiations for a multi-bank Key Debt Metrics 1H17 syndicated facility, expect to conclude refjnancing of debt facilities prior to the April maturity Facility limit $m 80.0 • Ability to redeploy capital should a quality Drawn amount $m 41.5 investment opportunity arise Undrawn capacity $m 38.5 • Signifjcant headroom, ICR covenant 2 times, Weighted average debt expiry years 0.3 LTV covenant 50% Proportion hedged % 96 • Limited forecast capital expenditure on portfolio assets Weighted average hedge maturity years 3.1 Cost of Debt 1 % 4.7 Interest cover ratio times 6.8 LVR % 19.7 1) Including weighted average swap rate, facility establishment fees and all-in margins (base & line fees) PAGE 14
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Transfer of Management Rights from 360 Capital Group Limited to Centuria Capital Group • On 9 January 2017, Centuria Capital Group (CNI) acquired 360 Capital Investment Management Limited (CIML), the Responsible Entity of 360 Capital Offjce Fund (TOF) – CIML was subsequently renamed Centuria Property Funds No. 2 Limited (CPF2L); and – 360 Capital Offjce Fund has subsequently been renamed Centuria Urban REIT with ASX identifjcation code changed to CUA • In addition to acquiring the Responsible Entity of CUA, Centuria Capital Limited and its associates also acquired 360 Capital Group’s 28.8% investment holding CUA – Continues a strong alignment of interest between Centuria management and investors • CUA investment strategy remains unchanged PAGE 15
CENTURIA URBAN REIT I 1H17 INTERIM RESULTS I CUA:ASX I 09 FEBRUARY 2017 Section 4 Strategy & Guidance
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