CENTURIA OFFICE REIT — Annual Report 2018

Aug 20, 2018

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Centuria Metropolitan REIT F Y18 RESULTS | ASX:CMA | 21 AUGUST 2018

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Contents

1 Introduction 2 Financial Results 3 Portfolio Overview

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4 Guidance & Strategy

5 Appendices

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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SECTION ONE

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2 KENDALL
STREET
WILLIAMS
LANDING
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MELBOURNE
CBD - 20KM
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PRINCES
FWY
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WILLIAMS
LANDING
TRAIN
STATION
ARTIST IMPRESSION
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CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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ASX-LISTED SPECIALIST INVESTMENT MANAGER Centuria Profile

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Centuria Capital Group $428m Market Capitalisation[1]

2 $4.9bn Assets Under Management (AUM)

2 $4.0bn Property Funds Management AUM

LISTED PROPERTY $2.1bn[2]

UNLISTED PROPERTY $1.9bn

INDUSTRIAL METROPOLITAN REIT (CIP) REIT (CMA) $1.1bn $1.0bn2 AUM AUM

FIXED TERM CENTURIA FUNDS DIVERSIFIED PROPERTY FUND 15

$0.9bn Investment Bonds AUM

$0.3bn Co-Investments

CENTURIA CENTURIA PROPERTYLINK METROPOLITAN INDUSTRIAL REIT GROUP REIT (CMA)[3] (CIP)[3] 19.9% 19.9% 9.3%

19.9% 19.9%

• 1 As at 30 June 2018

• 2 Includes 2 Kendall Street, Williams Landing, VIC, as if complete

• 3 Co-investment ownership percentage includes the ownership by associates of Centuria Capital Group

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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AUSTRALIA’S LARGEST ASX LISTED METROPOLITAN OFFICE REIT

Creating shareholder value since inception

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~~Annual total unit holder return since IPO[1] 14.8%~~

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TOTAL RETURN SINCE IPO [1, 2]
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ASSETS UNDER MANAGEMENT ($BN)

NTA ($) PER UNIT

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1.0
58.8%
48.4%
45.7% FY15-18 CAGR [3]
0.6
0.4
0.3
CMA S&P/ASX 300 FY15 FY16 FY17 FY18
A-REIT INDEX
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7.9%
CAGR [3]
$2.49
$2.32
$2.18
$1.97
$1.91
1HFY15 FY15 FY16 FY17 FY18
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1 IPO December 2014

• 2 Source: Moelis Australia

3 Past performance is not indicative of future performance

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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AUSTRALIA’S LARGEST ASX LISTED INCOME FOCUSED OFFICE REIT Key metrics

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14.9 19 m m
% $601 $930.5
Return on equity [1] High quality assets [2] Market capitalisation [3] Portfolio value [2]
98.9 4.0 28.3 7.2
% % %
yrs
Portfolio occupancy [4] Portfolio WALE [5] Gearing [6] 12 month total return [7]
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• 1 Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA

• 2 Includes 3 Carlingford Road, Epping, NSW, settlement expected in November 2018. Includes 2 Kendall Street, Williams Landing, VIC as if complete

• 3 Based on CMA closing price of $2.48 on 30 June 2018

• 5 By gross income

• 6 Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill

• 7 Source: Moelis Australia. Based on movement in security price from ASX opening on 1 July 2017 to ASX closing on 30 June 2018 plus distributions per security paid during the respective period(s) assuming re-investment of distributions

• 4 By area

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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HIGHLIGHTS

Australia’s pre-eminent metropolitan office REIT

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1 2 3
Earnings delivery Active management Portfolio enhancement
Guidance achieved Over $256m of transactions $1.0 billion [5] of total assets underpinned
distributable earnings of 18.6 cpu [1] leveraging Centuria’s extensive experience by high quality office assets
distribution of 18.1 cpu in metropolitan markets
Mature portfolio underpinned by high credit
Continued track record of delivering 28% gearing , within target range tenants and diverse income streams
on earnings and distributions
Occupancy 99% [3] highest since inception, Inclusion in the S&P/ASX 300 index
Strong return on equity 14.9% [2] WALE 4.0 years [4]
NTA uplift 7.3% to $2.49 per units in FY18
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1 Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standard (AAS) and represents the profit under AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect core earnings of CMA 2 Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA 3 By area

4 By gross income 5 Includes 2 Kendall Street, Williams Landing, VIC as if complete

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS 7

SECTION TWO

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77 MARKET STREET WOLLONGONG, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS 8

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)
Interest income	$m	0.2	0.1	0.1
Total revenue	$m	73.3	40.7	32.6
EXPENSES
Direct property expenses	$m	(16.7)	(8.9)	(7.8)
Responsible entity fees	$m	(4.2)	(2.4)	(1.8)
Finance costs	$m	(8.4)	(5.5)	(2.9)
Management and other administrative expenses	$m	(1.6)	(1.1)	(0.5)
Total expenses	$m	(30.9)	(17.9)	(13.0)
Distributable earnings	$m	42.4	22.8	19.6
Weighted average securities on issue	m	227.6	119.7	108.2
Distributable earnings per unit1	cpu	18.6	19.0	(0.4)
Distribution	$m	42.7	20.9	21.8
Distribution per unit	cpu	18.1	17.5	0.6
Distribution yield2	%	7.3	7.0	0.3
Return on equity3	%	14.9	14.7	0.1
Payout ratio	%	97.2	91.9	5.3

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Revenue increase driven by acquisitions and leasing in FY18

Responsible entity fees increased due to acquisitions and positive revaluations

Delivered FY18 guidance, increased distribution per unit by 3.4%

Return on equity driven by leasing velocity and active asset management initiatives

1 Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standard (AAS) and represents the profit under AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect the core earnings of CMA 2 Based on CMA closing price of $2.48 per security as at 30 Jun 2018 and $2.50 per security as at 30 June 2017 3 Return on equity calculated as (closing NTA minus opening NTA plus distributions) divided by opening NTA

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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CAPITAL MANAGEMENT

Balance sheet headroom

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DEBT MATURITY PROFILE

• structured debt book ,

• Conservatively well supported by major domestic lenders

• – Staggered debt tranches reduce refinancing risk

• °[No near term maturities]

• Well positioned to access equity and debt markets

• Gearing below 35% following funding commitments for 2 Kendall Street, Williams Landing, VIC and sale of 3 Carlingford road, Epping, NSW

• covenant headroom , interest

• Significant cover ratio covenant of 2.0x and LVR covenant of 50.0%

• 1 Comprises $40 million in May 2020 and $50 million in June 2020

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$145m
$105m
$70m
FY19 FY20 [1] FY21 FY22 FY23
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KEY DEBT METRICS FY18 FY17
Facility limit $m 320.0 260.0
Drawn amount $m 267.6 189.5
Undrawn capacity $m 52.4 70.5
Wei hted avera e debt ex ir Years 2.5 3.4
g g p y
Pro ortion hed ed % 59.8 54.9
p g
Wei hted avera e hed e maturit Years 2.49 3.0
g g g y
Cost of debt [2] % 3.6 3.9
Gearin % 28.3 29.5
g [3]
Interest cover ratio Times 6.1 5.6
Loan to value rate % 30.7 31.1
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3.6%
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All in cost of debt [2]
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m $52.4 Current facility headroom

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28.3%
Gearing [3]
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• 2 Including weighted average swap rate, facility establishment fees and all-in margins (base and line fees)

• 3 Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill. 30 June 2018 proforma gearing of 30.0% adjusted for 2 Kendall Street, Williams Landing, VIC and sale of 3 Carlingford Road, Epping, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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SECTION THREE

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201 PACIFIC HIGHWAY, ST LEONARDS, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS 11

PORTFOLIO COMPOSITION

Geographically diversified portfolio weighted to eastern seaboard markets

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PORTFOLIO SNAPSHOT FY18 [1] FY17
Number of assets # 19 15
Book value $m 930.5 610.0
WACR % 6.68 7.19
NLA sqm 184,339 131,011
OCCUPANCY BY AREA % 98.9 97.3
WALE GROSS INCOME Yrs 4.0 3.9
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Average NABERS energy rating of 4.0 Stars[2] driven by management initiatives

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WA 10%
144 Stirling St, Perth
42-46 Collins Street, West Perth
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QLD 31%

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144 Stirling St, Perth
42-46 Collins Street, West Perth
NT
QLD
WA
SA
NSW
ACT
VIC
SA 6%
1 Richmond Road, Keswick
131-139 Grenfell Street, Adelaide
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35 Robina Town Centre Drive, Robina 555 Coronation Drive, Brisbane 438-517 Kingsford Smith Drive, Hamilton 154 Melbourne Street, South Brisbane 149 Kerry Road, Archerfield

NSW 36% 9 Help Street, Chatswood 201 Pacific Highway, St Leonards 203 Pacific Highway, St Leonards 3 Carlingford Road, Epping 77 Market Street, Wollongong 13 Ferndell Street, Granville

ACT 10%

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54 Marcus Clarke Street, Canberra
60 Marcus Clarke Street, Canberra
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VIC 7%
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576 Swan Street, Richmond 2 Kendall Street, Williams Landing

• 1 Excluding WACR, includes Williams Landing, VIC, as if complete. 3 Carlingford Road, Epping, NSW contracted to sell, settlement expected in November 2018.

• 2 Excl. 3 Carlingford Road, Epping, NSW (held for sale), CMA’s industrial assets and 35 Robina Town Centre, Robina QLD

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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LEASING OVERVIEW

Demonstrating proactive asset management, providing income continuity

Highest portfolio occupancy since inception

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NO. OF
KEY LEASE TRANSACTIONS TRANSACTIONS SQM
1 3,503
203 Pacific Highway, St Leonards, NSW
154 Melbourne Street, Brisbane, QLD 3 2,893
54 & 60 Marcus Clarke Street, ACT 8 2,513
1 Richmond Rd, Keswick, SA 1 2,330
9 Help Street, Chatswood, NSW 4 1,887
SUBMARKET OCCUPANCY (%) [1,2] WALE (YRS) [2,3]
NSW 99.9 3.4
VIC 100.0 6.8
QLD 96.1 4.3
SA 100.0 3.6
ACT 100.0 2.9
WA 100.0 3.7
Total 98.9 4.0
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• Four of six sub markets , fully occupied

• remainder at near maximum occupancy

• Significant asset repositioning achieved

• °[Canberra assets now fully occupied]

• °[154 Melbourne Street substantial ] releasing progress, 2,893 sqm leased 25.6% of NLA

• °[Positive reversion realised on ] recent leasing deal at 203 Pacific Highway St Leonards

• °[Lease extension over 28.7% of NLA ] at 1 Richmond Road

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9.75 % Portfolio NLA leased in FY18

17,970 sqm Portfolio NLA leased in FY18

6,985 sqm 19 new leases in FY18 10,985 sqm 17 renewals in FY18

1 By area

• 2 Includes Williams Landing, VIC, as if complete

3 By gross income

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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PORTFOLIO METRICS

Mature portfolio with quality tenants

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WEIGHTED AVERAGE LEASE EXPIRY[1,3]

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50%
7% CH2M Hill
47.0
16% CSC Australia
40%
39.6
39% Department housing 30 JUNE 2018
& public works (DOJ) (WALE 4.0YRS)
30%
20%
15.3
14.7 11.5 14.4 14.0 14.6 30 JUNE 2017
11.2 10.4 (WALE 3.9YRS)
10%
2.7
1.2
Vacant FY19 FY20 FY21 FY22 FY23+
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TENANT DIVERSIFICATION (TOP 10 TENANTS BY GROSS INCOME)[1]

• 43% of portfolio income underpinned by high credit worthy and government tenants

• Diversity of quality income streams

• 99% occupancy[2] highest since inception, WALE increased to 4.0 years

• 47% of income expiry is at or beyond FY23

							6.5%	DOMINO’S PIZZA LTD CISCO SYSTEMS AUSTRALIA MINISTER FOR INFASTRUCTURE GE CAPITAL FINANCE AUSTRALASIA MINISTER FOR WORKS (WA POLICE) HATCH BLUESCOPE STEEL LIMITED AUSTAR ENTERTAINMENT PTY LIMITED TARGET AUSTRALIA INSURANCE AUSTRALIA
					5.5% 5.8%
				4.6%
3.2% 3.2% 3.2% 3.4% 3.7% 3.8%

1 Includes Williams Landing, VIC, as if complete

• 2 By area

3 Weighted by gross income

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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PORTFOLIO VALUATIONS

Valuation growth underpinned by market drivers and active management initiatives

	FY18 $m	FY17 $m INCREASE $m BOOK VALUE	FY17 $m INCREASE $m BOOK VALUE	%	FY18 % FY17 % BPS CAPITALISATION RATE	FY18 % FY17 % BPS CAPITALISATION RATE	FY18 % FY17 % BPS CAPITALISATION RATE
Like for like portfolio1
ex. acquisitions	626.2	574.0	52.3	9.1	6.65	7.22	(57)
Acquisitions2	268.3	-	268.3	n.a	6.90	n.a	n.a
Disposals3	36.0	36.0	36.0	n.a	5.25	6.69	(144)
Total	930.5	610.0	320.6	52.6	6.68	7.19	(52)

GAIN IN VALUATION

FY18 FY17 VALUATION CAP RATE PROPERTY VALUATION VALUATION MOVEMENT MOVEMENT COMMENTS Held for sale. Settlement expected 3 Carlingford Road, Epping, NSW 36.0 27.0 9.0 (100bps) November 2018 Driven by leasing initiatives and strong 203 Pacific Highway St Leonards, NSW 57.0 47.5 9.5 (50bps) NSW transaction demand Driven by leasing initiatives and strong 9 Help Street, Chatswood, NSW 76.0 65.0 11.0 (50bps) NSW transaction demand 1 Richmond Road, Keswick, SA 33.0 28.5 4.5 (100bps) Supported by active asset management

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• Total portfolio value increased year on year by 52.6% to $930.5million[2]

• °[Like for like portfolio increased 9.1% ] to $626.2[1] million

• °[Valuation growth aided by leasing ] success and rental growth

• Transactional activity accretive to like for like portfolio cap rate of 6.65%[1]

• °[Acquisitions ] [7.10%][ average cap rate ] °[Divestments ] [5.25%][ average cap rate] °[Positive market evidence for ] 2 Kendall St, Williams Landing, VIC

1 Like for like valuation increase from FY18 excluding 3 Carlingford Road, Epping, NSW

2 Includes 2 Kendall Street, Williams Landing, VIC as if complete

• 3 Asset held for sale 3 Carlingford Road, Epping, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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CAPITAL TRANSACTIONS - ACQUISITIONS AND DIVESTMENTS Over $256 million transacted to improve portfolio quality

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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, NSW [4] PERTH, WA WEST PERTH, WA EPPING, NSW [5] ARTARMON, NSW
$85.8m acquisition, $33.3m acquisition, $58.2m acquisition, $33.6m acquisition, $36.0m divestment $10.3m divestment,
6.6% initial yield [1] 7.5% initial yield [1] 9.2% initial yield [1] 8.7% initial yield [1] 27.2% premium to 14.4% premium to
prior valuation prior valuation
3.5 year WALE [2] , 4.3 year WALE [2] , 3.9 year WALE [2] , 4.5 year WALE [2] ,
100% occupied [3] 100% occupied [3] 100% occupied [3] 100% occupied [3]
Adjoins CMA's 203 Anchored by AHM Group Predominantly leased Predominantly leased
Pacific Highway, above (Medibank Private) and to WA Government to IAG Australia
St Leonard's train station Illawarra Retirement Trust (WA Police)
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1 Before transaction costs. Acquisition price for 144 Stirling Street, Perth and 201 Pacific Highway, St Leonards are gross price before adjustment for existing outstanding incentives 2 By income. WALE at acquisition date

• 3 By area

• 4 77 Market Street, Wollongong includes lease transactions agreed post 30 June 2017

• 5 Unconditional contract for sale, settlement targeted for 1H19

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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SECTION FOUR

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203 PACIFIC HIGHWAY, ST LEONARDS, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS 17

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

1b

Settle disposal of 3 Carlingford Road, NSW, and non-core industrial assets 1c Dispose of remaining industrial assets if market conditions are favorable

2

Maintain leasing focus addressing FY19 expiry profile

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CMA is well positioned , with a 99% occupancy[1] 4.0 year WALE[2] and gearing[3] currently at 28.3%

1 By gross income

• 2 By area

3

Access balance sheet and capital management initiatives to increase portfolio scalability and market prominence

3 Gearing is defined as total borrowings less cash divided by total assets less cash and goodwill. 30 June 2018 proforma gearing of 30.0% adjusted for 2 Kendall Street, Williams Landing, VIC and sale of 3 Carlingford Road, Epping, NSW

18

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

STRATEGY & GUIDANCE

Continue to build Australia’s pre-eminent metropolitan office REIT

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STRATEGY
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CMA remains focused on generating predictable and quality income streams and executing initiatives to create value.

• Deliver secure income streams through a diversified,

• national tenant base with a focus on occupancy and WALE

• Continue to enhance portfolio, upgrade asset quality

• overseen

• Provide a pure-play, high quality office portfolio by hands-on management

FY19 Guidance

• FY19 distributable earnings guidance of 18.3 – 18.5 cpu

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GUIDANCE
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• Includes impact from expected divestment of remaining industrial assets

• FY19 distribution guidance of 18.1 cpu

• °[Distribution guidance in line with FY18 distribution] °[Paid in equal ] [quarterly instalments][ of ] [4.525 cpu]

• Strong FY19 forecast distribution yield of 7.3%[1] p.a.

1 Based on the CMA closing price of $2.48 per security on 30 June 2018

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54 MARCUS CLARKE ST
CANBERRA, ACT
CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS 19
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SECTION FIVE

9 HELP STREET, CHATSWOOD, NSW

CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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APPENDIX A – MARKET OUTLOOK

Robust supply and demand fundamentals in metropolitan office markets

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YIELD SPREAD – A-GRADE METRO VS CBD A-GRADE[1]

• Non-CBD supply continues to trend below historic averages in several markets

• Australian metro market total vacancy (9.0%), lower than total CBD vacancy (9.2%)

• Metro vacancy has predominantly been impacted by demand, CBD's by withdrawal

• Seven out of ten , lowest vacancy markets

• nationally, are metro markets. Particularly low vacancy across Sydney North Shore markets

• Effective rent growth continues, particularly in low vacancy markets

• Yield spread convergence continuing between certain CBD and metro markets driven by increased investor demand for value outside CBD markets

• Continued appetite for assets well located near transport and infrastructure amenity

• 1 Source: ColliersEdge 2 Source: PCA/OMR

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10% 1.40%
1.20
1.00 6.56%
0.80
0.51 BPS
5
0.60
6.05%
0.40
0.20
0 0
SPREAD (RHS)
METRO A GRADE (EASTERN SEABOARD)
CBD A GRADE (NATIONAL)
AUSTRALIAN OFFICE VACANCY RATES [2]
21.6%
19.8%
25%
13.1%
20%
CBD
4.6% 4.6% 8.1%
15%
METROPOLITAN
10% 9.1%
5%
0%
AUSTRALIAN AVERAGE
OFFICE VACANCY
MAR-08 SEP-08 MAR-09 SEP-09 MAR-10 SEP-10 MAR-11 SEP-11 MAR-12 SEP-12 MAR-13 SEP-13 MAR-14 SEP-14 MAR-15 SEP-15 MAR-16 SEP-16 MAR-17 SEP-17 MAR-18
EAST MELBOURNE PARRAMATTA MELBOURNE CBD SYDNEY CBD SOUTHBANK MACQUARIE PARK CHATSWOOD ST KILDS ROAD NORTH SYDNEY HOBART CBD NEWCASTLE WOLLONGONG GOLD COAST CROWS NEST/ST LEONARDS ADELAIDE FRINGE CANBERRA BRISBANE FRINGE SUNSHINE COAST ADELAIDE CBD BRISBANE CBD WEST PERTH PERTH CBD DARWIN CBD
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CENTURIA METROP OLITAN REIT | ASX:CMA | F Y18 RESULTS

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APPENDIX B Income Statement

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$'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)
Management and other administrative expenses (1,625) (1,068)
Total expenses (30,952) (17,357)
Distributable earnings 42,368 22,791
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 income [1] 3,927 1,366
Amortisation of incentives and leasing fees (1,530) (356)
-
Net (gain) on fair value of investments 884
-
Lease incentives funded by vendors on property acquisitions (538)
Business combination transaction costs (434) (4,263)
Amortisation of borrowing costs (560) (367)
-
Corporate simplification costs (428)
85,082 37,689
Statutory net profit
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1 Net amortisation of tenant intensives

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APPENDIX C

Distribution Statement

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$'000 30 JUNE 2018 30 JUNE 2017
85,082 37,689
Statutory net profit
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 income [1] (3,927) (1,366)
Amortisation of incentives and leasing fees 1,530 356
-
Net (gain) on fair value of investments in listed trusts (884)
-
Lease incentives funded by vendors on property acquisitions 538
Business combination transaction costs 434 4,263
Amortisation of borrowing costs 560 367
-
428
Corporate simplification costs
Distributable earnings for the period 42,368 22,791
Distribution 42,740 20,897
Distributable Earnings per stapled security (cents) 18.6 19.0
Distribution per stapled security (cents) 18.1 17.5
Annualised Distributable Earnings yield [2] 7.5% 7.6%
Annualised Distribution Yield [2] 7.3% 7.0%
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1 Net amortisation of tenant incentives

2 Based on the CMA closing price of $2.48 per security on 30 June 2018 and $2.50 on 30 June 2017

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APPENDIX D

Balance Sheet and NTA Movement

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$'000 30 JUNE 2018 30 JUNE 2017
Cash 18,978 8,187
Investment properties 872,300 609,950
Goodwill 6,356 6,356
Trade and other receivables 1,325 1,127
Other assets 3,852 3,402
Total assets 902,811 629,022
Interest bearing liabilities [1] 265,961 187,742
Trade and other liabilities [2] 25,950 18,753 [3]
428 1988
Derivative financial instruments
- -
Other liabilities
Total liabilities 292,339 208,483
Net assets 610,472 420,539
Securities on issue (thousands) 242,793 178,241
Net tangible assets per unit ($) 2.49 2.32
Gearing (%) [4] 28.3 29.5
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NTA MOVEMENT

						$2.49
				(0.24)	(0.01)	/ UNIT
$2.32 / UNIT	~~(0.00)~~	~~(0.06)~~	(0.00)
FY17	SWAPS	EQUITY	ASSET	REVALUATION	OTHER5	FY18
	RESET & MTM	RAISE AND	DISPOSAL
	ACQUISITIONS

• 1 Drawn debt net of borrowing costs

• 2 Includes $11.0m distributions payable

• 3 Includes $5.2m distributions payable and $4.3m transaction costs payable

• 4 Gearing is defined as interest bearing liabilities less cash divided by total assets less cash and goodwill

• 5 Other includes movement in cash, payables, receivables and DRP impact

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APPENDIX E

FFO Reconciliation

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CMA
DISTRIBUTABLE PCA FFO DIFFERENCE
PROPERTY EARNINGS ($’000) ($’000)
85,082 85,082 0
Statutory net profit for the year
Net (gain) on fair value of investment properties (41,957) (41,957) 0
646 646 0
Loss/(gain) on fair value of derivative financial instruments
Straight-lining of rental income [1] (3,927) (3,927) 0
Amortisation of incentives and leasing fees 1,530 1,530 0
- -
Net (gain) on fair value of investments in listed trusts
- -
Lease incentives funded by vendors on property acquisitions
Business combination transaction costs 434 434
Amortisation of borrowing costs 560 560 0
- -
0
Corporate simplification costs
Funds from Operations 42,368 42,368 0
FFO per share 18.6 18.6 0
Distribution per share 18.1 18.1 0
Weighted average number of securities (’000) 227,637 227,637 0
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1 Net amortisation of tenant incentives

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APPENDIX F

Key vacancies

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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 both
Ground floor space split into three suites with spec fitout.
555 Coronation Dr, Brisbane, QLD 550 0.3% Sept-17 Several proposals, early negotiation stage
485 Kingsford Smith Dr, Hamilton, QLD 72 0.1% Rental G’tee Under rental guarantee until May 2019
Total / Average 1,938 1.1%
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APPENDIX G

Investment Portfolio

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ASSET STATE OWNERSHIP BOOK VALUE CAP RATE NLA WALE [3] OCCUPANCY [4]
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 5.4 100.0%
3 Carlingford Road, Epping [1] NSW 100% 36.0 5.25% 4,702 2.0 100.0%
77 Market St, Wollongong NSW 100% 34.6 7.00% 6,755 4.4 100.0%
576 Swan Street, Richmond VIC 100% 63.5 5.75% 8,331 3.7 100.0%
154 Melbourne Street, South Brisbane QLD 100% 78.5 6.75% 11,314 2.2 88.4%
483 Kingsford Smith Drive QLD 100% 78.0 6.25% 9,322 6.5 99.2%
35 Robina Town Centre Drive, Robina QLD 100% 55.3 7.13% 9,814 5.3 100.0%
555 Coronation Drive, Brisbane QLD 100% 32.5 7.50% 5,569 2.5 90.1%
144 Stirling Street, Perth [2] WA 100% 56.0 7.50% 11,042 2.9 100.0%
42-46 Colin Street, West Perth WA 100% 34.5 7.50% 8,439 4.6 100.0%
60 Marcus Clarke, Canberra ACT 100% 63.5 7.00% 12,132 2.4 100.0%
54 Marcus Clarke, Canberra ACT 100% 20.9 7.50% 5,169 3.9 100.0%
1 Richmond Road, Keswick SA 100% 33.0 7.50% 8,087 5.0 100.0%
131-139 Grenfell Street, Adelaide SA 100% 19.3 8.00% 4,052 1.4 100.0%
Industrial
149 Kerry Road, Archerfield QLD 100% 28.1 6.25% 13,774 6.5 100.0%
13 Ferndell Street, Granville NSW 100% 20.7 6.75% 15,302 1.8 100.0%
Total / weighted average 872.3 6.68% 171,420 3.7 98.8%
Under construction
2 Kendall Street Williams Landing, Melbourne VIC 100% 58.2 6.50% 12,919 10.0 100.0%
Total / weighted average 930.5 6.68% 184,339 4.0 98.9%
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1 Contracted to sell, settlement anticipated to occur September 2018

2 144 Stirling Street, Perth valuation includes outstanding existing incentives

• 3 By gross income

4 By area

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Disclaimer

This presentation has been prepared by Centuria Property Funds Limited Limited (ABN 11 086 553 639, AFSL 231 149) (CPFL) as responsible entity of Centuria Metropolitan REIT (‘CMA’ or the ‘Trust’).

This presentation contains selected summary information and does not purport to be allinclusive or to contain all of the information that may be relevant, or which a prospective investor may require in evaluations for a possible investment CMA. It should be read in conjunction with CMA’s periodic and continuous disclosure announcements which are available at www.centuria.com.au. The recipient acknowledges that circumstances may change and that this presentation may become outdated as a result. This presentation and the information in it are subject to change without notice and CPFL is not obliged to update this presentation.

This presentation is provided for general information purposes only. It is not a product disclosure statement, pathfinder document or any other disclosure document for the purposes of the Corporations Act and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission. It should not be relied upon by the recipient in considering the merits of CMA or the acquisition of securities in CMA . Nothing in this presentation constitutes investment, legal, tax, accounting or other advice and it is not to be relied upon in substitution for the recipient’s own exercise of independent judgment with regard to the operations, financial condition and prospects of CMA. The information contained in this presentation does not constitute financial product advice. Before making an investment decision, the recipient should consider its own financial situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this presentation, including obtaining investment, legal, tax, accounting and such other advice as it considers necessary or appropriate. This presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. It is not an invitation or offer to buy or sell, or a solicitation to invest in or refrain from investing in, securities in CMA or any other investment product.

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The information in this presentation has been obtained from and based on sources believed by CPFL to be reliable.

To the maximum extent permitted by law, CPFL and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this presentation. To the maximum extent permitted by law, CPFL does not accept any liability (including, without limitation, any liability arising from fault or negligence) for any loss whatsoever arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation may contain forward-looking statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters (‘Forward Statements’). Forward Statements can generally be identified by the use of forward looking words such as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans”, “forecast”, “target” or similar expressions. Forward Statements including indications, guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. No independent third party has reviewed the reasonableness of any such statements or assumptions. No member of CPFL represents or warrants that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this presentation. Except as required by law or regulation, CPFL assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. The reader should note that this presentation may also contain pro forma financial information.

Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standards (AAS) and represents the profit under AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect the core earnings of the Trust.

All dollar values are in Australian dollars ($ or A$) unless stated otherwise.

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Thank you

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