Good morning. My name is Jessie Curtis, and as Centuria Industrial REIT's Fund Manager, I would like to welcome you to CIP's First Half FY '20 Results Presentation.

In today's presentation, I will step through CIP's half year financial results, provide an overview of initiatives being executed across CIP's portfolio and provide CIP's outlook for the remainder of FY '20 along with earnings guidance. CIP is a listed entity and part of the larger Centuria Capital Group family, an established specialist investment manager that operates under the ASX code CNI.

With $7.3 billion of assets under management, Centuria Capital Group provides its investors with exposure to quality real estate and investment bond sectors. Included in the S&P/ASX 300, CIP accounts for around 22% of Centuria Capital Group's total assets under management.

Centuria Capital Group is a strong supporter of CIP and remains the trust's largest unitholder with a co-investment holding of 19.9%. This strong alignment to CNI provides CIP with various opportunities to utilize a highly experienced and extensive in-house real estate team to create asset and unitholder value.

Turning to Slide 6. This slide demonstrates the performance of CIP since Centuria commenced management of the REIT in January 2017.

Over this time, Centuria have actively managed the portfolio and the balance sheet to generate unitholder returns and enhance CIP's position as Australia's largest domestic pure-play industrial REIT. Total unitholder returns during this time have exceeded the ASX 300 A-REIT index, with a strong total return over the last 12 months of 29.1%.

At the same time, the portfolio has continued to grow to $1.6 billion, and net tangible assets per unit have also increased to $2.83 per unit. The first half performance for CIP has been very pleasing.

Our team continues to deliver on key priorities for the portfolio. During the half, we transacted a number of significant acquisitions for CIP with approximately $300 million of new assets acquired, growing the portfolio to $1.6 billion.

These acquisitions were highly complementary to the portfolio and have contributed to the transformation of the portfolio's overall metrics. Our team's active and hands-on approach to the portfolio is continuing our leasing success with terms agreed for over 63,000 square meters during the half and portfolio occupancy being maintained at 95.8%.

Actively managing the portfolio has placed CIP in a strong position with remaining FY '20 expiries negligible at only 1.1% portfolio. We also announced a number of value-add initiatives across the portfolio which will continue to maximize unitholder value.

I'll touch on these initiatives later in the presentation. Gearing for the REIT trended lower to 35.5% at December 31.

New long-term debt was also secured during the period, increasing CIP's weighted average debt maturity. CIP continues to deliver strong results for unitholders, and we are on track to deliver our FY '20 funds from operation guidance.

Turning now to our financial results. Total revenue increased during the period as we received rental from recent acquisitions.

Like-for-like income was up 4.5%, mainly driven by leasing and higher occupancy compared to the previous period. We expect this to normalize over the remainder of the financial year to deliver 2% to 3% like-for-like.

Finance credit costs decreased over the period due to a reduction in debt costs. FFO per unit and distributions per unit were in line with our guidance at $0.099 per unit and $0.094 per unit, respectively.

Finally, the 12-month return on equity through 31 December was a strong 13.4%. Moving to capital management.

Delivering a strong balance sheet to allow CIP to execute on its investment strategy remains a focus. Pleasingly, reported gearing reduced to 35.5%, having steadily trended downwards over the past 3 years and sits within the REIT's target gearing range of 30% to 40%.

$130 million of new long-term debt facilities were established during the half, increasing the weighted average debt maturity to 3.8 years with no further maturities until May 2022. Following these initiatives, $65 million of headroom is available to continue to pursue opportunities for the portfolio.

CIP's debt -- cost of debt has also reduced, and our serviceability remains strong with an interest coverage ratio of 4.8x. CIP also successfully completed an equity raise during the half to enhance the quality of the portfolio with clearly identified uses for the proceeds.

Combined with a staggered debt profile and support from a diversified lending base, CIP's balance sheet is well positioned to support future growth initiatives. Now to the property portfolio.

Slide 12 shows a snapshot of CIP's portfolio composition, including key metrics and the geographic spread of our assets. The portfolio value is now approaching $1.6 billion across 48 industrial and logistics assets.

We have maintained critical mass in our core markets and a holding of 85% to the strong performing eastern seaboard markets. Nearly 1 million square meters of lettable area is across our portfolio and is well diverse with over 120 customers.

The average tenancy size across the portfolio is just under 10,000 square meters and positions us to capitalize on the high leasing volume in this size range to minimize downtime. Portfolio metrics during the half were transformed with strategic acquisitions and portfolio increasing the scale and profile of CIP.

The weighted average lease expiry of the portfolio substantially increased from 4.3 years to 7.1 years. Notably, the Queensland subportfolio WALE increased to over 13 years.

We will look at these results in more detail on the next slide. Leasing across the portfolio continues to be driven by our active approach to management and tenant demand for well-located industrial and logistics premises.

During the half, terms were agreed of 63,000 square meters representing 6.8% of the portfolio's lettable area. This leasing success has maintained the portfolio's strong occupancy at a high 95.8%.

Derisking forward leasing and fostering strong relationships with our tenant customers has also been a focus of the team. Over the period, our efforts have paid off with only 6.6% of the portfolio expiring prior to the end of FY '21, down from 15.4% at FY '19 year-end.

Pleasingly, this has translated into a staggered WALE that supports sustainable income streams with over 66% of the portfolio's income expiring at or beyond 2024. This is a direct result of being able to adapt and find solutions to our customers' changing needs.

We will continue to drive leasing of our existing vacancies to maintain high occupancy and de-risk future expiries through actively engaging with our tenants to maximize retention within the portfolio. Turning to valuations.

Net tangible assets or NTA has continued to grow with an increase of 3.7% during the half. The growth in NTA has been driven by acquisitions and revaluation gains of $28.1 million on a like-for-like basis.

Australian industrial real estate continues to draw interest from both domestic and international capital. And with the scarcity of investment-grade stock available in the market, this is driving investment yield compression.

This is predominantly being experienced on the eastern seaboard, and this trend can be seen in CIP's valuations with only 90% of the revaluation increase coming from the New South Wales, Victoria and Queensland subportfolios. Pleasingly, a number of these major gains came from assets that experienced strong leasing outcomes.

Now looking at transactions during the period. It has been a record half for CIP with the announcement of 6 transactions totaling over $300 million.

These acquisitions transformed the portfolio's metrics and grew the total value to $1.6 billion of assets. Most notably was the acquisition of a portfolio of ultra-long WALE assets leased to Australia's largest biscuit manufacturer, Arnott's, purchased for $236 million.

The remaining acquisitions are leased to high-quality tenants and continue to grow our critical mass in core industrial locations. This continues to demonstrate our track record in originating and executing acquisitions in a competitive environment to complement the quality and scale of the portfolio.

There were no divestments to report for the half. Our transaction strategy remains simple: to earn fit-for-purpose industrial assets located within infill markets with close proximity to major infrastructure.

Our team will continue to identify and act swiftly on investment opportunities as they arise to facilitate growth and improve the quality of the portfolio. As mentioned earlier, CIP commenced a number of value-add initiatives during the half.

These initiatives allow CIP to leverage the strong relationships with its national customer base and Centuria's in-house management expertise to capitalize on opportunities to enhance the quality of the portfolio and create value. CIP is currently executing on approximately 47,000 square meters of value-add across the portfolio.

2 notable examples of these initiatives are commencing development to expand one of CIP's existing assets at 21 Jay Street, Townsville in Queensland by approximately 5,500 square meters with a new 12-year lease to Woolworths upon completion. The second being the repositioning and leasing of 9-13 Caribour Drive, Direk in South Australia, achieving a new lease to Fisher & Paykel with no downtime from the previous occupant.

The team will continue to actively manage the portfolio with the identification and execution of select value-add initiatives to generate quality income streams and maximize value. Finally, moving to our strategy and guidance.

The strategy of CIP remains unchanged. We seek to deliver investors with income and capital growth from a high-quality portfolio of Australian industrial assets to position ourselves as Australia's leading domestic, pure-play industrial REIT.

Demand within the Australian and logistics sector continues to be supported by population growth, trends in online retailing and the scarcity of investment-grade stock. CIP remains well positioned to benefit from the increasing demand in the sector with our assets strategically located within infill markets within close proximity to key infrastructure.

The focus remains on executing our key objectives. These being: to deliver a high level of service to our tenant customers to drive leasing and retention in our portfolio; growing the portfolio with well-located, fit-for-purpose, industrial and logistics assets; and executing on value-add initiatives to create and maximize value for our unitholders.

We are extremely pleased with CIP's first half results and reconfirm CIP's FY '20 funds from operation guidance of $0.196 to $0.199 per unit, reflecting growth of 2% to 3% over FY '19 and distributable earnings of $0.187 per unit. That concludes the formal presentation.

I would now like to open the lines for any questions.

Great job on the leasing front. I'm just wondering, across the 63,000 square meters of leasing completed during the period, can you just talk to the trends you're seeing with regards to rent reversions and incentives, perhaps, sort of, if it's easy just to break it up by key markets?

Yes, sure. Most of our leasing came from our New South Wales and Victoria portfolio.

So I can probably say most of those. In the Victorian portfolio, the main area, we saw positive rental spreads for the Victorian portfolio, and we saw our incentives sitting somewhere between 15% and 25% depending on the assets.

In the Sydney portfolio, we saw rental spreads hold for that particular subportfolio. And incentives we're seeing, in that market, range somewhere between 5% to 12%.

And are those incentives trending downwards, too? Or have they sort of stabilized at those levels?

Yes. I think in Sydney, we're seeing incentives still trending down.

It -- all across existing stock. In Melbourne, we're probably seeing incentives holding where they have been for the last 12 months.

Yes. Okay.

And then just on the expiries, you've got roughly 5,000 square meters vacant at 310 Spearwood, and you've got another 10,000 square meters. Can you just talk about the Perth market and what your strategy is with that space?

Sure. The 15,000 at Henderson remains vacant.

We have had some inquiry on that. That asset is also listed for sale.

The asset at Spearwood, it had some really positive engagement on that upcoming 5,000 as well as the additional 10,000 that will come up at that particular asset, and we're very close to agreeing terms on that asset.

Look, just a question on the value-add initiatives on that Slide 16. Just on the Townsville asset, just wondering if you can just give me a bit of a feel of the development cost there and the timing, that would be great.

Sure. So from a timing perspective, that development commenced in December of 2019, and that's likely to be completed by the end of this financial year.

The total cost of that development under that development agreement is a maximum contribution of $14 million.

Great. And just the timing of the Hemmant, yes, Q1 2020 you've got there.

So yes, that's great.

In the presentation, you haven't got a slide on the reconciliation from earnings to FFO. I take it that's going to be in the accounts?

Yes, that will be in the accounts.

Thanks, everyone, for joining the call today and also for your interest in Centuria Industrial REIT. I look forward to discussing these results with you over the next couple of weeks.