Centuria Capital Group (CNI) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome. On behalf of Centuria's Board of Directors and senior management, I would like to formally welcome you to our 2022 Annual General Meeting. I'm Garry Charny, Chairman of the Centuria Capital Group. As a quorum is present, I declare the meeting open. I'd like to acknowledge the Gadigal people of the Eora Nation, the traditional custodians of this land which our AGM is being held, and pay my respects to Elders past, present and emerging. We also welcome our friends from Aotearoa. It is a privilege and relief to host this AGM in person, in addition to our virtual capacity. Late last night, I was advised that one of our co-CEOs has not been so lucky and was diagnosed COVID positive. Accordingly, it is my pleasure to introduce in person my fellow Board members, Susan Wheeldon, Jason Huljich, Kristie Brown and John Slater. John McBain and Peter Done are both attending the meeting virtually. Together, the directors bring to the Board an important range of skills and experience across the business, which our company is engaged, including funds management, property and investment markets, banking and finance, accounting, legal and technology. A brief profile of each director is included in the 2022 annual report. Also attending the meeting today are Anna Kovarik, our Co Sec; our CFO, Simon Holt; along with Naomi Philp from HWL Ebsworth Lawyers; and Paul Thomas, the audit partner from KPMG. Paul is available to answer any questions regarding the conduct of the audit and the content and preparation of the audit report. If I might start with some housekeeping matters and meeting formalities, and I apologize, but we need to go through this in some detail. If any securityholders who are attending remotely experience any technical issues during the course of the meeting, they should contact Boardroom by telephoning 1 (300) 737-760 within Australia, or (612) 9290-9600 outside Australia. If you are present in the room today and have a mobile phone, please ensure it's turned off for the duration of the meeting. The business of the AGM is set out in the Notice of Meeting. We propose to follow the order of business as set out in that notice. The Centuria Capital Group consists of Centuria Capital Limited, which I shall refer to as the company throughout this morning's meeting; and Centuria Funds Management Limited, as the responsible entity of Centuria Capital Fund, which I shall refer to as the Trust. I will refer to the collective group as Centuria. Each share in the company is staple to a unit in the Trust, which forms stapled securities. This meeting is a concurrent meeting of the shareholders of the company and the unitholders in the Trust, which is permitted by the respective constitutions of the company and the Trust. Every securityholder and proxy holder in the room with us today should have registered on the way in, and all those eligible to vote should now have a blue voting card. Any persons who believe they're entitled to vote but doesn't have a blue card should now see a member of the Boardroom staff with a station of the registration desk outside. Please note that any person with a green card or a white card is not entitled to vote. To those securityholders who have appointed me as Chairman of the meeting as their proxy, I should be voting undirected proxies in favor of each item. If you are a proxy holder and you've been instructed how to vote, I ask you to ensure any vote you cast as a proxy holder is in accordance with those instructions. If you are a Centuria securityholder or a properly authorized representative of the securityholder, you'll have opportunity to ask questions or make comments during -- on the proposed resolutions during the meeting. The online platform for the conduct of this meeting enables securityholders to ask written and verbal questions. We will also be taking questions from securityholders who are present in the room. If you're a Centuria securityholder or a properly authorized representative of a securityholder attending the AGM online, you may ask a question at any time during the meeting by clicking on the messaging tab, which will appear at the top of your screen. Due to a slight technical delay with the webcasting, we encourage all securityholders to submit their questions as soon as possible. And please note, if you try and ask a question in real time that you may receive the broadcast, I will be on the next item already. So expedition required. To send in a question, simply click in the Ask a Question box, type your question and select the Send arrow. Your question will be sent immediately for review. The company secretary will then identify the securityholder, read out the relevant questions submitted by that securityholder. I will attempt to respond to all these questions in the meeting. Securityholders have also been given the opportunity to submit written questions to the co sec prior to the meeting. Securityholders and their representatives who are attending virtually can submit their written questions on the resolutions now and at any time during the meeting until I advise the meeting that discussion on those resolutions have been closed. However, questions relating to meeting procedure and how to vote may be submitted until the close of voting. To ask your question verbally, click on the request to speak button at the bottom of the broadcast window. The audio questions interface will now display. You'll be prompted to confirm your name and enter the topic of your questions, submit your request and follow the instructions to allow access to your microphone and connect to the queue. For those securityholders and their properly authorized representatives who are present in the room this morning, if you wish to ask a question at the relevant time, please raise your blue or green card and wait for a microphone to be brought to you. Before asking your question, please state your name. If you're not a securityholder, please state the name of the securityholder whom you represent. Please note that if you hold a white card, you are not entitled to ask a question. Every securityholder and proxy holder attending online and in person are eligible to vote and ask questions, should have registered using the virtual meeting user guide as set out in the notice. Voting on the resolutions will be conducted by way of a poll. Securityholders attending online may vote at this meeting by clicking on the voting tab on the navigation tab -- bar. You may submit your vote on each of the resolutions by clicking for, against or abstain buttons. Your selection will change color, and confirmation message will appear. Voting can be performed at any time during this meeting until I declare that the poll has closed. To those securityholders who appointed me as Chairman of the meeting as their proxy, I should be voting undirected proxies in favor of each item. If you are a proxy holder and have been instructed how to vote, I ask you to ensure that your vote is cast as a proxy holder in accordance with those instructions. The Notice of this Meeting dated 25 October 2022, has been in securityholders' hands for a required number of days, and therefore, I propose to take it as read. The company's annual report has been placed on the company's website for your review and has been sent to securityholders who have requested a copy. The minutes of the last AGM was signed as true and correct -- as a true and correct record of the meeting and are available for inspection from the co sec. Voting on the resolutions will be conducted by way of a poll. On a poll, each Centuria securityholder has 1 vote for each security held. Resolutions 2 through 7 are ordinary resolutions and will be passed. And more than 50% of the votes cast on a relevant resolution are in favor of that resolution. Persons holding stapled security as at 7 p.m. on Wednesday, 23 November were, for the purposes of determining voting entitlements at this meeting, taken to be the securityholders of the vote. Voting exclusions applied to a number of the resolutions is detailed within the Notice of Meeting convening this meeting. I intend to read out and propose each of the resolutions and then to conduct a poll on all resolutions together. Our returning officer is [ Andy Marr ] from Boardroom. Shortly, I will take you through the formal resolutions on which you're being asked to vote. You will have an opportunity to submit questions, be updated on the votes already received and be given a further opportunity to vote. And I apologize for the length of that introduction, but hybrid meetings create their own challenges. So to my Chairman's address. Having recently come out of the effects of the global pandemic, although signs are even that is not quite yet done, we find ourselves in a febrile economic landscape highlighted by rising interest rates and 1980s style inflation. Rest assured, the juxtaposition of these 2 themes occupies your Board and management daily. Yet before I speak about that, let me reflect on the last financial year. 2022 has been a year of sustained growth for the company. Most significantly, our strategy to diversify to new asset classes through corporate acquisitions in preceding reporting periods delivered a more diversified, resilient platform across real estate sectors, geographical reach and capital sources. This year, diversification has been a central theme for the group. Our now 7 real estate verticals, along with our investment bonds business, contributed to a collective 18% growth across funds under management, totaling $20.6 billion. We also delivered a record period for operating earnings and distribution. Our Western Australian entity recently rebranded from Primewest to Centuria, the final signpost of a successful integration into the wider group. The Perth team, which has grown 37% to 85 employees, continues to be led by directors David Schwartz, John Bond and Jim Litis. This expansion mirrors our growth in the agricultural, daily needs retail and large format retail sectors. Likewise, our real estate credit funds entity, Centuria Bass Credit, continued to grow and broaden its suite of unlisted wholesale investment opportunities. Centuria Bass is capturing strong demand for nonbank finance across various real estate sectors, especially as the big 4 banks tightened their lending criteria. Founders Giles Borten and Nick Goh now lead a 22-strong Sydney group with the support of Melbourne-based partner, Yehuda Gottlieb and his team. Across the Tasman, Mark Francis and Bryce Barnett continue to lead the New Zealand team. During the period, the New Zealand portfolio increased to 95 assets worth approximately $2.5 billion. The Australian health care division, led by Andrew Hemming, continued to increase assets under management, and the entire group health care portfolio now sits at approximately $1.7 billion. Pure-play listed funds, Centuria Office REIT and Centuria Industrial REIT, continued to perform well throughout the year. What the next 12 months will bring is not as clear. Industrial seemingly will continue as a darling of the markets, for understandable reasons, but whether the tightening in yields remains is a matter for some debate. Similarly, the office market seems to have split experts. On any view, offices are not going away. In the new paradigm of work-from-home normalcy, how they are used is going to change as is how they will be fitted out. Ultimately, though, the critical social interaction they provide, the sense of esprit de corps and their function as petri dishes of ideas with human beings in a room together cannot and will not be replaced anytime soon. There may be less desks in the office of the future, but there will be more meeting rooms and social facilities for staff. Also, over the last 12 months, we have strengthened our commitment to ESG initiatives. They now represent a touchstone of this company's ethos and values. Our Culture and ESG Committee, ably led by Susan Wheeldon, recently presided over the publication of the second Centuria Sustainability Report, and our third Modern Slavery Report will be issued shortly. We define our commitment to sustainability within a threefold framework: conscious of climate change, our environmental considerations; valued stakeholders, our social responsibilities; and responsible business principles, our governance directives. During the period, we became a member of the Green Building Council of Australia, adding to our membership in New Zealand. Our membership of both councils supports our expanding green development pipeline with our industrial REIT announcing a target of 5-star Green Star rating for all new developments. This year, we also collaborated with a national Australian-built environment rating system, NABERS, to develop their warehouse and cold storage ratings tool. In so doing, we are committed to being part of the next generation of sustainable industrial assets. Our second task force on climate-related financial disclosure has been expanded as the group continues to integrate climate change into its business as usual operations with climate change now a standard investment consideration. This year, the Centuria Office REIT completed a solar feasibility assessment and has begun installing solar panels across its portfolio. We recognize also that our workforce is the backbone of our company. Ensuring employee satisfaction is critical to the retention and engagement of valued staff, which is why we undertake an annual pulse check. The 2022 independent staff engagement survey revealed 74% of our staff are proud to work at Centuria and would recommend Centuria as a great place to work. These are strong results and a testament to the company's leadership. At Board level, it's my pleasure to report the appointment of Susan Wheeldon as the Independent Chair of the Group Nomination and Remuneration Committee, in addition to her other duties. We have also restructured our responsible entity Boards with Jennifer Cook appointed as an independent NED of Centuria Property Funds No. 2; and Elizabeth McDonald, an independent NED of Centuria Property Funds as well as a member of the Audit, Risk and Compliance Committee. Our commitment to diversity in our workplace, be it at Board, senior management or general staff level, is undiminished now and into the future. The aim is simple: that our Boards properly represent and reflect the society that is modern Australia. I'm pleased to report that those Boards are now a broad church, and our focus on diversity, coupled with meritocracy, means there is remarkable strength and depth within the group. Looking ahead, the short to medium term will provide Centuria with market challenges. We are conscious of the share price and remain focused on every available lever at our disposal to ensure the creation of shareholder wealth. For those of us who can remember the GFC and the one before that, we know that with a steady hand, prudent management and patience, we can navigate these troubled waters and ultimately protect and grow shareholder value. These markets also present opportunities, and it is in Centuria's DNA to harness those opportunities. Before I hand over to our joint CEOs, John McBain and Jason Huljich, may I take a brief segue to a question that regularly comes up with investors. How is the joint CEO thing going? Well, after 3 years, I'm prepared to say the thing is a resounding success. It is not for every company and is unique to the personalities involved. It does not work where the incumbents are competitors and not truly symbiotic, as is our case. The sorcerer's apprentice has indeed come of age, and they complement each other in outstanding fashion. Of all this Board's decisions, the joint CEO structure at Centuria may be our best. I would like to take this opportunity to thank my fellow Board members for their commitment and contribution as well as Centuria's senior management team. It would be remiss of me not to mention again the enormous and vital contribution Peter Done makes as a Chair of our Audit and Risk Committees across the group. Finally, on behalf of the entire Board, I extend my sincere thanks to you, our securityholders. Your support is never taken for granted, and we remain committed to the task at hand. I would now invite John McBain, up there somewhere he'll be in a moment, to deliver his first the joint CEO addresses. There he is, COVID and all. John?

Thank you, Garry. I hope everyone can hear me properly. So my apologies for not being there in person. So good morning, everybody, and thank you for attending. On behalf of my fellow and joint CEO, Jason Huljich, we welcome you to the -- at our welcome to the Centuria 2022 AGM. We, too, acknowledge the traditional Australian and New Zealand landowners, past, present and emerging. It is my pleasure to address Centuria's financial performance, corporate activities and highlight the sustainability initiatives we've implemented since we met last year. I will also provide an update on our corporate strategy and market outlook, which will be followed by Jason's address concerning Centuria's funds management and real estate activities during the year. During FY '22, Centuria recorded a record $3.1 billion of real estate activity, growing assets under management to $20.6 billion, which is up 18% from the previous reporting period. In addition to this heightened activity, during the past 2 reporting periods, we completed the integration of 2 significant corporate acquisitions, which have provided a runway into new real estate sectors and geographies. And we've been able to grow these new verticals further through the implementation of Centuria's funds management systems and expertise and the support of the group's strong balance sheet. Of course, systems and fiscal strength are only part of a successful integration. And as our Chairman correctly observed, under COVID constraints, it's been difficult to execute on the human elements of a merger. Fortunately, this year, the opening of domestic and international borders enabled Jason and I to meet the Centuria investors and staff at road shows throughout New Zealand, Western Australia, Victoria, Queensland and New South Wales. This provided us with a crucial opportunity to explain that though the name above the door may have changed, the business is still run by the highly proficient professional team they've been dealing with in the past. Moving to financial results. Throughout the past 5 years, Centuria's delivered year-on-year growth across assets under management, distributions per security and operating profit after tax, while expanding capital sources through joint venture partnerships and institutional mandates as well as accessing our traditional, now expanded, retail distribution network and in relation to the Centuria REITs, of course, the equity capital markets. To this end, the group delivered a 63% increase in operating profit after tax of $114.5 million, which translated to operating earnings per security of $0.145 throughout FY '22. This was in line with our upgraded guidance and represented a 20.8% increase from the previous corresponding period. FY '22 distributions per security of $0.11 also met guidance and delivered a 10% increase over FY '21. Total FY '22 operating revenue increased 38% to $292.6 million, while importantly, management fee revenue grew 77% to $146.8 million. This was bolstered by activities through the integration of our Western Australian entity as well as transactional activity across our industrial and health care sectors. More specifically, transaction fee revenue increased 162% to $39.3 million, and $33 million of performance fees were recognized. Recurring revenues accounted for 89% of total group revenues. During the year, we recorded latent unrecognized performance fees of $179 million, reflecting the embedded fees inherent within the unlisted managed portfolio. Transactional income, comprising acquisition, financing, underwriting and sales fees, was up 162% during FY '22. This result was underpinned by the record-breaking FY '22 property transactions and real estate finance activity I referred to previously. Centuria continues to co-invest in funds it operates, including ASX-listed REITs, CIP and COF, as well as NZX-listed Asset Plus Limited and our institutional mandates. These co-investments provide a continuous source of recurring revenue. Increased group co-investments delivered an operating profit of $48.4 million in FY '22, up 33% from the prior period. Through the group's 50% increase in the Centuria Bass Credit joint venture, property and development finance contributed $4.1 million to our operating earnings. Centuria Bass continues to focus on new growth opportunities arising from market volatility and bank lending restrictions. We believe it will be one of Centuria's fastest-growing divisions in FY '23 and beyond. Also during FY '22, development operating profit increased 44% to $6.5 million, and development activities continue to be predominantly directed towards the creation of new quality investment assets for existing or proposed Centuria-managed funds. Accordingly, our development management fee revenues are expected to continue to grow as we undertake further projects, for example, in the health care sector. Centuria retained a strong focus on capital management during FY '22 with net operating cash inflows of $182 million and a net operating interest cover ratio of 6.8x against a covenant of 2x. During the period, the group finalized 2 revolving loan facilities totaling $150 million. These remain undrawn until we perceive value. And it's intended that debt capital of this nature is recycled as we establish and sell down funds. As we have grown in scale and diversification, so have our relationships with investors and finance providers. We have developed solid relationships with more than 21 quality lenders. Centuria's undrawn facilities, together with our cash balance of $185 million, made a total of $339 million available at financial year-end. The group has built this balance sheet strength to ensure maximum flexibility, together with the capacity to take opportunities that are likely to become available in the near term, while maintaining strong financial covenant ratios. I'll talk about corporate activities. To facilitate optimal debt capital and maintain sound capital management, we've bolstered our treasury team with key personnel now secured in Sydney, Perth and Auckland. This expanded team allows Centuria to develop robust, on-the-ground relationships with key finance providers. Let me reiterate our belief that property is a relationship-based business. And as our AUM has expanded, so too has our team. Centuria has grown to more than 400 personnel across 8 offices in 3 countries. With this expansion, we have introduced what is to be a regular independent staff engagement survey.This year showed high levels of engagement and satisfaction, as our Chairman mentioned. Our leadership program also ensures further development of future leaders, nurturing the management skills of recognized personnel across departments and throughout Australasia. Fostering the next generation of leaders ensures continuity across the business and flexibility as our workforce grows. Our Chairman addressed some details surrounding the group's ESG efforts, but I'd like to focus further on 3 topics. First, we believe we have an important responsibility to explain our ESG position and the actions we are taking to our team. We prioritize sharing information and actively encourage employee feedback and regular workshops held on a variety of topics surrounding our social and environmental endeavors. The result is that our membership of the Green Building Council, our consultation and cooperation with NABERS, our second TCFD disclosure and our second sustainability report are matters which are not just ideological corporate pursuits, they are important initiatives which are explained carefully to our staff and which they comment on freely. Second, an example of our practical approach to community responsibility is our support for St. Lucy's School in Sydney, which provides primary and secondary education for students with disabilities. Centuria has supported the school for the past 10 years, and our commitment to the school involves volunteer days as well as an annual trivia night fundraising. In FY '22, we raised a record $175,000, an increase of 25% from the previous year. Finally, diversity remains a focus, and the group is pleased to report that its gender diversity has improved to a 41-59 split between females to males. I'll talk about corporate strategy. The Centuria platform offers unique characteristics as an external manager. These include its bias towards high-margin unlisted real estate business, its geographic reach and Australasian focus, our extremely defensive asset sector composition with sufficient channels to weather volatility, and of course, our extensive internal investor base. We are truly diversified real estate funds manager. These attributes, coupled with our REIT management revenues, joint venture interests, institutional partnerships and real estate credit business, combine to create a strong recurring revenue base. Again, this diversity of revenue streams, in conjunction with our nimble and highly reactive business model, differentiates us from our peers. In the near future, we believe real estate investors will maintain a sharp focus on the alternative agriculture and health care sectors as well as value-add opportunistic property plays and the attractive returns available in the real estate credit sector. Centuria is well placed to respond to this demand, and we intend to do so in a disciplined fashion, but always with the ability to deploy capital and act quickly where we have researched good opportunities. Turning to outlook. Centuria has operated for more than 26 years in a variety of market conditions and cycles, during which it has grown under the guidance of Jason, myself and our governing Board. Many of our senior executives have been with us for over 15 years, and we are confident that as a group, we have the experience to maintain a disciplined approach to market disruptions and, just as importantly, the ability to seize on well-priced assets for new funds. Interest rates are fundamental to most investing regardless of asset class. Rates have continued to rise for FY '23, but are ultimately expected to abate. Consequently, we believe it is important to take a through-cycle approach to real estate investment, which, by its nature, is long term. Centuria will continue to retain its strong focus on the Australasian real estate sector and, as I outlined, intends to grow its platform in these alternative health care, agriculture and nonbank lending sectors, which are receiving strong, continued demand from investors. In addition, we'll continue to leverage our strong distribution network and our institutional relationships to take advantage of both core and value-add real estate opportunities across our traditional asset classes. Looking ahead, we've provided FY '23 operating earnings per security guidance of $0.145 and distribution per security guidance of $0.116, the latter reflecting a 5.4% increase on FY '22. Before passing over to Jason, I'd like to thank our team across Australia, New Zealand and the Philippines for their unwavering loyalty and dedication. Similarly, we thank the Chairman and Board of Directors across the group and Responsible Entity Boards as well as our external committees whose guidance and support are invaluable to the company's success. I also thank my fellow joint CEO, Jason Huljich, for his support and leadership of one of Australasia's most successful funds management and real estate teams. Most of all, I wish to thank you, our securityholders, for your ongoing confidence and support, and we look forward to updating you throughout FY '23. It is now my pleasure to hand over to Jason Huljich to deliver his joint CEO address.

Thank you, John. I'm pleased to report that throughout the year, Centuria executed a collective $4.3 billion worth of gross real estate activity in Australia and New Zealand across our office, industrial, health care, agriculture, large format retail, daily needs retail and credit funds. This activity was complemented by our $2.1 billion development pipeline and a valuation uplift of $1 billion across the platform. Centuria's real estate platform has expanded by more than 20% to $19.8 billion with unlisted real estate funds increasing 18% to $13 billion and listed funds growing 24% to $6.8 billion. Growth was generated by $2.6 billion of real estate acquisitions together with $0.5 billion of real estate credit. Today, the group manages 419 assets, leased to approximately 2,500 tenant customers with average rent collections totaling a healthy 98%. During the year, the team leased more than 500,000 square meters across an impressive 469 individual leasing deals, representing 12.6% of the group's total net lettable area. Collectively, our Australasian platform provides a high average occupancy exceeding 97% and an average weighted lease expiry profile of 6.7 years. The group's strong occupancy and staggered expiry profiles provide opportunities to deliver income predictability as well as capturing rental uplift upon expiry. Centuria is one of the largest transactional teams within Australia. We're specialists in each real estate sector. The team achieved considerable success throughout the year via off-market transactions and select sales campaigns, demonstrating the strength of our industry relationships and the quality of our people. In FY '22, organic transactions took center stage, totaling 90 properties and 67 real estate loans, which is a record level of activity for the group. Examples of these transactions include trophy assets in the $100 million to $300 million range, such as a super-prime last mile distribution center in the core Sydney industrial market of Fairfield; an A-grade, recently completed metropolitan office building in South Melbourne; a New Zealand aged care portfolio incorporating 38 assets; and Australia's largest greenhouse in Warragul, Victoria. In addition to our property acquisitions, our development pipeline also assisted with organic growth, providing modern, sustainable assets for our listed and unlisted funds. In particular, circa $1 billion of our committed pipeline is focused on new health care properties and precincts while around 15% is dedicated to new industrial real estate. Within Australia, the industrial sector has less than 1% vacancy, resulting in significant rental growth and an opportunity to take advantage of these very tight supply-demand fundamentals. As John mentioned, our development division continues to generate strong recurring development management fees and, in some instances, development profits on completion. Across our unlisted platform, we now service more than 12,000 retail, wholesale and institutional investor clients. During FY '22, our distribution team raised $620 million of equity across our new and open-ended funds. More than 32% of our unlisted AUM has no fund expiry review date, and 56% have expiry review dates at or beyond 5 years. During FY '22, we launched a number of unlisted single-asset fixed-term funds, and these included: office funds, predominantly leased to government tenants, such as the Centuria Government Income Property Fund No. 1 and 2; bespoke investment opportunities sourced with new JV partners, such as our 50-50 partnership with MA Financial on the purchase of 25 Grenfell Street, an office acquisition in Adelaide; and a wholesale retail trust, underpinned by the Northgate Shopping Centre in Geraldton, Western Australia. Our multi-asset unlisted fund suite continued to expand, including the Centuria Healthcare Property Fund, which grew to $568 million; the Centuria New Zealand Industrial Fund, which increased to $588 million; the Centuria Diversified Property Fund, which merged with Primewest Property Investment Fund, expanding its portfolio to $260 million; the Centuria New Zealand Healthcare Property Fund, which is underpinned by the $181 million Heritage-operated aged care portfolio; and the new Centuria Agriculture Fund, which was seeded with $177 million glasshouse estate operated by the Flavorite Group. Our listed A-REITs also continued to expand throughout the year. Centuria Office REIT, which has the ticker COF, acquired $314 million worth of assets and achieved significant leasing success across more than 41,000 square meters. COF is a S&P/ASX 300-listed entity and Australia's largest listed pure-play office REIT with 23 high-quality office assets worth $2.4 billion. The S&P/ASX 200-listed, Centuria Industrial REIT, which has the ticker CIP, is Australia's largest listed pure-play industrial REIT with 88 industrial properties worth a combined $4.1 billion. During the year, it acquired 23 high-quality industrial assets and 3 development sites worth $765 million. It also leased more than 185,000 square meters of space. Institutional partnerships. During the year, institutional capital investments in Centuria's unlisted platform increased 12% to $1.9 billion. This includes a health care joint venture with Morgan Stanley Real Estate Investing; a joint venture with Blackrock for a Perth prime office building worth $280 million; an office mandate worth over $600 million; and a daily needs retail investment mandate of over $900 million with $600 million currently filled. In summary, diversification of sector, geography and capital is central to Centuria's strategy. We will continue to leverage our geographic diversity, our in-depth market knowledge in favored sectors and our access to capital to grow assets under management with a strong focus on earnings growth. We are committed to being a leading Australasian real estate funds manager. I'd like to take this opportunity to thank our Chairman, the directors of the group and our RE Boards, and my fellow joint CEO, John McBain. John and I have worked in partnership for the past 26 years, and it is honor to continue to work alongside him. Last but not least, sincere thanks to you, our securityholders, for your confidence you place in Centuria and your enduring support. I'll now hand back to the Chairman. Thank you.

Thanks, John and Jason. I'll now move to the first item of business on the agenda, which is to receive and consider the financial report, directors' report and auditor's report of the company for the financial year ended 30 June 2022. I'd like to open -- so what -- the way we'll proceed is we'll go through each resolution, we'll open up for questions, both online and in the room. And then we'll move on to the next resolution, and we will vote at the conclusion of all the resolutions. So we'll go through them and deal with them each in order, and then there'll be a vote, which will be by way of the poll. So in relation to this one, I'd like to open for questions. Before I do that, as I've mentioned, Paul Thomas from the company's auditors, KPMG, is here and is able to answer any questions on the preparation and content of the audit report and the conduct of the audit itself. He cannot respond to questions on the results. I ask that if you have any questions to the auditor, you direct them through me as Chairman of the meeting.

Before I open to the room, we did receive 1 question on this item ahead of the AGM from a securityholder, [ Mr. Clifton ]. The question was, to what extent did the recent COVID worldwide pandemic affect the financial operations of Centuria Capital Group? And have financial operations returned to normal prepandemic conditions? Well, in short, the business proved remarkably resilient throughout the pandemic. Operationally, there were some practical issues, all of which were dealt with. And of course, we assisted some tenants with rental abatements during the worst of things. However, as the results indicate, it came through remarkably unscathed. Market conditions have now altered, but they are less as a result of COVID and more related to the economic conditions that I spoke about previously. So first, if we can check with the Company Secretary to see if there are any online comments.

There are no questions online.

No questions? And then if there are any questions in the room in relation. There is a microphone.

I've been a long-term shareholder, and I've got a very basic question. If you look at some of these unlisted property trusts, you look at -- I've got a copy here, the Allendale, when you've taken over Primewest -- and I can show you, if you read Page 21, it doesn't give us sort of detail. Centuria used to give it already out sources and applications of funds and says other transaction cost, $11.42 million. And if you look at all previous property syndicates of Centuria, I haven't had -- what's this one? This is [indiscernible] well, sorry, that's Income Fund No. 1, the one with [indiscernible]. Previously, you've always given details of all legal work and all the breakup of sums of money. But I rang up Centuria, and I won't say the name of the person or I may tell you privately, I said, can you give me a breakup of this $11 million because otherwise, I'll ask at the AGM, and that's why I'm asking the question. It's not up to standard of what Centuria used to give. Like in the west, I would just say, yes, maybe they're still in the west.

Fair question. I'll let Jason answer that.

Sure. No problem. Look, the difference probably between the 2 offers is one is a wholesale offer, which is governed by information memorandum; and the industrial offer is our retail offer, which is governed by PDS. There is more detail on the PDS under the asset regulations, but if you do have a question like that, we should be able to answer it if you call us up.

[indiscernible]

Yes. Look, we do have that information. So it's disappointing it wasn't provided.

[indiscernible]

Yes. No, I'm looking forward to hearing the person you spoke to. We'll deal with that after.

I'll say that through to you.

Yes. But fair question. And can we speak after the meeting, and we'll have a chat, and we'll get you that information in any event. Are there any other questions in relation to that?

I didn't bring it with me. I think it was out of the back page of the financial section of the Sydney Morning Herald on Saturday. It was talking about property in New York, and it said, in New York, they consider the long -- surely, most of the other people have read the financial bit of the Sydney Morning Herald on Saturday. From memory, it said this, they expect in the future, New York, there will be 30% less demand to real estate in New York. And I say, "Well, why would Sydney be any different?" And you said, "That is unexpected." I even have one of my own sons -- today is Friday. I was in town yesterday working at Martin Place. I said, "Gee, why are there so many people here?" If I went up Martin Place at 5:00 tonight near the new Christmas tree, I'll bet there won't be as many people as there were last night. People don't work 5 days a week. And to say companies won't have hot desking, how could companies not have hot desking? How? Even if you've got 10 floors in a building, big companies will say, we only need 7 now. Centuria, you're going to have 3.

I think the issue is twofold. First of all, the New York property market is a unique market. And whilst I spent a lot of time over there, probably not appropriate to comment for this, but those are anecdotal figures, and from what I understand, not necessarily backed up by the reality. What's more relevant, I think to us, and it's a fair question, and I touched on it in my speech, is the way offices are going to be used is going to be different. So let me give you an example. There's a number of companies that now say you can work from home 2 days a week. So you're absolutely right. People are not coming in. Now whether they're working or not at home, a different discussion, and I have views on that, but the truth is on the 3 days that the -- the other 3 days, what they insist on is that everybody is in the office and having their meetings with their relevant teams and whatnot. And the experience we're finding is all of a sudden, 10 meeting rooms over a week would have been fine because everything is spread across 5 days. Now all of a sudden, they have to have enough meeting rooms for the entire team in 3 days. So what's happening is larger companies are changing the nature of what's in the office, but they're not taking less space. Now that's -- it's too early to be absolutely prescriptive about that and say this is what is happening across the board, but anecdotally, we understand that to be the case from our own experience. We understand that to be the case. And in my own view, that's going to be the case. There's very few CEOs, with the exception of the tech sector that is slightly different, and I accept, but it's probably not working out of the CBD anyway, at least in Sydney. With that exception, there are very few CEOs saying, don't come back to work, you're all going to be working from home. So we are strongly of the view, not because we're in office, but we generally believe that office is not going away anytime soon.

[indiscernible]

It's a fair question.

But you own 20% of COF.

Correct.

That was listed, what is it, $2, a bit over $2. Now what is it, $1.45? Is it $1.60 right now?

Correct.

Well, that's never been worse.

No, no, no. But what an opportunity, what an opportunity. You should be piling into it. I can't give an investment advice here, of course. But you're quite -- the market is uncertain. I think that's the answer. They're waiting to see whether buildings are going to be revalued. They're waiting to see. And markets always run slowly behind what's going on in the real world. That's the truth. Now whether the market is always correct or not, people say that, but that's the truth, that the markets are waiting to see what's happening with the office. But we're at the coal phase of it, and we genuinely believe that our view currently is the correct view. Are there any other questions regarding the -- sorry, have you got -- was that -- okay. Are there any other questions regarding the reports?

In that case, I will close questions on that item. And in relation to this one, I will just ask the company secretary to record in the minutes that the annual financial report, directors' report and auditor's reports for the year ended 30 June 2022 were received and considered at the AGM. And we will now move on to the next item of business, which is the remuneration report. The remuneration report is outlined in the annual report. It sets out not only details of the exact payments made to directors and the CFO, but also addresses the policy framework on which those payments are made. We are required by law to put the remuneration report, which forms part of the company's financial report, to a vote. In accordance with the Corporations Act, the status of the vote is nonbinding. Securityholders may be aware that legislation regarding remuneration reporting was introduced, commonly referred to as the 2-strike rule. If the remuneration report receives a no vote of above 25% at 2 successive AGMs, then a spill resolution must be put to the securityholders. If at least 50% of the securityholders vote in favor of the spill resolution, another securityholder meeting must be scheduled within 90 days in which the directors vacate their office and stand for reelection. In any event, it's important that our securityholders understand how remuneration of our directors, senior management and personnel is decided within the company. Our philosophy regarding remuneration is stated in the remuneration report and contained in the company's annual report, which is available on our website. Centuria recognizes the important role people play in the realization of its long-term objectives. To grow and be successful, Centuria must be able to attract, motivate and retain capable individuals at a cost that is acceptable to securityholders. The policy focus is on providing competitive rewards to attract and retain executive talent, aligning remuneration to the creation of value to securityholders and linking the overall cost of remuneration to the ability of the company to pay. The resolution set out in the Notice of Meeting reads: The company's remuneration report for the financial year ended 30 June 2022 be adopted. I'll now check with the co sec to ask if there are any questions online. Are there any questions in relation to the remuneration report in the room? No? In that case, if I could update you on the position of the proxies received are as follows: For, 537,689,323 or 96.83% of the vote; against, 17,603,943 or 3.17% of the vote; and the abstentions are 231,637. And as I indicated, the voting will be conducted at the end of all the -- we going through the resolutions. So the next 2 items of business relate to the reelection of directors. The first resolution is that Mr. Jason Huljich be reelected as a director of the company. In accordance with the terms of the company's constitution, Jason retires by rotation at the close of the AGM and, being eligible, offers himself for reelection as a director. He was appointed as an Executive Director of the Centuria Capital Group Board on the 28th of November 2007. Jason's 26-year real estate career spans the commercial and industrial real estate sectors. He is an Executive Director of Centuria Capital Group, Centuria Life Limited, Centuria Healthcare, Centuria Healthcare Asset Management and Centuria Property Funds No. 3 Limited, formerly Primewest Management Limited, as well as a Director of Centuria Funds Management New Zealand and Centuria New Zealand Industrial Fund Limited, and a Nonexecutive Director of Centuria Bass Credit Limited. Jason is the joint CEO, alongside John McBain, collectively overseeing more than $20 billion of assets under management and managing over 400 staff throughout Australia, New Zealand and the Philippines. Jason is chiefly responsible for the group's real estate portfolio and funds management operations, including the listed Centuria Industrial REIT, Centuria Office REIT as well as Centuria's extensive range of unlisted funds across Australia and NZ. Several unlisted funds regularly feature in the top 10 performing core funds in the Property Council of Australia/MSCI Australia Unlisted Retail Quarterly Property Funds Index. Since Centuria was established, Jason has been pivotal in raising over $5 million for the listed and unlisted vehicles. He has been central to positioning Centuria as Australia's fourth largest external property funds manager. CNP and CIP are included in the S&P/ASX 200 Index, and CIP is also part of the FTSE EPRA NAREIT Global Index. COF is included in the S&P/ASX 300 Index. Jason has a hands-on approach to real estate operations throughout the group's platform. The transactions, development, funds management, distribution and asset management teams will report directly to him. He began his career after graduating with a Bachelor of Commerce, Commercial Law major from the University of Auckland. He is a Property Funds Association of Australia Past President. PFA is the peak industry body representing $125 billion direct property investment industry. He currently sits on the Property Council of Australia's Global Investment Committee. The Board considers Jason as an Executive Director. The Board, other than Jason, who is to be reelected and abstained from the vote, unanimously support the resolution and recommend that securityholders vote in favor of the resolution. Are there any questions or comments from securityholders in the room regarding Jason? No? Then if I may, are there any online, Anna?

No.

Nothing. Thank you. The current state of proxies with regard to Jason are as follows: for, 571,852,622 votes or 99.83% in favor; 980,780 votes or 0.1% of the votes against; and 16,698 votes are abstentions. The next item is the reelection of Mr. John Slater. As with the previous resolution, in accordance with the terms of the company's constitution, John retires by rotation at the close of the AGM and, being eligible, offers himself for reelection as a director. He was appointed a financial adviser to Centuria Life in 2011 and is a member of that Board in 2013. On May 22, 2013, he was appointed as a Director of Centuria Capital Limited. He serves on the Nomination and Remuneration Committee. He was previously a senior executive at KPMG Financial Services prior to establishing a financial advisory practice. Since the sale of that practice, he has focused on consulting activities and his nonexecutive roles with Centuria. John has deep experience in all financial markets gained during his 35-year career. Over this time, he has been directly involved with investments and investment committees and sits on the Investment Committee of Centuria Life Limited and the Over Fifty Guardian Friendly Society Limited. He continues to be active in investment committee activities in other nonaligned financial groups. The Board considers John as an Independent Nonexecutive Director. And the Board, other than John who's to be reelected and abstained from participation, unanimously support this resolution and recommend to the securityholders they vote in favor of the resolution. Anna, are there any questions online in relation to John?

No. None online.

Are there any questions in the room in relation to John? In that case, if I could indicate that the number of proxies received for this resolution are as follows: for, 539,475,381 or 94.18% in favor; 33,357,519 or 5.82% against; and an abstention of 17,200. I can then go on to item 5, which is the approval of the Centuria Capital Group Executive Incentive Plan. Approval is sought pursuant to the ASX Listing Rules and the Corporations Act to the terms of the group's executive incentive plan and for the issue of securities under the plan for a 3-year period for eligible participants other than issues to any persons who are executive directors, and in respect of whom, specific securityholder is required for each issue of securities under the plan. Plan forms a key element of the group's incentive and retention strategy for senior executives. Terms of the plan were approved at the Group's 2019 Annual General Meeting and have not changed since then. Given that approximately 3 years have expired since the date the plan was last approved, the group is seeking the reapproval of securityholders to the plan rules and the issue of performance rights and securities under the plan for a further 3-year period. The proposed resolution put to vote by securityholders as an ordinary resolution is that for the purpose of the ASX Listing Rules 7.1 and 7.2, and for all other purposes, approval be given to the Centuria Capital Group Executive Incentive Plan, a summary of the terms and conditions of which are set out in the explanatory notes and to the issue of performance rights and equity securities under the incentive plan during the 3 years following the date of this meeting. The Board, other than Mr. McBain and Mr. Huljich to participate in the plan, unanimously support the resolution and recommend the securities that they vote in -- securityholders they vote in favor of this resolution. And are there any questions with regard to that?

No. None online.

Are there any questions in the room with regard to that? Thank you. Then if I might go on -- I apologize. The proxies are as follows: [ 546,530,973,000 ] in favor or 98.52%; [ 8.221,098 million ] or 14.8% against; and 3,763,666 votes are abstaining. If I can then go to item 6(a) and 6(b), which the grant of tranche 10 performance rights under the Centuria Capital Group Executive Incentive Plan to John McBain and Jason Huljich. The following resolutions deal with the allocation of performance rights to executive directors. Please note that securities will only invest in the directors if the long-term performance hurdles, as set out in the Notice of Meeting, are met. The executive incentive plan forms a key element of the group's incentive and retention strategy for senior executives. The primary objectives, the Nomination Rem Committee and the Board in setting remuneration of the executive directors and providing them with equity-based LTIs under the plan for '23, '24 and '25 financial years, are to focus the executive directors on the long-term performance of the Centuria Capital Group, creation of security value, ensure the executive directors' remuneration outcomes are aligned with securityholder interests, and ensure the executive directors' remuneration is competitive, aligned with general market practice of ASX-listed companies. The resolutions relating to each executive director are detailed on the screen as follows: To continue for the -- to consider for the purpose of ASX Listing Rule 10.14, and all other purposes, and, if thought fit, to pass the following resolutions as ordinary resolutions of the group. Item 6(a), approval be given for the issue of Tranche 10 performance rights to Mr. John McBain under the Centuria Capital Group Executive Incentive Plan on the terms summarized in the explanatory notes; and item 6(b), approval be given for the issue of Tranche 10 performance rights to Mr. Jason Huljich under the Centuria Capital Group Incentive Plan on the terms summarized in the explanatory notes. I wish to draw your attention to the fact that these are 2 resolutions which are voted for separately, as stated on Pages 6 and 7 of the Notice of Meeting. The Board, other than Mr. McBain and Mr. Huljich could not vote, unanimously support this resolution and recommend that securityholders vote in favor of these resolutions. Anna, are there any questions online with regard to these?

No questions online.

Any questions in the room? No? Thank you. I'll close the questions on that. The proxies, as they stand at the moment, are as follows: In relation to Mr. McBain, for, 560,497,165 or 99.67% of the vote in favor; and 1,846,591 or 0.33% of the vote against; the abstention is at [ 2.61802 million ]. The proxies received in relation to Tranche 10 performance rights in relation to Mr. Jason Huljich are: For, 561,935,434 votes or approximately 99.67%; against 1.846,591 or 0.3% of the -- 0.33% of the votes counted; and the abstentions are 2,621,994 votes. Then if I might come to item 7, approval under Listing Rule 7.4 to refresh the group's 15% placement capacity under ASX Listing Rule 7.1. The resolution reads that for the purpose of ASX Listing Rule 7.4 and for all other purposes, approval be given for the issue of 117,970 securities at an issue price of $1.99 per security on 1 July 2022, pursuant to the Centuria Capital Group Employee Stapled Security Scheme on the terms and conditions summarized in the explanatory notes. The Board, other than Mr. McBain and Mr. Huljich, unanimously support this resolution and recommends that the securityholders vote in favor of these resolutions. I will now ask Anna, are there any questions in relation to this one?

No questions online.

Any questions in the room in relation to this? No? Then the proxies are: for, 572,259,870 or 99.93%; against, 420,905 or 0.07%; and the abstentions, 165,918. So I will now call on the poll on items 2 to 7. Accordingly, for securityholders in the room, if you can complete any voting cards, and I will ask Boardroom to collect them for the purposes of the poll. For those attending online, please complete your votes online by selecting the voting icon at the top of your screen. We'll now pause the meeting for 5 minutes to allow securityholders in the room to vote and to pass on to Boardroom. So we'll just break for 5 minutes to allow that to happen. Thank you. [Voting] [Break]

I think we're done in the room. Online still hasn't voted. We'll be closing the poll shortly. So if they could just do that, please. Does anyone have any voting cards left in the room who wishes to vote? No? In that case, I declare the poll closed. As the counting of the votes and the conduct of the poll may take some time, I propose to close the meeting and publish the results of the poll as soon as possible through a release made to the ASX. Ladies and gentlemen, we have now completed all items of business for today's meeting. As mentioned, we will publish results of the poll as soon as possible. Before I close this meeting, may I take the opportunity, on behalf of my entire Board and the Boards of the REITs, to thank you for your attendance and participation at today's meeting. And can I take the opportunity to wish you all a happy Christmas, Hanukkah and break. I now declare the meeting closed.