A Note to CMA Investors

11 December 2015

As the calendar year comes rushing to an end, and today being our first anniversary as a listed REIT, we thought it appropriate to take a moment and reflect on CMA’s journey.

CMA started on a great footing, with early support from both institutional and retail investors ensuring a successful listing on 10 December 2014 with our security price closing on the listing date at $2.10 per stapled security.

Our first quarter in March 2015 focused on leasing, particularly the de-risking of pending expiries at 9 Help Street, Chatswood. Early success on this front lead to an increase in both rental income and asset valuation. The Australian equity markets were buoyant with steady buying of CMA pushing the security price to a high of $2.39 during the March quarter. At the same time the Fund paid its first distribution of 5.06 cents per stapled security, in line with PDS forecasts.

The June 2015 quarter saw the acquisition of four additional properties at a combined value of $139 million. These four properties complimented the existing portfolio by increasing the Fund’s weighted average lease term (WALE), providing further geographic diversification, and also providing an opportunity to generate future capital appreciation through repositioning the two properties located in Marcus Clarke Street, Canberra. The Entitlement Offer used to fund the acquisitions was well supported and increased CMA’s market capitalisation to approximately $250 million, bringing us closer to our goal of S&P ASX 300 Index inclusion. CMA finished the June quarter and financial year end having met its PDS forecasts and paying a distribution of4.16 cents per stapled security. During the six months to 30 June 2015 the Fund’s portfolio increased in valuation by $11.0 million with majority of uplift generated by the external valuations of 9 Help Street and 3 Carlingford Road, which increased $5.5 million and $4.5 million respectively. At 30 June 2015 the Fund’s NTA per stapled security was $1.97 with a closing price of $2.10 per stapled security. FY16 earnings and distribution guidance was announced at 17.9 cents and 17.0 cents per stapled security, respectively.

The September 2015 quarter saw the continuing delivery of our active management philosophy, bedding down the Fund’s new acquisitions including readying the Fund’s Canberra properties for a renewed and reinvigorated leasing campaign, as well as the ongoing tenant lease renewals within the Fund’s portfolio. Towards the end of the September quarter the Australian equity market began to soften driven by global economic concerns and CMA’s security price closing at $1.98 at 30 September 2015. A quarterly distribution of 4.25 cents per stapled security was paid, in line with PDS forecasts.

Now we are close to completing the calendar year, the December 2015 quarter has seen a continuation of positive activity and momentum in the Fund’s portfolio. CMA has entered into an unconditional contract to acquire a 50% interest in a modern, well leased A Grade office building at 203 Pacific Hwy, St Leonards for $43 million before costs, with the remaining 50% being acquired by Centuria’s unlisted funds division. Ongoing leasing success has continued across the portfolio particularly at both 9 Help Street, Chatswood and the recently acquired Marcus Clarke Street properties.

The Record Date for CMA’s December quarter distribution is 31 December with4.25 cents per stapled security to be paid.

As we look to the year ahead our portfolio is well positioned to benefit from the prevailing market conditions, including the continued withdrawal of competing suburban office and industrial supply for residential conversion. This will underpin tenant demand for CMA’s properties delivering stable income streams and valuation uplift to securityholders. The recent Government announcements committing to the construction of the second Sydney Harbour rail crossing and the Sydney Metro rail lines will generate additional benefits to CMA’s portfolio over time, particularly the Fund’s assets in Sydney’s Northern Suburbs.

Centuria Metropolitan REIT continues to offer investors a high, secure and most importantly, sustainable, distribution yield in excess of 8% with distributions continuing to be paid on a quarterly basis. In volatile economic times such as we are currently experiencing these characteristics underpin CMA’s strength.

We thank you for your continued support and we look forward to the challenges of 2016 and providing you with sustainable and predictable returns. CMA will present its half year results briefing at 2.30pm on 18 February 2016. A webcast of the presentation will be available at CMA’s website (www.centuria.com.au) on the day and we invite you to participate.

Wishing you and your family a safe and enjoyable holiday season.

Kind Regards,

Centuria Metropolitan REIT


Nicholas_Collishaw_signature_web                                                Nicholas_Blake_signature_web

Nicholas Collishaw                                     Nicholas Blake
CEO – Listed Property Funds                       Trust Manager – CMA


Hengky_Widjaja_signature_web                                    Shalome_Mielewska_signature_web

Hengky Widjaja                                        Shalome Mielewska
Trust Analyst – CMA                                      Investor Relations Manager