Aims Apac REIT · SGX:O5RU
Aims Apac REIT — FY2020 Earnings Presentation
43 slides from Aims Apac REIT's earnings presentation, May 12, 2020
Slide 1: AIMS APAC REIT FY2020 Fourth Quarter Financial Results
AIMS APAC REIT FY2020: Fourth Quarter Financial Results Ended 31 March 2020 Results Presentation 12 May 2020 AIMS APAC REIT 1
Slide 2: Important notice
Important notice Disclaimer This Presentation is focused on comparing actual results for the financial period from 1 April 2019 to 31 March 2020 (“FY2020”) and 1 January 2020 to 31 March 2020 (“4Q FY2020”) versus actual results year-on-year (“y-o-y”) and quarter-on-quarter (“q-o-q”). This Presentati
Slide 3: Contents
CONTENTS Highlights for 4Q FY2020 4 4Q FY2020 & Full Year Financial Results 10 Prudent Capital Management 15 Portfolio Performance 19 FY2020 Milestones 29 Market Outlook and Strategy 34 Updates on COVID-19 38 AIMS APAC REIT 3
Slide 4: Highlights for 4Q FY2020
>1 HIGHLIGHTS FOR 4Q FY2020 AIMS APAC REIT 4
Slide 5: Highlights for 4Q FY2020
Highlights for 4Q FY2020 >1 Focusing on active asset management • DPU performance: 2.00 cents per Unit for the quarter1, after partial retention of distributable income of S$2.9 million to conserve cash for the Group’s working capital purposes. DPU would have been 2.40 cents if the Australian distri
Slide 6: Highlights for 4Q FY2020 (cont'd)
Highlights for 4Q FY2020 (cont’d) >1 Active lease management • Executed 22 new and renewal leases in 4Q FY2020, representing 30,632 sqm (or 4.6% of total net lettable area). • Portfolio occupancy remained stable at 89.4%1, as compared to the preceding quarter, mainly due to the commencement of renta
Slide 7: Highlights for 4Q FY2020 (cont'd)
Highlights for 4Q FY2020 (cont’d) >1 Prudent Capital Management • Aggregate leverage as at 31 March 2020 is at 34.8%. • Overall blended funding cost of 3.5% with 81.1% of the portfolio’s interest rates fixed taking into account interest rate swaps and fixed rate notes. • AA REIT has received commitm
Slide 8: Attractive return on investment
Attractive return on investment >1 8.12% 8.00% % yield per annum 5.61% 684 bps spread 4.00% 2.50% 1.28% 0.61% 0.00% AA REIT Yield 1 FTSE ST REIT 12-month Yield 2 CPF Ordinary Account 3 Singapore Government 10-year Bank 12-month fixed deposits 2 bond 2 1 Based on closing price of S$1.17 on 11 May 202
Slide 9: Total distribution and unitholders' funds since FY2011
Total distribution and unitholders’ funds since FY2011 >1 1000.0 962.1 Total Unitholders Funds (S$’m) 940.7 955.0 939.0 928.5 911.9 888.4 900.0 800.0 700.0 665.3 626.2 586.2 600.0 500.0 30.00 80.00 Distributions per Unit (Singapore cents) 72.06 70.50 70.50 69.20 67.37 66.51 70.00 Total Distributions
Slide 10: 4Q FY2020 & Full Year Financial Results
4Q FY2020 & FULL YEAR >2 FINANCIAL RESULTS AIMS APAC REIT 10
Slide 11: Distribution details
Distribution details >2 Stock counter Distribution period DPU (cents) AIMS APAC Reit For 1 January 2020 to 31 March 2020 2.00 Code: O5RU Distribution Period For 1 January 2020 to 31 March 2020 Ex-date 19 May 2020, 9.00am Record date 20 May 2020, 5.00pm Return of Tax Declaration Forms 9 June 2020, 5.
Slide 12: 4Q and FY2020 Results
4Q and FY2020 Results >2 4Q 3Q Q-o-Q 4Q Y-o-Y FY2020 FY2019 Y-o-Y FY2020 FY2020 % FY2019 % S$’000 S$’000 % S$’000 S$’000 S$’000 Gross Revenue1 28,218 29,458 (4.2) 29,918 (5.7) 118,860 118,078 0.7 Net Property Income1,2 20,513 23,110 (11.2) 20,323 0.9 89,054 78,493 13.5 Share of profits of joint 4,32
Slide 13: Balance sheet
Balance sheet >2 As at As at As at 31 March 2020 31 December 2019 31 March 2019 Total Assets (S$’m) 1,648.91 1,670.01 1,484.8 Comprising (S$’m): - Investment properties 1,366.81 1,319.11 1,202.3 - Investment property under development - 49.81 32.7 - Joint venture 252.8 271.5 221.8 - Trade and other
Slide 14: Key financial metrics for 4Q FY2020
Key financial metrics for 4Q FY2020 >2 4Q FY2020 3Q FY2020 Portfolio Value1 S$1,526.7 million S$1,546.8 million Market Capitalisation2 S$826.8 million S$1,005.9 million NAV per Unit S$1.35 S$1.37 Share Price2 S$1.17 S$1.43 (Discount to) / Premium over NAV2 (13.3)% 4.4% Aggregate Leverage3 34.8% 35.2
Slide 15: Prudent Capital Management
>3 PRUDENT CAPITAL MANAGEMENT AIMS APAC REIT 15
Slide 16: Debt facilities as at 31 March 2020
Debt facilities as at 31 March 2020 >3 Secured SGD borrowings • Total secured facility of S$345.0 million comprising: • 4-year term loan facility of S$100.0 million, maturing in August 20201 • 4-year revolving credit facility of S$120.0 million, maturing in November 2021 • 4-year term loan facility
Slide 17: Debt facilities as at 31 March 2020 (cont'd)
Debt facilities as at 31 March 2020 (cont’d) >3 Unsecured borrowings • S$50.0 million 5-year fixed rate notes at 3.60% maturing in March 2022 • S$100.0 million 5-year fixed rate notes at 3.60% maturing in November 2024 (maiden issuance under the S$750 million Multicurrency Debt Issuance Programme es
Slide 18: Debt facilities as at 31 March 2020 (cont'd)
Debt facilities as at 31 March 2020 (cont’d) >3 Maturity date S$’m Pro forma effect of refinancing the existing facilities due Due in August 2020 (FY2021) 100.0 in Aug 2020 and Nov 2020 Due in November 2020 (FY2021) 56.7 Due in March 2022 (FY2022) 50.0 Due in June 2022 (FY2023) 20.7 S$36m 100 undraw
Slide 19: Portfolio Performance
>4 PORTFOLIO PERFORMANCE AIMS APAC REIT 19
Slide 20: Revenue performance since FY2011
Revenue performance since FY2011 >4 140,000 124,389 120,119 118,860 118,078 120,000 115,432 116,916 108,240 100,000 92,082 89,054 83,983 82,329 80,013 79,433 78,493 80,000 76,417 S$’000 73,245 71,895 59,071 59,896 60,000 52,982 40,000 20,000 - FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Slide 21: Key portfolio statistics
Key portfolio statistics >4 As at As at 31 March 2020 31 December 2019 Number of Properties 27 27 Portfolio Value (S$ million)1 1,526.7 1,546.8 Net Lettable Area (sqm) 671,191 646,694 Number of Tenants 192 187 Portfolio Occupancy (%) 89.4 89.4 Weighted Average Lease Expiry (WALE) (years)2 4.30 4.01
Slide 22: Portfolio breakdown
Portfolio breakdown By 4Q FY2020 gross rental income >4 Master Leases, 30.5% Business Park 16.5% Multi- tenanted, 69.5% Logistics and Hi Tech Space Warehouse 9.5% 46.9% Occupancy (%) Light Industrial Total Portfolio 89.4 13.2% (27 properties) Master Leases1 100.0 General Industrial 13.9% Multi-tenan
Slide 23: Diversified tenant / industry base
1,2 Diversified tenant / industry base >4 (By 4Q FY2020 Gross Rental Income) Logistics, 28.2% Telecommunication, 13.9% Engineering, 11.5% Biotech / Life Sciences, 9.3% Infrastructure, 0.8% Consumer products, 6.6% IT & Electronics, 3.6% Fashion and Apparels, 6.1% FMCG, 3.6% Furniture, 2.8% Pharmaceut
Slide 24: Active lease management
Active lease management >4 Lease Expiry Profile as at 31 March 2020 (By 4Q FY2020 Gross Rental Income) % of total 4Q FY2020 sqm NLA Total new leases signed 7 8,150 1.2 Total renewal leases signed1 15 22,482 3.4 35.0% 29.7% 30.0% 25.4% % of gross rental income 25.0% 20.2% 20.0% 14.2% 15.0% 10.0% 7.2%
Slide 25: Quality tenant base
Quality tenant base ^ >4 Top 10 tenants by 4Q FY2020 Gross Rental Income Tenant % Optus Administration Pty Limited 13.2 Illumina Singapore Pte Ltd 9.3 Schenker Singapore (Pte) Ltd 4.8 Beyonics International Pte Ltd 3.9 GSM (Operation) Pty Ltd 3.9 CWT Pte. Limited* 3.6 Focus Network Agencies (Singapo
Slide 26: Long land lease expiry – 36.9 years
Long land lease expiry – 36.9 years >4 The weighted average unexpired land lease* was 36.9 years as at 31 March 2020 60.0% 50.0% 43.0% % of Net Lettable Area 40.0% 38.8% 30.0% 20.0% 9.8% 10.0% 8.4% 0.0% 0.0% ≤ 30 years > 30 to 40 years > 40 to 50 years > 50 to 60 years > 60 years * For the calculati
Slide 27: Comparisons to Singapore's industrial average occupancy levels
Comparisons to Singapore’s industrial average occupancy levels >4 100.0% 95.0% 93.4% 89.4% % Occupancy 90.0% 89.2% 89.0% 87.9% 87.4% 87.5% 86.0% 85.0% 80.0% 75.0% Overall Business Park Warehouse Industrial AA REIT JTC's 1Q 2020 Source: Based on JTC’s 1st Quarter 2020 statistics. AIMS APAC REIT 27
Slide 28: Portfolio summary
Portfolio summary >4 Diversified Occupancy tenancies of 89.4% and industry base Weighted Average Average Security Lease Deposit of Expiry of 3.6 months 4.30 years AIMS APAC REIT 28
Slide 29: FY2020 Milestones
>5 FY2020 MILESTONES AIMS APAC REIT 29
Slide 30: Significant milestones
Significant milestones >5 Pursuing accretive opportunities for portfolio growth • Completed acquisition of Boardriders Asia Pacific HQ on 15 July 2019 Headline yield of 7.8%; freehold industrial facility with quality tenant and long lease – Fully leased to Boardriders for a 12-year lease with opti
Slide 31: Significant milestones (cont'd)
Significant milestones (cont’d) >5 Developing a higher quality portfolio • Secured a 12-year master lease with existing master tenant at Optus Centre New lease will commence from 1 July 2021 following the completion of an AEI that includes end-of-trip facilities, new access roads, drop-off areas,
Slide 32: Significant milestones (cont'd)
Significant milestones (cont’d) >5 Continued focus on active asset and lease management • Completion of redevelopment of 3 Tuas Ave 2 – Obtained Temporary Occupation Permit (TOP) on 10 January 2020, in line with the project’s expected completion Project development costs (including land value and
Slide 33: Significant milestones (cont'd)
Significant milestones (cont’d) >5 Continued focus on active asset and lease management (cont’d) • Completion of AEI base contract for NorthTech at Woodlands – Completed within budget on 2 January 2020. Increase in property’s value to S$116.5 million compared to S$102.0 million (as at 31 March 201
Slide 34: Market Outlook and Strategy
MARKET OUTLOOK AND >6 STRATEGY AIMS APAC REIT 34
Slide 35: Market Update and Outlook
Market Update and Outlook >6 Macro Environment • The COVID-19 global outbreak has continued to escalate since February 2020, which has brought about significant deterioration to the operating environment and has negatively impacted the economic situation in many countries, including Singapore and Au
Slide 36: Strategy
Strategy >6 Active asset and Prudent capital and Portfolio growth leasing management risk management To pursue accretive Prudent capital investment Continual focus on management by opportunities in proactive asset and substantially hedging Singapore and lease management. interest rate exposure. Aust
Slide 37: Potential opportunities within AA REIT's portfolio
Potential opportunities within AA REIT’s portfolio >6 A large proportion of current portfolio have under-utilised plot ratios; with potential organic opportunities. 2 Ang Mo Kio Street 65 8 Senoko South Road 11 Changi South Street 3 10 Changi South Lane 3 Toh Tuck Link 7 Clementi Loop 541 Yishun Ind
Slide 38: Updates on COVID-19
>7 UPDATES ON COVID-19 AIMS APAC REIT 38
Slide 39: Resilience of the Portfolio
Resilience of the Portfolio >7 Diversified tenant base • Singapore portfolio remains resilient as leases to logistics companies are handling Singapore’s stockpile of essential items. • Average Security Deposit of 3.6 months • Typical range of Security Deposits ranges from 3 months to beyond 6 months
Slide 40: New measures from MAS
New measures from MAS >7 MOF, IRAS & MAS jointly announced new measures on 16 April 2020 to provide S-REITs with greater flexibility to manage their cash flows and raise funds amid a challenging operating environment due to COVID-19: Higher leverage limit • Raised the aggregate leverage limit for S-
Slide 41: Property tax rebate
Property tax rebate >7 Property tax rebate – Singapore • Qualifying non-residential properties will be granted an enhanced property tax rebate for the period of 1 January 2020 to 31 December 20201. • The applicable rebate is 30% for premises used for an industrial purpose or business park. • Legisla
Slide 42: Tenant update
Tenant update >7 Singapore • Legislative provisions to provide temporary relief from legal action for businesses and individuals who are unable to fulfil their contractual obligations, including leases by tenants, because of COVID-191 for a period of six months from 20 April 2020 up to 19 October 20
Slide 43: Thank you
Awarded Gold Awards for Excellence in Awarded Shareholder Communications Corporate Governance, Social Responsibility Excellence Award at the and Investor Relations at The Asset Corporate 18th Investors' Choice Awards 2017 Awards 2019 Awarded Best Investor Relations Company and Awarded the Honours Aw