Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Starhill Global REIT — Q1 FY2017/18 Earnings Presentation
48 slides from Singapore Exchange's earnings presentation, Oct 27, 2017
Slide 1: First Quarter FY 2017/18 Financial Results
First Quarter FY 2017/18 Financial Results 27 October 2017 Singapore Australia Malaysia China Japan 1
Slide 2: Financial Highlights
1 Financial Highlights Wisma Atria Singapore
Slide 3: Key highlights
Key highlights 1Q FY17/18 DPU at 1.20 cents – Net property income (NPI) would have increased by 0.9% y-o-y to S$41.4 million after excluding the one-off pre-termination rental compensation for a retail lease at Wisma Atria Property in the corresponding quarter – DPU decreased by 7.7% y-o-y to 1.20
Slide 4: 1Q FY17/18 financial highlights
1Q FY17/18 financial highlights 3 months ended 3 months ended Period: 1 Jul – 30 Sep 30 Sep 2017 30 Sep 2016 % Change (1Q FY17/18) (1Q FY16/17) Gross Revenue $53.0 mil $55.3 mil (4.1%) Net Property Income $41.4 mil $42.9 mil (3.5%) Income Available for Distribution $26.7 mil $29.5 mil (9.3%) Income
Slide 5: DPU performance
DPU performance Cents FY 2014/15 (18 months) 8.00 7.60 7.00 5.11 6.00 FY 2016/17 4.92 4Q 5.00 1.18 3Q 4.00 2Q 1Q 1.18 3.00 5.18 4.39 5.00 3.90 4.12 2.00 3.80 2.49 3.58 1.26 2.90 3.10 1.00 1.30 1.20 - FY 2006 FY2006 FY 2007 FY 2008 FY 2009 FY2008 FY 2010 FY2010 FY 2011 FY 2012 FY2012 FY 2013 FY2014/1
Slide 6: 1Q FY17/18 financial results
1Q FY17/18 financial results $’000 1Q FY17/18 1Q FY16/17 % Change Gross Revenue 52,981 55,259 (4.1%) Notes: 1. Being accretion of tenancy Less: Property Expenses (11,611) (12,370) (6.1%) deposit stated at amortised cost in accordance with Net Property Income 41,370 42,889 (3.5%) Financial Reporting
Slide 7: 1Q FY17/18 financial results
1Q FY17/18 financial results Revenue Net Property Income $’000 1Q FY17/18 1Q FY16/17 % Change $’000 1Q FY17/18 1Q FY16/17 % Change Wisma Atria Wisma Atria Retail (1) 13,975 15,728 (11.1%) Retail (1) 11,241 12,452 (9.7%) Office (2) 2,630 2,860 (8.0%) Office (2) 1,908 2,096 (9.0%) Ngee Ann City Ngee A
Slide 8: Attractive trading yield versus other investment instruments
Attractive trading yield versus other investment instruments 7.00% 6.26% 6.00% 5.00% 4.11% 4.00% 3.00% 5.91% 2.50% 2.15% 2.00% 1.65% 1.00% 0.35% 0.00% SG REIT Annualised SGREIT Annualised CPF Ordinary 10-Year Singapore 5-Year Singapore 12-month Bank Fixed 1Q FY17/18 FY17/18 Yield Yield Account Gover
Slide 9: Unit price performance
Unit price performance Starhill Global REIT’s Unit Price Movement and Daily Traded Volume Liquidity statistics (1 Oct 2016 to 30 Sep 2017) Average daily traded 2.6 mil 0.84 20,000,000 volume for 1Q FY17/18 18,000,000 (units)1 0.82 16,000,000 0.80 Estimated free float2 55% 14,000,000 Trading Volume 0
Slide 10: Distribution timetable
Distribution timetable Distribution Period 1 July 2017 to 30 September 2017 Distribution Amount 1.20 cents per unit Distribution Timetable Notice of Books Closure Date 27 October 2017 Last Day of Trading on “Cum” Basis 1 November 2017, 5.00 pm Ex-Date 2 November 2017, 9.00 am Book Closure Date 6 Nov
Slide 11: Proactive capital management
Proactive capital management Drawn down S$460 million unsecured loan facilities to largely refinance outstanding loans ahead of maturities. Extended debt maturity to approximately 3.8 years $ million Debt maturity profile $70m MTN $260m term loan 450 As at 30 September 2017 $100m MTN 400 $125m MTN *
Slide 12: Interest rate and foreign exchange exposures
Interest rate and foreign exchange exposures BORROWINGS Interest rate exposure AS AT 30 SEPTEMBER 2017 Borrowings Borrowings as at 30 September 2017 are about hedged via 99% hedged by a combination of: interest rate Borrowings caps 87% fixed rate debt and interest rate swaps; fixed/hedged 12% via
Slide 13: Balance sheet remains strong
Balance sheet remains strong Total assets of approximately $3.2 billion NAV As at 30 September 2017 $’000 statistics Non Current Assets 3,144,193 NAV Per Unit (as at 30 September 2017) (1) $0.92 Current Assets 79,019 Adjusted NAV Per Unit (net of distribution) $0.91 Total Assets 3,223,212 Current Li
Slide 14: Portfolio Performance Update
2 Portfolio Performance Update Myer Centre Adelaide Adelaide, Australia 14
Slide 15: Defensive portfolio with upside potential
Defensive portfolio with upside potential Balance of long term and short term leases Master leases and long-term leases, incorporating periodic rent reviews, represent 48.0% of gross rent as at 30 September 2017 Ngee Ann City Property Retail (Singapore) Expires in 2025 with a 5.5% increase in base
Slide 16: Retail portfolio occupancy resilient at 98.1%
Retail portfolio occupancy resilient at 98.1% 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 30 Jun 30 Jun 30 Jun 30 Sep As at 05 06 07 08 09 10 11 12 13 15 16 17 17 SG Retail 100.0% 100.0% 100.0% 98.3% 100.0% 99.1% 98.3% 99.8% 99.9% 99.4% 99.2% 99.2% 99.2% SG Office 92.8% 97.8% 98.7
Slide 17: Staggered portfolio lease expiry profile
Staggered portfolio lease expiry profile Weighted average lease term of 6.6 and 4.9 years (by NLA and gross rent respectively) Portfolio Lease Expiry (as at 30 September 2017) (1)(2) 50% By NLA By Gross Rent 49.1% (4) 40% 40.2% (4) 35.5% (3) 30.6% (3) 30% 20% 10.7% 7.3% 10.0% 10% 8.5% 4.4% 3.7% 0% F
Slide 18: Staggered portfolio lease expiry profile by category
Staggered portfolio lease expiry profile by category Retail Lease Expiry Profile by Gross Rents Office Lease Expiry Profile By Gross Rents (as at 30 September 2017) (1) (as at 30 September 2017) (2) 50% 40% 37.3% 44.2% (4) 40% 30% 13.9% 29.7% (3) 25.4% 30% 20% 20% 10.3% 13.3% 10% 10% 7.9% 7.9% 10.1%
Slide 19: Singapore Retail: Stable tenant sales
Singapore Retail (Wisma Atria & Ngee Ann City) Stable tenant sales in 1Q FY17/18 S$ million Million Wisma Atria Retail 54 8 Wisma Atria Retail Traffic Count at Primary Entrances Tenant Sales and Traffic 52 7 Revenue and NPI declined 11.1% and 9.7% y-o-y Retail Sales Turnover 6 50 respectively main
Slide 20: Singapore Retail
Singapore Retail High occupancies sustained notwithstanding soft retail climate Lease expiry schedule (by gross rent) as at 30 September 2017 Proactive leasing: 100% Wisma Atria Property Ngee Ann City Property 86.3% (1) Approximately 47.8% of retail 80% Includes Toshin master lease at leases by gr
Slide 21: Singapore Offices
Singapore Offices Finalising terms with new prospective tenants for a third of vacant spaces 1Q FY17/18 revenue and NPI declined 13.2% and 15.0% y-o-y respectively Occupancies declined to 83.5% as at 30 September 2017. However, we are currently finalising terms with new prospective tenants for a
Slide 22: Singapore Offices
Singapore Offices Lease expiry schedule (by gross rent) as at 30 September 2017 50% 46.2% 40% 29.7% 30% 27.4% Wisma Atria Property 25.0% Ngee Ann City Property 20% 17.1% 16.8% 15.2% 12.0% 10.6% 10% 0% FY17/18 FY18/19 FY19/20 FY20/21 Beyond FY20/21 Committed occupancy rates (by NLA) 97.9% 96.6% 95.3%
Slide 23: Australia - Myer Centre Adelaide, David Jones Building & Plaza Arcade
Australia - Myer Centre Adelaide, David Jones Building & Plaza Arcade Australia portfolio performed well with higher retail rental income Revenue and NPI for 1Q FY17/18 was 6.9% and 3.8% respectively higher than in 1Q FY16/17, mainly due to higher retail revenue from Myer Centre Adelaide and Austr
Slide 24: Plaza Arcade's redevelopment
Plaza Arcade’s redevelopment Retail space to increase by 33% Construction works commenced last quarter and is scheduled for completion by the first quarter of 2018 The new international anchor tenant will complement the city centre’s revitalised retail offerings as landlords within the precinct
Slide 25: Adelaide and Perth remain attractive to international retailers
Adelaide and Perth remain attractive to international retailers Adelaide City Centre Perth City Centre New international tenant Adelaide Train Station Myer Centre Adelaide 25
Slide 26: Australia: Stability from long-term leases
Australia Stability from long-term leases Lease expiry schedule (by gross rent) as at 30 September 2017 80% Perth Properties Myer Centre Adelaide 72.4%(1) 65.2%(2) 60% David Jones’ long term lease accounts for 64.3% of revenue 40% for Perth Properties in 15.2% 20% 8.0% 9.0% 10.4% 9.2% 1Q FY17/18 4
Slide 27: Malaysia – Starhill Gallery and Lot 10 Property
Malaysia – Starhill Gallery and Lot 10 Property Rejuvenation on track Revenue and NPI declined in 1Q FY17/18 by 4.0% and 4.1% respectively over the previous corresponding period in 1Q FY16/17, mainly due to depreciation of the Malaysian ringgit against the Singapore dollar Lot 10 internal rejuve
Slide 28: Others: China Property and Japan Properties
Others China Property and Japan Properties NPI for 1Q FY17/18 was approximately S$1.0 million, up from S$0.6 million in 1Q FY16/17 largely due to lower operating expenses for the China Property, as the departmental store model was converted to a single tenancy model Renovation works in China on tr
Slide 29: Outlook
3 Outlook Lot 10 Kuala Lumpur, Malaysia
Slide 30: Outlook
Outlook Focus on prime locations • Orchard Road – Singapore’s iconic shopping strip • Rundle Mall – Adelaide’s premier retail precinct • Hay Street Mall & Murray Street Mall – Perth’s CBD • Bukit Bintang – Kuala Lumpur’s premier shopping and entertainment district Delivering value to Unitholders • N
Slide 31: Looking ahead
Looking ahead Completion Organic growth from rental reversion Toshin: 5.5% increase in base rent for master lease in Ngee Ann City Retail from June 2016. Next rent review in June 2019 Katagreen: Master tenancy for Starhill Gallery and Lot 10 extended from 28 June 2016 with 6.67% rental uplift Myer C
Slide 32: Summary
Summary 11 mid to high-end retail properties in five countries Quality Assets: - Singapore makes up ~68% of total assets with Australia and Malaysia ~29% of total assets as Prime Locations core markets. China and Japan account for the balance of the portfolio Quality assets with strong fundament
Slide 33: Appendices
4 Appendices Starhill Gallery Kuala Lumpur, Malaysia
Slide 34: 68% of total asset value attributed to Singapore
68% of total asset value attributed to Singapore ASSET VALUE 1Q FY17/18 GROSS REVENUE 1Q FY17/18 GROSS REVENUE BY COUNTRY AS AT 30 SEP 2017 BY COUNTRY BY RETAIL/OFFICE Others* Others* Malaysia 2.9% Malaysia Office 2.5% 11.4% 12.7% 11.3% Australia 17.4% Australia 23.7% Singapore 61.1% Singapore 68.3%
Slide 35: Singapore – Wisma Atria Property: Diversified tenant base
Singapore – Wisma Atria Property Diversified tenant base WA retail trade mix – by % gross rent WA office trade mix – by % gross rent (as at 30 Sep 2017) (as at 30 Sep 2017) Information General Trade Aerospace Banking and Government Technology Health & 3.7% 2.7% Financial Beauty related services 2.9%
Slide 36: Singapore – Ngee Ann City Property: Stable of quality tenants
Singapore – Ngee Ann City Property Stable of quality tenants NAC retail trade mix – by % gross rent NAC office trade mix – by % gross rent (as at 30 Sep 2017) (as at 30 Sep 2017) Services General Trade Banking & Aerospace 2.5% 0.5% Financial 5.3% Beauty & Services 6.3% Fashion Retail Wellness Petrol
Slide 37: Top 10 tenants contribute 57.7% of portfolio gross rents
Top 10 tenants contribute 57.7% of portfolio gross rents Tenant Name Property % of Portfolio Gross Rent (1) (2) Toshin Development Singapore Pte Ltd Ngee Ann City, Singapore 21.1% Ngee Ann City & Wisma Atria, Singapore YTL Group(3) 14.2% Starhill Gallery & Lot 10, Malaysia Myer Pty Ltd Myer Centre A
Slide 38: Singapore – Wisma Atria Property
Singapore – Wisma Atria Property Address 435 Orchard Road, Singapore 238877 Wisma Atria comprises a podium block with four levels and one basement level of retail, three levels of car parking space and 13 levels of office space in the office block. Description Starhill Global REIT's interest in Wism
Slide 39: Singapore – Ngee Ann City Property
Singapore – Ngee Ann City Property Address 391/391B Orchard Road, Singapore 238874 Ngee Ann City is a commercial complex with 18 levels of office space in the twin office tower blocks (Tower A and B) and a seven-storey podium with three basement levels comprising retail and car parking space. Descri
Slide 40: Adelaide, Australia – Myer Centre Adelaide
Adelaide, Australia – Myer Centre Adelaide Address 14-38 Rundle Mall, Adelaide SA 5000, Australia Myer Centre Adelaide comprises a retail centre, three office buildings and four basement levels with approximately 467 car parking lots. The retail centre is spread across eight Description floors and a
Slide 41: Perth, Australia – David Jones Building & Plaza Arcade
Perth, Australia – David Jones Building & Plaza Arcade David Jones Building Address 622-648 Hay Street Mall, Perth, Western Australia A four-storey property, which includes a heritage-listed building constructed circa 1910 that was formerly the Savoy Description hotel. The property is anchored by th
Slide 42: Kuala Lumpur, Malaysia – Starhill Gallery
Kuala Lumpur, Malaysia – Starhill Gallery Address 181 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia Starhill Gallery is a shopping centre comprising part of a Description seven-storey building with five basements and a 12-storey annex building with three basements. Net lettable area 306,113 sq f
Slide 43: Kuala Lumpur, Malaysia – Lot 10 Property
Kuala Lumpur, Malaysia – Lot 10 Property Address 50 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia 137 parcels and 2 accessory parcels of retail and office spaces held under separate strata titles within a shopping centre known as Lot 10 Shopping Centre which consists of Description an 8-storey b
Slide 44: Chengdu, China – China Property
Chengdu, China – China Property Address No.19, Renminnan Road, Chengdu, China A four-storey building completed in 2003. Part of a mixed- Description use commercial complex comprising retail and office. Gross floor area 100,854 sq ft Number of tenants 1(1) Title Leasehold estate of 40 years expiring
Slide 45: Japan Properties
Japan Properties – Properties are within five minutes’ walk from nearest subway stations No. of Properties 3 Net lettable area 30,429 sq ft Number of 15 (1) tenants Ebisu: Title Freehold 1) Daikanyama Bldg 2) Ebisu Fort Total Valuation S$59.6 million(1) Meguro: 1) Nakameguro Place Note: 1. As at 30
Slide 46: References used in this presentation
References used in this presentation 1Q, 2Q, 3Q, 4Q means the periods between 1 July to 30 September; 1 October to 31 December; 1 January to 31 March and 1 April to 30 June 1Q FY16/17 means the period of 3 months from 1 July 2016 to 30 September 2016 1Q FY17/18 means the period of 3 months from 1 Ju
Slide 47: Disclaimer
Disclaimer This presentation has been prepared by YTL Starhill Global REIT Management Limited (the “Manager”), solely in its capacity as Manager of Starhill Global Real Estate Investment Trust (“Starhill Global REIT”). A press release, together with Starhill Global REIT’s unaudited financial stateme
Slide 48: YTL Starhill Global REIT Management Limited
YTL Starhill Global REIT Management Limited CRN 200502123C Manager of Starhill Global REIT 391B Orchard Road, #21-08 Ngee Ann City Tower B Singapore 238874 Tel: +65 6835 8633 Fax: +65 6835 8644 www.starhillglobalreit.com 48
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