Frasers Centrepoint Trust · SGX:J69U
Frasers Centrepoint Trust — FY2017 Earnings Presentation
62 slides from Frasers Centrepoint Trust's earnings presentation, November 2017
Slide 1: Frasers Centrepoint Trust Investor Presentation
Frasers Centrepoint Trust Investor Presentation Causeway Point Northpoint + Changi City Point Bedok Point YewTee Point Anchorpoint Yishun 10 Retail Podium November 2017
Slide 2: Important notice
Important notice Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward-looking statement and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual resu
Slide 3: Contents
Contents Section Slide number Overview 4 Highlights from Financial Results for 4QFY17 and Full year FY2017 ended 30 September 2017 15 Northpoint AEI 41 Outlook 46 Appendix 49 3
Slide 4: Overview
Causeway Point Overview
Slide 5: Frasers Centrepoint Trust (FCT)
Overview Frasers Centrepoint Trust (FCT) • REIT listed on the SGX-ST with a market capitalisation of S$1.95 billion1 • Owns a portfolio of six suburban retail malls in Singapore, which are located next to /near MRT stations and bus interchanges • Achieved 6.4% CAGR in DPU over 11 consecutive years s
Slide 6: FCT – Largest REIT by market cap within the Frasers Centrepoint Group
Overview FCT – Largest REIT by market cap within the Frasers Centrepoint Group Info below as at 30 Sep 2017 FCL: Listed on SGX since Jan 2014, market cap: S$6.07b. FCT: Listed on SGX since Jul 2006, market cap of S$1.95b. FLT: Listed on SGX since Jun 2016, market cap: S$1.62b FHT: Listed on
Slide 7: Singapore-centric, suburban-focused retail property portfolio
Overview Singapore-centric, suburban-focused retail property portfolio Properties are located next to or near to MRT stations / Bus Interchanges Northpoint North Wing & Anchorpoint YewTee Point Causeway Point Yishun 10 Retail Podium Bedok Point Changi City Point Woodlands BUS Yishun YewTee BUS Expo
Slide 8: Portfolio of retail malls valued at $2.67 billion
Overview Portfolio of 6 retail malls valued at $2.67 billion All valuations are as at 30 September 2017 Percentage figures represent asset value as proportion of total appraised value of S$2,668.1 million Valuations by Properties (S$ million) Causeway Point 1,190.0 44.6% Northpoint City North Wing &
Slide 9: Steady and consistent performance
Overview Steady and consistent performance Gross Revenue (S$ million) Net Property Income (S$ million) 189.2 183.8 181.6 168.8 131.0 129.8 129.6 158.0 147.2 118.1 111.6 104.4 114.7 117.9 80.1 82.6 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY201
Slide 10: Delivering steady and growing distributions
Overview Delivering steady and growing distributions Eleven consecutive years of DPU growth since listing Distribution per Unit (S cents) CAGR FY2006 – FY2017: 6.4% 11.608 11.764 11.90 10.93 11.187 10.01 8.20 8.32 7.29 7.51 6.55 6.03* FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY
Slide 11: Strong financial position, low gearing
Overview Strong financial position, low gearing Key financial position indicators Gearing level1 As at 30 Sep17 30 Sep 16 29.9% 30.3% 31.3% 30.1% 29.2% 29.3% 28.1% 27.6% 28.2% 28.3% 29.0% Gearing level1 29.0% 28.3% Interest cover2 6.85 times 7.43 times Total borrowings $798m $734m % of borrowing on
Slide 12: Clear growth strategy
Overview Clear growth strategy Strategy Key drivers 1 Acquisition growth • Sponsor’s pipeline assets • 3rd party asset acquisition, including in Singapore and overseas 2 • Enhance configuration of floor plates / layout Enhancement growth to achieve better asset yield and sustainable income growth •
Slide 13: Growth from Acquisitions and AEIs
Overview Growth from Acquisitions and AEIs Northpoint 2 Changi City Point Yishun 10 Retail YewTee Point Bedok Point Podium Purchase price: $290.2m Purchase price: $127.0m Purchase price: $305.0m Purchase price: $37.75m Acquired: 5 Feb 2010 Acquired: 23 Sep 2011 Acquired: 16 Jun 2014 Acquired: 16 Nov
Slide 14: Sponsor’s retail assets in Singapore
Overview Sponsor’s retail assets in Singapore Northpoint City North Wing (f.k.a. Northpoint Shopping Centre) Northpoint City South Wing (2) (expected to open in 4Q of 2017) Causeway Point YewTee Point Artist’s impression The Centrepoint Waterway Point (1) (Opened Jan 2016) Bedok Point Eastpoint Anch
Slide 15: Highlights from Financial Results for 4QFY17 and Full year FY2017
Changi City Point Highlights from Financial Results for 4QFY17 and Full year FY2017 ended 30 September 2017
Slide 16: Strong 4Q17 results drive DPU up 5.5% to 2.97 cents
Results - Highlights Strong 4Q17 results drive DPU up 5.5% to 2.97 cents Gross Revenue Net Property Income Distribution per Unit NAV per Unit ($ million) ($ million) (cts) ($) ▲ 8.1% ▲10.0% ▲ 5.5% ▲ 4.7% 48.2 2.97 2.02 34.6 44.6 2.815 31.4 1.93 4Q17 4Q16 4Q17 4Q16 4Q17 4Q16 4Q17 4Q16 NAV: Net asset
Slide 17: Improved occupancy and healthy rental reversion
Results - Highlights Improved occupancy and healthy rental reversion Portfolio Occupancy Portfolio Average Rental Reversion 92.0% +8.3% 89.4% +4.6% 87.1% +0.4% 30.9.17 30.9.16 30.6.17 4Q17 4Q16 *3Q17 * 3Q17 rental reversion excluding Bedok Point was +5.4% 17
Slide 18: 4Q17 Revenue lifted by higher rental income
Results - Highlights 4Q17 Revenue lifted by higher rental income 4Q17(a) 4Q16 Y-o-Y Comments $’000 Jul 17 to Sep 17 Jul 16 to Sep 16 change Higher rental contributions mainly from Causeway Point, Northpoint City Gross Revenue 48,248 44,619 ▲ 8.1% North Wing, Changi City Point and additional revenue
Slide 19: Full year DPU hit historical high of 11.90 cents
Results - Highlights Full year DPU hit historical high of 11.90 cents FY2017(a) FY2016 Y-o-Y Comments $’000 Oct 16 to Sep 17 Oct 15 to Sep 16 change Lower due to planned vacancies in Gross Revenue 181,595 183,816 ▼ 1.2% conjunction with the AEI works at Northpoint City North Wing Property Expenses (
Slide 20: 11 consecutive years of Steady DPU growth
Results - Highlights 11 consecutive years of Steady DPU growth FCT Annual DPU +1.2% year-on-year (cents) CAGR FY2006 – FY2017: 6.4% 11.608 11.764 11.90 10.93 11.187 10.01 8.20 8.32 7.29 7.51 6.55 6.03 * FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 (IPO) * Annua
Slide 21: 4Q17 Revenue up 8.1% year-on-year
Results – Performance by properties 4Q17 Revenue up 8.1% year-on-year Growth driven mainly by higher contributions from Northpoint City North Wing Gross Revenue $ million Higher occupancy Higher rental rate 4Q17 4Q16 Higher rental Due to lower and average gross from renewed rate from average gross r
Slide 22: FY2017 Revenue 1.2% lower year-on-year
Results – Performance by properties FY2017 Revenue 1.2% lower year-on-year FY2017 performance was mainly affected by planned vacancies at Northpoint City North Wing due to the AEI works Gross Revenue FY2017 FY2016 $ million Mainly affected Due to lower by the planned average gross ▼ 1.2% vacancies i
Slide 23: 4Q17 Property Expenses 3.8% higher year-on-year
Results – Performance by properties 4Q17 Property Expenses 3.8% higher year-on-year Higher year-on-year property expense due to absence of property tax write backs Property Expenses $ million 4Q17 4Q16 ▲ 3.8% 13.67 13.17 Higher due to Higher due to Due to lower absence of absence of property tax wri
Slide 24: FY2017 Property Expenses 3.6% lower year-on-year
Results – Performance by properties FY2017 Property Expenses 3.6% lower year-on-year Property Expenses $ million FY2017 FY2016 ▼ 3.6% 52.04 53.96 ▼ 8.6% 19.18 20.99 ▲ 5.7% ▼ 5.2% 12.29 11.63 ▼ 10.7% ▲ 6.3% ▼ 3.5% 8.60 9.07 3.67 4.11 4.40 4.14 3.89 4.03 FCT Portfolio Causeway Point Northpoint City Ch
Slide 25: 4Q17 Net Property Income up 10.0% year-on-year
Results – Performance by properties 4Q17 Net Property Income up 10.0% year-on-year Growth driven mainly by higher contributions from Northpoint City North Wing Net Property Income (NPI) $ million 4Q17 4Q16 ▲ 10.0% 34.58 31.45 ▲ 4.2% 15.62 14.99 ▲ 27.6% 10.07 ▲ 16.6% ▼ 7.7% 7.89 ▼ 21.3% ▲ 13.9% 4.36
Slide 26: FY2017 NPI is comparable year-on-year
Results – Performance by properties FY2017 NPI is comparable year-on-year Net Property Income (NPI) $ million FY2017 FY2016 ▼ 0.2% 129.56 129.85 ▲ 5.7% 65.54 62.03 ▼ 10.8% ▲ 3.7% 29.74 33.33 ▼ 1.6% ▼ 13.5% ▼ 1.5% 15.93 15.36 10.05 10.21 4.63 4.70 3.66 4.23 FCT Portfolio Causeway Point Northpoint Cit
Slide 27: The larger malls account for 85.8% of portfolio NPI
Results – NPI contribution by properties The larger malls account for 85.8% of portfolio NPI Percentage of FY2017 Net Property Income (NPI) contribution by property Bedok Point Anchorpoint 2.8% 3.6% YewTee Point 7.8% Causeway Point 50.6% Changi City Point 12.3% Northpoint City North Wing + Yishun 10
Slide 28: Balance sheet
Balance sheet
Slide 29: Strong financial position with gearing level at 29.0%
Balance sheet Strong financial position with gearing level at 29.0% As at 30 September 17 30 September 16 Gearing ratio1 29.0% 28.3% Interest cover for the quarter2 6.85 times 7.43 times Total borrowings $798 million $734 million % of borrowing on fixed rates or hedged via 55% 59% interest rate swap
Slide 30: NAV up 4.7% to new high of $2.02 per unit
Balance sheet NAV up 4.7% to new high of $2.02 per unit Due mainly to surplus on revaluation of portfolio properties 30 Sep 2017 30 Sep 2016 As at S$’000 S$’000 Non-current assets 2,733,061 2,568,969 Current assets 17,804 25,508 Total assets 2,750,865 2,594,477 Current liabilities (202,016) (278,800
Slide 31: Weighted average debt maturity: 2.34 years
Balance sheet Weighted average debt maturity @ 30 Sep 2017: 2.34 years Type of borrowings Aggregate amount Unsecured bank borrowings: S$152 million (19.1%) Medium Term Note: S$360 million (45.1%) Secured bank borrowings*: S$286 million (35.8%) Total Borrowings: S$798 million (100.0%) $266m $230m (33
Slide 32: Total appraised value of portfolio properties: $2.7 billion
Balance sheet Total appraised value of portfolio properties: $2.7 billion Compression of valuation cap rates of between 25 bps and 60 bps compared to FY2016 FY2017 FY2016 Valuation @30.09.2017 Valuation @30.09.2016 Property Valuation Valuation Valuation Valuation Cap rate (a) Valuer Cap rate (a) Val
Slide 33: Operational performance
Operational performance
Slide 34: Portfolio occupancy improved to 92.0% from 87.1% Q-o-Q
Operational performance Portfolio occupancy improved to 92.0% from 87.1% Q-o-Q Improved occupancy at Northpoint City North Wing as reconfigured areas are handed over to tenants for fitting out Occupancy also improved at Causeway Point, Changi City Point, Bedok Point and Anchorpoint Mall Occupanc
Slide 35: 4Q17 average rental reversion at +8.3%
Operational performance 4Q17 average rental reversion at +8.3% Causeway Point accounts for 84.4% of the leased area renewed in 4Q17 4Q17 Leased area Change compared to (1 Jul – 30 Sep 2017) No. of renewals As % Mall’s NLA preceding rental rates1 Renewed (sq ft) Causeway Point 18 43,391 10.4% +7.6% N
Slide 36: FY2017 average rental reversion at +5.1%
Operational performance FY2017 average rental reversion at +5.1% FY2017 Leased Area Change compared to (1 Oct 16 – 30 Sep 17) No. of renewals As % Mall’s NLA preceding rental rates1 Renewed (sq ft) Causeway Point 83 161,006 38.7% +7.7% Northpoint City 23 20,929 9.6% +6.8% North Wing Changi City Poin
Slide 37: Maintaining positive rental reversions through economic cycles
Operational performance Maintaining positive rental reversions through economic cycles FCT Portfolio Average Rental Reversions1 15.0% 14.0% 12.8% 12.1% 9.9% 8.6% 7.2% 7.7% 6.5% 6.3% 5.1% FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 1. Based on the variance between the
Slide 38: Portfolio Lease Expiry as at 30 September 2017
Operational performance Portfolio Lease Expiry as at 30 September 2017 Weighted Average Lease Expiry (WALE) Expiry profile as % of total gross rental income By NLA 1.82 years (3Q17: 1.77 years) 35.6% 29.2% 26.9% By Gross Rent 1.73 years (3Q17: 1.69 years) 4.3% 4.0% Lease expiry1 as at 30 Sep 2017 FY
Slide 39: The 3 larger malls account for 73% of leased area to be renewed
Operational performance The 3 larger malls account for 73% of the leased area to be renewed in FY2018 as at 30 September 2017 Number of Lease Area Expiring as % of leased as % of total gross FY2018 Leases Expiring (sq ft) area of Mall rent of Mall Causeway Point 75 106,927 25.8% 27.4% Northpoint Cit
Slide 40: 4Q17 shopper traffic 9.9% lower y-o-y, 5.0% lower q-o-q
Operational performance 4Q17 shopper traffic 9.9% lower y-o-y, 5.0% lower q-o-q Overall traffic affected mainly due to AEI at Northpoint City North Wing, shopper traffic is 2.5% lower y-o-y and 2.6% lower q-o-q Shopper Traffic (millions)# 27.1 26.4 25.9 25.1 25.2 25.0 24.5 23.9 22.7 Jul -Sep 2015 Oc
Slide 41: Northpoint City North Wing AEI update
Northpoint City North Wing Northpoint City North Wing AEI update
Slide 42: Summary of the AEI for Northpoint City North Wing
Northpoint City North Wing AEI update Summary of the AEI for Northpoint City North Wing • The AEI is part of the overall strategy to periodically upgrade our malls to provide sustainable income growth for FCT • AEI was budgeted at $60 million and funded by borrowings and internal resources. The fina
Slide 43: More than 95% of the reconfigured areas have been leased
Northpoint City North Wing AEI update More than 95% of the reconfigured areas have been leased and handed over to the tenants Integration works with Northpoint City South Wing are in its final stage Projected versus Actual Occupancy at Northpoint City North Wing Projection Actual occupancy 81.9% 81.
Slide 44: Overview of Northpoint City
Northpoint City North Wing AEI update Overview of Northpoint City Northpoint City South Wing Owned by FCL Northpoint City North Wing Owned by FCT Note: North Park Residences, the residential component of the mixed-use development Northpoint City, comprises 12 blocks of total 920 units. 44
Slide 45: Rejuvenated mall with refreshed shopper experience
Northpoint City North Wing AEI update Rejuvenated mall with refreshed shopper experience 45
Slide 46: Outlook
YewTee Point Outlook
Slide 47: FCT’s malls to remain resilient
Outlook FCT’s malls to remain resilient • Excluding motor vehicles, retail sales index increased 3.7% year-on-year in August 2017. • Over at Northpoint City North Wing, while its integration works with South Wing are in its final stage, more than 95% of the reconfigured areas have been leased and ha
Slide 48: Thank you
Thank you Analyst & media contact: Chen Fung-Leng Frasers Centrepoint Asset Management Ltd Tel: (65) 6277-2657 Email: fungleng.chen@fraserscentrepoint.com Website: www.fct.sg
Slide 49: Appendix
Appendix
Slide 50: 4Q17 year-on-year and quarter-on-quarter comparison
Appendix: Year-on-year and quarter-on-quarter comparison 4Q17 year-on-year and quarter-on-quarter comparison Year-on-Year Comparison Quarter-on-Quarter Comparison 4Q17 4Q16 Change 3Q17 Change $’000 (unless otherwise indicated) Jul 17 to Sep 17 Jul 16 to Sep 16 Inc/(Dec) Apr 17 to Jun 17 Inc/(Dec) Gr
Slide 51: Portfolio Information as at 30 September 2017: Debt Information
Appendix: Portfolio Information as at 30 September 2017 Debt Information Average cost of Borrowings (all-in) 2.3% Annualised based on rates fixed @ 30 September 2017 Moody's rating Baa1 S&P rating BBB+ Interest cover (EBIT/Σinterest) (times) 6.80 For the quarter 1 Jul - 30 Sep 2017 Gearing 29.0% as
Slide 52: Portfolio Lease expiry profile as at 30 September 2017
Appendix: Portfolio Lease expiry profile as at 30 September 2017 as at 30 September 2017 FY2018 FY2019 FY2020 FY2021 FY2022 Total Causeway Point No of leases 75 73 72 3 0 223 Expiries as % Total NLA 25.8% 36.1% 31.5% 6.5% 0.0% 100.0% NLA (sq ft) Expiring 106,927 149,501 130,585 27,035 - 414,048 Expi
Slide 53: Trade mix as at 30 September 2017
Appendix: Trade mix as at 30 September 2017 As % of As % of total Gross Trade Classifications (in descending order of % rent) total NLA Rental Income 1 Food & Restaurants 30.8% 37.6% 2 Fashion 13.9% 19.1% 3 Services/Education 7.3% 9.0% 4 Beauty, Hair, Cosmetics, Personal Care 5.0% 7.3% 5 Household 8
Slide 54: Top 10 tenants by gross rental as at 30 September 2017
Appendix: Top 10 tenants by gross rental as at 30 September 2017 As % of total As % of No. Tenant Gross Rental total NLA Income 1 Cold Storage Singapore (1983) Pte Ltd1 5.4% 4.4% 2 Copitiam Pte Ltd2 3.8% 3.7% 3 Metro (Private) Limited3 5.6% 3.4% 4 Courts (Singapore) Limited 3.3% 2.8% 5 NTUC Fairpric
Slide 55: Historical portfolio information by quarter
Appendix: Historical portfolio information by quarter Occupancy by Properties Note: Yellow cells means property is undergoing AEI Property (Occupancy rate as at end of each quarter) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Causeway Point 99.5% 99.6% 99.2% 99.5% 99.2% 98.8% 99.0% 9
Slide 56: Summary of FCT’s portfolio of properties
Appendix: Portfolio Information Summary of FCT’s portfolio of properties FCT Portfolio Causeway Northpoint City Yishun 10 Changi City Bedok Point YewTee Point Anchorpoint Point North Wing Retail Podium Point Net Lettable 415,626 218,172^ 10,412 207,239 82,713 73,670 70,989 Area (sq ft)* 99 years lea
Slide 57: Summary of past Asset Enhancement Initiatives (AEIs)
Appendix: Summary of past AEIs Summary of past Asset Enhancement Initiatives (AEIs) Anchorpoint Northpoint Causeway Point (completed Nov 2007, (completed Mar 2010) (completed Dec 2012) relaunched in May 2008) Change in average rent Before AEI : $5.32 Before AEI : $11.00 Before AEI : $10.20 per sq ft
Slide 58: FCT’s investment in Hektar REIT
Appendix: FCT’s Investment in Hektar REIT FCT’s investment in Hektar REIT • FCT holds a 31.15% stake in Malaysia-listed Hektar REIT as at 30 September 2017. Hektar REIT portfolio comprises 6 retail malls in Malaysia 1. Subang Parade (Subang Jaya, Selangor); 2. Mahkota Parade (Bandar Melaka, Melaka);
Slide 59: Research Coverage on FCT
Appendix: Research Coverage on FCT Firm name (alphabetical order) Analyst 1. BNP Paribas Team Coverage 2. Bank of America Merrill Lynch Chua Donald 3. CIMB Lock Mun Yee 4. Citi Research Adrian Chua 5. CLSA Tan Xuan 6. Credit Suisse Nicholas Teh 7. Daiwa David Lum 8. DBS Vickers Derek Tan 9. HSBC Pra
Slide 60: Healthy economic fundamentals underpin resilience of Singapore’s retail malls
Appendix: Singapore Household median income and unemployment rate Healthy economic fundamentals underpin the resilience of Singapore’s retail shopping malls Household median income in Singapore Low unemployment rate in Singapore continues to grow $10,000 4.0 8,666 8,846 $9,000 8,292 7,872 3.4 $8,000
Slide 61: Singapore Retail Sales Index (RSI)
Appendix: Singapore Retail Sales Index (RSI) Singapore Retail Sales Index (RSI) Percentage Change Over Corresponding Period Of Previous Year At Current Prices YoY change of Retail Sales Index excluding motor vehicles(%) This table excludes the data for motor vehicle sales and petrol services 2016 20
Slide 62: FCT Historical Trading Data
Appendix: FCT Historical Trading Data 9 months 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Unit Price (S$) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Sep Highest 1.890 1.460 1.400 1.580 1.570 2.020 2.320 2.000 2.150 2.210 2.170 Lowest 1.300 0.490 0
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