Capitaland Ascendas Reit · SGX:A17U

Capitaland Ascendas Reit — Ascendas Real Estate Investment Trust — FY16/17 Earnings Presentation

63 slides from Capitaland Ascendas Reit's earnings presentation, May 2017

  1. Slide 1: Investor Presentation

    12, 14 & 16 Science Park Drive, Singapore Stage 4, Power Park Estate, Melbourne, Australia Investor Presentation May 2017 1

  2. Slide 2: Disclaimers

    Disclaimers This material shall be read in conjunction with Ascendas Reit’s financial statements for the financial quarter ended 31 March 2017. This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results

  3. Slide 3: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 3

  4. Slide 4: Overview of Ascendas Real Estate Investment Trust

    Overview of Ascendas Real Estate Investment Trust  First and largest business space and industrial REIT listed on the Singapore Exchange and a constituent of the FTSE Straits Times Index effective 4 June 2014  Total assets of about S$10.2bn (US$7.3bn)  Issuer and senior unsecured rating of A3 by

  5. Slide 5: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Business Parks Science Parks (as at 26 Apr 2017) Portfolio GFA (sqm) 410,647 411,587 % of Ascendas Reit - by GFA 11% 11% - by asset value 18% 20% Characteristics Zone is defined by Govt Master Plan. Sub

  6. Slide 6: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Integrated Development, Hi-Specs Industrial Data Centres (as at 26 Apr 2017) Amenities & Retail (IDAR) Portfolio GFA (sqm) 157,299 509,824* 109,756 % of Ascendas Reit - by GFA 4% 14% 3% - by asset value

  7. Slide 7: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Light Industrial Flatted Factories Logistics & (as at 26 Apr 2017) Distribution Centres Portfolio GFA (sqm) 393,740 197,143 835,825* % of Ascendas Reit - by GFA 11% 5% 22% - by asset value 7% 3% 13% Cha

  8. Slide 8: Ascendas Reit’s Singapore Property Map

    Ascendas Reit’s Singapore Property Map  Strategically located along major expressways  Several properties e.g. Business Park, Science Park and some High-Specs Industrial properties are in close proximity to MRT stations  Light Industrial and Hi-Specs Industrial properties are primarily centrally

  9. Slide 9: Australia Portfolio – 29 Properties

    Australia Portfolio – 29 Properties * (28 Logistics, 1 Business Park) Brisbane 155,966 sm Sub-sector Logistics Business Park Perth 20,895 sm Logistics 7 properties No. of 28 * 1 Properties Logistics 1 property Portfolio 687,532 22,628 GLA/NLA (sqm) % of Ascendas Reit 18% 1% - by GFA 11% 2% - by asse

  10. Slide 10: Ascendas Reit’s Steady Growth since Listing

    Ascendas Reit’s Steady Growth since Listing 10

  11. Slide 11: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 11

  12. Slide 12: Key Highlights for FY16/17

    Key Highlights for FY16/17  Total amount available for distribution rose by 18.0% y-o-y to S$446.3m • Key contributors were new acquisitions in FY15/16 and FY16/17: Australian Portfolio, ONE@Changi City (Singapore), 197-201 Coward Street (Australia) and 12, 14 & 16 Science Park Drive (Singapore) 

  13. Slide 13: Key Highlights for FY16/17

    Key Highlights for FY16/17  Assets Under Management increased to S$10.2b • S$565.6m of acquisitions in Australia and Singapore • S$35.8m of asset enhancement works • S$441.6m of divestments  Annual Property Revaluation • Total valuation of 129 properties# was S$9,874.2m as at 31 Mar 2017 • Same-st

  14. Slide 14: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 14

  15. Slide 15: FY16/17 vs FY15/16

    FY16/17 vs FY15/16 % (S$’000) FY16/17(1) FY15/16(1) fav/ (unfav) Gross revenue(2) 830,592 760,988 9.1 Net property income(3) 610,954 533,701 14.5 Total amount available for distribution(4) 446,304 378,321 18.0 DPU (cents) (5) 15.743 15.357 2.5 (1) The Group had 131 properties and 133 properties as a

  16. Slide 16: 4Q FY16/17 vs 3Q FY16/17

    4Q FY16/17 vs 3Q FY16/17 4Q 3Q % (S$’000) FY16/17(1) FY16/17(1) fav/ (unfav) Gross revenue(2) 208,937 208,626 0.1 Net property income(2) 154,069 154,970 0.6 Total amount available for distribution 111,862(3) 115,086 2.8 DPU (cents)(4) 3.852 3.993 3.5 (1) The Group had 131 properties and 130 properti

  17. Slide 17: Distribution Details

    Distribution Details Stock Counter Distribution Period DPU (cents) # Taxable Tax-exempt Capital Total Income Income Ascendas Reit 16 Feb 2017 to 1.818 0.027 0.114 1.959 31 Mar 2017 Distribution Timetable Last day of trading on “cum” basis 28 Apr 2017 (Friday) Ex-distribution date 2 May 2017 (Tuesday

  18. Slide 18: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 18

  19. Slide 19: Investment Highlights in FY16/17

    Investment Highlights in FY16/17 Purchase Country Consideration / Completion Date Value (S$m) Acquisitions 565.6 197 – 201 Coward Street, Mascot, Australia 145.6(1) Sep-16 Sydney 12, 14 & 16 Science Park Drive Singapore 420.0 Feb-17 Asset Enhancement Initiatives 35.8 2 Senoko South Road Singapore 12

  20. Slide 20: High Quality Science Park Acquisition: 12, 14 & 16 Science Park Drive

    High Quality Science Park Acquisition: 12, 14 & 16 Science Park Drive (DNV/DSO) Purchase Consideration S$420.0m Acquisition Fee, Stamp S$17.5m Duty and Other transaction costs Total Acquisition Cost S$437.5m Vendor Ascendas Land (Singapore) Pte Ltd Valuation (as at 31 S$440.0m March 2017) Land Area

  21. Slide 21: First Australian Business Park Acquisition: 197-201 Coward Street

    First Australian Business Park Acquisition: 197-201 Coward Street, Mascot, Sydney Purchase Consideration A$143.4m Acquisition Fee, Stamp A$10.0m Duty and Other transaction costs Total Acquisition Cost A$153.4m Vendor Frasers Property Australia Valuation (as at 31 March A$148.0m by Knight Frank 2017)

  22. Slide 22: Divestments in FY16/17 to Recycle Capital

    Divestments in FY16/17 to Recycle Capital  Divested 4 properties, realising total capital gains of S$194.6m over original costs Four Acres Singapore A-REIT Jiashan Logistics Centre Ascendas Z-Link A-REIT City @Jinqiao Description Built-to-suit global Single-storey logistics facility Business Park B

  23. Slide 23: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 23

  24. Slide 24: Healthy Balance Sheet

    Healthy Balance Sheet  Aggregate leverage improved to 33.8% (from 37.3% in March 2016) on the back of divestment proceeds, equity fund raising and Exchangeable Collateralised Securities (ECS) conversion into Units  Available debt headroom of S$2.1b to reach 45.0% aggregate leverage As at As at As

  25. Slide 25: Well-spread Debt Maturity Profile

    Well-spread Debt Maturity Profile  Well-spread debt maturity with the longest debt maturing in 2029  Average debt maturity: 3.3 years 17% 800 43% Diversified 12% 700 Financial Resources 600 248 500 100 28% SGD (million) 95 400 301 300 593 200 451 200 350 357 100 200 200 192 154 - - - - - - - - - -

  26. Slide 26: Key Funding Indicators

    Key Funding Indicators  Robust indicators enable Ascendas Reit to borrow at competitive costs As at As at As at 31 Mar 17 31 Dec 16 31 Mar 16 Aggregate Leverage 33.8%(2) 31.8% 37.3% Unencumbered properties as % of total 89.3% 77.3% 77.2% investment properties(1) Interest cover ratio 5.7 x 5.6 x 5.5

  27. Slide 27: Prudent Interest Rate Risk Management

    Prudent Interest Rate Risk Management  78.9% of borrowings is hedged for an average term of 3.2 years  50 bps increase in interest rate is expected to have a pro forma impact of S$3.6m decline in distribution or 0.12 cent in DPU Increase in Decrease in Change as Pro forma DPU interest rates distri

  28. Slide 28: Annual Property Revaluation

    Annual Property Revaluation  Total valuation of 129 properties was S$9,874.2m  Same-store valuation of 127 properties @ 31 Mar 2017(2) was stable at S$9,276m (vs. S$9,177m @ 31 Mar 2016(3))  Capitalisation rate of 6.29% for total portfolio (vs. 6.34% @ 31 Mar 2016) As at 31 Mar 2017 Valuation (S$

  29. Slide 29: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 29

  30. Slide 30: Overview of Portfolio Occupancy

    Overview of Portfolio Occupancy 100.0% 96.3% 97.5% 94.7% 88.6% 88.1% 87.9% 90.2% 90.2% 87.6% 90.0% 80.0% 70.0% 60.0% 51.2% 50.0% 40.0% 30.0% 20.0% 10.0% N.A.(1)N.A.(1) 0.0% Singapore Australia China Total Mar-17 Dec-16 Mar-16 Gross Floor 3,025,823(2) 692,153(3) N.A. 3,717,976(4) Area# (sqm) Note: (1

  31. Slide 31: Singapore: Occupancy

    Singapore: Occupancy  Occupancy rose by 50 bps to 88.6% boosted by the acquisition of 12, 14 & 16 Science Park Drive and new take ups at 40 Penjuru Lane and Pioneer Hub As at 31 Mar 2017 31 Dec 2016 31 Mar 2016 Total Singapore Portfolio GFA (sqm) 3,025,823(1)(2)(3) 2,946,951 (1) (2)(3) 2,967,777(4)

  32. Slide 32: Australia: Occupancy

    Australia: Occupancy  Occupancy fell to 96.3% mainly due to the termination of a short-term license space at 494 - 500 Great Western Highway (Sydney) As at 31 Mar 2017 31 Dec 2016 31 Mar 2016 Total Australian Portfolio GFA (sqm) 692,153(1) 692,153(1) 669,525 Australian Portfolio occupancy (same sto

  33. Slide 33: Singapore: Sources of New Demand (4QFY16/17)

    Singapore: Sources of New Demand (4QFY16/17)  Continues to attract demand from a wide spectrum of industries By Gross By NLA Revenue 33

  34. Slide 34: Singapore: Sources of New Demand (FY16/17)

    Singapore: Sources of New Demand (FY16/17)  Continues to attract demand from a wide spectrum of industries By Gross By NLA Revenue 34

  35. Slide 35: Achieved Positive Portfolio Rental Reversions in FY16/17

    Achieved Positive Portfolio Rental Reversions in FY16/17  Achieved 3.1% positive rental reversion in FY16/17  Rental reversion is expected to be subdued or flat in view of current global uncertainty, lower anticipated demand and excessive supply of industrial properties in Singapore % Change in Re

  36. Slide 36: Weighted Average Lease Expiry

    Weighted Average Lease Expiry (By gross revenue)  Portfolio Weighted Average Lease Expiry (WALE) at 4.3 years WALE (as at 31 March 2017) Years Singapore 4.3 Australia 4.9 Portfolio 4.3 36

  37. Slide 37: Portfolio Lease expiry profile

    Portfolio Lease expiry profile (as at 31 Mar 2017) Breakdown of expiring leases  Portfolio weighted average lease to expiry (WALE) of 4.3 years for FY17/18 and FY18/19  Lease expiry is well-spread, extending beyond 2030 2%  About 16.6% of gross revenue is due for renewal in FY17/18 23% 26%  Weig

  38. Slide 38: Singapore: Lease expiry profile

    Singapore: Lease expiry profile (as at 31 Mar 2017) Breakdown of expiring leases  Singapore portfolio weighted average lease to expiry (WALE) for FY17/18 and FY18/19 of 4.2 years  Lease expiry is well-spread, extending beyond 2030 23% 27%  18.3% of Singapore’s gross revenue is due for renewal in

  39. Slide 39: Australia: Lease expiry profile

    Australia: Lease expiry profile (as at 31 Mar 2017) Breakdown of expiring leases for FY17/18 and FY18/19  Australia portfolio weighted average lease to expiry (WALE) of 4.9 years  Lease expiry is well-spread, extending beyond 2027  3.4% of Australia’s gross revenue is due for renewal in 45% FY17/

  40. Slide 40: Ongoing Projects: Improve portfolio quality

    Ongoing Projects: Improve portfolio quality Estimated Value Estimated (S$m) Completion Re-development 106.6 20 Tuas Ave 1 61.4 1Q 2018 50 Kallang Avenue 45.2 2Q 2017 Asset Enhancement Initiatives (AEI) 7.7 The Gemini 7.7 3Q 2017 Total AEI + Re-development 114.3 40

  41. Slide 41: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 41

  42. Slide 42: Well Diversified Portfolio

    Well Diversified Portfolio By value of Investment Properties 6.9% Logistics & 30.9% Distribution Hi-Specs Integrated Centres Singapore Business & Logistics and Industrial Development, 13% Science Amenities & Retail Distribution Business Park Centres Australia Park 69.1% 7% Australia 11% 2% Flatted F

  43. Slide 43: Tenants’ Industry Diversification

    Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 10.6% Distributors, trading company 9.8% Financial 9.7% M&E and Machinery & Equipment 8.6% Information Technology 7.4% Telecommunication & Datacentre 6.9% Electronics 6.8% Life Science 4.6% Food Produc

  44. Slide 44: Low Exposure to Manufacturing

    Low Exposure to Manufacturing As at 31 Mar 2017  9.8% of NLA occupied by tenants engaged in manufacturing activities 9.8%  Manufacturing activities include food & Tenants’ business beverages, aeronautical auxiliary equipment, activities by precision engineering etc. NLA  Non-manufacturing activit

  45. Slide 45: Quality and Diversified Customer Base

    Quality and Diversified Customer Base  Total customer base of around 1,390 tenants  Top 10 customers (as at 31 Mar 2017) account for about 20.8% of portfolio gross rental income  Security deposits for single-tenant properties range from 3 to 11 months of rental income  On a portfolio basis, weig

  46. Slide 46: Diversified Portfolio

    Diversified Portfolio Aperia, 5.4% ONE @ Changi City, 4.1% 12, 14, 16 Science Park Drive, 3.6% 1, 3, 5 Changi Business Park Crescent, 3.4% Kim Chuan Telecommunication Complex , 2.7% 40 Penjuru Lane, 2.4% TelePark, 2.4% 31 International Business Park, 2.3% Neuros & Immunos, 2.3% Hyflux Innovation Cen

  47. Slide 47: MTB Occupancy: NPI & DPU Sensitivity

    MTB Occupancy: NPI & DPU Sensitivity  100 bps increase in MTB occupancy is expected to result in a 0.9% increase in portfolio net property income or about 0.19 cents increase in DPU Change in MTB Expected change in Change in portfolio Impact on full FY occupancy annualised MTB NPI NPI (%) DPU (cent

  48. Slide 48: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 48

  49. Slide 49: Market Outlook

    Market Outlook Singapore  Economy is expected to grow at 1.0% to 3.0% in 2017 (source: MTI).  Potential incoming supply of about 2.4m sqm of industrial space in 2017, will put further pressure on rental rates and occupancy (source: JTC).  There is growing optimism over global economic prospects.

  50. Slide 50: Agenda

    Agenda Overview of Ascendas Reit FY16/17 & 4Q FY16/17 Key Highlights Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook Ascendas Reit’s Strengths 50

  51. Slide 51: Ascendas Reit's Strengths

    Ascendas Reit's Strengths Diversity and Depth  Solid and well diversified portfolio  Five main property segments  Well-located and high quality properties  Balance of long term vs. short term leases provides stability with potential for positive rental reversions  No single property accounts fo

  52. Slide 52: Ascendas Reit's Strengths

    Ascendas Reit's Strengths  Downside protection in earnings • Stable portfolio with 83.4% of portfolio revenue committed for FY17/18 and a portfolio average lease to expiry of about 4.3 years • Mix of long term and short term leases provide earnings stability  Long term leases have a weighted avera

  53. Slide 53: Ascendas Reit's Strengths

    Ascendas Reit's Strengths  Development capability • Has capability and capacity to create own assets which could be more yield accretive than acquisitions of income producing properties  Operational platform (Property Manager, Ascendas Services Pte Ltd) • Dedicated asset management, sales/marketin

  54. Slide 54: Ascendas Reit's Strategies

    Ascendas Reit's Strategies Total Returns Predictable income Capital stability Proactive and Outcome dedicated Stability Growth manager with track record Strategies Prudent Proactive Value-Adding Capital & Risk Asset Investments Management Management Property Fund Manager: Fund Manager: Manager: Perf

  55. Slide 55: Additional Information

    Additional Information (1) Quarterly Results (2) Ascendas Reit Singapore Occupancy vs Industrial Average (3) Singapore Industrial Property Market 55

  56. Slide 56: Quarterly Results

    Quarterly Results (For illustrative FY15/16 FY16/17 purpose)# Summary (S$ m) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Gross Revenue 181 183 193 204 761 208 205 209 209 831 Net Property Income 124 124 142 144 534 149 152 155 155 611 Total amount available for 92 94# 97 89 372# 107 113 115 111 446 distribu

  57. Slide 57: New 1Q FY17/18 Acquisition: Stage 4, Power Park Estate

    New 1Q FY17/18 Acquisition: Stage 4, Power Park Estate, Dandenong South, Melbourne Purchase Consideration A$24.8m Acquisition Fee, Stamp Approx. A$0.8m Duty and Other transaction costs Total Acquisition Cost A$25.6m Vendor Goodman Dandenong Trust Valuation (as at 28 June A$24.8m by Urbis 2016) Land

  58. Slide 58: Ascendas Reit Singapore Occupancy vs Industrial Average

    Ascendas Reit Singapore Occupancy vs Industrial Average 100% 95% 89.8% 89.8% 89.7% 90% 87.9% 88.5% 88.4% 87.5% 85% 83.0% Occupancy 80% 75% 70% 65% 60% 55% 50% Business and Science Hi-Specs Industrial Light Industrial Logistics Park Ascendas Reit JTC Source : Ascendas Reit’s Singapore portfolio as at

  59. Slide 59: Average Market Rents by Segment (Singapore)

    Average Market Rents by Segment (Singapore) 120 4Q2016: Industrial Rental Index 93.8 100 80 2Q2016: 3Q2016: 96.2 94.3 60 40 20 Source : JTC 0 2015 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2016 5.5 $5.50 4.5 $4.29 $3.70 3.5 $3.10 2.5 $1.65 1.5 $1.64 0.5 2016Q1 2016Q2

  60. Slide 60: Singapore: In-place rent for MTB space due for renewal

    Singapore: In-place rent for MTB space due for renewal in FY17/18 and FY18/19  Actual rent reversion achieved depends on various factors such as location of property/ unit, lease terms etc. * * * Left Axis: Right Axis: * Rates for ground floor space 60

  61. Slide 61: Singapore Industrial Market: New Supply

    Singapore Industrial Market: New Supply  Total stock (net) : 46.3m sqm, of which • Business & Science Parks account for 2.1m sqm (4.6%) • Logistics & Distribution Centres account for 9.5m sqm (20.5%) • Remaining stock are factory space  Potential new supply (net) of about 2.7 m sqm (~5.9% of exist

  62. Slide 62: Singapore Business & Science Parks: New Supply

    Singapore Business & Science Parks: New Supply  No speculative business & science park supply going forward % Pre- Expected Location Developer NLA (sqm)* committed Completion (est) Completed 2016 Ayer Rajah (One-north) SHINE Systems Assets Pte Ltd 17,144 100% 2016 Science Park Ascendas Land (S) Pte

  63. Slide 63: The End

    The End Important Notice This presentation has been prepared by Ascendas Funds Management (S) Limited as Manager for Ascendas Real Estate Investment Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied u

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