Frasers Property Ltd. · SGX:TQ5

Frasers Property — Frasers Commercial Trust — OCBC Global Treasury REITs Presentation 2014

43 slides from Frasers Property's conference presentation, August 2014

  1. Slide 1: Frasers Commercial Trust OCBC Global Treasury REITs Presentation 2014

    Frasers Commercial Trust OCBC Global Treasury REITs Presentation 2014 August 2014

  2. 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

  3. Slide 3: Contents

    Contents 3  Key highlights  Operational and financial overview  Supplementary materials

  4. Slide 4: Key highlights

    Be J IRAsERS TRUST

  5. Slide 5: Key highlights – Asset locations and valuation

     Key highlights – Asset locations and valuation 55  FCOT offers balanced exposure to 5 quality properties in Singapore and Australia  No single property consists of more than 32% of portfolio value 3QFY14 Portfolio Net Property Properties Portfolio Value 1 Income 2 office assets SINGAPORE 1 busin

  6. Slide 6: Key highlights - FCOT's competitive strengths

     Key highlights - FCOT’s competitive strengths 6 Strong sponsor Efficient capital Quality assets and risk and strategic management location FCOT’s competitive strengths Experienced Proactive asset management management team Corporate rating of Baa3, stable outlook

  7. Slide 7: Key highlights – Strong sponsor

     Key highlights – Strong sponsor 7 FCOT is supported by a strong sponsor Key attributes of sponsor  Frasers Centrepoint Limited (“FCL”) has strong foothold in property development, investment and management  Established track record  Strong financials  Strong regional footprint  Integrated pro

  8. Slide 8: Quality and strategically located assets – Singapore CBD

     Key highlights – Quality and strategically located assets 8  Singapore office assets are centrally located in the CBD area 55 Market Street Singapore CBD China Square Central

  9. Slide 9: Quality and strategically located assets – Alexandra Technopark

     Key highlights – Quality and strategically located assets 9  Alexandra Technopark is located within the prominent Alexandra business corridor, a dynamic business hub at the fringe of the Central area Alexandra Technopark Alexandra business corridor

  10. Slide 10: Quality and strategically located assets – Australia

     Key highlights – Quality and strategically located assets 10  Australian assets are strategically located Perth Canberra Central Park, Perth Perth CBD Tuggeranong Town Caroline Chisholm Centre, Centre, Canberrra Canberra

  11. Slide 11: High occupancy rates and WALE

     Key highlights – Quality and strategically located assets 11  High occupancy rates demonstrate the good location and connectivity of the assets FCOT Property Portfolio WALE by gross rental income 3.9 years (as at 30 June 2014) As at 30 June 2014. Excludes retail turnover rent

  12. Slide 12: Key highlights – Experienced management team

     Key highlights – Experienced management team 12  Experienced management team delivered fourth consecutive year of growth in distributable income and DPU since recapitalisation exercise  From FY09 – FY13:  Distributable income grew at 18.1% CAGR  DPU grew at 15.8% CAGR  NAV grew at 4.1% CAGR ^

  13. Slide 13: Key highlights – Baa3 corporate rating

     Key highlights – Baa3 corporate rating 13  Rated Baa3 with stable outlook by Moody’s  Balanced portfolio of properties  Properties located in well regulated markets – Singapore and Australia  Healthy lease expiry profile  Stable rents, recurring cashflows  Expects FCOT’s properties to contin

  14. Slide 14: Key highlights – Proactive asset management

     Key highlights – Proactive asset management 14  Manager constantly reviews trade mix and market position of properties to increase income and property values  Upgrading and unlocking value of property improves positioning of property and enhance future growth potential Before After After Before

  15. Slide 15: Key highlights – Efficient capital and risk management

     Key highlights – Efficient capital and risk management 15  Gearing consistently below 40.0% since recapitalisation exercise  Interest cover has more than doubled since FY09 demonstrates improved profile  Average interest rate decreased by 40.0% since 4QFY09 * In FY09, FCOT changed its financial

  16. Slide 16: Key highlights – Good corporate governance

    16  Key highlights – Good corporate governance 16  FCOT wins prestigious award in Corporate Governance  Runner-up, Singapore Corporate Governance Award under the REITs and Business Trust category, 14th SIAS Investors’ Choice Award  Award recognises companies with good corporate governance practi

  17. Slide 17: Operational and financial overview

    Operational and financial overview

  18. Slide 18: Operational and financial overview – Stability of income

     Operational and financial overview Contents 18 18 1. Stability of income  Healthy lease expiry profile  Healthy occupancy and long WALE  Quality tenants and master lease  Organic growth 2. Solid fundamentals 3. Growth strategy

  19. Slide 19: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 19 19 More than 43% of lease expiry in FY2018 and beyond provides income stability Portfolio lease expiry by gross rental income Number of leases expiring 20 47 62 27 21 NLA (sq ft) expiring 1,089,846 93,834 199,603 120,194 730,977 Expiries as % total NLA 48

  20. Slide 20: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 20 Low passing rents and higher occupancy provide opportunities for higher income Represents the expiry of master lease of Alexandra Technopark. Property Lease Expiry as a proportion of total However, underlying leases will Portfolio Gross Rental Income in F

  21. Slide 21: Lease expiry of Alexandra Technopark underlying leases

     Portfolio review – Lease expiry profile of Alexandra Technopark underlying leases 21 21  More than 38% of lease expiry in FY2018 and beyond after early renewal of 511,000 square feet of leases  Provide income stability after the expiry of Master Lease in August 2014 Alexandra Technopark underlyi

  22. Slide 22: Portfolio review – Rental reversions

     Portfolio review – Rental reversions 22 Positive rental reversions for new and renewed leases that commenced in 3QFY141 New tenant replaced an expired long lease which was contracted >10 years ago 87.0% 11.1% 11.5% 10.7% China Square 55 Market Alexandra Central Park Central Street Technopark2 As a

  23. Slide 23: Portfolio review – Occupancy Rates & WALE

     Portfolio review – Occupancy Rates & WALE 23  Strong average occupancy rate of 98.0%  Healthy WALE of 3.9 years Geographical occupancy and % of NPI contribution As at Key portfolio statistics 30 June 2014 Ave Occupancy 98.0% WALE by gross rental income 3.9 years As at 30 June 2014. Excludes reta

  24. Slide 24: Portfolio review – Mid-term rent reviews

     Portfolio review – Mid-term rent reviews 24 24 More than 41% of leases have built-in step-up rents FY14 - Fixed % and other fixed lease rent reviews FY14 – 17 - Portfolio fixed % reviews GROSS RENTAL INCOME Average Total Property Leases step-up rent Property Portfolio China Square 5 3.1% 4.1% 1.0%

  25. Slide 25: Portfolio review – Stability of income

     Portfolio review – Stability of income 25 Master lessee/ blue chip tenants with long leases contribute 66% of total gross rental income Master Leases % (Gross Rental Tenant Lease Expiry Income) Alexandra Technopark – Orrick Investments Pte Ltd Aug 2014 21.2% Blue Chip Tenants with Long Leases % (G

  26. Slide 26: Operational and financial overview – Solid fundamentals

     Operational and financial overview Contents 26 26 1. Stability of income 2. Solid fundamentals  Natural hedge in place  Well supported by financial institutions  Well spread debt maturity profile and improved gearing  Positive market outlook  Growing demand 3. Growth strategy

  27. Slide 27: Capital Management – Debt statistics

    27  Capital Management – Debt statistics 27  Healthy interest coverage ratio of 4.39 times  Low all-in interest rate of 2.8%  Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 30 June 2014 1,400 Total Assets (S$’000) 1,860,71

  28. Slide 28: Capital Management and debt statistics

    28  Capital Management and debt statistics 28  Hedged about 51% of gross borrowings  In the midst of discussions to re-finance and term out all the debt Debt maturity Debt composition – floating vs. hedged Post debt prepayment and divestment of Japanese properties 1 Hedging debt As at As a % of:

  29. Slide 29: Solid fundamentals – positive market outlook

    2. Solid fundamentals – positive market outlook 29 Singapore office rents trend – Rents continue to grow Singapore Grade A and Grade B office rents1 1 Source: CBRE Research

  30. Slide 30: Solid fundamentals – proposed Singapore office projects

     Solid fundamentals – proposed Singapore office projects 30 Singapore office supply 2014 – 20171,2 Net absorption vs new supply1,2 Average new supply for 2014 -2017 is in line with the average net absorption for 2011 - 2013 Major office supply: • CapitaGreen • Marina One • Cecil Street (700,000 sf)

  31. Slide 31: Demand likely to pick up on back of rising office rents

    2. Solid fundamentals – Demand likely to pick up on back of rising office rents 31 Singapore business park rents trend – Rents are rising for city fringe business park Singapore Business Park (city fringe) rents1 1 Source: CBRE Research

  32. Slide 32: Solid fundamentals – proposed Singapore business park supply

     Solid fundamentals – proposed Singapore office projects 32 Singapore business park supply 2014 – 20171  Only Mapletree Business City Phase 2 is located in the Alexandra Precinct area  Most of the supply are purpose built business parks (e.g. BTS Major business park supply: projects, training cen

  33. Slide 33: Perth CBD office supply and rents

     Perth CBD office supply and rents 33 Average Premium Grade net face rents are between A$725 – A$850 psm per annum Perth CBD office supply1 Market conditions 1  Perth CBD office market vacancy rate in January 2014 was 9.0%, up from 6.9% in July 2013  Only Melbourne’s vacancy rate (8.4%) is better

  34. Slide 34: Portfolio review – Asset updates

     Portfolio review – Asset updates 34 Attained 100.0% committed occupancy for the office tower of China Square Central  Continue to benefit from asset enhancement initiatives and Precinct Master Plan  Greater connectivity after Telok Ayer MRT station opened in December 2013  Attractive office acc

  35. Slide 35: Portfolio review – Asset updates

     Portfolio review – Asset updates 35  Expiry of Master Lease at Alexandra Technopark in August 2014 provides income uplift  Positive reversions arising from:  Immediate uplift in income after the expiry of the Master Lease  Low underlying passing rents  Alexandra Technopark is strategically lo

  36. Slide 36: Portfolio review – Singapore asset updates

     Portfolio review – Singapore asset updates 36 China Square Central – 55 Market Street – Alexandra Technopark – high occupancy rate healthy occupancy rate High occupancy rate Occupancy 98.1%^ 94.6%^ 96.9% (underlying occupancy) Average underlying passing gross rent: S$3.6 psf New leases , Coastal O

  37. Slide 37: Portfolio review – Australia asset updates

     Portfolio review – Australia asset updates 37 Central Park – Healthy Caroline Chisholm Centre –full occupancy WALE of 3.7 years with long WALE of 11.0 years Occupancy 94.1% 100.0% Property occupied by a single tenant, i.e. the Commonwealth of Australia as represented by Centrelink (Aaa rated*) unt

  38. Slide 38: Delivering growth

     Delivering growth 38 38 Organic and in-organic initiatives to deliver growth in distributable income Master Lease expiry at Alexandra Technopark in Aug 2014 Full-year effects of redemption/ Positive conversion of rental CPPUs reversions DPU Continue to China Square grow Central portfolio enhanceme

  39. Slide 39: Appendix

    2 yy ‘outta TRUST

  40. Slide 40: Key highlights - Properties in Singapore

     Key highlights - Properties in Singapore 40 55 Market Street, Singapore China Square Central, Singapore Alexandra Technopark, Singapore Description • 16-storey commercial property with 2 • 15-storey commercial office tower and • High-tech business space development floors (incl. basement) of retai

  41. Slide 41: Key highlights - Properties in Australia

     Key highlights - Properties in Australia 41 Central Park, Perth Caroline Chisholm Centre, Canberra Description • 47-storey premium grade, tallest building in Perth • 5-storey Grade A contemporary office building • Equipped with state of the art facilities, located in the heart of the CBD • Located

  42. Slide 42: Results – Financial highlights

     Results – Financial highlights 42 Better performance of China Square Central, offset by weaker performances of the Australian properties TOTAL: S$22.9 million 3QFY14 Net Property Singapore: S$11.6 million (51%) Income (S$m) Australia: S$11.3 million (49%)

  43. Slide 43: Thank you

    Thank you Frasers Centrepoint Asset Management (Commercial) Limited Level 21 | 438 Alexandra Road | Alexandra Point | Singapore 119958 Tel: +65 6276 4882| Fax: +65 6276 8942| Email: fcot@fraserscentrepoint.com www. fraserscommercialtrust.com

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