Frasers Property Ltd. · SGX:TQ5

Frasers Property — Frasers Commercial Trust — 3QFY16 Earnings Presentation

38 slides from Frasers Property's earnings presentation, Jul 22, 2016

  1. Slide 1: Frasers Commercial Trust 3QFY16 Financial Results

    Frasers Commercial Trust 3QFY16 Financial Results 22 July 2016

  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  Results  Actual vs. forecast results for 357 Collins Street  Portfolio review  Capital management  Moving Forward

  4. Slide 4: Results

    Results Z J Pease TRUST

  5. Slide 5: Results – Key highlights

     Results – Key highlights 5 Alexandra Technopark and contribution from 357 Collins Street continue to boost performance in 3QFY16 Distribution to Unitholders (S$’000) 18.6% increase in distribution to Unitholders 1 Higher contribution from Alexandra Technopark:  Higher rental rates achieved  Lowe

  6. Slide 6: Results – 3QFY16 Financial highlights

     Results – 3QFY16 Financial highlights 6  19% rise in distributable income for 3QFY16 1 Apr 2016 – 30 Jun 3QFY16 Y-o-Y Contributing factors 2016 (S$ ‘000) Change (%)  Higher revenue contribution from Alexandra Technopark due to higher rental rates, Gross Revenue 38,550 11% contribution from 357 C

  7. Slide 7: Results – 3QFY16 Financial highlights

     Results – 3QFY16 Financial highlights 7 Better performance from Alexandra Technopark and contribution from 357 Collins Street TOTAL: S$28.1 million 3QFY16 Net Property Singapore: S$15.5 million (55%) Income (S$m) Australia: S$12.6 million (45%) * Affected units were mainly retail units at 18 Cross

  8. Slide 8: Results – Financial highlights

     Results – Financial highlights 8  Continuous DPU growth for 3QFY16 DPU (Cents) 3%

  9. Slide 9: Results – Distribution payment

     Results – Distribution payment 9 DRP will be applied for the distribution for 3QFY16 Distribution Period 1 April 2016 to 30 June 2016 Distribution of 2.4101 cents per Unit comprising: a) taxable income distribution of 1.6875 cents; Ordinary Unit Distribution Rate b) Tax-exempt income distribution

  10. Slide 10: Actual vs forecast results for 357 Collins Street

    Actual vs forecast results for 357 Collins Street

  11. Slide 11: Actual vs forecast results for 357 Collins Street in 3QFY16

     Results - Actual vs forecast results for 357 Collins Street in 3QFY16 11 Actual net property income of 357 Collins Street surpassed forecast by 12% ^ Includes the reimbursement of rent-free periods of A$0.04 million each for the forecast and actual results for 3QFY16. * Profit forecast of 357 Coll

  12. Slide 12: Portfolio review

    Portfolio review FRASERS COMMERCIAL

  13. Slide 13: Portfolio review – Valuation

     Portfolio review – Valuation 13  Balanced portfolio consisting of Singapore and Australian properties  No one property consist of more than 29% of portfolio value Singapore Perth Canberra Singapore $ 1,209.1 62% Melbourne Australia $ 747.8 38% Total $ 1,956.9 100% As at 30 June 2016. Excludes re

  14. Slide 14: Portfolio review – Occupancy Rates & WALE

     Portfolio review – Occupancy Rates & WALE 14  Healthy average occupancy rate of 93.3%  Healthy WALE of 3.1 years Geographical occupancy and % of NPI contribution As at Key portfolio statistics 30 June 2016 Ave Occupancy 93.3% Portfolio WALE by gross rental 3.1 years income  China Square Central

  15. Slide 15: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 15 15  Minimal lease expiries for FY16  Microsoft has extended its current lease for a further 5 years from FY17 to FY22  Proactive leasing reduced lease expiries in FY18 and lengthened lease expiry profile Portfolio lease expiry by gross rental income Mi

  16. Slide 16: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 16 FY16 - Minimal lease expiries for the Singapore properties Property Lease Expiry in FY16 as a proportion of Property Lease Expiry in FY17 as a proportion of Portfolio Gross Rental Income Portfolio Gross Rental Income 7 (office) 16 (office) Number of lease

  17. Slide 17: Portfolio review – Rental reversions

     Portfolio review – Rental reversions 17 Singapore properties continue to achieve positive rental reversions for new and renewed leases that commenced in 3QFY161 despite the challenging leasing market China Square Central: 55 Market Street: Alexandra Technopark: +5.5%2 +10.3% +8.4% As at 30 June 20

  18. Slide 18: Portfolio review – Robust leasing activities

     Portfolio review – Robust leasing activities 18  Robust leasing activities  Committed, new and renewed tenants in 3QFY16 include: Tenant Industry Property The 3rd Space Management Pte Ltd Retail China Square Central Multimedia and Wavecell Pte Ltd China Square Central telecommunications Pana Har

  19. Slide 19: Portfolio review – Mid-term rent reviews

     Portfolio review – Mid-term rent reviews 19 19 More than 52% of leases have built-in step-up rents FY16 - Fixed % and other fixed lease rent reviews FY16 – 19 - Portfolio fixed % reviews GROSS RENTAL INCOME Average Total Property Leases step-up rent Property Portfolio China Square 3 2.5% 4.0% 0.8%

  20. Slide 20: Portfolio review – Stability of income

     Portfolio review – Stability of income 20 Top 10 tenants:  Established and well diversified across various sectors  MNCs, government department or public listed companies  Contribute 57% of portfolio gross rental income and have a long WALE of 5.4 years Top 10 tenants by gross rental income % (

  21. Slide 21: Asset updates – Developments at China Square Central

     Asset updates – Developments at China Square Central 21  Construction work for the development of a 16 storey hotel and Commercial Project1 are on track2  New retail and commercial spaces with better frontage and visibility will also be created2  Construction expected to be completed by mid-201

  22. Slide 22: Asset updates – Alexandra Technopark

     Asset updates – Alexandra Technopark 22  Microsoft extended its current lease at Alexandra Technopark for a further five years  Current lease originally expiring in FY17 will now expire in FY22  Alexandra Technopark continues to attract tenants with its strategic location within Alexandra Preci

  23. Slide 23: Asset updates – Alexandra Technopark

     Asset updates – Alexandra Technopark 23  Hewlett-Packard Enterprise (“HPE”) and Hewlett-Packard Singapore (“HPS”) collectively occupy 47.6% of Alexandra Technopark1  Space occupied by HPE and HPS decreased by 1.3% points compared to a year ago  Continuous tenant engagement and proactive leasing

  24. Slide 24: Asset updates – Central Park

     Asset updates – Central Park 24  Retail arcade at Central Park has been revamped  New identity created for the retail shops with a refreshed and contemporary look Before After  Modern outdoor sitting area  Full height glass shopfront and improved shop presentation  Brigher and more spacious f

  25. Slide 25: Portfolio review – Singapore asset updates

     Portfolio review – Singapore asset updates 25 China Square Central – full 55 Market Street – Alexandra Technopark – occupancy at office tower healthy occupancy rate healthy occupancy rate Occupancy 88.6%* (office tower: 100.0%) 95.8% 94.8% WALE 1.5 years 1.2 years 1.5 years (1.9 years with lease e

  26. Slide 26: Portfolio review – Australia asset updates

     Portfolio review – Australia asset updates 26 Caroline Chisholm Centre Central Park – Healthy WALE of – full occupancy with 357 Collins Street – full 2.2 years long WALE of 9.0 years occupancy Occupancy 80.4%^ 100.0% 100.0% WALE 2.2 years (6.8 years with new lease#) 9.0 years 4.8 years New leases,

  27. Slide 27: Capital management

    Capital management FRASERS COMMERCIAL

  28. Slide 28: Capital Management – Debt statistics

    28  Capital Management – Debt statistics 28  Healthy interest coverage ratio of 4.5 times  Low average interest rate of 2.99%  Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 30 June 2016 Total Assets (S$’000) 2,027,599 Gro

  29. Slide 29: Capital Management and debt statistics

    29  Capital Management and debt statistics 29  Well spread debt maturity profile  No refinancing required until FY17  All debts are unsecured  Hedged 81% of gross borrowings on fixed rate Debt maturity Debt composition – floating vs. hedged Weighted average term to maturity: 2.6 years 1 Hedging

  30. Slide 30: Moving forward

    Moving forward

  31. Slide 31: Solid fundamentals - Singapore office rents

     Solid fundamentals - Singapore office rents 31 Singapore office - Grade B rents relatively more stable Singapore Grade A and Grade B office rents1 Grade A CBD Core ↓ 4.0% qoq to S$9.50 psf Grade B Islandwide ↓ 3.3% qoq to S$7.25 psf Grade B CBD Core ↓ 3.8% qoq to S$7.65 psf Source: CBRE Research 1

  32. Slide 32: Solid fundamentals - demand, supply and outlook for Singapore CBD office

     Solid fundamentals - demand, supply and outlook for Singapore CBD office 32 Office supply-demand dynamics and vacancy rates 1  Q2 2016 total Islandwide office net absorption was negative 74,741 sf, the fourth consecutive quarter of contraction  Net new demand remained muted with few expansions a

  33. Slide 33: Solid fundamentals - Singapore business park rents

     Solid fundamentals - Singapore business park rents 33 Singapore business park rents trend – City fringe business park rents increased 2% in Q2 20161 Singapore Business Park (city fringe) rents1 Source: CBRE Research 1 CBRE, Singapore Market View, Q2 2016

  34. Slide 34: Solid fundamentals - demand, supply and outlook for business park

     Solid fundamentals - demand, supply and outlook for business park 34 Business Park supply-demand dynamics and future pipeline1  Business parks island-wide vacancy increased to 13.8% in Q2 2016 from 10.6% in Q1 2016, mainly due to the inclusion of Mapletree Business City II  Transactions and enqu

  35. Slide 35: Perth CBD office supply and rents

     Perth CBD office supply and rents 35  Overall market indicators are beginning to show signs of stabilisation  Net absorption in the twelve months to January 2016 was 21,043 sqm  Leasing activity up 35% in the twelve months to March 20161  Net face rents in Perth range from A$625 to A$750 per s

  36. Slide 36: Melbourne CBD office supply and rents

     Melbourne CBD office supply and rents 36  Premium and A-grade net absorption totalled 43,792 sqm, accounting for 78% of the Melbourne CBD office space absorbed1  Melbourne continues to have the second lowest vacancy rate amongst all of Australia’s CBDs - vacancy rate for Grade A office fell from

  37. Slide 37: Delivering growth

     Delivering growth 37 37 Organic and in-organic initiatives to deliver growth in distributable income Grow portfolio organically and inorganically Proactive Asset enhancement management of expiring leases DPU initiatives Prudent capital management

  38. Slide 38: 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

Frasers Commercial Trust — 3QFY16 Earnings Presentation on 6ix