Capitaland Ascendas Reit · SGX:A17U
Capitaland Ascendas Reit — H1 2024 Earnings Presentation
60 slides from Capitaland Ascendas Reit's earnings presentation, Jul 30, 2024
Slide 1: 1H 2024 Financial Results
CapitaLand Ascendas REIT 1H 2024 Financial Results 30 July 2024 Aperia, Singapore
Slide 2: Agenda
Agenda 04 Key Highlights 06 Financial Performance 10 Investment Management 12 Capital Management 18 Asset Management 35 Market Outlook 42 Portfolio Resilience & Sustainability 52 Appendix: - Historical Financial Results - Singapore Occupancy The Shugart, Singapore (CLAR vs Industrial Average) - Aver
Slide 3: Disclaimers
Disclaimers • This presentation may contain forward-looking statements. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors i
Slide 4: Key Highlights
1H 2024 Financial Results 500 Green Road, Brisbane, Australia Key Highlights
Slide 5: Key Highlights
Key Highlights 1H 2024 Asset Healthy Portfolio Occupancy 93.1% Distributable Income Management 31 Dec 2023: 94.2% S$330.8 m +1.0% y-o-y Financial Positive Portfolio Rental Reversion# +13.4% Performance Distribution per Unit 7.524 cents -2.5% y-o-y Capital Healthy Aggregate Leverage 37.8% Investment
Slide 6: Financial Performance
1H 2024 Financial Results Financial Performance Croydon, London, United Kingdom
Slide 7: Financial Performance 1H FY2024 vs 1H FY2023
Financial Performance 1H FY2024 vs 1H FY2023 1H 1H (S$’m) Variance FY2024 FY2023 Mainly attributable to: • Acquisition of The Shugart, Singapore and The Chess Building, UK in May 2023 and Aug 2023 Gross revenue 770.1 718.1 7.2% respectively; • Completion of development of MQX4, Australia and convert
Slide 8: Financial Performance 1H FY2024 vs 2H FY2023
Financial Performance 1H FY2024 vs 2H FY2023 1H 2H (S$’m) Variance FY2024 FY2023 Mainly attributable to: • Full period contribution from the acquisition of The Chess Building, UK, completion of Gross revenue 770.1 761.7 1.1% development of MQX4, Australia and convert-to-suit project of 6055 Lusk Bou
Slide 9: Distribution Details
Distribution Details Distribution Period DPU (Singapore cents) 1 1 Jan 2024 to 30 Jun 2024 7.524 (1) Distribution timetable Last day of trading on “cum” basis 5 August 2024 (Monday) Ex-distribution date 6 August 2024 (Tuesday), 9.00 am Record date 7 August 2024 (Wednesday), 5.00 pm Distribution paym
Slide 10: Investment Management
1H 2024 Financial Results Investment Management 510 Townsend Street, San Francisco, United States
Slide 11: Asset Enhancement Initiative (Completed post-2Q 2024)
Asset Enhancement Initiative (Completed post-2Q 2024) Pacific Tech Centre, Singapore Completed works include refurbishment of interior finishes in the main lobby and upgrading of the existing common corridors on all levels with air-conditioning to improve the overall tenant Description and visitor e
Slide 12: Capital Management
1H 2024 Financial Results Capital Management Reynolds House, Manchester, United Kingdom
Slide 13: Healthy Balance Sheet
Healthy Balance Sheet ▪ Aggregate leverage is healthy at 37.8% (1)(2) ▪ Available debt headroom of ~S$4.4 b to reach MAS’s aggregate leverage limit of 50.0% As at As at As at 30 Jun 2024 31 Dec 2023 30 Jun 2023 Total Debt (S$m) (1)(2)(3) 6,726 6,724 6,560 Total Assets (S$m) (1)(2) 17,807 17,759 17,8
Slide 14: Total Borrowings: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2034 ▪ Average debt maturity healthy at 3.7 years (Dec 2023: 3.4 years) ▪ Green financing increased by S$0.6 b to S$2.7 b (1) in 1H FY2024, accounting for about 39% of total borrowings (1) 2%4% 34% 1400
Slide 15: Key Funding Indicators
Key Funding Indicators ▪ Robust financial metrics that exceed bank loan covenants by a healthy margin ▪ A3 credit rating facilitates good access to wider funding options at competitive rates As at As at As at 30 Jun 2024 31 Dec 2023 30 Jun 2023 Aggregate Leverage (1)(2) 37.8% 37.9% 36.7% Unencumbere
Slide 16: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management Proportion of Borrowings on Fixed Rates Refinancing in FY2024 ▪ ~83% of borrowings are on fixed rates with an average term ▪ S$377 m(2) of borrowings are due to be refinanced in FY2024 of 3.8 years ▪ A 50 bps increase in interest rate on refinancing is expected
Slide 17: High Natural Hedge
High Natural Hedge ▪ Maintained high level of natural hedge of ~76% for overseas investments to minimise the effects of any adverse exchange rate fluctuations AUD $ USD $ GBP £ EUR € 69% 72% 85% 100% A$ 2.6 b 2.5 (S$ 2.3 b) US$ 1.5 b (S$ 2.1 b) 2.0 A$ 1.7 b US$ 1.1 b S$ billion (S$ 1.6 b) £ 0.7 b (S
Slide 18: Asset Management
1H 2024 Financial Results Asset 3 Thomas Holt Drive, Sydney, Australia Management
Slide 19: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy -0.3% QoQ -1.8% QoQ +0.2% QoQ +1.8% QoQ -0.2% QoQ 96.8% 96.6% 99.5% 99.3% 97.5% 99.5% 92.0% 92.3% 92.3% 92.1% 93.1% 93.3% 94.4% 87.7% 89.5% Singapore United States Australia United Kingdom / Europe Total Portfolio Jun-24 Mar-24 Jun-23 Gross Floor 3,188,808 692,162 (2)
Slide 20: Singapore Occupancy
Singapore Occupancy ▪ Occupancy remained stable at 92.0%: o Higher occupancy at Hansapoint, a business space property (30 Jun 2024: 47.2% vs 31 Mar 2024: 36.5%) o Higher occupancy at Siemens Centre, an industrial property (30 Jun 2024: 94.0% vs 31 Mar 2024: 90.0%) o Offset by lower occupancy at 40 P
Slide 21: United States Occupancy
United States Occupancy ▪ Occupancy decreased to 87.7% mainly due to the expiration of leases at two single-tenant properties: o Lackman Business Centre 4, a logistics property (Kansas City) (30 Jun 2024: 0% vs 31 Mar 2024: 100%) o 9405 Gemini, a business space property (Portland) (30 Jun 2024: 0% v
Slide 22: Australia Occupancy
Australia Occupancy ▪ Occupancy remained stable at 96.8% driven by higher occupancy rates in business space properties: o Full occupancy at 1-5 Thomas Holt Drive, a business space property (Sydney) (30 Jun 2024: 100% vs 31 Mar 2024: 95.1%) o Higher occupancy at 254 Wellington Road, a business space
Slide 23: United Kingdom/Europe Occupancy
United Kingdom/Europe Occupancy ▪ Occupancy remained high at 99.3% due to the decommissioning of Welwyn Garden City, a data centre property (UK) As at 30 Jun 2024 31 Mar 2024 30 Jun 2023 Total UK/Europe Portfolio GFA (sqm) 588,305 (1) 599,705 (2) 588,985 UK/Europe Portfolio Occupancy (same-store) (1
Slide 24: Sources of New Demand in 1H 2024
Sources of New Demand in 1H 2024 By Gross Rental Income Singapore Engineering, 27.7% Engineering, 23.5% 25.8% Engineering, (2) Government Government and IO/NGOs/NPOs, and IO/NGOs/NPOs, 26.6% Government and IO/NGOs/NPOs,20.0% 21.6% Biomedical and Biomedical IT & Data Agri/Aquaculture, and Centers, 13
Slide 25: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Average portfolio rent reversion of leases renewed in 2Q 2024 and 1H 2024 was 11.7% and 13.4% respectively ▪ Rental reversion for FY2024 is expected to be in the positive high-single digit range % Change in Renewal Rates for Multi-tenant Buildings (1) 2Q 2024 1Q 2024 2Q
Slide 26: Weighted Average Lease Expiry
Weighted Average Lease Expiry By Gross Revenue ▪ Portfolio Weighted Average Lease Expiry (WALE) remained stable at 3.8 years WALE (as at 30 Jun 2024) Years Singapore 3.5 United States 4.3 Australia 2.9 United Kingdom/Europe 6.0 Portfolio 3.8 CapitaLand Ascendas REIT 1H 2024 Financial Results 26
Slide 27: Portfolio Lease Expiry Profile
Breakdown of expiring leases for Portfolio Lease Expiry Profile FY2024 and FY2025 As at 30 Jun 2024 o Portfolio WALE of 3.8 years 34.1% 42.3% o Lease expiry is well-spread, extending beyond FY2027 FY2024 o Weighted average lease term of new leases(1) signed in 1H 2024 was 3.5 years and contributed 2
Slide 28: Singapore: Lease Expiry Profile
Breakdown of expiring leases for Singapore: Lease Expiry Profile FY2024 and FY2025 As at 30 Jun 2024 34.3% o Singapore portfolio WALE of 3.5 years 46.4% o Lease expiry is well-spread, extending beyond FY2027 FY2024 o 7.2% of Singapore’s gross rental income is due for renewal in FY2024 19.3% 35% 32.4
Slide 29: United States: Lease Expiry Profile
Breakdown of expiring leases for United States: Lease Expiry Profile FY2024 and FY2025 As at 30 Jun 2024 o United States portfolio WALE of 4.3 years Portland , 7.1% o Lease expiry is well-spread, extending beyond FY2027 San Diego , 26.8% o 8.9% of United States’ gross rental income is due for renewa
Slide 30: Australia: Lease Expiry Profile
Breakdown of expiring leases for FY2024 and FY2025 Australia: Lease Expiry Profile As at 30 Jun 2024 2.4% Brisbane, o Australia portfolio WALE of 2.9 years 23.0% o Lease expiry is well-spread, extending beyond FY2027 FY2024 o 7.5% of Australia’s gross rental income is due for renewal in FY2024 Sydne
Slide 31: United Kingdom/Europe: Lease Expiry Profile
Breakdown of expiring leases for United Kingdom/Europe: Lease Expiry Profile FY2024 and FY2025 As at 30 Jun 2024 o United Kingdom/Europe portfolio WALE of 6.0 years o Lease expiry is well-spread, extending beyond FY2027 FY2024 o 0.8% of United Kingdom/Europe’s gross rental income is due for renewal
Slide 32: Improving Portfolio Quality
Improving Portfolio Quality Ongoing Projects ▪ There are six ongoing projects worth S$572.8 m that are undergoing redevelopment and refurbishment to improve returns of the existing portfolio. Estimated Total Cost Estimated City/Country Sub-segment (S$m) Completion Date Redevelopments 543.6 1 Science
Slide 33: Asset Enhancement Initiative (New): Aperia
Asset Enhancement Initiative (New) Aperia, Singapore The AEI will upgrade the drop-off point and entrances to enhance tenants’ and visitors’ arrival experience. Improvements will also be made to the retail mall layout and tenant mix to Description increase footfall. Selected industrial units along l
Slide 34: Asset Enhancement Initiative (New): ONE@Changi City
Asset Enhancement Initiative (New) ONE@Changi City, Singapore Refurbishment of interior finishings to modernise the South Tower main lobby and creation of new collaborative spaces to elevate the overall tenant and visitor experience. Description Property Segment Business Space & Life Sciences Net Le
Slide 35: Market Outlook
1H 2024 Financial Results Market Outlook Grab Headquarters, Singapore
Slide 36: Market Outlook: Macro Environment
Market Outlook Macro Environment ▪ According to the International Monetary Fund (IMF), global growth is expected to be at 3.2% in 2024 and 3.3% in 2025, a similar pace as 2023. ▪ The stable but slow outlook reflects resilient economic activity amidst continued restrictive monetary policies to fight
Slide 37: Market Outlook: Singapore
Market Outlook Singapore ▪ Based on advance estimates by the Ministry of Trade and Industry (MTI), the Singapore economy grew 2.9% y-o-y in 2Q 2024, extending the 3.0% growth in 1Q 2024. ▪ In May 2024, the MTI maintained its forecast for the Singapore economy to grow by 1.0% to 3.0% in 2024. The rec
Slide 38: Market Outlook: United States
Market Outlook United States (US) ▪ In 2Q 2024, the US economy grew at an estimated annual rate of 2.8% on higher consumer spending, wholesale trade and retail trade, as well as non-residential fixed investment, compared to the 1.4% growth in 1Q 2024. The IMF forecasts that the US economy will grow
Slide 39: Market Outlook: Australia
Market Outlook Australia ▪ In 1Q 2024, the Australian economy saw a modest growth of 0.1% q-o-q due to subdued domestic demand as increased consumption expenditure was offset by a decline in total investment. The IMF projects GDP growth of 1.4% in 2024 for Australia, a slower pace of growth than 202
Slide 40: Market Outlook: United Kingdom and Europe
Market Outlook United Kingdom (UK) ▪ In 1Q 2024, the economy grew by 0.7% q-o-q, following consecutive declines in the previous two quarters. Growth was driven by increases in the services sector and consumer spending. According to the IMF, the UK economy is projected to grow by a modest 0.7% in 202
Slide 41: Market Outlook: Summary
Market Outlook Summary ▪ Uncertainties surrounding the inflation trend, the pace and timing of monetary policy easing, as well as the intensity of ongoing geopolitical conflicts will continue to pose challenges to tenants’ businesses and CLAR’s operating costs. ▪ Leveraging on our resilient and well
Slide 42: Portfolio Resilience & Sustainability
1H 2024 Financial Results Portfolio Resilience & Sustainability FM Global Centre, Singapore
Slide 43: Diversified Portfolio Across Developed Markets
Diversified Portfolio Across Developed Markets Investment Properties stood at S$16.9 b (1) 64% Singapore as at 30 Jun 2024 o Singapore: S$10.8 b 12% United States o United States: S$2.1 b Asset Value o Australia: S$2.3 b S$16.9 b (1) 14% Australia o United Kingdom/Europe: S$1.7 b 10% United Kingdom/
Slide 44: Multi-Asset Portfolio
Multi-Asset Portfolio Steering Towards Growth Sectors Steering our portfolio towards asset classes that cater 45%, Business Space and Life Sciences to the changing market and tenant requirements arising Business Space from structural trends and changing consumption 37% patterns such as digitalisatio
Slide 45: A Diverse Mix of Tenants' Business Industries
A Diverse Mix of Tenants’ Business Industries Logistics & Supply Chain Management 65.4% 12.6% Engineering 11.7% customer base Data centres 10.3% Technology, logistics and life Biomedical Sciences 10.1% sciences industries Information & Communications Technology 8.8% Electronics 8.3% Financial Servic
Slide 46: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of more than 1,780 tenants ▪ Top 10 customers (as at 30 Jun 2024) account for about 17.5% of monthly portfolio gross revenue ▪ On a portfolio basis, weighted average security deposit is about 6.3 months of rental income Top 10 Customers by
Slide 47: Diversified Portfolio
Galaxis,4.2% Aperia,3.8% Diversified Portfolio 12, 14 & 16 Science Park Drive,2.6% ONE @ Changi City,2.5% Croydon,2.1% Nucleos,2.1% 510 Townsend Street,1.9% 40 Penjuru Lane,1.9% Kim Chuan Telecommunication Complex,1.8% 138 Depot Road,1.8% TelePark,1.8% 1, 3 & 5 Changi Business Park Crescent,1.7% The
Slide 48: Sustainability Management Structure
Sustainability Management Structure Provide strategic CLI Board of Directors oversight of The Manager’s Sustainability Committee (SC) ESG policies (Established in 2020) and Strategy and Sustainability Committee integration (Board Committee) Chairman: CEO Provide CLI Leadership Council Serves as sust
Slide 49: CapitaLand Ascendas REIT's ESG Targets
CapitaLand Ascendas REIT’s ESG Targets ENVIRONMENTAL SOCIAL GOVERNANCE • New acquisitions / developments to • Zero incidents resulting in staff • Zero lapses in corporate governance / meet a targeted green certification permanent disability or fatality corruption / employee misconduct rating(1) • At
Slide 50: Continued Momentum for Green Initiatives
Continued Momentum for Green Initiatives CLAR continues to push boundaries in our environmental efforts, embodying our commitment as a responsible real estate player. Green Properties Green Energy Green Financing 47% 25 >S$2.6b Singapore green-certified properties with Green properties Financing⁴ so
Slide 51: Steadfast in Commitments
Steadfast in Commitments CLAR’s commitments and ongoing efforts on ESG have garnered recognition from international benchmarks and standards. Latest Achievements Green Certifications Real Estate Assessment Public Disclosure ‘A’ Rating for four years consecutive - SINGAPORE GOVERNANCE AND TRANSPARENC
Slide 52: Appendix
1H 2024 Financial Results Appendix 540-570 Congress Circle South, Chicago, United States
Slide 53: Historical Financial Results
Historical Financial Results Financial Highlights 1H 2023 2H 2023 FY2023 1H 2024 (S$ m) Gross Revenue 718 762 1,480 770 Net Property Income 509 514 1,023 528 Total Amount Available for Distribution 327 327 654 331 No. of Units in Issue (m) 4,391 4,394 4,394 4,397 Distribution Per Unit (cents) 7.719
Slide 54: Singapore Occupancy: CLAR vs Industrial Average
Singapore Occupancy CLAR vs Industrial Average 100.0% 97.6% 94.7% 91.3% 91.3% 90.0% 83.2% 80.0% 78.3% 70.0% Occupancy Rate 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Business Space & Life Sciences Industrial and Data Centres Logistics CLAR JTC Statistics Source : CLAR's Singapore portfolio as at 30 Ju
Slide 55: Average Market Rents (Singapore)
Average Market Rents (Singapore) By Segment 120.00 Rental Index of All Singapore Industrial Property Rental Index (Base Year: 4Q2012) 100.00 80.00 60.00 40.00 20.00 0.00 $6.5 Average Gross Rents ($ psf per month) Business Park (City Fringe): $6.10 psfpm $6.0 $5.5 $5.0 $4.5 $4.0 Business Park (Rest o
Slide 56: Singapore Industrial Market: New Supply
Singapore Industrial Market New Supply ▪ Potential new supply of 3.25 m sqm* (6.1% of existing stock) over next 3 years, of which ~73% are pre-committed ▪ Island-wide occupancy as at 31 Mar 2024 stood at 88.7%, a decrease of 0.3 percentage point as compared to the previous quarter New Existing Suppl
Slide 57: Singapore Business & Science Park New Supply
Singapore Business & Science Park New Supply (1) Expected % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) 2024 Punggol Digital District (Phase 1 & 2) JTC Punggol Way 232,770 60% Science Park 2025 Geneo SPRINT Plot 1 TM Pte Ltd 112,330 0% Drive 27 International 20
Slide 58: Singapore Industrial & Data Centres New Supply
Singapore Industrial & Data Centres New Supply (1) Expected % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) Additions/alterations to 2024 United Microelectronics Corporation Pasir Ris Industrial Drive 1 232,070 100% Existing Factory 2024 Single User Factory Googl
Slide 59: Singapore Logistics New Supply
Singapore Logistics: New Supply (1) Expected % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) Warehouse Development at 2024 Mapletree Logistics Trust Benoi Road 82,380 0% Benoi Road Single-user industrial 2025 TL Development (WDG) Pte. Ltd Benoi Sector 103,670 100
Slide 60: Thank you
Thank you Galaxis, Singapore
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