CapitaLand Integrated Commercial Trust · SGX:C38U
CapitaLand Integrated Commercial Trust — CapitaCommercial Trust — H1 2008 Earnings Presentation
40 slides from CapitaLand Integrated Commercial Trust's earnings presentation, Jul 23, 2008
Slide 1: 1H 2008 Financial Results Briefing
CapitaCommercial p Trust 1H 2008 Financial Results Briefing 23 July 2008
Slide 2: Important Notice
Important Notice This presentation is focused on comparing actual results versus forecasts stated in the CapitaCommercial Trust (CCT)’s Circular dated 9 June 2008. This shall be read in conjunction with p paragraph g p 9 of CCT’s 2008 Second Quarter Unaudited Financial Statement and Distribution Ann
Slide 3: Agenda
Agenda Positive 1H 2008 Financial Results Proactive Capital Management Internal / Organic Growth Resilient Office Market Summary 3
Slide 4: Positive Financial Results
Positive Financial R Results lt
Slide 5: 1H 2008 DPU Up By 22.7%
1H 2008 DPU Up By 22.7% 1H 2008 1H 2007 Change g S$'000 S$'000 % Gross Revenue 145 585 145,585 117 400 117,400 24 0 24.0 Net Property Income 101,150 86,388 17.1 Distributable Income 71,918 58,526 22.9 Distribution Per Unit 5.19¢ 4.23¢ 22.7 Annualised DPU 10.44¢ 8.53¢ 22.4 1 2 Distribution Yield 5.5%
Slide 6: 1H DPU Outperforms Forecast by 4.2%
1H 08 DPU Outperforms Forecast by 4.2% 1 Jan 2008 to 30 Jun 2008 Actual Forecast1 Change S$'000 S$'000 % Gross Revenue 145,585 144,122 1.0 Net Property p y Income , 101,150 99,706 , 1.4 Distributable Income 71,918 68,969 4.3 Distribution Per Unit 5 19¢ 5.19¢ 4 98¢ 4.98¢ 42 4.2 Annualised DPU 10.44¢
Slide 7: Delivering Higher DPU Year-on-Year
Delivering Higher DPU Year-on-Year 16.3% Distribution yield based on 2009 Projected DPU and closing price per unit on 30 June 2008 of S$1.91 : 6.5% 22.0% 12.34 20 0% 20.0 (2) 10.44 10.61 18 7% 18.7% 7.6% 8.70 7.8% 7.33 6.81 6.32 (1) 15 May to 31 Dec FY 2005 FY 2006 FY 2007 1 Jan to 30 Jun Forecast F
Slide 8: Portfolio Value Increases to S$5.6 Bil
Portfolio Value Increases to S$5.6 Bil As at 1 Dec 07 As at 1 Jun 08 Variance S$ mil S$psf S$ mil S$psf % Capital Tower 1,224 1,652 1,283 1,734 4.8% 6 Battery Road 1,249 2,515 1,438 2,897 15.1% HSBC Building 270 1,347 363 1,811 34.4% Starhub Centre 350 1,247 362 1,288 3.4% Robinson Point 218 1,637 2
Slide 9: Total Assets at S$6.3B, Adj. NAV at S$3.12
Total Assets at S$6.3B, Adj. NAV at S$3.12 30 Jun 08 31 Dec 07 S$'000 S$'000 1 Non-current assets 5,719,939 5,238,359 2 Current assets 589 765 589,765 40 374 40,374 Total assets 6,309,704 5,278,733 3 Current liabilities 770,151 220,725 Non-current liabilities 1,135,949 1,120,386 Net assets 4,403,604
Slide 10: Distribution Details
Distribution Details Distribution Period From 1 Jan 2008 to 30 Jun 2008 5 9 ce 5.19 cents s Distribution Per Unit Taxable - 5.16 cents Tax-exempt - 0.03 cents Distribution Timetable T di on "E Trading "Ex"" B Basis i 30 JJuly l 2008 Books Closure Date 1 August 2008 Distribution Payment Date 28 Augus
Slide 11: Proactive Capital Management
Proactive Capital Management
Slide 12: S$1.2 bn of Debt raised for Acquisition of 1 George Street
S$1.2 bn of Debt raised for Acquisition of 1 George Street Issued S$370 million 2% coupon Convertible Bonds Convertible Bonds Yield To Maturity of 3.95% MTN Programme Raised S$150 million under MTN Programme 2-year Committed S$650 million – assumed rate: 4.8%; Secured Term Loan All-in interest rate
Slide 13: Strong Balance Sheet with Prudent Gearing
Strong Balance Sheet with Prudent Gearing As at As at As at 11 Jul 081 30 Jun 08 31 Dec 07 Total debt (S$'mil) 2 487 2 2,487.2 1 837 2 1,837.2 1,261.7 1 261 7 Gearing ratio2 35.7% 29.1% 23.9% g ratio3 Interest service coverage 3.5 times 3.5 times 3.3 times Average cost of debt 3.5% 3.7% 3.9% Average
Slide 14: Debt Maturity Profile
Debt Maturity Profile Several refinancing options available,, focus on finalising g well ahead of maturity 32% 27% 25% S$10 m RCS - short term CCT - S$650m loan (0.4%) Convertible CCT - Bonds S$580m 2-year (15%) CCT - CMBS committed S$520m (24%) secured RCS - CMBS CCT - short term loan1 (21%) term l
Slide 15: 95% of 2008 Interest Rate Is Fixed
95% of 2008 Interest Rate Is Fixed 93% 95% 83% 75% 61% 55% 40% 40% 30% 30% 2008 2009 2010 2011 2012 As At 30 Jun 08 As at 11 Jul 08 1 Note: 1. Date of completion of the acquisition of 1 George Street and drawdown of the S$650 mil 2-year secured term loan. 15
Slide 16: Internal / Organic Growth
Internal / Organic Growth (Portfolio (P f li before b f addition ddi i off g Street)) 1 George
Slide 17: 63% of Income Contributed by Office
63% of Income Contributed by Office CCT’s focus is owning and investing in real estate and real estate-related assets, which are income-producing and used, or predominantly used, for commercial purposes Major usage mix for CCT properties By Monthly Gross Rental Income (for the month of June 2008) Of
Slide 18: Portfolio Diversification with focus on Quality
Portfolio Diversification with focus on Quality 1 About 80% of Net Property Income contribution from Grade A assets and Raffles City2 Robinson Point, Market Street Car 2.5% Park, 1.5% Bugis Village, 3.9% Golden Shoe Car Park, 3.9% Starhub Centre, 4.3% Raffles City, 40.3% HSBC B Building, ildi 3.9% C
Slide 19: Diverse Office Trade Mix
Diverse Office Trade Mix¹ Telecommunications, Legal, 2.5% 2.6% Education, 2.1% Business Ancillary Food & Management/Consulta Beverage, 1.1% ncy Services/Business Activities, 2.7% Car Park Income, 4.5% Real Estate & Property Services, 7.4% IT Services & Banking, Insurance & Consultancy/Internet Finan
Slide 20: Committed Occupancy Consistently Above Market
Committed Occupancy Consistently Above Market CCT's Committed Occupancy p y Since Inception p 120.00% 100 00% 100.00% 98.8% 98 8% 92.3%1 80.00% 60 00% 60.00% CCT Occupancy Rate 40.00% URA Occupancy Index 20.00% 0.00% 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2004 2005 2006 2007 2008 Note: 1
Slide 21: Balanced Portfolio Lease Expiries
Balanced Portfolio Lease Expiries Most of 2008’s Expiries Have Been Renewed 19.6% 16.2% 15.1% 15.5% 10.7% 10.1% 8.5% 7.5% 2.7% 2.1% 2.5% 1.5% 0.4% 2 9% 2.9% 2 1% 2.1% 2008 2009 2010 2011 2012 and Beyond 1 2 Office Retail Hotels and Convention Centre Leases Renewed from 1 Jan to 30 Jun 2008 Notes: 1.
Slide 22: Well-Dispersed Office Lease Expiries Mitigate Concentration Risk
Well-Dispersed Office Lease Expiries Mitigate Concentration Risk Leases eases up for o Renewal e e a (by GGross oss Rental e ta Income) co e) as at 30 Jun 2008 30.5% 25.4% 24.2% 15.7% 16.8% 4.2% 4.5% 2008 2009 2010 2011 2012 and Beyond Leases Renewed from 1 Jan to 30 Jun 2008 22
Slide 23: Significantly Higher Rent Reversions Achieved Above Last Contracted Rent
Significantly Higher Rent Reversions1 Achieved Above Last Contracted Rent 250% 200% 193% 150% 100% 52% 50% 0% OFFICE RETAIL Note: 1. For leases signed g during g the p period 1 Jan to 30 June 2008 ((Both dates inclusive). ) Based on weighted g average g basis. 23
Slide 24: CCT Buildings' Rental Rates Consistently Outperform Market
1 CCT Buildings’ Rental Rates Consistently Outperform Market 3 Highest Rental Rates Est. Average Micro- Committed Market Rent2 (S$ psf pm) 1Q 2008 2Q 2008 1Q 2008 2Q 2008 Capital Tower3 - - 10.90 11.20 6 Battery Road 20.50 21.60 17.20 17.80 Raffles City Tower 16.50 16.70 10.90 11.50 Robinson Point 1
Slide 25: Upside Potential from Contracted Rental Rate
Upside Potential from Contracted Rental Rate Average Gross Rental Rate of Expiring Leases1 vs. Micro-Market Rent2 80% Capital Tower $12.00 6 Battery Road $20.00 Micro-Market Rent: S$11.20 psf pm 60% Micro-Market Rent: S$17.80 psf pm $10.00 $ 60% $16 00 $16.00 45% $8.00 40% $11.95 $12.00 40% $5.55 $6
Slide 26: Top 10 Tenants – Portfolio
Top 10 Tenants¹ – Portfolio 53% of Gross Rental Income Contributed by Top Ten Blue‐Chip Tenants 15.3% 13.5% 5.7% 4.4% 3.3% 3.2% 3.1% 2.3% 1.7% 1.4% RC Hotels Standard Government of Nomura JPMorgan CapitaLand The Hongkong Robinson & Cisco System Economic (Pte) Ltd Chartered Singapore Singapore Chase
Slide 27: Locked-in Gross Rental Income Provides Stability
Locked-in Gross Rental Income Provides Stab ty Stability % of Forecast Gross Rental Income Committed1 98% 70% FY 2008 FY 2009 Note: 1 The forecast and projected gross rental excludes gross rental income from Raffles City Singapore 1. Singapore. The forecasts and their accompanying assumptions are st
Slide 28: Resilient Office Market
Resilient Office Market Cap/taCommercial
Slide 29: Singapore's Core Office is Under-Supplied compared with World's Major Financial Centres
Singapore’s Core Office is Under-Supplied compared p with the World’s Major Financial Centres 229 160 Sq ft (mil) 121 81 50 39 23 9 Manhattan, NY Midtown NY London W. End London City (total) Sydney Tokyo Central (3- Hong Kong Singapore (Raffles (Grade A) (Grade A) (total) Kus) (Central) Place) Sourc
Slide 30: Singapore Has Only 6.7 mil sq ft of Grade A Office
Singapore Has Only 6.7 mil sq ft of Grade A Office Outside of Central Region Grade A 2.2 Fringe Area Office, 4% 11.1 6.7 mil 20% sq ft f Downtown Core Other Area in sq ft (mil) 27.5 Office 49% grades, Rest of 20.8 mil Central Area sq ft f 10.9 19% Orchard Rd 4.3 8% • Singapore’s g p Total Office Sto
Slide 31: Growth in Financial Services & Insurance Occupiers Creates Demand for Grade A Office
Growth in Financial Services & Insurance Occupiers Creates Demand for Grade A Office Typical Occupiers’ O Profile f off Grade G A Office Off Buildings in CBD C Profile in 2004 Profile in 2008 Source: Jones Lang LaSalle Research, July 2008 31
Slide 32: Average Annual Supply of 1.9 mil sq ft is Lower Than Historical Average
Average Annual Supply of 1.9 mil sq ft (2008 – 2012) is Lower Than Historical Average Singapore private office space (Central Area) – demand and supply Ave annual supply = 2.4 mil sq ft Remaking of Singapore as Post-Asian financial crisis and Ave annual demand global city SARs - weak demand & during
Slide 33: Firm Lease Commitments for MBFC 3 years ahead of completion
Firm Lease Commitments for MBFC 3 years ahead of buildings’ buildings completion Key Financial Institutions in Marina Bay Financial Centre Company Net Lettable Area (sqft) Phase Comments Standard Chartered 508,298 1 85% or 24 floors in Tower 1 Natixis 65 000 65,000 1 3 floors in Tower 1 Wellington I
Slide 34: Office Rents Expected to Remain Stable Through 2010
Office Rents Expected to Remain Stable oug 2010 Through 0 0 CBRE Research, May 2008 Projected Rents 20.00 Historical Rents 18.00 q ft per month) 16.00 14.00 12.00 20.00 00 00 10 00 10.00 (S$ per sq 19.0 19.0 17.50 0 17.15 5 17.00 0 15.50 15.00 8.00 6.00 8.73 7.81 7.71 7.50 4.00 6.43 6.30 5.70 5.35 5
Slide 35: Summary
Summary Cap/taCommercial 35 —~ Trust
Slide 36: Summary
Summary Delivered higher 1H 2008 DPU of 5.19 cents Significant upside potential from strong rent reversions due to portfolio’s below market rentals Already locked in about 98% and 70% of forecast gross rental income for 2008 and 2009 respectively (excluding Raffles City Singapore) Already wo
Slide 37: CapitaCommercial Trust Management Limited
CapitaCommercial C it C i l Trust T tM Managementt Li Limited it d 39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel: (65) 6536 1188 Fax: (65) 6533 6133 http://www cct com sg http://www.cct.com.sg For enquiries, please contact: Ms Ho Mei Peng Head, Investor Relations & Communications Direc
Slide 38: Supplementary Slides
S Supplementary l t Slides Slid 38
Slide 39: Gross Revenue - By Asset
Gross Revenue - By Asset Actual vs Forecast 1 Jan 08 to 30 Jun 08 2Q 2008 Actual Forecast 1 Change g Actual S$'000 S$'000 % S$'000 Capital Tower 24,561 24,396 0.7 12,382 6 Battery Road 34 812 34,812 34 751 34,751 02 0.2 18 353 18,353 HSBC Building 4,416 4,415 0.0 2,232 Starhub Centre 7,124 7,027 1.4
Slide 40: Net Property Income - By Asset
Net Property Income - By Asset Actual vs Forecast 1 Jan 08 to 30 Jun 08 2Q 2008 Actual Forecast 1 Change Actual S$'000 S$'000 % S$'000 Capital Tower 14,526 14,346 1.3 7,389 6 Battery Road 25 631 25,631 25 218 25,218 16 1.6 13 805 13,805 HSBC Building 3,917 3,906 0.3 1,771 Starhub Centre 4,381 4,253
CapitaCommercial Trust — H1 2008 Earnings Presentation on 6ix