Capitaland Ascendas Reit · SGX:A17U
Capitaland Ascendas Reit — A-REIT (Ascendas Real Estate Investment Trust) — 2QFY2008/09 Earnings Presentation
28 slides from Capitaland Ascendas Reit's earnings presentation, Oct 17, 2008
Slide 1: 2QFY2008/09 Financial Results Presentation
2QFY2008/09 Financial Results Presentation 17 October 2008 Disclaimers This Presentation is focused on comparing results for the three months ended 30 September 2008 versus actual results year-on-year (“yoy”). This shall be read in conjunction with A-REIT’s Results for the period from 1 July 2008 to
Slide 2: Agenda; Key Highlights
Agenda • Key highlights • Financial performance • Investment management • Capital management • Asset Management Portfolio Update Portfolio Resilience Portfolio Growth • Market outlook • Conclusion A-REIT 2QFY2008/09 Results .. 3 Key Highlights • 2QFY08/09 DPU of 4.01 cents, up 14.2% yoy and 3.1% qoq
Slide 3: Distribution Details
Distribution Details Stock counter Distribution Period Distribution per unit (cents) Ascendasreit 1 Jul 08 to 30 Sep 08 4.01 Distribution Timetable Last day of trading on “cum” basis 24 October 2008, Friday Ex-date 28 October 2008, Tuesday Books closure date 30 October 2008, Thursday Distribution pa
Slide 4: DPU – 2QFY2008/09 vs 2QFY2007/08
DPU – 2QFY2008/09 vs 2QFY2007/08 (S$’000) 2QFY2008/09(1) 2QFY2007/08(1) % Change Gross revenue 97,330 80,237 21.3% Less: Property operating expenses (24,714) (20,092) 23.0% Net property income 72,616 60,145 20.7% Borrowing costs(2) (14,582) (10,528) 38.5% FRS 39 F.V. Adjustments(3) (417) (107) 290.7
Slide 5: 2QFY2008/09 vs 1QFY2008/09; Healthy Organic Growth
2QFY2008/09 vs 1QFY2008/09 (S$’000) 2QFY08/09(1) 1QFY08/09(1) % Change Gross revenue 97,330 92,537 5.2% Less: Property operating expenses (24,714) (22,837) 8.2% Net property income 72,616 69,700 4.2% Borrowing costs(2) (14,582) (12,376) 17.8% FRS 39 F.V. Adjustments(3) (417) (448) 6.7% Non-property
Slide 6: Attractive yield relative to 10-year Govt Bond
Attractive yield relative to 10-year Govt Bond S-REITs yield range from low of 5.9% to high of 16.1% 18.0% 18.0% 16.0% 16.0% 14.0% 14.0% 12.0% 12.0% 10.0% 10.0% Wt average: 8.4% 8.0% 16.1% 8.0% 520 bps 6.0% spread 6.0% 4.0% 8.4% 4.0% 5.9% 2.0% 3.2% 3.2% 3.2% 2.0% 0.0% 0.0% S-REIT High A-REIT S-REIT
Slide 7: Development Projects
Agenda • Key highlights • Financial performance • Investment management • Capital management • Asset Management Portfolio Update Portfolio Resilience Portfolio Growth • Market outlook • Conclusion A-REIT 2QFY2008/09 Results .. 13 Development Projects • Completed 2 development projects worth about $1
Slide 8: Completed Project: Pioneer Hub
Completed Project: Pioneer Hub • Two blocks of 6-storey ramp-up high specification industrial facility completed • Achieved occupancy rate of 99.4% upon completion of development • Remaining space on offer to prospective tenants Pioneer Hub upon completion A-REIT 2QFY2008/09 Results .. 15 Completed
Slide 9: Development projects: Plaza8
Development projects: Plaza8 at Changi Business Park : Suburban business space Sep 08: Phase 1 building Mar 08: Construction of Phase 1 June 08: Construction in progress of Phase 1 on schedule • Built-to-suit for Citigroup • Estimated total GFA: 44,000 sqm • Phase 1 completion expected by 4Q FY2008/
Slide 10: Development project: Built-to-Suit for Expeditors Singapore
Development project: Built-to-Suit for Expeditors Singapore • Development of a part 2-storey / part 4-storey logistics facility at Plot 6 of Airport Logistics Park (within Airport Free Trade Zone) • Estimated development cost of about S$25.6 million • Expected date of completion: 3QFY2009/10 • 100%
Slide 11: Healthy Balance Sheet; Interest Rate Risk Management
Healthy Balance Sheet (S$bn) As at 30 Sep 08 As at 30 Sep 07 Total Assets 4.6 3.4 Borrowings 1.9 1.2 Net assets attributable to 2.5 2.0 unitholders Aggregate Leverage 41.4% 38.4% Net asset value per unit 185 cents 148 cents A-REIT 2QFY2008/09 Results .. 21 Interest Rate Risk Management • 76.7% of in
Slide 12: Interest Cost Sensitivity; Re-financing Risk Management
Interest Cost Sensitivity • 76.7% of debt is hedged into fixed rate for the next 3.9 years • Floating rate portion is subject to interest rates fluctuation • Every incremental 0.1% increase in interest rate is expected to decrease DPU by 0.03 cents per annum Increase in Expected resultant Expected %
Slide 13: High Occupancy; Long Leases
Agenda • Key highlights • Financial performance • Investment management • Capital management • Asset Management Portfolio Update Portfolio Resilience Portfolio Growth • Market outlook • Conclusion A-REIT 2QFY2008/09 Results .. 25 High Occupancy; Long Leases • Healthy renewals & new take-up As at 30
Slide 14: Broad based sources of new demand
Broad based sources of new demand 2QFY08/09 tenants’ industry sector by net lettable area R&D • Continue to attract new Others 6% 7% IT demand from tenants in the 7% traditional sectors such as Biomedical manufacturing, IT, transport & 7% storage and precision engineering Telecommunication Electroni
Slide 15: Weighted Average Lease to Expiry – Overall portfolio
Weighted Average Lease to Expiry - Overall portfolio • Weighted average lease to expiry for the portfolio is 5.5 years • Lease expiry profile is well balanced and extends beyond 2021 • Stability in portfolio as 4.3% of income up for renewal for balance of FY2008/09. 20% REIT Property Income 10% 15.2
Slide 16: Well Diversified Portfolio; Sale & Leaseback Lease Expiry
Well Diversified Portfolio - by Value Mix of Sale-&-Leaseback vs Asset Class Diversification Multi-tenanted Buildings Warehouse Retail Facilities Logistics & 3% Business & Distribution Science Parks Centres 27% 29% 49% 51% 6% Flatted Factories 13% 22% Hi-Tech Light Industrial Industrial A-REIT 2QFY2
Slide 17: High levels of committed income
Security deposit for sale & leaseback properties • Amount of security deposit for sale-and-leaseback transactions depends on evaluation of credit standing of the tenant • Security deposits for sale & leaseback properties range from 8 to 15 months No. of SLB Weighted Average No. of Months Properties
Slide 18: Limited exposure to conventional manufacturing
Limited exposure to conventional manufacturing 2QFY08/09 tenants’ business activities by net lettable area • 21% of NLA are occupied by tenants engaged in conventional manufacturing activities, of which 64% are tenants with Manufacturing, long-term leases 21% • Manufacturing activities include food
Slide 19: Cap rates across the region; Stable Asset Values
Cap rates across the region • Cap rate for Singapore industrial properties is at a healthy spread of about 300bps over 10 year government bond benchmark and more than 150bps spread over office cap rate • Spreads for similar properties around major cities in the region are lower CBD Office Suburban I
Slide 20: Subsector Performance
Agenda • Key highlights • Financial performance • Investment management • Capital management • Asset Management Portfolio Update Portfolio Resilience Portfolio Growth • Market outlook • Conclusion A-REIT 2QFY2008/09 Results .. 39 Subsector Performance • Business & Science Parks and Hi-Tech Industria
Slide 21: Potential Rental Reversion FY2008/09
Spilt of short term & long term leases within sector Majority of leases in high growth sectors of business and science park and hi-tech industrial are on short term basis. Hence, potential to enjoy positive rental reversion Science and Business Park (by NLA) Logistics and Distribution Centres (by NL
Slide 22: Potential Rental Reversion FY2009/10 and FY2010/11
Potential Rental Reversion FY2009/10 $4.00 80,000 $4.10 70,000 $3.60 $3.15 $3.10 60,000 Average rents ($psf pm) $2.60 Area due for renewal (sqm) 50,000 $2.50 $2.10 40,000 $2.10 $1.45 $1.45 $1.43 $1.60 30,000 $1.40 $1.42 $1.34 $1.10 20,000 $0.60 10,000 $0.10 - -$0.40 Business & Science Hi-tech Indust
Slide 23: Market Outlook
Agenda • Key highlights • Financial performance • Investment management • Capital management • Asset Management Portfolio Update Portfolio Resilience Portfolio Growth • Market outlook • Conclusion A-REIT 2QFY2008/09 Results .. 45 Market Outlook • Full year economic growth estimate revised down to 3.
Slide 24: Industrial Property Rental Trend
Industrial Property Rental Trend 140 140 Rental index improved by 2.3% in 2Q 2008 and by 47.5% since the trough in 2004. 120 120 100 100 Industrial Rental Index 80 80 60 60 40 40 20 20 0 0 Base year: Q21998 A-REIT 2QFY2008/09 Results .. 47 Average Gross Rents by Sector • Growth for rental between 3%
Slide 25: Potential New Supply
Potential New Supply • Potential supply of 3.86 million sqm of industrial space expected over the next three years Sector New 2008 2009 2010 2011 (‘000 sqm) Supply (total) Business & Science Park 637 - 274 202 161 % pre-committed (est) - 38% 45% 49% Industrial (Hi-tech and 2,557 898 885 820 22 Light
Slide 26: A-REIT's strengths
A-REIT's strengths Diversity and Depth • Largest business and industrial REIT in Singapore • Solid and well diversified portfolio Six property asset classes Well-located quality properties Balance of long term vs short term leases provides stability with potential for positive rental reversions No s
Slide 27: A-REIT's strategies
A-REIT's strengths Development capability • Has development capability to create own assets which are more yield accretive than acquisitions of income producing properties Operational platform • Dedicated asset management, sales/marketing, leasing and property management team of over 80 people • Pos
Slide 28: Thank you
Thank you Important Notice This presentation has been prepared by Ascendas-MGM Funds Management 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
A-REIT (Ascendas Real Estate Investment Trust) — 2QFY2008/09 Earnings Presentation on 6ix