Frasers Property Ltd. · SGX:TQ5
Frasers Property — Frasers Commercial Trust — 2QFY14 Earnings Presentation
34 slides from Frasers Property's earnings presentation, Apr 23, 2014
Slide 1: Frasers Commercial Trust 2QFY14 Financial Results
Frasers Commercial Trust 2QFY14 Financial Results 23 April 2014
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
Slide 3: Contents
Contents 3 Results Portfolio review Capital management Moving Forward
Slide 4: Results
Results Z J Pease TRUST
Slide 5: Results – Key highlights
Results – Key highlights 5 1 Better performance of China Square Central Better performance of China Square Central, off-set by weaker Australian dollar, lower occupancy for Central Park and slightly higher expenses due to painting works undertaken at Caroline Chisholm Centre Lower occupancy fo
Slide 6: Results – Financial highlights
Results – Financial highlights 6 6% rise in distributable income for 2QFY14 1 Jan 2014 – 31 Mar 2QFY14 Y-o-Y Contributing factors 2014 (S$ ‘000) Change (%) Better performance of China Square Central due to higher occupancy rates and rental Gross Revenue 28,600 4% rates, offset by weaker Austra
Slide 7: Results – Financial highlights: net property income by country
Results – Financial highlights 7 Better performance of China Square Central, offset by weaker performance of the Australian properties TOTAL: S$21.7 million 2QFY14 Net Property Singapore: S$11.2 million (52%) Income (S$m) Australia: S$10.5 million (48%)
Slide 8: Results – Financial highlights: DPU
Results – Financial highlights 8 Continuous DPU growth for 2QFY14 Implementation of DRP for 2QFY14 DPU (Cents) 3% * Adjusted for Unit consolidation
Slide 9: Results – Distribution payment
Results – Distribution payment 9 Distribution Period 1 January 2014 to 31 March 2014 Distribution of 2.0524 cents per Unit comprising: a) taxable income distribution of 1.2015 cents; and Ordinary Unit Distribution Rate b) tax-exempt income distribution of 0.8509 cents. Last day of trading on “cum”
Slide 10: Portfolio review
Portfolio review FRASERS COMMERCIAL
Slide 11: Portfolio review – Valuation
Portfolio review – Valuation 11 Balanced portfolio consisting of Singapore and Australian properties No one property consist of more than 32% of portfolio value Singapore Perth Canberra Singapore $ 1,171.0 65% Australia $ 625.5 35% Total $ 1,796.5 100% As at 31 March 2014. Excludes retail turn
Slide 12: Portfolio review – Occupancy Rates & WALE
Portfolio review – Occupancy Rates & WALE 12 Strong average occupancy rate of 97.5% Healthy WALE of 4.1 years Geographical occupancy and % of NPI contribution As at Key portfolio statistics 31 March 2014 Ave Occupancy 97.5% WALE by gross rental income 4.1 years As at 31 March 2014. Excludes re
Slide 13: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 13 13 More than 42% of lease expiry in FY2018 and beyond provides income stability Portfolio lease expiry by gross rental income Number of leases expiring 31 49 56 22 19 NLA (sq ft) expiring 1,108,747 94,528 191,381 106,384 722,502 Expiries as % total NLA 48
Slide 14: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 14 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
Slide 15: Lease expiry profile of Alexandra Technopark underlying leases
Portfolio review – Lease expiry profile of Alexandra Technopark underlying leases 15 15 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
Slide 16: Portfolio review – Rental reversions
Portfolio review – Rental reversions 16 Singapore properties continue to enjoy positive rental reversions for new and renewed leases that commenced in 2QFY141 18.2% 14.2% 6.4% China Square 55 Market Alexandra Central Street Technopark2 As at 31 March 2014. Excludes retail turnover rent 1 Weighted
Slide 17: Portfolio review – Robust leasing activities
Portfolio review – Robust leasing activities 17 286,372 square feet committed, new and renewed leases in 2QFY14 Represents 12.6% of portfolio total NLA Committed, new and renewed tenants include: Tenant Industry Property GroupM (additional space taken by Media and telecommunications China Sq
Slide 18: Portfolio review – Mid-term rent reviews
Portfolio review – Mid-term rent reviews 18 18 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%
Slide 19: Portfolio review – Stability of income
Portfolio review – Stability of income 19 Master lessee/ blue chip tenants with long leases contribute 67% of total gross rental income Master Leases % (Gross Rental Tenant Lease Expiry Income) Alexandra Technopark – Orrick Investments Pte Ltd Aug 2014 21.5% Blue Chip Tenants with Long Leases % (G
Slide 20: Portfolio review – Asset updates
Portfolio review – Asset updates 20 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
Slide 21: Singapore asset updates
Portfolio review – Singapore asset updates 21 China Square Central – 55 Market Street – Alexandra Technopark – healthy leasing activities healthy occupancy rate High occupancy rate Occupancy 96.9%^ 96.7%^ 96.9% (underlying occupancy) Average underlying passing gross rent: S$3.6 psf New leases , MW
Slide 22: Australia asset updates
Portfolio review – Australia asset updates 22 Central Park – Healthy Caroline Chisholm Centre –full occupancy WALE of 3.8 years with long WALE of 11.3 years Occupancy 94.1%^ 100.0% Slightly lower occupancy compared to previous year due to Property occupied by a single tenant, i.e. the Commonwealth
Slide 23: Capital management
Capital management FRASERS COMMERCIAL
Slide 24: Capital Management – Debt statistics
24 Capital Management – Debt statistics 24 Healthy interest coverage ratio of 4.16 times Low all-in interest rate of 2.7% Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 31 March 2014 1,400 Total Assets (S$’000) 1,843,5
Slide 25: Portfolio reshaping – effects of CPPU net redemption/conversion on DPU
25 Portfolio reshaping– effects of CPPU net redemption/conversion on DPU 25 Redemption of CPPUs is accretive to Unitholders In 2QFY14, 0.8 million CPPUs were converted1 On 1 April 2014, a further 0.05 million CPPUs were converted2 To-date, a total of 342.3 million CPPUs were either redeemed
Slide 26: Capital Management and debt statistics
26 Capital Management and debt statistics 26 No refinancing requirements in FY14 Hedged about 51% of gross borrowings Debt maturity Debt composition – floating vs. hedged Post debt prepayment and divestment of Japanese properties 1 Hedging debt As at As a % of: 31 March 2014 Total Gross Borrow
Slide 27: Moving forward
Moving forward
Slide 28: Solid fundamentals – positive market outlook
2. Solid fundamentals – positive market outlook 28 Singapore office rents trend – Rents continue to grow Singapore Grade A and Grade B office rents1 1 Source: CBRE Research
Slide 29: Solid fundamentals – Singapore CBD office demand, supply and outlook
2. Solid fundamentals – demand, supply and outlook for Singapore CBD office 29 Office supply-demand dynamics1 Strong leasing activity in CBD Core in Q1 2014 Demand mainly from insurance, e-commerce and IT sectors Positive net absorption of 99,000 sf in CBD Core Vacancy in CBD Core decreased
Slide 30: Solid fundamentals – Demand likely to pick up on rising office rents
2. Solid fundamentals – Demand likely to pick up on back of rising office rents 30 Singapore business park rents trend – Rents at healthy levels Singapore Business Park (city fringe) rents1 1 Source: CBRE Research
Slide 31: Solid fundamentals – business & science park outlook
2. Solid fundamentals – demand, supply and outlook for business & science park 31 Manufacturing Indices1 Vacancy rose from 9.3% to 10.3% in Q1 2014 due to 420,000 sf new supply and softened demand Demand mainly from IT, finance and consumer product sectors No major corrections in rents expecte
Slide 32: Perth CBD office supply and rents
Perth CBD office supply and rents 32 Minimal change in Premium Grade Perth office rents over the past 12 months Perth CBD office supply1 Perth CBD average net face rents1 Market conditions 1 – Perth CBD office market vacancy rate in December 2013 was 9.0%, up from 6.9% in the first half of 2013, a
Slide 33: Delivering growth
Delivering growth 33 33 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
Slide 34: 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 — 2QFY14 Earnings Presentation on 6ix