Frasers Property Ltd. · SGX:TQ5
Frasers Property — Frasers Commercial Trust — Non-Deal Roadshow (January 2014)
46 slides from Frasers Property's roadshow presentation, January 2014
Slide 1: Frasers Commercial Trust Investor Presentation
Frasers Commercial Trust Investor Presentation January 2014
Slide 2: Important notice
Important notice By attending the meeting where this Presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this Presentation has been prepared by Frasers Centrepoint Asset Management (Commercial) Ltd. (in its capacity a
Slide 3: Important notice
Important notice This Presentation includes market and industry data and forecast that have been obtained from internal survey, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Industry publications, surveys and forecasts g
Slide 4: Contents
Contents 4 Key highlights Operational and financial overview Supplementary materials
Slide 5: Key highlights
= GF COMMERCIAL TRUST
Slide 6: Key highlights - Properties in Singapore
Key highlights - Properties in Singapore 6 55 Market Street, Singapore China Square Central, Singapore Alexandra Technopark, Singapore Description • 16-storey commercial property with 2 • 15-storey commercial office tower and • High-tech business space development floors (incl. basement) of retail s
Slide 7: Key highlights - Properties in Australia
Key highlights - Properties in Australia 7 Central Park, Perth Caroline Chisholm Centre, Canberra Description • 47-storey premium grade, tallest building in Perth • 5-storey Grade A contemporary office building • Equipped with state of the art facilities, located in the heart of the CBD • Located in
Slide 8: Key highlights – Asset locations and valuation
Key highlights – Asset locations and valuation 88 FCOT offers balanced exposure to 5 quality properties in Singapore and Australia No single property consists of more than 32% of portfolio value FY13 Portfolio Net Property Properties Portfolio Value 1 Income 2 2 office assets SINGAPORE 1 business sp
Slide 9: Key highlights - FCOT's competitive strengths
Key highlights - FCOT’s competitive strengths 9 Strong sponsor Efficient capital Quality assets and risk and strategic management location FCOT’s competitive strengths Experienced Proactive asset management management team Corporate rating of Baa3, stable outlook
Slide 10: Key highlights – Strong sponsor
Key highlights – Strong sponsor 10 FCOT is supported by a strong sponsor Key attributes of sponsor Frasers Centrepoint Limited (“FCL”) has strong foothold in property development, investment and management Established track record Strong financials Strong regional footprint Integrated property devel
Slide 11: Key highlights – Quality and strategically located assets
Key highlights – Quality and strategically located assets 11 Singapore office assets are centrally located in the CBD area 55 Market Street Singapore CBD China Square Central
Slide 12: Key highlights – Quality and strategically located assets
Key highlights – Quality and strategically located 12 Telok Ayer MRT station opened on 22 December 2013 – increased connectivity to China Square Central China Square Central is now close to 3 MRT stations Marina Bay Financial Marina Bay Sands Centre 6 mins 3 mins 3 mins 5 mins Chinatown MRT Telok Ay
Slide 13: Key highlights – Quality and strategically located assets
Key highlights – Quality and strategically located assets 13 Alexandra Technopark is located within the prominent Alexandra business corridor, a dynamic business hub at the fringe of the Central area Alexandra Technopark Alexandra business corridor
Slide 14: Key highlights – Quality and strategically located assets
Key highlights – Quality and strategically located assets 14 Australian assets are strategically located Perth Canberra Central Park, Perth Perth CBD Tuggeranong Town Caroline Chisholm Centre, Centre, Canberrra Canberra
Slide 15: Key highlights – High occupancy rates
Key highlights – Quality and strategically located assets 15 High occupancy rates demonstrate the good location and connectivity of the assets FCOT Property Portfolio WALE by gross rental income 4.4 years (as at 31 December 2013) As at 31 December 2013. Excludes retail turnover rent
Slide 16: Key highlights – Experienced management team
Key highlights – Experienced management team 16 Experienced management team delivered fourth consecutive year of growth in distributable income and DPU since recapitalisation exercise From FY09 – FY13: Distributable income grew at 18.1% CAGR DPU grew at 15.8% CAGR NAV grew at 4.1% CAGR ^ Adjusted fo
Slide 17: Key highlights – Experienced management team
Key highlights – Experienced management team 17 Management team structure Board of Directors Audit, Risk and Compliance Committee Chief Executive Officer Asset Management Investments Finance Investor Relations
Slide 18: Key highlights – Baa3 corporate rating
Key highlights – Baa3 corporate rating 18 Rated Baa3 with stable outlook by Moody’s Balanced portfolio of properties Properties located in well regulated markets – Singapore and Australia Healthy lease expiry profile Stable rents, recurring cashflows Expects FCOT’s properties to continue generating
Slide 19: Key highlights – Proactive asset management
Key highlights – Proactive asset management 19 Manager constantly reviews trade mix and market position of properties to increase income and property values Upgrading and unlocking value of property improves positioning of property and enhance future growth potential Before After After Before Precin
Slide 20: Key highlights – Efficient capital and risk management
Key highlights – Efficient capital and risk management 20 Gearing consistently below 40.0% since recapitalisation exercise Interest cover has more than doubled since FY09 demonstrates improved profile Average interest rate decreased by 40.0% since 4QFY09 * In FY09, FCOT changed its financial year en
Slide 21: Key highlights – Good corporate governance
21 Key highlights – Good corporate governance 21 FCOT wins prestigious award in Corporate Governance Runner-up, Singapore Corporate Governance Award under the REITs and Business Trust category, 14th SIAS Investors’ Choice Award Award recognises companies with good corporate governance practices and
Slide 22: Operational and financial overview
Operational and financial overview
Slide 23: Operational and financial overview: Stability of income
Contents Operational and financial overview 23 23 1. Stability of income Healthy lease expiry profile Healthy occupancy and long WALE Quality tenants and master lease Organic growth 2. Solid fundamentals 3. Growth strategy
Slide 24: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 24 24 More than 42% of lease expiry in FY2018 and beyond provides income stability Portfolio lease expiry by gross rental income Number of leases expiring 40 48 53 13 18 NLA (sq ft) expiring 1,121,025 92,616 187,955 95,385 715,636 Expiries as % total NLA 50.7%
Slide 25: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 25 Rental reversions and leasing up leading to higher occupancy provide opportunities for higher income Represents the expiry of Property Lease Expiry as a proportion of total master lease of Alexandra Portfolio Gross Rental Income in FY14 Technopark Number of
Slide 26: Portfolio review – Lease expiry profile of Alexandra Technopark underlying leases
Portfolio review – Lease expiry profile of Alexandra Technopark underlying leases 26 26 More than 40% 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 underlying lea
Slide 27: Portfolio review – Rental reversions
Portfolio review – Rental reversions 27 Positive rental reversions for new and renewed leases commenced in FY131 and 1QFY142 Positive rental reversions achieved in Positive rental reversions achieved FY131 in 1QFY142 26.1% 20.2% 18.7% 10.7% 11.0% 7.4% China Square 55 Market Street Alexandra Central
Slide 28: Portfolio review – Occupancy Rates & WALE
Portfolio review – Occupancy Rates & WALE 28 Strong average occupancy rate of 97.1% Healthy WALE of 4.4 years Geographical occupancy and % of NPI contribution As at Key portfolio statistics 31 December 2013 Ave Occupancy 97.1% WALE by gross rental income 4.4 years As at 31 December 2013. Excludes re
Slide 29: Portfolio review – Mid-term rent reviews
Portfolio review – Mid-term rent reviews 29 29 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% C
Slide 30: Portfolio review – Stability of income
Portfolio review – Stability of income 30 Master lessee/ blue chip tenants with long leases contribute 68% of total gross rental income Master Leases % (Gross Rental Tenant Lease Expiry Income) Alexandra Technopark – Orrick Investments Pte Ltd Aug 2014 21.7% Blue Chip Tenants with Long Leases % (Gro
Slide 31: Operational and financial overview: Solid fundamentals
Contents Operational and financial overview 31 31 1. Stability of income 2. Solid fundamentals Natural hedge in place Well supported by financial institutions Well spread debt maturity profile and improved gearing Positive market outlook Growing demand 3. Growth strategy
Slide 32: Capital Management – Debt statistics
32 Capital Management – Debt statistics 32 Healthy interest coverage ratio of 4.18 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 December 2013 1,400 Total Assets (S$’000) 1,832,114 1,
Slide 33: Capital Management – Financial institutions
Capital Management – Financial institutions 33 FCOT is well supported by financial institutions
Slide 34: Capital Management – Debt statistics
34 Capital Management – Debt statistics 34 Well spread debt maturity profile 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 December 2013 Total facilities S$694 mi
Slide 35: Solid fundamentals – positive market outlook
2. Solid fundamentals – positive market outlook 35 Singapore office rents trend – Rents have started to grow Singapore Grade A and Grade B office rents1 1 Source: CBRE Research
Slide 36: Solid fundamentals – demand, supply and outlook
2. Solid fundamentals – demand, supply and outlook 36 Office supply-demand dynamics1 Island-wide net absorption was 1.27 mil sf in Q4 2013 Annual net absorption of 2.45 mil sf was the highest level since 2011 and 58% higher than the 10 year average of 1.55 mil sf Overall island-wide office vacancy r
Slide 37: Solid fundamentals – proposed office projects
Solid fundamentals – proposed office projects 37 Expected Proposed office pipeline Estimated net Location completion in CBD/ fringe CBD areas1 lettable area (sf) Q4 2014 Capitagreen Raffles Place 700,000 Average new supply for Q4 2014 South Beach Development Beach Rd/ City Hall 527,450 2014 -2017 is
Slide 38: Solid fundamentals – positive market outlook
2. Solid fundamentals – positive market outlook 38 Premium Grade Perth office market remains resilient Perth Office CBD forecast gross office supply by type1 Perth Office CBD vacancy by grade1 Market conditions 1 – Perth CBD office market vacancy rate has increased from 5.7% in January 2013 to 6.9%
Slide 39: Portfolio review – Asset updates
Portfolio review – Asset updates 39 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 located with g
Slide 40: Portfolio review – Singapore asset updates
Portfolio review – Singapore asset updates 40 China Square Central – 55 Market Street – Alexandra Technopark – healthy leasing activities healthy occupancy rate High occupancy rate Occupancy 92.9%^ 90.0% 96.4% (underlying occupancy) Average underlying passing gross rent: S$3.4 psf New leases , OCBC
Slide 41: Portfolio review – Australia asset updates
Portfolio review – Australia asset updates 41 Central Park – Long Caroline Chisholm Centre –full WALE of 4.1 years occupancy with long WALE of 11.5 years Occupancy 93.3% 100.0% Slightly lower occupancy compared to previous year due to Property occupied by a single tenant, i.e. the Commonwealth the d
Slide 42: Delivering growth
Delivering growth 42 42 Various initiatives in place to deliver growth in distributable income Positive rental reversions Expiry of the Enhanced China Master Lease at Square Central Alexandra with increased Technopark in connectivity August 2014 Redemption/ conversion of Grow portfolio in CPPUs cont
Slide 43: Appendix
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Slide 44: Results – Key highlights
Results – Key highlights 44 1 Better performance of the properties Better performances of the Singapore properties, off-set by weaker Australian dollar and slightly lower occupancy for Central Park Weaker Australian dollar off-set by a realised gain on forward currency contracts arising from hedging
Slide 45: Results – Financial highlights
Results – Financial highlights 45 Better performances of the Singapore properties, offset by weaker AUD Net Property Income (S$m) TOTAL: S$22.1 million 1QFY14* Singapore: S$11.0 million (50%) Australia: S$11.1 million (50%) * * Includes the Japanese properties which were divested on 25 October 2012.
Slide 46: 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 — Non-Deal Roadshow (January 2014) on 6ix