OUE Real Estate Investment Trust · SGX:TS0U
OUE Real Estate Investment Trust — OUE Commercial REIT — Q3 2017 Earnings Presentation
37 slides from OUE Real Estate Investment Trust's earnings presentation, Nov 2, 2017
Slide 1: Financial Results for 3rd Quarter 2017
Financial Results for 3rd Quarter 2017 2 November 2017
Slide 2: Important Notice
Important Notice This presentation shall be read in conjunction with OUE Commercial REIT’s Financial Results announcement for 3Q 2017 dated 2 November 2017. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in OUE Com
Slide 3: Agenda
Agenda Key Highlights Financial Performance and Capital Management Portfolio Performance Outlook Appendices 3
Slide 4: Key Highlights
Key Highlights Financial Highlights 3Q 2017 revenue of S$43.3 million was 2.1% lower year-on-year (“YoY”) due to lower retail rental income during the quarter. Net property income of S$34.1 million was 3.5% lower YoY, as property tax expense and leasing commission were higher on the back of signif
Slide 5: Key Highlights
Key Highlights Capital Management Aggregate leverage as at 30 September 2017 was 36.9% with a weighted average cost of debt of 3.5% p.a. In September 2017, OUE C-REIT’s maiden issuance of S$150 million 3.03 per cent. fixed rate notes maturing in 2020 saw strong take-up. The diversification of fu
Slide 6: Financial Performance & Capital Management
Financial Performance & Capital Management
Slide 7: Delivered Sustainable Distribution
Delivered Sustainable Distribution Delivered sustainable distribution to Unitholders since IPO Distribution Since IPO (1) Period commencing from OUE C-REIT’s listing date of 27 January 2014 to 31 December 2014 (2) FY2014-FY2016 compound annual growth rate (CAGR) computed on the basis of annualised a
Slide 8: 3Q 2017 vs 3Q 2016
3Q 2017 vs 3Q 2016 3Q 2017 3Q 2016 Change Revenue (S$m) 43.3 44.2 -2.1% Net Property Income (S$m) 34.1 35.3 -3.5% Amount Available for Distribution 17.8 17.2 +3.4% to Unitholders (S$m) DPU (cents) 1.15 1.32 -12.9% Pro forma DPU (cents) - 1.11(1) +3.6% • 3Q 2017 revenue of S$43.3 million was 2.1% low
Slide 9: 3Q 2017 vs 3Q 2016
3Q 2017 vs 3Q 2016 S$'000 3Q 2017 3Q 2016 Change (% ) Revenue 43,273 44,184 (2.1) Property operating expenses (9,197) (8,856) 3.9 Net property income 34,076 35,328 (3.5) Other income 878 608 44.4 Amortisation of intangible asset (1,113) (1,117) (0.4) Manager's management fees (2,409) (3,126) (22.9)
Slide 10: YTD Sep 2017 vs YTD Sep 2016
YTD Sep 2017 vs YTD Sep 2016 YTD Sep 2017 YTD Sep 2016 Change Revenue (S$m) 132.3 132.8 -0.4% Net Property Income (S$m) 103.5 103.8 -0.3% Amount Available for Distribution 52.3 52.0 +0.5% to Unitholders (S$m) DPU (cents) 3.53 4.00 -11.8% Pro forma DPU (cents) - 3.52(1) +0.3% • YTD September 2017 net
Slide 11: YTD Sep 2017 vs YTD Sep 2016
YTD Sep 2017 vs YTD Sep 2016 S$'000 YTD Sep 2017 YTD Sep 2016 Change (% ) Revenue 132,303 132,786 (0.4) Property operating expenses (28,816) (28,975) (0.5) Net property income 103,487 103,811 (0.3) Other income 2,309 2,070 11.5 Amortisation of intangible asset (3,339) (3,353) (0.4) Manager's managem
Slide 12: Healthy Balance Sheet
Healthy Balance Sheet S$ million As at 30 Sep 2017 Investment Properties 3,402.5 Total Assets 3,478.8 Loans and borrowings 1,210.7 Total Liabilities 1,400.8 Net Assets Attributable to Unitholders 1,319.3 Units in issue and to be issued (’000) 1,544,013 NAV per Unit (S$) 0.85 12
Slide 13: Capital Management
Capital Management Maiden issue of S$150 million 3.03% fixed rate notes maturing in 2020 in September 2017. The diversification of funding sources and shift to unsecured borrowings improves OUE C- REIT’s financial flexibility Announced in October 2017 the proposed redemption of S$75 million CPPU
Slide 14: Debt Maturity Profile as at 30 Sep 2017
Debt Maturity Profile as at 30 Sep 2017 Maiden issuance of S$150 million 3.03 per cent. fixed rate notes maturing in 2020 extended OUE C-REIT’s debt maturity profile 14
Slide 15: Portfolio Performance
Portfolio Performance
Slide 16: Portfolio Composition
Portfolio Composition By Asset Value(1) By Revenue Contribution(2) By Segment Income(2) (1) Based on independent valuations as at 31 December 2016 and OUE C-REIT’s proportionate interest in One Raffles Place (2) For 3Q 2017 and based on OUE C-REIT’s attributable interest in One Raffles Place 16
Slide 17: Resilient and Stable Portfolio
Resilient and Stable Portfolio One Raffles Place achieved seven consecutive quarters of increase in committed occupancy since acquisition in October 2015 Lippo Plaza maintained 100% committed office occupancy in 3Q 2017 OUE C-REIT’s Portfolio Committed Occupancy (1) Proforma committed occupancy
Slide 18: Office Occupancy Higher Than Market
Office Occupancy Higher Than Market Committed office occupancy at One Raffles Place increased 7.2 ppt since acquisition in October 2015, despite Singapore office market occupancy falling 2.7 ppt in the same period Singapore Shanghai (1) Singapore Market Occupancy refers to Core CBD office occupancy
Slide 19: Committed Office Rents In Line Or Above Market
Committed Office Rents In Line Or Above Market Average Expired Average Passing 3Q 2017 Committed Rents(1) Market Rents Rents Rents in Sep 2017 OUE Bayfront S$13.43 psf/mth S$11.50 – S$13.50 psf/mth S$9.10 psf/mth(2) S$11.44 psf/mth One Raffles S$10.82 psf/mth S$7.00(3) – S$10.70 psf/mth S$9.10 psf/m
Slide 20: Average Passing Office Rents
Average Passing Office Rents Singapore Shanghai 20 (1) Proforma average passing rents as at 30 September 2013 as disclosed in OUE C-REIT’s Prospectus dated 17 January 2014
Slide 21: Lease Expiry Profile - Portfolio
Lease Expiry Profile - Portfolio WALE(1) of 2.5 years by NLA(2) and 2.6 years by Gross Rental Income As at 30 Sep 2017 (1) “WALE” refers to the weighted average lease term to expiry (2) “NLA” refers to net lettable area 21
Slide 22: Lease Expiry Profile - OUE Bayfront
Lease Expiry Profile - OUE Bayfront Completed 2017 lease renewals, with 88% of OUE Bayfront’s gross rental income due only in 2019 and beyond WALE of 2.9 years by NLA and Gross Rental Income As at 30 Sep 2017 22
Slide 23: Lease Expiry Profile - One Raffles Place
Lease Expiry Profile - One Raffles Place WALE of 2.3 years by NLA and 2.2 years by Gross Rental Income As at 30 Sep 2017 23
Slide 24: Lease Expiry Profile - Lippo Plaza
Lease Expiry Profile - Lippo Plaza Substantially renewed 2017 office leases due for renewal while maintaining 100% committed office occupancy WALE of 2.4 years by NLA and 3.2 years by Gross Rental Income As at 30 Sep 2017 24
Slide 25: Quality and Diversified Tenant Base
Quality and Diversified Tenant Base Top 10 tenants contribute approximately 27.9% of gross rental income WALE by NLA 3.5 years As at 30 Sep 2017 25
Slide 26: Diversified Tenant Base
Diversified Tenant Base As at Sep 2017 26
Slide 27: Outlook
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Slide 28: Outlook – Singapore
Outlook – Singapore Based on advance estimates by the Ministry of Trade and Industry (“MTI”), Singapore’s economy grew 4.6%(1) YoY in 3Q 2017, improving from the 2.9% growth in 2Q 2017. The strong growth was driven by the manufacturing sector, which expanded 15.5% YoY, compared to 8.2% in 2Q 2017.
Slide 29: Outlook – China
Outlook – China China’s 3Q 2017 GDP growth was 6.8%(1), slowing slightly from the 6.9% growth recorded 2Q 2017. While policymakers’ efforts to curb property speculation and credit expansion was expected to temper growth, GDP growth continued to be healthy and broad-based. Exports and factory produ
Slide 30: Appendices
Appendices • Overview of OUE C-REIT • OUE C-REIT’s Portfolio • Singapore Office Market • Shanghai Office Market
Slide 31: Overview of OUE C-REIT
Overview of OUE C-REIT OUE C-REIT is a Singapore real estate investment trust listed on the Mainboard of Singapore Exchange Securities Trading Limited with the principal investment strategy of investing, directly or indirectly, in a portfolio of income-producing real About OUE C-REIT estate which
Slide 32: Premium Portfolio of Assets – OUE Bayfront
Premium Portfolio of Assets OUE Bayfront GFA (sq m) 46,774.6 NLA (sq m) Office: 35,342.7; Retail: 1,830.0; Overall: 37,172.7 Committed Occupancy (@ 30 Sep 2017) Office: 98.2%; Retail: 100.0%; Overall: 98.2% Valuation (@ 31 Dec 2016) S$1,146.0 m (S$2,864 psf) Valuation Cap Rate (Office): 3.75% OUE Ba
Slide 33: Premium Portfolio of Assets – One Raffles Place
Premium Portfolio of Assets One Raffles Place GFA (sq m) 119,626.3 Attributable NLA (sq m) Office: 56,090.0; Retail: 9,500.0; Overall: 65,590.0 Committed Occupancy (@ 30 Sep 2017) Office: 97.3%; Retail: 85.7%; Overall: 95.4% Valuation(1) (@ 31 Dec 2016) S$1,738.3 m (S$2,462 psf) Valuation Cap Rate (
Slide 34: Premium Portfolio of Assets – Lippo Plaza
Premium Portfolio of Assets Lippo Plaza GFA (sq m) 58,521.5 Attributable NLA (sq m) Office: 33,538.6; Retail: 5,685.9; Overall: 39,224.5 Committed Occupancy (@ 30 Sep 2017) Office: 100.0%; Retail: 90.4%; Overall: 98.6% Valuation(1) (@ 31 Dec 2016) RMB2,524.0 m / RMB43,129 psm (S$517.8m)(2) Land Use
Slide 35: Singapore Office Market
Singapore Office Market Core CBD office occupancy corrected 1.6 ppt QoQ to 92.5% as at 3Q 2017 with the completion of a new office project, while Grade A office rents rose 1.7% QoQ to S$9.10 psf/mth, the first increase in 10 quarters Leasing transactions in 3Q 2017 were mid-sized, driven by relo
Slide 36: Shanghai Office Market
Shanghai Office Market In 3Q 2017, Shanghai CBD Grade A office occupancy declined 1.0 ppt QoQ to 86.1% due to significant new office completions in the quarter. CBD Grade A office rents fell 3.4% to RMB10.15 psm/day. In the Puxi area, Grade A office occupancy declined by 2.3 ppt QoQ to 85.3% as
Slide 37: Thank you
samme werner UE DIE COMMERCIAL REIT W a) O Thank you