Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — SPH REIT — Q3 FY2016 Earnings Presentation
23 slides from Singapore Exchange's earnings presentation, Jul 7, 2016
Slide 1: 3Q FY16 Financial Results
3Q FY16 Financial Results 7 July 2016
Slide 2: Disclaimer
Disclaimer This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in SPH REIT (“Units”). The value of Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guarantee
Slide 3: Contents
Contents Results Slide 3 Balance sheet Slide 8 Operational performance Slide 12 Growth strategy and market outlook Slide 17 Distribution details and timetable Slide 22 2
Slide 4: Key Highlights
Keyhighlights Key Highlights Net property income for 3Q FY16 up 1.8% year-on-year 3Q FY16 DPU was 1.36 cents, an increase of 0.7% year-on- year YTD 3Q FY16 DPU was 4.09 cents Annualised distribution yield was 5.81% (based on closing price of $0.940 per unit on 31 May 2016) Asset enhancemen
Slide 5: Resilient performance
Resilient performance 3Q FY16 3Q FY15 Change S$’000 S$’000 % Gross revenue 52,232 51,235 1.9% Property expenses (12,209) (11,909) 2.5% Net property income (NPI) 40,023 39,327 1.8% Income available for distribution 34,995 34,612 1.1% Distribution to Unitholders(a) 34,575 34,094 1.4% Distribution per
Slide 6: Resilient performance (YTD 3Q)
Resilient performance YTD 3Q YTD 3Q Change FY16 FY15 % S$’000 S$’000 Gross revenue 157,417 154,324 2.0% Property expenses(a) (36,681) (36,869) 0.5% Net property income (NPI) (a) 120,736 117,455 2.8% Income available for distribution(b) 106,728 104,985 1.7% Distribution to Unitholders(c) 103,802 102,
Slide 7: Higher gross revenue and NPI
Higher gross revenue and NPI S$m Gross Revenue Net Property Income 180.0 157.4 160.0 154.3 140.0 128.1 125.0 120.0 100.0 120.7 117.5 80.0 99.3 96.5 60.0 40.0 29.3 29.3 20.0 21.4 21.0 – Portfolio Paragon The Clementi Portfolio Paragon The Clementi Mall Mall YTD 3Q FY16 YTD 3Q FY15 6
Slide 8: Stable and regular DPU
Stable and regular DPU Cents 1.60 1.40 1.39 1.40 1.36 1.33 1.35 1.33 1.20 0.80 0.40 - 1Q FY15 2Q FY15 3Q FY15 4Q FY15 1QFY16 2QFY16 3QFY16 7
Slide 9: Balance sheet
Unsaved Document / 23/04/2013 / 09:00 8 Balance sheet
Slide 10: Financial position
Financial position As at As at 31 May 2016 31 August 2015 S$’000 S$’000 Total assets 3,304,498 3,309,621 Total liabilities 917,224 911,811 Net assets 2,387,274 2,397,810 Net asset value per unit S$0.94 S$0.95 Gearing (a) 25.7% 25.7% Note: (a) Gearing is computed based on total debt/ total assets 9 9
Slide 11: Low gearing and high % of fixed debt
Low gearing and high % of fixed debt Proactive capital management with 84.7% of the S$850m debt facility on a fixed rate basis Gearing level of 25.7% and average cost of debt of 2.84% p.a. Weighted average term to maturity: 2.2 years, and is expected to be extended when the refinancing of the
Slide 12: Market value of properties
Market value of properties Valuation as at 31 August (a) Capitalisation Rate As at 31 August 2015 2014 2015 and 2014 S$m S$m Paragon 2,641.0 2,588.0 4.85% - Retail 4.25% - Medical Suite/Office The Clementi Mall (b) 571.5 571.0 5.00% SPH REIT Portfolio 3,212.5 3,159.0 Notes: (a) Valuations as at 31 A
Slide 13: Operational performance
Unsaved Document / 23/04/2013 / 09:00 12 Operational performance
Slide 14: Resilient operating performance
Resilient operating performance • Both malls achieved 100% occupancy • Paragon achieved a moderate rental uplift of 4.9% for new and renewed leases in YTD 3Q 2016 • The Clementi Mall recorded positive rental reversion of 4.5% in YTD 3Q 2016 • YTD 3Q 2016 visitor traffic declined year-on-year by 2.2%
Slide 15: Rental reversion up 4.9%
Rental reversion up 4.9% NLA Number of As a % Change compared renewed / new renewals / of properties' to preceding (a) leases (sqft) (c) new leases NLA rental rates Paragon 79 192,464 27.0% 4.9% The Clementi Mall 22 21,235 11.0% 4.5% (b) SPH REIT Portfolio 101 213,699 23.6% 4.9% Notes: (a) For expir
Slide 16: Staggered portfolio lease renewal
Staggered portfolio lease renewal Weighted Average Lease Expiry (WALE) as at 31 May 2016 By NLA 2.1 years By Gross Rental Income 2.2 years Lease expiry as at 31 May 2016 FY2020 and FY2017 FY2018 FY2019 beyond Expiries as a % 32.9% 32.0% 18.1% 17.0% of total NLA Expiries as a % of Gross rental 26.5%
Slide 17: Paragon: Staggered lease expiry
Paragon: Staggered lease expiry Expiry by Gross Rental Income Expiry by NLA 40.6% 39.1% 24.5% 20.0% 20.4% 20.5% 19.9% 15.0% FY2017 FY2018 FY2019 FY2020 & FY2017 FY2018 FY2019 FY2020 & beyond beyond The Clementi Mall (a) : tenant retention rate of more than 90% for first renewal cycle Expiry by Gross
Slide 18: Growth strategy and market outlook
Unsaved Document / 23/04/2013 / 09:00 17 Growth strategy and market outlook
Slide 19: Multi-pronged growth strategy to ensure growth
Multi-pronged growth strategy to ensure growth Ensure that interests of all stakeholders, including tenants, shoppers and unitholders are protected while keeping its properties at the forefront of evolving retail mall trends and Proactive asset relevant to changing demands of consumers management
Slide 20: Continual asset enhancement
Continual asset enhancement Air Handling Unit (“AHU”) decanting project in Paragon • Replace aging AHUs with fan coil unit (“FCU”) and convert about 7,000 sqft back- of-house space into revenue generating net lettable area (“NLA”) at retail levels. • Multi-phased approach from September 2015 to mid
Slide 21: Market outlook
Market outlook • Outlook for Singapore economy remain modest - The Singapore economy grew by 1.8% year-on-year in the first quarter of 2016, unchanged from the previous quarter. - The Ministry of Trade and Industry (MTI) has maintained the 2016 growth forecast at 1.0% to 3.0%. • STB expects modest g
Slide 22: Distribution details and timetable
Distribution details and timetable Distribution period 3Q FY16 (1 March 2016 – 31 May 2016) Distribution per unit 1.36 cents per unit Ex-date 13 July 2016 Record date 15 July 2016 Payment date 16 August 2016 21
Slide 23: Thank You
Thank You Please visit www.sphreit.com.sg for more information. 22