Capitaland Ascendas Reit · SGX:A17U

Capitaland Ascendas Reit — Ascendas Real Estate Investment Trust (A-REIT) — 2Q FY15/16 Earnings Presentation

58 slides from Capitaland Ascendas Reit's earnings presentation, October 2015

  1. Slide 1: Investor Presentation

    Australian Logistics Portfolio The Kendall Aperia Investor Presentation October 2015 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  2. Slide 2: Disclaimers

    Disclaimers This material shall be read in conjunction with A-REIT’s financial statements for the financial quarter ended 30 September 2015. This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may

  3. Slide 3: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 3

  4. Slide 4: Overview of Ascendas Real Estate Investment Trust

    Overview of Ascendas Real Estate Investment Trust  First and largest business space and industrial REIT listed on the Singapore Exchange and a constituent of the FTSE Straits Times Index effective 4 June 2014  Total assets of about S$8.3bn (US$6.0 bn) as at 30 September 2015  Issuer and senior un

  5. Slide 5: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Business Parks (BP) Science Parks (SP) (as at 30 Sep 2015) Portfolio GFA (sqm) 338,652 340,890 % of A-REIT - by GFA 11% 11% - by asset value 16% 18% Characteristics Zone is defined by Govt Master Plan.

  6. Slide 6: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Integrated Development, Amenities Hi-Specs Industrial (Hi-S) Data Centres (DC) (as at 30 Sep & Retail (IDAR) 2015) Portfolio GFA (sqm) 157,299 526,578 109,756 % of A-REIT - by GFA 5% 18% 4% - by asset v

  7. Slide 7: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Light Industrial (LI) Flatted Factories (FF) Logistics & (as at 30 Sep 2015) Distribution Centres (Log) Portfolio GFA (sqm) 370,283 197,143 829,775 % of A-REIT - by GFA 12% 7% 28% - by asset value 8% 4%

  8. Slide 8: A-REIT's Singapore Property Map

    A-REIT’s Singapore Property Map  Strategically located along major expressways  Several properties e.g. Business Park, Science Park and some High-Specs Industrial properties are in close proximity to CBD  Light Industrial and Hi-Specs Industrial properties are primarily centrally located near maj

  9. Slide 9: Australia Portfolio – 26 Logistics Properties

    Australia Portfolio – 26 Logistics Properties Sydney (198,129 sqm) Perth (20,895 sqm) 1. 1A & 1B Raffles Glade (Ceva, QLS) 26. 35 Baile Road* (Blackwoods) 2. 7 Grevillea Street (Kmart) 3. 5 Eucalyptus Pace (CH2) By rental 4. Lot 4 Honeycomb Drive (Officemax) income 5. 1-15 Kellet Close (Strandbags /

  10. Slide 10: China: Suburban Business Park Properties

    China: Suburban Business Park Properties to Cater to Growing Demand Sub-sector Business Park (China) Number of 2 Properties Portfolio GFA (sqm) 111,307 % of A-REIT - by GFA 4% - by asset value 4% Location Tier 1 cities: e.g. Shanghai & Beijing Ascendas Z-link Characteristics Suburban office, corpora

  11. Slide 11: A-REIT's Steady Growth since Listing

    Total Unitholders’ Amount Available Funds (S$m) for Distribution (S$m) A-REIT’s Steady Growth since Listing 11

  12. Slide 12: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 12

  13. Slide 13: Key Highlights for 2Q FY15/16

    Key Highlights for 2Q FY15/16  Total amount available for distribution rose by 14.0% y-o-y to S$100.2m  DPU grew 13.7% y-o-y to 4.160 cents from 3.660 cents in 2Q FY14/15  Key performance drivers were: • Contributions from new properties: Aperia and The Kendall • Contributions from completed asse

  14. Slide 14: Key Highlights for 2Q FY15/16

    Key Highlights for 2Q FY15/16  Investment highlights • Proposed acquisition of a portfolio of 26 freehold logistics properties in Australia for S$1,013m (A$1,013m)  Acquisition is expected to complete in 4Q 2015. • Divested BBR Building for S$13.9m • Completed two asset enhancement works at Techli

  15. Slide 15: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 15

  16. Slide 16: 2Q FY15/16 vs 2Q FY14/15

    2Q FY15/16 vs 2Q FY14/15 (S$’000) % 2Q FY15/16(1) 2Q FY14/15(1) fav/ (unfav) Gross revenue(2) 182,625 164,781 10.8 Net property Income(2) 123,803 114,667 8.0 Total amount available for distribution 100,159 87,846 14.0 DPU (cents)(3) 4.160 3.660 13.7 Recurrent amount available for 93,634 87,846 6.6 d

  17. Slide 17: 2Q FY15/16 vs 1Q FY15/16

    2Q FY15/16 vs 1Q FY15/16 (S$’000) % 2Q FY15/16(1) 1Q FY15/16(1) fav/ (unfav) Gross revenue(2) 182,625 180,507 1.2 Net property Income(2) 123,803 124,265 0.4 Total amount available for distribution 100,159 92,486 8.3 DPU (cents)(3) 4.160 3.841 8.3 Recurrent amount available for distribution(4) 93,634

  18. Slide 18: Distribution Details

    Distribution Details Stock Counter Distribution Period Distribution per Unit (cents) Ascendas REIT 1 April 2015 to 30 September 8.001 2015 Distribution Type Taxable Tax-exempt Capital Breakdown of DPU (cents) 7.872(1) 0.092 0.037 (1) Included in taxable distribution was a one-off distribution of 0.2

  19. Slide 19: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 19

  20. Slide 20: Investment Highlights in 2Q FY15/16

    Investment Highlights in 2Q FY15/16 Value (S$m) Completed Acquisition Australian logistics portfolio 1,013.0 Expected in 4Q 2015 Asset Enhancements Completed Techlink & Techview 26.2 Jul-15 Honeywell Building 4.2 Sep-15 Divestment BBR Building 13.9 Sep-15  Proposed acquisition of a portfolio of 26

  21. Slide 21: Proposed acquisition in 2Q FY15/16

    Proposed acquisition in 2Q FY15/16 A-REIT Purchase A$1,013m (S$1,013m) Consideration Acquisition Fee to A$10.13m (S$10.13m) to be paid in Manager units Other Transaction Costs A$54.7m (S$54.7m) includes stamp duty, professional advisory fees etc. Total Acquisition Cost A$1,077.8m (S$1,077.8m)  Prop

  22. Slide 22: Asset Enhancement (completed): Techlink & Techview

    Asset Enhancement (completed): Techlink & Techview Completion July 2015 Description Located within the Kaki Bukit Industrial Estate. Techview is located next to the upcoming Kaki Bukit MRT station. AEI: To maximise plot ratio and also Techlink: New drop-off point enhance property positioning: upgrad

  23. Slide 23: Asset Enhancement (completed): Honeywell Building

    Asset Enhancement (completed): Honeywell Building Completion September 2015 Description A 6-storey building located in Changi Business Park AEI: Upgrading of main entrance foyer and drop-off point, lift lobby, restrooms, common corridors and mechanical & electrical equipment. Upgraded main entrance

  24. Slide 24: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 24

  25. Slide 25: Healthy Balance Sheet

    Healthy Balance Sheet  Aggregate leverage maintains at 34.6% as at 30 Sep 2015  Following the proposed acquisition of Australian Logistics Portfolio (Sep 2015) and S$300 million perpetual securities (Oct 2015), aggregate leverage is expected to increase to 37.8% As at As at (S$m) 30 Sep 15 30 Jun

  26. Slide 26: Well-spread Debt Maturity Profile

    Well-spread Debt Maturity Profile  Well-spread debt maturity with the longest debt maturing in 2029  Refinanced CNY69m term loan by extending the maturity to 2018 13% 10%  Issued S$100m 2.95% MTNs due 2020 in August 2015 10%  Average debt maturity: 3.6 years Diversified Financial Resources 39% 2

  27. Slide 27: Key Funding Indicators

    Key Funding Indicators  Robust indicators enable A-REIT to borrow at competitive costs As at As at 30 Sept 15 30 Jun 15 Aggregate Leverage 34.6% 34.7% Unencumbered properties as % of total investment 86.2% 86.2% properties(1) Interest cover ratio 6.2 x(2) 6.2 x(3) Total debt / EBITDA 6.4 x(2) 6.2 x

  28. Slide 28: Prudent Interest Rate Risk Management

    Prudent Interest Rate Risk Management  72.1% of borrowings is hedged for an average term of 3.4 years  50 bps increase in interest rate is expected to have an annualised pro forma impact of S$4.0 million decline in distribution or 0.17 cent in DPU Increase in Decrease in Change as Pro forma DPU in

  29. Slide 29: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 29

  30. Slide 30: Stable Occupancy

    Stable Occupancy  Portfolio occupancy and Multi-tenant building (MTB) occupancy improved to 89.0% and 84.9% respectively from 88.8% and 84.7% a quarter ago, mainly due to higher occupancies at:  40 Penjuru Lane (75.5% from 70.9% in 1Q FY15/16)  Aperia (90.4% from 83.9% in 1Q FY15/16)  A-REIT Cit

  31. Slide 31: A-REIT vs Industrial Average Occupancy

    A-REIT vs Industrial Average Occupancy 100% 95% 93.8% 92.5% 90.7% 90.7% 89.6% 90% 87.3% 87.7% 84.4% 85% 80% Occupancy Rate 75% 70% 65% 60% 55% 50% Business and Science Hi-Specs Industrial Light Industrial Logistics Park A-REIT JTC Source : A-REIT’s Singapore portfolio as at 30 September 2015. Market

  32. Slide 32: Sources of New Demand – 2Q FY15/16

    Sources of New Demand – 2Q FY15/16  Continues to attract demand from a wide spectrum of industries 0.9% 1.0% 0.9% 1.0% 1.0% 1.3% 1.9% 1.4% 2.4% 3.8% 2.8% 49.1% 54.7% 3.4% 4.5% By By 4.5% Gross 8.9% NLA 10.2% Income 10.8% 11.4% 11.8% 12.3% Transport and Storage Others Electronics Telecommunication &

  33. Slide 33: Achieved Positive Rental Reversion

    Achieved Positive Rental Reversion  Achieved +9.1% rental reversion for leases renewed in 2Q FY15/16  Positive rental reversion was registered across all segments Multi-tenant properties (1) Net lettable area Vacant space (sqm) 2Q FY15/16 (sqm) increase in renewal rates (2) As at 30 Sep 2015 Busin

  34. Slide 34: Update on Properties in China

    Update on Properties in China Ascendas Z-link A-REIT City @Jinqiao Location Located within Zhongguncun Location Located in north Jinqiao within the Software Park in Haidian District, Jinqiao Economic and Technological Beijing Zone, in Shanghai Tenants Higher value-added industries such Tenants Highe

  35. Slide 35: Lease Expiry Profile

    Lease Expiry Profile (as at 30 September 2015)  Portfolio weighted average lease to expiry (WALE) of 3.6 years Breakdown of expiring leases for FY15/16 and  Lease expiry is well-spread, extending beyond 2025 FY16/17  About 10.2% of property income is due for renewal in balance of FY15/16 as at 30

  36. Slide 36: In-place rent for space due for renewal

    In-place rent for space due for renewal in FY15/16 and FY16/17  Current market rental rate is above the weighted average passing rental for most of the multi-tenant space due for renewal in FY15/16 and FY16/17  Expect moderate positive rental reversion of around mid-single digit for FY15/16 * * *

  37. Slide 37: Ongoing Projects: Improve portfolio quality

    Ongoing Projects: Improve portfolio quality Value (S$m) Estimated Completion Development 23.7 Jiashan Logistics Facility 23.7 1Q 2016 Asset Enhancements (AEI) 71.2 Acer Building 10.7 2Q 2016 Cintech I to IV 12.7 1Q 2016 2 Senoko South Road 12.1 4Q 2015 40 Penjuru Lane 35.7 4Q 2015 (formerly C&P Logi

  38. Slide 38: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 38

  39. Slide 39: Well Diversified Portfolio

    Well Diversified Portfolio By value of Investment Properties 9.6% 12.0% Science Business Park Park 90.4% 88.0% 22.9% Hi-Specs 43.7% Light Industrial Industrial 56.3% 77.1% 23.3% 29.5% Integrated Logistics & Development, Distribution Amenities & Notes: • Multi-tenant buildings account for 78.5% of A-

  40. Slide 40: Tenants' Industry Diversification

    Tenants’ Industry Diversification By Monthly Gross Revenue Information Technology 10.5% M&E and Machinery & Equipment 10.1% 3rd Party Logistics, Freight Forwarding 9.8% Distributors, trading company 8.9% Telecommunication & Datacentre 8.6% Electronics 8.2% Financial 7.0% Life Science Food Products &

  41. Slide 41: Low Exposure to Manufacturing

    Low Exposure to Manufacturing As at 30 September 2015  13.4% of NLA occupied by tenants engaged in manufacturing activities 13.4%  Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc. Tenants’ business activities by NLA  Non-manufacturing

  42. Slide 42: Quality and Diversified Tenant Base

    Quality and Diversified Tenant Base  Total tenant base of around 1,430 tenants  Top 10 tenants (as at 30 September 2015) account for about 19.0% of portfolio gross rental income 5.4% 2.4% 2.3% 1.4% 1.4% 1.4% 1.3% 1.2% 1.2% 1.1% Singapore DBS Citibank, Siemens Hydrochem Biomedical Cold Storage Equi

  43. Slide 43: Diversified Portfolio

    Diversified Portfolio Aperia, 6.0% 1, 3, 5 Changi Business Park Crescent, 3.7% Kim Chuan Telecommunication Complex , 3.0% 31 International Business Park, 2.7% Neuros & Immunos, 2.7% TelePark, 2.7% 40 Penjuru Lane, 2.5% Hyflux Innovation Centre, 2.5% TechPoint, 2.2% TechPlace II, 2.2% Pioneer Hub , 2

  44. Slide 44: Security Deposits for Single-tenant Properties

    Security Deposits for Single-tenant Properties  Weighted average security deposits for single-tenant properties range from 6 to 11 months of rental income  On a portfolio basis, weighted average security deposit is about 5 months of rental income No. of single tenant Weighted average security prop

  45. Slide 45: MTB Occupancy: NPI / DPU Sensitivity

    MTB Occupancy: NPI / DPU Sensitivity  100 bps increase in MTB occupancy is expected to result in a 1.0% increase in portfolio net property income or about 0.21 cents increase in DPU Change in MTB Expected change in Change in portfolio Impact on full FY occupancy annualised MTB NPI NPI (%) DPU (cent

  46. Slide 46: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 46

  47. Slide 47: Market Outlook

    Market Outlook  According to Ministry of Trade and Industry's (“MTI”) advance estimates, Singapore’s economy grew 1.4% y-o-y in 3Q 2015. 2015 GDP growth forecast is lowered to between 2.0% to 2.5%.  JTC industrial property price and rental index declined by 0.3% and 0.8% q-o-q respectively in 3Q 2

  48. Slide 48: Agenda

    Agenda Overview of A-REIT Key Highlights for 2Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 48

  49. Slide 49: A-REIT's Strengths

    A-REIT's Strengths Diversity and Depth  Solid and well diversified portfolio  Five main property segments  Well-located quality properties  Balance of long term vs. short term leases provides stability with potential for positive rental reversions  No single property accounts for more than 6.0%

  50. Slide 50: A-REIT's Strengths

    A-REIT's Strengths  Downside protection in earnings • Stable portfolio with 89.8% of portfolio revenue committed for FY15/16 and a portfolio average lease to expiry of about 3.6 years • Mix of long term and short term leases provide earnings stability  Long term leases have a weighted average leas

  51. Slide 51: A-REIT's Strengths

    A-REIT's Strengths  Development capability • Has capability and capacity to create own assets which could be more yield accretive than acquisitions of income producing properties  Operational platform (Property Manager, Ascendas Services Pte Ltd) • Dedicated asset management, sales/marketing, leas

  52. Slide 52: A-REIT's Strategies

    A-REIT's Strategies Total Returns Predictable income Capital stability Proactive and Outcome dedicated Stability Growth manager with track record Strategies Prudent Proactive Value-Adding Capital & Risk Asset Investments Management Management Property Fund Manager: Fund Manager: Manager: Performance

  53. Slide 53: Additional Information

    Additional Information (1) Quarterly Results (2) Singapore Industrial Property Market 53

  54. Slide 54: Quarterly Results

    Quarterly Results (For illustrative purpose)* FY14/15 FY15/16 Summary (S$ million) 1Q 2Q 3Q 4Q 1Q 2Q Gross Revenue 163 165 172 174 181 183 Net Property Income 116 115 115 117 124 124 Total amount available for 89* 87* 87* 88* 92 94# distribution No. of units in issue (m) 2,404 2,404 2,406 2,406 2,40

  55. Slide 55: Average Market Rents by Segment

    Average Market Rents by Segment 120 Industrial Rental Index 100 80 60 40 Source : JTC 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 6.5 5.5 $5.50 4.5 $4.11 3.5 $3.65 $3.15 2.5 $1.85 1.5 $1.83 0.5 Business Park (City Fringe) Business & Science Parks (M

  56. Slide 56: Industrial Property Market: New Supply

    Industrial Property Market: New Supply  Total stock (net) : 43.5 million sqm, of which • Business & Science Parks account for 1.8 million sqm (4.1%) • Logistics & Distribution Centres account for 8.6 million sqm (19.8%) • Remaining stock are factory space  Potential new supply (gross) of about 4.1

  57. Slide 57: Business & Science Parks: New Supply

    Business & Science Parks: New Supply % Pre- Expected Location Developer GFA (sqm) committed Completion (est) 2015 Ayer Rajah (One-North) Mediacorp Pte Ltd 77,690 100% 2015 Changi Business Park SKJ Group Pte Ltd 13,050 78% 2015 Science Park Ascendas Land (S) Pte Ltd. 45,260 100% Total (2015) 136,000

  58. Slide 58: The End

    The End Important Notice This presentation has been prepared by Ascendas Funds Management (S) 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 u

Ascendas Real Estate Investment Trust (A-REIT) — 2Q FY15/16 Earnings Presentation on 6ix