Oue Real Estate Investment Trust · SGX:TS0U
Oue Real Estate Investment Trust — OUE Commercial REIT — H1 2022 Earnings Presentation
36 slides from Oue Real Estate Investment Trust's earnings presentation, Jul 25, 2022
Slide 1: Financial Results for 1H 2022
Financial Results for 1H 2022 25 July 2022
Slide 2: Important Notice
Important Notice This presentation should be read in conjunction with the announcements released by OUE Commercial REIT (“OUE C-REIT”) on 25 July 2022 (in relation to its Interim Financial Information for the Six-Month Period Ended 30 June 2022). This presentation is for information purposes only an
Slide 3: Agenda
Agenda ▪ 1H 2022 At A Glance ▪ Financial Summary & Capital Management ▪ Commercial Segment ▪ Hospitality Segment ▪ Looking Ahead ▪ Appendices
Slide 4: 1H 2022 At A Glance
1H 2022 At A Glance ▪ 1H 2022 amount to be distributed was S$59.5 million, translating to DPU of 1.08 cents ▪ Office segment remains the main revenue contributor at 56.0% in 2Q 2022 Financial Performance ▪ Stable NAV per Unit of S$0.57 as at 30 June 2022 ▪ Singapore office properties committed occup
Slide 5: Financial Summary & Capital Management
Financial Summary & Capital Management
Slide 6: 1H 2022 Financial Performance
1H 2022 Financial Performance 1H 2022 1H 2021 YoY Change (S$m) (S$m) (%) Revenue 115.8 133.5 (13.3) Net Property Income 93.6 109.0 (14.2) Share of Joint Venture Results 8.3 4.1 NM Amount to be Distributed(1) 59.5 67.2 (11.4) Distribution per Unit (cents) 1.08 1.23 (12.2) ▪ Net property income of S$9
Slide 7: Distribution Details
Distribution Details Payment of distribution for the period from 1 January 2022 to 30 June 2022 Distribution Period 1 January 2022 to 30 June 2022 1.08 cents per Unit comprising: i. Taxable income distribution of 0.84 cents per Unit Distribution Per Unit ii. Tax exempt income distribution of 0.19 ce
Slide 8: Portfolio Composition
Portfolio Composition Mandarin Lippo Plaza Gallery 5.4% Hotel master lease Crowne Plaza 8.0% agreements provide Crowne Plaza Changi Airport Changi Airport One Raffles 9.3% One Raffles minimum rent of 8.0% Place Place S$67.5 million 27.4% 25.2% Retail per annum(3) 16.2% Mandarin Hospitality Lippo Pla
Slide 9: Tenant Base and Portfolio Lease Expiry Profile
Tenant Base and Portfolio Lease Expiry Profile Others Pharmaceuticals & Healthcare Maritime & Logistics 2.4% 1.4% 2.6% Legal 3.1% Services Office Retail(1) Hospitality Hospitality IT, Media & 3.4% 27.0% Telecommunications 4.1% 25.7% Energy & Commodities 4.1% Manufacturing & 15.1% Distribution 4.3% 1
Slide 10: Balance Sheet
Balance Sheet S$ million As at 30 Jun 2022 As at 31 Dec 2021 Investment Properties 5,413.1 5,409.7 Total Assets 5,844.7 5,832.5 Borrowings 2,016.4 1,985.4 Total Liabilities 2,259.2 2,244.0 Net Assets Attributable to Unitholders 3,127.4 3,128.0 Units in Issue and to be Issued (‘000) 5,459,367 5,449,6
Slide 11: Capital Management
Capital Management ▪ As at 30 June 2022, aggregate leverage remained stable at 39.1% with weighted average cost of debt of 3.1% p.a. ▪ Debt maturity profile is well-spread out with average term of debt at 2.7 years. S$178 million of debt due in 2022 will be refinanced ahead of maturity with the aver
Slide 12: Commercial Segment
Commercial Segment
Slide 13: Commercial Segment Performance – 1H 2022
Commercial Segment Performance – 1H 2022 (S$ million) 17.7% 20.9% 99.8 82.1 78.5 62.1 Revenue Net Property Income 1H 2022 1H 2021 ▪ Net property income of S$62.1 million was 20.9% lower YoY mainly due to deconsolidation of OUE Bayfront’s performance post the divestment of a 50% interest in the prope
Slide 14: Office Segment Occupancy
Office Segment Occupancy Singapore ▪ Singapore office properties committed Chart Title 100% occupancy improved 2.1 ppt QoQ to 92.9% 96.2% as at 30 June 2022 due to improvements in 95% 95.6% 93.0% office leasing momentum and supported by 90.6% 90% the Manager’s focus on prioritising occupancy 85% 3Q1
Slide 15: Office Segment Rental Performance
Office Segment Rental Performance ▪ Due to higher-than-market expiring rents, rental reversion at OUE Bayfront was -3.7% ▪ Negative rental reversion at OUE Downtown Office narrowed QoQ to -0.9% amidst improving market conditions Average Expired Comparable Sub-market Rents 2Q 2022 Rental Reversions S
Slide 16: Average Passing Rents
Average Passing Rents S$ psf/mth 10.40 10.58 11.75 11.85 11.43 11.60 11.98 12.25 12.49 12.46 12.55 ▪ Average passing rents for all 10.26 10.28 9.92 9.68 9.92 9.98 9.95 9.97 9.45 7.92 8.04 8.01 7.98 Singapore office properties 6.94 7.27 Singapore remained stable as at June 2022, (Office) with OUE Bay
Slide 17: Top 10 Tenants – Commercial Segment
Top 10 Tenants – Commercial Segment Top 10 Tenants contribute 26.9% of Commercial Segment Gross Rental Income(1) 7.5% 5.9% 3.2% 1.8% 1.8% 1.6% 1.4% 1.3% 1.2% 1.2% Deloitte & Luxury Bank of Virgin Active Professional Victoria's Allen & Overy Regus Aramco Asia Moody's Touche LLP Ventures America Merri
Slide 18: Lease Expiry Profile – Commercial Segment
Lease Expiry Profile – Commercial Segment 8.3% of OUE C-REIT’s commercial segment gross rental income remains due for renewal for balance of 2022 By NLA By Gross Rental Income Completed (Year-to-date) 28.1% 26.6% 22.8% 23.1% 14.3% 22.0% 21.3% 14.2% 19.2% 18.8% 9.8% 8.3% 2022 2023 2024 2025 2026 and
Slide 19: Lease Expiry Profile by Commercial Property
Lease Expiry Profile by Commercial Property OUE Bayfront One Raffles Place WALE: 2.7 years (NLA); 2.6 Years (GRI) WALE: 2.2 years (NLA); 2.1 Years (GRI) 30.4% 29.3% 28.4% 27.0% 21.0% 24.6% 18.2% 25.8% 25.8% 24.5% 21.1% 16.2% 23.3% 22.5% 21.9% 21.9% 21.0% 20.9% 13.4% 12.5% 5.3% 5.6% 7.9% 8.0% 2022 20
Slide 20: Mandarin Gallery
Mandarin Gallery Committed Occupancy ▪ Committed occupancy increased 1.6 ppt to 90.3% as at 5.3% 5.5% 6.5% 5.9% 7.6% 6.7% 5.3% 30 June 2022. Including short-term leases, committed occupancy was 95.6% 99.1% 98.3% 91.1% 91.6% 89.6% 87.4% 86.7% 88.7% 90.3% ▪ Shopper traffic and sales in 2Q 2022 improve
Slide 21: Hospitality Segment
Hospitality Segment
Slide 22: Hospitality Segment Performance
Hospitality Segment Performance 1H 2022 Revenue and NPI 2Q 2022 vs 1Q 2022 RevPAR (S$ million) (S$) Flat 3.1% 203.4% 12.2% 99.7% 302 33.8 33.8 31.5 30.6 226 142 126 113 99 Revenue Net Property Income Hilton Singapore Orchard Crowne Plaza Changi Hospitality Segment Airport 1H 2022 1H 2021 2Q 2022 1Q
Slide 23: Hospitality Segment Customer Profile
Hospitality Segment Customer Profile By Geography By Type 2Q 2022 2Q 2022 (By room nights) (By room revenue) Oceania Others 5% 2% Corporate 20% North America 14% Europe Southeast Asia 7% Wholesale 63% 11% South Asia 5% Transient 68% North Asia 5% Notes Excludes aircrew and delays “Transient” refers
Slide 24: Looking Ahead
LOOKiIng Ahead
Slide 25: Outlook
Outlook ▪ Positive leasing momentum from end-2021 carried through to 2Q 2022, activity was mainly driven by renewals and new set-ups in the legal and non-bank financial sectors ▪ Technology sector’s hiring slowdown has raised concerns over potential demand risk, but core Singapore CBD Grade A office
Slide 26: Outlook
Outlook ▪ Prime Orchard Road retail rents remained at S$34.20 psf per month in 2Q 2022 amidst stable leasing demand ▪ While retail sales have continued to improve alongside the easing of border and social restrictions, Singapore retailer confidence has been tempered by uncertainties in the economic
Slide 27: Looking Ahead
Looking Ahead Strengthen portfolio Reinforce the Capitalise on opportunities fundamentals to drive capital structure to enhance value organic growth Proactive asset management Optimise cost of debt by Overseas inorganic growth to sustain occupancy while strengthening credit profile to strategy
Slide 28: Thank You
COMMERCIAL Thank You
Slide 29: Appendices
Appendices ▪ Premium Portfolio of Assets ▪ Singapore Office Market ▪ Shanghai Office Market ▪ Singapore Hospitality Market ▪ Hotel Master Lease Details
Slide 30: Premium Portfolio of Assets
Premium Portfolio of Assets Strategically located assets in the prime business districts of Singapore and Shanghai OUE Downtown Hilton Singapore Crowne Plaza OUE Bayfront One Raffles Place Lippo Plaza Mandarin Gallery Office Orchard Changi Airport Description A landmark Grade A Iconic integrated Gra
Slide 31: Singapore Office Market
Singapore Office Market ▪ Positive leasing momentum from end-2021 carried through to 2Q 2022 as Singapore eased workplace restrictions. Demand was largely driven by renewals and the legal and non-bank financial sectors. Consequently, core CBD Grade A occupancy increased 0.1 ppt to 95.6% in 2Q 2022,
Slide 32: Singapore Office Demand, Supply & Office Rents
Singapore Office Demand, Supply & Office Rents ('000 sq ft) (S$ psf/mth) 7,000 20 6,000 18 16 5,000 14 4,000 12 3,000 10 2,000 8 1,000 6 4 0 2 -1,000 0 -2,000 -2 -3,000 -4 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2Q21 4Q21 Demand (LHS) Supply (LHS) Prime Office
Slide 33: Shanghai Office Market
Shanghai Office Market Shanghai ▪ Shanghai CBD Grade A office 100.0% 10.3 10.5 10.4 10.4 10.3 10.36 10.35 10.3510.32 11.0 occupancy increased 0.5 ppt QoQ to 10.1510.21 10.26 10.2710.2010.10 95.0% 92.8% 9.68 9.28 9.09 9.19 10.0 90.8%, while rents edged up 0.1% 8.94 8.99 9.02 9.16 9.00 90.2% 89.4% 90.
Slide 34: Shanghai CBD Demand, Supply & Vacancy
Shanghai CBD Demand, Supply & Vacancy Grade A Office Net Absorption, New Supply and Vacancy Rate Office Supply Pipeline in Shanghai CBD '000 sq m '000 sq m % 600 1,000 16.0% 900 527 14.0% 500 800 12.0% 329 700 400 600 10.0% 299 500 8.0% 300 400 6.0% 200 300 4.0% 200 100 80 49 100 2.0% - 0.0% - 2009
Slide 35: Singapore Hospitality Market
Singapore Hospitality Market ▪ YTD June 2022 visitor arrivals were 1.5 million, nearly 12 times more compared to the same period in 2021, as Singapore significantly reopened its borders to all fully vaccinated travellers from 1 April 2022 ▪ The Singapore Tourism Board expects Singapore to receive be
Slide 36: Hotel Master Lease Details
Hotel Master Lease Details Property Hilton Singapore Orchard (“HSO”) Crowne Plaza Changi Airport No. of Guestrooms 1,080 563 Master Lease Variable Rent Comprising Sum of: Variable Rent Comprising Sum of: Rental (i) 33.0% of HSO GOR(1) ; and (i) 4% of Hotel F&B Revenues; (ii) 27.5% of HSO GOP(2); (ii