Suntec Real Estate Investment Trust · SGX:T82U
Suntec Real Estate Investment Trust — Suntec REIT — Q3 2022 Earnings Presentation
57 slides from Suntec Real Estate Investment Trust's earnings presentation, Oct 26, 2022
Slide 1: Suntec REIT Business Updates
SUNTEC REIT BUSINESS UPDATES For the Quarter ended 30 September 2022 26 October 2022
Slide 2: Agenda
03 17 3Q 22 Financial Overview Singapore Office Portfolio Performance 04 27 3Q 22 Operational Overview Australia Portfolio Performance 05 30 Financial Highlights UK Portfolio Performance 14 33 Capital Management Singapore Retail Portfolio Performance Agenda 43 Suntec Convention Performance 46 Our ES
Slide 3: 3Q 22 Financial Overview
3Q 22 Financial Overview Distributable Income Distribution Per Unit Capital Management to Unitholders to Unitholders S$60.0 million 2.084 cents Fixed Interest Rate -5.8% y-o-y -6.6% y-o-y Borrowings 56% (2Q 22) to Distribution Income DPU from 58% (3Q 22) from Operations Operations S$54.2 million 1.8
Slide 4: 3Q 22 Operational Overview
3Q 22 Operational Overview Portfolio Committed Occupancy Portfolio WALE 97.9% 95.9% 4.5 2.3 Office Portfolio Retail Portfolio Office Portfolio Retail Portfolio Office Portfolio 57% 43% Work Done 293,000 sq ft for 3Q 22 Retail Portfolio 60% 40% Renewal Leases New Leases 4
Slide 5: Financial Highlights
Suntec City MBFC Properties One Raffles Quay Olderfleet, 477 Collins Street Financial Highlights The Minster Building 177 Pacific Highway 55 Currie Street Nova Properties 21 Harris Street Southgate Complex
Slide 6: Portfolio Financial Performance Strengthened in 3Q 22
Portfolio Financial Performance Strengthened in 3Q 22 NPI and JV Income Increased by 12.1% and 2.4% 15.7% 3Q 21 3Q 22 Mainly due to: Gross Revenue & Net Property Income: 12.1% Higher contributions from Suntec City Higher contributions from The Minster Building6 107.3 Lower occupancy at 177 Pacific H
Slide 7: DI and DPU Dipped Against 3Q 21
DI and DPU Dipped Against 3Q 21 Due to Higher Financing Costs Distributable Income From Mainly due to: (S$ mil) Operations Higher financing costs 5.8% From capital 60.0 Higher asset management fees in cash (50%) vs 3Q 21 (20%) 5.8 Higher NPI 63.7 Capital Distribution in 3Q 22 54.2 Distribution Payme
Slide 8: Singapore Office Portfolio Continued to Strengthen
Singapore Office Portfolio Singapore Office Portfolio Continued to Strengthen NPI and JV Income Increased by 3.8% and 7.2% 1.2% 3Q 21 3Q 22 Mainly due to: 3.8% Gross Revenue & Net Property Income: Higher occupancy and rent at Suntec City Office 7.2% 33.6 34.0 26.1 27.1 JV Income: 18.0 19.3 Higher oc
Slide 9: Australia Portfolio Remained Stable
Australia Portfolio Australia Portfolio Remained Stable Impacted by Weaker Australian Dollar In AUD 3Q 21 9.9% 3Q 22 13.6% Mainly due to: 28.4 25.6 11.5% 23.5 20.3 Gross Revenue & Net Property Income: 2.6 2.3 Absence of surrender fee received in 3Q 21; Gross Revenue (A$ mil) Net Property Income (A$
Slide 10: UK Portfolio Remained Resilient
UK Portfolio UK Portfolio Remained Resilient Impacted by Weaker British Pound In £ 3Q 21 3Q 22 9.1% Same Store4 54.2% 59.1% 3.4 3.1 4.4 4.8 3.7 3.5 2.4 2.2 Mainly due to: Gross Revenue & Net Property Income: Gross Revenue (£ mil) Net Property Income (£ mil) JV Income (£ mil) Full quarter contributio
Slide 11: Singapore Retail Portfolio Registered Stronger Improvement
Singapore Retail Portfolio Singapore Retail Portfolio Registered Stronger Improvement Gross Revenue and NPI Grew by 31.2 % and 39.4% 3Q 21 31.2% 3Q 22 Mainly due to: Gross Revenue & Net Property Income: 39.4% Higher occupancy, rent (fixed and GTO) and marcoms revenue at Suntec City Mall Absence of r
Slide 12: Suntec Convention Continued Momentum of Recovery
Suntec Convention Suntec Convention Continued Momentum of Recovery 2nd Consecutive Quarter of Positive NPI 3Q 21 340.7% 3Q 22 Mainly due to: Higher revenue from corporate events, conferences, and long-term licences 11.9 Higher fixed costs due to absence of Job Support Scheme grant and higher facilit
Slide 13: Diversified Portfolio Across Geography and Sector
Diversified Portfolio Across Geography and Sector Singapore Market and Office Assets Are Mainstays Income Contribution by Geography 67% 20% 13% Singapore Australia UK 3% Convention Income Contribution by Sector 76% 21% Office Retail 13
Slide 14: Capital Management
Capital Management Olderfleet, 477 Collins Street, Melbourne
Slide 15: Key Financial Indicators
Key Financial Indicators Fixed Interest Rate Borrowings and Foreign Currency Income Hedged Increased As at 30 Jun 22 As at 30 Sep 22 NAV Per Unit1 S$2.132 S$2.097 Total Debt Outstanding S$4,890 mil S$4,821 mil Aggregate Leverage Ratio2 43.1% 43.1% Weighted Average Debt Maturity 2.99 years 2.73 years
Slide 16: ~20% of Total Debt are Green/Sustainability-Linked Loans
~20% of Total Debt are Green/Sustainability-Linked Loans Debt Maturity Profile Perpetual Securities 1,600 (First Reset) 1,600 1,400 1,400 210 1,200 1,200 1,000 1,000 280 800 800 210 600 600 1172 900 300 300 400 400 739 200 200 310 200 200 200 150 0 0 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2029
Slide 17: Singapore Office Portfolio Performance
Singapore Office Portfolio Performance 17 One Raffles Quay, Singapore
Slide 18: Singapore Office Portfolio Remained Strong
Singapore Office Portfolio Singapore Office Portfolio Remained Strong High Occupancies with Well-Spread Expiry Committed Occupancy Lease Expiry Profile As at 30 Sep 22 % of Total NLA4 Comparison Core CBD Occupancy: 94.8%3 99.6% 100% 98.5% 99.4% 26.9% 21.9% 18.9% 18.1% 0.6% 11.0% 2.6% Suntec City One
Slide 19: Positive Rent Reversion Continued
Singapore Office Portfolio Positive Rent Reversion Continued 17 Quarters of Positive Rent Reversion New Tenants by Sector (sq ft) Work Done1 Technology, Media and 42% New Leases 52% Telecommunications 191,800 sq ft 58% Renewal Leases Banking, Insurance and Financial 31% for 3Q 22 Services Legal 7% R
Slide 20: Suntec City Office Performance
Suntec City Office Performance Suntec City Office, Singapore
Slide 21: Occupancy and Rent Outperformed Market Level
Suntec City Office Occupancy and Rent Outperformed Market Level Near 100% in Committed Occupancy psf pm 100% $9.25 $9.26 $9.28 $9.28 $9.50 $8.78 $9.09 $9.08 $8.84 $8.91 $8.70 $8.50 90% $7.50 80% $6.50 98.6% 99.4% 99.6% 97.0% 95.6% 96.0% 95.5% 97.2% 93.4% 94.8% $5.50 70% $4.50 60% $3.50 50% $2.50 3Q
Slide 22: Demand Remained Healthy
Suntec City Office Demand Remained Healthy Rent Reversion Remained Positive New Tenants by Sector (sq ft) Work Done1 36% New Leases Banking, Insurance and Financial 55,500 sq ft 64% Renewal Leases Services 38% for 3Q 22 Technology, Media and 30% Telecommunications Reak Estate and Property Services 1
Slide 23: Opportunities from Expiring Leases
Suntec City Office Opportunities from Expiring Leases Comfortable Baseline from Expiring Rents Expiry Rent 100.0% $10.5 90.0% $10.0 $9.87 $9.88 80.0% $9.47 $9.5 $9.28 $9.27 70.0% $9.17 $9.0 60.0% $8.5 50.0% $8.0 40.0% $7.5 30.0% $7.0 20.0% 39.0% 26.6% 10.0% $6.5 17.2% 1.2% 7.2% 8.4% $6.0 2022 2023 2
Slide 24: One Raffles Quay and MBFC Towers 1 & 2 Performance
One Raffles Quay and MBFC Towers 1 & 2 Performance MBFC Properties, Singapore
Slide 25: Backfilling of Vacancies Driven by TMT Sector
One Raffles Quay and MBFC Towers 1 & 2 Backfilling of Vacancies Driven by TMT Sector Strong Rent Reversion Achieved New Tenants by Sector (sq ft) Work Done1 44% 56% Technology, Media and 58% 136,300 sq ft Telecommunications for 3Q 22 Banking, Insurance and Financial 29% New Leases Services Renewal L
Slide 26: Singapore Office Outlook and Focus
Singapore Office Outlook and Focus Geopolitical and economic headwinds continue to Rent growth underpinned Flight to quality trend dampen business by tight office supply continues sentiments Tenant retention remains Office income expected to High portfolio occupancy strengthen further from 17 key am
Slide 27: Australia Portfolio Performance
Australia Portfolio Performance 177 Pacific Highway, Sydney
Slide 28: Australia Portfolio Occupancy Improved Further
Australia Portfolio Occupancy Improved Further Renewal Terms Agreed for More Than Half of 2023 Expiring Leases Committed Occupancy Lease Expiry Profile As at 30 Sep 22 % of Total NLA3 Comparison Nationwide CBD Office Occupancy: 86.0%1 98.7% 100.0% 95.2% 55.3% 93.8% 93.0% 91.7% 25.2% 4.8% 2.7% 1.0% 5
Slide 29: Australia Outlook and Focus
Australia Outlook and Focus Flight to quality trend Slowing economic growth Small increase in persists in Sydney and but high employment nationwide CBD office Melbourne with prime rents expected to remain vacancy expected expected to continue to improve Asset enhancement to Creation of fully-fitted
Slide 30: UK Portfolio Performance
UK Portfolio Performance Nova Properties, London
Slide 31: Strong UK Portfolio Occupancy
Strong UK Portfolio Occupancy Long WALE with No Lease Expiry until 2027 Committed Occupancy Lease Expiry Profile As at 30 Sep 22 % of Total NLA3 Comparison 98.3% of lease expiries will be in 2027 and beyond if tenants do not Central exercise lease breaks London Office Occupancy: 92.2%1 9.4% 100.0% 9
Slide 32: UK Office Outlook and Focus
UK Office Outlook and Focus Recessionary fears amidst Central London office Expansionary demand from high interest rates will have occupancy of 92.2%1 TMT, banking and finance negative impact on assets’ expected to remain stable sectors value with limited new supply Revenue resilient Proactive tenan
Slide 33: Singapore Retail Portfolio Performance
Singapore Retail Portfolio Performance Suntec City, Singapore
Slide 34: Portfolio Committed Occupancy Improved to 96.5%
Singapore Retail Portfolio Portfolio Committed Occupancy Improved to 96.5% Expected to Hold Steady Till End 2022 Committed Occupancy Lease Expiry Profile As at 30 Sep 22 % of Total NLA2 Comparison Central Area Outside Orchard occupancy: 88.6%1 96.7% 91.6% 96.5% 25.7% 23.4% 23.7% 16.7% 3.5% 4.5% 2.5%
Slide 35: Portfolio Rent Reversion Continued to Strengthen
Singapore Retail Portfolio Portfolio Rent Reversion Continued to Strengthen Driven by Positive Rent Reversion at Suntec City Mall Work Done1 Rent Reversion 74,100 sq ft for 3Q 22 +4.8% for 3Q 22 +2.9% for YTD 3Q 22 4Q 21 1Q 22 2Q 22 3Q 22 41% New Leases Renewal Leases 4.8% 59% 2.7% -0.9% -13.5% Note
Slide 36: Suntec City Mall Performance
Suntec City Mall Performance Suntec City Mall, Singapore
Slide 37: Rent Reversion Improved Further in 3Q 22
Suntec City Mall Rent Reversion Improved Further in 3Q 22 Leasing Demand Mainly Driven by F&B Work Done1 Rent Reversion 69,900 sq ft for 3Q 22 +5.6% for 3Q 22 +3.6% for YTD 3Q 22 4Q 21 1Q 22 2Q 22 3Q 22 42% New Leases 5.6% Renewal Leases 0.0% 3.2% 58% -11.8% Notes: 1. Reflects net lettable area of n
Slide 38: Anchor Suntec City Mall as Destination of Choice
Suntec City Mall Anchor Suntec City Mall as Destination of Choice Elevate Retail and Dining Experiences with Exciting Brands and Concepts New-to-Suntec Popular Chinese Multi-concept flagship Malaysia’s largest Famous LA eggslut’s Japanese café with restaurant chain – that houses a Apple authorized 2
Slide 39: Strong Return of Events and Roadshows
Suntec City Mall Strong Return of Events and Roadshows To Attract Different Shopper Profile and Increase Footfall Pending photos Chanel Cool Haus Team Williams Launch of the No. 1 Chanel – with beauty workshops Inaugural launch of the Canadian ice cream brand Fan engagement pop-up in conjunction wit
Slide 40: Digital Activation to Drive Online-to-Offline Conversion
Digital Activation to Drive Online-to-Offline Conversion To Engage and Reward Shoppers and Drive Sales F1 Themed Microsite Game Spin & Win Suntec+ in-app game developed in Stand to win the grand prize of a tandem with the F1 SG Grand 3D2N staycation worth over $800 Prix, to drive engagement and with
Slide 41: 3Q 22 Tenant Sales Continued Growth Momentum
Suntec City Mall 3Q 22 Tenant Sales Continued Growth Momentum Mall Traffic Continued to Increase Shopper Traffic and Tenant Sales psf (vs 2019) 140% 121% 121% 115% 115% 120% 112% 104% 106% 105% 101% 100% 2019 103% Average 104% 94% 91% 80% 87% 82% 82% 74% 75% 60% 3Q 22 40% 20% 0% Tenant Sales (Whole
Slide 42: Singapore Retail Outlook and Focus
Singapore Retail Outlook and Focus Rebound of MICE sector Cautious optimism for Recovery of retail will growth amongst retailers and tourist arrivals to boost continue into FY23 due to challenging macro footfall recovery environment Proactive lease Revenue recovery Improve returns through management
Slide 43: Suntec Convention Performance
Suntec Convention Performance Suntec Singapore
Slide 44: Strong Improvement in Revenue Performance
Suntec Convention Strong Improvement in Revenue Performance Driven by Robust Line-Up of Conferences and Events Conferences and Events Comex 2022 Hilton APAC GM Conference 2022 AWS Summit 2022 44
Slide 45: Suntec Convention Outlook and Focus
Suntec Convention Outlook and Focus Return of international Domestic market for Any easing of China’s MICE gathering pace, consumer and corporate border control measures supported by strong events will continue to drive will further propel growth pipeline of events recovery Income contribution for S
Slide 46: Our ESG Commitment
Our ESG Commitment 177 Pacific Highway
Slide 47: Ongoing Green Initiatives
Ongoing Green Initiatives 21 Harris Street, 55 Currie Street, 477 Collins Street • On-site solar photovoltaic (PV) panel as renewable energy source Suntec City • 28 EV charging stations Energy • Solar PV panel system Southgate Complex • Installation of additional water tanks to capture rainwater as
Slide 48: Continual Commitment to ESG
Continual Commitment to ESG All 12 assets About 20% of total debt are Green Building certified green / sustainability-linked loans Awarded GRESB highest accolade of Global Sector Leader for Office-Listed category for the second successive year. 2 assets in Australia and 177 Pacific Highway 2 assets
Slide 49: ESG Environmental – De-carbonization Target
ESG Environmental – De-carbonization Target • Attain Carbon Neutral status for all Australia and UK assets Carbon Neutral • Target to attain Net-Zero Carbon status by 2030 for assets with full ownership control • Target to attain Net-Zero Carbon status by 2050 for all assets across portfolio • Net-Z
Slide 50: Our Focus
Our Focus 55 Currie Street, Adelaide
Slide 51: Our Key Focus to Navigate the Challenges Ahead
Our Key Focus to Navigate the Challenges Ahead Unlock Value from Asset Enhancement Initiatives and Proactive Capital Potential Divestment of Mature Management Assets Explore Good Quality, Accretive Continual Commitment to Assets Sustainability Practices 51
Slide 52: Thank you
Thank you For enquiries, please contact: Eugenia Ong Manager, Asset Management Eugenia.ong@esr.com The Minster Building, London
Slide 53: Disclaimer
Disclaimer This presentation is focused on the comparison of the business updates for the quarter ended 30 September 2022 versus the quarter ended 30 September 2021. The information included in this release does not constitute an offer or invitation to sell or the solicitation of an offer or invitat
Slide 54: About Suntec REIT
About Suntec REIT 21 Harris Olderfleet,477 Collins Street, Street, Sydney Melbourne
Slide 55: About Suntec REIT
About Suntec REIT Singapore’s First Composite REIT Market Capitalisation S$4.4 Billion1 London Asset Under Management S$12.0 Billion2 Listed on 9 Dec 2004 on the SGX-ST High quality office assets, complemented by Singapore retail and convention components 10 properties – 3 in Singapore, 2 in Sydney,
Slide 56: Portfolio Snapshot
Portfolio Snapshot Singapore and UK Properties Suntec City One Raffles MBFC The Minster Nova Properties Suntec City – Suntec Convention Quay Properties Building Office & Retail Description Integrated commercial World-class convention Two premium Two premium Two Grade A Grade A Office development com
Slide 57: Portfolio Snapshot
Portfolio Snapshot Australia Properties 177 Southgate Olderfleet 477 55 Currie Street 21 Harris Street Pacific Highway Complex Collins Street Description 31-storey Grade A office Integrated development Premium Grade, 40- Twelve-storey, Grade A Nine-storey, Grade A building comprising two A-Grade lev