Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Ascendas Reit — H1 2022 Earnings Presentation
57 slides from Singapore Exchange's earnings presentation, Aug 2, 2022
Slide 1: 1H 2022 Financial Results
Ascendas Reit 1H 2022 Financial Results 2 August 2022 Aperia, Singapore
Slide 2: Disclaimers
Disclaimers • This presentation may contain forward-looking statements. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors i
Slide 3: Agenda
Agenda 04 Key Highlights 06 Financial Performance 10 Investment Management 14 Capital Management 20 Asset Management 36 Market Outlook 42 Portfolio Resilience & Sustainability 53 Appendix: - Historical Financial Results - Ascendas Reit’s Singapore Occupancy vs Industrial Average FM Global Centre, Si
Slide 4: Key Highlights
1H 2022 Financial Results 1-7 Wayne Goss Drive, Brisbane, Australia Key Highlights
Slide 5: Key Highlights
Key Highlights 1H 2022 Financial Distributable Income Capital Healthy Aggregate Leverage 36.7% Performance S$330.7 m Management 30 Jun 2021: 37.6% +6.3% y-o-y Distribution per Unit High Level of Natural Hedge 7.873 cents ~75% 30 Jun 2021: ~81% +2.8% y-o-y Asset Improved Portfolio Occupancy Investmen
Slide 6: Financial Performance
1H 2022 Financial Results Financial Performance 540-570 Congress Circle South, Chicago, United States
Slide 7: Financial Performance 1H 2022 vs 1H 2021
Financial Performance 1H 2022 vs 1H 2021 (S$’m) 1H 2022 1H 2021 Variance Mainly attributable to: • Full six-months contribution from the 11 data centres in Europe acquired in Mar 2021, acquisition of the remaining 75% interest in AF5PL* that holds Galaxis, Singapore, in Jun 2021, acquisition of 11 L
Slide 8: Financial Performance 1H 2022 vs 2H 2021
Financial Performance 1H 2022 vs 2H 2021 (S$’m) 1H 2022 2H 2021 Variance Mainly attributable to: • Contribution from the acquisition of 11 Logistics properties in Kansas City, USA, in Nov 2021, Gross revenue 666.5 640.5 4.1% the completion of 500 Green Road, Brisbane, Australia and 7 Kiora Crescent,
Slide 9: Distribution Details
Distribution Details Distribution Period DPU (Singapore cents) 1 1 Jan 2022 to 30 Jun 2022 7.873(1) Distribution timetable Last day of trading on “cum” basis 8 Aug 2022 (Monday) Ex-distribution date 10 Aug 2022 (Wednesday), 9.00 am Record date 11 Aug 2022 (Thursday), 5.00 pm Distribution payment dat
Slide 10: Investment Management
1H 2022 Financial Results Investment Management 510 Townsend Street, San Francisco, United States
Slide 11: 1H 2022 Investment Highlights
1H 2022 Investment Highlights o Completed S$272.9 m of acquisition, redevelopment and asset enhancement initiative. Purchase Consideration / 1H 2022 City/Country Sub-segment Completion Date Total Cost (S$ m) Completed Acquisitions 223.4 500 Green Road Brisbane, Australia Logistics 69.1(1) 11 Feb 202
Slide 12: Acquisition (Completed in 2Q 2022)
Acquisition (Completed in 2Q 2022) 7 logistics properties in Chicago, United States Total Purchase Consideration(1) S$133.2 m (US$99.0 m) Acquisition Fee(2), Stamp Duty and Other S$3.5 m (US$2.6 m) Transaction Costs Total Acquisition Cost(3) S$136.7 m (US$101.6 m) 501 South Steward Road Vendor BREIT
Slide 13: Asset Enhancement Initiative (Completed in 2Q 2022)
Asset Enhancement Initiative (Completed in 2Q 2022): Changi Logistics Centre, Singapore Enhancement works involved transformer power upgrading, fire safety regularization works and Description modernization of building services such as toilets, cargo and passenger lifts. Upgraded smoke purging syste
Slide 14: Capital Management
1H 2022 Financial Results Capital Management Reynolds House, Manchester, United Kingdom
Slide 15: Healthy Balance Sheet
Healthy Balance Sheet ▪ Aggregate leverage is healthy at 36.7% (1)(2) ▪ Available debt headroom of ~S$4.6 b to reach MAS’s aggregate leverage limit of 50.0% As at As at As at 30 Jun 2022 31 Dec 2021 30 Jun 2021 Total Debt (S$ m) (1)(2)(3) 6,389 6,143 6,271 Total Assets (S$ m) (1)(2) 17,420 17,126 16
Slide 16: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2032 ▪ Extended debt maturity to 3.9 years ▪ To date, green financing totaling S$1.5 b (1) accounts for about 23% of total borrowings 1400 7% 5% 1200 36% 943 Diversified 1000 S$ million 892 874 Financia
Slide 17: Key Funding Indicators
Key Funding Indicators ▪ Robust financial metrics that exceed bank loan covenants by a healthy margin ▪ A3 credit rating facilitates good access to wider funding options at competitive rates As at As at As at 30 Jun 2022 31 Dec 2021 30 Jun 2021 Aggregate Leverage (1)(2) 36.7% 35.9% 37.6% Unencumbere
Slide 18: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management ▪ 80.0% of borrowings are on fixed rates with an average term of 3.7 years ▪ 25 bps increase in interest rate is expected to have a pro forma impact of S$3.1 m decline in distribution or 0.07 cents decline in DPU Decrease in Change as Pro Forma DPU Impact Change
Slide 19: High Natural Hedge
High Natural Hedge ▪ Maintained high level of natural hedge of ~75% for overseas investment to minimise the effects of any adverse exchange rate fluctuations. A$ Natural Hedge US$ Natural Hedge £ Natural Hedge € Natural Hedge 65% 81% 71% 100% US$1.8 b A$2.4 b (S$ 2.5 b) (S$ 2.4 b) US$1.6 b S$ billio
Slide 20: Asset Management
1H 2022 Financial Results Asset Management Nucleos, Singapore
Slide 21: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 96.6% 96.8% 95.8% 95.3% 94.0% 92.8% 97.7% 96.7% 98.2% 91.9% 90.0% 94.0% 92.6% 91.3% 87.9% Jun-22 Mar-22 Jun-21 Singapore Australia United States United Kingdom / Europe Total Gross Floor 3,079,386 840,368(2) 691,390(3) 590,393(4) 5,201,537 Area (sqm)(1) (1) Gross Floo
Slide 22: Singapore
Singapore Occupancy ▪ Occupancy rose to 91.9% mainly attributable to ▪ full occupancy at 1 Changi South Lane, a logistics property (30 Jun 2022: 100% vs 31 Mar 2022: 0%); ▪ higher occupancy at UBIX, a newly redeveloped industrial property (30 Jun 2022: 51.5% vs 31 Mar 2022: 18.0%). As at 30 Jun 2022
Slide 23: Australia
Australia Occupancy ▪ Occupancy remained healthy at 96.6%. As at 30 Jun 2022 31 Mar 2022 30 Jun 2021 Total Australian Portfolio GFA (sqm) 840,368 840,368(1) 851,207(2) Australian Portfolio Occupancy (same store)(3) 96.4% 96.6% 96.6% Occupancy of Investments completed in the last 100%(4) 100%(4) 100%
Slide 24: United States
United States Occupancy ▪ Occupancy rose to 95.3% mainly due to the addition of seven fully occupied logistics properties in Chicago (acquired in Jun 2022). As at 30 Jun 2022 31 Mar 2022 30 Jun 2021 Total United States Portfolio GFA (sqm) 691,390(1) 551,856(2) 357,056 United States Portfolio Occupan
Slide 25: United Kingdom / Europe
United Kingdom / Europe Occupancy ▪ Occupancy rose to 97.7% mainly due to the lease up of Unit 13 Wellesbourne Distribution Park, a logistics property which was vacant as at 31 March 2022. As at 30 Jun 2022 31 Mar 2022 30 Jun 2021 Total UK/Europe Portfolio GFA (sqm) 590,393 590,393 590,393 UK/Europe
Slide 26: Singapore: Sources of New Demand in 1H 2022
Singapore: Sources of New Demand in 1H 2022 2.2% 3.0% 0.7% 1.1% 9.1% 7.0% 8.6% 0.3% 9.0% 0.6% 6.0% 8.4% 10.3% 9.5% By Gross 10.6% Rental By NLA 23.0% 9.7% Income 20.5% 11.2% 12.0% 19.6% 17.6% Engineering Logistics & Supply Chain Management Electronics Education and Media Lifestyle, Retail and Consum
Slide 27: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Average portfolio rent reversion of leases renewed in 2Q 2022 and 1H 2022 was 13.2% and 9.4% respectively. ▪ Rental reversion for FY2022 is expected to be in the positive mid single-digit range. % Change in Renewal Rates for 2Q 2022 1Q 2022 2Q 2021 Multi-tenant Building
Slide 28: Weighted Average Lease Expiry
Weighted Average Lease Expiry By Gross Revenue ▪ Portfolio Weighted Average Lease Expiry (WALE) stood at 3.7 years WALE (as at 30 Jun 2022) Years Singapore 3.4 Australia 3.1 United States 4.1 United Kingdom/Europe 5.3 Portfolio 3.7 As c endas Rei t 1 H 2 0 2 2 Fi n a n c i a l Res u l t s 28
Slide 29: Portfolio Lease Expiry Profile
Breakdown of expiring leases for Portfolio Lease Expiry Profile FY2022 and FY2023 As at 30 Jun 2022 19.7% o Portfolio WALE of 3.7 years o Lease expiry is well-spread, extending beyond FY2036 FY2022 57.4% o About 10.2% of gross rental income is due for renewal in the remaining of FY2022 22.9% o Weigh
Slide 30: Singapore: Lease Expiry Profile
Breakdown of expiring leases Singapore: Lease Expiry Profile for FY2022 and FY2023 As at 30 Jun 2022 o Singapore portfolio WALE of 3.4 years 32.5% o Lease expiry is well-spread, extending beyond FY2036 44.3% FY2022 o About 9.5% of Singapore’s gross rental income is due for renewal in the remaining o
Slide 31: Australia: Lease Expiry Profile
Breakdown of expiring leases Australia: Lease Expiry Profile for FY2022 and FY2023 As at 30 Jun 2022 3% Melbourne o Australia portfolio WALE of 3.1 years 8% Brisbane 11% o Lease expiry is well-spread, extending till FY2031 FY2022 o About 5.7% of Australia’s gross rental income is due for renewal in
Slide 32: United States: Lease Expiry Profile
Breakdown of expiring leases (1) United States: Lease Expiry Profile for FY2022 and FY2023 As at 30 Jun 2022 7% Kansas City 2% Portland o United States portfolio WALE of 4.1 years Chicago 9% Raleigh 5% o Lease expiry is well-spread, extending beyond FY2033 22% FY2022 o About 18.9% of United States’
Slide 33: United Kingdom/Europe: Lease Expiry Profile
Breakdown of expiring leases United Kingdom/Europe: Lease Expiry Profile for FY2022 and FY2023 As at 30 Jun 2022 13% o United Kingdom/Europe portfolio WALE of 5.3 years United Kingdom, 22% o Lease expiry is well-spread, extending beyond FY2036 FY2022 o About 7.2% of United Kingdom/Europe’s gross ren
Slide 34: Improving Portfolio Quality
Improving Portfolio Quality Ongoing Projects Estimated City/Country Estimated Total Cost (S$m) Completion Date Acquisitions Under Development 161.0 MQX4, Macquarie Park Sydney, Australia 161.0(1) 1Q 2023(2) Redevelopments 384.5 1 Science Park Drive (34% stake) Singapore 300.2(3) 2Q 2025 iQuest@IBP S
Slide 35: Asset Enhancement Initiative (New)
Asset Enhancement Initiative (New): The Alpha, Singapore Refurbishment of the main lobby will include modernization of the interiors and collaboration spaces such as meeting rooms and working pods to enhance the overall tenant experience. Lift lobbies and common corridors will also undergo a facelif
Slide 36: Market Outlook
1H 2022 Financial Results Market Outlook Perimeter Two, Raleigh, United States 36
Slide 37: Market Outlook
Market Outlook Inflation rates have soared globally driven by supply chain disruptions exacerbated by the Russian-Ukraine war and pent-up consumer spending. Central banks around the world have taken action to contain inflation by raising interest rates. The International Monetary Fund (IMF) expects
Slide 38: Market Outlook: Australia
Market Outlook Australia ▪ In 1Q 2022, the Australian economy grew 3.3% y-o-y and 0.8% quarter-on-quarter (q-o-q). Household spending rose 1.5% in the quarter following the easing of COVID-19 restrictions. The IMF projected the Australian economy to achieve a GDP growth of 3.8% in 2022. ▪ In 2Q 2022
Slide 39: Market Outlook: United States
Market Outlook United States ▪ In 2Q 2022, the USA economy shrank for a second consecutive quarter. GDP declined by 0.9% q-o-q following a 1.6% q-o-q contraction in 1Q 2022. Whilst consumer spending and exports grew during the quarter, this was offset by a decline in business inventories ▪ Inflation
Slide 40: Market Outlook: United Kingdom / Europe
Market Outlook United Kingdom (UK) / Europe ▪ UK’s GDP rose 8.7% y-o-y and 0.8% q-o-q in 1Q 2022. In May 2022, GDP grew by 0.5% month-on-month, contributed by growth across the services, production and construction sectors. UK’s economy is projected to expand by 3.2% in 2022. ▪ UK’s Consumer Price I
Slide 41: Market Outlook: Conclusion
Market Outlook Conclusion ▪ The war in Ukraine has injected greater uncertainty into the global economy. Supply chain disruptions, higher prices and interest rates have affected trade, commodity and financial markets. These could have some impact on tenants’ businesses as well as on Ascendas Reit’s
Slide 42: Portfolio Resilience & Sustainability
1H 2022 Financial Results Portfolio Resilience & Sustainability 254 Wellington Road, Melbourne, Australia
Slide 43: Diversified Portfolio Across Developed Markets
Diversified Portfolio Across Developed Markets Investment Properties stood at S$16.6 b(1) 61% Singapore as at 30 Jun 2022 o Singapore: S$10.0 b 15% United States o United States: S$2.5 b Asset Value o Australia: S$2.4 b S$16.6 b (1) 14% Australia o United Kingdom/Europe: S$1.7 b 10% United Kingdom/E
Slide 44: Multi-Asset Portfolio
Multi-Asset Portfolio Steering Towards Growth Sectors Steering our portfolio towards asset classes to cater to 47%, Business Space and Life Sciences the changing market and tenant requirements arising Business Space from structural trends and changing consumption 40% patterns such as digitalisation,
Slide 45: Tapping the Growing Technology, Logistics & Life Science Industries
Tapping the Growing Technology, Logistics & Life Science Industries 64.3% of our customer base is from the Data centres 11.1% Engineering 11.1% growing technology, logistics and life Logistics & Supply Chain Management 10.9% sciences industries Information & Communications… 10.7% Biomedical Sciences
Slide 46: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of more than 1,600 tenants. ▪ Top 10 customers (as at 30 Jun 2022) account for about 17.1% of monthly portfolio gross revenue. ▪ On a portfolio basis, weighted average security deposit is about 4.7 months of rental income. Top 10 Customers
Slide 47: Diversified Portfolio
Galaxis,4.5% Aperia,3.6% Diversified Portfolio Paul van Vlissingenstraat,2.8% ONE @ Changi City,2.5% 12, 14 & 16 Science Park Drive,2.6% Nucleos,2.4% 510 Townsend Street,2.0% 1, 3 & 5 Changi Business Park Crescent,2.0% Neuros & Immunos,1.9% Kim Chuan Telecommunication Complex,1.9% Pioneer Hub,1.8% T
Slide 48: Sustainability Committees
Sustainability Committees Strategic Oversight & Implementation of Strategies The Manager’s Sustainability Committee CapitaLand Investment (Established in 2020) (CLI / Sponsor) Board of Directors Chairman: CEO CLI Strategic Committee Strategic oversight of ESG policies and integration Committee Membe
Slide 49: Ascendas Reit's ESG Targets
Ascendas Reit’s ESG Targets Targets Timeline • Green Certification for new acquisitions/developments to meet a minimum green rating target set(1) o Singapore – Green Mark GoldPLUS award - o Overseas – certification by a green rating system administered by a national government ministry/agency or a W
Slide 50: Updates on Green Initiatives
Updates on Green Initiatives Green Financing Green Buildings ▪ Established Green Finance Framework in FY2020 ▪ To date, 74% or 44% of Ascendas Reit’s respective managed and total properties by GFA is green certified ▪ Total of ~S$1.5b comprising Green Bond, Green (31 Mar 2022: 48% and 31% respective
Slide 51: Committed to Reduce Carbon Footprint
Committed to Reduce Carbon Footprint ▪ By 2022, Ascendas Reit aims to power the common facilities’ electricity usage at Nucleos, Singapore, with renewable energy; in addition to the existing 3 properties at one-north(1) and Singapore’s first SLE industrial building, LogisTech. Neuros & Immunos, Sing
Slide 52: Green Buildings Status
Green Buildings Status 74% 52 53 UBIX, 21 Changi Serangoon Serangoon 18 South Techplace I Techplace II Singapore North North Avenue 2 Avenue 4 Avenue 4 Green Mark of Managed 18 138 Depot 2 Senoko 20 Tuas Certifications Properties are Green Woodlands Loop Ubi Biz-Hub South Road Road Pioneer Hub Avenu
Slide 53: Appendix
1H 2022 Financial Results Appendix Unit 5 Wellesbourne Distribution Park, West Midlands, United Kingdom 53
Slide 54: Historical Financial Results
Historical Financial Results Financial Highlights 1H 2021 2H 2021 FY 2021 1H 2022 (S$ m) Gross Revenue 586 641 1,227 667 Net Property Income 446 475 921 477 Total Amount Available for 311 319 630 331 Distribution No. of Units in Issue (m) 4,193 4,198 4,198 4,201 Distribution Per Unit (cents) 7.660 7
Slide 55: Singapore Occupancy vs Industrial Average
Ascendas Reit’s Singapore Occupancy vs Industrial Average 100.0% 98.6% 95.0% 90.9% 90.9% 89.4% 90.0% 86.7% 85.1% 85.0% Occupancy Rate 80.0% 75.0% 70.0% 65.0% 60.0% 55.0% 50.0% Business Space & Life Sciences Industrial & Data Centres Logistics Ascendas REIT JTC Statistics Source : Ascendas Reit’s Sin
Slide 56: Average Market Rents (Singapore)
Average Market Rents (Singapore) By Segment Rental Index of All Singapore Industrial Property 120.00 2022Q2: Rental Index (Base Year: 2022Q1: 93.7 100.00 92.3 80.00 2021Q1: 2021Q2: 2021Q3: 2021Q4: 4Q2012) 90.1 90.6 91.2 91.4 60.00 40.00 20.00 0.00 Source : JTC 2Q 2022 Market Report Business Park (Ci
Slide 57: Thank you
ascendas Reit 3 ba ‘A Member of CapitaLand Investment