Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Soilbuild Business Space REIT — Q1 2018 Earnings Presentation
36 slides from Singapore Exchange's earnings presentation, Apr 16, 2018
Slide 1: 1Q FY2018 Results Presentation
1Q FY2018 Results Presentation 16 April 2018
Slide 2: Disclaimer
Disclaimer This presentation should be read in conjunction with the financial statements of Soilbuild Business Space REIT for the first quarter from 1 January 2018 to 31 March 2018 (hereinafter referred to 1Q FY2018) This presentation is for information only and does not constitute an offer or solic
Slide 3: Agenda
Agenda 1Q FY2018 Financial Financial Position / 04 Key Highlights 06 Performance 13 Capital Management Divestment of KTL Market Update and 17 Portfolio Update 30 Offshore 32 Outlook 3
Slide 4: Key Highlights
Key Highlights
Slide 5: Key Highlights of 1Q FY2018
Key Highlights of 1Q FY2018 • Year-on-year (“y-o-y”) gross revenue fell by 11.5% to S$19.4 million and net property income (“NPI”) fell by 11.6% to S$17.0 million. 1Q FY2018 • Distributable income fell to S$14.0 million in 1Q FY2018 from S$15.6 million in 1Q FY2017. Results • Distribution per Unit (
Slide 6: Financial Performance 1Q FY2018
Financial Performance 1Q FY2018
Slide 7: 1Q FY2018 Financial Results Y-o-Y
1Q FY2018 Financial Results Y-o-Y For the period from Variance Variance 1 January to 31 March 1Q FY2018 1Q FY2017 (‘000) (%) (S$’000) Gross Revenue 19,447 21,985 (2,538) (11.5) Less Property Expenses (2,458) (2,772) 314 11.3 Net Property Income 16,989 19,213 (2,224) (11.6) Interest Income 502 434 68
Slide 8: 1Q FY2018 Financial Results Q-o-Q
1Q FY2018 Financial Results Q-o-Q Variance Variance For the period 1Q FY2018 4Q FY2017 (‘000) (%) (S$’000) Gross Revenue 19,447 20,747 (1,300) (6.3) Less Property Expenses (2,458) (2,995) 537 17.9 Net Property Income 16,989 17,752 (763) (4.3) Interest Income 502 436 66 15.1 Gain on divestment of a p
Slide 9: Distribution per Unit
Distribution per Unit 1Q FY2018 vs 1Q FY2017 vs 4Q FY2017 Y-o-Y Q-o-Q 1Q FY2018 1Q FY2017 4Q FY2017 Variance (%) Variance (%) Distributable Income (S$’000) 13,960 15,573 (10.4) 14,559 (4.1) Distribution per Unit (“DPU”) 1.324 1.489 (11.1) 1.383 (4.3) (cents) Annualised Distribution Yield 8.1%(1) 8.8
Slide 10: 1Q FY2018 Distribution
1Q FY2018 Distribution Distribution Details 1Q FY2018 Distribution Period 1 January 2018 – 31 March 2018 Distribution Amount SGD 1.324 cents per unit Distribution Timetable 1Q FY2018 Last Day of Trading on “cum” Basis Thursday, 19 April 2018 Ex-Date Friday, 20 April 2018 Books Closure Date Tuesday,
Slide 11: Stable Distributable Income since IPO
Stable Distributable Income since IPO Stable NPI 20.0 Net Property Income 17.8 18.9 19.2 18.7 17.8 17.8 17.5 17.2 17.3 17.3 17.0 (S$ million) 16.7 15.8 14.2 14.2 14.9 15.0 13.7 14.0 10.0 6.9 5.0 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4
Slide 12: Stable Distributions since IPO
Stable Distributions since IPO Cumulative DPU of 28.1 cents Distribution Yield = 8.1%(3) Cumulative Closing Price(1) Cumulative Index price (S$) Distribution (S$) DPU (cents) Returns(2) (%) 130 0.9 3Q 2013 0.745 0.760 0.97 4Q 2013 0.770 2.270 2.91 1Q 2014 0.780 3.832 4.91 0.85 120 2Q 2014 0.800 5.33
Slide 13: Financial Position / Capital Management
Financial Position / Capital Management
Slide 14: Statement of Financial Position
1Q FY2017 Financial Results – Statement of Financial Position (S$’000) 31 March 2018 31 December 2017 Investment Properties 1,111,296 1,110,600 Property held for sale - 53,000 Other Assets 81,979 18,003 Total Assets 1,193,275 1,181,603 Borrowings 475,104 474,359 Other Liabilities 48,509 38,606 Net A
Slide 15: Prudent Capital Management
Prudent Capital Management 1) Fixed interest rate for 70.1% of borrowings for a 2) Aggregate leverage of 40.2%(1) weighted average term of 1.1 years(1). 31 March 2017 Bank Facility drawn down MTN Interest Free Loan Total Bank Debt Drawn Down S$243.5 million Multicurrency Debt Issuance S$181.5 millio
Slide 16: Interest Rate Risk Management
Interest Rate Risk Management Interest Rate Increase in FY2018 As a % of FY2017 As a % of FY2017 Increase with finance expense Finance Expenses Distributable Income effect from (S$’000) (%) (%) 1 April 2018 0.25% 470 3.0 0.8 0.50% 939 6.0 1.6 0.75% 1,408 9.0 2.4 16
Slide 17: Portfolio Update
Portfolio Update
Slide 18: Portfolio Overview
Portfolio Overview Portfolio Summary(1) Valuation(2) S$1,111.3 million Business Park Properties Total NLA 3.69 million sq ft Industrial COS Printers Properties WALE (by GRI) 3.0 years NLA: 58,752 sq ft NK Ingredients Valuation: S$10.6 million NLA: 312,375 sq ft Senoko Way Occupancy 87.5% Valuation:
Slide 19: Long Land Lease Expiry
Long Land Lease Expiry Percentage of Unexpired Land Lease Term By Valuation 66.1% 13.1% 17.6% 3.2% Below 25 years 25 - 35 years 35 - 45 years Above 45 years Long Average Land Lease Tenure of 42.8 Years (by valuation) Property Acquisition Date Land Lease Expiry Date Valuation (S$’m)(1) Solaris 16-Aug
Slide 20: Portfolio Occupancy
Portfolio Occupancy Occupancy (%) 100 100 100 97.7 Eightrium 97.0 94.7 Tuas 95 Connection West Park 92.7 BizCentral Portfolio 90 90.4 Industrial 88.9 87.5 Average 85 84.9 81.5 80 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY2014 FY2014 FY2014 FY2014 FY2015 FY2015 FY2015 FY2015 FY2016 FY2016
Slide 21: Leasing Update
Leasing Update Avg. EGR before Renewal / Avg. EGR after Renewal / Rental No. of Leases Area (sq ft) New Leases ($ psf) New Leases ($ psf) Reversion 1Q FY2018 Renewal / 13 250,997(1) 1.52 1.41 (7.2%) Forward Renewal New Leases 5 51,997(2) 1.60 1.41 (11.9%) Total 18 302,994 1.53 1.41 (7.8%) Effective
Slide 22: Trade Sector of Leases Signed
Trade Sector of Leases Signed For leases signed in FY2018 By Gross Rental Income Food Products & Beverages 2% Real Estate and Construction 4% Marine Offshore 5% Oil & Gas 6% Supply Chain Management, 3rd Party Logistics, Freight Forwarding 6% Information Technology 7% Others 8% Fabricated Metal Produ
Slide 23: Well Staggered Lease Expiry
Well Staggered Lease Expiry WALE (by NLA) 2.9 years WALE (by Gross Rental Income) 3.0 years WALE of leases signed in 1Q FY2018 was 3.4 years (by GRI) 40% 37.50% Solaris Sub-Tenant Lease Expiry (2) (by GRI) 2.7% 35% 3.0% >15 Aug 2018 32.2% 4.8% 2019 30% 27.2% 2020 2021 24.6% 25.5% 25% 9.7% 4.9% 2022
Slide 24: Solaris Lease Expiry Profile
Solaris Lease Expiry Profile WALE (by NLA) 2.3 years WALE (by Gross Rental Income) 2.3 years 45% 40% 39.6% 38.8% 35% 30% 25% 20% 19.1% 19.0% 18.9% 19.4% 15% 10% 11.9% 11.9% 10.5% 10.9% 5% 0.0% 0.0% 0% 2018 2019 2020 2021 2022 >2022 Solaris Expiry by NLA Solaris Expiry by GRI No underlying lease expi
Slide 25: Lease Expiry Profile
Lease Expiry Profile Based on Solaris Underlying Tenant(2) WALE (by NLA) 3.1 years WALE (by Gross Rental Income) 3.4 years 30% 25.2% 24.6% 25% 1.4% 22.3% 19.4% 19.4% 20% 18.2% 16.0% 2.0% 13.4% 14.4% 15% 13.6% 4.7% 13.6% 12.8% 2.4% 6.8% 1.2% 6.6% 10.1% 9.3% 10% 2.3% 6.6% 6.2% 4.1% 11.2% 12.7% 12.4% 5
Slide 26: Well diversified Portfolio
Well diversified Portfolio Portfolio Income Spread Diversified Tenant Base By Property By Gross Revenue 11% 10% 5% 6% MNC 3% 4% 12% 1% 2% SME 109 1% tenants in 1Q FY2018 32% portfolio(3) 57% SGX Listed Corporation 7% Gross Revenue(1) Government Agency 23% 24% Balanced Portfolio with Growth Upside By
Slide 27: Well diversified Portfolio
Well diversified Portfolio Well-spread Trade Sectors By Gross Rental Income Marine Offshore Oil & Gas 1% 16% Precision Engineering, Electrical and Machinery 1% 5% Products Chemicals 1% 2% 2% Electronics 10% 5% Others Fabricated Metal Products 4% % of Monthly Publishing, Printing & Reproduction of Re
Slide 28: Diverse Tenant Base
Diverse Tenant Base Speedy-Tech 2.4% Dyson Operations Pte Ltd 2.5% John Wiley & Sons 2.7% (Singapore) Pte Ltd Ubisoft Singapore Pte Ltd 2.9% Nestle Singapore (Pte) Ltd 3.1% Mediatek Singapore Pte Ltd 4.2% Autodesk Asia Pte Ltd 4.6% SPRING Singapore 4.8% NK Ingredients Pte Ltd 6.7% SB (Westview) Inve
Slide 29: Rental Growth from Master Leases
Rental Growth from Master Leases Long-term Master Leases Lease Term from start of Master Lease Agreement Master Lease Property Date of Acquisition Lease Term Lease Expiry 1 Solaris 16-Aug-13 5 Years 15-Aug-18 2 Beng Kuang Marine 10-May-13 7 Years 9-May-20 3 COS Printers 19-Mar-13 10 Years 18-Mar-23
Slide 30: Proposed Divestment of KTL Offshore
Proposed Divestment of KTL Offshore
Slide 31: Unlocking Capital
Unlocking Capital Completion of Divestment of KTL Offshore Address 61 & 71 Tuas Bay Drive Description Two adjacent detached purpose-built factories located along Tuas Bay Drive, off Tuas South Avenue 2 Remaining Land Tenure 48.6 years (as at 31 Dec 2017) Gross Floor Area 208,057 sq ft Acquisition Ye
Slide 32: Market Update & Outlook
Build BUSINESS SPACE REIT
Slide 33: Industrial Properties Profile
Industrial Properties Profile 4Q 2013 vs 4Q 2014 4Q 2014 vs 4Q 2015 4Q 2015 vs 4Q 2016 4Q 2016 vs 4Q 2017 Vacancy Rental Vacancy Rental Vacancy Rental Vacancy Rental Change y-o-y Rate Index Rate Index Rate Index Rate Index Multi-user 1.4% 0.7 0.0% 3.4 0.1% 7.7 0.8% 2.6 Single-user 1.2% 5.1 0.6% 0.9
Slide 34: Industrial Properties Profile
Industrial Properties Profile Vacancy Rate and Rental Index (Base 4Q 2012 = 100) Vacancy rate (%) Rental index 35 106.8 108.9 110.0 106.5 104.3 105.0 30 100.0 99.9 100.1 99.1 25 98.3 95.0 90.5 89.9 89.2 89.1 20 90.0 90.7 88.5 86.7 85.0 15 85.8 80.0 10 75.0 70.0 5 65.0 0 60.0 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 35: The Year Ahead
The Year Ahead Singapore’s Industrial Property Soilbuild REIT Economy Sector • MTI announced based on • Stronger leasing demand in • Completed close to advance estimates, tandem with the growth in 303,000 sq ft of new Singapore economy grew Manufacturing GDP and leases, renewals and 4.3% y-o-y and 1
Slide 36: Thank You
THANK YOU Key Contacts: Roy Teo Lim Hui Hua Chief Executive Officer Chief Financial Officer Tel: (65) 6415 5983 Tel: (65) 6415 5985 Email: roy.teo@soilbuild.com Email: lim.huihua@soilbuild.com
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