Frasers Property Ltd. · SGX:TQ5

Frasers Property — Frasers Commercial Trust — FY2017 Earnings Presentation

38 slides from Frasers Property's earnings presentation, Oct 20, 2017

  1. Slide 1: Frasers Commercial Trust 4QFY17 and FY17 Financial Results

    Frasers Commercial Trust 4QFY17 and FY17 Financial Results 20 October 2017

  2. Slide 2: Important notice

    Important notice Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward-looking statement and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual resu

  3. Slide 3: Contents

    Contents 3  Results  Capital Management  Portfolio Review  Appendix: Assets Details and Markets Overview

  4. Slide 4: Results

    Results FRASERS COMMERCIAL

  5. Slide 5: Results – FY17 key highlights

     Results – FY17 key highlights 5  FY17 distribution income rose 1.3% y-o-y to S$78.6 million1  FY17 DPU of 9.82 cents in-line with FY16  Better overall performance by Australian portfolio underpinned by better performance by 357 Collins Street and average stronger Australian dollar, offset by hi

  6. Slide 6: Results – 4QFY17 financial highlights

     Results – 4QFY17 financial highlights 6 1 Jul 2017 – 4QFY17 Y-o-Y Contributing factors 30 Sept 2017 (S$ ‘000) Change (%) 3%  Lower occupancy rates for Alexandra Technopark, China Square Central1 and Central Gross Revenue 38,306 Park, offset by effects of average stronger Australian dollar.  High

  7. Slide 7: Results – FY17 Financial highlights

     Results – FY17 Financial highlights 7 1.3% y-o-y rise in FY17 distributable income 1 Oct 2016 – 30 Sept FY17 Y-o-Y Contributing factors 2017 (S$ ‘000) Change (%)  Higher revenue contribution from 357 Collins Street due to higher occupancy and rental rates achieved, a one-off payment received in r

  8. Slide 8: Results – 4QFY17 Financial highlights

     Results – 4QFY17 Financial highlights 8 Higher repair and maintenance expenses for Caroline Chisholm Centre and lower occupancy rates for Alexandra Technopark, China Square Central and Central Park, offset by effects of stronger Australian dollar Net Property Income (S$m) TOTAL: S$26.7 million for

  9. Slide 9: Results – FY17 Financial highlights

     Results – FY17 Financial highlights 9 Better performance by Australian portfolio underpinned by better performance by 357 Collins Street and average stronger Australian dollar, offset by higher repair and maintenance expenses for Caroline Chisholm Centre and lower occupancy rates for Alexandra Tec

  10. Slide 10: Results – Financial highlights

     Results – Financial highlights 10  FY17 DPU in-line with FY16  4QFY17 DPU stable q-o-q  18.0% of management fees were taken in Units1 in 4QFY17  7.5% management fees were taken in Units in FY17 overall vs 18.2% in FY16 DPU (Cents) FY16: 9.82 cents FY17: 9.82 cents 1 In 4QFY16, no Manager’s man

  11. Slide 11: Results – Distribution payment

     Results – Distribution payment 11 DRP will be applied for the distribution for 4QFY17 Distribution Period 1 July 2017 to 30 September 2017 Distribution of 2.4070 cents per Unit comprising: a) taxable income distribution of 1.5262 cents; Ordinary Unit Distribution Rate b) tax-exempt income distribu

  12. Slide 12: Capital Management

    Capital Management FRASERS COMMERCIAL

  13. Slide 13: Portfolio valuations as at 30 Sep 2017

     Portfolio valuations as at 30 Sep 2017 13  Portfolio value up 4.1% y-o-y  Higher valuations for China Square Central and the Australian properties Local Variance from 30 Variance from 30 Date of currency Translation as at September 2016 (local September 2016 valuation Value 30-Sep-17 currency va

  14. Slide 14: Capital Management – Debt statistics

    14  Capital Management – Debt statistics 14  Healthy gearing of 34.7%, lower than 35.9% in 3Q17  Healthy interest coverage ratio of 4.1 times  Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 30 Sept 2017 Total Assets (S$’00

  15. Slide 15: Well-Spread Debt Expiry Profile

    15  Well-Spread Debt Expiry Profile 15  Well-spread debt maturity profile, with not more than S$183 million due in any financial year  No debt maturing until August 2018  81% of gross borrowings on fixed rate  All assets are unencumbered Debt maturity Debt composition – floating vs. fixed inter

  16. Slide 16: Portfolio Review

    Portfolio Review

  17. Slide 17: Portfolio review – Asset values

     Portfolio review – Asset values 17 Diversified portfolio with no single property accounting for more than 27% of portfolio value Singapore Asset values as at 30 September 2017 Perth Canberra Singapore $ 1,212.0 mil 59% Melbourne Australia $ 858.9 mil 41% Total $ 2,070.9 mil 100% * Reflects FCOT’s

  18. Slide 18: Portfolio review – Occupancy Rates & WALE

     Portfolio review – Occupancy Rates & WALE 18  Average committed occupancy rate of 85.9%  WALE of 3.4 years1,2 Geographical occupancy and % NPI contribution As at Committed Key portfolio statistics 30 Sept 2017 occupancy2 Ave Occupancy 89.1% 85.9% Portfolio WALE by gross 2.6 years 3.4 years renta

  19. Slide 19: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 19 Well-spread lease expiry profile provides income defensiveness Lease expiries in FY18 reduced by 5.5% mainly due to the Lease expiry in FY22 and space committed by an entity of Rio Tinto Limited for 12 beyond increased to years at Central Park*. Inclusive

  20. Slide 20: Portfolio review – Lease expiry profile

     Portfolio review – Lease expiry profile 20 Proactive management of leases Inclusive of space which will not be renewed by Hewlett-Packard Property Lease Enterprise at Alexandra Technopark Lease expiry reduced by half Expiries in FY18 as a following lease expiry in November after 5.5% of leases by

  21. Slide 21: Portfolio review – Rental reversions

     Portfolio review – Rental reversions 21 Positive rental reversions for new/renewed leases:  average 3.1%1 for c.67,000 sf (2.6% of portfolio) that commenced in 4QFY17  average 1.9%1 for c.253,900 sf (9.7% of portfolio) that commenced in FY17 Weighted average rental reversions1 Property 1QFY17 2Q

  22. Slide 22: Portfolio review – Leasing activities

     Portfolio review – Leasing activities 22  Healthy levels of leasing activities and market interest  Selected new/renewed leases in 4QFY17: Tenant Industry Property Sushi Tei Pte Ltd Food & beverage China Square Central Elitaire Law LLP Legal China Square Central Job Studio Pte Ltd Consultancy/ b

  23. Slide 23: Portfolio review – Mid-term rent reviews

     Portfolio review – Mid-term rent reviews 23 23 37% of FY18 leases have built-in step-up rents FY18 – 21 - Portfolio fixed % reviews GROSS RENTAL INCOME1 Average Total Property Leases step-up rent Property Portfolio China Square 9 1.8% 41.3% 7.2% Central 55 Market Street 1 0.7% 7.6% 0.3% Alexandra

  24. Slide 24: Portfolio review – Stability of income

     Portfolio review – Stability of income 24 Top 10 tenants:  MNCs, government department and public listed companies  Established names and well diversified across various sectors  Contribute 60% of portfolio gross rental income and have a WALE of 4.2 years as at 30 September 2017 Top 10 tenants

  25. Slide 25: Asset updates – Asset enhancement at Alexandra Technopark

     Asset updates – Asset enhancement at Alexandra Technopark 25  $45 million AEI and re-branding on track to complete around mid-2018  Creating a contemporary business campus with greater connectivity and a more activated, stimulating and engaging environment  Tenants can look forward to a generou

  26. Slide 26: Asset updates – Developments at China Square Central

     Asset updates – Developments at China Square Central 26  Construction works for the development of the 16-storey Hotel and Commercial Project1 are on track and expected to be completed by mid-2019  New retail and commercial spaces with better frontages and visibility will also be created2  The

  27. Slide 27: Asset updates – Enhancement of China Square Central retail podium

     Asset updates – Enhancement of China Square Central retail podium 27  Provisional Permission obtained for rejuvenation and repositioning of retail podium at 18 Cross Street  S$38 million1 project expected to commence in 1Q 2018 and complete by mid-20191  NLA to potentially increase to c.75,000

  28. Slide 28: Asset updates – Enhancement of China Square Central retail podium

     Asset updates – Enhancement of China Square Central retail podium 28 Exciting new tenant mix, wider food and beverage, wellness and services options Artist’s impression for illustration only Artist’s impression for illustration only Current provisional scheme is being refined and further details w

  29. Slide 29: Appendix: Asset Details and Markets Overview

    Appendix: Asset Details and Markets Overview

  30. Slide 30: Portfolio review – Singapore assets update

     Portfolio review – Singapore assets update 30 Alexandra Technopark – China Square Central – stable 55 Market Street – stable rejuvenation and occupancy for office tower occupancy repositioning underway Occupancy 79.8% ^(office tower: 92.8%)* 90.0%^ 76.2%^# WALE 1.6 years 1.8 years 1.1 years# New l

  31. Slide 31: Portfolio review – Australia asset updates

     Portfolio review – Australia asset updates 31 Caroline Chisholm Centre 357 Collins Street – full Central Park – long WALE of 5.5 – full occupancy with occupancy in a strong years* long WALE of 7.8 years market Occupancy 88.9%* 100.0% 100.0% WALE 1.4 years (5.5 years with new leases*) 7.8 years 3.6

  32. Slide 32: Solid fundamentals - Singapore office rents

     Solid fundamentals - Singapore office rents 32 Singapore office:  Grade B rents relatively more stable  General increase in average rents marked the first increase in 10 quarters Singapore Grade A and Grade B office rents1 Grade A CBD Core 1.7% qoq to S$9.10 psf Grade B CBD Core 0.7% qoq to S$

  33. Slide 33: Solid fundamentals - demand, supply and outlook for Singapore CBD office

     Solid fundamentals - demand, supply and outlook for Singapore CBD office 33 Office supply-demand dynamics1  Market is turning positive on the back of stronger economic fundamentals and generally more positive market sentiment  Most leasing transactions in 3Q 2017 were of medium sizes and mostly

  34. Slide 34: Solid fundamentals - Singapore business park rents

     Solid fundamentals - Singapore business park rents 34 Singapore business parks – City fringe business park rents increased 0.9% in Q3 20171 Singapore Business Park (city fringe) rents1 Source: CBRE Research 1 CBRE, Singapore Market View, Q3 2017

  35. Slide 35: Solid fundamentals - demand, supply and outlook for Singapore business park

     Solid fundamentals - demand, supply and outlook for Singapore business park 35 Business Park supply-demand dynamics1  As at end Q3 2017, island-wide vacancy rose slightly by 0.2 %-points to 12.1% mainly due to weaker demand in suburban business parks  Business parks are still in demand by tenant

  36. Slide 36: Perth CBD office supply and rents

     Perth CBD office supply and rents 36  Perth CBD office market appears to be bottoming, overall vacancy fell to 21.1% as at July 2017  11.7% vacancy rate for Premium Grade office as at July 2017 expected to decline to 9.2% by July 2018  Premium Grade office benefitting from “flight to quality” a

  37. Slide 37: Melbourne CBD office supply and rents

     Melbourne CBD office supply and rents 37  128,400 sqm net absorption for the year to June 2017 for the Melbourne CBD office market was the strongest since 2008, and 15 consecutive quarters of positive take-up was a national record  Leasing activities the strongest since 2010  6.5% vacancy rate

  38. Slide 38: Thank you

    Thank you Frasers Centrepoint Asset Management (Commercial) Limited 438 Alexandra Road | #21-00| Alexandra Point | Singapore 119958 Tel: +65 6276 4882| Fax: +65 6276 8942| Email: fcot@fraserscentrepoint.com www. fraserscommercialtrust.com

Frasers Commercial Trust — FY2017 Earnings Presentation on 6ix