Capitaland Ascendas Reit · SGX:A17U
Capitaland Ascendas Reit — A-REIT (Ascendas Real Estate Investment Trust) — Q1 FY16/17 Earnings Presentation
47 slides from Capitaland Ascendas Reit's earnings presentation, Jul 21, 2016
Slide 1: 1Q FY16/17 Financial Results Presentation
Logistics Properties, Australia ONE@Changi City, Singapore 1Q FY16/17 Financial Results Presentation 21 July 2016 A-REIT is managed A-REIT by Ascendas is managed Funds by Ascendas Management Funds (S) Ltd, Management (S)aLtd, member of Ascendas-Singbridge a member Group Group of Ascendas-Singbridge
Slide 2: Disclaimers
Disclaimers This material shall be read in conjunction with A-REIT’s financial statements for the financial year ended 30 June 2016. This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ
Slide 3: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 4: Key Highlights for 1Q FY16/17
Key Highlights for 1Q FY16/17 Total amount available for distribution rose by 15.5% y-o-y to S$106.9m Estimated DPU grew 4.0% y-o-y to 3.996 cents from 3.841 cents in 1Q FY15/16. Key performance drivers were: • Contributions from new acquisitions: Australian Portfolio and ONE@Changi City • Low
Slide 5: Key Highlights for 1Q FY16/17
Key Highlights for 1Q FY16/17 Total amount available for distribution rose by 19.9% q-o-q to $106.9 million Estimated DPU grew 17.2% q-o-q to 3.996 cents from 3.410 cents • Boosted by newly acquired ONE@Changi City Investment highlights • S$24.6 million of asset enhancement works • S$59.4 mill
Slide 6: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 7: 1Q FY16/17 vs 1Q FY15/16
1Q FY16/17 vs 1Q FY15/16 1Q 1Q % (S$’000) FY16/17(1) FY15/16(1) fav/ (unfav) Gross revenue(2) 207,588 180,507 15.0 Net property income(2) 149,480 124,265 20.3 Total amount available for distribution 106,855 92,486 15.5 DPU(3)(4) 3.996 3.841 4.0 (1) The Group had 131 properties and 105 properties as
Slide 8: 1Q FY16/17 vs 4Q FY15/16
1Q FY16/17 vs 4Q FY15/16 1Q 4Q % (S$’000) FY16/17(1) FY15/16(1) fav/ (unfav) Gross revenue(2) 207,588 204,044 1.7 Net property income(2) 149,480 143,465 4.2 Total amount available for distribution 106,855 89,102 19.9 DPU before performance fee (cents)(4) 3.996 3.759 6.3 DPU after performance fee (ce
Slide 9: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 10: Investment Highlights in 1Q FY16/17
Investment Highlights in 1Q FY16/17 Purchase Consideration Country Completion date / Value (S$m) Asset Enhancements 24.6 2 Senoko South Road Singapore 12.3 Apr-16 The Kendall Singapore 1.6 May-16 Acer Building Singapore 10.7 May-16 Divestments 59.4 Four Acres Singapore Singapore 34.0 29-Apr-16 1 A-R
Slide 11: Asset Enhancement in 1Q FY16/17: Senoko South Road
Asset Enhancement in 1Q FY16/17: 2 Senoko South Road To convert the property into a multi-tenanted food factory. Reconfiguration of floor layouts, Description construction of new loading bays, addition of cargo lifts, toilets and M&E installations. AEI Cost Approx. S$12.3 million Valuation S$37.8 mi
Slide 12: Asset Enhancement in 1Q FY16/17: The Kendall
Asset Enhancement in 1Q FY16/17: The Kendall Cladding and repainting of the property’s Description façade. Upgrading of toilets. AEI Cost Approx. S$1.6 million Valuation S$127.7 million as at 31 Mar 16 Completion 30 May 2016 Completed façade cladding (TOP Date) Land Tenure 63 years remaining GFA 20,
Slide 13: Asset Enhancement in 1Q FY16/17: Acer Building
Asset Enhancement in 1Q FY16/17: Acer Building Rejuvenation of the property. Works include constructing a new central drop off and Description entrance foyer, upgrading lift lobbies, corridors, restrooms, lift interiors etc. AEI Cost Approx. S$10.7 million Valuation S$83.0 million as at 31 Mar 16 Co
Slide 14: Divestments in 1Q FY16/17
Divestments in 1Q FY16/17 Four Acres Singapore A-REIT Jiashan Logistics Centre Built-to-suit global development & training Single-storey logsitics facility in Shanghai, Description centre for Unilever China Remaining Land Tenure 25 years 49 years NLA 9,170 sqm 35,206 sqm Acquisition Year / Price 201
Slide 15: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 16: Healthy Balance Sheet
Healthy Balance Sheet Aggregate leverage would further improve to 36.2% with divestment of Ascendas Z-link property As at As at 30 Jun 2016 31 Mar 16 Total debt (S$m) (1) 3,625 3,678 Total assets (S$m) 9,797 9,870 Aggregate leverage 37.0% 37.3% Unitholders' funds (S$m) 5,449 5,481 Net asset value
Slide 17: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile Maintain a balanced debt maturity profile with no more than 20% debt maturing in a single year 8% 8% Average debt maturity: 3.3 years 10% S$14m ECS was converted into Units in May 2016 Diversified Financial 37% Resources 800 20% of total debt 700 - 37% 600 - 2
Slide 18: Key Funding Indicators
Key Funding Indicators Robust indicators enable A-REIT to borrow at competitive costs As at As at 30 Jun 16 31 Mar 16 Aggregate Leverage 37.0% (2) 37.3% Unencumbered properties as % of total investment 78.2% 77.2% properties(1) Interest cover ratio 5.2 x 5.5 x Total debt / EBITDA 6.7 x 7.9 x Weigh
Slide 19: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management 75.9% of borrowings is hedged for an average term of 3.8 years 50 bps increase in interest rate is expected to have a pro forma impact of S$4.4 million decline in distribution or 0.16 cent in DPU Increase in Decrease in Change as Pro forma DPU interest rates
Slide 20: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 21: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 100.0% 90.9% 94.7% 88.3% 87.9% 89.8% 88.2% 87.6% 88.8% 90.0% 80.0% 70.0% 68.6% 70.0% 60.0% 51.2% 50.0% 40.0% 30.0% 20.0% 10.0% N.A. 0.0% Singapore Australia China Total Jun-16 Mar-16 Jun-15 Gross Floor 2,965,535* 669,525 111,307 3,746,367* Area (sqm) Note: - The Austr
Slide 22: Singapore Occupancy
Singapore Occupancy Singapore occupancy improved to 88.3% mainly due to new take up at 40 Penjuru Lane and 5 Toh Guan Road East As at 30 Jun 2016 31 Mar 2016 30 Jun 2015 Total Singapore Portfolio GFA (sqm) 2,965,535(1)(2) 2,967,777(3) 2,876,878 Singapore Portfolio occupancy (same store) (4) 89.1%
Slide 23: Singapore: Sources of New Demand
Singapore: Sources of New Demand Continues to attract demand from a wide spectrum of industries 0.3% 0.3% 0.6% 0.6% 2.6% 4.5% 4.4% 5.4% 0.8% 30.0% 1.4% 8.4% 1.0% 2.0% 1.4% 8.4% 2.3% By Gross 8.4% 51.2% By NLA Income 10.5% 10.9% 17.0% 13.3% 14.3% General Manufacturing Lifestyle and Services Structu
Slide 24: Achieved Positive Rental Reversions
Achieved Positive Rental Reversions Achieved +4.1% rental reversion for leases renewed in 1Q FY16/17 Positive rental reversion was registered across all segments Multi-tenant properties (1) 1Q FY16/17 1Q FY15/16 4Q FY15/16 increase in renewal increase in renewal increase in renewal rates (1)# ra
Slide 25: Weighted Average Lease Expiry (By gross revenue)
Weighted Average Lease Expiry (By gross revenue) Portfolio Weighted Average Lease Expiry (WALE) at 3.6 years WALE (years) 30 June 2016 Singapore 3.5 Australia 5.2 China 2.3 Portfolio 3.6 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 26: Portfolio Lease expiry profile
Portfolio Lease expiry profile (as at 30 June 2016) Breakdown of expiring leases Portfolio weighted average lease to expiry (WALE) of 3.6 years for FY16/17 and FY17/18 Lease expiry is well-spread, extending beyond 2031 0.7% 1% 14% About 14.9% of gross revenue is due for renewal in balance of F
Slide 27: Singapore: Lease expiry profile
Singapore: Lease expiry profile (as at 30 June 2016) Breakdown of expiring leases Singapore portfolio weighted average lease to expiry (WALE) of for FY16/17 and FY17/18 3.5 years 15% Lease expiry is well-spread, extending beyond 2030 19% 16.6% of Singapore’s gross revenue is due for renewal in
Slide 28: Australia: Lease expiry profile
Australia: Lease expiry profile (as at 30 June 2016) Breakdown of expiring leases Australia portfolio weighted average lease to expiry (WALE) of for FY16/17 and FY17/18 5.2 years Lease expiry is well-spread, extending beyond 2027 2.2% of Australia’s gross revenue is due for renewal in balance
Slide 29: Singapore: In-place rent for space due for renewal
Singapore: In-place rent for space due for renewal in FY16/17 and FY17/18 Current market rental rate is slightly above the weighted average passing rental for most of the multi-tenant space due for renewal in FY16/17 Expect modest rental reversion in the low-single digit or flat for FY16/17 * *
Slide 30: Ongoing Projects: Improve portfolio quality
Ongoing Projects: Improve portfolio quality Estimated Value Estimated (S$m) Completion AzkoNobel House 6.5 4Q 2016 The Aries 4.7 4Q 2016 279 Jalan Ahmad Ibrahim (New) (formerly known as IDS Logistics 61.4 1Q2018 Corporate HQ) Total Asset Enhancements (AEI) 72.6 A-REIT is managed by Ascendas Funds Ma
Slide 31: Asset Enhancement (New): Jalan Ahmad Ibrahim
Asset Enhancement (New): 279 Jalan Ahmad Ibrahim To maximize plot ratio of the existing site and develop a ramp-up 3-storey warehouse block Description equipped with 10m clear height, loading bays with docklevellers at doorsteps etc. AEI Cost $61.4 m Estimated 1Q 2018 Completion Land Tenure 40 years
Slide 32: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 33: Well Diversified Portfolio
Well Diversified Portfolio 9.9% 5.7% By value of Investment Properties Business Science Park Park Logistics & Logistics and Distribution Distribution Centres, 14% AREIT Beijing, 90.1% 94.3% Integrated Centres 2% Development, Australia, 11% AREIT Shanghai, Amenities & 2% 30.1% 32.1% Retail, 7% Austra
Slide 34: Tenants' Industry Diversification
Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 10.4% Distributors, trading company 10.1% Financial 9.8% M&E and Machinery & Equipment 8.8% Information Technology 8.3% Telecommunication & Datacentre 8.0% Electronics 6.9% Life Science 5.2% Food Produ
Slide 35: Low Exposure to Manufacturing
Low Exposure to Manufacturing As at 30 June 2016 10.1% of NLA occupied by tenants engaged in manufacturing activities 10.1% Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc. Tenants’ business activities by NLA Non-manufacturing acti
Slide 36: Quality and Diversified Customer Base
Quality and Diversified Customer Base Total customer base of around 1,450 tenants Top 10 customers (as at 30 June 2016) account for about 18.7% of portfolio gross rental income Security deposits for single-tenant properties range from 4 to 11 months of rental income On a portfolio basis, wei
Slide 37: Diversified Portfolio
Diversified Portfolio Aperia, 5.6% One@Changi City, 4.3% 1, 3, 5 Changi Business Park Crescent, 2.8% Kim Chuan Telecommunication Complex , 2.7% Neuros & Immunos, 2.6% 31 International Business Park, 2.5% 40 Penjuru Lane, 2.4% TelePark, 2.4% Hyflux Innovation Centre, 2.1% TechPlace II, 1.9% TechPoint
Slide 38: MTB Occupancy: NPI / DPU Sensitivity
MTB Occupancy: NPI / DPU Sensitivity 100 bps increase in MTB occupancy is expected to result in a 0.9% increase in portfolio net property income or about 0.21 cents increase in DPU Change in MTB Expected change in Change in portfolio Impact on full FY occupancy annualised MTB NPI NPI (%) DPU (cent
Slide 39: Agenda
Agenda Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 40: Market Outlook
Market Outlook Singapore’s 2Q 2016 economy grew 2.2% y-o-y, in line with the Ministry of Trade and Industry’s (MTI) earlier estimates of between 1.0% to 3.0% JTC industrial property price and rental index declined by 2.5% and 2.7% q-o-q respectively in 1Q 2016 According to the Reserve Bank of
Slide 41: Additional Information
Additional Information (1) Quarterly Results (2) A-REIT Singapore Occupancy vs Industrial Average (3) Singapore Industrial Property Market A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group
Slide 42: Quarterly Results
Quarterly Results (For illustrative purpose)* FY15/16 FY16/17 Summary (S$ million) 1Q 2Q 3Q 4Q Total 1Q Gross Revenue 181 183 193 204 761 208 Net Property Income 124 124 142 144 534 149 Total amount available for 92 94# 97 89 372# 107 distribution No. of units in issue (m) 2,408 2,408 2,504 2,666 2,
Slide 43: A-REIT Singapore Occupancy vs Industrial Average
A-REIT Singapore Occupancy vs Industrial Average 100% 95% 90.5% 91.2% 90.5% 90.4% 90% 88.0% 86.8% 86.0% 85% 81.7% 80% Occupancy Rate 75% 70% 65% 60% 55% 50% Business and Science Hi-Specs Industrial Light Industrial Logistics Park A-REIT JTC Source : A-REIT’s Singapore portfolio as at 30 june 2016. M
Slide 44: Average Market Rents by Segment (Singapore)
Average Market Rents by Segment (Singapore) 120 Industrial Rental Index 100 80 60 40 20 Source : JTC 0 6.5 5.5 $5.40 4.5 $4.10 3.5 $3.70 $3.10 2.5 $1.73 1.5 $1.71 0.5 Business Park (City Fringe) Business & Science Parks (Median Rents) Business Park (Rest of Island) Hi-Specs Light Industrial Logistic
Slide 45: Singapore Industrial Property Market: New Supply
Singapore Industrial Property Market: New Supply Total stock (net) : 44.9 million sqm, of which • Business & Science Parks account for 2.1 million sqm (4.6%) • Logistics & Distribution Centres account for 9.1 million sqm (20.2%) • Remaining stock are factory space Potential new supply (net) of a
Slide 46: Singapore Business & Science Parks: New Supply
Singapore Business & Science Parks: New Supply There are currently no Business & Science Park supply after 2016 % Pre- Expected Location Developer NLA (sqm)* committed Completion (est) 2016 Ayer Rajah (One-north) SHINE Systems Assets Pte Ltd 17,144 87% 2016 Science Park Ascendas Land (S) Pte Ltd.
Slide 47: The End
The End Important Notice This presentation has been prepared by Ascendas Funds Management (S) Limited as Manager for Ascendas Real Estate Investment Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied u
A-REIT (Ascendas Real Estate Investment Trust) — Q1 FY16/17 Earnings Presentation on 6ix