Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Suntec REIT — H1 2020 Earnings Presentation
44 slides from Singapore Exchange's earnings presentation, Jul 23, 2020
Slide 1: Suntec REIT Financial Results
SUNTEC REIT FINANCIAL RESULTS For the Half Year ended 30 June 2020 23 July 2020
Slide 2: Agenda
Agenda 03 28 1H 20 Highlights Australia Portfolio Performance 04 31 Financial Highlights Projects Under Development & AEIs 12 33 Capital Management Looking Ahead 16 Singapore Office Portfolio Performance 23 Singapore Retail Portfolio Performance 2
Slide 3: 1H 20 Highlights
1H 20 Highlights Distribution to Unitholders : S$92.8 million Distributable Income from Operations: Distribution Retained S$103.1 million, -12.2% YOY -S$10.3 million (10%) Distribution Per Unit to Unitholders: 3.293 cents1,2 -31.3% YOY Capital Management Issued Secured All-in S$400 mil A$450 mil Gre
Slide 4: Financial Highlights
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Slide 5: 1H 20 Financial Performance
1H 20 Financial Performance Income Contribution Gross Revenue Net Property Income from JV -16.1% -20.6% -5.8% 178.1 149.4 114.6 90.9 49.7 46.9 1H 19 1H 20 1H 19 1H 20 1H 19 1H 20 5
Slide 6: 1H 20 Gross Revenue decreased 16.1% y-o-y
1H 20 Gross Revenue decreased 16.1% y-o-y S$ mil Total 149.4 -16.1% Total 178.1 65.1 Higher occupancy and rent with provision for rent assistance Suntec City Office 65.6 for qualifying SME tenants 47.0 Rent assistance and lower occupancy partially offset by Suntec City Mall 64.4 commencement of leas
Slide 7: 1H 20 NPI & JV Income Contribution - Office
1H 20 NPI & JV Income Contribution - Office S$ mil Office 113.8 OfficeTotal Total +2.3% 111.2 45.4 Suntec City Office Lower revenue and higher provision 48.3 15.9 Weakened AUD 177 Pacific Highway 16.6 21 Harris 1.8 Contribution with effect from 6 Apr 2020 - 55 Currie 5.7 Contribution with effect fro
Slide 8: 1H 20 NPI & JV Income Contribution – Retail & Convention
1H 20 NPI & JV Income Contribution – Retail & Convention S$ mil 28.0 -42.4% Retail Total 48.6 26.1 Suntec City Mall Rent assistance1, lower marcom revenue 45.1 and GTO rent Marina Bay Link Mall 1.2 Rent assistance1 2.1 Southgate Retail 0.7 Rent assistance2 1.4 Suntec Convention -4.1 1H 20 4.5 Closur
Slide 9: Distribution Income to Unitholders
Distribution Income to Unitholders Distributable Income from Operations DPU to Unitholders (S$ mil) (SG cents) -12.2% 4.795 -31.3% 0.474 117.5 103.1 4.321 3.293 From Capital 1H 19 1H 20 1H 19 1H 20 Distributable Income from Operations DPU to Unitholders S$103.1 million, -12.2% y-o-y 3.293 cent1, -31
Slide 10: Diversified Portfolio across Sector and Geography
Diversified Portfolio across Sector and Geography Suntec One Raffles Singapore, 1% Quay, 9% Office, Suntec City, 83% MBFC 48% Properties, 19% 1H 20 1H 20 NPI & Income Contribution NPI & Income Contribution 177 Pacific Highway, Retail, 12% 20% 21 Harris, 1% Southgate Convention, Complex, 6% 55 Currie
Slide 11: Distribution Timetable
Distribution Timetable Distribution Payment Distribution Period 1 April – 30 June 2020 Amount (cents/unit) 1.5331 Ex-date 30 Jul 2020 Record date 3 Aug 2020 Payment date 27 Aug 2020 Note: 1. 1.760 cents had been paid on 28 May 2020. Total 3.293 cents for 1H 2020. 11
Slide 12: Capital Management
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Slide 13: Balance Sheet
Balance Sheet As at 30 Jun ‘20 As at 31 Dec ‘19 Total Assets S$10,534 mil S$10,032 mil Total Liabilities S$4,548 mil S$3,926 mil Net Assets Attributable to Unitholders S$5,892 mil S$5,977 mil Units in Issue (‘000) 2,816,3261 2,801,0162 NAV Per Unit S$2.089 SS$2.126 Decline in NAV per Unit Due to Dec
Slide 14: Key Financial Indicators
Key Financial Indicators As at 30 Jun ‘20 As at 31 Dec ‘19 Total Debt Outstanding S$4,253 mil S$3,663 mil Aggregate Leverage Ratio1 41.3% 37.7% Weighted Average Debt Maturity 3.35 years 3.06 years All-in Financing Cost 2.63% p.a. 3.05% p.a. Adjusted ICR2 2.7X 2.9X Weighted average interest maturity
Slide 15: Proactive Capital Management
Proactive Capital Management Debt and Interest Maturity Profile 1,400 1,200 300 1,000 821 800 632 100 280 600 87 501 150 350 300 400 900 600 396 534 200 200 370 216 216 200 0 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 Bank facility Medium term notes Convertible bonds Fixed/Hedge Expiry
Slide 16: SG Office Portfolio Performance
SG OFFICE PORTFOLIO PERFORMANCE
Slide 17: Singapore Office Committed Occupancy
Singapore Office Committed Occupancy 98.1% 98.0%1 100.0% 100.0%2 98.6%3 Overall CBD Occupancy 93.3%4 Suntec City Office One Raffles Quay MBFC Towers 1 & 2 9 Penang Road Singapore Overall Committed Occupancy Outperformed Market Note: 1. Combined occupancy for One Raffles Quay office and ancillary ret
Slide 18: Singapore Office Leasing Activity
Singapore Office Leasing Activity Portfolio Work Done1 in 1H 20: 213,500 sq ft Portfolio Work Done1 in 2Q 20: 81,400 sq ft (33% are new leases) (19% are new leases) New New 69,700 sq ft 15,100 sq ft Renew 66,300 sq ft Renew 143,800 sq ft New Tenants by Sector in 1H 20 (sq ft) Technology, media and t
Slide 19: Singapore Office Lease Expiry
Singapore Office Lease Expiry % of Singapore Office NLA1 (sq ft) Net Lettable Area1 Sq ft % of Total FY 2020 169,901 7.0% 6.9% FY 2021 665,359 27.3% FY 2022 429,634 17.6% 1.6% 27.3% 10.3% FY 2023 410,660 16.8% 18.9% 17.6% 16.8% 10.8% FY 2024 265,029 10.8% 7.0% FY 2025 & 461,454 18.9% 2020 2021 2022
Slide 20: Suntec City Office - Committed Occupancy and Average Gross Rent
Suntec City Office - Committed Occupancy and Average Gross Rent psf pm 110% $8.77 $9.00 $8.68 $8.53 $8.51 $8.53 $8.58 $8.45 $8.45 $8.45 $8.50 100% 99.6% 99.1% 98.9% 99.1% 99.9% 100.0% 98.7% 98.1% $8.00 94.4% 90% $7.50 80% $7.00 70% $6.50 60% $6.00 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 2Q 2
Slide 21: Suntec City Office – Leasing Activity
Suntec City Office – Leasing Activity Work Done1 in 1H 20: 164,700 sq ft (29% are new leases) New 47,200 sq ft Rent Reversion 1H 20 +11.4% 1Q 20 2Q 20 +13.1% +9.1% Renew 117,500 sq ft Nine Consecutive Quarters of Positive Rent Reversion New Tenants by Sector in 1H20 (sq ft) Technology, media and tel
Slide 22: Suntec City Office - Lease Expiry Profile & Expiry Rent
Suntec City Office - Lease Expiry Profile & Expiry Rent psf pm 100.0% $10.0 90.0% $9.66 $9.46 $9.5 $9.39 $9.36 80.0% $8.95 $9.0 70.0% $8.76 $8.5 60.0% 50.0% $8.0 12.6% 40.0% $7.5 30.0% $7.0 20.0% 37.6% 13.4% $6.5 10.0% 18.3% 13.9% 14.7% 4.9% 8.7% $6.0 2020 2021 2022 2023 2024 2025 & beyond % of Tota
Slide 23: SG Retail Portfolio Performance
SG RETAIL PORTFOLIO PERFORMANCE 23
Slide 24: Singapore Retail Portfolio
Singapore Retail Portfolio Portfolio Work Done2 in 1H 20: 126,900 sq ft Committed Occupancy (41% are new leases) Secondary 96.3% 98.0% 96.4% market occupancy 95.81 New 51,600 sq ft Renewal 75,300 sq ft Suntec City Mall Marina Bay Link Mall Overall Note: 1. Source: JLL 2. Reflects net lettable area o
Slide 25: Singapore Retail Lease Expiry
Singapore Retail Lease Expiry % of Singapore Retail NLA1 (sq ft) Net Lettable Area1 Sq ft % of Total FY 2020 186,087 20.6% 3.6% FY 2021 175,355 19.0% 19% FY 2022 199,103 22.0% FY 2023 176,878 19.6% 20.6% 22.0% 19.6% 19.0% FY 2024 49,365 5.4% 9.8% 5.4% FY 2025 & 88,803 9.8% 2020 2021 2022 2023 2024 2
Slide 26: Suntec City Mall – Operational Performance
Suntec City Mall – Operational Performance Rent Reversion 1H 20 +8.4% 1Q 20 2Q 20 Committed Occupancy +16.1% -2.4% (as at 30 Jun 2020) 96.3% Overall NLA Footfall 6% 5% 25 5% Shopper Traffic (million) 20 -52.6% 2Q19 4% 15 2Q20 3% (-83.4%) 10 2% 1% 1% 5 1Q19 1Q20 (-22.0%) 0% 0 Rent Deferment Pre-termi
Slide 27: Suntec City Mall - Lease Expiry Profile
Suntec City Mall - Lease Expiry Profile 3.7% 19.5% 20.6% 21.7% 19.1% 19.7% 9.9% 5.3% 2020 2021 2022 2023 2024 2025 & beyond Expiring Completed Vacant 1 Proactive Management of Lease Expiries Note: 1. 32,282 sq ft of NLA was vacant as at 30 June 2020. 27
Slide 28: Australia Portfolio Performance
AUSTRALIA PORTFOLIO PERFORMANCE
Slide 29: Australia Committed Occupancy
Australia Committed Occupancy 100.0% 99.7% 91.7%2 93.1% 92.8% Nationwide CBD 1Q20 Occupancy 91.6%1 68.7%2 177 Pacific Highway 21 Harris Southgate Office 55 Currie Australia Overall Southgate Retail Note: 1. Source: JLL 2. Rent guarantee on vacant spaces 29
Slide 30: Australia Lease Expiry
Australia Lease Expiry % of Australia Lease Expiry NLA1 (sq ft) Net Lettable Area1 Sq ft % of Total FY 2020 11,068 0.8% FY 2021 69,926 5.3% FY 2022 64,578 4.9% 43.9% 35.7% FY 2023 472,145 35.7% 33,097 2.5% 6.9%2 FY 2024 5.9% FY 2025 & 580,219 43.9% 0.8% 5.3% 4.9% 2.5% Beyond 2020 2021 2022 2023 2024
Slide 31: Project Under Development
PROJECT UNDER DEVELOPMENT
Slide 32: Project Under Development
Project Under Development Olderfleet, 477 Collins Street, Australia • Practical Completion expected in end Jul 2020 with income commencement in 1 Aug 2020 • Leasing update: 97.0% pre-committed with additional 0.2% with Heads of Agreement • Long WALE ~ 11 years • Tenants committed include: o Deloitte
Slide 33: Looking Ahead
LOOKING AHEAD
Slide 34: Looking Ahead – Singapore Office Portfolio
Looking Ahead – Singapore Office Portfolio • Demand expected to remain subdued because of recessionary outlook on the economy • Leasing activities comprising mainly renewals with landlords facing rent resistance from tenants Outlook • Companies remain focused on cost containment; relocation and expa
Slide 35: Looking Ahead – Suntec City Mall
Looking Ahead – Suntec City Mall • Signs of recovery in shopper traffic – YOY decline moderated to -60% in Jul 20 vs. -90% during circuit breaker period Outlook • Shopper traffic will further increase as more businesses are allowed to resume operations and office workers return to work progressively
Slide 36: Looking Ahead – Suntec Convention
Looking Ahead – Suntec Convention • Challenges faced by MICE industry in Singapore are unprecedented • MICE events are still not permitted during Phase 2 of re-opening • Recovery likely to be led by local corporate events, meetings and consumer shows when current measures on safe distancing are ease
Slide 37: Looking Ahead – Australia Portfolio
Looking Ahead – Australia Portfolio • Office occupiers in Sydney and Adelaide started gradual return to office on split team arrangements • Melbourne in second lockdown for 6 weeks since 8 July 2020, Southgate retail tenants are unable to Outlook open for business • Leasing demand will be subdued an
Slide 38: Weathering Through Challenging Times
Weathering Through Challenging Times 1 Proactively Manage Risks to Strengthen Resilience of Properties Disciplined Approach in Reducing Costs and Discretionary 2 Capital Expenditure Achieve Balance between Reasonable Returns to Unitholders, 3 Build Cash Reserve and Assisting Tenants Source for Good
Slide 39: Thank You
Real Estate Investment Trust © SUNTEC THANK YOU 9 Penang Road MBEC Properties ‘One Rattles Suntec City 17 Pacific Oldereet, 477 Southgate Complex 55 Curie Street 21 Hanis Street Quay Highway Collins Street
Slide 40: Contact
Contact Melissa Chow Manager, Investor Relations melissachow@ara-group.com 5 Temasek Boulevard, Tel: +65 6835 9232 www.suntecreit.com #12-01, Suntec Tower 5 Fax: +65 6835 9672 www.ara-group.com Singapore 038985 40
Slide 41: About Suntec REIT
About Suntec REIT Singapore’s first and largest composite REIT S$4.0 Billion1 Market Capitalisation S$10.5 Billion2 Assets Under Management • Listed on 9 Dec 2004 on the SGX-ST • High quality office assets, Singapore complemented by retail and convention components Adelaide • 9 properties – 4 in Sin
Slide 42: Portfolio Snapshot
Portfolio Snapshot Suntec City One Raffles MBFC 9 Penang Suntec City – Suntec Quay Properties Road Office & Retail Singapore Description Integrated World-class Two premium Two premium New Grade A commercial convention Grade A office Grade A office commercial development and exhibition towers towers
Slide 43: Portfolio Snapshot
Portfolio Snapshot 177 Southgate Olderfleet 477 55 Currie 21 Harris Pacific Highway Complex Collins Street Description 31-storey Grade A Integrated Premium Grade, Twelve-storey, Nine-storey, office building waterfront 40- level state- Grade A office Grade A office development of-the-art building bui
Slide 44: Disclaimer
Disclaimer This presentation is focused on the comparison of actual results for the half year ended 30 June 2020 versus results achieved for the quarter ended 30 June 2019. It should be read in conjunction with Paragraph 8 of Suntec REIT’s financial results for the quarter ended 30 June 2020 announc