Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Suntec REIT — H1 2022 Earnings Presentation
59 slides from Singapore Exchange's earnings presentation, Jul 27, 2022
Slide 1: Suntec REIT Financial Results
SUNTEC REIT FINANCIAL RESULTS For the Half Year ended 30 June 2022 27 July 2022
Slide 2: Agenda
03 1H 22 Highlights 18 Singapore Office Portfolio 04 Performance 1H 22 Operational Highlights 26 05 Australia Portfolio Performance Financial Highlights 29 15 UK Portfolio Performance Capital Management Agenda 32 Singapore Retail Portfolio Performance 43 Suntec Convention Performance 46 Our Focus Su
Slide 3: 1H 22 Financial Highlights
1H 22 Financial Highlights Capital Management Distributable Income Distribution Per Unit to Unitholders to Unitholders S$500 million S$138.1 million 4.810 cents Sustainability-linked +16.8% y-o-y +15.8% y-o-y loan secured in Apr ‘22 Re-financing requirements for FY 22 Distribution Income DPU from co
Slide 4: 1H 22 Operational Highlights
1H 22 Operational Highlights Portfolio Committed Occupancy Portfolio WALE 97.0% 95.3% 4.5 2.3 Office Portfolio Retail Portfolio Office Portfolio Retail Portfolio Office Portfolio 64% 36% Work Done 494,800 sq ft for 1H 22 Retail Portfolio 70% 30% Renewal Leases New Leases 4
Slide 5: Financial Highlights
Suntec City MBFC Properties One Raffles Quay Olderfleet, 477 Collins Street Financial Highlights The Minster Building 177 Pacific Highway 55 Currie Street Nova Properties 21 Harris Street Southgate Complex
Slide 6: Strong Financial Performance in 1H 22
Strong Financial Performance in 1H 22 NPI and JV Income Increased by 35.8% and 5.5% 22.0% Mainly due to: Gross Revenue & Net Property Income: 1H 21 New contribution from The Minster Building 35.8% 1H 22 Higher contributions from Suntec City Higher contributions from 477 Collins Street and 21 Harris
Slide 7: Maintained Strong Growth in DI and DPU
Maintained Strong Growth in DI and DPU DPU (Including Capital Distribution) Increased 15.8% YoY Distributable Income (S$ mil) From Mainly due to: Operations 16.8% From capital New contribution from The Minster Building 138.1 11.5 Higher contributions from Suntec City Mall and Suntec City Office High
Slide 8: Singapore Office Portfolio Strengthened Further
Singapore Office Portfolio Singapore Office Portfolio Strengthened Further NPI and JV Income Increased by 9.5% and 12.3% 2.2% 1H 21 Mainly due to: 1H 22 Gross Revenue & Net Property Income: 9.5% Higher occupancy and rent at Suntec City Office 12.3% Absence of sinking fund at Suntec City Office Dives
Slide 9: Australia Portfolio Remained Resilient
Australia Portfolio Australia Portfolio Remained Resilient Higher Occupancy and Rent Achieved at 477 Collins Street and 21 Harris Street 5.8% Mainly due to: 1H 21 4.4% Gross Revenue & Net Property Income: 1H 22 Higher occupancy and rent at 477 Collins Street and 21 Harris Street Lower occupancy at 1
Slide 10: Robust Contribution by UK Portfolio
UK Portfolio Robust Contribution by UK Portfolio 1H 21 1H 22 17.4% Mainly due to: Gross Revenue & Net Property Income: Acquisition of The Minster Building completed on 28 July 2021 13.8 13.5 12.8 JV Income: 11.5 Lower provision of bad debt in 1H 22 Lower retail rent rebates 0.0 0.0 Gross Revenue (S$
Slide 11: Singapore Retail Portfolio NPI Improved by 41.5%
Singapore Retail Portfolio Singapore Retail Portfolio NPI Improved by 41.5% Higher Occupancy and Rent at Suntec City Mall 21.0% 1H 21 1H 22 Mainly due to: 41.5% Gross Revenue & Net Property Income: Higher occupancy, rent (fixed and GTO) and marcoms revenue at Suntec City Mall Absence of sinking fund
Slide 12: Suntec Convention NPI Turned Positive in 2Q 22
Suntec Convention Suntec Convention NPI Turned Positive in 2Q 22 Turnaround After 10 Quarters 1H 21 218.0% 1H 22 Mainly due to: Higher revenue from corporate events, 12.4 conferences, and long-term licences 152.7% Lower fixed costs Higher operating expenses in line with higher 3.9 2.9 revenue -5.5 G
Slide 13: Diversified Portfolio Across Geography and Sector
Diversified Portfolio Across Geography and Sector Singapore Market and Office Assets are Mainstays 1% 2% Convention Convention Income Contribution by Sector 77% 22% AUM Breakdown by Sector 78% 20% Office Retail Office Retail Income Contribution by Geography 67% 21% 12% AUM breakdown by Geography 72%
Slide 14: Portfolio Valuation Remained Stable in Local Currency
Portfolio Valuation Remained Stable in Local Currency Slight Decrease in SGD Terms Due to Weaker Australian Dollar and Pound Investment 31 Dec 21 30 Jun 22 Variance ($) Variance (%) Range of Cap Rates as Properties at 30 Jun 22 Singapore S$8,369.2M S$8,488.3M S$119.1M 1.4% Office S$5,825.0M S$5,944.
Slide 15: Capital Management
Capital Management Olderfleet, 477 Collins Street, Melbourne
Slide 16: Key Financial Indicators
Key Financial Indicators NAV Per Unit and ALR Improved Against 31 Dec 2021 As at 31 Dec 21 As at 30 Jun 22 NAV Per Unit1 S$2.110 S$2.132 Total Debt Outstanding S$4,944 mil S$4,890 mil Aggregate Leverage Ratio2 43.7% 43.1% Weighted Average Debt Maturity 2.92 years 2.99 years All-in Financing Cost 2.3
Slide 17: FY 2022 Re-financing Completed
FY 2022 Re-financing Completed ~20% of Total Debt are Green/Sustainability-Linked Loans Debt Maturity Profile Perpetual Securities 1,600 (First Reset) 1,600 1,400 1,400 216 1,200 1,200 1,000 1,000 280 1,198 800 800 216 600 600 300 900 400 400 739 300 200 200 341 200 200 200 150 0 0 FY2025 FY2026 FY2
Slide 18: Singapore Office Portfolio Performance
Singapore Office Portfolio Performance 18 MBFC Properties, Singapore
Slide 19: Singapore Office Portfolio Remained Resilient
Singapore Office Portfolio Singapore Office Portfolio Remained Resilient Healthy Occupancy and Well-Spread Lease Expiry Committed Occupancy Lease Expiry Profile As at 30 Jun 22 % of Total NLA4 Comparison Core CBD Occupancy: 93.6%3 99.4% 93.8% 97.5% 97.8% 26.0% 26.5% 17.4% 2.2% 13.4% 9.4% 5.1% Suntec
Slide 20: Positive Rent Reversion of 5.5% in 1H 22
Singapore Office Portfolio Positive Rent Reversion of 5.5% in 1H 22 16 Quarters of Positive Rent Reversion New Tenants by Sector (sq ft) Work Done1 31% Banking, Insurance and Financial 27% New Leases Services 316,100 sq ft 69% Renewal Leases Technology, Media and Telecommunications 19% for 1H 22 Man
Slide 21: Suntec City Office Performance
Suntec City Office Performance Suntec City Office, Singapore
Slide 22: Robust Leasing Activities
Suntec City Office Robust Leasing Activities Continual Demand from Financial Services and TMT sectors New Tenants by Sector (sq ft) Work Done1 Banking, Insurance and Financial 23% 45% New Leases Services 200,300 sq ft 55% Renewal Leases Technology, Media and 21% for 1H 22 Telecommunications Manufact
Slide 23: Occupancy and Rent Outperformed Market Level
Suntec City Office Occupancy and Rent Outperformed Market Level Committed Occupancy Continued to Strengthen to Above 99% psf pm 110% $9.25 $9.26 $9.28 $9.50 $9.09 $9.08 $8.78 $8.84 $8.91 $8.40 $8.50 100% 98.6% 99.4% 97.0% 96.0% 97.2% 95.6% 95.5% $7.50 93.4% 93.6% 90% $6.50 80% $5.50 70% $4.50 60% $3
Slide 24: Near Completion of Renewals for 2022
Suntec City Office Near Completion of Renewals for 2022 Positive Rent Reversion Amid High Expiring Rents Expiry Rent 100.0% $10.5 90.0% $10.0 $9.88 80.0% $9.59 $9.42 $9.5 $9.31 $9.27 70.0% $8.94 $9.0 60.0% $8.5 50.0% $8.0 40.0% $7.5 30.0% $7.0 20.0% 39.0% 28.5% 10.0% $6.5 2.9% 15.4% 5.2% 8.4% $6.0 2
Slide 25: Singapore Office Outlook and Focus
Singapore Office Outlook and Focus Resilient office market Economic slowdown TMT and Financial underpinned by tightened resulting from global Services continue to be key vacancies and limited new headwinds demand drivers supply Managing rents and Office income continues to Maintaining high strengthe
Slide 26: Australia Portfolio Performance
Australia Portfolio Performance Southgate Complex, Melbourne
Slide 27: Australia Portfolio Occupancy Continued to Strengthen
Australia Portfolio Occupancy Continued to Strengthen Proactive Management of Expiring Leases to Lengthen WALE Committed Occupancy Lease Expiry Profile As at 30 Jun 22 % of Total NLA3 Comparison Nationwide CBD Office Occupancy: 86.5%1 98.7% 99.5% 95.0% 54.8% 93.8% 92.7% 91.5% 24.7% 5.0% 2.6% 5.1% 5.
Slide 28: Australia Outlook and Focus
Australia Outlook and Focus Prime gross effective rents Nationwide CBD office in Sydney and Melbourne Continual growth in employment level and GDP vacancy expected to expected to improve as increase marginally flight to quality trend continues Revenue resilient Forward renewal of leases Create fully
Slide 29: UK Portfolio Performance
UK Portfolio Performance Nova Properties, London
Slide 30: Strong UK Portfolio Occupancy
Strong UK Portfolio Occupancy Long WALE with Minimal Lease Expiry until 2027 Committed Occupancy Lease Expiry Profile As at 30 Jun 22 % of Total NLA3 Comparison Central London Office Occupancy: 92.2%1 98.0% 100.0% 96.7% 98.3% 1.7% 0.3% Nova Properties The Minster Building 2 UK Overall 2022 2023 2024
Slide 31: UK Office Outlook and Focus
UK Office Outlook and Focus Central London office Workspace strategy remain Global headwinds occupancy of 92.2%1 weighing on economic important for talent expected to remain stable retention and productivity growth with limited new supply Asset enhancement Revenue resilient Placemaking activities to
Slide 32: Singapore Retail Portfolio Performance
Singapore Retail Portfolio Performance Suntec City, Singapore
Slide 33: Portfolio Committed Occupancy Remained Stable at 95.7%
Singapore Retail Portfolio Portfolio Committed Occupancy Remained Stable at 95.7% Committed Occupancy Expected to Improve Further by End 2022 Committed Occupancy Lease Expiry Profile As at 30 Jun 22 % of Total NLA2 Comparison Central Area Outside Orchard occupancy: 88.6%1 96.1% 95.7% 85.4% 26.2% 4.3
Slide 34: Portfolio Rent Reversion Turned Positive in 2Q 22
Singapore Retail Portfolio Portfolio Rent Reversion Turned Positive in 2Q 22 Driven by Positive Rent Reversion at Suntec City Mall Work Done1 Rent Reversion 142,200 sq ft for 1H 22 +1.5% for 1H 22 3Q 21 4Q 21 1Q 22 2Q 22 2.7% 30% -0.9% New Leases Renewal Leases -11.7% 70% -13.5% Note: 1. Reflects ne
Slide 35: Suntec City Mall Performance
Suntec City Mall Performance Suntec City Mall, Singapore
Slide 36: Positive Rent Reversion Registered in 2Q 22
Suntec City Mall Positive Rent Reversion Registered in 2Q 22 Driven Mainly by New Leases at +5.2% Rent Reversion Work Done1 Rent Reversion 136,600 sq ft for 1H 22 +2.3% for 1H 22 3Q 21 4Q 21 1Q 22 2Q 22 3.2% 0.0% 31% New Leases Renewal Leases 69% -11.2% -11.8% Notes: 1. Reflects net lettable area of
Slide 37: Refreshed Retail Experience
Suntec City Mall Refreshed Retail Experience Introduction of New-to-Market / New-to-Suntec Brands 1Q 22 2Q 22 37
Slide 38: Increased Traffic Through Atrium Events and Roadshows
Suntec City Mall Increased Traffic Through Atrium Events and Roadshows Physical and Digital Activations to Acquire, Engage and Reward Shoppers ATOME Festival Clarins in the City My Little Pony Virtual Race Featuring a 1-day runway show, photo booths, Spin Pop-up beauty trailer featuring photo-worthy
Slide 39: 2Q 22 Sales Recovered to Above 2019 Levels
Suntec City Mall 2Q 22 Sales Recovered to Above 2019 Levels Mall Traffic Continued to Improve Shopper Traffic and Tenant Sales psf 140% 115% 115% 120% 104% 100% 2019 104% 103% Average 94% 91% 80% 74% 75% 60% 2Q 22 40% 20% 0% Tenant Sales (Whole Mall) psf Tenant Sales (Same Store) psf Shopper Traffic
Slide 40: New-to-Suntec Openings in 2H 22
Suntec City Mall New-to-Suntec Openings in 2H 22 Reinforces Emphasis on Dining and Activity-Based Concepts Food and Beverage Lifestyle 40
Slide 41: Asset Enhancement at East Wing Level 2 by 4Q 22
Suntec City Mall Asset Enhancement at East Wing Level 2 by 4Q 22 Improved Tenant Mix and Traffic Flow 13% increase in net lettable area 15% Return on Investment Artist’s impression Artist’s impression New seating area to increase sales potential New aisles between kiosks to facilitate traffic flow 4
Slide 42: Singapore Retail Outlook and Focus
Singapore Retail Outlook and Focus Footfall expected to Increase in tenant sales Retailers remain cautious improve with return of likely to be moderated due due to manpower atrium events, office, to weaker consumer shortages and rising convention and tourists sentiments operating costs Revenue recov
Slide 43: Suntec Convention Performance
Suntec Convention Performance Suntec Convention, Singapore Suntec Singapore
Slide 44: Strong Improvement in Revenue Performance
Suntec Convention Strong Improvement in Revenue Performance Improvement Across Key Revenue Streams Conferences and Corporate Events Long Term Licences InsureTech Connect Asia 2022 STB Tourism Industry Conference City Harvest Church1 Note: 1. Source: City Harvest Church website. 44
Slide 45: Suntec Convention Outlook and Focus
Suntec Convention Outlook and Focus Recovery underway as Domestic market for International MICE events Singapore strengthened consumer and corporate returning but on a smaller position as destination of events remains key driver scale choice for MICE for recovery Increased optimism on Diversify fixe
Slide 46: Our Focus
Our Focus 55 Currie Street, Adelaide
Slide 47: Pursuing Growth from a Position of Strength
Pursuing Growth from a Position of Strength Proactive Lease Strengthen Balance Sheet Management to Enhance through Active Capital and Resilience of Properties Portfolio Management Further Enhance Suntec REIT’s Deliver Sustainable Income Stability by Sourcing for Returns and Long-Term Good Quality, A
Slide 48: Continual Commitment to ESG
Continual Commitment to ESG All properties in About 20% of total debt are 177 Pacific Highway is portfolio are green / sustainability-linked carbon neutral Green-Certified loans Suntec City Office Towers Green Mark Platinum Award certified “Water Efficient for Suntec City Office Building” by the Pub
Slide 49: Ongoing Green Initiatives
Ongoing Green Initiatives • Adoption of more energy-efficient AHU motors • Enhancement to Chiller and Energy optimisation programme • Purchase and use of renewable energy from electricity grid in UK and Australia Energy • Installation of on-site solar PV panel as renewable energy source • Upgrade an
Slide 50: Thank you
Thank you For enquiries, please contact: Eugenia Ong Manager, Asset Management eugeniaong@ara-group.com The Minster Building, London
Slide 51: Disclaimer
Disclaimer This presentation is focused on the comparison of the actual results for the half year ended 30 June 2022 versus results achieved for half year ended 30 June 2021. It should be read in conjunction with Suntec REIT’s financial results for the half year ended 30 June 2021 announced on SGXNE
Slide 52: About Suntec REIT
About Suntec REIT 21 Harris Olderfleet,477 Collins Street, Street, Sydney Melbourne
Slide 53: About Suntec REIT
About Suntec REIT Singapore’s First Composite REIT Market Capitalisation S$4.6 Billion1 London Asset Under Management S$12.1 Billion2 Listed on 9 Dec 2004 on the SGX-ST High quality office assets, complemented by Singapore retail and convention components 10 properties – 3 in Singapore, 2 in Sydney,
Slide 54: Portfolio Snapshot
Portfolio Snapshot Singapore and UK Properties Suntec City One Raffles MBFC The Minster Nova Properties Suntec City – Suntec Convention Quay Properties Building Office & Retail Description Integrated commercial World-class convention Two premium Two premium Two Grade A Grade A Office development com
Slide 55: Portfolio Snapshot
Portfolio Snapshot Australia Properties 177 Southgate Olderfleet 477 55 Currie Street 21 Harris Street Pacific Highway Complex Collins Street Description 31-storey Grade A office Integrated development Premium Grade, 40- Twelve-storey, Grade A Nine-storey, Grade A building comprising two A-Grade lev
Slide 56: Appendix
Appendix 56 Olderfleet, 477 Collins Street, Melbourne
Slide 57: Singapore Portfolio Increased by S$119.0 million or 1.4%
Singapore Portfolio Increased by S$119.0 million or 1.4% Driven by Increase in Valuation for Office Assets Investment 31 Dec 21 30 Jun 22 30 Jun 22 Variance ($) Variance (%) Cap Rates as Properties of 30 Jun ‘22 Singapore Suntec City Office S$2,975.0M S$3,036.0M S$2,422.4 psf S$61.0M 2.1% 3.55% Sunt
Slide 58: Australia Portfolio Increased by A$0.3 million or 0.01%
Australia Portfolio Increased by A$0.3 million or 0.01% Supported by Improvements in Rents at 21 Harris Street and 477 Collins Street Investment 31 Dec ‘21 30 Jun ‘22 30 Jun ‘22 Variance ($) Variance (%) Cap Rates as Properties of 30 Jun ‘22 Australia 177 Pacific Highway A$720.0M A$720.0M A$17,985.2
Slide 59: UK Portfolio Increased by £1.2 million or 0.2%
UK Portfolio Increased by £1.2 million or 0.2% Slight Increase in Valuation for Nova Properties Investment Properties 31 Dec ‘21 30 Jun ‘22 30 Jun ‘22 Variance ($) Variance (%) Cap Rates as of 30 Jun ‘22 UK Nova Properties (50%) 1 £449.8M £451.0M £1,588.5 psf £1.2M 0.3% 4.26% The Minster Building 2