Cpn Retail Growth Leasehold Reit · SET:CPNREIT
Cpn Retail Growth Leasehold Reit — Q3 2020 Earnings Presentation
35 slides from Cpn Retail Growth Leasehold Reit's earnings presentation, Nov 12, 2020
Slide 1: CPN Retail Growth Leasehold REIT Investor Presentation 3Q20
CPN Retail Growth Leasehold REIT Investor Presentation 3Q20 12 November 2020
Slide 2: Disclaimer
Disclaimer • The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for units in CPN Retail Growth Leasehold REIT (CPNREIT and units in CPNREIT, “Uni
Slide 3: Agenda
Agenda Business Updates Operation Highlights Key Financial Highlights Prepared by Investor Relations, CPN REIT Management Co., Ltd. Agenda Page 3
Slide 4: Business Updates
Business Updates Prepared by Investor Relations, CPN REIT Management Co., Ltd. Agenda Page 4
Slide 5: Top-class assets at prime locations
Top-class assets at prime locations Front-running properties in Greater Bangkok and major provinces for locals and tourists CentralPlaza Pinklao Pinklao Tower A & B CentralPlaza Chiangmai Airport Year acq. 2009 Year acq. 2009 Year acq. 2014 Lease end Dec-2024 Lease end Dec-2024 Lease end Apr-2044 NL
Slide 6: Traffic Recovery & Rental Discount Policy
Traffic Recovery & Rental Discount Policy 90% TRAFFIC RECOVERY (% TO AVERAGE 2019) 80% 77% 77% RM2 67% 76% 70% 66% 75% RM3 60% 63% 60% 59% 60% PKO 55% 53% 50% CMA 53% 40% 40% PTB 38% 30% Mar Jun Sep % RENTAL DISCOUNT (excl. NTG, UHG) 80% 67% 70% 60% 50% 40% 30% 17% 19% 20% 10% 0% 1Q 20 2Q 20 3Q 20 P
Slide 7: Asset Enhancement
Asset Enhancement Hilton Pattaya Renovation CentralPlaza Rama 2 Renovation • Renovation period: Apr – Oct 2020 • Renovation period: Jul 2020 – Oct 2021 • Investment cost: Baht 437 million • Investment cost: Baht 1.1 billion • CPNREIT investment cost: Baht 320 million • Credit Facilities : Bank loan
Slide 8: Hilton Pattaya – Rental Postponement
Hilton Pattaya – Rental Postponement Rental Income Baht mn 1Q20 2Q20 3Q20 4Q20 Fixed (F) 225.0 56.0 56.0 56.0 56.0 Variable (V) ≤ 50% of fixed 3.0 - - - Total Fixed + Variable 59.0 56.0 56.0 56.0 Rental Postponement • The postponed rental is calculated as per the specified formula. • Rental payment
Slide 9: Investment in Additional Assets of CPN
Investment in Additional Assets of CPN Tentative Timeline for Capital Increase & Acquisition 2020 2021 Oct Nov Dec Jan Feb • Revise Filing with Q3/2020 update • Filing submission • SEC approval process • Effective Filing Completed in Feb 2021 • Subscription period • Asset Transfer • New units to be
Slide 10: Operation Highlights
Operation Highlights Prepared by Investor Relations, CPN REIT Management Co., Ltd. Agenda Page 10
Slide 11: NLA and Occupancy Rates
NLA and Occupancy Rates The Ninth Towers ‘000 sqm NLA (1) & Unilever House CentralFestival CentralPlaza Pattaya Beach 400 Chiangmai Airport 327 327 326 Acquired Projects 300 249 249 218 225 224 248 200 249 218 181 Existing Projects 100 0 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 Average Occ. Rate
Slide 12: Rental Structure
Rental Structure % of occupied area 32 CPNREIT 48 CPNREIT 52 (Office) (Plaza) 68 100 Fixed Rent 41 36 Pinklao Tower A&B 59 % of Tenant Sales 64 100 38 39 49 51 62 61 100 Note: Information as of 30 September 2020 Prepared by Investor Relations, CPN REIT Management Co., Ltd. Operation Highlights Page
Slide 13: New and Renewed Leases
New and Renewed Leases From 1 July to 30 Septemer 2020 Project Renewals and New Leases/1 No. of Leases Area (sqm) % of Total /2 CentralPlaza Rama 2 32 4,799 13% CentralPlaza Rama 3 5 960 4% CentralPlaza Pinklao 10 1,407 7% Pinklao Tower A and B 3 1,544 5% CentralPlaza Chiangmai Airport 13 1,258 5% C
Slide 14: Lease Expiry Profile
Lease Expiry Profile % of occupied area and expiry by year Unilever Y2034 SFX Cinema CDS Y2025 29% 100% 19% 29% 40% 11% 17% 21% 24% 18% 15% 60% 34% 34% 37% 25% 13% 37% 24% 28% 11% 15% 12% 10% 21% 15% 29% 41% 18% 36% 41% 8% 9% 7% 8% 4% 4Q20 Y2021 Y2022 Y2023 BEYOND Y2023 CentralPlaza Rama 2 CentralPl
Slide 15: Key Financial Highlights
Key Financial Highlights Prepared by Investor Relations, CPN REIT Management Co., Ltd. Agenda Page 15
Slide 16: TFRS 16: Right-of-Use Asset & Lease Liability
TFRS 16: Right-of-Use Asset & Lease Liability Thai Financial Reporting Standard 16 (“TFRS 16”) “Leases” • Lease over 1-year period is recognized as a rights-of-use asset and corresponding lease liability. Each lease payment is allocated between the liability and finance cost. The finance cost is cha
Slide 17: TFRS 16: Straight-line Rental Income & Discount
TFRS 16: Straight-line Rental Income & Discount Thai Financial Reporting Standard 16 (“TFRS 16”) “Leases” • Rental income and discount from lease over 1-year period is recognized by the lessor on a straight-line basis over the lease term. • In the early period of the contract, rental income would be
Slide 18: TFRS 16: Straight-line Rental & Discount Adjustment
TFRS 16: Straight-line Rental & Discount Adjustment 3Q20 Mall & Office Hotel NTG & UHG P&L (THB mn) Rental & service income 873.2 56.5 157.9 1,087.6 - Contract 1,074.6 56.5 157.9 1,289.0 - Actual discount (201.4) - - (201.4) Straight-line adjustment for lease over 1-year term - Rental income 6.9 4.3
Slide 19: Straight-line Rental Income from Hotel Business
Straight-line Rental Income from Hotel Business (Baht mn) Total Fixed Straight-line Revenue Full Year Rent Income Increase (Decrease) 2018 210.0 241.9 31.9 2019 217.4 241.9 24.6 2020 225.0 241.9 17.0 TFRS 16: Lease Standard, stated that 2021 232.8 241.9 9.1 2022 241.0 241.9 1.0 “lease income from op
Slide 20: Balance Sheet
Balance Sheet CPNREIT % QoQ Unit: Baht Million 30 Sep 19 31 Dec 19 31 Mar 20 30 Jun 20 30 Sep 20 Change Investment at fair value Central Rama 2 6,962 6,359 23,107 23,180 23,229 0.2% Central Rama 3 10,698 11,447 11,447 11,447 11,447 0.0% Central Pinklao 5,678 5,216 5,216 5,216 5,216 0.0% Chiangmai Ai
Slide 21: Flexible funding capacity for portfolio expansion
Flexible funding capacity for portfolio expansion 80,000 Unit: THB mn Borrowing and Gearing Limit Borrowing NAV Liabilities % Gearing 71,127 70,000 Asset Lease Conversion to liabilities 60,000 CPNREIT Acquisition 50,000 47,056 46,850 46,687 REIT Gearing 40,000 Limit (IG) 60% of TAV 30,000 29,462 29,
Slide 22: Profit and Loss
Profit and Loss Change Change Change Unit: Baht Million 9M20 9M19 3Q20 3Q19 2Q20 YoY YoY QoQ Property income 3,027.8 3,867.6 (21.7%) 1,114.4 1,280.8 (13.0%) 735.8 51.4% Rental and service income 3,013.6 3,855.3 (21.8%) 1,113.0 1,278.6 (13.0%) 729.0 52.7% Other income 14.2 12.3 15.8% 1.4 2.2 (36.4%)
Slide 23: 3Q20 F/S vs Core Performance
3Q20 F/S vs Core Performance Balance Sheet 3Q 20 9M 20 3Q 20 FS Change % 9M 20 FS Change % (in thousand Baht) Excl. TFRS 16 Excl. TFRS 16 Income Rental and serv ice income 1,112,956 1,087,641 25,315 2.3% 3,013,632 2,790,991 222,641 8.0% I nterest income 988 988 - 0.0% 6,512 6,512 - 0.0% Other income
Slide 24: Distribution Summary
Distribution Summary Distribution Period 1 April – 30 September 2020 Capital Reduction 0.2100 Baht/Unit 0.4055 0.4157 0.4163 0.4055 0.4055 0.4060 0.4060 0.4000 0.3795 Capital 0.3500 Reduction 0.3000 0.2707 0.2500 0.2100 0.2000 0.1500 0.1000 0.0500 0.0000 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Slide 25: End of presentation
End of presentation For more information, please contact: Investor Relations CPN Retail Growth Leasehold REIT (CPNREIT) CPN REIT Management Company Limited 31st Fl, the Offices at CentralWorld 999-9 Rama I Rd., Patumwan District Bangkok 10330 @ ir_cpnreit@cpn.co.th Thailand +662 667 5555 ext. 1660 h
Slide 26: Establishment and Investment Track Record
Establishment and Investment Track Record A robust and diversified portfolio of high-quality assets 2020 5 4 1 Asset Acquisition Shopping Centers Office Buildings Hotel 2017 Conversion of Acquisition of CPNRF to CentralPlaza Pinklao CPNREIT (2) March 2020 Acquisition of The Ninth Towers Office Centr
Slide 27: Growth strategy and focus areas
Growth strategy and focus areas Continuous effort to identify, study, Geographical expansion assess and review, jointly with the REIT Manager and Property Manager, new investment opportunities M&A Asset diversification Provide long-term returns to unitholders Remerchandizong tenant mix and improve z
Slide 28: Why Invest In CPNREIT?
Why Invest In CPNREIT? Invested properties size The largest retail REIT in Thailand 1 with over THB 44 billion worth of invested properties of Thailand’s retail PFs/REITs (1) Unit: THB bn 44.5 32.0 Top-class assets in prime locations 2 diversified throughout Bangkok and major provinces in Thailand 1
Slide 29: CPNREIT transparent management structure
CPNREIT transparent management structure Investment in CPNREIT Distribution REIT Manager Management Trustee Fee Trustee Fee Management Represents Services Interest of Unitholders Property Management Services Invest in Assets Net Property Income Property Hotel Manager Property Manager Management Fee
Slide 30: Diversified unitholder structure
Diversified unitholder structure Strong support from retail and institutional unitholders, as well as from Central Pattana PCL (CPN) as the Sponsor Unitholders Unit: % of total units outstanding Foreign Trustee 26.7 9.7 2,212.48 million units 28.0 REIT Manager outstanding Retail Local 35.7 Instituti
Slide 31: Strong Relationship With Industry Leaders
Strong Relationship With Industry Leaders REIT and its underlying assets are managed by professional leaders in the industry Experienced Unitholders REIT manager High caliber professionals Trustee with extensive experience in retail asset investment and management Regionally acclaimed REIT Manager p
Slide 32: Asset information
Asset information Project Rama 2 Rama 3 Pinklao Chiangmai Pattaya Hilton Airport Beach Pattaya Location Bangkok Bangkok Bangkok Chiangmai Pattaya, Pattaya, Chonburi Chonburi Gross Floor Area 251,182 169,740 188,345 122,991 70,095 49,686 incl. Parking (sqm) Net Leasable 82,566 36,495 62,045 38,060 29
Slide 33: Asset information
Asset information Project The Ninth Towers Unilever House Location Bangkok Bangkok Gross Floor Area incl. Parking (sqm) 95,997 30,176 Net Leasable Area (sqm) 59,322/1 18,527 Land Tenure 27 years 1 month 18 days 14 years 8 months 13 days ending 18 April 2047 ending 14 November 2034 Building & Utility
Slide 34: Solid Operating Performance Track Record
Solid Operating Performance Track Record Healthy revenue generated from operations Growing TAV from higher property value and acquisition Unit: THB bn ~11% Unit: THB / unit ~10% 6Y CAGR 6Y CAGR 4.93 5.14 21.27 21.18 21.10 3.53 3.53 14.01 14.82 15.19 3.31 3.14 12.09 2.71 2013 2013 2014 2015 2015 2016
Slide 35: CPNREIT Credit Rating by TRIS Rating
CPNREIT Credit Rating by TRIS Rating • On 22 July 2020, TRIS Rating affirmed the company rating of CPNREIT and the ratings on its senior unsecured debentures at “AA”, and downward the rating outlook to “Negative” from “Stable” • Key Rating Considerations: ➢ Largest REIT in Thailand ➢ Rental income f
CPN Retail Growth Leasehold REIT — Q3 2020 Earnings Presentation on 6ix