Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Suntec REIT — Q1 2024 Earnings Presentation
55 slides from Singapore Exchange's earnings presentation, Apr 25, 2024
Slide 1: Suntec REIT Business Updates
SUNTEC REIT BUSINESS UPDATES For the Quarter ended 31 March 2024 25 April 2024
Slide 2: Agenda
03 18 1Q 24 Financial Overview Singapore Office Portfolio Performance 04 28 1Q 24 Operational Overview Australia Portfolio Performance 05 32 Financial Highlights UK Portfolio Performance 15 35 Capital Management Singapore Retail Portfolio Performance Agenda 42 Suntec Convention Performance 45 Our ES
Slide 3: 1Q 24 Financial Overview
1Q 24 Financial Overview Capital Management Distributable Income Distribution Per Unit from Operations1 to from Operations1 to Refinanced Unitholders Unitholders $950 million due in FY 2024 & FY 2026 $44.0 million 1.511 cents Interest savings of -1.1% y-o-y -1.8% y-o-y ~32 basis points (~$3.1M per a
Slide 4: 1Q 24 Operational Overview
1Q 24 Operational Overview Portfolio Committed Occupancy Portfolio WALE 95.1% 95.5% 4.2 2.2 Office Portfolio Retail Portfolio Office Portfolio Retail Portfolio Office Portfolio 80% 20% Work Done 222,600 sq ft Retail Portfolio 69% 31% Renewal Leases New Leases 4
Slide 5: Financial Highlights
Suntec City MBFC Properties One Raffles Quay Olderfleet, 477 Collins Street Financial Highlights The Minster Building 177 Pacific Highway 55 Currie Street Nova Properties 21 Harris Street Southgate Complex
Slide 6: Portfolio Performance Remained Resilient
Portfolio Performance Remained Resilient Gross Revenue (S$ mil) NPI (S$ mil) JV Income1 (S$ mil) Mainly due to: Gross Revenue & Net Property Income: Stronger operating performance from Suntec City 1.1M or 1.0% Office, Mall and Suntec Convention Lower contribution from 55 Currie Street (Adelaide) and
Slide 7: DI and DPU from Operations Remained Resilient
DI and DPU from Operations Remained Resilient DI and DPU from Operations Declined Slightly by 1.1% and 1.8% Respectively Distributable Income (S$ mil) DPU (SG cents) Mainly due to: (6.3M or 12.5%) 50.3 (0.226 ¢ or 13.0%) Completion of capital distribution ($5.8m) 5.8 44.0 1.737 1.511 Higher financin
Slide 8: Distribution Payment
Distribution Payment Distribution Payment Distribution Period 1 Jan 2024 – 31 Mar 2024 Amount (cents/unit) 1.5111 Ex-date 3 May 2024 Record date 6 May 2024 Payment date 30 May 2024 Note: 1. The Manager continues to receive 50% of its asset management fees in units and balance in cash in 1Q 2024. 8
Slide 9: Singapore Office Portfolio Revenue and NPI Remained Stable
Singapore Office Portfolio Singapore Office Portfolio Revenue and NPI Remained Stable Stronger JV Income from Higher Occupancy and Rent Gross Revenue (S$ mil) NPI (S$ mil) JV Income (S$ mil) Mainly due to: 0.4M or 1.1% Gross Revenue & Net Property Income: Higher occupancy and rent at Suntec City Off
Slide 10: Australia Portfolio Impacted by Vacancies, Incentives and Interest Expense
Australia Portfolio Australia Portfolio Impacted by Vacancies, Incentives and Interest Expense Gross Revenue (A$ mil) NPI (A$ mil) JV Income (A$ mil) Mainly due to: Gross Revenue & Net Property Income: (1.7M or 6.5%) (2.7M or 12.9%) Lower occupancy at 55 Currie Street Incentives at 177 Pacific Highw
Slide 11: UK Portfolio Impacted by Vacancies at The Minster Building
UK Portfolio UK Portfolio Impacted by Vacancies at The Minster Building Gross Revenue (£ mil) NPI (£ mil) JV Income (£ mil) (0.5M or 12.8%) (0.7M or 18.9%) 0.6M or 18.2% Mainly due to: Gross Revenue & Net Property Income: 3.9 3.4 3.7 3.3 3.9 Lower occupancy at The Minster Building 3.0 1Q 23 1Q 24 1Q
Slide 12: Singapore Retail Portfolio Performance Improved
Singapore Retail Portfolio Singapore Retail Portfolio Performance Improved Gross Revenue (S$ mil) NPI (S$ mil) JV Income (S$ mil) Mainly due to: 1.0M or 3.0% Gross Revenue & Net Property Income: Higher rent at Suntec City Mall 0.3M or 1.3% Higher marketing expenses 33.3 34.3 23.3 23.6 JV Income: 0.1
Slide 13: Suntec Convention Performance Improved
Suntec Convention Suntec Convention Performance Improved Gross Revenue (S$ mil) Net Property Income (S$ mil) 2.4M or 26.1% Mainly due to: Higher revenue from MICE, long term licences and advertising Higher variable costs due to higher proportion of events 11.6 requiring F&B 9.2 Higher staff costs fr
Slide 14: Diversified Portfolio Across Geography and Sector
Diversified Portfolio Across Geography and Sector Singapore Market and Office Assets Are Mainstays Income Contribution by Geography 71% 17% 12% Singapore Australia UK Income Contribution by Sector 74% 25% 1% Office Retail Convention 14
Slide 15: Capital Management
Capital Management Olderfleet, 477 Collins Street, Melbourne
Slide 16: Key Financial Indicators
Key Financial Indicators As at 31 Dec 23 As at 31 Mar 24 NAV Per Unit $2.10 $2.09 Total Debt Outstanding $4,277 mil $4,240 mil Aggregate Leverage Ratio1 42.3% 42.2% Weighted Average Debt Maturity 3.00 years 3.57 years All-in Financing Cost2 3.84% p.a.3 4.03% p.a.3 Adjusted ICR4 2.0X 1.9X Weighted Av
Slide 17: Refinanced $950 million Due in FY 2024 & FY 2026
Refinanced $950 million Due in FY 2024 & FY 2026 Interest Savings of ~32 basis points (~$3.1M per annum) Debt Maturity Profile Perpetual Securities 1400 1,000 (First Reset) 1200 800 1000 800 600 540 680 950 600 198 700 400 400 300 298 200 200 400 366 221 200 200 200 127 150 0 0 FY2024 FY2025 FY2026
Slide 18: Singapore Office Portfolio Performance
Singapore Office Portfolio Performance 18 One Raffles Quay, Singapore
Slide 19: Singapore Office Portfolio Maintained Strong Occupancy
Singapore Office Portfolio Singapore Office Portfolio Maintained Strong Occupancy Committed Occupancy Lease Expiry Profile As at 31 Mar 24 % of Total NLA4 Comparison Core CBD Occupancy: 95.1%3 99.4% 99.4% 99.2% 99.4% 0.6% 24.1% 23.9% 21.1% 13.9% 10.3% 6.1% Suntec City One Raffles MBFC Towers 1 Singa
Slide 20: Strong Rent Reversion
Singapore Office Portfolio Strong Rent Reversion Over 5 Years (23 Quarters) of Positive Rent Reversion Rent Reversion Work Done1 +11.4% for 1Q 24 123,200 sq ft in 1Q 24 14.0% 80% 13.1% 68% 10.5% 11.4% 32% 20% 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1Q 24 Renewal Leases New Leases Note: 1. Reflects net lettabl
Slide 21: Suntec City Office Performance
Suntec City Office Performance Suntec City Office, Singapore
Slide 22: Occupancy and Rent Continue to Outperform Market
Suntec City Office Occupancy and Rent Continue to Outperform Market Suntec 1Q 24 CBRE Core CBD $9.35 $9.85 $10.02 $9.25 $8.90 100.0% $10 $8.84 95.0% $9 90.0% 85.0% $8 80.0% $7 99.9% 100.0% 99.4% 75.0% 95.6% 97.2% 95.1% $6 70.0% 65.0% $5 60.0% $4 55.0% $3 50.0% FY 20 FY 21 FY 22 FY 23 1Q 24 1Q 24 Sun
Slide 23: Strong Rent Reversion Continued With High Tenant Retention
Suntec City Office Strong Rent Reversion Continued With High Tenant Retention Rent Reversion Work Done1 +10.8% for 1Q 24 69,000 sq ft in 1Q 24 14.0% 80% 12.2% 10.8% 10.8% 58% 42% 20% 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1Q 24 Renewal Leases New Leases Note: 1. Reflects net lettable area of new leases and r
Slide 24: Well Spread Lease Expiry Profile
Suntec City Office Well Spread Lease Expiry Profile 100.0% Expiry Rent $12.0 90.0% $11.0 80.0% $10.80 70.0% $10.64 $10.56 $10.0 $10.19 60.0% $10.03 $9.65 50.0% $9.0 40.0% $8.0 30.0% 20.0% $7.0 25.6% 26.1% 10.0% 18.9% 16.4% 11.5% 0.9% $6.0 2024 2025 2026 2027 2028 2029 & Beyond 24
Slide 25: Performance of One Raffles Quay and Marina Bay Financial Centre Towers 1 & 2
Performance of One Raffles Quay and Marina Business Financial Centre Towers 1 & 2 MBFC Properties, Singapore
Slide 26: Robust Rent Reversion Continued with High Tenant Retention
One Raffles Quay & MBFC Towers 1 & 2 Robust Rent Reversion Continued with High Tenant Retention Rent Reversion Work Done1 +12.0% for 1Q 24 54,300 sq ft in 1Q 24 14.2% 82% 81% 13.1% 12.0% 10.3% 18% 19% 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1Q 24 Renewal Leases New Leases Note: 1. Based on Suntec REIT’s inter
Slide 27: Singapore Office Outlook and Focus
Singapore Office Outlook and Focus Singapore’s economy Businesses remain cost- expected to grow by 2.7% Office market expected to conscious due to higher YoY in line with projected remain resilient with for longer interest rate GDP growth of 1% to 3% moderate rent growth environment Revenue continue
Slide 28: Australia Portfolio Performance
Australia Portfolio Performance 21 Harris Street, Sydney
Slide 29: Portfolio Committed Occupancy Outperforms Market
Australia Portfolio Portfolio Committed Occupancy Outperforms Market Committed Occupancy As at 31 Mar 24 85.7% 83.0% 85.3% 82.0% 100% 98.8% 100% 86.5% 88.9% 56.2% 177 Pacific 21 Harris Street Southgate Complex 477 Collins Street 55 Currie Street Australia Overall Highway Sydney Melbourne Adelaide CB
Slide 30: Backfill of Vacancies
Australia Portfolio Backfill of Vacancies Rent Reversion Lease Expiry Profile % of Total NLA2 Comparison +12.2% Work Done1 26,000 sq ft 41.7% 11.1% 19.3% 56% 8.8% 10.5% 44% 5.5% 3.1% 2024 2025 2026 2027 2028 2029 & Beyond Renewal New Leases Vacant NLA Expiries WALE 4.8 years Notes: 1. Based on Sunte
Slide 31: Australia Outlook and Focus
Australia Outlook and Focus Nationwide CBD office GDP growth remains market occupancy Incentives in Melbourne subdued1. Companies expected to fall in 2024 and Adelaide expected to look to contain costs with new supply coming remain high onstream2 Asset enhancement Satisfying tenants’ Lower revenue e
Slide 32: UK Portfolio Performance
UK Portfolio Performance 32 Nova Properties, London
Slide 33: Portfolio Committed Occupancy Outperforms Market
UK Portfolio Portfolio Committed Occupancy Outperforms Market Committed Occupancy at The Minster Building Improved by 4 percentage points Committed Occupancy Lease Expiry Profile As at 31 Mar 24 % of Total NLA2 Comparison 72.6% of lease expiries will be in 2029 and beyond if tenants do not Central e
Slide 34: UK Office Outlook and Focus
UK Office Outlook and Focus Central London UK economic growth occupancy and rental Good quality office space expected to remain slow growth expected to in prime locations amidst global economic uncertainties and improve due to tight continue to be sought geopolitical tensions supply and increase in
Slide 35: Singapore Retail Portfolio Performance
Singapore Retail Portfolio Performance Suntec City, Singapore
Slide 36: Portfolio Committed Occupancy Outperformed Market
Singapore Retail Portfolio Portfolio Committed Occupancy Outperformed Market Committed Occupancy Lease Expiry Profile As at 31 Mar 24 % of Total NLA2 Comparison Central Area Outside Orchard occupancy: 92.1%1 95.8% 97.1% 95.8% 4.2% 33.3% 25.3% 14.0% 12.6% 4.7% 6.0% Suntec City Mall Marina Bay Link Ov
Slide 37: Suntec City Mall Performance
Suntec City Mall Performance Suntec City Mall, Singapore
Slide 38: Positive Rent Reversion for Consecutive Quarters
Suntec City Mall Positive Rent Reversion for 8 Consecutive Quarters Rent Reversion Work Done1 +21.7% for 1Q 24 72,100 sq ft in 1Q 24 25.3% 25.7% 65% 68% 21.7% 18.2% 35% 32% 2Q 23 3Q 23 4Q 23 1Q 24 1Q 23 1Q 24 Renewal Leases New Leases Note: 1. Reflects net lettable area of new leases and renewals co
Slide 39: Enhanced Retail Experience to Attract Shoppers
Suntec City Mall Enhanced Retail Experience to Attract Shoppers 9 New-to-Market / Suntec Brands Commenced Operations in 1Q 24 Onggii Kidodo Space Tim Hortons New-to-market Korean restaurant New-to-Suntec indoor playground New-to-Suntec coffeehouse chain from Canada 39
Slide 40: 1Q 24 Tenant Sales and Traffic Improved
Suntec City Mall 1Q 24 Tenant Sales and Traffic Improved +5% YoY YoY Traffic Variance Tenant Sales psf ($) YoY Variance 140,000 +5% 2019 Avg 60.0 +6% +5% Daily Traffic +1% +5% 120,000 +10% +8% +1% 50.0 2019 Avg Tenant 100,000 Tenant Sales psf ($) Sales psf Avg Daily Traffic 40.0 ($) 80,000 30.0 60,0
Slide 41: Singapore Retail Outlook and Focus
Singapore Retail Outlook and Focus YoY retail sales growth Continual tourism Rent growth and expected to remain recovery and the growth occupancy underpinned stable of MICE sector remain by healthy demand and key to retail sales growth limited supply Curate differentiated Improvement in revenue Proa
Slide 42: Suntec Convention Performance
Suntec Convention Performance Suntec Singapore
Slide 43: Large-Scale International and Local Events in 1Q 24
Suntec Convention Large-Scale International and Local Events in 1Q 24 Singapore MotorShow City of Good Summit Aviation Festival Asia 11 – 14 Jan 22 Feb 28 – 29 Feb World Congress of Anaesthesiologists IT Show 2024 3 Mar – 7 Mar 14 – 17 Mar 43
Slide 44: Suntec Convention Outlook and Focus
Suntec Convention Outlook and Focus Singapore being Singapore MICE market positioned as “World’s STB’s effort expected to continues to attract key Best MICE City” by drive MICE growth and international headline Singapore Tourism Board tourism recovery events (STB)1 Grow alternative revenue Higher di
Slide 45: Our ESG Commitment
Our ESG Commitment 21 Harris Street, Sydney
Slide 46: Continual Commitment to ESG
Continual Commitment to ESG Achievement All assets Green Building certified 177 Pacific Highway Obtained “B” EPC Energy 477 Collins and Nova Properties 55 Currie Street Rating for The Minster achieved WELL Platinum Carbon Neutral Building Certification Attained highest GRESB 5 Star rating for 4 cons
Slide 47: Roadmap Towards Net-Zero Carbon Emission Target by 2050
Roadmap Towards Net-Zero Carbon Emission Target by 2050 All AUS assets to be All SGP assets to be Net-Zero carbon on 100% Renewable on 100% Renewable emission for all Energy Energy assets Net-Zero carbon 21 Harris & 477 Collins emission for fully owned All SGP assets to to be Carbon Neutral assets c
Slide 48: Looking Ahead
Looking Ahead 55 Currie Street, Adelaide
Slide 49: Navigating Challenges
Navigating Challenges Unlock Value from Asset Proactive Capital Management Enhancement Initiatives and and Cost Prudence Divestment of Mature Assets Explore Good Quality, Accretive Continual Commitment to Assets Sustainability Practices 49
Slide 50: Thank you
Thank you For enquiries, please contact: Melissa Chow Eugenia Ong Manager, Investor Relations Manager, Portfolio Management Melissa.chow@esr.com Eugenia.ong@esr.com The Minster Building, London
Slide 51: Disclaimer
Disclaimer This presentation is focused on the comparison of the business update for the quarter ended 31 March 2024 and the quarter ended 31 March 2023. The information included in this release does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purch
Slide 52: About Suntec REIT
About Suntec REIT 177 Pacific Olderfleet,477 Highway, Collins Street, Sydney Melbourne
Slide 53: About Suntec REIT
About Suntec REIT Singapore’s First Composite REIT Market Capitalisation S$3.1 Billion1 London Asset Under Management S$12.2 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