Frasers Centrepoint Trust · SGX:J69U
Frasers Centrepoint Trust — 2Q FY2020 Earnings Presentation
50 slides from Frasers Centrepoint Trust's earnings presentation, Apr 23, 2020
Slide 1: Frasers Centrepoint Trust Financial Results Presentation 2Q ended 31 March 2020
Frasers Centrepoint Trust Financial Results Presentation for the Second Quarter ended 31 March 2020 23 April 2020
Slide 2: Forward-looking statements disclaimer
◆ Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward-looking statement and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performanc
Slide 3: FCT Overview, Financial Results, Outlook, Appendix
FCT Overview Financial Results for the Second Quarter ended 31 March 2020 Outlook Appendix 3
Slide 4: FCT overview
◆ SGX-listed REIT that owns and invests primarily in suburban retail properties in Singapore, focused on Singapore domestic necessity spending, F&B and services ◆ FCT’s property portfolio comprises 7 suburban retail properties in Singapore totalling 1.4 million sq ft of NLA. FCT also owns a 24.82% s
Slide 5: FCT Retail Portfolio
FCT Retail Portfolio (~1.4 million sq ft NLA) ◆ Among the largest suburban retail property owners in Singapore Anchorpoint YewTee Point Causeway Point Northpoint City Waterway Point1 Changi City Point Bedok Point ◆ All properties are located in the North Wing (FCT), South Wing (FPL) suburban regions
Slide 6: Necessity and convenience shopping, everyday dining
Necessity & convenience shopping Fun for the family Everyday dining Essential services Social and family dining 6
Slide 7: Key malls enhance FCT's resilience
Yishun Yew Tee Woodlands Northpoint City YewTee Point Causeway Point North Wing (FCT) and South Wing (FPL) ◆ FCT’s key malls are Punggol located in north and Waterway Point north-east regions that Bedok have low retail space per Bedok Point capita of below 3, which is below national average Changi B
Slide 8: Largest malls in HDB towns with good growth potential
◆ The three largest malls in FCT’s portfolio are located in HDB towns with good growth potential ◆ Punggol currently has 10,632 (last year: 8,806) new flats under construction and is the fastest growing HDB town HDB Resident Current Growth Population Current units Units + HDB potential to Healthy ro
Slide 9: Woodlands and Punggol development plans
◆ Regional Centre ◆ The Next Generation poised in Singapore’s Smart & Integrated North region District ◆ New business, ◆ SIT's Punggol campus, industry, R&D and Singapore's first learning & innovation university in the north- institution to be east, will be up by 2023; introduced able to accommodate
Slide 10: Frasers Experience app
• Frasers Experience app (FRx) is the digital platform to redefine how we interact with our shoppers; to enhance shopper experiences at our malls; to offer more benefits with less time needed and more conveniences with less hassle • Earn rewards points via QR code at more than 1300 retailers at the
Slide 11: Growth strategy: acquisition, asset enhancement, organic growth
Future Northpoint 2 Bedok Changi City Yishun 10 Investment in Waterway Point Opportunities YewTee Point Point Point Retail Podium PGIM ARF (40%-stake) 2010 2011 2014 2016 2019 2019 • Northpoint City South Acquisition Wing 24.82% in Growth PGIM ARF • Acquisition opportunities of 3rd party assets Anch
Slide 12: Singapore-centric, suburban-focused REIT
Investments in PGIM ARF and Waterway Point strengthened FCT’s position as a leading suburban retail REIT in Singapore Poised for growth Opportunity for growth through acquisitions AEI opportunities to optimise property performance Continue to focus on necessity spending, convenience, accessi
Slide 13: Financial Results for the Second Quarter ended March 2020
Financial Results for the Second Quarter ended 31 March 2020 23 April 2020 Waterway Point
Slide 14: 2Q20 Results Highlights
2Q20 Results Highlights Financial highlights • Gross revenue of S$50.2 million, up 0.9% y-o-y • NPI of S$36.0 million, down 1.3% y-o-y • DPU of 1.61 cents, down 48.7% y-o-y (2Q19: 3.137 cents) • NAV and NTA per Unit of S$2.21 as at 31 March 2020 • Gearing level at 37.4%1 as at 31 March 2020 Operatio
Slide 15: 2Q20 financial results
• Revenue growth mainly from increase in gross rent from renewals and step-up rents from existing leases • Retention of 50% of distributable income to preserve financial flexibility in current time of uncertainty • DPU of 1.61 cents is 48.7% lower y-o-y, due to enlarged unit base and cash retained •
Slide 16: 1H20 financial results
• Increase in distributable income mainly from dividends from PGIM ARF and 40%-stake in SST (1H19: nil) • 1H20 DPU of 4.67 cents is 24.2% lower y-o-y due mainly to larger unit base and cash retained in 2Q20 Increase / S$’000 1H20 1H19 (Decrease) Gross Revenue 99,920 99,014 0.9% Property Expenses (27
Slide 17: Gross Revenue 2Q20
◆ The portfolio revenue grew 0.9% on rental growth from all properties except Changi City Point and Anchorpoint. ◆ The growth was partially offset by lower turnover rent due to tenants’ sales, lower carpark income (complimentary parking between 22 February 2020 and 31 March 2020) and no atrium renta
Slide 18: Gross Revenue 1H20
Gross Revenue S$ million 1H20 1H19 ▲0.9% Share of results of 99.92 99.01 Due to absence of Joint Venture2 carpark income after expiry of car Improved Based on FCT’s 40% share of park management occupancy and results in joint venture SST Due to contract on 30 Nov average rental which holds Waterway P
Slide 19: Property Expenses 2Q20
◆ Property expenses variances mainly due to absence of property tax writebacks at Causeway Point, Changi City Point and YewTee Point which occurred in 2Q19 Property Expenses S$ million Share of results of Absence of Joint Venture2 2Q20 2Q19 Absence of property Absence of Absence of carpark expense t
Slide 20: Property Expenses 1H20
Property Expenses S$ million Share of results of 1H20 1H19 Absence of Joint Venture2 carpark expense Absence of Absence of one- due to expiry of Based on FCT’s 40% share of ▲1.7% results in joint venture SST which property tax off marketing car park 27.64 writeback and expense relating Absence of pr
Slide 21: NPI 2Q20
◆ NPI margin for 2Q20 at 71.7%, 1.6%-point lower than 73.3% in 2Q19 NPI S$ million Share of results of 2Q20 2Q19 Joint Venture2 Based on FCT’s 40% share of ▼1.3% results in joint venture SST which 36.44 holds Waterway Point 35.96 ▼2.2% 16.67 17.05 ▲2.1% 10.30 10.09 ▼8.0% ▼3.3% ▲3.8% ▲23.9% 6.06 4.58
Slide 22: NPI 1H20
NPI S$ million Share of results of 1H20 1H19 Joint Venture2 ▲0.6% Based on FCT’s 40% share of 72.28 71.83 results in joint venture SST which holds Waterway Point ▼2.3% 33.13 33.89 ▲ 4.0% 20.90 20.09 ▼ 1.1% ▲ 2.5% 12.15 9.38 9.48 ▲ 5.0% ▲24.1% 5.30 5.17 2.12 2.02 1.47 1.18 FCT Portfolio Causeway Poin
Slide 23: Financial position
Financial position
Slide 24: Gearing, borrowings and credit ratings
◆ Gearing at 33.3%1, cost of borrowings down to 2.44% ◆ 25 March 2020: Moody’s downgraded FCT’s credit rating from Baa1 to Baa2 and its outlook from stable to negative ◆ 13 April 2020: S&P downgraded FCT’s credit rating from BBB+ to BBB and placed on CreditWatch negative 31 March 2020 31 December 20
Slide 25: Key covenants
Key Covenants (tested quarterly) Requirements As at 31 March 2020 Gearing ratio Less than 45% 37.4%1 Interest cover ratio for the quarter2 More than 1.5 times 6.40 times Unitholders’ Fund More than S$1.2 billion S$2.48 billion Coverage ratio of unencumbered assets More than 250% 337% to Unsecured de
Slide 26: Balance sheet as at 31 Mar 2020
31 Mar 2020 31 Dec 2019 30 Sep 2019 As at S$’000 S$’000 S$’000 Non-current assets 3,605,086 Increase in cash 3,603,131 3,594,638 due to proceeds Trade and other receivables 5,795 from drawdown of 3,351 3,142 short-term facilities Cash and cash equivalents 105,143 13,225 13,103 Current assets 110,938
Slide 27: Debt maturity profile
Weighted Average Debt Maturity as at 31 March 2020: 2.13 years Type of borrowings Aggregate amount ■Unsecured bank borrowings S$500.0 million (43.6%) ■MTN S$240.0 million (20.9%) ■Secured bank borrowings1 S$406.0 million (35.5%) Total Borrowings S$1,146.0 million (100.0%) S$280m (24.4% of total S$26
Slide 28: Operational performance
Operational performance
Slide 29: Portfolio occupancy
◆ 31 March 2020 Portfolio occupancy: +0.1%-point y-o-y and -1.2%-point q-o-q ◆ Changi City Point’s q-o-q decline in occupancy was due to non-renewals of 2 tenants and pre-termination of 1 tenant during the quarter. These units are currently being marketed. Mall Occupancy 31 Mar 19 30 Jun 19 30 Sep 1
Slide 30: WALE and lease expiry profile
◆ WALE @ 31 March 2020 stands at 1.83 years by NLA (1Q20: 1.77 years) and 1.76 years by GRI (1Q20: 1.63 years) ◆ Renewed expiring leases of all anchor tenants due in FY2020 ◆ Less than 12% of expiring leases (by NLA) remaining to be renewed in 2H20 Lease expiry profile as % of Total GRI 31.7% 30.6%
Slide 31: Rental reversions on renewals
Change compared Leased area As % of (1 Oct 2019 – 31 Mar 2020) No. of renewals with preceding rental renewed (sq ft) property’s NLA rates1 Causeway Point 28 85,469 20.3% 6.0% Northpoint City North Wing2 30 38,752 16.9% 2.8% Waterway Point 36 61,441 16.5% 6.0% Changi City Point 24 41,851 20.4% 5.7% B
Slide 32: Lease expiries in FY2020
◆ Less than 12% of expiring leases (by NLA) remaining to be renewed in 2H20 Lease area Lease Expiries in FY2020 Number of as % of leased as % of total GRI of expiring As at 31 March 2020 leases expiring area of property property (sq ft) Causeway Point 45 44,916 10.9% 17.6% Northpoint City North Wing
Slide 33: Shopper traffic and tenants' sales
Portfolio Shopper Traffic Portfolio Tenants’ Sales ◆ Portfolio shopper traffic turned from positive y-o-y ◆ Tenants’ sales psf for the period December 2019 to change in January 2020 to mild negative in February February 2020 was 4.0% down y-o-y, mainly 2020 and a sharp 9.0% fall in March 2020 attrib
Slide 34: Update on COVID-19 situation
Update on COVID-19 situation
Slide 35: Tenant Support Package for malls
TSP announced for all 14 malls1 under Frasers Property Retail: TSP announced on 26 February 2020 Enhancements announced on 27 March 2020 • Passing on the full 15% property tax rebate2 to all • Passing on the full property tax rebate2 to all qualifying qualifying tenants tenants • Flexibility to conv
Slide 36: Outlook
Outlook
Slide 37: Outlook: MTI forecast and Circuit Breaker measures
◆ On 26 March 2020, the Ministry of Trade and Industry (“MTI”) downgraded its growth forecast for Singapore GDP to “-4.0 to -1.0 per cent” from “-0.5 to 1.5 per cent”. Singapore Department of Statistics (DOS) reported retail sales index (excluding motor vehicles) for February 2020 has dropped 10.2%,
Slide 38: COVID-19 regulations and impact on FCT
◆ The “Covid-19 (Temporary Measures) (Temporary Relief for Inability to Perform Contracts) Regulations 2020” (the “Regulations”) provides tenants with relief from their contractual obligations for six months from the effective date of the Regulations, and this period may be extended to a year. The r
Slide 39: Frasers Centrepoint Trust
F~ ERASERS CENTREPOINT TRUST >
Slide 40: Appendix
Appendix
Slide 41: Glossary and abbreviations
◆ 2Q19: Second Quarter 2019 ended 31 March 2019 ◆ NAV: Net asset value ◆ 2Q20: Second Quarter 2020 ended 31 March 2020 ◆ NLA: Net Lettable Area ◆ 1H19: Six months ended 31 March 2019 ◆ NPI: Net Property Income ◆ 1H20: Six months ended 31 March 2020 ◆ NTA: Net Tangible Value ◆ AEI: Asset Enhancement
Slide 42: 2Q20 y-o-y and q-o-q comparison
2Q20 y-o-y and q-o-q comparison y-o-y comparison q-o-q comparison Change Change $’000 (unless otherwise indicated) 2Q20 2Q19 Inc / (Dec) 1Q20 Inc / (Dec) Gross Revenue 50,168 49,733 0.9% 49,752 0.8% Property Expenses (14,204) (13,289) 6.9% (13,433) 5.7% NPI 35,964 36,444 (1.3%) 36,319 (1.0%) Income
Slide 43: Borrowings and credit ratings detail
Average cost of Borrowings (all-in) 2.44% Annualised based on rates fixed @ 31 March 2019 Moody's rating Baa2 Moody’s changed rating from Baa1 to Baa2 on 25 March 2020 S&P rating BBB S&P changed rating from BBB+ to BBB on 13 April 2020 Interest cover (EBIT/Σ interest) (times) 6.4 For the quarter 1 J
Slide 44: Lease expiry profile by property
FCT - Portfolio FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2028 Grand Total No. of leases 153 288 268 151 19 2 1 882 NLA (sq ft) expiring 165,573 370,504 496,138 263,817 77,385 2,699 21,248 1,397,364 Expiries as % of total leased area 11.9% 26.5% 35.5% 18.9% 5.5% 0.2% 1.5% 100.0% Expiries as
Slide 45: Trade classifications
Trade Classifications As % of total NLA As % of total GRI (In descending order of % of GRI) F&B 30.9% 37.7% Fashion 12.8% 13.5% Beauty & Health 8.3% 11.8% Services 4.8% 8.9% Household 9.9% 7.5% Supermarket & Hypermarket 7.3% 5.1% Leisure/Entertainment 6.6% 3.0% Sports Apparel & Equipment 3.2% 2.8% B
Slide 46: Top 10 tenants by GRI
Rank by Tenants As % of total NLA As % of total GRI GRI 1 NTUC Fairprice Co-operative1 4.7% 3.2% 2 Cold Storage Singapore (1983) Pte Ltd2 3.6% 3.0% 3 Copitiam Pte Ltd3 2.9% 2.6% 4 Metro (Private) Limited4 4.3% 2.6% 5 Courts (Singapore) Limited 2.5% 2.1% 6 Koufu Pte Ltd 2.3% 2.0% 7 Cotton On Singapor
Slide 47: Portfolio average rental reversions
Portfolio Average Rental Reversions1 15.0% 14.0% 12.8% 12.1% 9.9% 8.6% 7.2% 7.7% 6.5% 6.3% 5.1% 4.8% 5.2% 3.2% FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 1H20 1. Based on the variance between the average rental rates between the new lease and the prece
Slide 48: DPU (S cents)
DPU (S cents) 11.9 12.015 12.07 11.608 11.764 11.187 10.93 10.01 8.2 8.32 7.29 7.51 6.55 6.03 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 (IPO)* *Annualised DPU for the period 5 Jul 2006 (IPO) to 30 September 2006. 48
Slide 49: FCT property valuation
NLA Valuation @ NLA Valuation @ Land Tenure Years Land Tenure Years FCT Property 30/9/2019 Expiry PGIM ARF Retail Property 30/9/2019 Expiry Type remaining Sqm Sq ft Type remaining Sqm Sq ft (S$'000) (S$'000) Causeway Point 39,027 420,082 1,298,000 Leasehold 2094 74 Tiong Bahru Plaza 19,947 214,710 6
Slide 50: Experience matters.
Experience matters.
Frasers Centrepoint Trust — 2Q FY2020 Earnings Presentation on 6ix