CapitaLand Ascendas REIT · SGX:A17U
CapitaLand Ascendas REIT — H1 2023 Earnings Presentation
63 slides from CapitaLand Ascendas REIT's earnings presentation, Jul 31, 2023
Slide 1: 1H 2023 Financial Results
CapitaLand Ascendas REIT 1H 2023 Financial Results 31 July 2023 Aperia, Singapore
Slide 2: Disclaimers
Disclaimers • This presentation may contain forward-looking statements. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors i
Slide 3: Agenda
Agenda 04 Key Highlights 06 Financial Performance 10 Investment Management 14 Capital Management 20 Asset Management 37 Market Outlook 44 Portfolio Resilience & Sustainability 54 Appendix: - Singapore Occupancy (CLAR vs Industrial Average) - Average Market Rents FM Global Centre, Singapore - Singapo
Slide 4: Key Highlights
1H 2023 Financial Results 1-7 Wayne Goss Drive, Brisbane, Australia Key Highlights
Slide 5: Key Highlights
Key Highlights 1H 2023 Distributable Income Asset Improved Portfolio Occupancy S$327.5 m 94.4% -1.0% y-o-y Management 30 Jun 2022: 94.0% Financial Positive Portfolio Rental Reversion# Performance Distribution per Unit +14.2% 7.719 cents -2.0% y-o-y Capital Healthy Aggregate Leverage Investment Prope
Slide 6: Financial Performance
1H 2023 Financial Results Financial Performance Croydon, London, United Kingdom
Slide 7: Financial Performance 1H 2023 vs 1H 2022
Financial Performance 1H 2023 vs 1H 2022 (S$m) 1H 2023 1H 2022 Variance Mainly attributable to: • Completion of 500 Green Road, Brisbane, Australia, and 7 Kiora Crescent, Sydney, Australia, in Feb 2022, and acquisition of seven logistics properties in Chicago, US, in Jun 2022; Gross revenue 718.1 66
Slide 8: Financial Performance 1H 2023 vs 2H 2022
Financial Performance 1H 2023 vs 2H 2022 (S$m) 1H 2023 2H 2022 Variance Mainly attributable to: • Contribution from the acquisition of 622 Toa Payoh Lorong 1, Singapore in Jan 2023, 1 Buroh Gross revenue 718.1 686.1 4.7% Lane, Singapore, in Feb 2023 and The Shugart, Singapore, in May 2023 (Collectiv
Slide 9: Distribution Details
Distribution Details Distribution Period DPU (Singapore cents) 1 25 May 2023 to 30 Jun 2023 (1) 1.578 (2) Distribution timetable Last day of trading on “cum” basis 4 August 2023 (Friday) Ex-distribution date 7 August 2023 (Monday), 9.00 am Record date 8 August 2023 (Tuesday), 5.00 pm Distribution pa
Slide 10: Investment Management
1H 2023 Financial Results Investment Management 510 Townsend Street, San Francisco, United States
Slide 11: 1H 2023 Investment Highlights
1H 2023 Investment Highlights o Completed three acquisitions worth S$514.9 m and one divestment worth S$35.4 m in Singapore. Purchase Consideration 1H 2023 City/Country Sub-segment Completion Date (S$m) Completed Acquisitions 622 Toa Payoh Lorong 1 Singapore Industrial and Data Centres 104.8 11 Jan
Slide 12: Acquisition (Completed in 2Q 2023)
Acquisition (Completed in 2Q 2023) Seagate’s R&D facility (The Shugart), Singapore Purchase Consideration S$218.24 m Acquisition Fee(1), Stamp Duty and S$14.18 m Other Transaction Costs Total Acquisition Cost S$232.4 m Vendor Seagate Singapore International Headquarters Pte Ltd Valuation (as at 31 M
Slide 13: Divestment (Completed in 2Q 2023)
Divestment (Completed in 2Q 2023) KA Place, Singapore o Divested at a premium of 219% to purchase price and 55% to recent valuation Property Description KA Place, 159 Kampong Ampat is a 7-storey high-specification industrial building with a car park on the second storey. Sales Price S$35.38m Buyer K
Slide 14: Capital Management
1H 2023 Financial Results Capital Management Reynolds House, Manchester, United Kingdom
Slide 15: Healthy Balance Sheet
Healthy Balance Sheet ▪ Aggregate leverage is healthy at 36.7% (1)(2) ▪ Available debt headroom of ~S$4.8 b to reach MAS’s aggregate leverage limit of 50.0% As at As at As at 30 Jun 2023 31 Dec 2022 30 Jun 2022 Total Debt (S$m) (1)(2)(3) 6,560 6,296 6,389 Total Assets (S$m) (1)(2) 17,870 17,332 17,4
Slide 16: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2032 ▪ Average debt maturity healthy at 3.3 years ▪ Green financing increased to S$2.1 b(1), accounting for about 30% of total borrowings(1) 3% 5% 1200 36% 1000 906 946 Diversified 873 862 842 869 Finan
Slide 17: Key Funding Indicators
Key Funding Indicators ▪ Robust financial metrics that exceed bank loan covenants by a healthy margin ▪ A3 credit rating facilitates good access to wider funding options at competitive rates As at As at As at 30 Jun 2023 31 Dec 2022 30 Jun 2022 Aggregate Leverage (1)(2) 36.7% 36.3% 36.7% Unencumbere
Slide 18: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management Proportion of Borrowings on Fixed Rates Refinancing in FY2023 ▪ ~82% of borrowings are on fixed rates with an average term ▪ S$668 m of borrowings are due to be refinanced in FY2023 of 3.2 years ▪ A 100 bps increase in interest rate on refinancing is expected ▪
Slide 19: High Natural Hedge
High Natural Hedge ▪ Maintained high level of natural hedge of ~75% for overseas investment to minimise the effects of any adverse exchange rate fluctuations ▪ With EUR fully-hedged and if AUD, USD and GBP weaken by 15%, overall impact to NAV is less than 3% A$ Natural Hedge US$ Natural Hedge £ Natu
Slide 20: Asset Management
1H 2023 Financial Results Asset Management Nucleos, Singapore
Slide 21: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 99.5% 99.3% 99.5% 99.5% 97.7% 95.3% 96.6% 94.4% 94.4% 94.0% 92.3% 92.3% 91.9% 92.1% 92.5% Jun-23 Mar-23 Jun-22 Singapore United States Australia United Kingdom / Europe Total Gross Floor 3,218,548 682,755 (2) 839,697(3) 588,985(4) 5,329,985 Area (sqm)(1) (1) Gross Flo
Slide 22: Singapore Occupancy
Singapore Occupancy ▪ Occupancy was stable at 92.3% As at 30 Jun 2023 31 Mar 2023 30 Jun 2022 Total Singapore Portfolio GFA (sqm)(1) 3,218,548 3,188,360 3,079,386 Singapore Portfolio Occupancy (same store)(2) 92.0% 92.1% 92.1% Occupancy of Investments Completed in the last 99.5%(3) 99.2%(4) 89.8%(5)
Slide 23: United States Occupancy
United States Occupancy ▪ Occupancy declined to 92.1% mainly due to movements in Raleigh As at 30 Jun 2023 31 Mar 2023 30 Jun 2022 Total United States Portfolio GFA (sqm) 682,755(1) 682,750(1) 691,390 United States Portfolio Occupancy 92.1% 92.5% 95.3% (same store)(2) Occupancy of Investments Comple
Slide 24: Australia Occupancy
Australia Occupancy ▪ Occupancy improved by 20bps to a high of 99.5% due to higher occupancy at Cargo Business Park, a logistics property in Brisbane (30 Jun 2023: 91.9% vs 31 Mar 2023, 77.2%) As at 30 Jun 2023 31 Mar 2023 30 Jun 2022 Total Australian Portfolio GFA (sqm) 839,697 840,252 840,368 Aust
Slide 25: United Kingdom/Europe Occupancy
United Kingdom/Europe Occupancy ▪ Occupancy remained high at 99.5% As at 30 Jun 2023 31 Mar 2023 30 Jun 2022 Total UK/Europe Portfolio GFA (sqm) 588,985 588,985 590,393 UK/Europe Portfolio Occupancy (same store)(1) 99.5% 99.5% 97.7% Occupancy of Investments Completed in the last N.A. N.A. N.A. 12 mo
Slide 26: Singapore: Sources of New Demand in 1H 2023
Singapore Sources of New Demand in 1H 2023 1.1% 2.6% 6.2% 0.5% 6.4% 6.2% 5.8% 8.3% 6.0% 0.6% 7.0% 3.4% 5.5% 0.4% 9.2% 7.9% By Gross By NLA 11.0% Rental Income 24.3% 18.0% 41.7% 13.8% 14.1% Logistics & Supply Chain Management IT & Data Centers Financial & Professional Services Engineering Lifestyle,
Slide 27: United States, Australia, UK/Europe: Sources of New Demand
United States, Australia, UK/Europe Sources of New Demand in 1H 2023 7.0% 12.9% 9.1% 6.5% 13.5% 4.8% 4.5% 1.8% 2.0% 1.1% 19.5% By Gross By NLA Rental Income 27.6% 38.9% 50.8% Logistics & Supply Chain Management Engineering IT & Data Centers Lifestyle, Retail and Consumer Products Biomedical and Agri
Slide 28: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Average portfolio rent reversion of leases renewed in 2Q 2023 and 1H 2023 was 18.0% and 14.2% respectively ▪ Rental reversion for FY2023 is expected to be in the positive high-single digit range % Change in Renewal Rates for Multi-tenant Buildings (1) 2Q 2023 1Q 2023 2Q
Slide 29: Weighted Average Lease Expiry
Weighted Average Lease Expiry By Gross Revenue ▪ Portfolio Weighted Average Lease Expiry (WALE) remained stable at 3.9 years WALE (as at 30 Jun 2023) Years Singapore 3.7 United States 4.3 Australia 2.8 United Kingdom/Europe 6.1 Portfolio 3.9 CapitaLand Ascendas REIT 1H 2023 Financial Results 29
Slide 30: Portfolio Lease Expiry Profile
Breakdown of expiring leases for Portfolio Lease Expiry Profile FY2023 and FY2024 As at 30 Jun 2023 21.4% o Portfolio WALE of 3.9 years o Lease expiry is well-spread, extending beyond FY2037 FY2023 53.3% o 6.9% of gross rental income is due for renewal in FY2023 25.3% o Weighted average lease term o
Slide 31: Singapore: Lease Expiry Profile
Breakdown of expiring leases Singapore: Lease Expiry Profile for FY2023 and FY2024 As at 30 Jun 2023 31.1% o Singapore portfolio WALE of 3.7 years 34.4% o Lease expiry is well-spread, extending beyond FY2037 FY2023 50.2% 51.1% o 6.9% of Singapore’s gross rental income is due for renewal in FY2023 24
Slide 32: United States: Lease Expiry Profile
Breakdown of expiring leases United States: Lease Expiry Profile for FY2023 and FY2024 As at 30 Jun 2023 24.5% o United States portfolio WALE of 4.3 years Kansas City , 24.5% Portland , o Lease expiry is well-spread, extending till FY2033 35.9% Raleigh FY2023 o 5.1% of United States’ gross rental in
Slide 33: Australia: Lease Expiry Profile
Breakdown of expiring leases Australia: Lease Expiry Profile for FY2023 and FY2024 As at 30 Jun 2023 o Australia portfolio WALE of 2.8 years 38% Sydney 32% o Lease expiry is well-spread, extending till FY2032 FY2023 o 12.9% of Australia’s gross rental income is due for renewal in FY2023 Brisbane 68%
Slide 34: United Kingdom/Europe: Lease Expiry Profile
Breakdown of expiring leases United Kingdom/Europe: Lease Expiry Profile for FY2023 and FY2024 As at 30 Jun 2023 o United Kingdom/Europe portfolio WALE of 6.1 years United Kingdom, 100% o Lease expiry is well-spread, extending beyond FY2037 FY2023 o 3.0% of United Kingdom/Europe’s gross rental incom
Slide 35: Improving Portfolio Quality
Improving Portfolio Quality Ongoing Projects Estimated City/Country Estimated Total Cost (S$m) Completion Date Acquisitions Under Development 161.0 MQX4, Macquarie Park Sydney, Australia 161.0(1) 2H 2023(2) Redevelopments 543.6 1 Science Park Drive (34% stake) Singapore 300.2(3) 2Q 2025 27 IBP (form
Slide 36: Redevelopment (New) Toh Guan Road East
Redevelopment (New) 5 Toh Guan Road East(1) This redevelopment involves the transformation of two blocks of warehouse space into a modern six-storey ramp-up logistics property. Notable features include 82 loading bays, power provision for cold storage usage and large contiguous floor Description pla
Slide 37: Market Outlook
1H 2023 Financial Results Market Outlook Grab Headquarters, Singapore
Slide 38: Market Outlook: Macro Environment
Market Outlook Macro Environment ▪ According to the International Monetary Fund (IMF), global growth is expected to slow down from 3.5% in 2022 to 3.0% in both 2023 and 2024. Advanced economies are projected to witness a slowdown in growth at an estimated 1.5% in 2023. ▪ The weaker outlook reflects
Slide 39: Market Outlook: Singapore
Market Outlook Singapore ▪ Based on advance GDP estimates by the Ministry of Trade and Industry (MTI) for 2Q 2023, the Singapore economy expanded by 0.7% y-o-y, faster than the 0.4% growth in 1Q 2023. The manufacturing sector contracted by 7.5% y-o-y, deteriorating from the 5.6% contraction in the p
Slide 40: Market Outlook: United States
Market Outlook United States (US) ▪ Based on the advance estimate for 2Q 2023, the US economy grew by an annualised rate of 2.4%, as compared with the 2.0% growth recorded in 1Q 2023. The increase in GDP reflected increases in consumer spending, nonresidential fixed investment, private inventory inv
Slide 41: Market Outlook: Australia
Market Outlook Australia ▪ In 1Q 2023, the Australian economy grew by 0.2% q-o-q. Although this marks the sixth consecutive rise in quarterly GDP, it is the weakest growth since September 2021. Domestic final demand was the primary contributor to GDP growth, offset by detraction in net trade due to
Slide 42: Market Outlook: United Kingdom
Market Outlook United Kingdom (UK) ▪ Based on the advance estimate for 1Q 2023, UK’s GDP registered a 0.1% growth q-o-q in 1Q 2023, following the 0.1% growth in the previous quarter. In output terms, the services sector growth was driven by increases in information and communication, and administrat
Slide 43: Market Outlook: Summary
Market Outlook Summary ▪ High interest rates, inflation, and global economic uncertainties continue to pose challenges. ▪ These ongoing challenges may have an impact on tenants’ businesses as well as on CLAR’s operating costs. ▪ The Manager is committed to proactively manage these challenges in a pr
Slide 44: Portfolio Resilience & Sustainability
1H 2023 Financial Results Portfolio Resilience & Sustainability 254 Wellington Road, Melbourne, Australia
Slide 45: Diversified Portfolio Across Developed Markets
Diversified Portfolio Across Developed Markets Investment Properties stood at S$17.0 b(1) 63% Singapore as at 30 Jun 2023 o Singapore: S$10.7 b 14% United States o United States: S$2.5 b Asset Value o Australia: S$2.3 b S$17.0 b (1) 14% Australia o United Kingdom/Europe: S$1.5 b 9% United Kingdom/Eu
Slide 46: Multi-Asset Portfolio
Multi-Asset Portfolio Steering Towards Growth Sectors Steering our portfolio towards asset classes that cater 47%, Business Space and Life Sciences to the changing market and tenant requirements arising Business Space from structural trends and changing consumption 40% patterns such as digitalisatio
Slide 47: Tapping the Growing Technology, Logistics & Life Sciences Industries
Tapping the Growing Technology, Logistics & Life Sciences Industries Logistics & Supply Chain Management 12.8% 63.4% of our customer base is from the Engineering 11.2% growing technology, logistics and life Data centres 10.1% sciences industries Information & Communications Technology 9.3% Biomedica
Slide 48: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of more than 1,750 tenants. ▪ Top 10 customers (as at 30 Jun 2023) account for about 16.0% of monthly portfolio gross revenue. ▪ On a portfolio basis, weighted average security deposit is about 5.0 months of rental income. Top 10 Customers
Slide 49: Diversified Portfolio
Galaxis,4.2% Aperia,3.4% ONE @ Changi City,2.8% 12, 14 & 16 Science Park Drive,2.4% Diversified Portfolio Nucleos,2.4% Neuros & Immunos,2.0% Pioneer Hub,2.2% 1 Buroh Lane,1.9% Kim Chuan Telecommunication Complex,1.8% 510 Townsend Street,1.8% TelePark,1.8% 1, 3 & 5 Changi Business Park Crescent,1.7%
Slide 50: Sustainability Management Structure
Sustainability Management Structure Provide strategic CLI Board of Directors oversight of The Manager’s Sustainability Committee (SC) ESG policies (Established in 2020) and Strategy and Sustainability Committee (Board Committee) integration Chairman: CEO Provide CLI Senior Leadership Council managem
Slide 51: CapitaLand Ascendas REIT's ESG Targets
CapitaLand Ascendas REIT’s ESG Targets Targets Timeline • Green Certification for new acquisitions/developments to meet a minimum green rating target set(1) o Singapore – Green Mark GoldPLUS certification or equivalent - o Overseas – certification by a green rating system administered by a national
Slide 52: Continued Momentum for Green Initiatives
Continued Momentum for Green Initiatives 73 green-certified properties¹ 20 properties with solar About 45% of total properties by GFA are green-certified. panels (3 additions in 1H 2023) Largest number of public Electric 1st industrial LogisTech is the One of the largest combined rooftop Vehicle cha
Slide 53: Steadfast in Commitments
Steadfast in Commitments Green Financing External Validation ▪ Established Green Finance Framework in FY2020 ▪ Total of >S$2b comprising Green Bond, Green Perpetual Securities, Green Loans ▪ Green Interest Rates Swap (~S$202 m) Green Financing (S$m) - $2,073 $1,823 $1,211 FY2021 FY2022 FY2023 1H Inf
Slide 54: Appendix
1H 2023 Financial Results Appendix Unit 5 Wellesbourne Distribution Park, West Midlands, United Kingdom
Slide 55: Historical Financial Results
Historical Financial Results Financial Highlights 1H 2022 2H 2022 FY2022 1H 2023 (S$ m) Gross Revenue 667 686 1,353 718 Net Property Income 477 492 969 509 Total Amount Available for 331 333 664 327 Distribution No. of Units in Issue (m) 4,201 4,204 4,204 4,391 Distribution Per Unit (cents) 7.873 7.
Slide 56: Singapore Occupancy: CLAR vs Industrial Average
Singapore Occupancy CLAR vs Industrial Average 98.7% 100.0% 93.2% 89.9% 91.0% 90.0% 84.8% 80.6% 80.0% Occupancy Rate 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% Business Space & Life Sciences Industrial & Data Centres Logistics CLAR JTC Statistics Source : CLAR's Singapore portfolio as at 30 Jun 2023. Marke
Slide 57: Average Market Rents (Singapore)
Average Market Rents (Singapore) By Segment Rental Index of All Singapore Industrial Property 120.0 2022Q4: 2023Q1: 2023Q2: 102.5 Rental Index (Base Year: 97.7 100.4 100.0 80.0 2022Q2: 2022Q3: 4Q2012) 2022Q1: 93.7 95.7 60.0 92.3 40.0 20.0 0.0 Source : JTC 2Q 2023 Market Report $6.5 Average Gross Ren
Slide 58: Singapore Industrial Market New Supply
Singapore Industrial Market New Supply ▪ Potential new supply of about 2.6m sqm* (5.1% of existing stock) over next 5 years, of which ~66% are pre-committed ▪ Island-wide occupancy as at 31 March 2023 stood at 88.8%, a marginal decline of 0.6 percentage point as compared to previous quarter (89.4%)
Slide 59: Singapore Business & Science Park New Supply
Singapore Business & Science Park New Supply (1) % Pre- Expected Developer Location GFA (sqm) committed Proposed Project Completion (Estimated) Surbana Jurong Campus 2023 Surbana Jurong Capital (JID) Pte Ltd Cleantech Loop 34,870 0% (Phase 2, BP Portion) BP Development (7 Science Park Science Park 2
Slide 60: Singapore Industrial & Data Centres New Supply
Singapore (1) Industrial & Data Centres New Supply Expected % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) 2024 JTC Space @ AMK JTC Corporation Ang Mo Kio Street 64/65 116,630 0% 2024 Single User Factory Malkoha Pte Ltd Sunview Way 171,340 100% Additions/alterat
Slide 61: Singapore Logistics: New Supply
Singapore Logistics: New Supply (1) Expected % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) Fairprice Group Fresh Food 2023 NTUC Fairprice Co-operative Ltd Sunview Road 59,680 100% Distribution Centre POKKA Logistics BTS 2024 ESR SG Real Estate Pte Ltd Benoi Cre
Slide 62: Singapore Industrial & Data Centres Completed Projects
Singapore Industrial & Data Centres Completed Projects (1) Year of % Pre-committed Proposed Project Developer Location GFA (sqm) Completion (Estimated) Octava (S) Property Investments Pte Ltd 0% 2023 Harbourlink Innohub Alexandra Terrace 68,200 (Lee Rubber) 2023 Tai Seng Exchange Soilbuild Group Tai
Slide 63: Thank you
Thank you Galaxis, Singapore
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