Capitaland Ascendas Reit · SGX:A17U

Capitaland Ascendas Reit — Ascendas Real Estate Investment Trust (A-REIT) — 1Q FY15/16 Earnings Presentation

60 slides from Capitaland Ascendas Reit's earnings presentation, July 2015

  1. Slide 1: Investor Presentation

    Hyflux Innovation Centre The Kendall Aperia Investor Presentation July 2015 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  2. Slide 2: Disclaimers

    Disclaimers This material shall be read in conjunction with A‐REIT’s financial statements for the financial quarter ended 30 June 2015. This presentation may contain forward‐looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may diff

  3. Slide 3: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 3

  4. Slide 4: Overview of Ascendas Real Estate Investment Trust

    Overview of Ascendas Real Estate Investment Trust  First and largest business space and industrial REIT listed on the Singapore Exchange and a constituent of the FTSE Straits Times Index effective 4 June 2014  Total assets of about S$8.2bn (US$6.0 bn) as at 30 June 2015  Issuer and senior unsecur

  5. Slide 5: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub‐sector Business Parks (BP) Science Parks (SP) Portfolio GFA (sqm) 338,652 340,890 % of A‐REIT ‐ by GFA 11% 11% ‐ by asset value 16% 18% Characteristics Zone is defined by Govt Master Plan. Zone is defined by G

  6. Slide 6: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub‐sector Integrated Development, Amenities Hi‐Specs Industrial (Hi‐S) Data Centres (DC) & Retail (IDAR) Portfolio GFA (sqm) 157,299 526,578 109,756 % of A‐REIT ‐ by GFA 5% 18% 4% ‐ by asset value 8% 18% 7% Chara

  7. Slide 7: Singapore: Diversified Portfolio Positioned for Future Growth

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub‐sector Light Industrial (LI) Flatted Factories (FF) Logistics & Distribution Centres (Log) Portfolio GFA (sqm) 376,784 197,143 829,775 % of A‐REIT ‐ by GFA 12% 7% 28% ‐ by asset value 8% 4% 17% Characteristics

  8. Slide 8: A-REIT's Singapore Property Map

    A‐REIT’s Singapore Property Map  Strategically located along major expressways  Several properties e.g. Business Park, Science Park and some High‐Specs Industrial properties are in close proximity to CBD  Light Industrial and Hi‐Specs Industrial properties are primarily centrally located near maj

  9. Slide 9: China: Suburban Business Park Properties

    China: Suburban Business Park Properties to Cater to Growing Demand Sub‐sector Business Park (China) Number of 2 Properties Portfolio GFA (sqm) 111,307 % of A‐REIT ‐ by GFA 4% ‐ by asset value 4% Location Tier 1 cities: e.g. Shanghai & Beijing Ascendas Z‐link Characteristics Suburban office, corpora

  10. Slide 10: A-REIT's Steady Growth since Listing

    Total Unitholders’ Amount Available Funds (S$m) for Distribution (S$m) A‐REIT’s Steady Growth since Listing 10

  11. Slide 11: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 11

  12. Slide 12: Key Highlights for 1Q FY15/16

    Key Highlights for 1Q FY15/16  Total Amount Available for Distribution rose by 5.6% y‐o‐y to S$92.5m  DPU grew 4.4% y‐o‐y to 3.841 cents from 3.680* cents in 1Q FY14/15  Key performance drivers were: • Contributions from Aperia, Hyflux Innovation Centre and The Kendall (acquired in FY14/15) • Pos

  13. Slide 13: Key Highlights for 1Q FY15/16

    Key Highlights for 1Q FY15/16  Investment highlights • Divested 26 Senoko Way for S$24.8m in April 2015 • DBS Asia Hub Phase 2, completed in April 2015 for S$21.8m, and fully leased to DBS • Completed new amenities block, Sparkle, located in Singapore Science Park II for S$17.2m in June 2015  Proa

  14. Slide 14: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 14

  15. Slide 15: 1Q FY15/16 vs 1Q FY14/15

    1Q FY15/16 vs 1Q FY14/15 For illustrative purpose(4) (S$’000) 1Q 1Q % 1Q % FY15/16(1) FY14/15(1) fav/ (unfav) FY14/15 (4) fav/ (unfav) (incl. China) Gross revenue(2) 180,507 163,178 10.6 163,178 10.6 Net property Income(2) 124,265 116,272 6.9 116,272 6.9 Total amount available for 92,486 87,607 5.6

  16. Slide 16: 1Q FY15/16 vs 4Q FY14/15

    1Q FY15/16 vs 4Q FY14/15 For illustrative purpose(4) (S$’000) 1Q 4Q % 4Q % FY15/16(1) FY14/15(1) fav/ (unfav) FY14/15 (4) fav/ (unfav) (incl China) Gross revenue(2) 180,507 173,794 3.9 173,794 3.9 Net property Income(2) 124,265 117,189 6.0 117,189 6.0 Total amount available for 92,486 89,248 3.6 88,

  17. Slide 17: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 17

  18. Slide 18: Investment Highlights in 1Q FY15/16

    Investment Highlights in 1Q FY15/16 Value (S$m) Completed Divestment 26 Senoko Way 24.8 Apr‐15 BBR Building 13.9 Expected in 2Q FY15/16 Development DBS Asia Hub Phase 2 21.8 Apr‐15 Asset Enhancements Completed Sparkle (Gemini‐Aries Link) 17.2 Jun‐15  Recycled capital through divestment • 26 Senoko

  19. Slide 19: Divestment

    Divestment Capital gains over original costs ‐ 26 Senoko Way: S$9.0m ‐ BBR Building: S$6.8m 26 Senoko Way BBR Building Location 26 Senoko Way BBR Building Description 2‐storey light industrial bldg Part 2‐storey and part 3‐storey with a 4‐storey linked extension light industrial building block Remai

  20. Slide 20: Development (Completed): DBS Asia Hub Phase 2

    Development (Completed): DBS Asia Hub Phase 2 Completion April 2015 Description Development of a 6‐storey business park building next to the existing DBS Asia Hub, which will be fully leased to DBS Bank Ltd in 2Q 2015 GFA Additional 7,081 sqm from Phase 2 Occupancy 100%; DBS has taken possession of

  21. Slide 21: Asset Enhancement (Completed): Sparkle

    Asset Enhancement (Completed): Sparkle (Gemini‐Aries link) Completion June 2015 Description Located within Singapore Science Park II AEI: Maximise plot ratio by creating amenities space, enhancing connectivity between the buildings and enhancing Covered walkway vibrancy within Science Park II GFA Th

  22. Slide 22: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 22

  23. Slide 23: Healthy Balance Sheet

    Healthy Balance Sheet  Aggregate leverage increased q‐o‐q to 34.7% from 33.5% after funding asset enhancement works and 2H FY14/15 distribution to Unitholders  Debt headroom of S$1.5 billion, before aggregate leverage reaches 45% ‐ financial flexibility to seize debt‐funded growth opportunities As

  24. Slide 24: Well-spread Debt Maturity Profile

    Well‐spread Debt Maturity Profile  Well‐spread debt maturity with the longest debt maturing in 2029  Early refinancing & restructuring of a S$300m term loan facility due 2017 to: 12% 10%  S$150m 5‐year term loan facility due 2020 14%  S$150m 7‐year MTNs due 2022 Diversified  Achieved annualised

  25. Slide 25: Key Funding Indicators

    Key Funding Indicators  Robust indicators enable A‐REIT to borrow at competitive costs As at As at 30 Jun 15 31 Mar 15 Aggregate Leverage 34.7% 33.5% Unencumbered properties as % of total investment 86.2% 86.1% properties(1) Interest cover ratio 6.2 x(2) 6.1 x(3) Total debt / EBITDA 6.2 x(2) 6.5 x(

  26. Slide 26: Prudent Interest Rate Risk Management

    Prudent Interest Rate Risk Management  69.5% of borrowings is hedged for an average term of 3.6 years  50 bps increase in interest rate is expected to have an annualised pro forma impact of S$4.3 million decline in distribution or 0.18 cent in DPU Increase in Decrease in Change as Pro forma DPU in

  27. Slide 27: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 27

  28. Slide 28: Occupancy: Healthy and Improving

    Occupancy: Healthy and Improving  Portfolio occupancy and Multi‐tenanted building (MTB) occupancy improved to 88.8% and 84.7% respectively from 87.7% and 83.0% a quarter ago, mainly due to higher occupancy at  40 Penjuru Lane (70.9% from 56.1% in 4Q FY14/15)  9 Changi South Street 3 (79.7% from 6

  29. Slide 29: Occupancy Rate: A-REIT vs Industrial Average

    A‐REIT vs Industrial Average Occupancy 100% 94.1% 95% 91.3% 91.3% 90.0% 88.1% 88.3% 88.8% 90% 85% 83.0% 80% Occupancy Rate 75% 70% 65% 60% 55% 50% Business and Science Hi‐Specs Industrial Light Industrial Logistics Park A‐REIT JTC Source : A‐REIT’s Singapore portfolio as at 30 June 2015. Market: JTC

  30. Slide 30: Sources of New Demand – 1Q FY15/16

    Sources of New Demand – 1Q FY15/16  Continues to attract demand from a wide spectrum of industries 30.5% 18.7% 25.0% 19.4% By By 12.2% 0.6% 1.1% Gross 1.3% NLA 1.4% 2.8% 1.2% 1.2% Income 2.1% 13.8% 2.3% 3.8% 11.0% 4.6% 6.3% 5.7% 7.5% 11.5% 6.4% 9.6% Electronics Others Transport and Storage IT Food

  31. Slide 31: Achieved Positive Rental Reversion

    Achieved Positive Rental Reversion  Achieved +6.6% rental reversion for leases renewed in 1Q FY15/16  Positive rental reversion was registered across all segments Multi‐tenanted properties (1) Net lettable area Vacant space (sqm) 1Q FY15/16 (sqm) increase in renewal rates (2) As at 30 Jun 2015 Bus

  32. Slide 32: Update on Properties in China

    Update on Properties in China Ascendas Z‐link A‐REIT City @Jinqiao Location Located within Zhongguncun Location Located in north Jinqiao within the Software Park in Haidian District, Jinqiao Economic and Technological Beijing Zone, in Shanghai Tenants Higher value‐added industries such Tenants Highe

  33. Slide 33: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 33

  34. Slide 34: Well Diversified Portfolio

    Well Diversified Portfolio By value of Investment Properties 9.6% 12.1% Science Business Logistics & Integrated Park Park Distribution Centres Development, AREIT Beijing Flatted 17% Amenities & 1% Factories Retail 90.4% 87.9% AREIT Shanghai 4% 8% 3% Light Industrial 8% 22.9% Trust Business Park Data

  35. Slide 35: Tenants' Industry Diversification

    Tenants’ Industry Diversification By Monthly Gross Revenue Information Technology 10.5% M&E and Machinery & Equipment 10.3% 3rd Party Logistics, Freight Forwarding 9.6% Distributors, trading company 8.8% Telecommunication & Datacentre 8.6% Electronics 8.2% Financial 7.0% Life Science 5.8% Food Produ

  36. Slide 36: Low Exposure to Manufacturing

    Low Exposure to Manufacturing As at 30 June 2015  13.6% of NLA occupied by tenants engaged in manufacturing activities 13.6%  Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc. Tenants’ business activities by NLA  Non‐manufacturing acti

  37. Slide 37: Quality and Diversified Tenant Base

    Quality and Diversified Tenant Base  Total tenant base of around 1,420 tenants  Top 10 tenants (as at 30 June 2015) account for about 19.2% of portfolio gross rental income 5.5% 2.4% 2.3% 1.4% 1.4% 1.4% 1.3% 1.2% 1.2% 1.1% Singapore Citibank, DBS Siemens Hydrochem Biomedical Cold Storage SenKee Eq

  38. Slide 38: Diversified Portfolio

    Diversified Portfolio Aperia, 5.6% 1, 3, 5 Changi Business Park Crescent, 3.7% Kim Chuan Telecommunication Complex , 3.1% Neuros & Immunos, 2.9% TelePark, 2.7% 31 International Business Park, 2.7% Hyflux Innvation Centre, 2.5% TechPoint, 2.4% 40 Penjuru Lane, 2.4% TechPlace II, 2.2% Pioneer Hub , 2.

  39. Slide 39: Security Deposits for Single-tenanted Properties

    Security Deposits for Single‐tenanted Properties  Weighted average security deposits for single‐tenanted properties range from 6 to 12 months of rental income  On a portfolio basis, weighted average security deposit is about 5 months of rental income No. of single tenanted Weighted average securit

  40. Slide 40: MTB Occupancy: NPI / DPU Sensitivity

    MTB Occupancy: NPI / DPU Sensitivity  100 bps increase in MTB occupancy is expected to result in a 1.0% increase in portfolio net property income or about 0.21 cents increase in DPU Change in MTB Expected change in Change in portfolio Impact on full FY occupancy annualised MTB NPI NPI (%) DPU (cent

  41. Slide 41: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 41

  42. Slide 42: Lease Expiry Profile

    Lease Expiry Profile (as at 30 June 2015)  Portfolio weighted average lease to expiry (WALE) of 3.7 years Breakdown of expiring leases for FY15/16 and  Lease expiry is well‐spread, extending beyond 2025 FY16/17  About 14.0% of property income is due for renewal in balance of FY15/16 as at 30 June

  43. Slide 43: In-place rent for space due for renewal

    In‐place rent for space due for renewal in FY15/16 and FY16/17  Current market rental rate is above the weighted average passing rental for most of the multi‐tenanted space due for renewal in FY15/16 and FY16/17  Expect moderate positive rental reversion of around mid‐single digit for FY15/16 * *

  44. Slide 44: Average Market Rents by Segment

    Average Market Rents by Segment 120 Industrial Rental Index 100 80 60 40 20 Source : JTC 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 6.5 $5.50 5.5 4.5 $4.20 $3.65 3.5 $3.15 2.5 $1.85 1.5 $1.83 0.5 Business Park (City Fringe) Business & Science Parks (Median R

  45. Slide 45: Ongoing Projects: Improve portfolio quality

    Ongoing Projects: Improve portfolio quality Value (S$m) Estimated Completion Development 23.7 Jiashan Logistics Facility 23.7 1Q 2016 Asset Enhancements (AEI) 101.6 Acer Building (NEW) 10.7 2Q 2016 Cintech I to IV (NEW) 12.7 1Q 2016 2 Senoko South Road 12.1 4Q 2015 40 Penjuru Lane 35.7 4Q 2015 (form

  46. Slide 46: Asset Enhancement (NEW): Acer Building

    Asset Enhancement (NEW): Acer Building Completion Estimated 2Q 2016 Description Located within International Business Park, comprises a part 5 & part 8‐storey building AEI: To upgrade lift lobbies, common corridors and restrooms, enhance Artist impression: New central façade, and construct new cover

  47. Slide 47: Asset Enhancement (NEW): Cintech I to IV

    Asset Enhancement (NEW): Cintech I to IV Artist Impressions Completion Estimated 1Q 2016 Description Located within Singapore Science Park I, comprises four 2 to 6‐storey buildings. Cintech I AEI: To enhance tenants’ experience within and around properties, the AEI works include upgrading lift lobbi

  48. Slide 48: Asset Enhancement (NEW): Honeywell Building

    Asset Enhancement (NEW): Honeywell Building Completion Estimated 3Q 2015 Description A 6‐storey building located in Changi Business Park AEI: Upgrading of main entrance foyer and drop‐off point, lift lobby, restrooms, common corridors and mechanical & electrical equipment. Toilet upgrading GFA 18,12

  49. Slide 49: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 49

  50. Slide 50: Market Outlook

    Market Outlook  According to Ministry of Trade and Industry's (“MTI”) advance estimates, Singapore’s economy grew 1.7% y‐o‐y in 2Q 2015. 2015 GDP forecast is maintained at 2.0% to 4.0%.  JTC industrial property price index and rental index rebounded slightly by 0.7% and 0.4% q‐o‐q respectively in

  51. Slide 51: Agenda

    Agenda Overview of A‐REIT Key Highlights for 1Q FY15/16 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook A‐REIT’s Strengths 51

  52. Slide 52: A-REIT's Strengths

    A‐REIT's Strengths Diversity and Depth  Solid and well diversified portfolio  Five main property segments  Well‐located quality properties  Balance of long term vs. short term leases provides stability with potential for positive rental reversions  No single property accounts for more than 5.6%

  53. Slide 53: A-REIT's Strengths

    A‐REIT's Strengths  Downside protection in earnings • Stable portfolio with 86.0% of portfolio revenue committed for FY15/16 and a portfolio average lease to expiry of about 3.7 years • Mix of long term and short term leases provide earnings stability  Long term leases have a weighted average leas

  54. Slide 54: A-REIT's Strengths

    A‐REIT's Strengths  Development capability • Has capability and capacity to create own assets which could be more yield accretive than acquisitions of income producing properties  Operational platform (Property Manager, Ascendas Services Pte Ltd) • Dedicated asset management, sales/marketing, leas

  55. Slide 55: A-REIT's Strategies

    A‐REIT's Strategies Total Returns Predictable income Capital stability Proactive and Outcome dedicated Stability Growth manager with track record Strategies Prudent Proactive Value‐Adding Capital & Risk Asset Investments Management Management Property Fund Manager: Fund Manager: Manager: Performance

  56. Slide 56: Additional Information

    Additional Information (1) Quarterly Results (2) Singapore Industrial Property Market 56

  57. Slide 57: Quarterly Results

    Quarterly Results FY14/15 FY15/16 (For illustrative purpose)* Summary (S$ million) 1Q 2Q 3Q 4Q 1Q Gross Revenue 163 165 172 174 181 Net Property Income 116 115 115 117 124 Total amount available for 89 87 87 88 92 distribution No. of units in issue (m) 2,404 2,404 2,406 2,406 2,408 Distribution Per

  58. Slide 58: Industrial Property Market: New Supply

    Industrial Property Market: New Supply  Current total stock (net) : 43.2 million sqm, of which • Business & Science Parks account for 1.8 million sqm (4.1%) • Logistics & Distribution Centres account for 8.5 million sqm (19.7%) • Remaining stock are factory space  Potential new supply (gross) of a

  59. Slide 59: Business & Science Parks: New Supply

    Business & Science Parks: New Supply % Pre‐ Expected Location Developer GFA (sqm) committed Completion (est) 2015 Ayer Rajah (One‐North) Mediacorp Pte Ltd 77,920 100% 2015 Changi Business Park Rigel Technology (S) Pte Ltd 15,990 100% 2015 Changi Business Park SKJ Group Pte Ltd 13,050 78% 2015 Scienc

  60. Slide 60: The End

    The End Important Notice This presentation has been prepared by Ascendas Funds Management (S) Limited as Manager for Ascendas Real Estate Investment Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied u

Ascendas Real Estate Investment Trust (A-REIT) — 1Q FY15/16 Earnings Presentation on 6ix