Suntec Real Estate Investment Trust · SGX:T82U

Suntec Real Estate Investment Trust — Q1 2018 Earnings Presentation

48 slides from Suntec Real Estate Investment Trust's earnings presentation, Apr 25, 2018

  1. Slide 1: Suntec REIT Financial Results 1Q 2018

    SUNTEC REIT FINANCIAL RESULTS For the 1st Quarter ended 31 March 2018 25 April 2018

  2. Slide 2: Agenda

    Agenda 03 1Q18 Highlights 05 Financial Highlights 16 Office Portfolio Performance 23 Retail Portfolio Performance 32 Convention Performance 35 Projects Under Development 37 FY18 Focus 39 Unit Performance 2

  3. Slide 3: 1Q 18 Highlights

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  4. Slide 4: 1Q 18 Highlights

    1Q 18 Highlights 1Q 18 Distributable Income Acquiring additional S$64.8 million 25% interest in +4.8% YOY Southgate Complex Portfolio Occupancy 99.1% Office 1Q 18 DPU Secured 98.4% Retail 2.433 cents S$400 million +0.3% YOY loan facility Suntec City Mall Footfall +12.7% YOY Annualised Yield 1 All-in

  5. Slide 5: Financial Highlights

    FINANCIAL HIGHLIGHTS

  6. Slide 6: 1Q Distributable Income up 4.8% y-o-y

    1Q 18 Distributable Income up 4.8% y-o-y Distributable Income (S$ mil) DPU (SG Cents) Mainly due to: 64.8 • Higher contribution from 61.8 3.0 6.5 2.425 2.433 0.118 Suntec Singapore and 0.244 58.8 58.3 Suntec City Mall 2.307 2.189 From • Capital distribution Operations From Capital 1Q 17 1Q 18 1Q 17

  7. Slide 7: 1Q Gross Revenue up 2.6% y-o-y

    1Q 18 Gross Revenue up 2.6% y-o-y Gross Revenue (S$ mil) Net Property Income (S$ mil) Mainly due to: • Higher contribution from convention and retail 88.4 90.7 61.8 63.0 • Partially offset by lower contribution from Suntec City office as some of the 1Q 17 1Q 18 1Q 17 1Q 18 committed leases will Fina

  8. Slide 8: Performance of Joint Ventures

    Performance of Joint Ventures Income Contribution (S$ mil) One Raffles Quay 1Q 18: Lower y-o-y due to one-offs in 1Q 17 24.3 22.7 MBFC 1Q 18: Higher y-o-y due to 1Q 17 1Q 18 one-offs in 1Q 18 Financial Highlights Southgate 1Q 18: Higher y-o-y due to 1Q 18 higher occupancy and rent S$22.7 attained mi

  9. Slide 9: 1Q Gross Revenue by Segment

    1Q 18 Gross Revenue by Segment S$ mil • Higher contribution from convention and retail offset by lower office contribution Office S$ mil Suntec City -1.53 1 177 Pacific Highway -0.21 DOWN -1.74 S$ mil Retail S$ mil Suntec City +0.69 +2.6% Suntec Singapore +0.44 UP 1.13 -3.8% +3.7% • Higher conventio

  10. Slide 10: 1Q Net Property Income by Segment

    1Q 18 Net Property Income by Segment S$ mil • Higher NPI mainly from convention Office S$ mil Suntec City -1.72 1 177 Pacific Highway -0.42 DOWN -2.14 Retail S$ mil Suntec City +0.75 S$ mil Suntec Singapore +0.55 UP 1.30 +1.9% • Higher convention contribution -5.7% due to higher revenue achieved +5.

  11. Slide 11: 1Q Net Property Income & JV Contributions

    1Q 18 Net Property Income & JV Contributions S$ mil • Lower JV contributions mainly due to one-offs in ORQ in 1Q 17 Office S$ mil MBFC properties +0.49 Southgate +0.10 ORQ -1.99 Others: Suntec City -2.14 177 Pacific Highway S$ mil DOWN -3.54 -0.5% -5.9% +4.7% +69.0% Office Retail Convention Total 1Q

  12. Slide 12: NPI & Income Contribution from JVs

    NPI & Income Contribution from JVs Contribution by Segment Contribution by Asset 11% 8% 65% 1Q 18 52% 1Q 18 16% 29% 11% 6% 2% Suntec City Suntec Singapore One Raffles Quay Office Retail Convention MBFC Properties 177 Pacific Highway Southgate Complex • Office portfolio accounts for 65% • Joint Ventu

  13. Slide 13: Balance Sheet & Key Financial Indicators

    Balance Sheet & Key Financial Indicators Balance Sheet 31 Mar 2018 Key Financial Indicators 31 Mar 2018 Total Assets S$9,194 mil Total Debt Outstanding S$3,271 mil (Group) Total Liabilities S$3,460 mil Debt-to-Asset Ratio 35.2% Net Assets Attributable to S$5,606 mil Aggregate Leverage Ratio1 36.6% U

  14. Slide 14: Proactive Capital Management

    Proactive Capital Management S$ 'mil Debt Maturity Profile (REIT Level) • Secured S$400 million 5- 1,200 year loan facility 1,000 • In process of refinancing 800 borrowings due in 2018 600 • Weighted average debt to 400 maturity stood at 2.94 200 years 0 FY18 FY19 FY20 FY21 FY22 FY23 FY24 S$500 mil

  15. Slide 15: S$9.6 billion of financing since 2008

    S$9.6 billion of financing since 2008 Financing Track Record 2000 1,805 1800 1600 1400 1,280 1200 1,110 1,100 S$ mil 1000 870 825 800 670 600 429 400 400 350 270 200 200 153 105 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Mar 2018 Global Financial Crisis Debt Equity • All-in financing cost o

  16. Slide 16: Office Portfolio Performance

    OFFICE PORTFOLIO PERFORMANCE

  17. Slide 17: Office Portfolio Summary

    Office Portfolio Summary MBFC Towers 177 Southgate AUS Office Total Office Suntec City One Raffles SG Office Office Portfolio 1&2 Pacific Complex Portfolio Portfolio Office Quay (1/3) Portfolio (1/3) Highway (25%) NLA (sq ft) ~1.3 mil ~443,000 ~548,000 ~2.3 mil ~431,000 ~178,000 ~609,000 ~2.9 mil 99

  18. Slide 18: Singapore Office Portfolio

    Singapore Office Portfolio • Achieved committed 99.7% 99.7% 100% 99.4% 99.4% 99.6% 98.3% 99.4% 99.5% occupancy of 99.5% versus overall CBD Grade A 95.0% occupancy of 91.9% in 1Q 95% 94.5% 94.5% 93.3% 93.5% 94.1% 94.1% FY18 91.9% • Average rent secured for the 90% quarter was S$9.02 psf/mth 85% 80% S

  19. Slide 19: Proactive Leasing Strategy

    Proactive Leasing Strategy Office Portfolio Work Done (sq ft) 1Q 18 Total leases signed in 1Q 18 89,000 sq ft 25,000 % of new leases 28% New & Replacements Portfolio Occupancy 99.1% Renewals (as at 31 Mar) 64,000 Tenant retention ratio1 88% Note: 1. Tenant retention ratio = Net lettable area renewed

  20. Slide 20: FY18 Office Expiring Leases Reduced to 9.0%

    FY18 Office Expiring Leases Reduced to 9.0% Expiry Profile Net Lettable Area1 Lease Expiry as % of Total Office NLA1 (sq ft) As at 31 Mar 18 % Sq ft % of Total 40 FY 2018 263,538 9.0% 30 441,811 15.1% 24.9 25.3 FY 2019 20 FY 2020 477,308 16.3% 15.1 16.3 11.3 FY 2021 731,214 24.9% 10 8.5 9.0 FY 2022

  21. Slide 21: Suntec City Office

    Suntec City Office • Office revenue declined 4.6% y-o-y primarily due to transitory downtime from replacement leases commencing progressively from March 2018 • Leases secured for the quarter at an average rent of S$8.95 psf/mth • Retention rate of 89% for FY 2018 lease expiries • New demand mainly f

  22. Slide 22: Australia Portfolio constitutes 13% of NPI & Income from JV

    Australia Portfolio constitutes 13% of NPI & Income from JV Olderfleet,477 Collins Street, 177 Pacific Highway, Sydney Southgate Complex, Melbourne , Melbourne • Sydney and Melbourne office markets continue to be on upward trend o 177 Pacific Highway  Maintained 100% committed occupancy o Southgate

  23. Slide 23: Retail Portfolio Performance

    RETAIL PORTFOLIO PERFORMANCE 23

  24. Slide 24: Retail Portfolio Summary

    Retail Portfolio Summary Southgate AUS Retail Total Retail Suntec City Marina Bay SG Retail Retail Portfolio Complex Portfolio Portfolio Mall Link Mall (1/3) Portfolio (25%) NLA (sq ft) ~0.9mil ~30,000 ~0.93mil ~30,000 ~30,000 ~1.0 mil Committed 98.6 98.9 98.6 91.0 91.0 98.4 Occupancy (1Q 18) (1Q 18

  25. Slide 25: Proactive Leasing Strategy

    Proactive Leasing Strategy Retail Portfolio Work Done (sq ft) 1Q 18 Total leases signed in 1Q 18 61,000 sq ft 17,000 % of new leases 28% New & Replacements Portfolio Occupancy Renewals 98.4% (as at 31 Mar) 44,000 Tenant retention ratio1 71% Note: 1Q 18 1. Tenant retention ratio = Net lettable area r

  26. Slide 26: Retail Lease Expiry Profile

    Retail Lease Expiry Profile Expiry Profile Net Lettable Area1 Lease Expiry as % of Total Retail NLA1 (sq ft) % As at 31 Mar 18 Sq ft % of Total 40 FY 2018 194,663 21.1% 30.1 30 27.2 FY 2019 250,999 27.2% 21.1 20 FY 2020 277,931 30.1% 9.9 FY 2021 91,475 9.9% 10 7.9 2.3 FY 2022 21,030 2.3% 0 FY 2023 &

  27. Slide 27: Suntec City Mall

    Suntec City Mall Strong operational performance Committed Occupancy Footfall Tenants sales per sq ft 98.6% +12.7% YOY +5.2% YOY 27

  28. Slide 28: Navigation Initiatives – Quick Series

    Navigation Initiatives – Quick Series • QuickGuide (NEW)- Scan QR Code or go to www.sunteccity.com.sg/quickguide to start web-based interactive in-mall directory with advanced search function to help shoppers locate shops/brands/products/services • QuickChat - Send SMS or scan QR code to start real

  29. Slide 29: Strategic Partnerships & Value Added Services

    Strategic Partnerships & Value Added Services HONESTBEE • Delivery service for Suntec City shoppers ALIPAY • Part of Suntec City’s Tourist Program to attract Chinese tourists to spend in Suntec City • Cash vouchers sponsored by Alipay to incentivise spending 29

  30. Slide 30: New Stores Opening

    ® New Stores Opening © SUNTEC

  31. Slide 31: New Stores Opening

    ® New Stores Opening © SUNTEC

  32. Slide 32: Convention Performance

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  33. Slide 33: 429 events held in 1Q 18

    e 429 events held in 1Q 18 (@ SUNTEC Real Estate Investment ‘Lrust 2 ~S = Beauty Asia 2018

  34. Slide 34: Events in 2Q 18

    e Events in 2Q 18 (@ SUNTEC NRAGRRT «seemless PAYMENTS + E-COMMERCE + RETAIL BroadcastAsia

  35. Slide 35: Projects Under Development

    PROJECTS UNDER DEVELOPMENT

  36. Slide 36: Projects Under Development

    Projects Under Development 9 Penang Road, Singapore Olderfleet, 477 Collins Street, Australia • Steel super structure works in progress • Level five slab works in progress • Scheduled to complete by end 2019 • Scheduled to complete by mid 2020 36

  37. Slide 37: FY18 Focus

    FY18 FOCUS — fa = oe

  38. Slide 38: FY18 Focus

    FY18 Focus Office • Proactive management to maintain high occupancy • Strengthen office proposition • Proactive management to strengthen key operational indicators: Occupancy, footfall and tenant sales Retail • Enhance shopping experience • Increase asset utilisation & right sizing • Lead the indust

  39. Slide 39: Unit Performance

    UNIT PERFORMANCE

  40. Slide 40: Unit Performance

    Unit Performance • 1Q 18 DPU of 2.433 cents • Trading yield of 5.22%1 • Market Capitalisation of S$5.0 billion1 as at 31 March 2018 • 4th largest REIT 2 on SGX 2.50 25 2.30 2.10 20 Volume (Daily, Millions) 1.90 15 Unit Price (S$) 1.70 1.50 1.30 10 1.10 0.90 5 0.70 0.50 0 Dec-04Jun-05Dec-05Jun-06Dec-

  41. Slide 41: Delivering Stable, Sustainable DPU

    Delivering Stable, Sustainable DPU DPU1 14 12 11.70 11.02 9.86 9.93 10.00 10.00 10.01 10 9.49 9.33 9.40 8.47 8 7.56 6.74 6 4 2.43 2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q 2018 • 13-years track record of delivering stable returns throughout the property market cycle • 1

  42. Slide 42: Established Track Record

    Established Track Record 1Q 18 DPU 2.433 cents Total DPU since IPO 125.9 cents Total Return for IPO Unitholders 214.9% 42

  43. Slide 43: Distribution Timetable

    Distribution Timetable Distribution Payment Distribution Period 1 January – 31 March 2018 Amount (cents/unit) 2.433 Ex-date 2 May 2018 Books closure date 4 May 2018 Payment date 30 May 2018 Source: ARATMS 43

  44. Slide 44: Thank You

    © SUNTEC Real Estate Investment Trust THANK YOU

  45. Slide 45: Contact

    Contact Ng Ee San Chan Kong Leong Melissa Chow Director, Finance Chief Executive Officer Manager, Investor Relations eesanng@ara.com.hk kongleongchan@ara.com.hk melissachow@ara.com.hk #16-02 Suntec Tower 4 Tel: +65 6835 9232 www.suntecreit.com 6 Temasek Boulevard Fax: +65 6835 9672 www.ara-asia.com

  46. Slide 46: Milestones

    46 Milestones 2010 2004 2007 Acquired one-third 2012 2014 2016 Suntec REIT Acquired one- interest in Marina Divested Chijmes Celebrated Acquired 25% launched third interest in Bay Financial Commenced Suntec REIT interest in Southgate largest IPO in One Raffles Centre Towers 1 & Remaking of 10th Comp

  47. Slide 47: About Suntec REIT

    About Suntec REIT Singapore’s first and largest composite REIT 9 PENANG ROAD • Listed on 9 Dec 2004 on the SGX-ST S$5.0 Billion • High quality office assets, complemented by retail and Market Capitalisation convention components S$9.6 Billion • 4 properties in Singapore, 1 property in Assets Under M

  48. Slide 48: Disclaimer

    Disclaimer This presentation is focused on the comparison of actual results for the quarter ended 31 March 2018 versus results achieved for the quarter ended 31 March 2017. It should be read in conjunction with Paragraph 8 of Suntec REIT’s financial results for the quarter ended 31 March 2018 announ

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