Capitaland Ascendas Reit · SGX:A17U
Capitaland Ascendas Reit — Ascendas Reit — Investor Presentation (March 2019)
40 slides from Capitaland Ascendas Reit's investor presentation, March 2019
Slide 1: Investor Presentation March 2019
Singapore Australia Investor Presentation March 2019 United Kingdom
Slide 2: Disclaimers
Disclaimers ▪ This material shall be read in conjunction with Ascendas Reit’s financial statements for the financial year ended 31 December 2018. ▪ This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and resu
Slide 3: Agenda
Agenda Overview of Ascendas Reit 4 Investment Management 12 Capital Management 20 Asset Management 25 Portfolio Resilience 30 Corporate Governance 34 Market Outlook 38 3
Slide 4: Overview of Ascendas Reit
Overview of Ascendas Reit 4
Slide 5: Largest Singapore Industrial Reit by market capitalisation
S$m 2,000 4,000 6,000 8,000 0 10,000 12,000 14,000 Sabana REIT 989 Soilbuild Business Space REIT 1,248 Cache Logistics 1,310 AIMS AMP Capital REIT 1,470 EC World REIT 1,488 Ascendas India Trust 2,086 Cromwell European Reit 2,222 Industrial Keppel DC REIT 2,253 Frasers Logistics & Industrial Trust 2,
Slide 6: Largest Singapore Industrial Reit
Largest Singapore Industrial Reit Investment Market Property Capitalisation S$11.1b S$8.0b 3 Countries Singapore 79% Australia 14% United Kingdom 7% 171 Properties Business Park and 36% Suburban Office Logistics & Distribution Centres 29% High-Specifications & Data 20% Centres Light Industrial & Fla
Slide 7: Steady Growth since Listing
Steady Growth since Listing No. of Properties Distribution per Unit (cents) 171 15.988 131 11.887 7.630 8 FY02/03 FY17/18 YTD FY02/03 FY17/18 YTD FY18/19 FY18/19 7
Slide 8: Well Diversified Portfolio (By Investment Property Value)
Well Diversified Portfolio (By Investment Property Value) Australia 14% Business & Science Parks, 33% United Kingdom 7% High-Specifications Industrial and Data Centres, 20% Light industrial and Flatted Factories, 8% Total Investment Integrated Development, Amenities & Retail, 7% Properties S$11.1b L
Slide 9: Singapore: 98 properties
Singapore: 98 properties Widest variety of industrial properties Properties are well-located along major expressways, airport, seaport and proximity to MRT stations Integrated Development , Amenities & Light industrial Retail Logistics & and Flatted 8% Distribution Factories Centres 11% Singapore 14
Slide 10: Australia: 35 properties (32 logistics + 3 suburban offices)
Australia: 35 properties (32 logistics + 3 suburban offices) Breakdown by Geography Located in 4 key cities: Sydney, Melbourne, Brisbane and Perth Perth Brisbane 207,061 sqm 2% Logistics 9 properties Melbourne Perth 20,895 sqm Suburban 2 Properties 25% Logistics 1 property Sydney Office Investment 4
Slide 11: United Kingdom: 38 logistics properties
United Kingdom: 38 logistics properties North West 105,489 sqm Breakdown by Geography England Logistics 5 properties Yorkshire & 67,409 sqm the Humber Logistics 4 properties South East 12% East Midlands 50,083 sqm North West Logistics 2 properties East Midlands 16% 7% Investment Yorkshire and the Hu
Slide 12: Investment Management
Investment Management 12
Slide 13: AUM Growth
AUM Growth ▪ Third party acquisitions: 59% ▪ Sponsor’s pipeline: 29% ▪ Development: 12% No. of Properties Total Assets 171 (S$ m) 11,970 131 10,354 8 636 FY02/03 FY17/18 YTD FY02/03 FY17/18 YTD FY18/19 FY18/19 13
Slide 14: Capital Recycling
Capital Recycling ▪ Divested 14 projects (S$0.7b) at above NAV Completed Divestments to Date 4 3 2 2 442 2 1 70 39 61 38 YTD FY18/19: 13 30 Old Toh Tuck Road FY 1 4 / 1 5 FY13/14 FY15/16 FY16/17 FY17/18 YTD FY18/19 ASSET VALUE (S$B) NO. OF PROPERTIES FY13/14: 6 Pioneer Walk and Blk 5006 at TP2 FY14/
Slide 15: Development Capability
Development Capability ▪ Has capability and capacity to develop own properties profitably Development Revaluation Capital Gains Development Segment Completion Cost 31 Mar 2018 (S$m) (S$m) (S$m) 1 Courts Megastore Integrated Development Nov-06 46.0 65.7 +43% 2 Giant Hypermart Integrated Development F
Slide 16: Asset Enhancement Initiatives
Asset Enhancement Initiatives ▪ Continuously identify buildings to maximise returns Maximise Plot Ratio Multi-tenant to Built-to-Suit Facility Redevelopment 40 Penjuru Lane 50 Kallang Avenue 20 Tuas Avenue 1 ▪ Construction of a new four storey ▪ Upgrading the specifications for ▪ Redeveloped into a
Slide 17: Investment Highlights in 3Q FY18/19
Investment Highlights in 3Q FY18/19 Purchase Consideration/ Country Completion Date Total Development Cost (S$m) Acquisition 459.2 2nd United Kingdom Portfolio United Kingdom 459.2 (1) 4 Oct 2018 (26 logistics properties) (England) Development - Post 3Q FY18/19 181.2 Built-to-suit business park Sing
Slide 18: Acquisition: 2nd Portfolio of Logistics Properties, United Kingdom
Acquisition 2nd Portfolio of 26 Logistics Properties, United Kingdom Agreed Portfolio Value (1)(2) £257.46 m (S$459.18 m) Acquisition Fee, Stamp Duty £6.80 m (S$12.13 m) and Other Transaction Costs Total Acquisition Cost (3) £260.05 m (S$463.80 m) Vendor Griffen Group UK Holding Limited Valuation (a
Slide 19: New: Build-to-suit Business Park Development in Singapore for Grab
New: Build-to-suit Business Park Development in Singapore for Grab Land Premium S$84.0 m Total Construction Costs S$88.8 m Stamp Duty & Other S$8.4 m Transaction Costs Total Development Costs S$181.2 m Land Area 11,435 sqm Land Tenure 30 years Gross Floor Area (GFA) 42,310 sqm Occupancy Rate (upon 1
Slide 20: Capital Management
Capital Management 20
Slide 21: Healthy Balance Sheet
Healthy Balance Sheet ▪ Disciplined approach towards capital and risk management ▪ Competitive cost of capital – A3 Moody’s credit rating 3 Aggregate Leverage Weighted Tenure Average all-in Moody’s Rating 36.7% Of Debt Debt Cost A3 Positive 3.6 years 3.0% Interest Cover Unencumbered Properties as %
Slide 22: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in 2029 ▪ Average debt maturity remained stable at 3.6 years ▪ In 3QFY18/19: ▪ Partially funded UK acquisition with new 3-year and 4-year term loans totaling £115m ▪ Refinanced a A$282m term loan for 7 years
Slide 23: High Level of Currency Hedge
High Level of Currency Hedge ▪ Achieved high level of natural hedge in Australia (76.8%) and the United Kingdom (100%) to minimise the effects of adverse exchange rate fluctuations AUD GBP Natural Hedge Natural Hedge 76.8% 100% A$1.59 b (S$1.54 b) A$1.22 b (S$1.18 b) £0.47 b £0.47 b (S$0.82 b) (S$0.
Slide 24: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management ▪ 75.6% of borrowings are on fixed rates with an average term of 3.2 years ▪ 50 bps increase in interest rate is expected to have a pro forma impact of S$5.0m decline in distribution or 0.16 cent decline in DPU Decrease in Change as Change in Interest Pro Forma
Slide 25: Asset Management
Asset Management 25
Slide 26: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 98.1% 98.5% 98.5% 100.0% 100.0% 91.3% 90.6% 91.1% 87.3% 87.1% 88.8% N.A. Singapore Australia United Kingdom Total Dec-18 Sep-18 Dec-17 Gross Floor 3,034,122 810,772 (2) 509,032 (3) 4,353,926 Area (sqm) (1) (1) Gross Floor Area as at 31 Dec 2018. (2) Gross Floor Area f
Slide 27: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Achieved portfolio reversion of 3.2% for leases renewed in 3Q FY18/19 ▪ Rental reversion is expected to see slight improvement in FY18/19 % Change in Renewal Rates for Multi-tenant Buildings (1) 3Q FY18/19 2Q FY18/19 3Q FY17/18 Singapore 3.2% 2.3% 5.8% Business & Scienc
Slide 28: Weighted Average Lease Expiry
Weighted Average Lease Expiry (By gross revenue) ▪ Portfolio Weighted Average Lease Expiry (WALE) improved to 4.4 years (from 4.3 years as at 30 Sep 2018) WALE (as at 31 Dec 2018) Years Singapore 3.9 Australia 4.5 United Kingdom 11.3 Portfolio 4.4 28
Slide 29: Portfolio Lease Expiry Profile
Portfolio Lease Expiry Profile (as at 31 Dec 2018) ▪ Portfolio weighted average lease to expiry (WALE) of 4.4 years Breakdown of expiring leases for FY18/19 and FY19/20 ▪ Lease expiry is well-spread, extending beyond 2032 ▪ About 1.6% of gross rental income is due for renewal for the 1% 1% 18% remai
Slide 30: Portfolio Resilience
Portfolio Resilience 30
Slide 31: Tenants' Industry Diversification
Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 13.1% Financial 9.1% Distributors, trading company 9.1% M&E and Machinery & Equipment 8.5% Life Science & Other Scientific Activities 7.5% Information Technology 6.7% Telecommunication & Datacentre 6.6
Slide 32: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of around 1,350 tenants ▪ Top 10 customers (as at 31 Dec 2018) account for about 19.8% of monthly portfolio gross revenue ▪ On a portfolio basis, weighted average security deposit is about 5.3 months of rental income 4.6% 3.0% 2.0% 2.0% 1.6
Slide 33: Diversified Portfolio
Diversified Portfolio Aperia, 5.1% ONE @ Changi City, 4.0% 12, 14 & 16 Science Park Drive, 3.5% 1, 3 & 5 Changi Business Park Crescent, 3.2% Kim Chuan Telecommunication Complex, 2.6% TelePark, 2.3% Neuros & Immunos, 2.2% Hyflux Innovation Centre, 2.0% Pioneer Hub, 2.0% TechPlace II, 1.9% Nexus@One N
Slide 34: Corporate Governance
Corporate Governance 34
Slide 35: Corporate Governance Framework
Corporate Governance Framework AFM, as manager of Ascendas Reit, Ascendas Reit, listed since is a Capital Markets Service License November 2002, is governed by the Holder. Activities conducted by AFM SGX Listing requirements are regulated by MAS. 35
Slide 36: Key Guidelines
Key Guidelines Gearing ▪ Aggregate leverage should not exceed 45% of the fund's deposited property Valuation ▪ Full valuation at least once a year Interested Party Transaction ▪ Asset is acquired from the interested parties at a price not more than the higher of the two assessed values, or sold to i
Slide 37: High Standards of Corporate Governance: Staying Ahead in Best Practices & Policies
High Standards of Corporate Governance: Staying Ahead in Best Practices & Policies ▪ Early adopter of best practices: SIAS Investors’ Choice • First AGM held in 2007, MAS Award made it compulsory for S-REITs in Most Transparent Company 2010 (2007 to 2015) • Nominating and Remuneration Singapore Corp
Slide 38: Market Outlook
Market Outlook 38
Slide 39: Market Outlook
Market Outlook ▪ Uncertainties surrounding US-China trade negotiations and Brexit have clouded the global economic outlook. ▪ Singapore’s economy grew 3.3% in 2018 and is expected to grow by 1.5% to 3.5% in 2019 (MTI). • Businesses remain cautious and continue to review their space requirements amid
Slide 40: Thank you
Thank you 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