Frasers Centrepoint Trust · SGX:J69U
Frasers Centrepoint Trust — Investor Presentation (August 2019)
55 slides from Frasers Centrepoint Trust's investor presentation, August 2019
Slide 1: Frasers Centrepoint Trust Investor Presentation
Frasers Centrepoint Trust Investor Presentation August 2019
Slide 2: Important Notice
Important notice Important Notice 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 c
Slide 3: Contents
Contents Outline Overview 4 Financial and operation highlights 11 Unit price performance and recent developments 19 Macro-economic and Retail Industry Indicators 23 Going forward 28 Appendix Appendix 1: Highlights from Financial Results Presentation 34 for the 3rd Quarter FY2019 ended 30
Slide 4: Frasers Centrepoint Trust (FCT)
Overview Frasers Centrepoint Trust (FCT) FCT is a Singapore-centric, suburban-focused retail REIT Market Cap listed on the Mainboard of the Singapore Exchange S$2.91 billion1 Investment property portfolio comprises 7 retail properties (US$2.13 billion) located in the suburban regions in Singapor
Slide 5: FCT's portfolio of suburban retail properties
FCT’s portfolio of suburban retail properties Our properties are located in populous residential areas, enjoy good connectivity to public transportation system, stable footfall and healthy mall occupancy. New addition to FCT Anchorpoint YewTee Point Causeway Point Northpoint City North Wing1 Water
Slide 6: FCT's retail properties are high quality assets
FCT’s retail properties are high quality assets Frasers Property is a leading brand in Singapore retail sector and strong presence in the suburban regions Modern, high quality retail malls with healthy occupancy and stable footfall Managed by experienced Frasers Property asset and property man
Slide 7: FCT's retail properties are well-positioned to grow
FCT’s retail properties are well-positioned to grow Key FCT properties are located in North and North-East regions which have retail space per capita of about 2.7, the lowest of all the 7 regions in Singapore Lower retail space per capita implies higher footfall growth potential for the malls in
Slide 8: Our malls attract steady shopper footfall
Overview Our malls attract steady shopper footfall • Visits to suburban retail malls are part of many shoppers’ daily routine FCT Portfolio Footfall (million) 100.1 94.6 +5.8% FY2017 FY2018 Necessity & convenience shopping Fun for the family Total footfall at FCT malls Everyday dining Essential serv
Slide 9: Our malls have easy access to public transport
Overview Our malls have easy access to public transport • Visits to suburban Northpoint retail City, located malls Central in Yishun are part of many shoppers’ daily routine Linkway to the Expo MRT Station of Downtown Yishun Bus Line from basement of Changi City Point Interchange (Sep 2019) Northpoi
Slide 10: Keeping our malls relevant in the digital age
Overview Keeping our malls relevant in the digital age • The future of shopping malls is about experiences and the customer journey • 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 benefit
Slide 11: Financial and operation highlights
Financial and operation highlights 11
Slide 12: Consistent performance
Consistent performance Revenue and Net Property Income (S$ million) Net Property Income Gross Revenue 9 months year-to-date 189.2 193.3 • Revenue +2.3% yoy 183.8 181.6 • NPI + 2.0% yoy 168.8 158.0 147.2 144.8 148.1 131.0 129.8 129.6 137.2 118.1 114.7 117.9 111.6 104.4 104.3 106.4 84.7 86.6 80.1 82.6
Slide 13: Steady DPU growth
Steady DPU growth Distribution per Unit (S cents) 11.9 12.015 11.608 11.764 9 months year-to-date 10.93 11.187 • DPU +0.04% yoy 10.01 9.153 9.157 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 1Q-3Q 1Q-3Q (IPO)* FY2018 FY2019 1
Slide 14: Strong financial position
Overview Strong financial position Key financial indicators as at 30 June 2019 Gearing level1 23.5% Gearing level of SREIT by sector Total borrowings $759 million 36.5% 35.7% 35.7% 35.6% 32.6%* 31.9% 31.7% Total assets $3,224 million Interest Cover2 4.52 times Overall average 34.8% 23.5% Weighted av
Slide 15: Well spread out debt maturity profile
Balance sheet Well spread out debt maturity profile Weighted Average Debt Maturity as at 30 June 2019: 2.3 years Type of borrowings Aggregate amount ■ Unsecured bank borrowings S$43 million (5.7%) ■ Medium Term Note S$310 million (40.8%) ■ Secured bank borrowings1) S$406 million (53.5%) $266m (35.
Slide 16: The larger malls account for 84.2% of portfolio's NLA
Results – NPI contribution by properties The larger malls account for 84.2% of portfolio’s NLA Net Lettable Area (NLA) by properties Anchorpoint 70,988 sq ft 4.9% Causeway Point YewTee Point 416,301 sq ft 73,669 sq ft 28.7% 5.1% Bedok Point 82,713 sq ft 5.7% Total NLA: Changi City Point 1.45 million
Slide 17: Maintaining healthy occupancy
Operational performance Maintaining healthy occupancy • FCT’s portfolio occupancy typically outperforms the sector average tracked by CBRE, except during periods when its major properties undergo asset enhancement initiative (AEI) works FCT’s portfolio occupancy versus suburban retail mall average o
Slide 18: Maintaining positive rental reversions through economic cycles
Operational performance Maintaining positive rental reversions through economic cycles FCT’s portfolio average rental reversions1) 15.0% 14.0% 12.8% 12.1% 9.9% 8.6% 7.7% 7.2% 6.5% 6.3% 5.1% 4.7% 3.2% FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 9MFY19 1) Based
Slide 19: Unit price performance and recent developments
Unit price performance and recent developments 19
Slide 20: FCT unit price has outperformed the FTSE REIT and STI Indices
FCT unit price has outperformed the FTSE REIT and STI Indices FCT unit price performance $3.20 $3.00 Last done price on 16 Aug $2.80 2019: $2.67 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 31/12/2018 31/1/2019 28/2/2019 31/3/2019 30/4/2019 31/5/2019 30/6/2019 31/7/2019 FCT unit price performance compared wi
Slide 21: Recent developments
Recent developments Acquisitions Completed the acquisition of 18.8% stake in PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”) on 4 and 26 April 2019 for a total purchase consideration of S$380 million. FCT’s interest in PGIM ARF increased to 21.13% following a redemption event in the fund on
Slide 22: FCT is well covered by research analysts
FCT is well covered by research analysts Analysts’ calls Count Firm Analysts 1 BNP Paribas Lee Wee Liat Positive call 12 (Buy, Overweight, Add) 2 Bank of America-Merrill Lynch Donald Chua Neutral Call 8 3 CGS-CIMB Eing Kar Mei (Hold, Neutral, Equal Weight) 4 Citi Investment Research Brandon Lee Sell
Slide 23: Macro-economic and Retail Industry Indicators
Macro-economic and Retail Industry Indicators 23
Slide 24: Healthy macro-economic fundamentals
Healthy macro-economic fundamentals Household median income among Singaporeans (citizens and permanent residents) continues to grow Low unemployment rate in Singapore 9,293 3.0 Household 8,846 9,023 median Income 8,666 8,292 (S$) 7,872 7,566 7,037 2.2 2.2 2.2 2.1 2.1 6,100 6,342 2.0 2.0 2.0 6,006 1.
Slide 25: Limited upcoming new retail supply
Limited upcoming new retail supply New Supply between 2H 2019 and 2021: Total new supply is ~522k sq ft, accounts for <1% of total retail stock in Singapore Total new supply in suburban region is ~286k sq ft, accounts for ~2.2% of total suburban retail stock Upcoming new retail space (sq ft) 300
Slide 26: Retail prime rents holding steady
Retail prime rents holding steady Suburban prime retail rents expected to hold steady Retail Prime Rent (S$ per square foot per month) $35.00 CBRE Research does not expect any major movements in prime $31.70 retail rents for H2 2019. The limited $30.00 $29.15 upcoming supply remains the saving gra
Slide 27: Going forward
Going forward
Slide 28: To scale up presence in suburban sector in Singapore
Overview To scale up presence in suburban sector in Singapore The recent acquisitions of 1/3 stake in Waterway Point and the 21.13% investment in PGIM ARF1 reinforce FCT’s core strength as a leading suburban retail space provider in Singapore, further expand its market share in this sector and hel
Slide 29: Retail sales projected to grow
Retail sales projected to grow According to Cistri, consumer retail spending is projected to grow a compounded annual growth rate of 2.6% per year from the current level of $34.4 billion Bulk of the retail sales are still in physical store and in Singapore (see chart below) Nominal Resident Reta
Slide 30: 3-pronged growth strategy
3-pronged growth strategy Northpoint 2 Bedok Changi Yishun 10 Investment Waterway Future YewTee Point Point City Retail in PGIM Point Opportunities Point Podium ARF (⅓-stake) • Northpoint City Acquisition 2010 2011 2014 2016 2019 2019 South Wing Growth 21.13% in • Acquisition PGIM ARF opportunities
Slide 31: Summary
Overview Summary Well-located suburban retail properties that enjoy good connectivity to public transport, high footfall and high occupancy Quality assets Diversified tenant base that focuses on necessity and convenience shopping; staple and F&B; and services to sustain footfall and tenants’ sal
Slide 32: Experience matters.
Experience matters.
Slide 33: Appendix 1: Highlights from Financial Results Presentation 3Q FY2019
Appendix - 1 Highlights from Financial Results Presentation for the 3rd Quarter FY2019 ended 30 June 2019
Slide 34: 3Q19 results highlights
Results - Highlights 3Q19 results highlights 3Q19 Financial performance DPU of 3.00 cents, 1.7% lower year-on-year (3Q18 DPU: 3.053 cents) Gross Revenue of $49.1 million, up 1.6% year-on-year Net Property Income of $34.6 million, down 1.1% year-on-year NAV and NTA per Unit of $2.11 as at 30
Slide 35: 3Q19 distributable income up 12.4% year-on-year
Results - Highlights 3Q19 distributable income up 12.4% year-on-year Increase in the income available for distribution in 3Q19 includes the contribution from FCT’s holdings in associates PGIM ARF and Hektar REIT, the increase was partially offset by higher borrowing costs and lower net property in
Slide 36: 9M19 distributable income up 3.2% year-on-year
Results - Highlights 9M19 distributable income up 3.2% year-on-year DPU for the 9-month period for FY2019 is 0.04% higher than the same period in the pervious year 9M19 9M18 $’000 Increase / (Decrease) Oct 18 to Jun 19 Oct 17 to Jun 18 Gross Revenue 148,117 144,836 2.3% Property Expenses (41,683)
Slide 37: 3Q19 gross revenue up 1.6% year-on-year
Results – Performance by properties 3Q19 gross revenue up 1.6% year-on-year Increase in gross revenue attributed mainly to higher portfolio occupancy and average gross rent compared with the same period a year ago. All malls, except Causeway Point, registered higher mall occupancy in 3Q19 compared
Slide 38: 3Q19 property expenses 8.9% higher year-on-year
Results – Performance by properties 3Q19 property expenses 8.9% higher year-on-year Higher overall property expenses mainly attributed to higher property tax expense due to: Absence of property tax refund which occurred in the same period last year Higher Annual Value of Northpoint City North Wi
Slide 39: 3Q19 NPI 1.1% lower year-on-year
Results – Performance by properties 3Q19 NPI 1.1% lower year-on-year Mainly due to higher property expense Net Property Income $ million 3Q19 3Q18 ▼ 1.1% 34.60 35.01 ▼ 3.9% 16.04 16.64 ▼ 3.3% 10.00 10.34 ▲ 4.4% ▲ 2.1% ▲ 15.1% ▲ 29.6% 4.48 4.29 2.40 2.35 0.99 0.86 0.70 0.54 FCT Portfolio Causeway P
Slide 40: Year-to-date positive growth year-on-year
Results – Performance by properties Year-to-date positive growth year-on-year Overall portfolio registered positive growth for the 9 months year-to-date Gross Revenue Net Property Income Distribution per Unit $ million $ million S cents ▲ 2.3% ▲ 2.0% ▲ 0.04% 148.10 106.40 144.80 104.30 9.157 9.153
Slide 41: FCT's financial position remains strong
Balance sheet FCT’s financial position remains strong As at 30 June 19 30 September 18 Gearing ratio1) 23.5% 28.6% Interest cover for the Quarter2) 4.52 times 5.61 times Total borrowings $759 million $813 million % of borrowing on fixed rates or hedged via interest rate swaps 67% 64% Average cost of
Slide 42: Debt maturity profile as at 30 June 2019
Balance sheet Debt maturity profile as at 30 June 2019 Weighted Average Debt Maturity as at 30 June 2019: 2.3 years Type of borrowings Aggregate amount ■ Unsecured bank borrowings S$43 million (5.7%) ■ Medium Term Note S$310 million (40.8%) ■ Secured bank borrowings1) S$406 million (53.5%) $266m (
Slide 43: Portfolio occupancy improved Q-o-Q to 96.8%
Operational performance Portfolio occupancy improved Q-o-Q to 96.8% Mall Occupancy 30 Jun 18 30 Sep 18 31 Dec 18 31 Mar 19 30 Jun 19 Causeway Point 99.9% 98.4% 98.7% 97.4% 97.5% Northpoint City North Wing1) 92.5% 96.5% 97.9% 96.5% 97.1% Changi City Point 92.6% 93.8% 94.8% 96.7% 96.4% Bedok Point 78.
Slide 44: 3Q19 average rental reversion at +3.1%
Operational performance 3Q19 average rental reversion at +3.1% Change compared Leased area As % of mall’s 3Q19 ( Apr – 30 Jun 2019) No. of renewals with preceding renewed (sq ft) NLA rental rates1) Causeway Point 19 43,887 10.5% 4.1% Northpoint City North Wing2) 4 1,377 0.6% 0.1% Changi City Point 8
Slide 45: Lease expiry profile
Operational performance Lease expiry profile Lease expiry profile as % of total gross rental income 37.3% Weighted Average Lease Expiry (WALE) 25.8% By NLA 1.85 years 21.2% (2Q19: .1.93 years) 9.4% By Gross Rent 1.67 years 5.6% (2Q19: 1.79 years) 0.4% 0.3% // FY2019 FY2020 FY2021 FY2022 FY2023 FY202
Slide 46: Lease expiries in FY2019 by property
Lease expiries in FY2019 by property As at 30 June 2019 Lease Area Lease Expiries in remaining Number of Leases as % of leased area as % of total gross Expiring 3 months of FY2019 Expiring of Mall rent of Mall (sq ft) Causeway Point 20 10,946 2.7% 5.0% Northpoint City North Wing1) 13 7,386 3.3% 4.0%
Slide 47: Improved shopper traffic and tenant's sales y-o-y
Improved shopper traffic and tenant’s sales y-o-y Shopper traffic grew 6.1% year-on-year (y-o-y), attributed mainly to higher traffic registered at Northpoint City North Wing and YewTee Point Portfolio tenants’ sales grew 2.9% y-o-y on a per square basis, all malls saw higher tenants’ sales comp
Slide 48: Outlook
Outlook Outlook The Ministry of Trade and Industry (“MTI”) announced on 12 July 2019 that based on advance estimates, the Singapore economy grew by 0.1% on a year-on-year basis in 2Q 2019, lower than the 1.1% growth in 1Q 2019. On a quarter-on-quarter (“qoq”) seasonally-adjusted annualised basis,
Slide 49: Portfolio Lease expiry profile as at 30 June 2019
Portfolio Lease expiry profile as at 30 June 2019 as at 30 June 2019 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 Total Causeway Point No of leases 20 71 61 46 10 2 0 0 0 0 210 Expiries as % Total NLA 2.7% 32.4% 19.1% 24.1% 20.5% 1.3% 0.0% 0.0% 0.0% 0.0% 100.0% NLA (sq ft) E
Slide 50: Trade mix as at 30 June 2019
Trade mix as at 30 June 2019 Trade Classifications As % of total Gross As % of total NLA (In descending order of % of rent) Rental Income Food & Restaurants 32.7% 38.5% Fashion 12.9% 17.1% Services/Education 8.4% 8.8% Beauty, Hair, Cosmetics, Personal Care 5.5% 7.7% Household 8.8% 6.9% Supermarket 8
Slide 51: Top 10 tenants by gross rental as at 30 June 2019
Top 10 tenants by gross rental as at 30 June 2019 As % of As % of total Gross Tenant total NLA Rental Income 1 Cold Storage Singapore (1983) Pte Ltd1) 5.4% 4.4% 2 Copitiam Pte Ltd2) 3.8% 3.6% 3 Metro (Private) Limited3) 5.6% 3.5% 4 Courts (Singapore) Limited 3.3% 2.9% 5 NTUC Fairprice Co-operative4)
Slide 52: Appendix 2: Additional Information
Appendix - 2 Additional Information
Slide 53: Sustainability Framework
Sustainability Framework FCT aligns and adopts Frasers Property Group’s Sustainability Framework. The Framework is driven by three pillars: Acting Progressively, Consuming Responsibly and Focusing on People. These pillars form the multi-disciplinary approach which we direct our efforts to manage and
Slide 54: FCT Sustainability Reporting Performance Highlights FY2018
FCT Sustainability Reporting Performance Highlights FY2018 Frasers Centrepoint Trust’s FY2018 Sustainability Report is part of its Annual Report FY2018 and is available at https://fct.frasersproperty.com/newsroom/20181221_063723_J69U_HT80N6BGW4ZZR31S.1.pdf 54
Slide 55: FCT's portfolio of investment properties
Appendix: Portfolio Information FCT’s portfolio of investment properties Causeway Northpoint City Yishun 10 Changi City Waterway Point Bedok Point YewTee Point Anchorpoint Point North Wing1 Retail Podium Point Gross Floor Area2 629,159 542,493 364,596 306,378 133,597 117,594 110,373 (GFA) square fee
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