Suntec Real Estate Investment Trust · SGX:T82U
Suntec Real Estate Investment Trust — Suntec REIT — 3Q 2024 Earnings Presentation
56 slides from Suntec Real Estate Investment Trust's earnings presentation, Oct 24, 2024
Slide 1: Suntec REIT Business Updates
SUNTEC REIT BUSINESS UPDATES For the Quarter ended 30 September 2024 24 October 2024
Slide 2: Agenda
03 18 3Q 24 Financial Overview Singapore Office Portfolio Performance 04 29 3Q 24 Operational Overview Australia Portfolio Performance 05 33 Financial Highlights UK Portfolio Performance 15 36 Capital Management Singapore Retail Portfolio Performance Agenda 43 Suntec Convention Performance 46 Our ES
Slide 3: 3Q 24 Financial Overview
3Q 24 Financial Overview Distributable Income Distribution Per Unit from Operations1 to from Operations1 to ESG - GRESB Unitholders Unitholders Highest $46.2 million 1.58 cents 5 Star Rating in-line with 3Q 23 -0.9% y-o-y Note: 1. Excluding capital distribution 3
Slide 4: 3Q 24 Operational Overview
3Q 24 Operational Overview Portfolio Committed Occupancy Portfolio WALE 95.6% 97.7% 3.9 2.4 Office Portfolio Retail Portfolio Office Portfolio Retail Portfolio 4
Slide 5: Financial Highlights
Suntec City MBFC Properties One Raffles Quay Olderfleet, 477 Collins Street Financial Highlights The Minster Building 177 Pacific Highway 55 Currie Street Nova Properties 21 Harris Street Southgate Complex
Slide 6: SG Assets Provide Strong Support to Portfolio Performance
SG Assets Provide Strong Support to Portfolio Performance Gross Revenue (S$ mil) NPI (S$ mil) JV Income1 (S$ mil) Gross Revenue & Net Property Income: Lower contribution from Suntec Convention, 55 Currie Street (Adelaide) and The Minster Building (London) (5.7M or 4.6%) Stronger operating performanc
Slide 7: DI and DPU from Operations Remained Resilient
DI and DPU from Operations Remained Resilient Distributable Income (S$ mil) DPU (SG cents) (5.8M or 11.2%) 52.0 (0.213¢ or 11.9%) 5.8 46.2 1.793 Completion of capital distribution ($5.8m) 0.198 1.580 Vacancies at 55 Currie Street and The Minster Building Better operating performance from Suntec City
Slide 8: Distribution Payment
Distribution Payment Distribution Payment Distribution Period 1 July 2024 – 30 September 2024 Amount (cents/unit) 1.5801,2 Ex-date 1 Nov 2024 Record date 4 Nov 2024 Payment date 28 Nov 2024 Note: 1. Total of 4.622 cents for YTD Sep 2024. 2. The Manager continues to receive 50% of its asset managemen
Slide 9: Singapore Office Portfolio Continued to Strengthen
Singapore Office Portfolio Singapore Office Portfolio Continued to Strengthen Stronger Operating Performance Across All Singapore Office Assets Gross Revenue (S$ mil) NPI (S$ mil) JV Income (S$ mil) 0.6M or 1.6% Gross Revenue & Net Property Income: Higher occupancy and rent at Suntec City Office 1.3
Slide 10: Australia Portfolio Impacted by Vacancies
Australia Portfolio Australia Portfolio Impacted by Vacancies A$ mil S$ mil1 Gross Revenue NPI Gross Revenue NPI Gross Revenue & Net Property Income: (1.4M or 5.2%) (1.3M or 5.5%) Lower occupancy at 55 Currie Street (2.2M or 10.9%) (1.9M or 10.7%) Higher occupancy and rent at 21 Harris 26.8 25.4 Str
Slide 11: UK Portfolio Impacted by Vacancy at The Minster Building
UK Portfolio UK Portfolio Impacted by Vacancy at The Minster Building £ mil S$ mil1 Gross Revenue NPI Gross Revenue NPI (1.3M or 17.6%) Gross Revenue & Net Property Income: (0.9M or 20.5%) (1.3M or 19.4%) (0.8M or 20.5%) Lower occupancy at The Minster Building 4.4 7.4 6.1 6.7 3.5 3.9 3.1 5.4 3Q 23 3
Slide 12: Singapore Retail Portfolio Performance Improved
Singapore Retail Portfolio Singapore Retail Portfolio Performance Improved NPI Impacted by Absence of One-Off Property Tax Refund Gross Revenue (S$ mil) NPI (S$ mil) JV Income (S$ mil) 1.7M or 5.1% Gross Revenue & Net Property Income: Higher rent at Suntec City Mall Absence of one-off property tax r
Slide 13: Performance Impacted by Fewer Large-Scale Events
Suntec Convention Performance Impacted by Fewer Large-Scale Events Gross Revenue (S$ mil) Net Property Income (S$ mil) (5.4M or 24.2%) Lower revenue and NPI from MICE as Singapore was the host city for large-scale events in 3Q 23 (World Congress of Dermatology; World Skills ASEAN) 22.3 16.9 (2.4M or
Slide 14: Diversified Portfolio Across Geography and Sector
Diversified Portfolio Across Geography and Sector Singapore Market and Office Assets Are Mainstays Income Contribution by Geography 72% 16% 12% Singapore Australia UK Income Contribution by Sector 71% 24% 5% Office Retail Convention 14
Slide 15: Capital Management
Capital Management Olderfleet, 477 Collins Street, Melbourne
Slide 16: Key Financial Indicators
Key Financial Indicators As at 30 Jun 24 As at 30 Sep 24 NAV Per Unit $2.10 $2.07 Total Debt Outstanding $4,253 mil $4,244 mil Aggregate Leverage Ratio1 42.3% 42.3% Weighted Average Debt Maturity 3.32 years 3.07 years All-in Financing Cost2 4.02% p.a. 4.06% p.a.3 Adjusted ICR4 1.9X 1.9X Weighted Ave
Slide 17: Interest Cost Expected to be Impacted by Expiring Hedges
Interest Cost Expected to be Impacted by Expiring Hedges Debt Maturity Profile Perpetual Securities 1400 (First Reset) 1000 1200 1000 800 800 600 680 600 1150 198 700 400 400 300 298 200 200 366 224 200 200 150 129 0 0 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Oct 2025 Jun 2026 Bank facility Medium
Slide 18: Singapore Office Portfolio Performance
Singapore Office Portfolio Performance 18 One Raffles Quay, Singapore
Slide 19: High Occupancy with Well Balanced Lease Expiry Profile
Singapore Office Portfolio High Occupancy with Well Balanced Lease Expiry Profile Committed Occupancy Lease Expiry Profile As at 30 Sep 24 % of Total NLA2 Comparison Core CBD Occupancy: 93.4%1 99.9% 98.7% 97.5% 99.1% 26.5% 24.6% 22.7% 15.6% 0.9% 7.3% 2.4% Suntec City One Raffles MBFC Towers 1 Singap
Slide 20: Strong Rent Reversion Continued
Singapore Office Portfolio Strong Rent Reversion Continued 25 Quarters of Positive Rent Reversion Rent Reversion Work Done1 +10.8% for YTD 3Q 24 132,000 sq ft in 3Q 24 14.0% 13.1% 77% 78% 12.9% 11.4% 7.9% 23% 22% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 3Q 24 Renewal Leases New Leases Note: 1. Reflects n
Slide 21: Suntec City Office Performance
Suntec City Office Performance Suntec City Office, Singapore
Slide 22: Occupancy and Rent Surpassed Market Levels
Suntec City Office Occupancy and Rent Surpassed Market Levels Suntec 3Q 24 CBRE $9.35 $9.85 $10.02 $10.11 $10.15 Core CBD $9.25 100.0% $8.84 $10 $8.95 95.0% $9 90.0% 85.0% $8 80.0% $7 99.9% 100% 100% 99.9% 75.0% 97.2% 99.4% 95.6% 93.4% $6 70.0% 65.0% $5 60.0% $4 55.0% $3 50.0% FY 20 FY 21 FY 22 FY 2
Slide 23: Robust Rent Reversion With High Tenant Retention
Suntec City Office Robust Rent Reversion With High Tenant Retention Rent Reversion Work Done1 +10.8% for YTD 3Q 24 115,400 sq ft in 3Q 24 14.0% 14.0% 79% 83% 12.2% 10.8% 7.9% 21% 17% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 3Q 24 Renewal Leases New Leases Note: 1. Reflects net lettable area of new leases
Slide 24: Current Achieved Rents Above 2024 and 2025 Expiring Rents
Suntec City Office Current Achieved Rents Above 2024 and 2025 Expiring Rents Expiry Rent 100.0% $12.0 90.0% $11.0 80.0% $10.80 $10.54 $10.58 70.0% $10.22 $10.05 $10.0 60.0% $9.59 50.0% $9.0 40.0% $8.0 30.0% 20.0% $7.0 27.7% 28.2% 10.0% 23.6% 14.5% 2.1% 3.8% $6.0 2024 2025 2026 2027 2028 2029 & Beyon
Slide 25: Performance of One Raffles Quay and Marina Business Financial Centre Towers 1 & 2
Performance of One Raffles Quay and Marina Business Financial Centre Towers 1 & 2 MBFC Properties, Singapore
Slide 26: Healthy Rent Reversion
One Raffles Quay & MBFC Towers 1 & 2 Healthy Rent Reversion Rent Reversion Work Done1 +10.6% for YTD 3Q 24 16,600 sq ft in 3Q 24 14.4% 66% 13.1% 59% 12.0% 8.4% 41% 6.8% 34% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 3Q 24 Renewal Leases New Leases Note: 1. Based on Suntec REIT’s interests in One Raffles Qu
Slide 27: Asset Enhancement Initiatives
One Raffles Quay Asset Enhancement Initiatives Refurbished Office Lobbies Refurbished North Tower Lobby Refurbished South Tower Lobby 27
Slide 28: Singapore Office Outlook and Focus
Singapore Office Outlook and Focus Macro and geopolitical Cautious optimism with uncertainties weigh on Singapore’s economy in continued prudence by global economic outlook 3Q24 grew by 4.1%1 YoY office occupiers in the notwithstanding supported by growth in most industries face of evolving market e
Slide 29: Australia Portfolio Performance
Australia Portfolio Performance 21 Harris Street, Sydney
Slide 30: Full Occupancy in Sydney Properties and 477 Collins Street
Australia Portfolio Full Occupancy in Sydney Properties and 477 Collins Street, Melbourne Committed Occupancy As at 30 Sep 24 Rent Reversion +13.3% for YTD 3Q 24 85.3% 84.2% 84.9% 80.2% 100% 100% 100% 89.2% 90.6% 61.4% Work Done2 41,100 sq ft in 3Q 24 177 Pacific 21 Harris 477 Collins Southgate 55 C
Slide 31: Well Spread Lease Expiry Profile
Australia Portfolio Well Spread Lease Expiry Profile Lease Expiry Profile % of Total NLA1 Comparison 43.5% 19.6% 9.4% 11.0% 1.2% 8.9% 6.4% 2024 2025 2026 2027 2028 2029 & Beyond Vacant NLA Expiries WALE 4.5 years Notes: 1. Based on Suntec REIT’s interest in 177 Pacific Highway, 21 Harris Street, Sou
Slide 32: Australia Outlook and Focus
Australia Outlook and Focus Market vacancy in Incentives in Melbourne GDP growth remains Melbourne and Adelaide subdued at 1.0%1 and Adelaide expected to remain elevated at 19.8% remain high and 15.8% respectively2 Asset enhancement in Lower revenue expected Cap rate expansion of 50 progress for Sou
Slide 33: UK Portfolio Performance
UK Portfolio Performance 33 Nova Properties, London
Slide 34: Full Occupancy Expected for The Minster Building
UK Portfolio Full Occupancy Expected for The Minster Building Committed Occupancy Lease Expiry Profile As at 30 Sep 24 % of Total NLA2 Comparison 72.4% of lease expiries will be in 2029 and beyond if tenants do not exercise lease breaks Central London Office Occupancy: 3.8% 91.4%1 99.6% 95.3% 91.3%
Slide 35: UK Office Outlook and Focus
UK Office Outlook and Focus Central London occupancy and rental Good quality office space GDP growth forecast to growth expected to in prime locations remain slow at 1.0%1 improve due to tight continue to be sought supply and increase in after office utilisation2 Revenue of The Minster 2025 lease br
Slide 36: Singapore Retail Portfolio Performance
Singapore Retail Portfolio Performance Suntec City, Singapore
Slide 37: Portfolio Committed Occupancy Strengthened
Singapore Retail Portfolio Portfolio Committed Occupancy Strengthened Committed Occupancy Lease Expiry Profile As at 30 Sep 24 % of Total NLA2 Comparison Central Area Outside Orchard occupancy: 91.8%1 98.4% 94.9% 98.3% 31.9% 27.4% 20.1% 12.0% 1.7% 6.9% Suntec City Mall Marina Bay Link Overall SG Ret
Slide 38: Suntec City Mall Performance
Suntec City Mall Performance Suntec City Mall, Singapore
Slide 39: Consecutive Quarters of Strong Rent Reversion
Suntec City Mall Consecutive Quarters of Strong Rent Reversion Rent Reversion Work Done1 +20.9% for YTD 3Q 24 81,100 sq ft in 3Q 24 Ex-Pure Fitness (~30k sf) Backfilled 25.3% 25.7% 73% 73% 21.7% 20.2% 21.2% 27% 27% 3Q 23 4Q 23 1Q 24 2Q 24 3Q 24 3Q 23 3Q 24 Renewal Leases New Leases Note: 1. Reflects
Slide 40: Enhanced Shopper Experience
Suntec City Mall Enhanced Shopper Experience 8 New-to-Market / New-to-Suntec Brands1 Commenced Operations in 3Q 24 SOTBOX LOJEL Pokémon Ga-Olé 1st outlet in Singapore, following the 1 concept store in Singapore st Singapore’s largest station success of its sister brand i.e. SOTPOT Note: 1. Images do
Slide 41: 3Q Tenant Sales Remained Stable
Suntec City Mall 3Q Tenant Sales Remained Stable YoY Traffic Variance Tenant Sales psf ($) YoY Variance 70 140,000 2019 Avg Daily 60 +3% +6% +6% +12% +8% +9% Traffic +1% -4% -1% 120,000 -2% 2019 Avg 50 Tenant Sales psf ($) 100,000 Tenant Avg Daily Traffic Sales psf 40 ($) 80,000 30 60,000 40,000 20
Slide 42: Singapore Retail Outlook and Focus
Singapore Retail Outlook and Focus MICE events and positive Rent growth and Consumers remain tourism outlook continue occupancy underpinned cautious in expenditure to drive traffic and tenant by healthy demand and sales limited supply Asset enhancement Improvement in revenue Proactive lease initiati
Slide 43: Suntec Convention Performance
Suntec Convention Performance Suntec Singapore
Slide 44: 3 New-to-SG International Conferences in 3Q 24
Suntec Convention 3 New-to-SG International Conferences in 3Q 24 International Conference on Metal- APAC League for Associations in Singapore Garden Festival Organic Frameworks Rheumatology 3 – 11 Aug 15 – 19 Jul 21 – 25 Aug COMEX 2024 Solana Breakpoint 2024 29 Aug – 1 Sep 19 – 21 Sep 44
Slide 45: Suntec Convention Outlook and Focus
Suntec Convention Outlook and Focus STB’s effort to boost MICE in Singapore MICE market Singapore expected to drive expected to grow at a 9% MICE growth CAGR1 (2023-2030) Grow alternative revenue opportunities such as Higher YoY dividend entertainment events contribution expected Suntec Convention,
Slide 46: Our ESG Commitment
Our ESG Commitment 21 Harris Street, Sydney
Slide 47: Continual Commitment to ESG
Continual Commitment to ESG Achievement All assets GREEN BUILDING CERTIFIED CARBON NEUTRAL Obtained “B” EPC 6 Properties achieved Highest 21 Harris Street ENERGY RATING for The Certifications - 177 Pacific Highway Minster Building Platinum or 6-Star Rating 55 Currie Street Attained highest GRESB 100
Slide 48: Roadmap Towards Net-Zero Carbon Emission Target by 2050
Roadmap Towards Net-Zero Carbon Emission Target1 by 2050 Net-Zero carbon 177 Pacific Highway & 55 emissions1 for all assets Currie to be on 100% Renewable Energy All SGP assets to be on Net-Zero carbon emission1 100% Renewable Energy 477 Collins to be Carbon for all AUS & UK assets Neutral Certified
Slide 49: Looking Ahead
Looking Ahead 55 Currie Street, Adelaide
Slide 50: Navigating Challenges
Navigating Challenges Unlock Value from Asset Proactive Capital Management Enhancement Initiatives and and Cost Prudence Divestment of Mature Assets Explore Good Quality, Accretive Continual Commitment to Assets Sustainability Practices 50
Slide 51: Thank you
Thank you For enquiries, please contact: Melissa Chow Eugenia Ong Manager, Investor Relations Manager, Portfolio Management Melissa.chow@esr.com Eugenia.ong@esr.com The Minster Building, London
Slide 52: Disclaimer
Disclaimer This presentation is focused on the comparison of the business updates for the quarter ended 30 September 2024 versus results achieved for the quarter ended 30 September 2023. The information included in this release does not constitute an offer or invitation to sell or the solicitation o
Slide 53: About Suntec REIT
About Suntec REIT 177 Pacific Olderfleet,477 Highway, Collins Street, Sydney Melbourne
Slide 54: About Suntec REIT
About Suntec REIT Singapore’s First Composite REIT Market Capitalisation S$3.9 Billion1 London Asset Under Management S$12.2 Billion2 Listed on 9 Dec 2004 on the SGX-ST High quality office assets, complemented by Singapore retail and convention components 10 properties – 3 in Singapore, 2 in Sydney,
Slide 55: Portfolio Snapshot
Portfolio Snapshot Singapore and UK Properties Suntec City One Raffles MBFC The Minster Nova Properties Suntec City – Suntec Convention Quay Properties Building Office & Retail Description Integrated commercial World-class convention Two premium Two premium Two Grade A Grade A Office development com
Slide 56: Portfolio Snapshot
Portfolio Snapshot Australia Properties 177 Southgate Olderfleet 477 55 Currie Street 21 Harris Street Pacific Highway Complex Collins Street Description 31-storey Grade A office Integrated development Premium Grade, 40- Twelve-storey, Grade A Nine-storey, Grade A building comprising two A-Grade lev