Capitaland Ascendas Reit · SGX:A17U

Capitaland Ascendas Reit — Ascendas Real Estate Investment Trust — Investor Presentation (July 2016)

59 slides from Capitaland Ascendas Reit's investor presentation, July 2016

  1. Slide 1: Investor Presentation

    9 Andretti Court, Victoria One@Changi City Investor Presentation Jul 2016 1 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  2. Slide 2: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 2 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Gr

  3. Slide 3: 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$9.8bn (US$7.2bn) as at 30 Jun 2016  Issuer and senior unsecured

  4. Slide 4: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Business Parks (BP) Science Parks (SP) Portfolio GFA (sqm) 410,647 332,716 % of A-REIT - by GFA 11% 9% - by asset value 18% 15% Characteristics Zone is defined by Govt Master Plan. Suburban office Zone

  5. Slide 5: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy Sub-sector Integrated Development, Hi-Specs Industrial (Hi-Specs) Data Centres (DC) Amenities & Retail (IDAR) Portfolio GFA (sqm) 157,299 528,408 109,756 % of A-REIT - by GFA 4% 14% 3% - by asset value 7% 15% 6% C

  6. Slide 6: Singapore: Diversified Portfolio Positioned for Future Growth of the Singapore Economy

    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) 393,740 197,143 835,825* % of A-REIT - by GFA 11% 5% 22% - by asset value 7% 3% 14% Characteristic

  7. Slide 7: 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 MRT stations  Light Industrial and Hi-Specs Industrial properties are primarily centrally located

  8. Slide 8: Australia Portfolio – 27 Logistics Properties

    Australia Portfolio – 27 Logistics Properties Sydney (236,708 sqm) Perth (20,895 sqm) 1. 1A & 1B Raffles Glade 27. 35 Baile Road 2. 7 Grevillea Street 3. 5 Eucalyptus Pace 4. Lot 4 Honeycomb Drive 5. 1-15 Kellet Close 6. 94 Lenore Drive 7. 484-490 Great Western Highway 8. 494-500 Great Western Highw

  9. Slide 9: A-REIT's Steady Growth since Listing

    A-REIT’s Steady Growth since Listing 9 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  10. Slide 10: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 10 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  11. Slide 11: Key Highlights for 1Q FY16/17

    Key Highlights for 1Q FY16/17  Total amount available for distribution rose by 15.5% y-o-y to S$106.9m  Estimated DPU grew 4.0% y-o-y to 3.996 cents from 3.841 cents in 1Q FY15/16.  Key performance drivers were: • Contributions from new acquisitions: Australian Portfolio and ONE@Changi City • Low

  12. Slide 12: Key Highlights for 1Q FY16/17

    Key Highlights for 1Q FY16/17  Total amount available for distribution rose by 19.9% q-o-q to $106.9 million  Estimated DPU grew 17.2% q-o-q to 3.996 cents from 3.410 cents • Boosted by newly acquired ONE@Changi City  Investment highlights • S$24.6 million of asset enhancement works • S$59.4 mill

  13. Slide 13: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 13 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  14. Slide 14: 1Q FY16/17 vs 1Q FY15/16

    1Q FY16/17 vs 1Q FY15/16 1Q 1Q % (S$’000) FY16/17(1) FY15/16(1) fav/ (unfav) Gross revenue(2) 207,588 180,507 15.0 Net property income(2) 149,480 124,265 20.3 Total amount available for distribution 106,855 92,486 15.5 DPU(3)(4) 3.996 3.841 4.0 (1) The Group had 131 properties and 105 properties as

  15. Slide 15: 1Q FY16/17 vs 4Q FY15/16

    1Q FY16/17 vs 4Q FY15/16 1Q 4Q % (S$’000) FY16/17(1) FY15/16(1) fav/ (unfav) Gross revenue(2) 207,588 204,044 1.7 Net property income(2) 149,480 143,465 4.2 Total amount available for distribution 106,855 89,102 19.9 DPU before performance fee (cents)(4) 3.996 3.759 6.3 DPU after performance fee (ce

  16. Slide 16: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 16 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  17. Slide 17: Investment Highlights in 1Q FY16/17

    Investment Highlights in 1Q FY16/17 Purchase Consideration Country Completion date / Value (S$m) Asset Enhancements 24.6 2 Senoko South Road Singapore 12.3 Apr-16 The Kendall Singapore 1.6 May-16 Acer Building Singapore 10.7 May-16 Divestments 59.4 Four Acres Singapore Singapore 34.0 29-Apr-16 1 A-R

  18. Slide 18: Asset Enhancement in 1Q FY16/17: Senoko South Road

    Asset Enhancement in 1Q FY16/17: 2 Senoko South Road To convert the property into a multi-tenanted food factory. Reconfiguration of floor layouts, Description construction of new loading bays, addition of cargo lifts, toilets and M&E installations. AEI Cost Approx. S$12.3 million Valuation S$37.8 mi

  19. Slide 19: Asset Enhancement in 1Q FY16/17: The Kendall

    Asset Enhancement in 1Q FY16/17: The Kendall Cladding and repainting of the property’s Description façade. Upgrading of toilets. AEI Cost Approx. S$1.6 million Valuation S$127.7 million as at 31 Mar 16 Completion 30 May 2016 Completed façade cladding (TOP Date) Land Tenure 63 years remaining GFA 20,

  20. Slide 20: Asset Enhancement in 1Q FY16/17: Acer Building

    Asset Enhancement in 1Q FY16/17: Acer Building Rejuvenation of the property. Works include constructing a new central drop off and Description entrance foyer, upgrading lift lobbies, corridors, restrooms, lift interiors etc. AEI Cost Approx. S$10.7 million Valuation S$83.0 million as at 31 Mar 16 Co

  21. Slide 21: Divestments in 1Q FY16/17

    Divestments in 1Q FY16/17 Four Acres Singapore A-REIT Jiashan Logistics Centre Built-to-suit global development & training Single-storey logsitics facility in Shanghai, Description centre for Unilever China Remaining Land Tenure 25 years 49 years NLA 9,170 sqm 35,206 sqm Acquisition Year / Price 201

  22. Slide 22: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 22 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  23. Slide 23: Healthy Balance Sheet

    Healthy Balance Sheet  Aggregate leverage would further improve to 36.2% with divestment of Ascendas Z-link property As at As at 30 Jun 2016 31 Mar 16 Total debt (S$m) (1) 3,625 3,678 Total assets (S$m) 9,797 9,870 Aggregate leverage 37.0% 37.3% Unitholders' funds (S$m) 5,449 5,481 Net asset value

  24. Slide 24: Well-spread Debt Maturity Profile

    Well-spread Debt Maturity Profile  Maintain a balanced debt maturity profile with no more than 20% debt maturing in a single year 8% 8%  Average debt maturity: 3.3 years 10%  S$14m ECS was converted into Units in May 2016 Diversified Financial 37% Resources 800 20% of total debt 700 - 37% 600 - 2

  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 16 31 Mar 16 Aggregate Leverage 37.0% (2) 37.3% Unencumbered properties as % of total investment 78.2% 77.2% properties(1) Interest cover ratio 5.2 x 5.5 x Total debt / EBITDA 6.7 x 7.9 x Weigh

  26. Slide 26: Prudent Interest Rate Risk Management

    Prudent Interest Rate Risk Management  75.9% of borrowings is hedged for an average term of 3.8 years  50 bps increase in interest rate is expected to have a pro forma impact of S$4.4 million decline in distribution or 0.16 cent in DPU Increase in Decrease in Change as Pro forma DPU interest rates

  27. Slide 27: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 27 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  28. Slide 28: Overview of Portfolio Occupancy

    Overview of Portfolio Occupancy 100.0% 90.9% 94.7% 88.3% 87.9% 89.8% 88.2% 87.6% 88.8% 90.0% 80.0% 70.0% 68.6% 70.0% 60.0% 51.2% 50.0% 40.0% 30.0% 20.0% 10.0% N. 0.0% A. Singapore Australia China Total Jun-16 Mar-16 Jun-15 Gross Floor 2,965,535* 669,525 111,307 3,746,367* Area (sqm) Note: - The Aust

  29. Slide 29: Singapore Occupancy

    Singapore Occupancy  Singapore occupancy improved to 88.3% mainly due to new take up at 40 Penjuru Lane and 5 Toh Guan Road East As at 30 Jun 2016 31 Mar 2016 30 Jun 2015 Total Singapore Portfolio GFA (sqm) 2,965,535(1)(2) 2,967,777(3) 2,876,878 Singapore Portfolio occupancy (same store) (4) 89.1%

  30. Slide 30: Singapore: Sources of New Demand

    Singapore: Sources of New Demand  Continues to attract demand from a wide spectrum of industries 0.3% 0.3% 0.6% 0.6% 2.6% 4.5% 4.4% 5.4% 0.8% 30.0% 1.4% 8.4% 1.0% 2.0% 1.4% 8.4% 2.3% By Gross 8.4% 51.2% By NLA Income 10.5% 10.9% 17.0% 13.3% 14.3% General Manufacturing Lifestyle and Services Structu

  31. Slide 31: Achieved Positive Rental Reversions

    Achieved Positive Rental Reversions  Achieved +4.1% rental reversion for leases renewed in 1Q FY16/17  Positive rental reversion was registered across all segments Multi-tenant properties (1) 1Q FY16/17 1Q FY15/16 4Q FY15/16 increase in renewal increase in renewal increase in renewal rates (1)# ra

  32. Slide 32: Weighted Average Lease Expiry (By Gross Revenue)

    Weighted Average Lease Expiry (By Gross Revenue)  Portfolio Weighted Average Lease Expiry (WALE) at 3.6 years WALE (years) 30 June 2016 Singapore 3.5 Australia 5.2 China 2.3 Portfolio 3.6 32 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  33. Slide 33: Portfolio Lease Expiry Profile (as at June 2016)

    Portfolio Lease Expiry Profile (as at June 2016) Breakdown of expiring leases  Portfolio weighted average lease to expiry (WALE) of 3.6 years for FY16/17 and FY17/18  Lease expiry is well-spread, extending beyond 2031 0.7% 1% 14%  About 14.9% of gross revenue is due for renewal in balance of FY16

  34. Slide 34: Singapore: Lease Expiry Profile (as at June 2016)

    Singapore: Lease Expiry Profile (as at June 2016) Breakdown of expiring leases  Singapore portfolio weighted average lease to expiry (WALE) of for FY16/17 and FY17/18 3.5 years 15%  Lease expiry is well-spread, extending beyond 2030 19%  16.6% of Singapore’s gross revenue is due for renewal in 6.

  35. Slide 35: Australia: Lease Expiry Profile (as at June 2016)

    Australia: Lease Expiry Profile (as at June 2016) Breakdown of expiring leases  Australia portfolio weighted average lease to expiry (WALE) of for FY16/17 and FY17/18 5.2 years  Lease expiry is well-spread, extending beyond 2027  2.2% of Australia’s gross revenue is due for renewal in balance of

  36. Slide 36: Singapore: In-place rent for space due for renewal in FY16/17 and FY17/18

    Singapore: In-place rent for space due for renewal in FY16/17 and FY17/18  Current market rental rate is slightly above the weighted average passing rental for most of the multi-tenant space due for renewal in FY16/17  Expect modest rental reversion in the low-single digit or flat for FY16/17 * *

  37. Slide 37: Ongoing Projects: Improve portfolio quality

    Ongoing Projects: Improve portfolio quality Estimated Value Estimated (S$m) Completion AzkoNobel House 6.5 4Q 2016 The Aries 4.7 4Q 2016 279 Jalan Ahmad Ibrahim (New) (formerly known as IDS Logistics 61.4 1Q2018 Corporate HQ) Total Asset Enhancements (AEI) 72.6 37 A-REIT is managed by Ascendas Funds

  38. Slide 38: Asset Enhancement (New): 279 Ahmad Ibrahim

    Asset Enhancement (New): 279 Ahmad Ibrahim To maximize plot ratio of the existing site and develop a ramp-up 3-storey warehouse block Description equipped with 10m clear height, loading bays with docklevellers at doorsteps etc. AEI Cost $61.4 m Estimated 1Q 2018 Completion Land Tenure 40 years remai

  39. Slide 39: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 39 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  40. Slide 40: Well Diversified Portfolio

    Well Diversified Portfolio 9.9% 5.7% By value of Investment Properties Business Science Park Park Logistics & Logistics and Distribution Distribution Centres, 14% AREIT Beijing, 90.1% 94.3% Integrated Centres 2% Development, Australia, 11% AREIT Shanghai, Amenities & 2% 30.1% 32.1% Retail, 7% Austra

  41. Slide 41: Tenants' Industry Diversification

    Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 10.4% Distributors, trading company 10.1% Financial 9.8% M&E and Machinery & Equipment 8.8% Information Technology 8.3% Telecommunication & Datacentre 8.0% Electronics 6.9% Life Science 5.2% Food Produ

  42. Slide 42: Low exposure to Manufacturing

    Low exposure to Manufacturing As at 30 June 2016  10.1% of NLA occupied by tenants engaged in manufacturing activities 10.1%  Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc. Tenants’ business activities by NLA  Non-manufacturing acti

  43. Slide 43: Quality and Diversified Customer Base

    Quality and Diversified Customer Base  Total customer base of around 1,450 tenants  Top 10 customers (as at 30 June 2016) account for about 18.7% of portfolio gross rental income  Security deposits for single-tenant properties range from 4 to 11 months of rental income  On a portfolio basis, wei

  44. Slide 44: Diversified Portfolio

    Diversified Portfolio Aperia, 5.6% One@Changi City, 4.3% 1, 3, 5 Changi Business Park Crescent, 2.8% Kim Chuan Telecommunication Complex , 2.7% Neuros & Immunos, 2.6% 31 International Business Park, 2.5% 40 Penjuru Lane, 2.4% TelePark, 2.4% Hyflux Innovation Centre, 2.1% TechPlace II, 1.9% TechPoint

  45. Slide 45: MTB Occupancy: NPI/DPU Sensitivity

    MTB Occupancy: NPI/DPU Sensitivity  100 bps increase in MTB occupancy is expected to result in a 0.9% 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 (cents)

  46. Slide 46: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 46 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  47. Slide 47: Market Outlook

    Market Outlook  Singapore’s 2Q 2016 economy grew 2.2% y-o-y, in line with the Ministry of Trade and Industry’s (MTI) earlier estimates of between 1.0% to 3.0%  JTC industrial property price and rental index declined by 2.5% and 2.7% q-o-q respectively in 1Q 2016  According to the Reserve Bank of

  48. Slide 48: Agenda

    Agenda Overview of A-REIT Key Highlights for 1Q FY16/17 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Market Outlook A-REIT’s Strengths 48 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge G

  49. Slide 49: 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%

  50. Slide 50: A-REIT's Strengths

    A-REIT's Strengths  Downside protection in earnings • Stable portfolio with 85.1% of portfolio revenue committed for FY16/17 and a portfolio average lease to expiry of about 3.6 years • Mix of long term and short term leases provide earnings stability  Long term leases have a weighted average leas

  51. Slide 51: 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

  52. Slide 52: 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

  53. Slide 53: Additional Information

    Additional Information (1) Quarterly Results (2) A-REIT Singapore Occupancy vs Industrial Average (3) Lease Expiry Profile – Singapore & Australia 53 A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

  54. Slide 54: Quarterly Results

    Quarterly Results (For illustrative purpose)* FY15/16 FY16/17 Summary (S$ million) 1Q 2Q 3Q 4Q Total 1Q Gross Revenue 181 183 193 204 761 208 Net Property Income 124 124 142 144 534 149 Total amount available for 92 94# 97 89 372# 107 distribution No. of units in issue (m) 2,408 2,408 2,504 2,666 2,

  55. Slide 55: A-REIT Singapore Occupancy vs Industrial Average

    A-REIT Singapore Occupancy vs Industrial Average 100% 95% 90.5% 91.2% 90.5% 90.4% 90% 88.0% 86.8% 86.0% 85% 81.7% 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 2016. M

  56. Slide 56: Average Market Rents by Segment (Singapore)

    Average Market Rents by Segment (Singapore) 120 Industrial Rental Index 100 80 60 40 Source : JTC 20 0 6.5 5.5 $5.40 4.5 $4.10 3.5 $3.70 $1.73 $3.10 2.5 1.5 $1.71 0.5 Business Park (City Fringe) Business & Science Parks (Median Rents) Business Park (Rest of Island) Hi-Specs Light Industrial Logistic

  57. Slide 57: Average Market Rents by Segment (Singapore)

    Average Market Rents by Segment (Singapore)  Total stock (net) : 44.9 million sqm, of which • Business & Science Parks account for 2.1 million sqm (4.6%) • Logistics & Distribution Centres account for 9.1 million sqm (20.2%) • Remaining stock are factory space  Potential new supply (net) of about

  58. Slide 58: Singapore Business & Science Parks: New Supply

    Singapore Business & Science Parks: New Supply  There are currently no Business & Science Park supply after 2016 % Pre- Expected Location Developer NLA (sqm)* committed Completion (est) 2016 Ayer Rajah (One-north) SHINE Systems Assets Pte Ltd 17,144 87% 2016 Science Park Ascendas Land (S) Pte Ltd.

  59. Slide 59: 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

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