Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — CapitaCommercial Trust — FY2009 Earnings Presentation
51 slides from Singapore Exchange's earnings presentation, Jan 20, 2010
Slide 1: CapitaCommercial Trust FY 2009 Results
CapitaCommercial C it C i l Trust T t FY 2009 Results 20 January 2010
Slide 2: Important Notice
Important Notice This presentation shall be read in conjunction with CCT’s 2009 Full Year Unaudited Financial Statement Announcement. The past performance of CCT is not indicative of the future performance of CCT. Similarly, the past performance of CapitaCommercial Trust Management Limited, the mana
Slide 3: Contents
Contents 1. FY 2009 Highlights 2. Solid Financial Results 3 Portfolio Reconstitution Strategy 3. 4. Stable Portfolio 5. Market Outlook 6 Focus Moving Ahead 6. 7. Supplementary Information 3 CapitaCommercial Trust Presentation *January 2010*
Slide 4: FY 2009 Highlights
1 FY 2009 Highlights 1. 4 CapitaCommercial Trust Presentation *January 2010*
Slide 5: DPU outperformance against preceding period
DPU outperformance against preceding period 29% 7.06 12% 3.73 5.48 3.33 FY 2008 FY 2009 DPU (2) Estimated 1H 2009 2H 2009 DPU (1) DPU Estimated DPU (1) Notes: (1) The DPU is computed on the basis that none of the S$370.0 mil Convertible Bonds (“CB”) is converted into units on or before books closure
Slide 6: Raised S$1.6 billion of capital in 2009 despite challenging market conditions
Raised S$1.6 billion of capital in 2009 despite challenging market conditions Date Amount Tenure and Type of Remarks Raised Rates Financing Jan 2009 S$580 mil 3 yrs Secured term Refinancing of loan Commercial mortgage- g g backed securities (CMBS) Jun 2009 S$143 mil 3 yrs @ all-in margin Secured ter
Slide 7: Continuing to sign new leases and renewals with positive rental reversion
Continuing to sign new leases and renewals with positive rental reversion • Signed new leases and renewals of 317,274 square feet in 4Q Q 2009 – Tenants include: • The Royal Bank of Scotland (bank) • Robinsons & Co (S) Pte Ltd (department store), • Tudor Capital Singapore Pte. Ltd.(financial service
Slide 8: Recognition for corporate responsibility standards
Recognition for corporate responsibility standards CCT has been included in FTSE4Good Index Series which recognises companies meeting i t international ti l corporate t responsibility ibilit standards t d d 8 CapitaCommercial Trust Presentation *January 2010*
Slide 9: Solid Financial Results
2 Solid Financial Results 2. 9 CapitaCommercial Trust Presentation *January 2010*
Slide 10: FY 2009 gross revenue up by 20%; distributable income up by 30%
FY 2009 gross revenue up by 20%; distributable income up by 30% 450,000 20% FY 2008 FY 2009 403,323 400 000 400,000 29% 350,000 335,285 300,211 300,000 , 30% 250,000 233,471 198,452 200,000 153,047 150,000 100,000 50 000 50,000 0 Gross Revenue Net Property Income Distributable Income Income contribu
Slide 11: 2H 2009 distributable income above 1H 2009 by 12%
2H 2009 distributable income above 1H 2009 by 12% 250,000 4% 1H 2009 2H 2009 197,435 205,888 10% 200,000 157,058 150 000 150,000 143 153 143,153 12% 105,029 100,000 93,423 50,000 0 Gross Revenue Net Property Income Distributable Income Income contribution primarilyy Improved operating g margin g due
Slide 12: 4Q 2009 distributable income above 4Q 2008 by 39%
4Q 2009 distributable income above 4Q 2008 by 39% 120,000 6% 103,240 4Q 08 4Q 09 97,164 97 164 22% 100,000 80,001 80,000 39% 65 609 65,609 60,000 52,893 37,964 40,000 40 000 20,000 0 Gross Revenue Net Property Income Distributable Income IIncome contribution ib i ffrom hi higher h IImproved d operat
Slide 13: DPU pay out expected on 26 Feb 2010
DPU pay out expected on 26 Feb 2010 Distribution Period From 1 Jul 2009 to 31 Dec 2009 Estimated Distribution Per Unit (1) Taxable - 3.73 cents (1) The estimated DPU is computed on the basis that none of the S$370.0 million Convertible Bonds is converted into units on or before the books closure dat
Slide 14: Downward revaluation of S$327.6m or approximately 5.4% from May 2009
Downward revaluation of S$327.6m or approximately 5.4% from May 2009 As at As at Change 31 Dec 09 Asset Valuation (S$’m) 22 May 09 31 Dec 09 % (S$psf) C it l Tower Capital T 1 130 0 1,130.0 1 052 5 1,052.5 (6 9) (6.9) 1 420 1,420 Six Battery Road 1,182.0 1,114.0 (5.8) 2,242 HSBC Building 317.0 299.8
Slide 15: Cap rates compression for Grade A and prime offices valuation signifies reduced risks
Cap rates compression for Grade A and prime offices valuation signifies reduced risks Cap rates December 2008 May 2009 December 2009 Grade A offices 4.5% 4.5% 4.25% & HSBC (0.25% up against Building June 2008) Prime offices 4.75% 4.75% 4.5% (0.25% up against June 2008) Raffles City Office – 4.5% 4 5
Slide 16: Total Assets at S$6.1B, Adj. NAV at S$1.37
Total Assets at S$6.1B, Adj. NAV at S$1.37 31 Dec 09 30 Sep 09 31 Dec 08 S$'000 S$'000 S$'000 Non-current assets(1) 5,595,598 , , 6,116,271 , , 6,785,965 , , Current assets(2) 504,374 223,181 85,426 Total assets 6,099,972 6,339,452 6,871,391 Current liabilities(3) 325 902 325,902 318 836 318,836 793
Slide 17: No major refinancing in 2010
No major refinancing in 2010 S$ million 1,200 1,000 $370m CCT - Balance of rights CB issue proceeds Put option 800 (about S$140m) i M in May and $50m MTN (18%) RCS - secured issue in Dec 2009 S$35 m facility $570m for partial due Sep 600 (2%) repayment p y of debt CCT - due in 2010 3-year $520m RCS
Slide 18: Gearing within target range of 30% to 45%
Gearing within target range of 30% to 45% As at 31 Dec 2009 2008 Total debt S$2,022.7m S$2,586.8m Gearing ratio (1) 33 2% 33.2% 37 6% 37.6% Interest service coverage 3.3 times 2.8 times ratio (2) Ave cost of debt 3 9% 3.9% 3 6% 3.6% Ave fixed rate term to 2.2 years 2.4 years i (3) expiry Notes: (1)
Slide 19: Enhanced financial flexibility
Enhanced financial flexibility • Total number of unsecured assets : 8 out of 11 • Value of unsecured assets : S$2.8 billion(1) (49% of total value of investment properties) • S$615.0 million untapped balance from S$1.0 billion multicurrency medium term note programme Six Battery y Road One George g
Slide 20: Portfolio Reconstitution Strategy
3 Portfolio Reconstitution Strategy 3. 20 CapitaCommercial Trust Presentation *January 2010*
Slide 21: Portfolio reconstitution strategy to further enhance asset quality
Portfolio reconstitution strategy to further enhance asset quality q y Flexibility and speed to seize growth opportunities Acquire Redeploy capital good quality g q y asset Organic growth Funding flexibility Unlock value at Asset optimal stage enhancement / off cycle l refurbishment Value creation 2
Slide 22: Robinson Point at optimal stage of life cycle
Robinson Point at optimal stage of life cycle Golden Shoe Car Wilkie Edge, 1.6% Park 2 Park, 2.6% 6% Market Street Car Park, 0.8% Bugis Village, 2.7% HSBC Building, 3.0% (1) Raffles City, 28.2% Robinson R bi Point, P i t 3.7% Starhub Centre, 5.0% Capital Tower, 13.3% Six Battery One George Road, 22.
Slide 23: Unlocking value
Unlocking value • Sale of Robinson Point for S$203.25 mil or S$1,527 ppsf on NLA • Sold to AEW Asia, a subsidiary of AEW Capital Management, L.P. • Estimated gain of S$19.2 mil (1) – 11.4% above Dec 2009 valuation of S$182.5 mil – 69.7% above 2004 appraised value of S$119.8 mil when acquired by CCT
Slide 24: Asset plan review for Starhub Centre
Asset plan review for Starhub Centre • Obtained Outline Planning Permission from the Urban Redevelopment Authority for change of use: – from Commercial to Residential (maximum 80% of GFA) and Commercial – Gross plot ratio of +4.9 (no change) • Change of use is still subject to other government autho
Slide 25: Stable Portfolio
4 Stable Portfolio 4. 25 CapitaCommercial Trust Presentation *January 2010*
Slide 26: Gross rental income predominantly contributed by Grade A offices
(1) Gross rental income predominantly contributed by Grade A offices CCT’s Focus is Owning g and Investing g in Real Estate and Real Estate-related Assets, which are Income-producing and used, or Predominantly used, for Commercial Purposes. Major M j usage mix i for f CCT properties ti (2) By Gross
Slide 27: Portfolio diversification with focus on quality
(1) Portfolio diversification with focus on quality More than 80% of Net Property Income (2) from Grade A offices and Raffles City Golden Shoe Car Wilkie Edge, 1.6% Market Street Car P k 2 Park, 2.7% 7% (2 (2.6%) 6%) (1 6%) (1.6%) Park, 0.8% (0.8%) Bugis Village, 2.8% (2.7%) HSBC Building, 3.2% (3)
Slide 28: Top ten blue-chip tenants contribute about 47% of monthly gross rental income
Top ten blue-chip tenants(1) contribute about 47% of monthly gross rental income Weighted Average Lease Term to Expiry (by floor area) (2) for Top 10 Tenants as at 31 Dec 2009 = 5.7 years Portfolio with Robinson Point Portfolio without Robinson Point RC Hotels Pte Ltd 13.0% RC Hotels Pte Ltd 13.3% S
Slide 29: Diverse tenant mix in CCT's portfolio
(1) Diverse tenant mix in CCT’s portfolio Car Park, 2.4% (2.3%) Department Store, 2.0% (1.9%) Retail Services, 2.5% (2.6%) Education, 1.4% (1.4%) Legal, 2.6% (2.8%) (2) Banking, Insurance & Others , 4.1% (4.4%) Financial Services, 36.8% (35.8%) Real Estate & Property Services, 2.4% (4.6%) Standard C
Slide 30: CCT's portfolio and Grade A office occupancy record increase against market trend
CCT’s portfolio and Grade A office occupancy record increase against market trend of declining occupancy CCT 4Q 2009 Occupancy level (1) 4Q Industry Statistics – Occupancy level Grade A office: 98.7% 3Q: 97.9% Grade A offices: 93.8% 3Q: 95.8% Portfolio: 94.8% 3Q: 94.0% Core CBD : 91.2% 3Q: 91.2% CCT
Slide 31: Well spread portfolio lease expiry profile
(1) Well spread portfolio lease expiry profile (2) Leases up for renewal (by Monthly Gross Rental Income ) as at 31 December 2009 22.3% 4.2% 16.1% 14.8% 13.3% 9 4% 9.4% 2.5% 6.1% 6.1% 7.1% 1.0% 0.9% 3.1% 2010 2011 2012 2013 2014 & Beyond Office Retail Hotels and Convention Centre Renewed Leases for
Slide 32: Already secured renewals for more than 20% of leases expiring in 2010
Already secured renewals for more than 20% of leases expiring in 2010 (1) Office leases expiring as a percentage of Monthly Office Gross Rental Income as at 31 December 2009 5.7% 32.1% 32.1% 20.2% 20.2% 20.0% 20.0% 18.1% 18.1% Renewed Leases for 2010 9.6% 9.6% 2010 2011 2012 2013 2014 & Beyond Avera
Slide 33: 2010 expiring leases mainly from Capital Tower and Raffles City Tower
2010 expiring leases mainly from Capital Tower and Raffles City Tower Average rent of office portfolio leases expiring in 2010 is $7.09 psf (1) 4Q 2009 Industry Statistics (1) – Grade A Office Average Market Rent: S$8 S$8.10 10 psf Prime Office Average Market Rent: S$6.75 psf 2010 60% $11.91 Ave Mon
Slide 34: Leasing risk mitigated by anticipation of office market recovery
Leasing risk mitigated by anticipation of office market recovery, but proactive leasing and prudent cost management strategy continues 2011 2012 60% $20.00 60% $20.00 $15.44 $16.00 $16.00 40% $13.05 40% $13.38 $12.45 $12.00 $12.00 $ $11 71 $11.71 $ $10.18 $10.77 $8.00 $8.00 20% 15.9% 20% $6.88 $4.00
Slide 35: Market Outlook
5 Market Outlook 5. 35 CapitaCommercial Trust Presentation *January 2010*
Slide 36: Future supply in Central Area until 2013 at 6.2 million sq ft
Future supply in Central Area (1) until 2013 at 6.2 million sq ft of which approx 34% have already been pre-committed itt d Singapore Private Office Space (Central Area) -- Demand & Supply Ave annual supply = 2.4 mil sq ft Remaking of Singapore 4.0 Ave annual demand during previous as global city gr
Slide 37: Office market rentals have declined 57% since the peak in 3Q2008
Office Market rentals have declined 57% since the peak in 3Q2008, but decline has eased Rate of Rental Increase/Decline over $18.00 preceding Quarter Grade A Office Prime Office $15.00 $15 00 $15.00 1Q 2009 -18.0% 18 0% -18.6% 18 6% 2Q 2009 -17.5% -18.1% $12.90 $12.30 3Q 2009 -13.3% -12.8% 4Q 2009 -
Slide 38: Market outlook – Positive signs, but recovery in 2010 expected to be uneven
Market outlook – Positive signs, but the recovery in 2010 is expected to be uneven Singapore’s year-on-year GDP at 3.5% in fourth quarter 2009 Forecast GDP for 2010 : 3.0% to 5.0% 25 20 21.6 duct (GDP) (%) 15 14.9 10 5 2.5 0.9 3.5 arket pricess 0 mestic Prod 0 -4.2 -3.2 -6.8 -5 -7.7 -2.1 -10 -11.5 D
Slide 39: Singapore banks back on hiring spree
“Singapore banks back on hiring spree” “More than 1,000 staff are being hired by banks, poised to cash in on the expected return of the good times. This is based on a check of banks by The Straits Times….DBS Bank aims to fill more than 500 positions across the region including Singapore this year, f
Slide 40: Focus Moving Ahead
6 Focus Moving Ahead 6. 40 CapitaCommercial Trust Presentation *January 2010*
Slide 41: Strategy for Driving DPU Growth
Strategy for Driving DPU Growth Distribution Per Unit Portfolio reconstitution Acquisitions / Sales / Development Projects Organic growth Asset Enhancement – Singapore & overseas Proactive and prudent capital management 41 CapitaCommercial Trust Presentation *January 2010*
Slide 42: 87% of 2009's Gross Rental Income already committed for 2010
87% of 2009’s Gross Rental Income (1) already committed for the year of 2010 3 Note: (1) Assuming the completion of the sale of Robinson Point as per the announcement on 20 Jan 2010, there is no material change to the above data. CapitaCommercial Trust Presentation *January 2010*
Slide 43: Supplementary Slides
Supplementary Slides 43 CapitaCommercial Trust Presentation *January 2010*
Slide 44: FY 2009 Gross Revenue – By Asset
FY 2009 Gross Revenue (1) – By Asset 2% S$ ‘000 FY 2008 FY 2009 120,075 120 000 120,000 117 376 117,376 13% 100,000 Lower average occupancy 85,171 80,000 19% 75,642 61,848 , 58,422 60,000 49,124 21% 40,000 3% 29% 4% 0.3% -6% 6% 30,518 20,133 20,000 16,591 14,280 8,924 9,209 11,048 9,924 10,356 11,09
Slide 45: FY 2009 Net Property Income – By Asset
FY 2009 Net Property Income (1) - By Asset S$ ‘000 000 5% 100,000 FY 2008 FY 2009 19% 84,690 80,908 80,000 Lower revenue coupled 67,832 with increase in promotional expenses p p for 40% 57,196 new tenants 60,000 49,433 39 899 39,899 40,000 39% 9% 51% 28,420 3% -0.3% -12% 23,539 20 000 20,000 15 176
Slide 46: Committed occupancy rates above market levels
Committed occupancy rates above market levels CCT 4Q 2009 Occupancy level 4Q Industry Statistics – Occupancy level Grade A office: 98.7% 3Q: 97.9% Grade A offices: 93.8% 3Q: 95.8% Portfolio: 94.8% 3Q: 94.0% Core CBD : 91.2% 3Q: 91.2% 2004 2005 2006 2007 2008 2009 Capital Tower 94 5 94.5 100 0 100.0
Slide 47: Recognition for properties
Recognition for properties • National Safety and Security Award (Cluster Category), by Safety & Security Watch Group, Singapore Police Force – Six Si Battery B tt Road R d and dRRaffles ffl City Cit Si Singapore • Fire Safety Excellence Award, Fire Safety Awards 2009 by National Fire and Civil Emerg
Slide 48: Occupation Cost – Ranking now at 32 from 15
Occupation Cost – Ranking now at 32 from 15; more cost competitive to base office in Singapore CBRE Global 50 Index (by occupation cost in US$/sf/year) Ranking Previous City Cost (Nov 09) ranking (May 09) London (West End), UK 1 184.85 2 (172.62) Tokyo ( Inner Central ), Japan 2 171.64 1 (183.62) To
Slide 49: Details of 2010 forecast office supply in Central Area
Details of 2010 forecast office supply in Central Area Expected Net Floor Total Net Floor Completion Development Location Area (sf) Area (sf) Tokio Marine Centre (formerly Asia Chambers Q1 redevelopment) McCallum St 133,000 Q1 Twenty Anson Anson Road 204,000 Marina Bay Financial Centre (Phase 1) – 7
Slide 50: Details of forecast office supply in Central Area for 2011 - 2012
Details of forecast office supply in Central Area for 2011 - 2012 Expected Net Floor Total Net Floor Completion Development Location Area (sf) Area (sf) Q1 2011 Ocean Financial Centre – 2% pre-committed Collyer Quay 850,000 2011 1 Raffles Place (OUB Centre Tower 2) Raffles Place 350,000 Hotel / Offi
Slide 51: CapitaCommercial Trust Management Limited contact details
CapitaCommercial C it C i l Trust T t Management M t Limited Li it d 39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel: (65) 6536 1188 Fax: (65) 6533 6133 http://www cct com sg http://www.cct.com.sg For enquiries, please contact: Ms Ho Mei Peng Head, Investor Relations & Communications Dir
CapitaCommercial Trust — FY2009 Earnings Presentation on 6ix