CapitaLand Ascendas REIT · SGX:A17U
CapitaLand Ascendas REIT — Ascendas Reit — FY17/18 Earnings Presentation
58 slides from CapitaLand Ascendas REIT's earnings presentation, Apr 23, 2018
Slide 1: FY17/18 Financial Results Presentation
FY17/18 Financial Results Presentation 23 April 2018 20 Tuas Avenue 1 108 Wickham Street, Fortitude Valley, Singapore Queensland Australia
Slide 2: Disclaimers
Disclaimers This material shall be read in conjunction with Ascendas Reit’s financial statements for the financial year ended 31 March 2018. This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may
Slide 3: Agenda
Agenda Key Highlights for FY17/18 4 Financial Performance 7 Investment Management 11 Capital Management 24 Asset Management: Portfolio Update 30 Asset Management: Portfolio Resilience 44 Market Outlook 50 3
Slide 4: Key Highlights for FY17/18
D ascendas Reit Key Highlights for FY17/18
Slide 5: Key Highlights for FY17/18
Key Highlights for FY17/18 Total amount available for distribution rose by 4.9% y-o-y to S$468.0m Key drivers were new acquisitions • Singapore: 12, 14 & 16 Science Park Drive (Singapore) • Australia: 197-201 Coward Street (Sydney) and 100 Wickham Street (Brisbane) Portfolio operating performa
Slide 6: Key Highlights for FY17/18
Key Highlights for FY17/18 Assets Under Management has grown 1.8% y-o-y to S$10.35b • Acquired S$225.8m worth of properties in Australia • Completed S$52.9m redevelopment and asset enhancement projects in Singapore • Divested S$60.8m worth of properties in Singapore Annual Property Revaluation •
Slide 7: Financial Performance
D ascendas Reit Financial Performance
Slide 8: FY17/18 vs FY16/17
FY17/18 vs FY16/17 % (S$’000) FY17/18 (1) FY16/17 (1) Fav/ (Unfav) Gross revenue 862,111 830,592 3.8 Net property income (2) 629,400 610,954 3.0 Total amount available for distribution (3) 468,045 446,304 4.9 DPU (cents) (4) 15.988 15.743 1.6 (1) The Group had 131 properties as at 31 March 2018 and
Slide 9: 4Q FY17/18 vs 3Q FY17/18
4Q FY17/18 vs 3Q FY17/18 4Q 3Q % (S$’000) FY17/18 (1) FY17/18 (1) Fav/ (Unfav) Gross revenue (2) 215,748 217,279 (0.7) Net property income (3) 157,870 157,625 0.2 Total amount available for distribution (4) 114,503 116,261 (1.5) DPU (cents) (5) 3.910 3.970 (1.5) (1) The Group had 131 properties as a
Slide 10: Distribution Details
Distribution Details Distribution timetable Last day of trading on “cum” basis 26 Apr 2018 (Thursday) Ex-distribution date 27 Apr 2018 (Friday), 9.00 am Books closure date 2 May 2018 (Wednesday), 5.00 pm Distribution payment date 24 May 2018 (Thursday) Taxable Capital Total Stock Counter Distributio
Slide 11: Investment Management
D ascendas Reit Investment Management 11
Slide 12: Investment Highlights in FY17/18
Investment Highlights in FY17/18 Purchase Consideration / Country Completion Date Cost (S$m) Total (Acquisition/Redevelopment/AEI) 278.7 Acquisitions 225.8 100 Wickham Street, Australia 90.3 (1) 25 Sep 2017 Fortitude Valley, Brisbane 108 Wickham Street, Australia 109.0 (2) 22 Dec 2017 Fortitude Vall
Slide 13: Suburban Office Acquisition: Wickham Street, Brisbane
Suburban Office Acquisition: 100 Wickham Street, Fortitude Valley, Brisbane, Australia Purchase Consideration (1)(2) A$83.8 m (S$90.3 m) Acquisition Fee, Stamp Duty and A$6.1 m (S$6.6m) Other Transaction Costs Total Acquisition Cost A$89.9 m ($96.9m) Vendor 100W Pty Ltd Valuation (as at 31 March 201
Slide 14: Suburban Office Acquisition: Wickham Street, Brisbane
Suburban Office Acquisition: 108 Wickham Street, Fortitude Valley, Brisbane, Australia Purchase Consideration (1)(2) A$106.2 m (S$109.0 m) Acquisition Fee, Stamp Duty and A$7.7 m (S$7.9 m) Other Transaction Costs Total Acquisition Cost A$113.9 m (S$116.8 m) Vendor 108 Wickham Pty Ltd Valuation (as a
Slide 15: Logistics Acquisition: Fox Drive, Melbourne
Logistics Acquisition: 52 Fox Drive, Dandenong South, Melbourne, Australia Purchase Consideration (1)(2)(3) A$24.8 m (S$26.5 m) Acquisition Fee, Stamp Duty and A$0.8 m (S$0.9 m) Other Transaction Costs Total Acquisition Cost A$25.6 m (S$27.3 m) Vendor Goodman Dandenong Trust Valuation (as at 31 Marc
Slide 16: Redevelopment: Kallang Avenue, Singapore
Redevelopment: 50 Kallang Avenue, Singapore New façade cladding, reconfiguration of spaces, lift Description modernisation, new air conditioning system and enlarging windows for natural lighting etc. Property Segment High-Specifications Industrial Gross Floor Area 18,970 sqm Valuation (as at 31 Mar
Slide 17: Asset Enhancement: The Gemini, Singapore
Asset Enhancement: The Gemini (part of The Aries, Sparkle & Gemini), Singapore Enhancement to main and lift lobbies, upgrading of lifts, replacement to energy Description efficient lighting, air-con systems, improvement to landscape, restroom, and level 2 terrace Property Segment Business & Science
Slide 18: Capital Recycling
Capital Recycling Divested 3 properties in Singapore, realising total capital gains of S$16.8m over original costs 84 Genting Lane 13 International Business Park 10 Woodlands Link 7-storey light industrial 7-storey business park Light industrial building Description building with a covered building
Slide 19: Investments/Divestments in FY18/19
Investments/Divestments in FY18/19 Purchase Consideration (Estimated) Country Cost/ Sale Price (S$m) Completion Date FY18/19 Proposed Acquisitions 65.3 169-177 Australis Drive, Australia 34.5 (1) 1Q FY18/19 Derrimut, Melbourne (NEW) 1-7 Wayne Goss Drive, Australia 30.8 (2) 3Q FY18/19 Berrinba, Brisb
Slide 20: Proposed Acquisition: Australis Drive, Melbourne
Proposed Acquisition (New): 169-177 Australis Drive, Derrimut, Melbourne, Australia Purchase Consideration (1)(2) A$34.0 m (S$34.5 m) Acquisition Fee, Stamp Duty and A$2.3 m (S$2.3 m) Other Transaction Costs Total Acquisition Cost A$36.3 m (S$36.8 m) Vendor Abacus Funds Management Valuation (as at 1
Slide 21: Proposed Acquisition: Wayne Goss Drive, Brisbane
Proposed Acquisition: 1-7 Wayne Goss Drive, Berrinba, Brisbane, Australia Land and Development Cost (1)(2) A$30.0 m (S$30.8 m) Acquisition Fee, Stamp Duty and A$1.0 m (S$1.0 m) Other Transaction Costs Total Investment Cost A$31.0 m (S$31.8 m) Goodman Property Services Developer (Aust) Pty Ltd (“Good
Slide 22: Redevelopment: Tuas Avenue 1, Singapore
Redevelopment: 20 Tuas Avenue 1, Singapore The property was redeveloped into a ramp-up 3-storey warehouse block with efficient and regular Description floor plate sizes. Features include a concrete rooftop carpark for 40 foot container and lorries. Plot ratio was maximized. Property Segment Logistic
Slide 23: Proposed Divestment: Old Toh Tuck Road, Singapore
Proposed Divestment: 30 Old Toh Tuck Road, Singapore 5-storey ramp-up logistics Description building located in the Western part of Singapore Remaining Land Tenure ~39 years (as at 31 Mar 2018) Gross Floor Area 16,353 sqm Acquisition Year/ Price 2006/ S$19.6 m Book Value S$20.3 m (as at 31 Mar 2018)
Slide 24: Capital Management
D ascendas Reit Capital Management 24
Slide 25: Healthy Balance Sheet
Healthy Balance Sheet Aggregate leverage remained healthy at 34.4% Available debt headroom of ~S$1.0b to reach 40.0% aggregate leverage As at As at As at 31 Mar 2018 31 Dec 2017 31 Mar 2017 Total Debt (S$m) (1) 3,563 3,649 3,442 Total Assets (S$m) 10,354 10,369 10,171 Aggregate Leverage 34.4% 35
Slide 26: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile Well-spread debt maturity with the longest debt maturing in 2029 Average debt maturity improved from 2.8 years to 3.2 years: Issued S$200m 7-year Notes at 3.14% (SOR + 70bps) in Mar 2018 Extended S$200m committed revolving credit facility by 3 years 17% 700
Slide 27: Key Funding Indicators
Key Funding Indicators Robust indicators enable Ascendas Reit to borrow at competitive costs As at As at As at 31 Mar 2018 31 Dec 2017 31 Mar 2017 Aggregate Leverage 34.4% (1) 35.2% 33.8% Unencumbered Properties as % 89.7% 89.7% 89.3% of Total Investment Properties (2) Interest Cover Ratio 5.9 x 5
Slide 28: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management 71.9% of borrowings are on fixed rates with an average term of 3.3 years 50 bps increase in interest rate is expected to have a pro forma impact of S$5.0m decline in distribution or 0.17 cent decline in DPU Decrease in Change as Change in Interest Pro Forma
Slide 29: Annual Property Revaluation
Annual Property Revaluation Total valuation of 130 properties was S$10.14b (1) Same-store valuation (2) of 126 properties @ 31 Mar 2018 was stable at S$9.84b (vs. S$9.75b @ 31 Mar 2017) Capitalisation rate of 6.24% for total portfolio (vs. 6.29% @ 31 Mar 2017) As at 31 Mar 2018 Valuation Weigh
Slide 30: Asset Management: Portfolio Update
Asset Management: Portfolio Update 30
Slide 31: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 98.5% 98.5% 96.3% 100.0% 89.5% 91.5% 91.1% 90.2% 88.8% 88.6% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Singapore Australia Total Mar-18 Dec-17 Mar-17 Gross Floor Area 3,012,157 (2) 737,092 (3) 3,749,249 (sqm) (1) Note: (1) Gross Floor Area as at 31 Ma
Slide 32: Singapore: Occupancy
Singapore: Occupancy Occupancy improved by 0.7% to 89.5% mainly due to higher occupancies at Techpoint, 20 Tuas Avenue 6 and Xilin Districentre Building D As at 31 Mar 18 31 Dec 17 31 Mar 17 Total Singapore Portfolio GFA (sqm) 3,012,157(1)(2)(3) 3,024,074(2)(3) 3,025,823(2)(4) Singapore Portfolio
Slide 33: Australia: Occupancy
Australia: Occupancy Occupancy maintained at 98.5% As at 31 Mar 18 31 Dec 17 31 Mar 17 Total Australian Portfolio GFA (sqm) 737,092 734,645 692,153 Australian Portfolio Occupancy (same store) (1) 98.4% 98.4% 96.3% Occupancy of Australian Investments 100.0% 100.0% 100.0% Completed in the last 12 mo
Slide 34: Singapore: Sources of New Demand (4Q FY17/18)
Singapore: Sources of New Demand (4Q FY17/18) Continues to attract demand from a wide spectrum of industries 0.4% 0.9% 8.4% 5.2% 4.5% 0.2% 8.4% 6.0%4.6% 0.8% 3.5% 3.0% 9.3% 1.9% 1.8% 0.9% 0.2% 14.4% 0.2% By NLA By Gross Revenue 15.2% 44.6% 65.4% Transport and Storage Biomedical Others Precision En
Slide 35: Singapore: Sources of New Demand (FY17/18)
Singapore: Sources of New Demand (FY17/18) Continues to attract demand from a wide spectrum of industries 0.9% 1.7% 0.8% 1.3% 7.8% 5.1% 8.2% 4.0% 8.6% 2.5% 0.5% 8.7% 2.7% 0.6% 2.5% 2.4% 2.1% 0.3% 0.5% 12.7% 15.4% By NLA By Gross Revenue 20.8% 36.4% 53.5% Transport and Storage Others IT Precision E
Slide 36: Portfolio Rental Reversions
Portfolio Rental Reversions Portfolio reversions of 0.7% and -6.8% were recorded for leases renewed in FY17/18 and 4Q FY17/18 respectively Rental reversion is expected to see slight improvement in FY18/19 Percentage Change in Renewal Rates (1) Multi-tenant Buildings FY17/18 FY16/17 4Q FY17/18 4Q
Slide 37: Weighted Average Lease Expiry
Weighted Average Lease Expiry (By gross revenue) Portfolio Weighted Average Lease Expiry (WALE) at 4.2 years WALE (as at 31 Mar 18) Years Singapore 4.0 Australia 5.1 Portfolio 4.2 37
Slide 38: Portfolio Lease Expiry Profile
Portfolio Lease Expiry Profile (as at 31 Mar 18) Breakdown of expiring leases Portfolio weighted average lease to expiry (WALE) of 4.2 years for FY18/19 and FY19/20 Lease expiry is well-spread, extending beyond 2032 6% About 14.0% of gross revenue is due for renewal in FY18/19 6% 24% Weighte
Slide 39: Singapore: Lease Expiry Profile
Singapore: Lease Expiry Profile (as at 31 Mar 18) Breakdown of expiring leases Singapore portfolio weighted average lease to expiry (WALE) for FY18/19 and FY19/20 of 4.0 years 6% Lease expiry is well-spread, extending beyond 2032 26% 15.2% of Singapore’s gross revenue is due for renewal in 25%
Slide 40: Australia: Lease Expiry Profile
Australia: Lease Expiry Profile (as at 31 Mar 18) Breakdown of expiring leases Australia portfolio weighted average lease to expiry (WALE) of for FY18/19 and FY19/20 5.1 years Lease expiry is well-spread, extending beyond 2031 14% 6.3% of Australia’s gross revenue is due for renewal in FY18/19
Slide 41: Ongoing Projects: Improve portfolio quality
Ongoing Projects: Improve portfolio quality Estimated Estimated Country Value (S$m) Completion Date Asset Enhancement Initiatives 34.5 Nordic European Centre (New) Singapore 8.5 4Q FY18/19 Aperia (New) Singapore 13.7 3Q FY18/19 21 Changi South Avenue 2 Singapore 4.5 1Q FY18/19 KA Centre, KA Place an
Slide 42: New Asset Enhancement Initiative: Nordic European Centre
New Asset Enhancement Initiative: Nordic European Centre, International Business Park, Singapore Activate the main lobby with shared collaborative spaces for tenants and visitors Refresh building façade Delight tenants with gym and End-of-trip facility, promoting Description Live-Work-Learn-Pl
Slide 43: New Asset Enhancement Initiative: Aperia
New Asset Enhancement Initiative: Aperia, Kallang Ave, Singapore Improve tenant mix with more F&B options and active lifestyle venues such as rock climbing, gym & yoga studio Create a Food Street corridor with more F&B options such as Description restaurant, café and take-away kiosk Enhance dr
Slide 44: Asset Management: Portfolio Resilience
Asset Management: Portfolio Resilience 44
Slide 45: Well Diversified Portfolio
Well Diversified Portfolio By value of Investment Properties 6.9% Logistics & 31.7% Distribution Business & Logistics and Science Park High-Specs & Integrated Centres Distribution Data Centres Singapore Suburban Offices Singapore Development, Centres Australia 11% Australia 68.3% Amenities & 11% Ret
Slide 46: Tenants' Industry Diversification
Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 11.4% Financial 9.6% Distributors, trading company 9.3% M&E and Machinery & Equipment 8.7% Life Science & Other Scientific Activities 7.8% Information Technology 7.4% Telecommunication & Datacentre 6.9
Slide 47: Quality and Diversified Customer Base
Quality and Diversified Customer Base Total customer base of around 1,320 tenants Top 10 customers (as at 31 Mar 2018) account for about 20.6% of portfolio gross rental income On a portfolio basis, weighted average security deposit is about 5.5 months of rental income 4.9% 3.1% 2.1% 2.1% 1.7%
Slide 48: Diversified Portfolio
Diversified Portfolio Aperia, 5.4% ONE @ Changi City, 4.1% 12, 14 & 16 Science Park Drive, 3.6% 1, 3 & 5 Changi Business Park Crescent, 3.4% Kim Chuan Telecommunication Complex , 2.7% TelePark, 2.5% 40 Penjuru Lane, 2.2% 31 International Business Park, 2.2% Neuros & Immunos, 2.1% Hyflux Innovation C
Slide 49: MTB Occupancy: NPI & DPU Sensitivity
MTB Occupancy: NPI & DPU Sensitivity 100 bps increase in MTB occupancy is expected to result in a 0.8% increase in portfolio net property income or about 0.18 cents increase in DPU Change in MTB Expected Change in Change in Portfolio Impact on Full FY Occupancy Annualised MTB NPI NPI (%) DPU (cent
Slide 50: Market Outlook
D ascendas Reit Market Outlook 50
Slide 51: Market Outlook
Market Outlook A rebound in investment and trade has contributed to the cyclical recovery in the global economy. However, the global outlook is still subject to downside risks, including in particular the escalating trade tensions between the US and China. Singapore‘s economy is forecast to grow
Slide 52: Additional Information
Additional Information (1) Quarterly Results (2) Ascendas Reit Singapore Occupancy vs Industrial Average (3) Singapore Industrial Property Market 52
Slide 53: Quarterly Results
Quarterly Results FY16/17 FY17/18 Summary (S$ m) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Gross Revenue 208 205 209 209 831 213 216 217 216 862 Net Property 150 152 155 154 611 152 161 158 158 629 Income Total Amount Available for 107 113 115 112 446 118 119 116 115 468 Distribution No. of Units in 2,674
Slide 54: Ascendas Reit Singapore Occupancy vs Industrial Average
Ascendas Reit Singapore Occupancy vs Industrial Average 100% 95% 93.2% 89.0% 89.1% 90% 88.1% 86.1% 86.6% 85% 80% Occupancy Rate 75% 70% 65% 60% 55% 50% Business and Science Park Hi-Specs and Light Industrial Logistics Ascendas Reit JTC Statistics Source : Ascendas Reit’s Singapore portfolio as at 31
Slide 55: Average Market Rents by Segment (Singapore)
Average Market Rents by Segment (Singapore) 120.00 Industrial Rental Index 4Q2017: 100.00 91.2 2Q2017: 3Q2017: 80.00 92.3 91.3 60.00 40.00 20.00 Source : JTC’s Fourth Quarter Market Report 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Business Park (C
Slide 56: Singapore Industrial Market: New Supply
Singapore Industrial Market: New Supply Potential new supply of about 2.8m sqm (~5.9% of existing stock) over next 3 years, of which 47% are pre-committed Island-wide occupancy was 88.9% as at 31 Dec 17 (vs. 88.6% as at 30 Sep 17) New Existing % of New/ Sector ('000 sqm) 2018 2019 2020 Supply Su
Slide 57: Singapore Business & Science Parks: New Supply
Singapore Business & Science Parks: New Supply % Pre- Expected GFA Location Developer committed Completion (sqm) (estimated) Under Construction 2018 Pasir Panjang Road Singapore Science Park Ltd 11,610 100% Changi Business Park 2018 Kingsmen Creatives Ltd 13,130 100% Central 2 2018 Media Circle BP-D
Slide 58: 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