Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — OUE Commercial REIT — Q3 2021 Earnings Presentation
35 slides from Singapore Exchange's earnings presentation, Nov 2, 2021
Slide 1: Business Update for 3rd Quarter 2021
Business Update for 3rd Quarter 2021 2 November 2021
Slide 2: Important Notice
Important Notice This presentation is for information purposes only and does not constitute an invitation, offer or solicitation of any offer to acquire, purchase or subscribe for units in OUE Commercial REIT (“OUE C-REIT”, and units in OUE C-REIT, “Units”). The value of Units and the income derived
Slide 3: Agenda
Agenda ▪ Key Highlights ▪ Financial Summary and Capital Management ▪ Commercial Segment ▪ Hospitality Segment ▪ Looking Ahead ▪ Appendices 3
Slide 4: Key Highlights
Key Highlights ▪ Financial Performance ✓ Amount available for distribution was S$30.2 million, 7.5% lower year-on-year (“YoY”) mainly due to 50% divestment of OUE Bayfront Financial Performance ✓ Stable NAV per Unit of S$0.58 as at 30 September 2021 ▪ Commercial segment committed occupancy improved
Slide 5: Financial Summary & Capital Management
Financial Summary & Capital Management
Slide 6: 3Q 2021 Financial Performance
3Q 2021 Financial Performance 3Q 2021 3Q 2020 YoY Change (S$m) (S$m) (%) Revenue 58.5 70.9 (17.5) Net Property Income 46.2 55.8 (17.1) Share of Joint Venture Results 4.0 - NM Amount Available for Distribution(1) 30.2 32.7 (7.5) ▪ Net property income of S$46.2 million was 17.1% lower YoY mainly due t
Slide 7: Portfolio Composition
Portfolio Composition Crowne Plaza Mandarin Changi Airport Gallery Hotel master lease 8.3% 8.9% agreements provide Mandarin minimum rent of One Raffles Crowne Plaza One Raffles Gallery Place Changi Airport Place S$67.5 million 8.4% Retail 26.5% 9.0% 24.8% per annum(4) 15.5% Hospitality 26.9% Lippo P
Slide 8: Tenant Base and Portfolio Lease Expiry Profile
Tenant Base and Portfolio Lease Expiry Profile Maritime & Others Pharmaceuticals & Logistics 2.4% Healthcare 1.6% Legal 2.6% IT, Media & 2.8% Telecommunications Office Retail (1) Hospitality 3.6% Hospitality 26.5% Services 3.8% Manufacturing & 22.1% Distribution 3.9% 17.8% Real Estate & Property Ser
Slide 9: Capital Management
Capital Management ▪ As at 30 September 2021, aggregate leverage was 38.4% with stable weighted average cost of debt of 3.2% p.a ▪ Distribution is mitigated against interest rate fluctuations with 81.3% of debt on fixed rate basis As at 30 Sep 2021 As at 30 Sep 2020 Aggregate Leverage 38.4% 40.3% To
Slide 10: Capital Management
Capital Management ▪ In October, obtained maiden S$540 million sustainability-linked loan which incorporates interest rate reductions linked to predetermined sustainability performance targets on energy and water efficiencies ▪ Proceeds will be used to refinance existing borrowings ➢ No further refi
Slide 11: Commercial Segment
Commercial Segment
Slide 12: Commercial Segment Performance – 3Q 2021
Commercial Segment Performance – 3Q 2021 (S$ million) 23.0% 23.4% 54.0 41.6 40.5 31.0 Revenue Net Property Income 3Q 2021 3Q 2020 ▪ Lower YoY revenue and net property income in 3Q 2021 was due to the recognition of contribution from OUE Bayfront as share of joint venture results. OUE Bayfront income
Slide 13: Office Segment Occupancy
Office Segment Occupancy Singapore ▪ OUE Bayfront’s committed office occupancy Chart Title as at 30 September 2021 was steady at 100% 98.6% 98.6%, ahead of the wider market 95% 94.5% ▪ Uptick in committed office occupancy of One 90.6% 90% Raffles Place and OUE Downtown Office to 90.5% 90.5% and 90.6
Slide 14: Committed and Average Office Rents
Committed and Average Office Rents ▪ Rental reversions for Singapore office properties in 3Q 2021 was -5.2% due to relatively higher-than-market expiring rents. YTD rental reversion ranged from -3.6% to 2.5% ▪ Rental reversion for Lippo Plaza in 3Q 2021 was flat Average Expired Comparable Sub-market
Slide 15: Average Passing Rents
Average Passing Rents S$ psf/mth 12.25 12.31 12.44 12.45 11.75 11.85 11.43 11.60 11.98 10.40 10.58 10.26 10.28 9.92 9.45 9.68 9.92 9.99 10.06 10.03 ▪ Sustained YoY growth in average 6.94 7.27 7.92 7.93 8.05 8.03 passing rents for OUE Bayfront due Singapore to positive rental reversions in past (Offi
Slide 16: Top 10 Tenants – Commercial Segment
Top 10 Tenants – Commercial Segment Top 10 Tenants(1) 7.3% By Gross Rental Income 26.5% 6.0% 3.1% 1.8% 1.8% 1.5% 1.4% 1.2% 1.2% 1.2% Deloitte & Luxury Bank of Virgin Active Professional Victoria's Allen & Overy Regus Moody's Aramco Asia Touche LLP Ventures America Merrill Singapore Pte Investment Se
Slide 17: Lease Expiry Profile - Commercial Segment
Lease Expiry Profile - Commercial Segment 5.3% of OUE C-REIT’s commercial segment gross rental income remains due for renewal for balance of 2021 By NLA By Gross Rental Income Completed (Year-to-date) 28.1% 26.5% 25.9% 24.6% 22.2% 21.1% 21.1% 20.1% 19.8% 19.0% 5.1% 5.3% 2021 2022 2023 2024 2025 and
Slide 18: Lease Expiry Profile by Commercial Property
Lease Expiry Profile by Commercial Property OUE Bayfront One Raffles Place WALE: 2.5 years (NLA); 2.5 Years (GRI) WALE: 1.9 years (NLA); 1.8 Years (GRI) 31.4% 31.5% 28.7% 28.1% 27.5% 28.5% 27.6% 25.6% 23.4% 18.4% 28.7% 21.5% 16.4% 20.9% 21.5% 25.7% 19.4% 19.4% 14.1% 12.4% 8.8% 9.5% 0.1% 0.1% 2021 20
Slide 19: Mandarin Gallery
Mandarin Gallery Committed Occupancy ▪ While occupancy was impacted by dampened leasing 1.8% 3.0% 5.5% 6.5% 0.9% 5.3% 5.9% sentiment, vacancy increase was also partly due to ongoing repositioning of certain spaces to F&B to 99.1% enhance tenant mix and strengthen appeal to shoppers 98.3% 97.8% 94.4%
Slide 20: Hospitality Segment
Hospitality Segment
Slide 21: Hospitality Segment Performance
Hospitality Segment Performance 3Q 2021 Revenue & NPI 3Q 2021 vs 2Q 2021 RevPAR (S$ million) (S$) Flat 0.3% 5.5% 11.5% 9.6% 16.9 16.9 125 15.2 15.3 111 102 92 68 72 Revenue Net Property Income Mandarin Orchard Crowne Plaza Changi Hospitality Segment Singapore Airport 3Q 2021 3Q 2020 3Q 2021 2Q 2021
Slide 22: Looking Ahead
Looking Ahead
Slide 23: Outlook
Outlook Singapore - Office ▪ Despite potential demand risks as occupiers assess their longer-term space requirements, limited supply pipeline is expected to support a positive medium-term outlook for Grade A office rents ▪ OUE C-REIT’s portfolio of high quality Grade A office properties and diversif
Slide 24: Ongoing Priorities
Ongoing Priorities Proactive Asset Preserving Cash Capitalise on Management & Flow & Financial Value-Enhancing Tenant Engagement Flexibility Opportunities ▪ Sustaining occupancy remains a key ▪ Focus on cost management and cash ▪ Transformational re-branding of focus conservation Mandarin Orchard Si
Slide 25: Appendices
Appendices ▪ Overview of OUE C-REIT ▪ Premium Portfolio of Assets ▪ Sustainability Commitment ▪ Singapore Office Market ▪ Shanghai Office Market ▪ Singapore Hospitality Market ▪ Hotel Master Lease Details
Slide 26: Overview of OUE C-REIT
Overview of OUE C-REIT One of the Largest Diversified Total Assets 7 7 High quality prime assets SGX-listed REITs S$ 5.8 billion(1) High quality prime assets 3 6 properties in Singapore and 1 Asset classes property in Shanghai OUE Bayfront One Raffles Place OUE Downtown Office Lippo Plaza Mandarin G
Slide 27: Premium Portfolio of Assets
Premium Portfolio of Assets Strategically-located assets in the prime business districts of Singapore and Shanghai OUE Downtown Mandarin Orchard Crowne Plaza OUE Bayfront One Raffles Place Lippo Plaza Mandarin Gallery Office Singapore Changi Airport Description A landmark Grade A Iconic integrated G
Slide 28: Sustainability Commitment
Sustainability Commitment ▪ Committed to improving energy efficiency of portfolio to align with low carbon emissions strategy Climate ✓ Green mark rating achieved for all commercial properties and Mandarin Orchard Singapore Resilience ✓ Continued to achieve reductions(1) in portfolio intensity level
Slide 29: Singapore Office Market
Singapore Office Market ▪ Core CBD Grade A occupancy decreased 1.1 ppt QoQ to 94.5% in 3Q 2021 due to an increase in uncommitted supply from a new office completion. Nonetheless, core CBD Grade A office rents rose for the second consecutive quarter to S$10.65 psf per month, 1.4% higher QoQ ▪ Despite
Slide 30: Singapore Office Demand and Supply vs Office Rental
Singapore Office Demand and Supply vs Office Rental Island-wide Office Demand, Supply and Office Rents ('000 sq ft) (S$ psf/mth) 7,000 20 6,000 18 16 5,000 14 4,000 12 3,000 10 2,000 8 1,000 6 4 0 2 -1,000 0 -2,000 -2 -3,000 -4 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 20
Slide 31: Shanghai Office Market
Shanghai Office Market Shanghai 10.50 10.36 100.0% 10.10 10.30 10.30 10.40 10.40 10.30 10.15 10.21 10.26 10.3510.35 10.32 10.27 10.20 10.10 11.00 ▪ Shanghai CBD Grade A office occupancy 9.70 9.90 9.68 10.00 95.0% 94.0% 95.0% 96.0% 9.28 9.09 9.00 8.88 8.94 8.99 9.00 increased 1.2 ppt QoQ to 87.2%, wh
Slide 32: Shanghai CBD Demand, Supply and Vacancy
Shanghai CBD Demand, Supply and Vacancy Grade A Office Net Absorption, New Supply and Vacancy Rate Office Supply Pipeline in Shanghai CBD ('000 sq m) ('000 sq m) 1,000 16.0% 900 900 14.0% 780 800 800 12.0% 700 700 600 10.0% 600 500 8.0% 500 377 400 400 340 6.0% 300 300 218 4.0% 200 200 2.0% 100 60 1
Slide 33: Singapore Hospitality Market
Singapore Hospitality Market ▪ Singapore visitor arrivals declined 85.7% YoY to 2.7 million for 2020 due to restrictions on inbound short-term visitors to stem the spread of COVID-19. YTD September arrivals were down 93.7% YoY at 0.2 million ▪ In the latest survey of UNWTO Panel of Tourism Experts,
Slide 34: Hotel Master Lease Details
Hotel Master Lease Details Property Mandarin Orchard Singapore Crowne Plaza Changi Airport No. of Guestrooms 1,077 563 Master Lease Variable Rent Comprising Sum of: Variable Rent Comprising Sum of: Rental (i) 33.0% of MOS GOR(1) ; and (i) 4% of Hotel F&B Revenues; (ii) 27.5% of MOS GOP(2); (ii) 33%
Slide 35: Thank You
COMMERCIAL Thank You