CapitaLand Ascendas REIT · SGX:A17U
CapitaLand Ascendas REIT — Ascendas Reit — Investor Presentation (May 2019)
49 slides from CapitaLand Ascendas REIT's investor presentation, May 2019
Slide 1: Investor Presentation
Singapore Australia Investor Presentation May 2019 United Kingdom
Slide 2: Disclaimers
Disclaimers ▪ This material shall be read in conjunction with Ascendas Reit’s financial statements for the financial year ended 31 March 2019. ▪ This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results
Slide 3: Agenda
Agenda Overview of Ascendas Reit 4 Investment Management 12 Capital Management 19 Asset Management 25 Portfolio Resilience 36 Corporate Governance 40 Market Outlook 44 3
Slide 4: Overview of Ascendas Reit
Overview of Ascendas Reit 4
Slide 5: Largest Singapore Industrial Reit (market capitalisation comparison)
S$m 2,000 4,000 6,000 8,000 0 10,000 12,000 14,000 Sabana REIT 989 Soilbuild Business Space REIT 1,248 Cache Logistics 1,310 AIMS AMP Capital REIT 1,470 EC World REIT 1,488 Ascendas India Trust 2,086 Cromwell European Reit 2,222 Industrial Keppel DC REIT 2,253 Frasers Logistics & Industrial Trust 2,
Slide 6: Largest Singapore Industrial Reit
Largest Singapore Industrial Reit Investment Market Property Capitalisation S$11.1b S$9.1b 3 Countries Singapore 79% Australia 14% United Kingdom 7% 171 Properties Business Park and 36% Suburban Office Logistics & Distribution Centres 29% High-Specifications & Data 20% Centres Light Industrial & Fla
Slide 7: Steady Growth since Listing
Steady Growth since Listing No. of Properties Distribution per Unit (cents) 171 16.035 7.630 8 FY02/03 FY18/19 FY02/03 FY18/19 7
Slide 8: Well Diversified Portfolio
Well Diversified Portfolio By Value of Investment Properties ▪ As at 31 Mar 2019, total investment Australia 14% properties stood at S$11.14 b Logistics and • Singapore portfolio: S$8.77 b Logistics & Distribution Suburban United Centres Distribution Offices Kingdom 7% • Australia portfolio: S$1.56
Slide 9: Singapore: 98 properties
Singapore: 98 properties Widest variety of industrial properties Properties are well-located along major expressways, airport, seaport and proximity to Integrated Development MRT stations , Amenities & Retail Logistics & Light industrial and Distribution 8% Flatted Factories Centres Singapore 11% 14
Slide 10: Australia: 35 properties
Australia: 35 properties (32 logistics + 3 suburban offices) Breakdown by Geography Located in 4 key cities: Sydney, Melbourne, Brisbane and Perth Melbourne 26% Brisbane 207,061 sqm Perth 20,895 sqm Logistics 9 properties Perth Suburban 2 Properties Logistics 1 property 2% Office Investment Brisbane
Slide 11: United Kingdom: 38 logistics properties
United Kingdom: 38 logistics properties North West 105,489 sqm Breakdown by Geography England Logistics 5 properties Yorkshire & 67,409 sqm the Humber Logistics 4 properties South East 12% North West East Midlands 50,083 sqm East Midlands 16% Logistics 2 properties 5% Yorkshire and Investment the Hu
Slide 12: Investment Management
Investment Management 12
Slide 13: AUM Growth
AUM Growth ▪ Third party acquisitions: 56% ▪ Sponsor’s pipeline: 21% ▪ Development: 13% No. of Properties Total Assets 171 (S$ m) 11,414 8 636 FY02/03 FY18/19 FY02/03 FY18/19 13
Slide 14: Capital Recycling
Capital Recycling ▪ Divested 14 projects (S$0.7b) at above NAV Completed Divestments to Date 4 3 2 2 442 2 1 0 70 39 61 13 38 FY18/19: 30 Old Toh Tuck Road FY 0 6 / 0 7 FY02/03 FY03/04 FY04/05 FY05/06 FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 ASS
Slide 15: Development Capability
Development Capability ▪ Has capability and capacity to develop own properties profitably Development Revaluation Capital Gains Development Segment Completion Cost 31 Mar 2019 (S$m) (S$m) (S$m) 1 Courts Megastore Integrated Development Nov-06 46.0 64.0 +39% 2 Giant Hypermart Integrated Development F
Slide 16: Asset Enhancement Initiatives
Asset Enhancement Initiatives ▪ Continuously identify buildings to maximise returns Maximise Plot Ratio Multi-tenant to Built-to-Suit Facility Redevelopment 40 Penjuru Lane 50 Kallang Avenue 20 Tuas Avenue 1 ▪ Construction of a new four storey ▪ Upgrading the specifications for ▪ Redeveloped into a
Slide 17: Investment Highlights: Acquisitions
Investment Highlights ▪ Acquired a total of S$948 m worth of properties in UK (S$832.4 m) and Australia (S$115.6 m) Purchase FY18/19 Country Consideration Completion Date (S$m) Acquisition 948.0 Australia 169-177 Australis Drive 34.5 4 Jun 2018 (Melbourne) Australia 1314 Ferntree Gully Drive 16.4 26
Slide 18: Investment Highlights: Redevelopment, AEI and Divestments
Investment Highlights ▪ Completed 1 redevelopment and 5 asset enhancement initiatives worth S$97.9 m ▪ Divested 2 properties which generated total proceeds of S$37.6 m Total Cost/ Sale FY18/19 Country Completion Date Price (S$m) Redevelopment 61.4 20 Tuas Avenue 1 Singapore 61.4 Apr 2018 Asset Enhan
Slide 19: Capital Management
Capital Management 19
Slide 20: Healthy Balance Sheet
Healthy Balance Sheet ▪ Disciplined approach towards capital and risk management ▪ Competitive cost of capital – A3 Moody’s credit rating 3 Aggregate Leverage Weighted Tenure Average all-in Moody’s Rating 36.3% Of Debt Debt Cost A3 4.0 years 3.0% Interest Cover Unencumbered Properties as % Debt/ EBI
Slide 21: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY29/30 ▪ Average debt maturity improved to 4.0 years (3QFY18/19: 3.6 years; 4QFY17/18: 3.2 years) • Issued HK$1.45 b (S$252 m) 10-yr bond at a tight 115 bps spread in Mar 2019. The proceeds was swapped i
Slide 22: High Level of Currency Hedge
High Level of Currency Hedge ▪ Achieved high level of natural hedge in Australia (75.5%) and the United Kingdom (100%) to minimise the effects of adverse exchange rate fluctuations AUD GBP Natural Hedge Natural Hedge 75.5% 100% A$1.6 b (S$1.6 b) A$1.2 b (S$1.2 b) £0.5 b £0.5 b (S$0.8 b) (S$0.8 b) To
Slide 23: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management ▪ 83.0% of borrowings are on fixed rates with an average term of 3.6 years ▪ 50 bps increase in interest rate is expected to have a pro forma impact of S$3.5m decline in distribution or 0.11 cent decline in DPU Decrease in Change as Change in Interest Pro Forma
Slide 24: Annual Property Revaluation
Annual Property Revaluation ▪ Total valuation of 171 properties was S$11.1b ▪ Same-store valuation (1) of 129 properties @ 31 Mar 2019 improved to S$10.22b (vs. S$10.11b @ 31 Mar 2018) Weighted Valuation Cap Rates As at 31 Mar 2019 Average Cap (S$b) Range Rates Singapore portfolio (98 properties) 8.
Slide 25: Asset Management
Asset Management 25
Slide 26: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 98.0% 98.1% 98.5% 100.0% 100.0% 91.9% 91.3% 91.5% 88.3% 87.3% 89.5% N.A. Singapore Australia United Kingdom Total Mar-19 Dec-18 Mar-18 Gross Floor 3,034,122 810,772 (2) 509,032 (3) 4,353,926 Area (sqm) (1) (1) Gross Floor Area as at 31 Mar 2019. (2) Gross Floor Area f
Slide 27: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Portfolio reversions of 3.7% and 6.6% were recorded for leases renewed in FY18/19 and 4Q FY18/19 respectively ▪ Rental reversion is expected to be flat in FY19/20 in view of the current global uncertainty and excessive supply of industrial properties in Singapore % Chan
Slide 28: Weighted Average Lease Expiry
Weighted Average Lease Expiry (By gross revenue) ▪ Portfolio Weighted Average Lease Expiry (WALE) stood at 4.2 years WALE (as at 31 Mar 2019) Years Singapore 3.8 Australia 4.5 United Kingdom 9.3 Portfolio 4.2 28
Slide 29: Portfolio Lease Expiry Profile
Portfolio Lease Expiry Profile (as at 31 Mar 2019) Breakdown of expiring leases ▪ Portfolio weighted average lease to expiry (WALE) of 4.2 years for FY19/20 and FY20/21 ▪ Lease expiry is well-spread, extending beyond 2032 5.9% 0.5% ▪ About 16.3% of gross rental income is due for renewal in 6.0% FY19
Slide 30: Ongoing Projects: Improve Portfolio Quality
Ongoing Projects: Improve Portfolio Quality Estimated Estimated Country Value (S$m) Completion Date Development 181.2 Built-to-suit business park Singapore 181.2 3Q FY20/21 development for Grab Redevelopment 35.0 25 & 27 Ubi Road 4 (NEW) Singapore 35.0 1Q FY21/22 Asset Enhancement Initiatives 21.5 5
Slide 31: Development (On-going): Build-to-suit Business Park for Grab
Development (On-going): Build-to-suit Business Park Development in Singapore for Grab Land Premium S$84.0 m Total Construction Costs S$88.8 m Stamp Duty & Other Transaction S$8.4 m Costs Total Development Costs S$181.2 m Land Area 11,435 sqm Land Tenure 30 years Gross Floor Area (GFA) 42,310 sqm Occ
Slide 32: Redevelopment (New): Ubi Road 4, Singapore
Redevelopment (New): 25 & 27 Ubi Road 4, Singapore ▪ Demolition of two existing light industrial buildings and redeveloping them into a single High-Specifications building ▪ Maximise site’s rental potential given the locational advantage, Description being 1-2 mins walk to Ubi MRT station ▪ Upgradin
Slide 33: Asset Enhancement Initiative (New): Serangoon North Avenue 4
Asset Enhancement Initiative (New): 52 & 53 Serangoon North Avenue 4, Singapore ▪ Utilize remaining plot ratio by converting the roof level to a new production area ▪ Enhance building frontage and Description introducing an open fencing design. ▪ Upgrade drop-off point canopy, main lobby and existin
Slide 34: Asset Enhancement Initiative (New): Plaza, Changi Business Park Crescent
Asset Enhancement Initiative (New): Plaza 8 (Part of 1, 3 & 5 Changi Business Park Crescent), Singapore ▪ Enhancement works to Podiums, reception, lobby, restrooms, common corridors, perimeter walkways etc. ▪ Improve existing layout of the Description driveway and creating new drop-off bays with new
Slide 35: Asset Enhancement Initiative (New): ONE@Changi City
Asset Enhancement Initiative (New): ONE@Changi City, Singapore ▪ Enhancement work to reception and lobby, and creating new lounge, discussion area to create a premium look and feel ▪ Enhancement work to drop-off area, with new ceiling design, Description new feature wall design, graphics for existin
Slide 36: Portfolio Resilience
Portfolio Resilience 36
Slide 37: Customers' Industry Diversification
Customers’ Industry Diversification By Monthly Gross Revenue ▪ Well-diversified customer base across more than 20 industries 3rd Party Logistics, Freight Forwarding 12.7% Distributors, trading company 9.4% Financial 9.0% M&E and Machinery & Equipment 8.3% Life Science & Other Scientific Activities 7
Slide 38: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of around 1,360 tenants ▪ Top 10 customers (as at 31 Mar 2019) account for about 20.2% of monthly portfolio gross revenue ▪ On a portfolio basis, weighted average security deposit is about 5.0 months of rental income 4.8% 3.1% 2.1% 2.0% 1.6
Slide 39: Diversified Portfolio
Diversified Portfolio Aperia, 5.3% ONE@ Changi City, 3.8% 12, 14 & 16 Science Park Drive, 3.6% 1, 3 & 5 Changi Business Park Crescent, 3.3% Kim Chuan Telecommunication Complex, 2.6% TelePark, 2.3% Neuros & Immunos, 2.2% Pioneer Hub, 2.2% Hyflux Innovation Centre, 2.0% TechPlace II, 2.0% 40 Penjuru L
Slide 40: Corporate Governance
Corporate Governance 40
Slide 41: Corporate Governance Framework
Corporate Governance Framework AFM, as manager of Ascendas Reit, Ascendas Reit, listed since is a Capital Markets Service License November 2002, is governed by the Holder. Activities conducted by AFM SGX Listing requirements are regulated by MAS. 41
Slide 42: Key Guidelines
Key Guidelines Gearing ▪ Aggregate leverage should not exceed 45% of the fund's deposited property Valuation ▪ Full valuation at least once a year Interested Party Transaction ▪ Asset is acquired from the interested parties at a price not more than the higher of the two assessed values, or sold to i
Slide 43: High Standards of Corporate Governance: Staying Ahead in Best Practices & Policies
High Standards of Corporate Governance: Staying Ahead in Best Practices & Policies ▪ Early adopter of best practices: SIAS Investors’ Choice • First AGM held in 2007, MAS made it Award compulsory for S-REITs in 2010 Most Transparent Company (2007 to 2015) • Nominating and Remuneration Singapore Corp
Slide 44: Market Outlook
Market Outlook 44
Slide 45: Market Outlook
Market Outlook ▪ The global economy continues to face considerable headwinds including the on- going US-China trade conflict and prolonged Brexit uncertainties. ▪ Singapore’s economy grew 1.3% y-o-y in 1Q 2019 and is expected to grow at slightly below the mid-point of the “1.5% to 3.5%” forecast ran
Slide 46: Additional Information
Additional Information 1 Historical Quarterly Results 2 Singapore Industrial Market: New Supply 46
Slide 47: Historical Quarterly Results
Historical Quarterly Results Financial FY17/18 FY18/19 Highlights (S$ m) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Gross Revenue 213 216 217 216 862 217 218 226 225 886 Net Property 152 161 158 158 629 159 159 168 164 650 Income Total Amount Available for 118 119 116 115 468 117 115 124 130 486 Distributi
Slide 48: Singapore Industrial Market: New Supply
Singapore Industrial Market: New Supply ▪ Potential new supply of about 3.2 m sqm (~6.5% of existing stock) over next 3 years, of which 55% are pre-committed ▪ Island-wide occupancy was 89.3% as at 31 Mar 19 (vs. 89.3% as at 31 Dec 18) New Existing % of New/ Sector ('000 sqm) 2019 2020 2021 Supply S
Slide 49: Thank you
Thank you 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