Frasers Property Ltd. · SGX:TQ5
Frasers Property — Frasers Commercial Trust — 1QFY17 Earnings Presentation
34 slides from Frasers Property's earnings presentation, Jan 23, 2017
Slide 1: Frasers Commercial Trust 1QFY17 Financial Results
Frasers Commercial Trust 1QFY17 Financial Results 23 January 2017
Slide 2: Important notice
Important notice Certain statements in this Presentation constitute “forward-looking statements”, including forward-looking financial information. Such forward-looking statement and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual resu
Slide 3: Contents
Contents 3 Results Portfolio Review Capital Management Looking Forward
Slide 4: Results
Results FRASERS COMMERCIAL
Slide 5: Results – 1QFY17 Key highlights
Results – 1QFY17 Key highlights 5 1QFY17 results attributed to the better performance of 357 Collins Street, overall stable portfolio and stronger Australian dollar Distribution to Unitholders (S$’000) 1.2% increase in distribution to Unitholders 1 Better performance from 357 Collins Street: Hig
Slide 6: Results – 1QFY17 Financial highlights
Results – 1QFY17 Financial highlights 6 1.2% rise in distributable income for 1QFY17 1 Oct 2016 – 31 Dec 1QFY17 Y-o-Y Contributing factors 2016 (S$ ‘000) Change (%) Higher revenue contribution from 357 Collins Street due to higher occupancy and rental Gross Revenue 39,679 0.1% rates achieved a
Slide 7: Results – 1QFY17 Financial highlights
Results – 1QFY17 Financial highlights 7 1QFY17 results attributed to the better performance of 357 Collins Street, overall stable portfolio and stronger Australian dollar Net Property Income (S$m) TOTAL: S$29.2 million for 1QFY17 Singapore: S$15.7 million (54%) Australia: S$13.5 million (46%) * Re
Slide 8: Results – Financial highlights: DPU
Results – Financial highlights 8 1QFY17 DPU remained steady YoY and increased approximately 2% QoQ, with no management fees taken in Units1 DPU (Cents) 1 In 1QFY16, 23% of the Manager’s management fees for the quarter were taken in Units. In 4QFY16, no management fees were taken in Units.
Slide 9: Results – Distribution payment
Results – Distribution payment 9 DRP will be applied for the distribution for 1QFY17 Distribution Period 1 October 2016 to 31 December 2016 Distribution of 2.5055 cents per Unit comprising: a) taxable income distribution of 1.6573 cents; Ordinary Unit Distribution Rate b) tax-exempt income distrib
Slide 10: Portfolio Review
Portfolio Review
Slide 11: Portfolio review – Valuation
Portfolio review – Valuation 11 Balanced portfolio of Singapore and Australian properties No one property accounts for more than 28% of portfolio value Singapore Asset values as at 31 December 2016 Perth Canberra Singapore $ 1,210.0 61% Melbourne Australia $ 779.8 39% Total $ 1,989.8 100% As a
Slide 12: Portfolio review – Occupancy Rates & WALE
Portfolio review – Occupancy Rates & WALE 12 Healthy average occupancy rate of 93.0% Healthy WALE of 3.8 years1 Geographical occupancy and % NPI contribution As at Key portfolio statistics 31 December 2016 Ave Occupancy 93.0% Portfolio WALE by gross rental 3.8 years income1 Planned vacancies
Slide 13: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 13 13 Well spread lease expiry profile provides income stability Lease expiry in FY21 and beyond increased to Lease expiry in FY17 was reduced to 15.3% after: 33.6% with the early Early renewal of the Microsoft lease at Alexandra renewal of the Microsoft T
Slide 14: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 14 Proactive management of leases Property Lease Expiry in FY17 as a Lease expiry was reduced to 8.2% after: proportion of Portfolio Gross Rental Early renewal of the Microsoft lease Income for a further 5 years from FY17 to FY22 Further committed leases
Slide 15: Portfolio review – Rental reversions
Portfolio review – Rental reversions 15 5.9%1 average positive rental reversion for 5 new/renewed leases that commenced in 1QFY17 at Alexandra Technopark and Central Park Alexandra Technopark: Central Park: +8.5% -17.2% 4 new/renewed leases aggregating approximately Retail space representing only
Slide 16: Portfolio review – Robust leasing activities
Portfolio review – Robust leasing activities 16 Active level of leasing activities Selected new/renewed leases in 1QFY17: Tenant Industry Property Thoughtworks Pte Ltd Consultancy/ Business services China Square Central Mouth Restaurant Food & beverage China Square Central LWC Pte Ltd Food & b
Slide 17: Portfolio review – Mid-term rent reviews
Portfolio review – Mid-term rent reviews 17 17 55% of FY17 leases have built-in step-up rents FY17 – 20 - Portfolio fixed % reviews GROSS RENTAL INCOME1 Average Total Property Leases step-up rent Property Portfolio China Square 3 1.5% 18.9% 3.4% Central 55 Market Street 2 0.7% 10.7% 0.4% Alexandra
Slide 18: Portfolio review – Stability of income
Portfolio review – Stability of income 18 Top 10 tenants: MNCs, government department and public listed companies Established names and well diversified across various sectors Contribute 58% of portfolio gross rental income and have a long WALE of 4.8 years as at 31 December 2016 Top 10 tena
Slide 19: Asset updates – Developments at China Square Central
Asset updates – Developments at China Square Central 19 Construction works for the development of the 16 storey Hotel and Commercial Project1 are on track and expected to be completed by mid-2019 New retail and commercial spaces with better frontage and visibility will also be created2 The H
Slide 20: Asset updates – Asset enhancement at Alexandra Technopark
Asset updates – Asset enhancement at Alexandra Technopark 20 Alexandra Technopark will be revamped to create a new campus-like environment More amenities, community-friendly spaces and greenery will be introduced to enhance well-being of tenants A new Central Plaza will be created to serve a
Slide 21: Portfolio review – Singapore assets update
Portfolio review – Singapore assets update 21 China Square Central – full 55 Market Street – Alexandra Technopark – occupancy at office tower healthy occupancy rate healthy occupancy rate Occupancy 88.3% (office tower: 100.0%)* 92.0% 94.6% WALE 1.3 years 1.4 years 1.0 years (1.4 years with lease e
Slide 22: Portfolio review – Australia asset updates
Portfolio review – Australia asset updates 22 Caroline Chisholm Centre 357 Collins Street – full Central Park – Long WALE of 7.0 – full occupancy with occupancy in a strong years# long WALE of 8.5 years market Occupancy 80.2% 100.0% 100.0% WALE 1.9 years (7.0 years with new lease#) 8.5 years 4.3 y
Slide 23: Capital Management
Capital Management FRASERS COMMERCIAL
Slide 24: Capital Management – Debt statistics
24 Capital Management – Debt statistics 24 Healthy gearing of 36.0% Healthy interest coverage ratio of 4.6 times Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 31 December 2016 Total Assets (S$’000) 2,068,644 Gross Bor
Slide 25: Capital Management and debt statistics
25 Capital Management and debt statistics 25 Well-spread debt maturity profile No refinancing required until September 2017 and all debts are unsecured 85% of gross borrowings on fixed rate Debt maturity Debt composition – floating vs. fixed interest rates Total facilities: S$746 million Wei
Slide 26: Looking Forward
Looking Forward
Slide 27: Solid fundamentals - Singapore office rents
Solid fundamentals - Singapore office rents 27 Singapore office - Grade B rents relatively more stable Singapore Grade A and Grade B office rents1 Grade A CBD Core ↓ 2.2% qoq to S$9.10 psf Grade B CBD Core ↓ 2.0% qoq to S$7.35 psf Grade B Islandwide ↓ 2.1% qoq to S$6.95 psf Source: CBRE Research 1
Slide 28: Solid fundamentals - demand, supply and outlook for Singapore CBD office
Solid fundamentals - demand, supply and outlook for Singapore CBD office 28 Office supply-demand dynamics1 Q4 2016 total island-wide office net absorption was 542,259 sf Island-wide vacancy increased marginally by 8 basis points to 6.0% in Q4 2016 Rents appeared close to finding support leve
Slide 29: Solid fundamentals - Singapore business park rents
Solid fundamentals - Singapore business park rents 29 Singapore business parks – City fringe business park rents remained stable in Q4 20161 Singapore Business Park (city fringe) rents1 Source: CBRE Research 1 CBRE, Singapore Market View, Q4 2016
Slide 30: Solid fundamentals - demand, supply and outlook for Singapore business park
Solid fundamentals - demand, supply and outlook for Singapore business park 30 Business Park supply-demand dynamics1 Business park market remained resilient in Q4 2016 Business park island-wide vacancy declined 60 basis points to 11.9% in Q4 2016 Net absorption of 114,054 sf in Q4 2016 was a
Slide 31: Perth CBD office supply and rents
Perth CBD office supply and rents 31 Premium Grade net face rents range between A$600 to A$725 per sqm per annum Vacancy rate in June 2016 was 21.8%, up from 16.6% in June 2015 Incentives currently around 47.5% and appears to be stabilising Increasing interest from suburban tenants as CBD
Slide 32: Melbourne CBD office supply and rents
Melbourne CBD office supply and rents 32 Vacancy was approximately 8% as at June 2016 Commercial office leasing activity in Central Melbourne reached a 5-year high in the twelve months to September 2016 Average net face rent for Grade A office space was A$450 to A$600 per sqm per annum with
Slide 33: Delivering growth
Delivering growth 33 33 Organic and in-organic initiatives to deliver growth in distributable income Prudent capital management Proactive asset Asset enhancement management DPU initiatives Yield-accretive acquisitions
Slide 34: Thank you
Thank you Frasers Centrepoint Asset Management (Commercial) Limited 438 Alexandra Road | #21-00| Alexandra Point | Singapore 119958 Tel: +65 6276 4882| Fax: +65 6276 8942| Email: fcot@fraserscentrepoint.com www. fraserscommercialtrust.com
Frasers Commercial Trust — 1QFY17 Earnings Presentation on 6ix