Oue Real Estate Investment Trust · SGX:TS0U
Oue Real Estate Investment Trust — OUE Commercial REIT — Non-Deal Roadshow (September 2015)
51 slides from Oue Real Estate Investment Trust's roadshow presentation, Sep 14, 2015
Slide 1: Investor Presentation for Tokyo Non-Deal Roadshow
Investor Presentation for Tokyo Non-Deal Roadshow 14-15 September 2015
Slide 2: Important Notice
Important Notice Standard Chartered Securities (Singapore) Pte. Limited, CIMB Bank Berhad, Singapore Branch and Oversea-Chinese Banking Corporation Limited were the joint global coordinators and issue managers for the initial public offering of OUE Commercial REIT. The Issue Managers assume no respo
Slide 3: Agenda
Agenda Overview Financial Performance and Capital Management Portfolio Performance Acquisition Appendices 3
Slide 4: Overview of OUE C-REIT
Overview of OUE C-REIT OUE C-REIT is a Singapore real estate investment trust listed on the Mainboard of Singapore Exchange Securities Trading Limited with the principal investment strategy of investing, directly or indirectly, in a About OUE C-REIT portfolio of income-producing real estate which
Slide 5: Premium Portfolio of Assets - OUE Bayfront
Premium Portfolio of Assets OUE Bayfront OUE Bayfront GFA (sq m) 46,774.6 Office: 35,569.0 NLA (sq m) Retail: 1,830.1 Overall: 37,399.1 Office : 95.1% Committed Occupancy as Retail : 100.0% at 30 June 2015 Overall : 95.4% Number of Car Park Lots 245 Valuation S$1,135m (as at 31 Dec 2014) OUE Bayfron
Slide 6: Vantage Position in Singapore's CBD
Vantage Position in Singapore’s CBD Location within the Singapore CBD Landmark commercial property One of the latest premium office buildings located at Collyer Quay between the new Marina Bay downtown and Raffles Place Excellent connectivity and convenient access to major transportation network
Slide 7: Diversified Tenant Base
Diversified Tenant Base OUE Bayfront Gross Rental Income by Trade Sector1 OUE Bayfront NLA by Trade Sector1 (1) For the month of June 2015 7
Slide 8: Premium Portfolio of Assets - Lippo Plaza
Premium Portfolio of Assets Lippo Plaza Lippo Plaza GFA (sq m) 58,521.5 Office: 33,538.6 NLA (sq m) Retail: 5,685.9 Overall: 39,224.5 Office : 95.2% Committed Occupancy as at Retail : 95.1% 30 Jun 2015 Overall : 95.2% Number of Car Park Lots 168 RMB2,340m / RMB39,985 psm Valuation (as at 31 Dec 2014
Slide 9: Grade A Building in Prime Commercial District
Grade A Building in Prime Commercial District The Huangpu District Located Within Shanghai’s Established Core CBD Grade-A commercial building located in Huangpu, Central Shanghai, one of the main commercial districts in Puxi The Huaihai Road precinct, in which the Lippo Plaza Property is situated,
Slide 10: Diversified Tenant Base
Diversified Tenant Base Lippo Plaza Gross Rental Income by Trade Sector1 Lippo Plaza NLA by Trade Sector1 (1) For the month of June 2015 10
Slide 11: Financial Performance & Capital Management
Financial Performance & Capital Management
Slide 12: Consistently Outperformed Forecast since Listing
Consistently Outperformed Forecast since Listing DPU has exceeded Forecast for six consecutive quarters since IPO Actual vs Forecasted Distribution per Unit (S cents) (1) OUE C-REIT was incorporated on 1 October 2013 but was dormant until Listing Date of 27 January 2014 7
Slide 13: Key Highlights
Key Highlights Financial Highlights Gross revenue in 2Q 2015 of S$19.7 million was 5.4% higher year-on-year (“y-o-y”), exceeding Forecast(1) by 2.0% 2Q 2015 net property income of S$14.7 million was 2.8% higher y-o-y, 3.2% ahead of Forecast Amount available for distribution in 2Q 2015 of S$12.
Slide 14: Key Highlights
Key Highlights Capital Management Aggregate leverage as at 30 June 2015 of 37.9% with an average term of debt of 2.46 years Average cost of debt was 2.74% p.a., with 72.7% of borrowings hedged into fixed rates for the next 2.72 years Post 2Q 2015, OUE C-REIT further increased its proportion of
Slide 15: 2Q 2015 – Actual vs Forecast
2Q 2015 – Actual vs Forecast Actual Forecast(1) Change Gross Revenue (S$m) 19.7 19.3 +2.0% Net Property Income (S$m) 14.7 14.2 +3.2% Amount Available for Distribution (S$m) 12.8 12.2 +5.0% DPU (cents) 1.46(2) 1.39 +5.0% Actual DPU(3) (cents) 1.01 N.M. N.M. • Gross revenue was 2.0% higher compared to
Slide 16: 2Q 2015 – Actual vs Forecast
2Q 2015 – Actual vs Forecast S$'000 Actual Forecast(1) Change (%) Gross revenue 19,677 19,287 2.0 Property operating expenses (4,984) (5,047) (1.2) Net property income 14,693 14,240 3.2 Other income 2,651 2,085 27.1 Amortisation of intangible asset (1,047) (1,650) (36.5) Manager's management fees (1
Slide 17: 2Q 2015 vs 2Q 2014
2Q 2015 vs 2Q 2014 2Q 2015 2Q 2014 Change Gross Revenue (S$m) 19.7 18.7 +5.4% Net Property Income (S$m) 14.7 14.3 +2.8% Amount Available for Distribution (S$m) 12.8 12.5 +2.6% DPU (cents) 1.46(1) 1.43 +2.1% Actual DPU(2) (cents) 1.01 N.M. N.M. • Gross revenue was 5.4% higher y-o-y due to higher rent
Slide 18: 2Q 2015 vs 2Q 2014
2Q 2015 vs 2Q 2014 S$'000 2Q 2015 2Q 2014 Change (%) Gross revenue 19,677 18,670 5.4 Property operating expenses (4,984) (4,378) 13.8 Net property income 14,693 14,292 2.8 Other income 2,651 2,392 10.8 Amortisation of intangible asset (1,047) (1,650) (36.5) Manager's management fees (1,260) (1,334)
Slide 19: 1H 2015 vs 1H 2014
1H 2015 vs 1H 2014 1H 2015 Prior Change 1H 2014(2) Change Period(1) Gross Revenue (S$m) 40.1 32.5 +23.4% 37.9 +5.7% Net Property Income (S$m) 30.4 24.6 +23.5% 28.7 +5.8% Amount Available for Distribution (S$m) 25.4 21.1 +20.3% 24.6 +3.1% DPU (cents) 2.90(3) 2.43 +19.3% 2.84 +2.1% Actual DPU(4) (cent
Slide 20: Balance Sheet as at 30 Jun 2015
Balance Sheet as at 30 Jun 2015 S$'000 Investment properties 1,642,529 Non-current assets 12,601 Current assets 29,081 Total Assets 1,684,211 Borrowings 628,592 Non-current liabilities 59,927 Current liabilities 32,721 Total Liabilities 721,240 Net Assets 962,971 Units in issue and to be issued ('00
Slide 21: Capital Management as at 30 Jun 2015
Capital Management as at 30 Jun 2015 Post 30 June 2015, OUE C-REIT entered into additional interest rate swaps, resulting in a higher proportion of fixed rate debt of 82.1% with an average term of fixed rate debt of 2.76 years Consequently, average cost of debt is expected to increase to about 2
Slide 22: Debt Maturity Profile
Debt Maturity Profile No refinancing requirement until 2017 (1) Based on SGD:CNY exchange rate of 1:4.613 22
Slide 23: Portfolio Performance
Portfolio Performance
Slide 24: Portfolio Composition
Portfolio Composition By Asset Value(1) By Gross Rental Income(2) By Segment Revenue(2) (1) Based on SGD:CNY exchange rate of 1:4.613 24 (2) For 2Q 2015 and based on SGD:CNY exchange rate of 1:4.598
Slide 25: Steady and High Portfolio Occupancy
Steady and High Portfolio Occupancy (1) Proforma committed occupancy as at 30 September 2013 as disclosed in OUE C-REIT”s Prospectus dated 17 January 2014 25
Slide 26: Office Occupancy In Line with Market
Office Occupancy In Line with Market OUE C-REIT’s Office Portfolio Committed Occupancy vs Market Occupancy (1) Market Occupancy for Singapore refers to Core CBD occupancy for 2Q 2015 according to CBRE Research. Market Occupancy for Shanghai refers to Shanghai Grade A Office occupancy for 2Q 2015 acc
Slide 27: Positive Office Rental Reversions
Positive Office Rental Reversions 2Q 2015 1H 2015 1Q 2015 2Q 2015(3) 2Q 2015 Rental reversions(1) Committed rents(2) Average passing rent OUE Bayfront 14.6% 25.5% S$12.00 – S$14.50 psf/mth S$10.60 psf/mth S$11.04 psf/mth Lippo Plaza 12.9% 12.5% RMB7.30 – RMB10.50 psm/day RMB9.18 psm/day RMB9.21 psm/
Slide 28: Lease Expiry Profile as at 30 Jun 2015
Lease Expiry Profile as at 30 Jun 2015 Portfolio WALE(1) of 2.7 years by NLA(2) and 3.0 years by Gross Rental Income (1) “WALE” refers to the weighted average lease term to expiry (2) “NLA” refers to net lettable area 28
Slide 29: Lease Expiry Profile as at 30 Jun 2015 - OUE Bayfront
Lease Expiry Profile as at 30 Jun 2015 OUE Bayfront WALE of 4.0 years by NLA and 3.9 years by Gross Rental Income 29
Slide 30: Lease Expiry Profile as at 30 Jun 2015 - Lippo Plaza
Lease Expiry Profile as at 30 Jun 2015 Lippo Plaza WALE of 1.5 years by NLA and 1.6 years by Gross Rental Income 30
Slide 31: Top Tenants
Top 10 Tenants Top 10 tenants of the portfolio contribute approximately 46.5% of Gross Rental Income(1) WALE by NLA 4.5 years 31 (1) For the month of June 2015
Slide 32: Diversified Tenant Base
Diversified Tenant Base Gross Rental Income by Trade Sector(1) NLA by Trade Sector(1) 32 (1) For the month of June 2015
Slide 33: Acquisition
Acquisitions Acquisition
Slide 34: Overview of One Raffles Place
Overview of One Raffles Place Description • One Raffles Place is an integrated commercial development comprising two Grade-A office towers and a retail podium Gross Floor Area • ~119,725.8 sq m (1,288,717 sq ft) • One Raffles Place Tower 1: ~38,090.3 sq m (410,000 sq ft) Net Lettable • One Raffles P
Slide 35: Overview of One Raffles Place
Overview of One Raffles Place Most Accessible Location and Focal Point of the CBD Largest Purpose-Built Shopping Mall in Raffles Place 35 One of the Tallest Buildings in the CBD
Slide 36: Transaction Overview
Transaction Overview • Acquisition of an indirect interest in One Raffles Place through the acquisition of between 75.0% and 83.33% interest in OUB Centre Limited (“OUBC”) from OUE Acquisition Limited (the “Sponsor”) Details • OUBC is the registered owner of One Raffles Place and owns 81.54% of the
Slide 37: Details of Rights Issue
Details of Rights Issue 9-for-20 Rights Issue to raise gross Use of Gross Proceeds of Rights Issue proceeds of approximately S$218.3 In S$m million and net proceeds of approximately S$214.9 million As a demonstration of its commitment to OUE C-REIT, the Sponsor provided an irrevocable undertakin
Slide 38: CPPU Issue
CPPU Issue Up to S$550.0m of convertible perpetual preferred Units (“CPPUs”) to be issued to the Sponsor The CPPUs will be classified as equity and will not increase OUE C-REIT’s aggregate leverage Term Perpetual Issue Price S$1.00 per CPPU Issue Size Up to S$550.0m of CPPUs Listing Not Listed D
Slide 39: Key Rationale for the Acquisition
Key Rationale for the Acquisition 1 Acquisition of a majority interest in a landmark commercial property in the Singapore CBD on a long land lease 2 Acquisition of a quality commercial property at an attractive price of S$2,382 psf 3 Favourable growth profile from potential increase in occupancy, po
Slide 40: Achieve Transformational Scale
Achieve Transformational Scale Achieve transformational scale through the Acquisition which will significantly enlarge its assets- under-management (“AUM”) and strengthen its competitive position in Singapore Increase in Total AUM Increase in Total Net Lettable Area In sq ft In S$m 106.3% 87.3% (1)
Slide 41: Enhanced Portfolio Diversification & Resilience
Enhanced Portfolio Diversification & Resilience Enhanced portfolio diversification and resilience, as well as reduced asset concentration risk Proportion of Portfolio Gross Revenue Contribution Denominated in Singapore dollars (1) Enlarged Portfolio Enlarged Portfolio Existing Portfolio (75.0% indir
Slide 42: Appendices
Appendices • Singapore Office Market • Shanghai Office Market
Slide 43: Overview of Singapore Office Sector
Overview of Singapore Office Sector Singapore’s CBD – Comprises traditional areas of Raffles Place, Shenton Way/Robinson Road/Cecil Street as well as the New Downtown at Marina Bay – Many established global financial institutions and headquarters of MNCs are located in Marina Bay and Raffles Place,
Slide 44: Singapore Office Market
Singapore Office Market Core CBD office occupancy edged up 0.1 ppt QoQ to 96.2% as at 2Q 2015, while Grade A office rents eased marginally by 0.9% QoQ to S$11.30 psf/mth With no large office developments scheduled for completion this year, vacancy levels are expected to remain stable for the nex
Slide 45: Demand and Supply vs Office Rental
Demand and Supply vs Office Rental Island-wide Office Demand, Supply vs Office Rental Source: URA statistics, CBRE Research 2Q11 was the last period where CBRE provided Prime office Rental data. Prime Grade A office rental data not available prior to 1Q02. 45
Slide 46: Known Office Supply Pipeline
Known Office Supply Pipeline Office Supply Pipeline in Singapore’s CBD and Fringe CBD (NLA sq ft) Source: URA statistics, CBRE Research, 2Q 2015 46
Slide 47: Overview of Shanghai Office Sector
Overview of Shanghai Office Sector Puxi, the traditional business and commercial hub of Shanghai – West of the Huangpu River and one of two main engines (the other being Pudong) driving the continued growth of Shanghai – Key office and commercial districts within Puxi are concentrated in the Jing’a
Slide 48: Shanghai Office Market
Shanghai Office Market CBD Grade A office occupancy in Shanghai improved from 92.6% as at 1Q 2015 to 93.8% as at 2Q 2015, while average market rents rose 2.4% QoQ to RMB9.7 psm/day In the Puxi CBD Grade A office submarket, occupancy also rose from 90.9% as at 1Q 2015 to 92.2% as at 2Q 2015, with
Slide 49: Demand, Supply and Vacancy
Demand, Supply and Vacancy Shanghai CBD Grade A Net Absorption, New Supply and Vacancy Rate Source: Colliers International 49
Slide 50: CBD Grade A Office Supply Pipeline
CBD Grade A Office Supply Pipeline Office Supply Pipeline in Shanghai CBD (sq m) Source: Colliers International, 2Q15 50
Slide 51: Thank you
COMMERCIAL REIT Thank you
OUE Commercial REIT — Non-Deal Roadshow (September 2015) on 6ix