Oue Real Estate Investment Trust · SGX:TS0U
Oue Real Estate Investment Trust — OUE Commercial REIT — Q4 2017 Earnings Presentation
39 slides from Oue Real Estate Investment Trust's earnings presentation, Jan 31, 2018
Slide 1: Financial Results for 4th Quarter 2017 and Year Ended 31 December 2017
Financial Results for 4th Quarter 2017 and Year Ended 31 December 2017 31 January 2018
Slide 2: Important Notice
Important Notice This presentation shall be read in conjunction with OUE Commercial REIT’s Financial Results announcement for 4Q 2017 dated 31 January 2018. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in OUE Com
Slide 3: Agenda
Agenda Key Highlights Financial Performance and Capital Management Portfolio Performance Outlook Appendices 3
Slide 4: Key Highlights
Key Highlights Financial Highlights 2017 net property income was marginally lower due mainly to lower one-off income, offset partially by lower property operating expenses. Amount available for distribution was higher due to absence of performance fees and higher income support drawn FY2017 amou
Slide 5: Key Highlights
Key Highlights Capital Management Aggregate leverage as at 31 December 2017 was 37.3% with a stable weighted average cost of debt of 3.5% per annum. 84.3% of borrowings were on fixed rate debt as at 31 December 2017, with an average term of fixed rate debt of 2.0 years Capital management focus i
Slide 6: Financial Performance & Capital Management
Financial Performance & Capital Management
Slide 7: Delivered Sustainable Distribution
Delivered Sustainable Distribution Delivered sustainable distribution to Unitholders since IPO Distribution Since IPO (1) Period commencing from OUE C-REIT’s listing date of 27 January 2014 to 31 December 2014 (2) FY2014-FY2017 compound annual growth rate (CAGR) computed on the basis of annualised a
Slide 8: 4Q 2017 vs 4Q 2016
4Q 2017 vs 4Q 2016 4Q 2017 4Q 2016 Change Revenue (S$m) 44.0 45.0 -2.3% Net Property Income (S$m) 34.7 34.8 -0.3% Amount Available for Distribution 17.7 15.4 +14.6% to Unitholders (S$m) DPU (cents) 1.14 1.18 -3.4% • 4Q 2017 revenue was slightly lower YoY at S$44.0m due to lower rental income compare
Slide 9: 4Q 2017 vs 4Q 2016
4Q 2017 vs 4Q 2016 S$'000 4Q 2017 4Q 2016 Change (% ) Revenue 43,994 45,023 (2.3) Property operating expenses (9,295) (10,203) (8.9) Net property income 34,699 34,820 (0.3) (1) Other income 1,003 482 NM Amortisation of intangible asset (1,113) (1,118) (0.4) Manager's management fees (2,478) (3,142)
Slide 10: FY2017 vs FY2016
FY2017 vs FY2016 FY2017 FY2016 Change Revenue (S$m) 176.3 177.8 -0.9% Net Property Income (S$m) 138.2 138.6 -0.3% Amount Available for Distribution 70.0 67.4 +3.8% to Unitholders (S$m) DPU (cents) 4.67 5.18 -9.8% • FY2017 revenue was slightly lower YoY at S$176.3 million due to lower one-off income
Slide 11: FY2017 vs FY2016
FY2017 vs FY2016 S$'000 FY2017 FY2016 Change (% ) Revenue 176,297 177,809 (0.9) Property operating expenses (38,111) (39,178) (2.7) Net property income 138,186 138,631 (0.3) Other income 3,312 2,552 29.8 Amortisation of intangible asset (4,452) (4,471) (0.4) Manager's management fees (9,593) (12,141
Slide 12: Distribution Details
Distribution Details Distribution Period 1 July 2017 to 31 December 2017 Distribution Per Unit 2.29 cents comprising (i) Taxable income distribution of 0.93 cents (ii) Tax-exempt income distribution of 0.83 cents (iiI) Capital distribution of 0.53 cents Notice of Books Closure Date 31 January 2018 E
Slide 13: Valuation as at 31 Dec 2017
Valuation as at 31 Dec 2017 Stable office capitalisation rates Valuation as at Valuation as at Office Cap 31 December 2017 (1) 31 December 2016 (2) Rate (S$ m) (S$ m) OUE Bayfront 1,153.0 1,146.0 3.75% One Raffles Place(3) 1,773.2 1,738.3 3.60% - 3.90% 588.9 524.2 Lippo Plaza N.A.(4) (RMB 2,887.0
Slide 14: Healthy Balance Sheet
Healthy Balance Sheet S$ million As at 31 Dec 2017 Investment Properties 3,515.1 Total Assets 3,573.6 Loans and borrowings 1,262.3 Total Liabilities 1,569.5 Net Assets Attributable to Unitholders 1,407.3 Units in issue and to be issued (’000) 1,546,769 NAV per Unit (S$) 0.91 14
Slide 15: Capital Management
Capital Management Redeemed S$100 million of CPPUs in January 2018 to reduce the amount of CPPUs outstanding so as to mitigate future DPU dilution from potential conversion of CPPUs into new units. Post redemption, the pro forma aggregate leverage as at 31 December 2017 is expected to be approxima
Slide 16: Debt Maturity Profile as at 31 Dec 2017
Debt Maturity Profile as at 31 Dec 2017 Successfully diversified funding sources via bond issuance and obtained unsecured bank borrowings to improve financial flexibility Already in active negotiations to complete 2018 refinancing ahead of maturity in 2H 2018 16
Slide 17: Portfolio Performance
Portfolio Performance
Slide 18: Portfolio Composition
Portfolio Composition By Asset Value(1) By Revenue Contribution(2) By Segment Income(2) (1) Based on independent valuations as at 31 December 2017 and OUE C-REIT’s proportionate interest in One Raffles Place (2) For 4Q 2017 and based on OUE C-REIT’s attributable interest in One Raffles Place 18
Slide 19: Resilient and Stable Portfolio
Resilient and Stable Portfolio All three properties saw increased occupancy in 2017 and achieved above market office occupancy in a challenging leasing market environment Lippo Plaza maintained 100% committed office occupancy for three consecutive quarters since June 2017 OUE C-REIT’s Portfolio
Slide 20: Office Occupancy Higher Than Market
Office Occupancy Higher Than Market Committed office occupancy at One Raffles Place increased 4.3 ppt in 2017, despite Singapore’s core CBD office occupancy declining 2.0 ppt in the same period Increased committed office occupancy by 5.5 ppt to full occupancy at Lippo Plaza when CBD Grade A offi
Slide 21: Committed Office Rents In Line Or Above Market
Committed Office Rents In Line Or Above Market Average Expired Average Passing 4Q 2017 Committed Rents(1) Market Rents Rents Rents in Dec 2017 OUE Bayfront S$12.79 psf/mth S$12.00 – S$12.50 psf/mth S$9.40 psf/mth(2) S$11.43 psf/mth One Raffles S$10.88 psf/mth S$8.50 – S$10.50 psf/mth S$9.40 psf/mth(
Slide 22: Average Passing Office Rents
Average Passing Office Rents Singapore Shanghai 22 (1) Proforma average passing rents as at 30 September 2013 as disclosed in OUE C-REIT’s Prospectus dated 17 January 2014
Slide 23: Lease Expiry Profile - Portfolio
Lease Expiry Profile - Portfolio 19.3% of OUE C-REIT’s portfolio gross rental income is due in 2018 WALE(1) of 2.5 years by NLA(2) and 2.6 years by Gross Rental Income As at 31 Dec 2017 (1) “WALE” refers to the weighted average lease term to expiry (2) “NLA” refers to net lettable area 23
Slide 24: Lease Expiry Profile - OUE Bayfront
Lease Expiry Profile - OUE Bayfront Only 8.6% of OUE Bayfront’s gross rental income is due in 2018 WALE of 2.7 years by NLA and Gross Rental Income As at 31 Dec 2017 24
Slide 25: Lease Expiry Profile - One Raffles Place
Lease Expiry Profile - One Raffles Place More than 70% of One Raffles Place’s office gross rental income expiring in 2018 is due only in 2H 2018 WALE of 2.5 years by NLA and 2.4 years by Gross Rental Income As at 31 Dec 2017 25
Slide 26: Lease Expiry Profile - Lippo Plaza
Lease Expiry Profile - Lippo Plaza WALE of 2.2 years by NLA and 3.0 years by Gross Rental Income As at 31 Dec 2017 26
Slide 27: Quality and Diversified Tenant Base
Quality and Diversified Tenant Base Top 10 tenants contribute approximately 27.5% of gross rental income WALE by NLA 3.6 years As at 31 Dec 2017 27
Slide 28: Diversified Tenant Base
Diversified Tenant Base As at Dec 2017 28
Slide 29: Outlook
Outlook DOI a ‘all ll
Slide 30: Outlook – Singapore
Outlook – Singapore Singapore’s economy grew 3.5%(1) in 2017. Growth was underpinned by the manufacturing sector which grew 10.5% YoY as electronics and precision engineering clusters expanded output. Services sectors saw growth accelerate in 4Q 2017 at 7.5% QoQ, faster than the 3.4% growth in 3Q
Slide 31: Outlook – China
Outlook – China China’s 2017 GDP growth was 6.9%(1), ahead of official target of around 6.5%, with the first annual acceleration in growth since 2010. The expansion was driven by strong export growth on the back of a synchronized uptick in the global economy in 2017 and supported by robust househo
Slide 32: Appendices
Appendices • Overview of OUE C-REIT • OUE C-REIT’s Portfolio • Singapore Office Market • Shanghai Office Market
Slide 33: 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 portfolio of income-producing real About OUE C-REIT estate which
Slide 34: Premium Portfolio of Assets – OUE Bayfront
Premium Portfolio of Assets OUE Bayfront GFA (sq m) 46,774.6 NLA (sq m) Office: 35,298.3; Retail: 1,830.1; Overall: 37,128.4 Committed Occupancy (@ 31 Dec 2017) Office: 98.2%; Retail: 100.0%; Overall: 98.2% Valuation (@ 31 Dec 2017) S$1,153.0 m (S$2,885 psf) Valuation Cap Rate (Office): 3.75% OUE Ba
Slide 35: Premium Portfolio of Assets – One Raffles Place
Premium Portfolio of Assets One Raffles Place GFA (sq m) 119,626.3 Attributable NLA (sq m) Office: 56,013.0; Retail: 9,386.0; Overall: 65,399.0 Committed Occupancy (@ 31 Dec 2017) Office: 96.5%; Retail: 86.4%; Overall: 94.9% Valuation(1) (@ 31 Dec 2017) S$1,773.2 m (S$2,519 psf) Valuation Cap Rate (
Slide 36: Premium Portfolio of Assets – Lippo Plaza
Premium Portfolio of Assets Lippo Plaza GFA (sq m) 58,521.5 Attributable NLA (sq m) Office: 33,538.6; Retail: 5,685.9; Overall: 39,224.5 Committed Occupancy (@ 31 Dec 2017) Office: 100.0%; Retail: 90.4%; Overall: 98.6% Valuation(1) (@ 31 Dec 2017) RMB2,887.0 m / RMB49,332 psm (S$588.9m)(2) Land Use
Slide 37: Singapore Office Market
Singapore Office Market Core CBD office occupancy improved 1.3ppt QoQ to 93.8% as at 4Q 2017 on the back of stronger leasing activity with quarterly islandwide net absorption of 783,621 sq ft. Expansionary demand was driven by the co-working and technology sectors CBD Grade A office rents contin
Slide 38: Shanghai Office Market
Shanghai Office Market Shanghai CBD Grade A office occupancy as at 4Q 2017 was 86.1%, flat QoQ but declined 3.7 ppt YoY due to significant new office completions during the year. CBD Grade A office rents as at 4Q 2017 were RMB10.21 psm/day, up 0.6% QoQ but down 2.4% YoY given the competition to re
Slide 39: Thank you
seme arse 0 LEE EE Se COMMERCIAL REIT W _ O Thank you