Capitaland Ascendas Reit · SGX:A17U

Capitaland Ascendas Reit — Ascendas Real Estate Investment Trust (A-REIT) — Q1 FY2014/15 Earnings Presentation

56 slides from Capitaland Ascendas Reit's earnings presentation, Jul 23, 2014

  1. Slide 1: 1Q FY14/15 Financial Results Presentation

    A-REIT City @Jinqiao Nexus @one-north Hyflux Innovation Centre 1Q FY14/15 Financial Results Presentation 23 July 2014

  2. Slide 2: Disclaimers

    Disclaimers The Group results include the consolidation of wholly owned subsidiaries: Ascendas ZPark (S) Pte. Ltd. (“AZ Park”) and its subsidiary, Ascendas Hi-Tech Development (Beijing) Co., Limited (“AHTDBC”), which were acquired on 3 October 2011; and Shanghai (JQ) Investment Holdings Pte. Ltd. (“

  3. Slide 3: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 3

  4. Slide 4: Key Highlights for 1Q FY14/15

    Key Highlights for 1Q FY14/15  Total Amount Available for Distribution rose by 2.8% y-o-y to S$87.6 million  DPU grew 2.5% to 3.64 cents in 1Q FY14/15 from 3.55 cents in 4Q FY13/14  Positive rental reversion of 11.8% achieved over preceding contracted rental rates  Acquired prime high-specificat

  5. Slide 5: Changes Implemented in 1Q FY14/15

    Changes Implemented in 1Q FY14/15  As announced in January 2014, with effect from FY14/15, A-REIT will make distributions semi-annually based on amounts calculated as at 30 September and 31 March each year  The Group adopted FRS 110 Consolidated Financial Statements with effect from 1 April 2014 a

  6. Slide 6: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 6

  7. Slide 7: 1Q FY14/15 vs 1Q FY13/14

    1Q FY14/15 vs 1Q FY13/14 (1) 105 properties as at 30 Jun 2014 and 103 properties as 1Q at 30 Jun 2013, including 1 which is classified as finance 1Q % lease receivable. (S$’000) FY13/14(1) FY14/15(1) inc/(dec) (2) Increased by 8.1% mainly due to new acquisitions since (Restated) 1 July 2013, positiv

  8. Slide 8: DPU 1Q FY14/15 vs 1Q FY13/14

    DPU 1Q FY14/15 vs 1Q FY13/14 1Q (1) 105 properties as at 30 Jun 2014 and 1Q FY13/14(1) % inc/ (S$’000) 103 properties as at 30 Jun 2013, FY14/15(1) (dec) including 1 which is classified as (Restated) finance lease receivable. (2) Higher tax expense for 1Q FY14/15 Total return for the period before t

  9. Slide 9: 1Q FY14/15 vs 4Q FY13/14

    1Q FY14/15 vs 4Q FY13/14 (1) 105 properties as at 30 June 2014 and as at 31 March 1Q 4Q FY13/14(1) % 2014, including 1 which is classified as finance lease (S$’000) (1) FY14/15 (Restated) inc/(dec) receivable. (2) Increased by 4.2% mainly due to higher occupancy Gross revenue(2) 163,178 156,539 4.2

  10. Slide 10: DPU 1Q FY14/15 vs 4Q FY13/14

    DPU 1Q FY14/15 vs 4Q FY13/14 (1) 105 properties as at 30 June 2014 and as at 4Q 31 March 2014, including 1 which is classified 1Q FY13/14(1) % (S$’000) as finance lease receivable. FY14/15(1) inc/(dec) (2) Higher tax expense for 4Q FY14/15 mainly (Restated) due to deferred tax provided on appreciati

  11. Slide 11: DPU 1Q FY14/15 vs 4Q FY13/14

    DPU 1Q FY14/15 vs 4Q FY13/14 (1) 105 properties as at 30 June 2014 and as at 31 4Q % March 2014, including 1 which is classified as 1Q FY13/14(1) finance lease receivable. (S$’000) inc/ FY14/15(1) (2) Tax-exempt income relate to a distribution of (Restated) (dec) finance lease interest income (net o

  12. Slide 12: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 12

  13. Slide 13: Investment Highlights

    Investment Highlights Value (S$m) Completed Acquisition 170.0 Hyflux Innovation Centre 170.0* Jun-14 Asset Enhancements 7.0 5 Toh Guan Road East 7.0 Jun-14 TOTAL 177.0 Divestment 12.6 1 Kallang Place 12.6 May-14  Acquired prime high-specifications building – Hyflux Innovation Centre and completed t

  14. Slide 14: New Acquisition: Hyflux Innovation Centre

    New Acquisition: Hyflux Innovation Centre Purchase Price S$170.0 million Upfront Land S$21.2 million (for the remaining Premium tenure of the first 30-year lease term) Total Purchase S$191.2 million Consideration Acquisition fee to S$1.7 million Manager Other transaction Approximately S$0.96 million

  15. Slide 15: Divestment: Kallang Place

    Divestment: 1 Kallang Place Location 1 Kallang Place Description A 7–storey light industrial cum warehouse facility Land Tenure 30 years from 1 Dec 1994 GFA 15,490 sqm 1 Kallang Place Acquisition Year 2007 Book Value as at 31 Mar S$10.5 million 2014 Sales Price S$12.6 million Flextronics Manufacturi

  16. Slide 16: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 16

  17. Slide 17: Healthy Balance Sheet

    Healthy Balance Sheet  Aggregate leverage increased q-o-q to 31.6% from 30.0% after funding investments and asset enhancement works  After funding of committed investments, aggregate leverage is expected to increase to 32.8%  Debt headroom of S$1.1 billion, before aggregate leverage reaches 40.0%

  18. Slide 18: Well-spread Debt Maturity Profile

    Well-spread Debt Maturity Profile  Well-spread debt maturity with not more than 20% of debt 7% 13% due for refinancing in any single year 17%  Lengthened debt maturity to 3.7 years from 3.3 years Diversified following completion of refinancing of CMBS in May 2014 Financial 28% Resources 35% 500 40

  19. Slide 19: Key Funding Indicators

    Key Funding Indicators  Robust indicators enable A-REIT to borrow at competitive costs As at As at 30 Jun 14 31 Mar 14 Aggregate Leverage 31.6% 30.0% Unencumbered properties as % of total investment 84.7% 62.2% properties(1) Interest cover ratio 6.5 x(2) 6.0 x(3) Total debt / EBITDA 5.6 x(2) 5.6 x(

  20. Slide 20: Prudent Interest Rate Management

    Prudent Interest Rate Management  70.0% of interest rate exposure is hedged for an average term of 3.5 years  A 0.5% point increase in interest rate is expected to result in S$3.6 million decline in distributions or 0.15 cent in DPU Increase in Decrease in Change as % of FY13/14 Pro forma impact i

  21. Slide 21: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 21

  22. Slide 22: Healthy & Stable Occupancy

    Healthy & Stable Occupancy  Multi-tenanted building (MTB) occupancy on a same store basis improved to 90.6%  Overall portfolio occupancy dipped to 88.1% due to the expiry of leases of 2 single-tenanted buildings • 30 Old Toh Tuck Road* is 61.2% occupied while 21 Jalan Buroh’s occupancy is expected

  23. Slide 23: Occupancy Rate: A-REIT vs Industrial Average

    A-REIT vs Industrial Average Occupancy 100% 95% 92.1% 92.4% 92.1% 90.3% 90.2% 91.1% 90% 85.8% 85% 83.4% 80% Occupancy Rate 75% 70% 65% 60% 55% 50% Business Park Hi-Specs Industrial Light Industrial Logistics A-REIT JTC Source : A-REIT’s Singapore portfolio as at 30 June 2014. Market: JTC JTC statist

  24. Slide 24: Sources of New Demand

    Sources of New Demand  Continues to attract demand from a wide spectrum of industries 12.9% 19.5% 13.3% 6.4% 4.1% 4.3% 1Q FY14/15 1Q FY14/15 6.2% by Gross by NLA 4.0% Income 2.0% 63.9% 2.4% 3.8% 2.1% 1.7% 1.8% 1.2% 1.3% 47.0% 0.5% 0.4% 0.3% 0.5% 0.1% 0.2% Transport and Storage Precision Engineering

  25. Slide 25: Achieved Positive Rental Reversion

    Achieved Positive Rental Reversion  Positive rental reversions registered across all segments  Achieved +11.8% rental reversion for leases renewed in 1Q FY14/15 Multi-tenanted Net lettable Vacant space 1Q FY14/15 Increase / (decrease) properties (1) area (sqm) (sqm) increase in in new take up rent

  26. Slide 26: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 26

  27. Slide 27: Well Diversified Portfolio

    Well Diversified Portfolio By value of Investment Properties Warehouse Retail Facilities Logistics & 2% Distribution Flatted Factories Centres AREIT Beijing 5% 19% 1% AREIT Shanghai Light Industrial 3% 9% Data Centres 7% Business Park 17% Hi-Specs Industrial 19% Science Park 18% Multi-tenanted build

  28. Slide 28: Tenants' Industry Diversification

    Tenants’ Industry Diversification By Monthly Gross Revenue 3rd Party Logistics, Freight Forwarding 11.3% M&E and Machinery & Equipment 11.0% Information Technology 10.0% Telecommunication & Datacentre 8.7% Electronics 8.0% Distributors, Trading Companies 7.6% Financial 6.5% Life Science 5.3% Food Pr

  29. Slide 29: Low Exposure to Conventional Manufacturing

    Low Exposure to Conventional Manufacturing As at 30 June 2014  15.4% of NLA occupied by tenants engaged in conventional manufacturing activities. 15.4%  Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc. Tenants’ business activities by 

  30. Slide 30: Quality and Diversified Tenant Base

    Quality and Diversified Tenant Base  Total tenant base of around 1,330 tenants  Top 10 tenants (as at 30 June 2014) account for 21.8% of portfolio gross rental income  C&P Holding’s lease is expiring 6.1% • 60% of existing space due to expire in Jul 2014: 17% pre-committed, 34% on offer • 3% of e

  31. Slide 31: Diversified Portfolio

    Diversified Portfolio 1, 3, 5 Changi Business Park Crescent, 4.4% Kim Chuan Telecommunication Complex , 3.4% 31 International Business Park, 3.2% Neuros & Immunos, 3.2% TelePark, 3.0% C&P Logistic Hub, 2.9% TechPoint, 2.5% TechPlace II, 2.4% Pioneer Hub , 2.4% Techlink, 2.4% 10 Toh Guan Road, 2.3% T

  32. Slide 32: Security Deposits for Single-tenanted Properties

    Security Deposits for Single-tenanted Properties  Weighted average security deposits for single-tenanted properties range from 6 to 13 months of rental income  On a portfolio basis, weighted average security deposit is about 6 months of rental income No. of single tenanted Weighted average securit

  33. Slide 33: MTB Occupancy & Rental Rate: NPI / DPU Sensitivity

    MTB Occupancy & Rental Rate: NPI / DPU Sensitivity  A 2.0% change in MTB occupancy or rental rate is expected to result in a 1.8% change in portfolio net property income or about 0.35 cents change in DPU % change in MTB Expected change in Change in portfolio Impact on full FY occupancy / rental ann

  34. Slide 34: Agenda

    Agenda Key Highlights for 1Q FY14/15 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 34

  35. Slide 35: Lease Expiry Profile (as at Jun 2014)

    Lease Expiry Profile (as at 30 Jun 2014) Breakdown of expiring leases for FY14/15 and FY15/16  Weighted average lease to expiry of 3.94 years  Lease expiry is well-spread, extending beyond 2025 14%  About 15.4 % due for renewal in balance of FY14/15 vs. 40% 13% 21.3% as at 31 March 2014 FY14/15 2

  36. Slide 36: In-place rent for space due for renewal

    In-place rent for space due for renewal in FY14/15 and FY15/16  Current market rental rate is above the weighted average passing rental for the multi-tenanted space due for renewal in FY14/15  Expect positive rental reversion of around mid-to-high single digit * * * Left Axis: Right Axis: * Rates

  37. Slide 37: Average Market Rents by Segment

    Average Market Rents by Segment 160 140 Industrial Rental Index 6.5 120 100 80 5.5 60 $5.49 40 20 Source : JTC 4.5 0 $4.25 $3.84 3.5 $3.00 2.5 $1.85 1.5 $1.83 0.5 Business Park (City Fringe) Business & Science Parks (Median Rents) Business Park (Rest of Island) Hi-Specs Light Industrial Logistics So

  38. Slide 38: Ongoing Projects: Improve portfolio quality

    Ongoing Projects: Improve portfolio quality Ongoing Value (S$m) Estimated  Embarked on 2 new Completion AEIs this quarter with Development 21.8 the objective of DBS Asia Hub Phase 2 21.8 2Q2015 maximising plot ratio Asset Enhancement Initiatives (AEIs) 132.1 and improving Gemini-Aries (NEW) 17.2 2Q

  39. Slide 39: Asset Enhancement (New): The Gemini and The Aries

    Asset Enhancement (New): The Gemini and The Aries Completion Estimated 2Q 2015 Description Located within Singapore Science Park II AEI: Maximise plot ratio by creating amenities space, enhancing connectivity between the buildings and enhancing vibrancy within Science Park II Artist impression - New

  40. Slide 40: Asset Enhancement (New): Science Hub

    Asset Enhancement (New): Science Hub Completion Estimated 1Q 2015 Description Located within Singapore Science Park I AEI: Reposition Science Hub as a social hub via the upgrading of overall building image, amenities space, improve building specifications and finishes. Upon completion, the property

  41. Slide 41: Agenda

    Agenda Key Highlights for FY13/14 Financial Performance Investment Management Capital Management Asset Management Portfolio Update Portfolio Resilience Portfolio Growth Market Outlook for FY14/15 41

  42. Slide 42: Market Outlook for FY14/15

    Market Outlook for FY14/15  Based on the Ministry of Trade and Industry's (“MTI”) advance estimates, Singapore’s economy grew by 2.1% y-o-y in 2Q 2014, moderating from the 4.7% growth in 1Q 2014. The manufacturing sector registered a weaker growth of 0.2% y-o-y after a 9.9% expansion in 1Q 2014. Th

  43. Slide 43: Additional Information

    Additional Information (1) Projects In-Progress and Completed (2) Recent Acquisition (3) Singapore Industrial Property Market 43

  44. Slide 44: Development: DBS Asia Hub Phase 2

    Development: DBS Asia Hub Phase 2 Completion Estimated 2Q 2015 Description Development of a 6-storey business park building next to the existing DBS Asia Hub, which will be fully leased to DBS Bank Ltd upon completion GFA Additional 7,081 sqm from Phase 2 Occupancy 100%; new block will be fully leas

  45. Slide 45: Asset Enhancement: C&P Logistic Hub

    Asset Enhancement: C&P Logistic Hub Completion Estimated 4Q 2015 Description Located in close proximity to Jurong Port, PSA ports and Jurong Island, and easily accessible via AYE AEI: Increase the plot ratio from existing 2.0x to 2.34x by building a new 4-storey warehouse block GFA 24,111 sqm of add

  46. Slide 46: Asset Enhancement: Techlink & Techview

    Asset Enhancement: Techlink & Techview Completion Estimated 4Q 2015 Description Located within the Kaki Bukit Industrial Estate. Techview is located next to the upcoming Kaki Bukit MRT station. AEI: To achieve the highest and best use, maximise plot ratio and also upgrade interior building finishes

  47. Slide 47: Asset Enhancement: The Alpha

    Asset Enhancement: The Alpha Completion Estimated 4Q 2014 Description Enhancing building specifications and positioning through improving connectivity from bus stop to the building, converting lobby to natural ventilation, upgrading of lifts and toilets. Converting under-utilized area Existing build

  48. Slide 48: Asset Enhancement: Corporation Place

    Asset Enhancement: Corporation Place Completion Estimated 3Q 2014 Description Upgrading all lifts and washrooms, and creating extended lobbies and physical connectivity between all lobbies to Existing building improve marketability of the building GFA 76,185 sqm Junimpression Artist 2012: Workofinne

  49. Slide 49: Asset Enhancement: LogisTech

    Asset Enhancement: LogisTech Completion Estimated 3Q 2014 Description Maximisation plot ratio from existing 1.16x to 1.25x by constructing a new 2- storey air-conditioned warehouse annex block of 3,370 sqm to capitalise on the strong demand for such space in the east Jun2014: GFA 30,332 sqm Architec

  50. Slide 50: Asset Enhancement: Techquest

    Asset Enhancement: Techquest Completion Estimated 3Q 2014 Description Improving building efficiency and specifications through reconfiguration of floor layout and upgrading of façade, Upgraded reception restrooms, lobbies, etc. to improve area marketability GFA 9,140 sqm Occupancy 81.2% (as at 30 Ju

  51. Slide 51: Asset Enhancement: Changi Business Park Crescent (Plaza 8)

    Asset Enhancement: 1 Changi Business Park Cresent (Plaza 8) Completion Estimated 3Q 2014 nd Description Conversion of 2 level amenity space to business park space to increase potential income of the property GFA 32,504 sqm (total GFA of 1 Changi Existing building Business Park Crescent) Occupancy 97

  52. Slide 52: Asset Enhancement Completed: Toh Guan Road East

    Asset Enhancement Completed: 5 Toh Guan Road East Completion June 2014 Description Upgrading of building specifications internally to improve marketability for Cargo lift enhancement logistics usage GFA 29,741 sqm Occupancy 96.0% (as at 30 Jun 2014) Building after AEI Cost Estimated S$7.0 million Bu

  53. Slide 53: Recent Acquisition: A-REIT City @Jinqiao

    Recent Acquisition: A-REIT City @Jinqiao Completion July 2013 Location North Jinqiao within the Jinqiao Economic and Technological Zone, 30 km from Pudong International Airport. In close proximity to subway stations of Line 12 and the future Line 9 & 14 Description 8 blocks of business park building

  54. Slide 54: Industrial Property Market: New Supply

    Industrial Property Market: New Supply  Current total stock: 41.3 million sqm, of which • Business & Science Parks account for 1.6 million sqm (3.9%) • Logistics & Distribution Centres account for 7.9 million sqm (19.2%) • Remaining stock are factory space  Potential new supply of about 5.1 millio

  55. Slide 55: Business & Science Parks: New Supply

    Business & Science Parks: New Supply Expected % Pre- Location Developer GFA (sqm) Completion committed (est) 2014 Changi Business Park Aviation Safety & Training Pte Ltd 16,440 100% 2014 Fusionopolis (one-north) Ascendas Fusion 5 Pte Ltd 58,510 60% 2014 Ayer Rajah (one-north) Mapletree Industrial Tr

  56. Slide 56: The End

    The End 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 u

Ascendas Real Estate Investment Trust (A-REIT) — Q1 FY2014/15 Earnings Presentation on 6ix