Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — OUE Commercial REIT — FY2020 Earnings Presentation
42 slides from Singapore Exchange's earnings presentation, Jan 28, 2021
Slide 1: Financial Results for 2H 2020 & FY 2020
Financial Results for 2H 2020 & FY 2020 28 January 2021
Slide 2: Important Notice
Important Notice This presentation should be read in conjunction with the announcements released by OUE Commercial REIT (“OUE C-REIT”) on 28 January 2021 (in relation to its Financial Results for Second Half 2020 and Financial Year ended 31 December 2020). This presentation is for information purpos
Slide 3: Agenda
Agenda ▪ Key Highlights ▪ Financial Summary and Capital Management ▪ Commercial Segment ▪ Hospitality Segment ▪ Looking Ahead ▪ Appendices 3
Slide 4: Key Highlights
Key Highlights FY 2020 Revenue Net Property Income Distribution to As at 31 Dec 2020 Financial Unitholders NAV per Unit Highlights S$292.0 m S$231.9 m S$132.8 m S$0.59 13.5% YoY 13.1% YoY 7.8% YoY 4.8% YoY Commercial Segment(1) Singapore Office Portfolio WALE FY 2020 Committed Occupancy FY 2020 Rent
Slide 5: Key Highlights: Divestment of 50% interest in OUE Bayfront
Key Highlights Divestment ▪ Divestment of OUE Bayfront, OUE Tower and OUE Link to a fund managed by Allianz Real Estate Asia of 50% Pacific Pte. Ltd. interest in ▪ Agreed value of S$1,267.5 million or S$3,170 psf represents 7.3% premium to book value as at 31 OUE December 2020, and 26.1% premium to
Slide 6: Financial Summary & Capital Management
Financial Summary & Capital Management
Slide 7: 2H 2020 Financial Performance
2H 2020 Financial Performance 2H 2020 2H 2019 YoY Change 1H 2020 HoH Change (S$m) (S$m) (%) (S$m) (%) Revenue 150.0 150.1 (0.1) 142.0 5.6 Net property income 119.4 120.6 (1.0) 112.5 6.1 Amount available for distribution 75.5 76.1 (0.8) 68.3 10.6 Ongoing working capital (3.0) (1.5) NM (3.0) - require
Slide 8: FY 2020 Financial Performance
FY 2020 Financial Performance FY 2020 FY 2019 YoY (S$m) (S$m) Change (%) Revenue 292.0 257.3 13.5 Net property income 231.9 205.0 13.1 Amount available for distribution 143.8 124.7 15.3 Ongoing working capital requirements (6.0) (1.5) NM Distribution retained (5.0) - NM Distribution to Unitholders 1
Slide 9: Distribution Details
Distribution Details Payment of distribution for period from 1 July 2020 to 31 December 2020 Distribution Period 1 July 2020 to 31 December 2020 1.43 cents per Unit comprising: i. Taxable income distribution of 1.02 cents per Unit Distribution Per Unit ii. Tax exempt income distribution of 0.38 cent
Slide 10: Portfolio Composition
Portfolio Composition Mandarin Crowne Plaza Gallery Changi Airport Hotel master lease Crowne Plaza 7.2% 7.7% agreements provide Changi Airport One Raffles Mandarin minimum rent of Gallery One Raffles 7.2% Place S$67.5 million 7.8% Place Retail 27.6% 25.2% per annum(3) 14.8% Hospitality Lippo Plaza 2
Slide 11: Valuation as at 31 December 2020
Valuation as at 31 December 2020 ▪ Valuation decreased 3.2% YoY to S$6,524.8 million as at 31 December 2020, due mainly to lower valuations for the hotel and retail segments of the portfolio ▪ Capitalisation rate for Singapore office remain unchanged. Valuation decline due to subdued rental growth o
Slide 12: Capital Management
Capital Management ▪ Aggregate leverage increased to 41.2% as at 31 December 2020 due to lower portfolio valuation ▪ Obtained S$900 million of facilities in December 2020, successfully refinancing S$450 million of debt due in December 2021 ➢ ~14% of debt due for refinancing in 2021 ➢ Term of debt in
Slide 13: Commercial Segment
Commercial Segment
Slide 14: Portfolio Performance – Commercial Segment
Portfolio Performance – Commercial Segment 2H 2020 & FY 2020 (S$ million) (S$ million) 1.3% 2.2% 0.2% 2.4% 224.5 225.0 116.2 117.8 171.1 175.3 89.0 91.0 Revenue Net Property Income Revenue Net Property Income 2H 2020 2H 2019 FY 2020 FY 2019 ▪ The lower YoY performance in revenue and net property inc
Slide 15: Commercial Segment Occupancy
Commercial Segment Occupancy ▪ Commercial segment committed occupancy remained stable quarter-on-quarter (“QoQ”) at 92.5% as at 31 December 2020 ▪ Committed office occupancy improved 0.4 percentage points (“ppt”) to 92.7% due to higher committed office occupancy at Lippo Plaza, which improved by 3.7
Slide 16: Office Segment Occupancy
Office Segment Occupancy Singapore ▪ OUE Bayfront’s committed office Chart Title occupancy remained at 100%, 100% 100.0% demonstrating resilience amidst a 96.1% 95% challenging operating environment 92.1% 92.1% ▪ One Raffles Place’s committed office 90% occupancy declined 0.8 ppt QoQ to 92.1% 85% 3Q
Slide 17: Committed Office Rents In Line Or Above Market
Committed Office Rents In Line Or Above Market ▪ Singapore office properties continued to achieve rents which were in line or above their respective market rents ▪ 4Q 2020 Singapore office rental reversions ranged from -0.8% to 19.3%. For FY 2020, rental reversions were between 5.3% to 20.1% Average
Slide 18: Average Passing Rents
Average Passing Rents S$ psf/mth 12.03 12.09 12.26 12.25 10.40 10.58 11.75 11.85 11.43 11.60 11.65 11.76 11.85 11.98 ▪ Average passing office rent 10.26 10.28 9.92 9.61 9.68 9.69 9.88 9.90 9.92 9.45 9.50 9.56 largely stable for Singapore office 7.27 7.31 7.39 7.44 7.92 Singapore 6.94 7.00 7.16 7.21
Slide 19: Top Tenants – Commercial Segment
Top 10 Tenants – Commercial Segment Top 10 Tenants 5.9% By Gross Rental Income 26.8% 5.0% 4.7% 2.2% 1.9% 1.7% 1.5% 1.3% 1.3% 1.3% (1) Deloitte & Bank of Luxury Allen & Overy Aramco Asia Virgin Active Hogan Lovells OUE Limited Aviva Ltd Professional Touche LLP America Merrill Ventures LLP Singapore P
Slide 20: Lease Expiry Profile - Commercial Segment
Lease Expiry Profile - Commercial Segment 24.5% of OUE C-REIT’s commercial segment gross rental income is due for renewal in 2021 By NLA By Gross Rental Income 28.2% 26.8% 25.4% 24.5% 22.2% 20.6% 14.6% 15.3% 10.6% 10.6% 0.6% 0.6% 2020 (1) 2021 2022 2023 2024 2025 and beyond WALE of 2.3 years by NLA(
Slide 21: Lease Expiry Profile by Commercial Property
Lease Expiry Profile by Commercial Property OUE Bayfront One Raffles Place WALE: 1.9 years (NLA); 2.0 Years (GRI) WALE: 1.9 years (NLA); 1.9 Years (GRI) 28.8% 30.2% 30.5% 29.4% 25.8% 27.2% 25.9% 27.7% 25.5% 26.3% 23.1% 21.1% 14.5% 14.9% 12.3%12.5% 6.6% 5.4% 4.1% 4.6% 1.3%1.1% 0.5% 0.7% (1) 2020 2021
Slide 22: Mandarin Gallery
Mandarin Gallery Committed Occupancy(1) ▪ Shopper traffic and sales stabilised at approximately 99.1% 100.0% 99.5% 98.2% 98.3% 97.8% 96.8% 94.4% 93.9% 91.1% 80% and 70% of pre-COVID levels respectively ▪ The Manager adopted flexible leasing strategies to support tenants’ requirements. Including shor
Slide 23: Tenant Base and Lease Expiry Profile – All Segments
Tenant Base and Lease Expiry Profile – All Segments Others Maritime & Logistics 1.6% Pharmaceuticals & Healthcare 2.4% 1.4% Services IT, Media & 3.5% Hospitality (1) Telecommunications 22.4% Office Retail Hospitality 21.8% 4.0% Real Estate & Property Services 17.6% 4.2% 15.3% Manufacturing & Distrib
Slide 24: Hospitality Segment
=a) _ Hospital segment
Slide 25: Portfolio Performance – Hospitality Segment
Portfolio Performance – Hospitality Segment 2H 2020 & FY 2020 (S$ million) (S$ million) 109.1% 105.3% 67.5 4.5% 2.7% 60.8 33.8 32.3 32.3 30.4 29.6 29.6 Revenue Net Property Income Revenue Net Property Income 2H 2020 2H 2019 FY 2020 FY 2019 ▪ Hospitality segment revenue for 2H 2020 and FY 2020 of S$3
Slide 26: Hospitality RevPAR Performance
Hospitality RevPAR Performance 4Q 2020 vs 3Q 2020 FY 2020 vs FY 2019 (S$) (S$) 17.8% 65.4% 39.8% 57.2% Flat 8.0% 216 209 196 135 115 118 95 88 90 74 74 75 Mandarin Orchard Crowne Plaza Changi Hospitality Segment Mandarin Orchard Crowne Plaza Changi Hospitality Segment Singapore Airport Singapore Air
Slide 27: Looking Ahead
Looking Ahead
Slide 28: Changing Dynamics in Property Landscape
Changing Dynamics in Property Landscape Office Retail Hospitality ▪ Occupiers are focused on space ▪ Uncertainty about economic and ▪ Limited positive impact to visitor rationalisation in view of weak employment outlook is expected to numbers expected from Singapore’s economic prospects. Demand cont
Slide 29: Navigating Through 2021
Navigating Through 2021 Proactive Asset Preserving Cash Increased Focus on Management & Flow & Financial Cleanliness, Health Tenant Engagement Flexibility & Well-being ▪ Tenant retention remains a key ▪ Focus on cost management and ▪ Leveraging on smart and focus; continue to monitor business cash c
Slide 30: Driving Value Creation for Unitholders
Driving Value Creation for Unitholders Capitalise on opportunities to Strengthen portfolio fundamentals to enhance value drive organic growth AEI to create value Proactive asset management to drive occupancy Transformational re-branding of Mandarin and rents. Support tenants’ evolving space Orch
Slide 31: Re-branding of Mandarin Orchard Singapore to Hilton Singapore Orchard
Re-branding of Mandarin Orchard Singapore to Hilton Singapore Orchard ▪ Transformational re-branding with addition of new income- generating spaces to drive growth in sustainable returns and value ▪ Re-branding will allow the hotel to leverage on Hilton’s strong brand recognition and global sales &
Slide 32: Divestment of 50% Interest in OUE Bayfront to Fund Managed by Allianz Real Estate
Divestment of 50% Interest in OUE Bayfront to Fund Managed by Allianz Real Estate ▪ Divestment of 50% interest in OUE Bayfront to a fund managed by Allianz Real Estate Pacific Pte. Ltd. via a sale and contribution agreement ▪ Agreed value of S$1,267.5 million or S$3,170 per sq ft(1) representing ➢ 7
Slide 33: Appendices
Appendices ▪ Overview of OUE C-REIT ▪ OUE C-REIT’s Portfolio ▪ Singapore Office Market ▪ Shanghai Office Market ▪ Singapore Hospitality Market ▪ Hotel Master Lease Details
Slide 34: Overview of OUE C-REIT
Overview of OUE C-REIT One of the Largest Diversified Total assets under management 7 7 High quality prime assets SGX-listed REITs S$ 6.5 billion(1) High quality prime assets 3 6 properties in Singapore and 1 Asset classes property in Shanghai OUE Bayfront One Raffles Place OUE Downtown Office Lippo
Slide 35: Premium Portfolio of Assets
Premium Portfolio of Assets Strategically-located assets in the prime business districts of Singapore and Shanghai OUE Downtown Mandarin Orchard Crowne Plaza OUE Bayfront One Raffles Place Lippo Plaza Mandarin Gallery Total Office Singapore Changi Airport Description A landmark Grade A Iconic integr
Slide 36: Singapore Office Market
Singapore Office Market ▪ Core CBD Grade A occupancy declined 0.7 ppt QoQ to 96.1% in 4Q 2020, while core CBD Grade A office rents corrected 2.8% QoQ to S$10.40 psf/mth, bringing the full year decline to 10.0% ▪ Occupancy and office rents are expected to remain under pressure in view of subdued dema
Slide 37: Singapore Office Demand and Supply vs Office Rental
Singapore Office Demand and Supply vs Office Rental Island-wide Office Demand, Supply and Office Rents ('000 sq ft) (S$ psf/mth) 7,000 20 6,000 18 16 5,000 14 4,000 12 3,000 10 2,000 8 1,000 6 4 0 2 -1,000 0 -2,000 -2 -3,000 -4 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 20
Slide 38: Shanghai Office Market
Shanghai Office Market Shanghai 100.0% 10.1010.3010.30 10.5010.4010.4010.30 10.15 10.2110.2610.3610.3510.35 10.32 10.2710.20 10.10 11.00 ▪ Shanghai CBD Grade A office occupancy 9.70 9.90 98.0% 9.30 9.49 9.68 9.28 9.09 9.00 10.00 edged down 0.2 ppt in 4Q 2020 to 85.1%. 96.0% 95.0% 94.0% 93.8% 96.0% 9
Slide 39: Shanghai CBD Demand, Supply and Vacancy
Shanghai CBD Demand, Supply and Vacancy Grade A Office Net Absorption, New Supply and Vacancy Rate Office Supply Pipeline in Shanghai CBD ('000 sq m) (‘000 sq m) 1,000 16.0% 800 707 900 14.0% 700 800 564 12.0% 600 700 500 423 600 10.0% 400 340 500 8.0% 300 400 6.0% 200 300 4.0% 100 60 200 2.0% - 100
Slide 40: Singapore Hospitality Market
Singapore Hospitality Market ▪ For 2020, Singapore visitor arrivals declined 85.7% YoY to 2.7 million due to restrictions on inbound short-term visitors to stem the spread of COVID-19 ▪ The World Tourism Organisation (UNWTO) expects a 70-75% annual decline in international tourist arrivals worldwide
Slide 41: Hotel Master Lease Details
Hotel Master Lease Details Property Mandarin Orchard Singapore Crowne Plaza Changi Airport No. of Guestrooms 1,077 563 Master Lease Variable Rent Comprising Sum of: Variable Rent Comprising Sum of: Rental (i) 33.0% of MOS GOR(1) ; and (i) 4% of Hotel F&B Revenues; (ii) 27.5% of MOS GOP(2); (ii) 33%
Slide 42: Thank You
COMMERCIAL Thank You