Frasers Centrepoint Trust · SGX:J69U
Frasers Centrepoint Trust — FY2016 Earnings Presentation
48 slides from Frasers Centrepoint Trust's earnings presentation, Oct 21, 2016
Slide 1: Financial Results Presentation for 4th Quarter & Full Year FY2016
Frasers Centrepoint Trust Financial Results Presentation for 4th Quarter & Full Year FY2016 ended 30 September 2016 21 October 2016 Causeway Point Northpoint Changi City Point Bedok Point YewTee Point Anchorpoint
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 Contents 1. Results Highlights slide 4 2. Balance sheet slide 16 3. Operational performance slide 21 4. Northpoint AEI Update slide 29 5. Outlook slide 34 6. Appendix slide 37 3
Slide 4: Results Highlights
Results Highlights
Slide 5: Results Highlights
Results - Highlights Results Highlights Financial performance • 4Q16 DPU of 2.815 cents, 1.5% lower year-on-year (4Q14 DPU: 2.859 cents) • FY2016 DPU amounts to 11.764 cents, up 1.3% year-on-year (FY2015: 11.608 cents) • 4Q16 Gross Revenue of $44.6 million, 6.0% lower year-on-year • 4Q16 Net Propert
Slide 6: 4Q16 DPU of 2.815 cents, 1.5% lower year-on-year
Results - Highlights 4Q16 DPU of 2.815 cents, 1.5% lower year-on-year 4Q16 4Q15 Y-o-Y $’000 Jul 16 to Sep 16 Jul 15 to Sep 15 change Lower contributions Gross Revenue 44,619 47,479 ▼ 6.0% from Northpoint (ongoing AEI) and Changi City Point Property Expenses (13,173) (15,756) ▼ 16.4% (changeover in a
Slide 7: Full year DPU up 1.3% to new high of 11.764 cents
Results - Highlights Full year DPU up 1.3% to new high of 11.764 cents FY2016 FY2015 Y-o-Y $’000 Oct 15 to Sep 16 Oct 14 to Sep 15 change Gross Revenue 183,816 189,242 ▼ 2.9% Property Expenses (53,964) (58,199) ▼ 7.3% Net Property Income 129,852 131,043 ▼ 0.9% Income Available for Distribution 108,1
Slide 8: Ten consecutive years of steady DPU growth
Results - Highlights Ten consecutive years of steady DPU growth • Maintains 100% payout ratio on an annual basis +1.3% FCT Annual DPU year-on-year (cents) CAGR FY2006 – FY2016: 6.9% * Annualised DPU for the period 5 Jul 06 (IPO) to 30 September 2006. CAGR: compound annual growth rate. 8
Slide 9: 4Q16 Revenue 6.0% lower year-on-year
Results – Performance by properties 4Q16 Revenue 6.0% lower year-on-year • Lower contributions from Northpoint (ongoing AEI) and Changi City Point (changeover in anchor tenant space) ▼ 6.0% ▲ 3.2% ▼ 18.9% ▼ 15.4% ▲ 2.2% ▼ 4.1% ▼ 1.4% Any discrepancy between individual amount and the aggregate is due
Slide 10: FY2016 Revenue 2.9% lower year-on-year
Results – Performance by properties FY2016 Revenue 2.9% lower year-on-year • Causeway Point continues to perform well with 2.5% y-o-y revenue growth • Northpoint performance affected by on-going asset enhancement works (AEI) • Changi City Point performance affected by lower mall occupancy due to ten
Slide 11: 4Q16 Property Expenses 16.4% lower year-on-year
Results – Performance by properties 4Q16 Property Expenses 16.4% lower year-on-year • Lower property expenses due mainly to lower utilities tariff rates and other property expenses ▼ 16.4% ▼ 4.3% ▼ 41.3% ▼ 11.9% ▼ 9.9% ▼ 0.9% ▼ 19.8% Any discrepancy between individual amount and the aggregate is due
Slide 12: FY2016 Property Expenses 7.3% lower year-on-year
Results – Performance by properties FY2016 Property Expenses 7.3% lower year-on-year • Lower property expenses due mainly to lower utilities tariff rates and other property expenses ▼ 7.3% ▼ 4.0% ▼ 18.0% ▼ 3.7% ▼ 7.4% ▼ 4.4% ▲ 1.5% Any discrepancy between individual amount and the aggregate is due t
Slide 13: 4Q16 Net Property Income 0.9% lower year-on-year
Results – Performance by properties 4Q16 Net Property Income 0.9% lower year-on-year ▼ 0.9% ▲ 6.2% ▼ 8.3% ▼ 17.3% ▼ 1.8% ▲ 13.3% ▲ 3.1% Any discrepancy between individual amount and the aggregate is due to rounding. 13
Slide 14: FY2016 Net Property Income 0.9% lower year-on-year
Results – Performance by properties FY2016 Net Property Income 0.9% lower year-on-year ▼ 0.9% ▲ 5.0% ▼ 7.8% ▼ 5.9% ▼ 14.5% ▲ 5.0% ▼ 2.1% Any discrepancy between individual amount and the aggregate is due to rounding. 14
Slide 15: Bigger malls to continue to drive portfolio NPI growth
Results – NPI contribution by Properties Bigger malls to continue to drive portfolio NPI growth • Causeway Point, Northpoint and Changi City Point account for 85% of portfolio NPI Percentage of Net Property Income contribution by mall in FY2016 15
Slide 16: Balance sheet
Balance sheet
Slide 17: Strong financial position with gearing level at 28.3%
Balance sheet Strong financial position with gearing level at 28.3% As at 30 September 16 30 September 15 Gearing ratio1 28.3% 28.2% Interest cover for the quarter2 7.43 times 7.09 times Total borrowings $734 million $718 million % of borrowing on fixed rates or hedged via 59% 75% interest rate swap
Slide 18: NAV per unit up 1.0% to $1.93
Balance sheet NAV per unit up 1.0% to $1.93 30 Sep 2016 30 Sep 2015 As at S$’000 S$’000 Non-current assets 2,568,969 2,527,148 Current assets 25,508 21,598 Total assets 2,594,477 2,548,746 Current liabilities (278,800) (327,669) Non-current liabilities (540,032) (466,533) Total liabilities (818,832)
Slide 19: Weighted average debt maturity: 2.7 years
Balance sheet Weighted average debt maturity @ 30 September 2016: 2.7 years Type of borrowings Aggregate amount Unsecured bank borrowings: S$178 million (24.2%) Medium Term Note: S$270 million (36.8%) Secured bank borrowings: S$286 million (39.0%) Total Borrowings: S$734 million (100.0%) $266m (36.2
Slide 20: Appraised valuation of investment properties
Balance sheet Appraised valuation of investment properties FY2016 FY2015 Valuation @30.09.2016 Valuation @30.09.2015 Property Valuation Valuation Valuation Valuation Cap rate (a) Valuer Cap rate (a) Valuer ($ million) ($ psf NLA) ($ million) ($ psf NLA) Causeway Point 1,143.0 2,749 5.35% ETC 1,110.0
Slide 21: Operational performance
Operational performance
Slide 22: Overall portfolio occupancy at 89.4%
Operational performance Overall portfolio occupancy at 89.4% • Portfolio occupancy affected by Northpoint’s ongoing asset enhancement works (AEI) and transitional vacancy due to fitting of an incoming anchor tenant at Changi City Point • Occupancy improved at the other four remaining malls • Bedok P
Slide 23: 4Q16 average rental reversion at +4.6%
Operational performance 4Q16 average rental reversion at +4.6% 4Q16 NLA (sq ft) Change compared to (1 Jul – 30 Sep 2016) No. of renewals As % Mall’s NLA preceding rental rates1 Renewed Causeway Point 17 6,789 1.6% +3.9% Northpoint 5 5,512 2.4% +2.7% Changi City Point 2 3,756 1.8% +14.1% Bedok Point
Slide 24: FY2016 average rental reversion at +9.9%
Operational performance FY2016 average rental reversion at +9.9% FY2016 NLA (sq ft) Change compared to (1 Oct 15 – 30 Sep 16) No. of renewals As % Mall’s NLA preceding rental rates1 Renewed Causeway Point 56 103,862 25.0% 9.6% Northpoint 17 16,534 7.1% 18.9% Changi City Point 36 54,941 26.5% 15.4% B
Slide 25: Maintaining positive rental reversions through economic cycles
Operational performance Maintaining positive rental reversions through economic cycles FCT rental reversions1 (FY2007 – FY2016) 4 year high 1. Change between the average rental rates between the new lease and the preceding lease contracted typically 3 years ago 25
Slide 26: Portfolio Lease Expiry as at 30 September 2016
Operational performance Portfolio Lease Expiry as at 30 September 2016 Weighted Average Lease Expiry (WALE) Expiry profile as % of total gross rental income By NLA 1.38 years (3Q16: 1.51 years) By Gross Rent 1.36 years (3Q16: 1.50 years) Lease expiry1 as at 30 Sep 2016 FY2017 FY2018 FY2019 FY2020 FY
Slide 27: Larger malls account for 75% of NLA to be renewed in FY2017
Operational performance The 3 larger malls account for 75% of the NLA to be renewed in FY2017 as at 30 September 2016 Number of Nett Lettable Area as % of leased as % of total gross FY2017 Leases (NLA) Expiring area of Mall rent of Mall Expiring (sq ft) Causeway Point 89 161,501 38.9% 40.3% Northpoi
Slide 28: 4Q16 shopper traffic up 0.4% y-o-y, up 2.8% q-o-q
Operational performance 4Q16 shopper traffic up 0.4% y-o-y, up 2.8% q-o-q Shopper Traffic (millions)# ▲ 0.4% y-o-y ▲ 2.8% q-o-q 26.4 25.9 25.1 25.2 24.4 24.6 24.5 23.2 23.2 Jul-Sep 2014 Oct-Dec 2014 Jan-Mar 2015 Apr-Jun 2015 Jul -Sep 2015 Oct-Dec 2015 Jan-Mar 2016 Apr-Jun 2016 Jul -Sep 2016 # based
Slide 29: Northpoint AEI update
Artist’s impression Northpoint AEI update
Slide 30: Asset Enhancement Initiative (AEI) for Northpoint
Northpoint AEI update Asset Enhancement Initiative (AEI) for Northpoint • The AEI at Northpoint is part of the overall strategy to periodically upgrade our malls to provide sustainable income growth for FCT • 18-month AEI commenced in March 2016, expected completion is in September 2017 • Mall to re
Slide 31: Plan view of Northpoint and upcoming Northpoint City retail component
Northpoint AEI update Plan view of Northpoint and upcoming retail component of Northpoint City by Frasers Centrepoint Limited Plan view of Northpoint Shopping Centre and the mixed-commercial and residential* development by Frasers Centrepoint Limited Links between Northpoint and Northpoint City (at
Slide 32: AEI works progressing on schedule
Northpoint AEI update AEI works progressing on schedule The AEI works have been phased to minimise income disruption, but Northpoint’s rental revenue will be impacted. PHASE 1 (March 2016 to January 2017) - Ongoing •Reconfiguration of retail space •Relocation of Food court at Basement level 2 •Reloc
Slide 33: AEI works progressing on schedule
Northpoint AEI update AEI works progressing on schedule • Occupancy for Oct 2016 - Mar 2017 to average 71% as AEI moves into Phase 2 from February 2017 Projected Occupancy at Northpoint (Jul 16 – Mar 17) Average: 71% * Projected occupancy at Northpoint Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sept-
Slide 34: Outlook
Outlook
Slide 35: FCT's malls are expected to remain resilient
Outlook FCT’s malls are expected to remain resilient • In line with the weaker economic growth outlook, the retail sector continues to face headwinds and challenges ahead. • Notwithstanding the uncertain economic outlook and barring unforeseen circumstances, FCT’s well-located suburban malls are exp
Slide 36: Thank you
Thank you Analyst & media contact: Chen Fung-Leng Frasers Centrepoint Asset Management Ltd Tel: (65) 6277-2657 Email: fungleng.chen@fraserscentrepoint.com Website: www.fct.sg
Slide 37: Distribution details
Appendix: Distribution details Distribution details Distribution period 1 July 2016 to 30 September 2016 Distribution per unit 2.815 cents Ex-date 26 October 2016 (Wednesday) Books closure date 28 October 2016 (Friday) at 5.00 pm Payment date 29 November 2016 (Tuesday) 37
Slide 38: 4Q16 year-on-year and quarter-on-quarter comparison
Appendix: Year-on-year and quarter-on-quarter comparison 4Q16 year-on-year and quarter-on-quarter comparison Year-on-Year Comparison Quarter-on-Quarter Comparison 4Q16 Change Change 4Q15 3Q16 $’000 (unless otherwise indicated) Inc/(Dec) Inc/(Dec) Gross Revenue 44,619 47,479 (6.0%) 45,032 (0.9%) Prop
Slide 39: Portfolio Information as at 30 September 2016
Appendix: Portfolio Information as at 30 September 2016 Debt Information Average cost of Borrowings (all-in) 2.1% Annualised based on rates fixed @ 30 September 2016 Moody's rating Baa1 S&P rating BBB+ Interest cover (EBIT/Σinterest) (times) 7.43 For the quarter 1 Jul - 30 Sep 2016 Gearing 28.3% as
Slide 40: Portfolio Lease expiry profile as at 30 September 2016
Appendix: Portfolio Lease expiry profile as at 30 September 2016 Lease Expiry Profile as at 30 September 2016 FY2017 FY2018 FY2019 FY2020 FY2021 Total Causeway Point No of leases 89 76 61 1 0 227 Expiries as % Total NLA 38.9% 25.7% 35.3% 0.1% 0.0% 100.0% NLA (sq ft) Expiring 161,501 106,697 146,379
Slide 41: Trade mix as at 30 September 2016
Appendix: Trade mix as at 30 September 2016 Trade Classifications (in descending order of % rent) % NLA % Rent 1 Food & Restaurants 27.7% 34.1% 2 Fashion 14.3% 21.3% 3 Services/Education 9.1% 9.2% 4 Beauty, Hair, Cosmetics, Personal Care 5.2% 7.9% 5 Household 8.4% 7.8% 6 Supermarket 6.7% 4.5% 7 Heal
Slide 42: Top tenants by gross rental as at 30 September 2016
Appendix: Top 10 tenants by gross rental as at 30 September 2016 No. Tenant % NLA % Rents 1 Cold Storage Singapore (1983) Pte Ltd1 5.7% 4.3% 2 Metro (Private) Limited 5.6% 3.5% 3 Courts (Singapore) Limited 3.3% 2.9% 4 Koufu Pte Ltd 2.8% 2.4% 5 Copitiam Pte Ltd3 2.2% 1.9% 6 Food Republic Pte Ltd 1.6%
Slide 43: Historical portfolio information by quarter
Appendix: Historical portfolio information by quarter Occupancy by Properties Note: Yellow cells means property is undergoing AEI Property (Occupancy rate as at end of each quarter) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Causeway Point 99.5% 99.6% 99.2% 99.5% 99.2% 98.8% 99.0% 99.8% Northpoint 96.3
Slide 44: Historical profit and loss statement by quarter
Appendix: Historical profit and loss statement by quarter Selected Financial Information Any discrepancy between individual amount and the aggregate is due to rounding. Note: Yellow cells means property is undergoing AEI 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Gross Rental Income ($ '000) Causeway P
Slide 45: Historical portfolio information by financial year
Appendix: Historical portfolio information by financial year Selected Financial Information Any discrepancy between individual amount and the aggregate is due to rounding. By Financial Year Note: Yellow cells means property is undergoing AEI FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Gross Re
Slide 46: Singapore-centric, suburban-focused retail asset portfolio
Appendix: Location of FCT’s Malls Singapore-centric, suburban-focused retail asset portfolio Six retail malls next to or near to Mass Rapid Transit (MRT) stations / Bus Interchanges Woodlands BUS Yishun YewTee BUS Expo Bedok BUS Queenstown Map source: URA Master Plan 2014 Illustration not to scale 4
Slide 47: Summary of FCT's portfolio
Appendix: Portfolio Information Summary of FCT’s portfolio FCT Portfolio Causeway Point Northpoint Changi City Point Bedok Point YewTee Point Anchorpoint as at 30 Sep 2016 Net Lettable Area 415,792 225,032 207,244 82,713 73,670 70,989 (sq ft) 99 years leasehold 99 years leasehold 60 years leasehold
Slide 48: Sponsor's retail assets in Singapore
Appendix: Sponsor’s retail assets Sponsor’s retail assets in Singapore Northpoint Retail Component of Northpoint City (2) Causeway Point (under development) YewTee Point The Centrepoint Artist’s impression Waterway Point (1) Opened Jan 2016 Bedok Point Eastpoint Anchorpoint Changi City Point Roberts
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