Frasers Property Ltd. · SGX:TQ5
Frasers Property — Frasers Commercial Trust — 3QFY14 Earnings Presentation
34 slides from Frasers Property's earnings presentation, Jul 21, 2014
Slide 1: Frasers Commercial Trust 3QFY14 Financial Results
Frasers Commercial Trust 3QFY14 Financial Results 21 July 2014
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 3 Results Portfolio review Capital management Moving Forward
Slide 4: Results
Results Z J Pease TRUST
Slide 5: Results – Key highlights
Results – Key highlights 5 1 China Square Central continues to boost the performance of the Trust Better performance of China Square Central, off-set by weaker Australian dollar and slightly higher expenses due to repair and maintenance works undertaken at Caroline Chisholm Centre Weaker Austr
Slide 6: Z FRASERS j
Z FRASERS 7 j eS << GF coment
Slide 7: Results – Financial highlights
Results – Financial highlights 7 Better performance of China Square Central, offset by weaker performances of the Australian properties TOTAL: S$22.9 million 3QFY14 Net Property Singapore: S$11.6 million (51%) Income (S$m) Australia: S$11.3 million (49%)
Slide 8: Results – Financial highlights
Results – Financial highlights 8 DPU in-line YoY Implementation of DRP for 3QFY14 DPU (Cents) * Adjusted for Unit consolidation
Slide 9: Results – Distribution payment
Results – Distribution payment 9 Distribution Period 1 April 2014 to 30 June 2014 Distribution of 2.1911 cents per Unit comprising: a) taxable income distribution of 1.3476 cents; and Ordinary Unit Distribution Rate b) tax-exempt income distribution of 0.8435 cents. Last day of trading on “cum” ba
Slide 10: Portfolio review
Portfolio review FRASERS COMMERCIAL
Slide 11: Portfolio review – Valuation
Portfolio review – Valuation 11 Balanced portfolio consisting of Singapore and Australian properties No one property consist of more than 32% of portfolio value Singapore Perth Canberra Singapore $ 1,171.0 65% Australia $ 643.7 35% Total $ 1,814.7 100% As at 30 June 2014. Excludes retail turno
Slide 12: Portfolio review – Occupancy Rates & WALE
Portfolio review – Occupancy Rates & WALE 12 Strong average occupancy rate of 98.0% Healthy WALE of 3.9 years Geographical occupancy and % of NPI contribution As at Key portfolio statistics 30 June 2014 Ave Occupancy 98.0% WALE by gross rental income 3.9 years As at 30 June 2014. Excludes reta
Slide 13: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 13 13 More than 43% of lease expiry in FY2018 and beyond provides income stability Portfolio lease expiry by gross rental income Number of leases expiring 20 47 62 27 21 NLA (sq ft) expiring 1,089,846 93,834 199,603 120,194 730,977 Expiries as % total NLA 48
Slide 14: Portfolio review – Lease expiry profile
Portfolio review – Lease expiry profile 14 Low passing rents and higher occupancy provide opportunities for higher income Represents the expiry of master lease of Alexandra Technopark. Property Lease Expiry as a proportion of total However, underlying leases will Portfolio Gross Rental Income in F
Slide 15: Lease expiry profile of Alexandra Technopark underlying leases
Portfolio review – Lease expiry profile of Alexandra Technopark underlying leases 15 15 More than 38% of lease expiry in FY2018 and beyond after early renewal of 511,000 square feet of leases Provide income stability after the expiry of Master Lease in August 2014 Alexandra Technopark underlyi
Slide 16: Portfolio review – Rental reversions
Portfolio review – Rental reversions 16 Positive rental reversions for new and renewed leases that commenced in 3QFY141 New tenant replaced an expired long lease which was contracted >10 years ago 87.0% 11.1% 11.5% 10.7% China Square 55 Market Alexandra Central Park Central Street Technopark2 As a
Slide 17: Portfolio review – Robust leasing activities
Portfolio review – Robust leasing activities 17 Committed, new and renewed tenants in 3QFY14 include: Tenant Industry Property Chain IQ Holding Consultancy China Square Central Coastal Oil Holdings Oil and gas China Square Central Wavecell Media and telecommunications China Square Central Pacific
Slide 18: Portfolio review – Mid-term rent reviews
Portfolio review – Mid-term rent reviews 18 18 More than 41% of leases have built-in step-up rents FY14 - Fixed % and other fixed lease rent reviews FY14 – 17 - Portfolio fixed % reviews GROSS RENTAL INCOME Average Total Property Leases step-up rent Property Portfolio China Square 5 3.1% 4.1% 1.0%
Slide 19: Portfolio review – Stability of income
Portfolio review – Stability of income 19 Master lessee/ blue chip tenants with long leases contribute 66% of total gross rental income Master Leases % (Gross Rental Tenant Lease Expiry Income) Alexandra Technopark – Orrick Investments Pte Ltd Aug 2014 21.2% Blue Chip Tenants with Long Leases % (G
Slide 20: Portfolio review – Asset updates
Portfolio review – Asset updates 20 Attained 100.0% committed occupancy for the office tower of China Square Central Continue to benefit from asset enhancement initiatives and Precinct Master Plan Greater connectivity after Telok Ayer MRT station opened in December 2013 Attractive office acc
Slide 21: Portfolio review – Asset updates
Portfolio review – Asset updates 21 Expiry of Master Lease at Alexandra Technopark in August 2014 provides income uplift Positive reversions arising from: Immediate uplift in income after the expiry of the Master Lease Low underlying passing rents Alexandra Technopark is strategically lo
Slide 22: Portfolio review – Singapore asset updates
Portfolio review – Singapore asset updates 22 China Square Central – 55 Market Street – Alexandra Technopark – high occupancy rate healthy occupancy rate High occupancy rate Occupancy 98.1%^ 94.6%^ 96.9% (underlying occupancy) Average underlying passing gross rent: S$3.6 psf New leases , Coastal O
Slide 23: Portfolio review – Australia asset updates
Portfolio review – Australia asset updates 23 Central Park – Healthy Caroline Chisholm Centre –full occupancy WALE of 3.7 years with long WALE of 11.0 years Occupancy 94.1% 100.0% Property occupied by a single tenant, i.e. the Commonwealth of Australia as represented by Centrelink (Aaa rated*) unt
Slide 24: Capital management
Capital management FRASERS COMMERCIAL
Slide 25: Capital Management – Debt statistics
25 Capital Management – Debt statistics 25 Healthy interest coverage ratio of 4.39 times Low all-in interest rate of 2.8% Borrowings in AUD provide natural hedge for the Australian properties Statistics Borrowings and assets by currency As at 30 June 2014 1,400 Total Assets (S$’000) 1,860,71
Slide 26: Capital Management and debt statistics
26 Capital Management and debt statistics 26 Hedged about 51% of gross borrowings In the midst of discussions to re-finance and term out all the debt Debt maturity Debt composition – floating vs. hedged Post debt prepayment and divestment of Japanese properties 1 Hedging debt As at As a % of:
Slide 27: Moving forward
Moving forward
Slide 28: Solid fundamentals – positive market outlook
2. Solid fundamentals – positive market outlook 28 Singapore office rents trend – Rents continue to grow Singapore Grade A and Grade B office rents1 1 Source: CBRE Research
Slide 29: Solid fundamentals – demand, supply and outlook for Singapore CBD office
2. Solid fundamentals – demand, supply and outlook for Singapore CBD office 29 Office supply-demand dynamics1 Leasing activity and occupier enquiries remained steady throughout Q2 2014, especially around the CBD Demand mainly from insurance, energy, commodities and IT sectors CBD Core and Frin
Slide 30: Solid fundamentals – Demand likely to pick up on back of rising office rents
2. Solid fundamentals – Demand likely to pick up on back of rising office rents 30 Singapore business park rents trend – Rents are rising for city fringe business park Singapore Business Park (city fringe) rents1 1 Source: CBRE Research
Slide 31: Solid fundamentals – demand, supply and outlook for business & science park
2. Solid fundamentals – demand, supply and outlook for business & science park 31 Manufacturing Indices1 Vacancy rose from 10.9% to 11.8% in Q2 2014 as the business park market was relatively quiet with muted activity Recruitment challenges in banking and finance and IT industries due to tight l
Slide 32: Perth CBD office supply and rents
Perth CBD office supply and rents 32 Average Premium Grade net face rents are between A$725 – A$850 psm per annum Perth CBD office supply1 Market conditions 1 Perth CBD office market vacancy rate in January 2014 was 9.0%, up from 6.9% in July 2013 Only Melbourne’s vacancy rate (8.4%) is better
Slide 33: Delivering growth
Delivering growth 33 33 Organic and in-organic initiatives to deliver growth in distributable income Master Lease expiry at Alexandra Technopark in Aug 2014 Full-year effects of redemption/ Positive conversion of rental CPPUs reversions DPU Continue to China Square grow Central portfolio enhanceme
Slide 34: Thank you
Thank you Frasers Centrepoint Asset Management (Commercial) Limited Level 21 | 438 Alexandra Road | Alexandra Point | Singapore 119958 Tel: +65 6276 4882| Fax: +65 6276 8942| Email: fcot@fraserscentrepoint.com www. fraserscommercialtrust.com
Frasers Commercial Trust — 3QFY14 Earnings Presentation on 6ix