Capitaland Ascendas Reit · SGX:A17U
Capitaland Ascendas Reit — Ascendas Reit — FY2021 Earnings Presentation
65 slides from Capitaland Ascendas Reit's earnings presentation, Feb 8, 2022
Slide 1: FY 2021 Financial Results
Ascendas Reit FY 2021 Financial Results 8 February 2022 Aperia, Singapore
Slide 2: Disclaimers
Disclaimers • This presentation may contain forward-looking statements. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors i
Slide 3: Agenda
Agenda 04 Key Highlights 06 Financial Performance 11 Investment Management 17 Capital Management 24 Asset Management 41 COVID-19 Update & Market Outlook 47 Portfolio Resilience & Sustainability 57 Appendix: - Historical Financial Results FM Global Centre, Singapore - Ascendas Reit’s Singapore Occupa
Slide 4: Key Highlights
FY2021 Financial Results 1-7 Wayne Goss Drive, Brisbane, Australia Key Highlights
Slide 5: Key Highlights
Key Highlights FY2021 Financial Distributable Income Capital Healthy Aggregate Leverage S$630.0 m 35.9% Performance +17.0% y-o-y Management 31 Dec 2020: 32.8% Distribution per Unit High Level of Natural Hedge (after performance fee) ~76% 15.258 cents 31 Dec 2020: ~72% +3.9% y-o-y Investment Properti
Slide 6: Financial Performance
FY2021 Financial Results Financial Performance 15231, 15253 and 15333 Avenue of Science, San Diego, United States 6
Slide 7: Financial Performance FY2021 vs FY2020
Financial Performance FY2021 vs FY2020 (S$’m) FY2021 FY2020 Variance Mainly attributable to: • Contribution from the completion of 254 Wellington Road, Australia in Sep 2020, acquisition of two properties in San Francisco, USA in Nov 2020, acquisition of 1-5 Thomas Holt Drive, Australia in Jan 2021,
Slide 8: Financial Performance 2H FY2021 vs 1H FY2021
Financial Performance 2H FY2021 vs 1H FY2021 2H 1H (S$’m) Variance FY2021 FY2021 Mainly attributable to: • Contribution from the acquisition of 11 data centres in Europe in Mar 2021, acquisition of the remaining 75% interest in AF5PL* that holds Galaxis, Singapore in Jun 2021, completion of Grab Hea
Slide 9: Financial Performance 2H FY2021 vs 2H FY2020
Financial Performance 2H FY2021 vs 2H FY2020 2H 2H (S$’m) Variance FY2021 FY2020 Mainly attributable to: • Contribution from the completion of 254 Wellington Road, Australia in Sep 2020, acquisition of two properties in San Francisco, USA in Nov 2020, acquisition of 1-5 Thomas Holt Drive, Australia
Slide 10: Distribution Details
Distribution Details Distribution Period DPU (Singapore cents) 1 1 Jul 2021 to 31 Dec 2021 7.598(1) Distribution timetable Last day of trading on “cum” basis 14 Feb 2022 (Monday) Ex-distribution date 15 Feb 2022 (Tuesday), 9.00 am Record date 16 Feb 2022 (Wednesday), 5.00 pm Distribution payment dat
Slide 11: Investment Management
FY2021 Financial Results Investment Management 510 Townsend Street, San Francisco, United States
Slide 12: FY2021 Investment Highlights
FY2021 Investment Highlights ▪ Completed S$2,115.4 m of acquisitions/developments and S$23.3 m of asset enhancement initiatives Purchase Consideration / FY2021 City/Country Sub-segment Completion Date Total Cost (S$ m) Completed Acquisitions 1,930.8 1 – 5 Thomas Holt Drive Sydney, Australia Business
Slide 13: FY2021 Divestment Highlights
FY2021 Divestment Highlights ▪ Divested five properties for total sales proceeds of S$247.9 m FY2021 City/Country Sub-segment Sale Price (S$ m) Completion Date Completed Divestments 247.9 11 Changi North Way Singapore Logistics 16.0 16 Apr 2021 1314 Ferntree Gully Road Melbourne, Australia Logistics
Slide 14: Acquisition: Kansas City logistics properties
Acquisition (Completed in 4Q 2021): 11 last-mile logistics properties in Kansas City, United States Total Purchase Consideration (1) S$207.8 m (US$156.0 m) Acquisition Fee(2), Stamp Duty and Other Transaction Costs S$4.4 m (US$3.3 m) Total Acquisition Cost S$212.2 m (US$159.3 m) North Topping Airwor
Slide 15: Asset Enhancement Initiative: Hansapoint, Singapore
Asset Enhancement Initiative (Completed in 4Q 2021): Hansapoint, Singapore The AEI works included lift lobby enhancement, a new gym and end-of-trip facilities. Enhancement Description works also included improvements to the driveway and canopy to enhance user experience. Property Segment Business Sp
Slide 16: Redevelopment: UBIX, Singapore
Redevelopment (Completed in 1Q 2022): UBIX, Singapore The five-storey premium B1 industrial building is located in Ubi industrial hub and provides direct connectivity to Ubi MRT Station. Upgraded building specifications include enlarged floor plates of up to 4,300sqm. Ground floor units come with a
Slide 17: Capital Management
FY2021 Financial Results Capital Management Reynolds House, Manchester, United Kingdom
Slide 18: Healthy Balance Sheet
Healthy Balance Sheet ▪ Aggregate leverage is healthy at 35.9% (1)(2) ▪ Available debt headroom of ~S$4.8 b to reach MAS’s aggregate leverage limit of 50.0% As at As at As at 31 Dec 2021 30 Jun 2021 31 Dec 2020 Total Debt (S$ m) (1)(2)(3) 6,143 6,271 4,784 Total Assets (S$ m) (1)(2) 17,126 16,697 14
Slide 19: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2031 ▪ Average debt maturity healthy at 3.5 years ▪ To date, green financing totaling S$1.2 b (1) accounts for about 20% of total borrowings 1400 10% 5% 1200 39% Diversified 1000 939 S$ million 871 874
Slide 20: Key Funding Indicators
Key Funding Indicators ▪ Robust financial metrics that exceed bank loan covenants by a healthy margin ▪ A3 credit rating facilitates good access to wider funding options at competitive rates As at As at As at 31 Dec 2021 30 Jun 2021 31 Dec 2020 Aggregate Leverage (1)(2) 35.9% 37.6% 32.8% Unencumbere
Slide 21: Prudent Interest Rate Risk Management
Prudent Interest Rate Risk Management ▪ 79.4% of borrowings are on fixed rates with an average term of 3.6 years ▪ 20 bps increase in interest rate is expected to have a pro forma impact of S$2.5 m decline in distribution or 0.06 cents decline in DPU Decrease in Change as Pro Forma DPU Impact Change
Slide 22: High Natural Hedge
High Natural Hedge ▪ Maintained high level of natural hedge of ~76% for overseas investment to minimise the effects of any adverse exchange rate fluctuations. A$ Natural Hedge US$ Natural Hedge £ Natural Hedge € Natural Hedge 68% 82% 70% 100% A$2.3 b US$1.7 b 2.5 (S$ 2.3 b) (S$ 2.3 b) US$1.5 b 2.0 (
Slide 23: Annual Property Revaluation
Annual Property Revaluation ▪ Total valuation of 217 investment properties(1) was S$16.29 b ▪ Same-store valuation for 192 properties(2) improved (+3.3%) to S$13.95 b (vs. S$13.50 b @ 31 Dec 2020) As at 31 Dec 2021 Valuation (S$b) Weighted Average Cap Rates Cap Rates Range Singapore portfolio (93 pr
Slide 24: Asset Management
FY2021 Financial Results Asset Management Nucleos, Singapore
Slide 25: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 99.2% 97.5% 97.4% 96.7% 98.2% 97.5% 94.5% 93.2% 91.7% 91.7% 90.2% 88.5% 88.4% 91.4% 92.9% Dec-21 Sep-21 Dec-20 Singapore Australia United States United Kingdom / Europe Total Gross Floor 3,066,797 788,396(2) 551,856(3) 590,393(4) 4,997,442 Area (sqm)(1) (1) Gross Floo
Slide 26: Singapore
Singapore Occupancy ▪ Improved to 90.2% mainly due to: ➢ Higher occupancy at (i) Xilin Districentre A&B (Logistics) - 31 Dec 2021: 100%; 30 Sep 2021: 68.6% (ii) Nucleos (Business Space) - 31 Dec 2021: 98.4%; 30 Sep 2021: 80.9% (iii) The Alpha (Business Space) - 31 Dec 2021: 74.0%; 30 Sep 2021: 47.1%
Slide 27: Australia
Australia Occupancy ▪ Occupancy remained healthy at 99.2%. As at 31 Dec 2021 30 Sep 2021 31 Dec 2020 Total Australian Portfolio GFA (sqm) 788,396 788,652 828,197 Australian Portfolio Occupancy 99.1% 97.3% 97.3% (same store)(1) Occupancy of Investments completed in the last 100%(2) 100%(3) 100%(3) 12
Slide 28: United States
United States Occupancy ▪ Occupancy rose to 94.5% mainly due to the acquisition of a portfolio of 11 logistics properties in Kansas City in Nov 2021. The occupancy of the logistics portfolio increased to 100% as at 31 Dec 2021 from 92.6% at acquisition. As at 31 Dec 2021 30 Sep 2021 31 Dec 2020 Tota
Slide 29: United Kingdom / Europe
United Kingdom / Europe Occupancy ▪ Occupancy remained healthy at 96.7% As at 31 Dec 2021 30 Sep 2021 31 Dec 2020 Total UK/Europe Portfolio GFA (sqm) 590,393 590,393 509,908 UK/Europe Portfolio Occupancy 96.6%(2) 98.3% 97.5% (same store)(1) Occupancy of Investments completed in the last 97.9%(3) 97.
Slide 30: Singapore: Sources of New Demand in 4Q 2021
Singapore: Sources of New Demand in 4Q 2021 5.2% 4.3% 3.7% 6.2% 6.6% 5.9% 5.9% 2.9% 3.0% 2.7% 8.0% 11.9% 0.7% 0.6% 11.9% By Gross 13.9% By NLA Rental Income 31.6% 16.5% 38.5% 20.0% IT & Data Centers Biomedical and Agri/Aquaculture Engineering Energy, Chemicals and Materials Logistics & Supply Chain
Slide 31: Singapore: Sources of New Demand in FY2021
Singapore: Sources of New Demand in FY2021 5.2% 3.5% 4.3% 4.9% 5.1% 5.0% 9.1% 4.5% 2.7% 7.2% 4.5% 3.9% 0.1% 10.4% 8.5% By Gross By NLA Rental 23.3% 11.4% Income 13.6% 25.5% 22.7% 24.6% Biomedical and Agri/Aquaculture IT & Data Centers Engineering Lifestyle, Retail and Consumer Products Logistics & S
Slide 32: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Average portfolio rent reversion of 4.5% was recorded for leases renewed in FY2021. ▪ Rental reversion for FY2022 is expected to be in the positive low single-digit range in view of current market uncertainties. % Change in Renewal Rates for Multi-tenant Buildings (1) F
Slide 33: Weighted Average Lease Expiry
Weighted Average Lease Expiry By Gross Revenue ▪ Portfolio Weighted Average Lease Expiry (WALE) stood at 3.8 years WALE (as at 31 Dec 2021) Years Singapore 3.4 Australia 3.5 United States 4.4 United Kingdom/Europe 5.7 Portfolio 3.8 As c endas Rei t FY2021 Financial Results 33
Slide 34: Portfolio Lease Expiry Profile
Breakdown of expiring leases for Portfolio Lease Expiry Profile FY2022 and FY2023 As at 31 Dec 2021 14% 4% 33% ▪ Portfolio WALE of 3.8 years 6% FY2022 ▪ Lease expiry is well-spread, extending beyond FY2036 5% ▪ About 18.7% of gross rental income is due for renewal in FY2022 16% 13% ▪ Weighted averag
Slide 35: Singapore: Lease Expiry Profile for FY2022 and FY2023
Breakdown of expiring leases Singapore: Lease Expiry Profile for FY2022 and FY2023 As at 31 Dec 2021 6% ▪ Singapore portfolio WALE of 3.4 years 21% 43% ▪ Lease expiry is well-spread, extending beyond FY2036 FY2022 ▪ About 21.7% of Singapore’s gross rental income is due for renewal in FY2022 12% 30%
Slide 36: Australia: Lease Expiry Profile for FY2022 and FY2023
Breakdown of expiring leases Australia: Lease Expiry Profile for FY2022 and FY2023 As at 31 Dec 2021 7% 6% ▪ Australia portfolio WALE of 3.5 years ▪ Lease expiry is well-spread, extending beyond FY2031 FY2022 ▪ 9.9% of Australia’s gross rental income is due for renewal in FY2022 87% 25% 21.2% 20% %
Slide 37: United States: Lease Expiry Profile for FY2022 and FY2023
Breakdown of expiring leases United States: Lease Expiry Profile for FY2022 and FY2023 As at 31 Dec 2021 8% 25% ▪ United States portfolio WALE of 4.4 years 18% ▪ Lease expiry is well-spread, extending beyond FY2033 FY2022 ▪ 19.9% of United States’s gross rental income is due for renewal in FY2022 25
Slide 38: United Kingdom/Europe: Lease Expiry Profile
Breakdown of expiring leases United Kingdom/Europe: Lease Expiry Profile for FY2022 and FY2023 As at 31 Dec 2021 ▪ United Kingdom/Europe portfolio WALE of 5.7 years 25% ▪ Lease expiry is well-spread, extending beyond FY2035 FY2022 ▪ 7.6% of United Kingdom/Europe’s gross rental income is due for rene
Slide 39: Improving Portfolio Quality
Improving Portfolio Quality Ongoing Projects Estimated City/Country Estimated Total Cost (S$m) Completion Date Acquisitions Under Development 251.2 Lot 7, Kiora Crescent Sydney, Australia 21.1(1) 1Q 2022(2) 500 Green Road Brisbane, Australia 69.1(3) 1Q 2022(2) MQX4, Macquarie Park Sydney, Australia
Slide 40: Redevelopment: Science Park Drive, Singapore (34% stake)
Redevelopment (Announced in 4Q 2021): 1 Science Park Drive, Singapore (34% stake) Estimated Total Development Cost (100% basis) S$883.0 m Ascendas Reit’s 34% interest S$300.2 m Land Tenure 59.7 years (extended from 58.8 years) Total 116,200 sqm: • 112,500 sqm of business space (80,000 sqm wet lab-re
Slide 41: COVID-19 Update & Market Outlook
FY2021 Financial Results COVID-19 Update & Perimeter Two, Raleigh, United States Market Outlook 41
Slide 42: COVID-19 Update
COVID-19 Update FY2020 FY2021 ▪ Minimal financial impact ▪ Minimal financial impact ➢S$17.8 m in rent rebates (1.7% of ➢S$1.8 m in rent rebates (0.2% of FY2021 FY2020 total gross revenue) was total gross revenue) was recognised recognised ➢Tenants who received rent rebates were ➢Tenants who received
Slide 43: Market Outlook
Market Outlook ▪ In January 2022, the International Monetary Fund (IMF) lowered its global growth forecast for 2022 by 50 basis points to 4.4%. Global recovery is expected to continue at a more moderate pace weighed down by the surge in Omicron infections worldwide and supply chain disruptions. Sing
Slide 44: Market Outlook: Australia
Market Outlook Australia ▪ In 3Q 2021, the Australian economy grew 3.9% y-o-y but contracted 1.9% q-o-q. Household spending declined 4.8% q- o-q as a result of further lockdowns across New South Wales, Victoria and the Australian Capital Territory to reduce the spread of the Delta variant. ▪ Whilst
Slide 45: Market Outlook: United States
Market Outlook United States ▪ In 2021, the USA economy grew 5.7% y-o-y compared to a 3.4% y-o-y contraction in 2020. Consumer spending helped support GDP growth in 4Q 2021 which rose 6.9% q-o-q compared to the 2.3% increase in 3Q 2021. GDP is expected to expand by 4.0% in 2022. ➢ The newly acquired
Slide 46: Market Outlook: United Kingdom / Europe
Market Outlook United Kingdom / Europe ▪ UK’s GDP rose 6.8% y-o-y and 1.1% q-o-q in 3Q 2021. Q4 2021 GDP is anticipated to either reach or surpass its pre- coronavirus level (Q4 2019). UK’s economy is projected to deliver a growth of 4.7% in 2022. The economies of Western Europe have largely rebound
Slide 47: Portfolio Resilience & Sustainability
FY2021 Financial Results Portfolio Resilience & Sustainability 254 Wellington Road, Melbourne, Australia
Slide 48: Diversified Portfolio
Diversified Portfolio United States, 14% By Value of Investment Properties Singapore, 61% Total Investment ▪ As at 31 Dec 2021, total investment properties stood at Australia, 14% Properties(5) S$16.3 b (217 properties(1)) ~S$16.3 b ▪ Diversified geographically: ▪ Singapore portfolio: S$9.9 b United
Slide 49: Tapping the Growing Technology, Logistics & Life Science Industries
Tapping the Growing Technology, Logistics & Life Science Industries Data centres 11.7% Information & Communications Technology 10.9% Engineering 10.9% Our properties cater to the growing technology, Logistics & Supply Chain Management 10.8% logistics and life science industries Biomedical Sciences 9
Slide 50: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of more than 1,570 tenants. ▪ Top 10 customers (as at 31 Dec 2021) account for about 18.3% of monthly portfolio gross revenue. ▪ On a portfolio basis, weighted average security deposit is about 5.0 months of rental income. Top 10 Customers
Slide 51: Diversified Portfolio
Galaxis,4.3% Aperia,3.5% 12, 14 & 16 Science Park Drive,2.6% ONE @ Changi City,2.6% Diversified Portfolio Nucleos,2.3% Croydon,2.0% 510 Townsend Street,2.0% 1, 3 & 5 Changi Business Park Crescent,1.9% Kim Chuan Telecommunication Complex,1.8% Techview,1.7% TelePark,1.7% Neuros & Immunos,1.6% Pioneer
Slide 52: Sustainability Committees
Sustainability Committees Strategic Oversight & Implementation of Strategies The Manager’s Sustainability Committee (Established in 2020) Chairman: CEO CapitaLand Investment (Sponsor) Committee Members: Management Team Members Provides strategic direction and • Portfolio Management support to The Ma
Slide 53: Ascendas Reit's ESG Targets
Ascendas Reit’s ESG Targets Targets Timeline • Green Certification for new acquisitions/developments to meet a minimum green rating target set(1) o Singapore – Green Mark GoldPLUS award - o Overseas – certification by a green rating system administered by a national government ministry/agency or a W
Slide 54: Green Initiatives
Green Initiatives Green Financing Green Buildings ▪ Established Green Finance Framework in FY2020 ▪ Largest number of BCA Green Mark certified properties amongst S-REITs: 40(1) ▪ Total of ~S$1.2b comprising Green Bond, Green Perpetual Securities, Green Loans ▪ Total portfolio comprises 49(1) Green c
Slide 55: Committed to Reduce Carbon Footprint
Committed to Reduce Carbon Footprint ▪ By 2022, Ascendas Reit aims to power the common facilities’ electricity usage at the 3 properties located at one- north (including Neuros & Immunos) with renewable energy Neuros & Immunos, Singapore Nexus @one-north, Singapore Nucleos, Singapore Achieved in 202
Slide 56: Green Buildings
Green Buildings Recent Acquisitions and Developments 1 & 3 Thomas Holt Drive, Sydney, 510 Townsend Street, San Francisco, USA 505 Brannan Street, San Francisco, USA 254 Wellington Road, Melbourne, Australia Galaxis, Singapore Australia 5-Star Green Star Design & 1 THD: 5.5-Star NABERS Energy LEED Pl
Slide 57: Appendix
FY2021 Financial Results Appendix Unit 5 Wellesbourne Distribution Park, West Midlands, United Kingdom 57
Slide 58: Historical Financial Results
Historical Financial Results Financial Highlights 1H FY2020 2H FY2020 FY2020 1H FY2021 2H FY2021 FY2021 (S$ m) Gross Revenue 521 528 1,049 586 641 1,227 Net Property Income 388 388 776 446 475 921 Total Amount Available for 263 275 538 311 319 630 Distribution No. of Units in Issue (m) 3,620 4,021 4
Slide 59: Ascendas Reit's Singapore Occupancy vs Industrial Average
Ascendas Reit’s Singapore Occupancy vs Industrial Average 100% 94.7% 95% 92.8% 90.2% 90.2% 90.0% 90% 87.1% 86.0% 84.6% 85% Occupancy Rate 80% 75% 70% 65% 60% 55% 50% Business and Science Park High-Specifications Industrial Light Industrial Logistics Ascendas REIT JTC Statistics Source : Ascendas Rei
Slide 60: Average Monthly Gross Rents
Average Market Rents (Singapore) By Segment 120 Rental Index of All Singapore Industrial Property 100 90.9 90.3 89.5 89.6 90.1 90.6 91.2 91.4 Rental Index (4Q 2012 = 100) 80 60 40 20 Source : JTC 4Q 2021 Market Report $6.50 Average Market Rents (Singapore) by Segment Average Monthly Gross Rents Busi
Slide 61: Singapore Industrial Market New Supply
Singapore Industrial Market New Supply ▪ Potential new supply of about 4.7 m sqm (~9.3% of existing stock) over next 4 years, of which ~62% are pre- committed ▪ Island-wide occupancy as at 31 Dec 21 remained at 90.1% as compared to previous quarter, but increased by 0.2% from previous year (2020Q4)
Slide 62: Singapore Business & Science Park New Supply
Singapore Business & Science Park New Supply (1) Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) 2022 Cleantech Loop JTC Corporation 25,830 30% 2022 Cleantech Loop Surbana Jurong Capital (JID) Pte Ltd 41,350 100% 2022 Venture Avenue PRE 15 Pte. Ltd. 139,353 0% 2023 Chang
Slide 63: Singapore High-Specifications & Light Industrial New Supply
Singapore High-Specifications & Light Industrial New Supply (1) Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) 2022 Seletar North Link HL-Sunway JV Pte Ltd 65,320 100% 2022 Senoko Road Tee Yih Jia Food Manufacturing Pte Ltd 100,000 100% 2022 Sunview Way Malkoha Pte Ltd
Slide 64: Singapore Logistics New Supply
Singapore Logistics: New Supply (1) Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) Tee Yih Jia Food Manufacturing 2022 Senoko Road 100,000 100% Pte Ltd 2022 Pioneer Sector 1 Soilbuild Business Park REIT 70,330 50% NTUC Fairprice Co-operative 2022 Sunview Road 69,610 100
Slide 65: Thank you
ascendas Reit 2 ‘A Member of CapitaLand Investment