Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — CapitaCommercial Trust — SIAS Corporate Profile Seminar (November 2011)
38 slides from Singapore Exchange's conference presentation, Nov 17, 2011
Slide 1: CapitaCommercial Trust: Delivering Value through Portfolio Reconstitution
CapitaCommercial Trust Fi t listed First li t d commercial i l REIT D li Delivering i Value V l through th h Portfolio P tf li Reconstitution R tit ti by Ms Lynette Leong, CEO SIAS C Corporate t PProfile fil Seminar S i 17 November 2011
Slide 2: Important Notice
Important Notice This presentation shall be read in conjunction with CCT’s Third Quarter 2011 Unaudited Financial Statement Announcement. The past performance of CCT is not indicative of the future performance of CCT. Similarly, the past performance of CapitaCommercial Trust Management Limited, the
Slide 3: Contents
Contents Slide No. 1. Who we are 4 2. Portfolio Reconstitution 11 3. Strong g balance sheet 23 4. Stable Portfolio 29 5 5. Market Outlook 34 6. Summary 36 3 CapitaCommercial Trust Presentation *November 2011*
Slide 4: Who We Are
1 Who We Are 1. 4 CapitaCommercial Trust Presentation *November 2011*
Slide 5: Singapore's First Listed Commercial REIT
Singapore’s First Listed Commercial REIT Listing May 2004 on Singapore Exchange Securities Trading Limited Portfolio Nine quality commercial assets in the Central Area of Singapore - Singapore Three Grade A offices and one prime office, three mixed-use properties, one multi-storey car park and one o
Slide 6: CCT's nine quality commercial assets
CCT’s nine quality commercial assets Grade A offices 60% interest in Capital Tower Six Battery Road One George Street Raffles City 40% interest in HSBC Golden Shoe Wilkie Edge Bugis Village Market Street Building Car Park Development 6 CapitaCommercial Trust Presentation *November 2011*
Slide 7: Gross rental income contribution by sector
CCT’s gross rental income supported by contribution from retail and hotels & convention centre CCT’s income(1) contribution by sector(2) Office 64% Office, Hotels & Convention Mainly Centre, 15% from 60% interest in Raffles City Retail, 21% Notes: (1) Excludes retail turnover rent (2) For the period
Slide 8: Portfolio diversification with focus on quality
Portfolio diversification with focus on quality(1) More than 90% of Net Property Income from Grade A and Prime offices(2) Wilkie Edge, 3% Golden Shoe Car Park, 3% Bugis Village, 3% HSBC Building, g, Raffles City 4% (60%), 34% Capital Tower, 17% O e George One Geo ge Six Battery y Street, 18% Road, 1
Slide 9: Diverse tenant mix in CCT's portfolio
Diverse tenant mix in CCT’s portfolio(1) Car Park, 2% Department Store, 2% Education, 1% Real Estate & Property Services 3% Services, Retail Services, 3% Legal, 4% Banking, Insurance & Financial Services Services, 35% (2) Others, 5% Food & Beverage, 7% Fashion, 7% Hospitality, 15% Government & Gover
Slide 10: Attractive yield compared to other investments
Attractive yield compared to other investments FTSE ST REIT Index 6.6% CCT's Distribution Yield 6.4% Office building/strata-titled office 3 0 - 4.5% 3.0 4 5% space Straits Times Index 3.9% CPF (ordinary) account 2.5% 10-year Government bond 1.6% Bank fixed deposit (12-month) 0.4% Bank savings deposi
Slide 11: Portfolio Reconstitution
2 Portfolio Reconstitution 2. 11 CapitaCommercial Trust Presentation *November 2011*
Slide 12: CCT's portfolio reconstitution strategy to generate higher value for Trust
CCT’s portfolio reconstitution strategy to generate higher value for Trust Redevelop Market Flexibility and speed to Street Car Park into seize i growth h opportunities ii Grade A office tower Redeploy Acquire good capital quality asset Funding Organic flexibility growth Unlock value at optimal stag
Slide 13: Raffles City B2 Link and B1 Marketplace 100% leased
Raffles City B2 Link and B1 Marketplace 100% leased Created C t d about b t 16,000 16 000 sq ft off additional dditi l nett lettable l tt bl area Achieved higher return on investment of 9.0% 13 CapitaCommercial Trust Presentation *November 2011*
Slide 14: Six Battery Road wins BCA Green Mark Platinum award
Six Battery Road wins prestigious BCA Green Mark Platinum award • Repositioning to enhance competitiveness • Asset enhancement focus: – Environmental sustainabilityy – Technical efficiency – Aesthetic value • Cost of enhancement = S$92m (disbursed over six years) • Projected return on investment: 8
Slide 15: Official opening of Rainforest Rhapsody
Official opening of “Rainforest Rhapsody”, the first indoor vertical garden in Singapore Singapore’s s CBD Strong lease commitment for upgraded space available in 2011: 98% or 92,600 sq ft (out of 93,700 sq ft of space to be upgraded pg as at 3Q 2011)) Positive feedback received from tenants on the
Slide 16: Market Street site is a well-connected island site
Market Street site is a well-connected island site in Raffles Place and near Marina Bay financial area Attractiveness of One Market Street site George St Six Battery Rd HSBC Bldg • In the heart of Singapore Singapore’s s Raffles Place Central Business District, and Golden Shoe close to Marina Bay Ca
Slide 17: Market Street development – a new Grade A office
Market Street development – a new Grade A office Total PDE S$1.4 billion Mr. Toyo Ito, internationally- Design acclaimed architect Tenure 99 years from 1 April 1974 Estimated GFA 887,000 sq ft Estimated NLA 720,000 sq ft Typical floor plate 20 000 – 25,000 20,000 25 000 sq ft Max. height 245 m contr
Slide 18: Joint venture structure
Joint venture structure CL CCT MEA 50% 40% 10% CapitaLand Property Commercial Management Services The Trustee- The Property MSO as Trustee & Manager Manager Manager Trust (CCT Manager and CapitaLand Project Preserves Commercial) Management g tax privileges Services for CCT Management The Project com
Slide 19: Independent valuations of land for proposed office development
Independent valuations to assess residual value of land for the proposed office development Basis: Residual land valuation approach Jones Lang LaSalle CB Richard Ellis (appointed by CCT Manager) (appointed by CCT Trustee) S$53.6 million S$53.0 million A Average valuation l ti S$53.3 million 9.7% S$4
Slide 20: Sale to MSO Trust at S$56m with call option
Sale to MSO Trust at S$56m with call option to buy completed asset within 3 years after TOP 3 Callll option C ti 1 Sale price of (CCT’s right S$56 to buy) at million* illi * market MSO valuation** after TOP Trust 2 *15.2% above Dec 2010 TOP in 2014 valuation as a car park ** Price must give at least
Slide 21: JV pays for 100% enhancement in land value
JV pays for 100% enhancement in land value which makes upp bulk of land-related costs Others (costs borne by CCT and recoverable 9% from MSO Trust, tenant compensation, marketing, financing and contingency) S$122m 39% Construction & Professional fees S$550m Differential Total premium p project p j a
Slide 22: Funding MSO Trust
Funding MSO Trust S$1.4 billion Project financing S$890 million (63% LTV) CL 50% CCT 40% MEA 10% Equity: S$255m Equity:: S$204m Equity Equity: S$51m 22
Slide 23: Strong balance sheet
3 Strong balance sheet 3. 23 CapitaCommercial Trust Presentation *November 2011*
Slide 24: CCT in stronger position now compared to 2008 Global Financial Crisis
CCT in stronger position now compared to 2008 Global Financial Crisis • Strong g balance sheet • Low gearing of 27.4% • Substantial cash reserve 24 CapitaCommercial Trust Presentation *November 2011*
Slide 25: Portfolio valuation still below previous peak
Portfolio valuation still below previous peak • Portfolio value has only recovered by 7.7% since trough Valuation of Existing Portfolio(1) (2008 to 2011) S$6,259.7m $ , Global Financial Crisis S$5,580.2m -17.2% +7.7% S$5 180 1m S$5,180.1m Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Note: (1) Ex
Slide 26: Total assets at S$6.2 billion; Adjusted NAV at S$1.52 per unit
Total assets at S$6.2 billion; Adjusted NAV at S$1.52 per unit 30 Sept 11 31 Dec 10 S$'000 S$'000 Non-current assets 5,680,063 5,554,383 Current assets 474 633 474,633 641 784 641,784 - Cash 468,092 635,937 Total assets 6,154,696 6,196,167 Current liabilities 649,425 986,290 Non-current liabilities
Slide 27: Completed refinancing of all 2011 debt
Completed refinancing of all 2011 debt - diverse sources of funding S$'mil (% of total Debt maturity profile as at 30 September 2011 borrowings) 700 600 Credit ratings S&P’s – BBB+ stable $120m Moody’ss – Baa2 corporate family rating with Moody (7%) 00 500 $570m stable outlook (34%) 400 $480m (28%)
Slide 28: Key financial indicators
Key financial indicators Solid balance sheet, healthy cash flows 3Q 2011 2Q 2011 Remarks Increase Total Gross Debt (S$'m) 1,688.3 1,666.7 (due to additional borrowings by RCS Trust) Increase Gearing Ratio 27.4% 26.9% (due to additional borrowings by RCS Trust) Net Debt/EBITDA 5.2 times 5.3 times Imp
Slide 29: Stable Portfolio
4 Stable Portfolio 4. 29 CapitaCommercial Trust Presentation *November 2011*
Slide 30: Well spread portfolio lease expiry profile
Well spread portfolio lease expiry profile Lease expiry profile as a percentage of monthly gross rental income(1) for Sep 2011 20.5% 16.4% 12.4% 10.5% 13.5% 9.3% 7 7% 7.7% 8 3% 8.5% 8.3% 5.5% 0.9% 3.9% 2011 2012 2013 2014 2015 and beyond Office Retail Hotels and Convention Centre Committed Note: (1)
Slide 31: Engaging tenants ahead of lease expiries
Engaging tenants ahead of lease expiries Office lease expiry profile as a percentage of monthly office gross rental income for Sep 2011 34.1% 27 4% 27.4% 22.6% 15.4% 13 9% 13.9% 9.2% 2011 2012 2013 2014 2015 & Beyond Office Committed Average office portfolio rent as at 30 Sep 2011 is $7.79psf 31 Cap
Slide 32: Undertaken measures to mitigate risk
Undertaken measures to mitigate risk 3Q 2011 Industry Statistics(1) – Grade A Office Average Market Rent: S$11.06 psf pm 2011 2012 60% Average rent of expiring leases: $15.41psf (2) $20 Average rent of remaining leases expiring is 60% $20 $10.33 psf $16.04 $16 $15.10 $16 40% 40% $12 $12.00 $12 $10.8
Slide 33: Positioning leasing strategy to benefit from office market recovery
Positioning leasing strategy to benefit from office market recovery upon lease expiries 2013 2014 60% $7 62 psf(1) Average rent of expiring leases: $7.62 $20 60% A Average rentt off expiring ii leases: l $10 03 psff(1) $10.03 $20 $16 $16 40% 40% $12 $12 $10.64 $10.73 $9.37 $8.59 $8.52 $8.93 $7.87 $8
Slide 34: Market Outlook
5 Market Outlook 5. 34 CapitaCommercial Trust Presentation *November 2011*
Slide 35: Average annual supply from 2012 to 2016 estimated at 1.4 mil sq ft
Average annual supply from 2012 to 2016 is estimated to be 1.4 mil square feet Singapore Private Office Space (Central Area) – Demand & Supply Avg annual supply = 2.4 mil sq ft Avg annual demand during prev Post-Asian Post Asian financial crisis crisis, SARs & GFC Remaking of Singapore as growth pha
Slide 36: Summary
6 Summary 6. 36 CapitaCommercial Trust Presentation *November 2011*
Slide 37: Summary
Summary • Portfolio reconstitution strategy to achieve higher value for CCT • Stronger position compared to 2008 global financial crisis – Strong balance sheet – Low gearing of 27.4% – Substantial cash reserve • Portfolio valuation still below previous peak • Yield attractiveness of CCT versus other
Slide 38: CapitaCommercial Trust Management Limited contact
CapitaCommercial C it C i l Trust T t Management M t Limited Li it d 39 Robinson Road #18-01 Robinson Point Singapore 068911 Tel: (65) 6536 1188 Fax: (65) 6533 6133 http://www cct com sg http://www.cct.com.sg For enquiries, please contact: Ms Ho Mei Peng Head, Investor Relations & Communications Dir
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