Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Ascendas Reit — H1 2020 Earnings Presentation
62 slides from Singapore Exchange's earnings presentation, Jul 23, 2020
Slide 1: Ascendas Reit 1H FY2020 Financial Results
ASCENDAS REIT 1H FY2020 Financial Results 23 July 2020
Slide 2: Disclaimers
Disclaimers • This material shall be read in conjunction with Ascendas Real Estate Investment Trust’s (“Ascendas Reit”) financial statements for the financial period ended 30 June 2020. • This presentation may contain forward-looking statements. Actual future performance, outcomes and results may di
Slide 3: Agenda
Agenda Key Highlights 5 Financial Performance 6 Investment Management 10 Capital Management 15 Asset Management 20 Portfolio Resilience 38 Sustainability 43 COVID-19 Updates 48 Market Outlook 52 3
Slide 4: Key Highlights
Key Highlights ONE@Changi City, Singapore
Slide 5: Key Highlights for 1H FY2020
Key Highlights for 1H FY2020 Financial Highlights Distributable Income Distribution per Unit Investment Properties S$263.2 m 7.270 cents S$12.75 b +3.7% y-o-y -10.8% y-o-y Asset Management Capital Management Stable Portfolio Positive Portfolio Healthy Aggregate High Level of Occupancy Rental Reversi
Slide 6: Financial Performance
Financial Performance FM Global Centre, Singapore 6
Slide 7: 1H FY2020 (Jan-Jun) vs 1H 2019 (Jan-Jun)
1H FY2020 (Jan-Jun) vs 1H 2019 (Jan-Jun) 1H 1H (S$’m) Variance FY2020 2019 Mainly attributable to: • Contribution from the US Portfolio of 28 business park properties and two Singapore business park properties, which were acquired in December 2019; • Partially offset by (i) rent rebates provided to
Slide 8: 1H FY2020 (Jan-Jun) vs 2H 2019 (Jul-Dec)
1H FY2020 (Jan-Jun) vs 2H 2019 (Jul-Dec) 1H 2H (S$’m) Variance FY2020 2019 Mainly attributable to: • Contribution from the US Portfolio of 28 business park properties and two Singapore business park properties, which were acquired in December 2019; • Partially offset by (i) rent rebates provided to
Slide 9: Distribution Details
Distribution Details Distribution Period DPU (Singapore cents) 1 1 January 2020 to 30 June 2020 7.270 Distribution timetable Last day of trading on “cum” basis 29 July 2020 (Wednesday) Ex-distribution date 30 July 2020 (Thursday), 9.00 am Record date 3 August 2020 (Monday), 5.00 pm Distribution paym
Slide 10: Investment Management
Investment Management 15378 Avenue of Science San Diego, United States
Slide 11: Investment Highlights – 1H FY2020
Investment Highlights – 1H FY2020 ▪ Completed one acquisition (S$104.6 m(1)) and four asset enhancement initiatives (S$22.9 m) ▪ Three properties divested for sales proceeds of S$125.3 m Purchase Consideration Completion 1H FY2020 Country Sub-segment (S$m) Date Acquisition 104.6 25% stake in Galaxis
Slide 12: Asset Enhancement Initiative (Completed in 2Q): The Galen
Asset Enhancement Initiative (Completed in 2Q): The Galen, Singapore Enhancement works were carried out to the building entrance and lift lobbies, common corridors to create a premium look and feel. Description In addition, upgrades included the creation of new collaborative spaces and meeting rooms
Slide 13: Asset Enhancement Initiative (Completed in 2Q): Great Western Highway
Asset Enhancement Initiative (Completed in 2Q): 484-490 & 494-500 Great Western Highway, Sydney, Australia Asset enhancement works include external redecoration of warehouses, Description internal refurbishment and new LED lighting & translucent roof sheeting Property Segment Logistics 484 Great Wes
Slide 14: Acquisition (3Q FY2020): Kiora Crescent, Yennora
Acquisition (3Q FY2020) : Lot 7 Kiora Crescent, Yennora, Sydney, Australia Purchase Consideration (1) S$21.1 m (A$23.5 m)(2) Acquisition Fee, Stamp Duty and S$1.29 m (A$1.43 m) Other Transaction Costs Total Acquisition Cost S$22.39 m (A$24.93 m) Vendor Larapinta Project Pty Ltd Valuation as at 30 Ju
Slide 15: Capital Management
Capital Management Nexus @one-north, Singapore 15
Slide 16: Healthy Balance Sheet
Healthy Balance Sheet ▪ Aggregate leverage is healthy at 36.1% (1)(2) ▪ Available debt headroom of ~S$3.8 b (1)(2) to reach 50.0% aggregate leverage ▪ Total assets include cash and equivalent of ~ S$361 m to meet current financial and operational obligations As at As at As at 30 Jun 2020 31 Dec 2019
Slide 17: Well-spread Debt Maturity Profile
Well-spread Debt Maturity Profile ▪ Well-spread debt maturity with the longest debt maturing in FY2029 ▪ Average debt maturity is stable at 3.6 years ▪ S$200m of committed and ~S$1.1b of uncommitted facilities are unutilised 1000 910 900 839 866 4% 808 7% 154 800 200 39% 700 325 557 350 600 S$ (mill
Slide 18: 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 30 Jun 2020 31 Dec 2019 Aggregate Leverage (1)(2) 36.1% (3) 35.1% Unencumbered Properties as % of
Slide 19: High Natural Hedge
High Natural Hedge ▪ Maintained high level of natural hedge for Australia (77%), the United Kingdom (100%) and United States (100%) to minimise the effects of adverse exchange rate fluctuations AUD GBP USD Natural Hedge Natural Hedge Natural Hedge 77% 100% 100% 1.8 A$1.7 b (S$ 1.6 b) US$1.0 b US$1.0
Slide 20: Asset Management
Asset Management Infineon Building , Singapore 20
Slide 21: Overview of Portfolio Occupancy
Overview of Portfolio Occupancy 98.4% 97.3% 97.5% 97.5% 100.0% 92.3% 92.1% 92.9% 91.5% 91.7% 91.1% 87.9% 88.6% 88.9% N.A. Singapore Australia United Kingdom United States Total Jun-20 Mar-20 Jun-19 Gross Floor 3,001,471 810,536(2) 509,907 (3) 313,059 4,634,973 Area (sqm) (1) (1) Gross Floor Area as
Slide 22: Singapore: Occupancy
Singapore: Occupancy ▪ Occupancy slid to 87.9% mainly due to a non-renewal at 31 Joo Koon Circle, a light industrial property As at 30 Jun 2020 31 Mar 2020 30 Jun 2019 Total Singapore Portfolio GFA (sqm) 3,001,471(1)(2)(3)(4) 3,000,799(1)(2)(3)(4) 3,017,037(1) Singapore Portfolio Occupancy 87.8% 88.
Slide 23: Australia: Occupancy
Australia: Occupancy ▪ Occupancy improved to 98.4% mainly due to a new short-term lease at 1314 Ferntree Gully Road, a logistics property in Melbourne As at 30 Jun 2020 31 Mar 2020 30 Jun 2019 Total Australian Portfolio GFA (sqm) 810,536 792,039(1) 810,772 Australian Portfolio Occupancy 99.1% 97.2%
Slide 24: United Kingdom: Occupancy
United Kingdom: Occupancy ▪ Occupancy remained high at 97.5% As at 30 Jun 2020 31 Mar 2020 30 Jun 2019 Total United Kingdom Portfolio GFA (sqm) 509,907 509,907 509,907 Occupancy of United Kingdom Investments N.A. N.A. 100.0% Completed in the last 12 months Overall United Kingdom Portfolio 97.5% 97.5
Slide 25: United States: Occupancy
United States: Occupancy ▪ Occupancy declined to 92.1% mainly due to the expiry of a lease in 15231, 15253 & 15333 Ave of Science, a business park property in San Diego As at 30 Jun 2020 31 Mar 2020 Total United States Portfolio GFA (sqm) 313,059 313,059 Occupancy of United States Investments Comple
Slide 26: Singapore: Sources of New Demand (1H FY2020)
Singapore: Sources of New Demand (1H FY2020) ▪ Continues to attract demand from a wide spectrum of industries 1.9% 4.0% 1.0% 1.5% 6.7% 6.1% 7.6% 5.5% 7.6% 5.2% 0.4% 8.0% 0.3% 4.1% 1.9% 9.7% 10.3% By Gross By NLA Rental 13.3% Income 23.3% 14.1% 46.1% 21.3% Logistics & Supply Chain Management Engineer
Slide 27: Portfolio Rental Reversions
Portfolio Rental Reversions ▪ Average portfolio rent reversion for leases renewed in 2Q FY2020 and 1H FY2020 was 4.3% and 5.4% respectively ▪ Expect to achieve a low single digit positive rent reversion in FY2020 in view of the current uncertainties % Change in Renewal Rates for Multi-tenant Buildin
Slide 28: Weighted Average Lease Expiry
Weighted Average Lease Expiry (By gross revenue) ▪ Portfolio Weighted Average Lease Expiry (WALE) stood at 3.9 years WALE (as at 30 Jun 2020) Years Singapore 3.5 Australia 4.3 United Kingdom 9.2 United States 3.8 Portfolio 3.9 28
Slide 29: Portfolio Lease Expiry Profile
Portfolio Lease Expiry Profile (as at 30 Jun 2020) Breakdown of expiring leases for FY2020 and FY2021 ▪ Portfolio weighted average lease to expiry (WALE) of 3.9 years. 1.5% 6.5%1.8% ▪ Lease expiry is well-spread, extending beyond FY2034 ▪ About 8.2% of gross rental income is due for renewal in FY202
Slide 30: Singapore: Lease Expiry Profile
Singapore: Lease Expiry Profile (as at 30 Jun 2020) Breakdown of expiring leases for FY2020 and FY2021 ▪ Singapore portfolio weighted average lease to expiry (WALE) of 3.5 years 10% ▪ Lease expiry is well-spread, extending beyond FY2034 ▪ 11.3% of Singapore’s gross rental income is due for renewal i
Slide 31: Australia: Lease Expiry Profile
Australia: Lease Expiry Profile (as at 30 Jun 2020) Breakdown of expiring leases for FY2020 and FY2021 ▪ Australia portfolio weighted average lease to expiry (WALE) of 4.3 years ▪ Lease expiry is well-spread, extending beyond FY2030 ▪ 2.1% of Australia’s gross rental income is due for renewal in FY2
Slide 32: United Kingdom: Lease Expiry Profile
United Kingdom: Lease Expiry Profile (as at 30 Jun 2020) Breakdown of expiring leases for FY2020 and FY2021 ▪ United Kingdom portfolio weighted average lease to expiry (WALE) of 9.2 years ▪ Lease expiry is well-spread, extending beyond FY2033 ▪ 1.0% of United Kingdom’s gross rental income is due for
Slide 33: United States: Lease Expiry Profile
United States: Lease Expiry Profile (as at 30 Jun 2020) Breakdown of expiring leases for FY2020 and FY2021 ▪ United States portfolio weighted average lease to expiry (WALE) of 3.8 years ▪ Lease expiry is well-spread, extending beyond FY2028 ▪ 1.7% of United States’ gross rental income is due for ren
Slide 34: Ongoing Projects: Improving Portfolio Quality
Ongoing Projects: Improving Portfolio Quality ▪ Commenced three new AEIs at 21 Changi South Avenue 2, 100 & 108 Wickham Street and 197 – 201 Coward Street for a total sum of S$16.3 m Estimated Country Land & Development Cost (S$m) Completion Date Acquisition (under development) 104.4 254 Wellington
Slide 35: Asset Enhancement Initiative (New): Changi South Ave 2
Asset Enhancement Initiative (New): 21 Changi South Ave 2, Singapore Construction of a new substation (power upgrade from 1MVA to 3MVA), air- Description conditioning installation and sprinkler upgrade at the 3 rd and 4 th storey of warehouse and a new service lift. Property Segment Logistics Net Le
Slide 36: Asset Enhancement Initiative (New): Wickham Street, Brisbane
Asset Enhancement Initiative (New): 100 & 108 Wickham Street, Brisbane, Australia Enhancement works include an upgrade of furnishing in the ground floor lobby and creation of collaboration spaces. The central Description courtyard will be refreshed with added landscaping and seating and architectura
Slide 37: Asset Enhancement Initiative (New): Coward Street, Sydney
Asset Enhancement Initiative (New): 197 – 201 Coward Street, Mascot, Sydney, Australia Improvement to existing building amenities which include new end-of-trip facilities for Description cyclists, landscaping of external gardens and construction of an outdoor seating area. Property Segment Suburban
Slide 38: Portfolio Resilience
Portfolio Resilience 1,3 & 5 Changi Business Park Crescent, Singapore 38
Slide 39: Well Diversified Portfolio
Well Diversified Portfolio Australia, By Value of Investment Properties 13% ▪ As at 30 Jun 2020, total investment properties United United States, Kingdom, 6% 11% stood at S$12.75 b Logistics and Distribution Centres Australia Suburban Logistics and 10% Offices ▪ Well-diversified geographically: Dis
Slide 40: Customers’ Industry Diversification
Customers’ Industry Diversification (By Monthly Gross Revenue) ▪ Well-diversified customer base across more than 20 industries Engineering 13.4% Logistics & Supply Chain Management 12.3% Information & Communications Technology 11.8% Biomedical Sciences 11.3% Financial Services 9.0% Electronics 8.5%
Slide 41: Quality and Diversified Customer Base
Quality and Diversified Customer Base ▪ Total customer base of more than 1,460 tenants ▪ Top 10 customers (as at 30 Jun 20) account for about 17.4% of monthly portfolio gross revenue* ▪ On a portfolio basis, weighted average security deposit is about 5.1 months of rental income. geographical locatio
Slide 42: Diversified Portfolio
Diversified Portfolio No single property accounts for more than 4.6% of Ascendas Reit’s monthly gross revenue* * Monthly gross revenue has been adjusted to exclude the government grant related to property tax and rent relief support provided to tenants amid the 42 COVID-19 pandemic.
Slide 43: Sustainability
Sustainability Techpoint, Singapore
Slide 44: Sustainability Achievements
Sustainability Achievements 1st industrial building in Largest number of public Largest combined solar farm Singapore awarded Green Electrical Vehicle (EV) by a real estate company in Mark Platinum Super Low charging points in Singapore Singapore Energy (SLE) status by BCA(1) LogisTech, Singapore 80
Slide 45: Powering Properties with Renewable Energy
Powering Properties with Renewable Energy Common facilities' electricity usage at three buildings located at one-north will be 100% powered with renewable energy generated from Ascendas Reit’s solar farms by 2022 Neuros & Immunos Nexus @one-north Nucleos By 2020 By 2021 By 2022 Power 1,300 four-room
Slide 46: Moving Towards a Green and Sustainable Portfolio
Moving Towards a Green and Sustainable Portfolio 34 Properties with BCA Green Mark Certifications Incorporating Green and Community Spaces 12 New Developments Existing Properties 1 9 3 1 7 6 1 5 1 Sky Terrace @ Grab’s HQ Fustal courts @ Plaza 8 8 6 5 3 Certified Gold GoldPlus Platinum Collaborative
Slide 47: COVID-19 Updates
COVID-19 Updates Nordic European Centre, Singapore 47
Slide 48: COVID-19 Country Update
COVID-19 Country Update Singapore Australia Government • Government assistance: • Mandatory code of conduct (for SMEs): landlords unable to Measures ✓ Property tax rebate (Retail/F&B/amenities: 100%, Industrial: terminate leases/draw on deposits and to offer reductions in Implemented 30%) rent (as w
Slide 49: COVID-19 Country Update
COVID-19 Country Update United Kingdom United States Government • Up until 30 September 2020, landlords are not allowed to • Landlords are not allowed to evict tenants due to non- Measures terminate leases for any missed payments. The UK payment of rents in Portland, Oregon (until 31 Mar 2021), Impl
Slide 50: Key Policy
Key Policy New Measures ▪ Higher aggregate leverage (gearing) limit to 50% (from 45%) (By Monetary Authority ▪ Extension to distribute at least 90% of S-REIT’s taxable income for FY ending in of Singapore, Ministry 2020 from 3 months (after the end of the FY) to 31 Dec 2021 to qualify for tax of Fin
Slide 51: Prudent Capital Management
Prudent Capital Management Robust Financial ▪ Healthy aggregate leverage at ~36% Metrics ▪ Financial metrics exceed key bank covenant thresholds ▪ Sufficient cashflow to meet financial and operational obligations currently ▪ Has reserves of S$561m, comprising of S$361m in cash and S$200m in committe
Slide 52: Market Outlook
Market Outlook 7 Grevillea Street, Sydney, Australia
Slide 53: Market Outlook
Market Outlook ▪ The International Monetary Fund (IMF) lowered global growth further for 2020 to -4.9% (from -3% in April 2020) as recent data releases have indicated deeper downturns in various economies. (source: IMF) ▪ The Singapore economy contracted 12.6% y-o-y in 2Q 2020, and is expected to sh
Slide 54: Additional Information
Additional Information 1 Historical Quarterly Results 2 Ascendas Reit’s Singapore Occupancy vs Industrial Average 3 Singapore Industrial Property Market 4 Singapore New Supply 54
Slide 55: Historical Quarterly Results
Historical Quarterly Results Financial Highlights FY2019 FY2020 1Q 2Q 3Q 1H (S$ m) Total* (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Jun) Gross Revenue 230 230 239 699 521 Net Property Income 178 178 182 538 388 Total Amount Available for 124 124 127 375 263 Distribution No. of Units in Issue (m) 3,113 3,11
Slide 56: Ascendas Reit’s Singapore Occupancy vs Industrial Average
Ascendas Reit’s Singapore Occupancy vs Industrial Average 92.2% 87.9% 86.7% 87.9% 87.5% 86.0% 86.9% 82.9% Occupancy Rate Business and Science Park High-Specifications Industrial Light Industrial Logistics Ascendas Reit JTC Statistics Source : Ascendas Reit’s Singapore portfolio as at 30 Jun 2020. Ma
Slide 57: Average Market Rents (Singapore)
Average Market Rents (Singapore) by Segment 3Q 2019: 4Q 2019: 120 91.0 91.0 1Q 2020: Rental Index (4Q 2012 = 100) 100 90.9 80 60 40 20 Source : JTC’s First Quarter 2020 Quarterly Market Report $6.50 Business Park (City Fringe): $5.85 psf pm Average Monthly Gross Rents $5.50 Business Park (Rest of Is
Slide 58: Singapore Industrial Market: New Supply
Singapore Industrial Market: New Supply ▪ Potential new supply of about 2.5 m sqm (~5.0% of existing stock) over next 3 years, of which 43% are pre- committed ▪ Island-wide occupancy remains unchanged at 89.2% as at 31 Mar 20 (from 31 Dec 19) New Existing Supply % of New/ Sector ('000 sqm) 2020 2021
Slide 59: Singapore Business & Science Parks: New Supply
Singapore Business & Science Parks: New Supply Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) 2020 Cleantech Loop JTC Corporation 61,640 0% 2021 One-north Avenue Ascendas Reit 36,240 100% 2021 Cleantech Loop Surbana Jurong 41,350 0% 139,230 26% Note: Excludes projects u
Slide 60: Singapore High-Specifications & Light Industrial: New Supply
Singapore High-Specifications & Light Industrial: New Supply Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) Senoko Drive/Senoko Tee Yih Jia Food 2020 79,830 100% Road Manufacturing Pte Ltd 2020 Bedok North Avenue 4 JTC Corporation 105,370 0% Google Asia Pacific Pte 2020
Slide 61: Singapore Logistics: New Supply
Singapore Logistics: New Supply Expected % Pre-committed Location Developer GFA (sqm) Completion (Estimated) 2020 Tembusu Crescent S H Cogent Logistics 86,010 100% 2020 Gul Circle JTC Corporation 140,090 0% Pandan Crescent Pte Ltd 2021 Pandan Crescent 120,200 0% (Logos) 2021 Sunview Road NTUC Fairpr
Slide 62: Thank you
Thank you d. Capjtaland passers