Capitaland Ascott Trust · SGX:HMN
Capitaland Ascott Trust — Ascott Residence Trust — Q2 2019 Earnings Presentation
47 slides from Capitaland Ascott Trust's earnings presentation, Jul 30, 2019
Slide 1: Ascott Residence Trust 2Q 2019 Financial Results
Ascott Residence Trust 2Q 2019 Financial Results 30 July 2019
Slide 2: Important Notice
Important Notice The value of units in Ascott Residence Trust (“Ascott REIT”) (the “Units”) and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by Ascott Residence Trust Management Limited, the Manager of Ascott REIT (the “Manager”)
Slide 3: Content
Content ▪ Key Highlights of 2Q 2019 ▪ Distribution Details ▪ Portfolio Overview ▪ Capital and Risk Management ▪ Key Country Updates ▪ Looking Forward ▪ Appendix - Value Creation Strategies - Other Information 3
Slide 4: Key Highlights of 2Q 2019
Key Highlights of 2Q 2019 Ascott Orchard Singapore
Slide 5: Ascott Reit – A Leading Global Hospitality REIT
Ascott Reit – A Leading Global Hospitality REIT Well-diversified portfolio of quality hospitality assets located in major gateway cities S$2.8b1 S$5.5b >11,700 74 37 Market Capitalisation Total Assets Apartment Units Properties Cities in 14 Countries United Kingdom China 4 properties 7 properties Be
Slide 6: Key Takeaways – 2Q 2019
Key Takeaways – 2Q 2019 Completion of … 2% 7% 2% 8% 1 1 Divestment of Ascott Y-o-Y Y-o-Y Y-o-Y Y-o-Y Raffles Place Singapore; received S$300.3m of Revenue Gross Profit RevPAU DPU balance proceeds • Higher RevPAU / operating performance from United Kingdom, 2 Acquisition of Belgium, Spain, China, Jap
Slide 7: lyf one-north Singapore: Development Progress
lyf one-north Singapore: Development Progress • Groundbreaking ceremony was held on 3 June 2019 • Site hoarding completed, main contract awarded and permit to commence work obtained • Piling works in progress, property on schedule to open in 2021 7
Slide 8: Financial Highlights (2Q 2019 vs 2Q 2018)
Financial Highlights (2Q 2019 vs 2Q 2018) Stronger operating performance from properties in key markets Revenue Gross Profit Revenue Per Available Unit (S$m) (S$m) (S$) 2% 7% 1% 2% 132.5 130.5 Y-o-Y Y-o-Y Y-o-Y Y-o-Y 67.6 63.1 158 155 62.5 2Q 2019 2Q 2018 2Q 2019 2Q 2018 2Q 2019 2Q 2018 Excluding FR
Slide 9: Financial Highlights (1H 2019 vs 1H 2018)
Financial Highlights (1H 2019 vs 1H 2018) Stronger operating performance from properties in key markets Revenue Gross Profit Revenue Per Available Unit (S$m) (S$m) (S$) 2% 9% -% 3% Y-o-Y Y-o-Y Y-o-Y Y-o-Y 248.4 243.3 122.3 111.8 146 142 112.1 1H 2019 1H 2018 1H 2019 1H 2018 1H 2019 1H 2018 Excluding
Slide 10: Revenue and Gross Profit by Contract Type
Revenue and Gross Profit by Contract Type (2Q 2019 vs 2Q 2018) Higher contribution from MCMGIs and Management Contracts Revenue (S$‘mil) Gross Profit (S$‘mil) RevPAU (S$) % 2Q 2019 2Q 2018 2Q 2019 2Q 2018 % Change 2Q 2019 2Q 2018 % Change Change Master Leases1 Income Income 18.5 20.2 (8) 16.6 18.7 (
Slide 11: Majority of Key Markets Posted Higher Gross Profit or RevPAU
Majority of Key Markets Posted Higher Gross Profit or RevPAU Gross Profit (LC’mil) RevPAU (LC) 2Q 2Q 2Q 2Q Key Reason % Change % Change 2019 2018 2019 2018 for Change Australia (AUD) 1.8 1.7 6 n.a. n.a. n.a. • Lower operation and maintenance expense Stable Income • Lower rent upon renewal of master
Slide 12: Distribution Details
Distribution Details Citadines Tour Eiffel Paris, France
Slide 13: Distribution Details
Distribution Details Distribution of 3.431 cents per Unit for period from 1 January 2019 to 30 June 2019 August 2019 Sun Mon Tue Wed Thu Fri Sat 5 August 1 2 3 Last Day of Trading on “cum” Basis 6 August 5 6 7 4 8 9 10 Ex-Date 11 12 13 14 15 16 17 7 August 18 19 20 21 22 23 24 Books Closure 29 Augus
Slide 14: Portfolio Overview
Portfolio Overview lyf one-north, Singapore (Artist’s Impression) Concept Design by WOHA
Slide 15: Performance Driven by Balanced and Diversified Asset Allocation
Performance Driven by Balanced and Diversified Asset Allocation 57% Asia Pacific 43% Europe/Americas Asia Pacific 56.8% Europe 26.5% Singapore 15.8% France 9.7% Japan 13.0% UK 9.5% China 10.0% Germany 4.7% Total Assets Australia 6.4% S$5,494m Spain 1.3% Vietnam 5.4% Belgium 1.3% Philippines 3.2% Ind
Slide 16: Resilient Portfolio
Resilient Portfolio Mix of stable and growth income sources targeting both long and short- …with a valuable stay segments… property portfolio … Stable • Approx. 40% of gross profit Income generated from stable income contracts2 19% >50% 14% • Decline due to re-constitution Tenure by Freehold Gross P
Slide 17: Delivering Resilient Performance
Delivering Resilient Performance 8 key markets contributed ~86% of total gross profit No concentration in any single market 39% Stable 61% Growth Master Leases 25% Management Contracts 61% France 11% United States 20% Singapore 6% 25% Japan 12% Gross Profit Germany 5% 61% China 9% S$67.6m Australia
Slide 18: Capital and Risk Management
Capital and Risk Management Somerset Heping Shenyang, China
Slide 19: Stronger Balance Sheet and Active Risk Management
Stronger Balance Sheet and Active Risk Management Lower gearing and higher interest cover compared to previous quarter Gearing remained low at Interest cover3 32.8% 1 5.2X ~48% (debt headroom2 of ~S$1.1b) Total Assets in Foreign (vs 4.5X) Currency Hedged (vs 35.7%) Low effective borrowing cost3 of ~
Slide 20: Diversified Funding Sources, Well Spread-out Debt Maturity
Diversified Funding Sources Well Spread-out Debt Maturity Debt due in 2019 has been refinanced in July 2019 Well-diversified funding sources of 53% Bank Loans : 47% MTN Debt Maturity Profile S$’m 25% 25% 420 409 200 120 16% 16% 270 274 123 87 10% 91 174 183 100 4% 129 67 3% 1% 166 22 74 62 43 2019 2
Slide 21: Key Country Updates
Key Country Updates Citadines Barbican London, United Kingdom
Slide 22: Australia
Master Lease Management Contracts Australia Contributed 6% to Gross Profit1 Additional revenue from Citadines Connect Sydney Airport offset by softer leisure and 3 Quest Citadines Connect Citadines on Citadines Bourke Melbourne St Georges corporate demand in Melbourne Properties Sydney Airport Terra
Slide 23: China
Management Contracts China Contributed 9% to Gross Profit First-tier demand remained resilient; Somerset Ascott Citadines Somerset Somerset Citadines Somerset Competition from new supply in Xu Hui Shanghai Guangzhou Xinghai Olympic Tower Grand Suzhou Central Zhuankou Wuhan Heping Shenyang Property s
Slide 24: Japan
Management Contracts Japan Contributed 12% to Gross Profit Stronger leisure demand Citadines Central Citadines Citadines Somerset 11 rental housing Shinjuku Tokyo Shinjuku Karasuma-Gojo Azabu East properties Tokyo Kyoto Tokyo in Japan 5%1 8% JPY Performance Highlights and Market Outlook 1,211.7 13,2
Slide 25: Singapore
Master Lease Management Contracts Singapore Contributed 10% to Gross Profit1 Higher market demand Ascott Somerset Liang Citadines Mount Orchard Court Property Sophia Property Singapore Singapore Singapore SGD 2% 2% Performance Highlights and Market Outlook 7.0 250 6.2 6.1 ▪ Revenue increased 2% due
Slide 26: United Kingdom
Management Contracts with Minimum Guaranteed Income United Kingdom Contributed 10% to Gross Profit Higher corporate and leisure Citadines Citadines Holborn- Citadines Citadines South demand Trafalgar Square Covent Garden Barbican Kensington London London London London GBP 11% 12% 11% Performance Hig
Slide 27: United States
Management Contracts United States Contributed 20% to Gross Profit New York market remains stable Element New York DoubleTree by Sheraton Tribeca Times Square West Hilton Hotel New York Hotel New York USD 2% 46% 1% Performance Highlights and Market Outlook 25.0 300 22.4 22.8 ▪ In 2Q 2019, New York m
Slide 28: Vietnam
Management Contracts Vietnam Contributed 8% to Gross Profit Stronger market demand Somerset Somerset Somerset West Somerset Ho Chi Somerset Grand Hanoi Hoa Binh Hanoi Lake Hanoi Minh City Chancellor Court Ho Chi Minh City Performance Highlights and Market Outlook 5% 7% 4% VND 200.0 1800 ▪ Gross prof
Slide 29: Looking Forward
Looking Forward Ascott Orchard Singapore
Slide 30: Looking Ahead
Looking Ahead Market Outlook Resilient Portfolio Tapering Economic Growth Portfolio Diversification & Income Resilience Global economy remains delicate as • Global presence and no concentration risk trade tensions continue to weigh on • ~60% in Asia Pacific where growth remains robust business confi
Slide 31: Proposed Combination with Ascendas Hospitality Trust
On 3 July 2019, Ascott Reit announced the Proposed Combination with Ascendas Hospitality Trust (“Proposed Combination)” Rationale and Benefits of the Proposed Combination • Potential positive re-rating, wider investor base and higher trading liquidity Proxy Hospitality 1 • Increase ability to drive
Slide 32: Proposed Combination
Proposed Combination Ascott Reit to acquire all A-HTRUST stapled units via a Trust Scheme, with Gross Exchange Ratio of 0.836x, based on the respective audited NAV per Unit Total Scheme Consideration of S$1.2 billion1 comprises: 5% Cash Consideration S$1.0868 S$0.0543 in cash2 per A-HTRUST Stapled U
Slide 33: Proposed Combination: Structure and Timeline
Proposed Combination Combined Entity Structure Indicative Timeline Joint Other Stapled Announcement CapitaLand1 3 July 2019 Unitholders of Trust Scheme Expected date of first Court 40.2%2 59.8%2 hearing of the application September 2019 to convene the Trust Scheme Meeting3 Ascott Reit’s October 2019
Slide 34: Appendix: Value Creation Strategies
Appendix Value Creation Strategies Citadines Connect Sydney Airport, Australia
Slide 35: Value Creation
Value Creation Five pronged approach to deliver value 1. Growth • Total assets grew sevenfold since IPO to S$5.5b 4. Capital & Risk • Maiden development project for first coliving property Management • “BBB” (stable outlook) rating by Fitch Ratings 2. Asset Management • RevPAU optimisation & yield m
Slide 36: Key Milestone Acquisitions since IPO
1 Key Milestone Acquisitions since IPO Total assets since listing (S$b) 2006 2010 2015 2018 Started in Pan Asia First Leap into Europe First Property Acquired Maiden Development in United States Project in Singapore 5.5 4.8 5.5 5.31 74 properties 4.7 3.6 4.1 3.0 3.0 3 July 2019 Announced Proposed 2.
Slide 37: Embarked on Maiden Development Project to Build New Coliving Product
1 Embarked on Maiden Development Project to Build New Coliving Product lyf one-north Singapore, located in a prime developing district with limited lodging supply Coliving a rising trend in today’s sharing economy amongst the rising millennial-minded business traveller market lyf one-north Singapore
Slide 38: Asset Enhancement Initiatives
2 Asset Enhancement Initiatives Enjoy ADR uplift upon completion of Asset Enhancement Initiatives Before After Element New York Times Square West The United States of America Somerset Grand Citra Jakarta Indonesia Criteria for Asset Enhancement Initiatives 1. Age of the Property 2. Market Outlook 3.
Slide 39: Unlocking Value
3 Unlocking Value Generated … Higher Yield Quality Assets Total Net Divestment Gains S$0.4 billion Accretive Acquisitions Total Divestment Proceeds S$1.6 billion Criteria for Divestment 1. Property Life Cycle 2. Market Conditions 3. Requirement for additional capital outlay Distribution of Divestmen
Slide 40: Capital & Risk Management
4 Capital & Risk Management Strong Balance Sheet Effective Capital Management Comfortable target gearing of Diversified funding sources & proactive interest approximately 40% rate management ‘BBB’ long-term rating by Fitch Ratings with stable outlook and low effective borrowing cost Balance Sheet He
Slide 41: Strong Sponsor – The Ascott Limited
5 Strong Sponsor – The Ascott Limited One of the leading international lodging owner-operators >112,000 >700 180 >30 Serviced residence & hotel units Properties Cities Countries Includes units under development Strong alignment of interests – Award-winning brands with >30 year track record CapitaLan
Slide 42: Working with Sponsor
5 Working with Sponsor Owner Sponsor & Operator Guests Ascott Residence Trust The Ascott Limited What we do: What we do: Description: Invest in serviced residences, rental Experienced operator of serviced A good mix of corporate and housing properties and other residence & lodging product leisure gu
Slide 43: Appendix: Other Information
Appendix Other Information Citadines Michel Hamburg, Germany
Slide 44: Key Features of Ascott REIT
Key Features of Ascott REIT • Invests primarily in real estate and real estate-related assets which are income-producing and which are used, or Investment predominantly used, as serviced residences, rental housing properties and other hospitality assets in any country in the Mandate world • Based on
Slide 45: Awards and Accolades
Awards and Accolades Highly coveted accolades awarded in past 2 years World Travel Awards 2019 Accorded seven accolades, including Europe’s Leading Serviced Apartment TripAdvisor Brand for the fourth year running Awards 2019 Europe's Leading Serviced Apartment Brand 2019: Citadines Apart'hotel 59 pr
Slide 46: Overview of Ascott REIT Structure
Overview of Ascott REIT Structure Unitholders Holding of Units Distributions Management Acts on behalf Services of Unitholders Manager Trustee Ascott Residence Trust DBS Trustee Limited Management Limited – for Unitholders Management Trustee’s Fees Fees Net Profit Dividends Ownership Ownership of As
Slide 47: Thank you
Thank you \ MERRE RABE \ WEE AROS Ee RRR E Bie wi
Ascott Residence Trust — Q2 2019 Earnings Presentation on 6ix