Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Starhill Global REIT — Q2 FY2015/16 Earnings Presentation
55 slides from Singapore Exchange's earnings presentation, Jan 26, 2016
Slide 1: Second Quarter FY2015/16 Financial Results
Second Quarter FY2015/16 Financial Results 26 January 2016 Singapore Australia Malaysia China Japan 1
Slide 2: Financial Highlights
1 Financial Highlights Wisma Atria Singapore
Slide 3: Key highlights
Key highlights DPU grew 2.3% y-o-y to 1.32 cents in 2Q FY15/16 – Annualised yield of 6.94% based on closing price of S$0.755 on 31 December 2015 Group Revenue rose by 13.8% and Group NPI up 10.4% y-o-y – Australia portfolio’s NPI up 121.6% y-o-y on contribution from Myer Centre Adelaide – Singap
Slide 4: 2Q FY15/16 financial highlights
2Q FY15/16 financial highlights 3 months ended 3 months ended Period: 1 Oct – 31 Dec 31 Dec 2015 31 Dec 2014 % Change (2Q FY15/16) (4Q FY14/15) Gross Revenue $55.6 mil $48.9 mil 13.8% Net Property Income $43.7 mil $39.6 mil 10.4% Income Available for Distribution $30.1 mil $29.1 mil 3.5% Income to b
Slide 5: YTD FY15/16 financial highlights
YTD FY15/16 financial highlights 6 months ended 6 months ended Period: 1 Jul – 31 Dec 31 Dec 2015 31 Dec 2014 % Change (YTD FY15/16) (YTD FY14/15) Gross Revenue $112.4 mil $97.5 mil 15.3% Net Property Income $87.3 mil $79.2 mil 10.3% Income Available for Distribution $60.1 mil $57.6 mil 4.3% Income
Slide 6: DPU performance
DPU performance cents FY 2014/15 8.00 7.60 7.00 1.29 6.00 1.26 5.00 1.29 4.00 6Q 5Q 3.00 1.27 4Q 5.00 3Q 4.12 4.39 2.00 3.90 1.32 1.25 2Q 3.80 1Q 1.00 3.58 3.10 2.90 1.24 1.31 - FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 YTD FY 2014/15 2Q FY15/16 FY15/16 Notes: 1. DPU from 1Q 20
Slide 7: 2Q FY15/16 financial results
2Q FY15/16 financial results $’000 2Q FY15/16 4Q FY14/15 % Change Gross Revenue 55,624 48,883 13.8% Less: Property Expenses (11,902) (9,286) 28.2% Net Property Income 43,722 39,597 10.4% Less: Fair Value Adjustment (1) (189) (14) NM Notes: Borrowing Costs (9,644) (7,402) 30.3% 1. Being accretion of
Slide 8: YTD FY15/16 financial results
YTD FY15/16 financial results YTD YTD $’000 % Change FY15/16 FY14/15 Gross Revenue 112,398 97,488 15.3% Less: Property Expenses (25,056) (18,315) 36.8% Net Property Income 87,342 79,173 10.3% Notes: Less: Fair Value Adjustment (1) (383) (108) 254.6% 1. Being accretion of tenancy deposit stated at am
Slide 9: 2Q FY15/16 financial results
2Q FY15/16 financial results Revenue Net Property Income $’000 2Q FY15/16 4Q FY14/15 % Change $’000 2Q FY15/16 4Q FY14/15 % Change Wisma Atria Wisma Atria Retail (1) 14,780 14,537 1.7% Retail (1) 11,782 11,437 3.0% Office (1) 2,998 2,821 6.3% Office (1) 2,244 2,183 2.8% Ngee Ann City Ngee Ann City R
Slide 10: YTD FY15/16 financial results
YTD FY15/16 financial results Revenue Net Property Income YTD YTD YTD YTD $’000 % Change $’000 % Change FY15/16 FY14/15 FY15/16 FY14/15 Wisma Atria Wisma Atria Retail (1) 29,897 28,578 4.6% Retail (1) 23,303 22,342 4.3% Office (1) 5,988 5,606 6.8% Office (1) 4,473 4,236 5.6% Ngee Ann City Ngee Ann C
Slide 11: Attractive trading yield versus other investment instruments
Attractive trading yield versus other investment instruments 6.94% 7.00% 6.00% 5.00% 4.34% 6.59% 4.00% 3.00% 2.60% 2.50% 1.90% 2.00% 1.00% 0.35% 0.00% SGREIT Annualised 10-Year Singapore CPF Ordinary 5-Year Singapore 12-month Bank Fixed 2Q FY15/16 Yield Government Bond Account Government Bond Deposi
Slide 12: Unit price performance
Unit price performance Starhill Global REIT’s Unit Price Movement and Liquidity statistics Daily Traded Volume (1 January 2015 to 31 December 2015) Average daily traded 2.4 mil (‘000) volume for 2Q FY15/16 $0.90 9,000 (units)1 8,000 $0.85 Estimated free float2 54% 7,000 $0.80 6,000 Market cap (SGD)3
Slide 13: Distribution timetable
Distribution timetable Distribution Period 1 October 2015 to 31 December 2015 Distribution Amount 1.32 cents per unit Distribution Timetable Notice of Books Closure Date 26 January 2016 Last Day of Trading on “Cum” Basis 29 January 2016, 5.00 pm Ex-Date 1 February 2016, 9.00 am Book Closure Date 3 F
Slide 14: Staggered debt maturity profile averaging 3.6 years
Staggered debt maturity profile averaging 3.6 years No significant debt refinancing requirement until year 2018 Debt maturity profile $ million As at 31 December 2015 Total debt S$1,136 million 400 Gearing 35.7% Interest cover(2) 4.5x 350 Average interest rate p.a.(3) 3.15% (1) 300 Unencumbered asse
Slide 15: Borrowings remain fully hedged
Borrowings remain fully hedged 80% of borrowings as at 31 December 2015 are hedged by a combination of fixed rate debt and interest rate swaps; while the remaining 20% are hedged via interest rate caps Borrowings Borrowings hedged via Mitigating the impact of interest rate fluctuation on hedged
Slide 16: Currency profile
Currency profile 2Q FY15/16 GROSS REVENUE Our core portfolio is largely based in Singapore and BY COUNTRY contributed approximately 61% of the Group’s revenue for 2Q FY15/16 Australia Overseas properties accounted for approximately 22.8% 39% of the Group’s revenue for 2Q FY15/16 Overseas Curre
Slide 17: Healthy balance sheet with total assets of approximately $3.2 billion
Healthy balance sheet with total assets of approximately $3.2 billion NAV As at 31 December 2015 $’000 statistics Non Current Assets 3,085,764 NAV Per Unit (as at 31 December 2015) (1) $0.90 Current Assets 97,393 Adjusted NAV Per Unit (net of distribution) $0.89 Total Assets 3,183,157 Current Liabil
Slide 18: Sharpening the portfolio
2 Sharpening the portfolio Myer Centre Adelaide Adelaide, South Australia
Slide 19: Divestment of Roppongi Terzo, Tokyo, Japan
Divestment of Roppongi Terzo, Tokyo, Japan on 7 January 2016 Divested Roppongi Terzo for JPY2,500.0 million (~S$29.9(1) million) compared to the latest valuation of JPY2,440.0(2) million as at 31 December 2015 Property accounts for 32.8% of SGREIT’s Japan portfolio and 0.9% of SGREIT’s portfolio
Slide 20: Portfolio Performance Update
3 Portfolio Performance Update Starhill Gallery Kuala Lumpur, Malaysia 20
Slide 21: Defensive portfolio with upside potential: Balance of long term and short term leases
Defensive portfolio with upside potential: Balance of long term and short term leases Master leases and long-term leases, incorporating periodic rent reviews, represent 42.3% of gross rent as at 31 December 2015 Ngee Ann City Property Retail (Singapore) Expires 2025 with the next rent review due M
Slide 22: Maintained high occupancies through economic cycles
Maintained high occupancies through economic cycles As at 31 Dec 05 31 Dec 06 31 Dec 07 31 Dec 08 31 Dec 09 31 Dec 10 31 Dec 11 31 Dec 12 31 Dec 13 30 Jun 15 31 Dec 15 SG Retail 100.0% 100.0% 100.0% 98.3% 100.0% 99.1% 98.3% 99.8% 99.9% 99.4% 98.3% SG Office 92.8% 97.8% 98.7% 92.4% 87.2% 92.5% 95.3%
Slide 23: Well-staggered portfolio lease expiry profile
Well-staggered portfolio lease expiry profile Weighted average lease term of 6.4 and 4.9 years (by NLA and gross rent respectively) Portfolio Lease Expiry (as at 31 December 2015) (1)(2) By NLA By Gross Rent 50% 41.9% (4) Malaysia’s master leases 40% account for 65% of the 33.7% (3) expiring leases
Slide 24: Well-staggered portfolio lease expiry profile by category
Well-staggered portfolio lease expiry profile by category Retail Lease Expiry Profile by Gross Rents Office Lease Expiry Profile By Gross Rents (as at 31 December 2015) (1) (as at 31 December 2015) (2) 50% 40% 35.0% 39.3% (4) 40% 30% 25.8% 30% 21.2% 20% 19.0% (3) 17.8% 20% 13.4% 13.1% 10.8% 10% 10%
Slide 25: Maintained full occupancy at Ngee Ann City Property
Singapore Retail Maintained full occupancy at Ngee Ann City Property Lease expiry schedule (by gross rent) as at 31 Dec 2015 Includes Toshin master lease at Ngee Ann City Wisma Atria Property Ngee Ann City Property Property 100% 86.0% (1) 80% Rental reversions were flat for leases committed in 2Q
Slide 26: Singapore – Wisma Atria Property (Retail)
Singapore – Wisma Atria Property (Retail) Tenant sales declined marginally by 1.0% y-o-y S$ million Million 2Q FY15/16 revenue increased 1.7% y-o-y 60.0 7.5 while NPI was up 3.0% y-o-y on the back of higher revenue and lower operating 55.0 7.0 expenses 50.0 Traffic Count at Primary Entrances 6.5
Slide 27: New tenants and tenant renovations
Singapore – Wisma Atria Property (Retail) New tenants and tenant renovations New tenants Seed Heritage, Sans & Sans and Southaven started their operations at Level 1 of Wisma Atria Property Paris Baguette completed its renovation to unveil a new concept in November 2015, which is unique to Wisma
Slide 28: Mall of choice along Orchard Road
Singapore – Ngee Ann City Property (Retail) Mall of choice along Orchard Road 2Q FY15/16 revenue up 1.0% and NPI up 2.0% over the previous corresponding period Ngee Ann City Property (Retail) maintains full occupancy as at 31 December 2015 Next rent review for the Toshin master lease is in Jun
Slide 29: Singapore offices: Driven by limited new supply
Singapore offices Driven by limited new supply Key office tenants 2Q FY15/16 revenue up 3.9% and NPI up 3.4% over the previous corresponding period Limited new supply for office space in Orchard Road continues to support leasing demand Full occupancies were achieved for both Wisma Atria Proper
Slide 30: Fully committed occupancies and positive rental reversions
Singapore Office Fully committed occupancies and positive rental reversions Lease expiry schedule (by gross rent) as at 31 Dec 2015 Wisma Atria Property Ngee Ann City Property 50% 44.0% Positive reversions of 1.7% 40% 36.4% achieved for leases committed in 2Q FY15/16 30% 25.3% 23.3% 21.1% 20.6% 20
Slide 31: Contribution from Myer Centre Adelaide
Australia – Myer Centre Adelaide, David Jones Building & Plaza Arcade Contribution from Myer Centre Adelaide 2Q FY15/16 revenue and NPI up 161.1% and 121.6% respectively over the previous corresponding period mainly due to contribution from Myer Centre Adelaide acquired in May 2015, partially offs
Slide 32: High occupancies
Australia High occupancies Lease expiry schedule (by gross rent) as at 31 Dec 2015 Perth Properties Myer Centre Adelaide 80% Maintained high occupancies at 65.3% (1) 58.7% (2) Perth Properties and Myer Centre 60% Adelaide 40% 20% 14.8% 11.8%9.0% David Jones’ lease comprises 8.9% 8.3% 8.6% 8.9% 5
Slide 33: Remains a destination for luxury retailers in Kuala Lumpur
Malaysia – Starhill Gallery and Lot 10 Property Remains a destination for luxury retailers in Kuala Lumpur Malaysia Properties’ 2Q FY15/16 revenue and NPI declined 14.5% and 14.8% respectively over the previous corresponding period, largely due to depreciation of the Malaysian ringgit against the
Slide 34: Impacted by upcoming retail mall supply and soft luxury retail market
China – Renhe Spring Zongbei Property Impacted by upcoming retail mall supply and soft luxury retail market The China portfolio contributed 3.0% of the Group’s revenue in 2Q FY15/16 In SGD terms, NPI in 2Q FY15/16 decreased 37.5% y-o-y. The decline was largely attributed to lower revenue as the
Slide 35: Full occupancies achieved
Japan Properties Full occupancies achieved* The Japan portfolio (including Roppongi Terzo which was divested in January 2016) contributed 2.1% of the Group’s revenue in 2Q FY15/16 In SGD terms, NPI in 2Q FY15/16 rose 27.7% y-o-y largely attributable to higher occupancies and appreciation of the
Slide 36: Outlook
4 Outlook David Jones Building & Plaza Arcade Perth, Australia
Slide 37: Outlook
Outlook Focus on prime locations •Orchard Road – Singapore’s iconic shopping strip •Rundle Mall – Adelaide’s premier retail precinct •Hay Street Mall & Murray Street Mall – Perth’s CBD •Bukit Bintang – Kuala Lumpur’s premier shopping and entertainment district Optimising capital and delivering value
Slide 38: Looking ahead
Looking ahead Completion Steady organic growth from rental reversion Toshin: Master lease for Ngee Ann City Retail Toshin master lease for Ngee Ann City Retail Next rent review in June 2016 Wisma Atria: Healthy demand for prime retail space in Orchard Road on limited new supply in Orchard Road Offic
Slide 39: Summary – Well positioned for growth
Summary – Well positioned for growth 12* mid to high-end retail properties in five countries Quality Assets: - Singapore makes up ~67% of total assets with Australia and Malaysia ~28% of total assets as Prime Locations core markets. China and Japan account for the balance of the portfolio Qualit
Slide 40: Appendices
5 Appendices Lot 10 Property Kuala Lumpur, Malaysia
Slide 41: 67% of total asset value attributed to Singapore
67% of total asset value attributed to Singapore ASSET VALUE 2Q FY15/16 GROSS REVENUE 2Q FY15/16 GROSS REVENUE BY COUNTRY AS AT 31 DEC 2015 BY COUNTRY BY RETAIL/OFFICE Japan China Japan China 2.1% 2.2% 2.8% 3.0% Office Malaysia 13.9% Malaysia 11.3% 11.8% Australia 22.8% Australia 16.2% Singapore Sin
Slide 42: Diversified tenant base
Singapore – Wisma Atria Property Diversified tenant base WA retail trade mix – by % gross rent WA office trade mix – by % gross rent (as at 31 December 2015) (as at 31 December 2015) Government General Trade related Banking and 4.1% Information Aerospace 2.4% Financial Services Health & Beauty Techn
Slide 43: Stable of luxury tenants
Singapore – Ngee Ann City Property Stable of luxury tenants NAC retail trade mix – by % gross rent NAC office trade mix – by % gross rent (as at 31 December 2015) (as at 31 December 2015) Aerospace Services General Trade Others 3.9% 2.7% 1.0% 4.3% Banking and Financial Services Beauty & Fashion Reta
Slide 44: Top 10 tenants contribute 53.5% of portfolio gross rents
Top 10 tenants contribute 53.5% of portfolio gross rents Tenant Name Property % of Portfolio Gross Rent (1) (2) Toshin Development Singapore Pte Ltd Ngee Ann City, Singapore 19.3% Ngee Ann City & Wisma Atria, Singapore YTL Group(3) 13.2% Starhill Gallery & Lot 10, Malaysia Myer Pty Ltd Myer Centre A
Slide 45: Singapore – Wisma Atria Property
Singapore – Wisma Atria Property Address 435 Orchard Road, Singapore 238877 Wisma Atria comprises a podium block with four levels and one basement level of retail, three levels of car parking space and 13 levels of office space in the office block. Description Starhill Global REIT's interest in Wism
Slide 46: Singapore – Ngee Ann City Property
Singapore – Ngee Ann City Property Address 391/391B Orchard Road, Singapore 238874 Ngee Ann City is a commercial complex with 18 levels of office space in the twin office tower blocks (Tower A and B) and a seven-storey podium with three basement levels comprising retail and car parking space. Descri
Slide 47: Adelaide, Australia – Myer Centre Adelaide
Adelaide, Australia – Myer Centre Adelaide Address 14-38 Rundle Mall, Adelaide SA 5000, Australia Myer Centre Adelaide comprises a retail centre, three office buildings and four basement levels with approximately 467 car parking lots. The retail centre is spread across eight Description floors and a
Slide 48: Perth, Australia – David Jones Building & Plaza Arcade
Perth, Australia – David Jones Building & Plaza Arcade David Jones Building Address 622-648 Hay Street Mall, Perth, Western Australia A four-storey property, which includes a heritage-listed building constructed circa 1910 that was formerly the Savoy Description hotel. The property is anchored by th
Slide 49: Kuala Lumpur, Malaysia – Starhill Gallery
Kuala Lumpur, Malaysia – Starhill Gallery Address 181 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia Starhill Gallery is a shopping centre comprising part of a Description seven-storey building with five basements and a 12-storey annex building with three basements. Net lettable area 306,113 sq f
Slide 50: Kuala Lumpur, Malaysia – Lot 10 Property
Kuala Lumpur, Malaysia – Lot 10 Property Address 50 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia 137 parcels and 2 accessory parcels of retail and office spaces held under separate strata titles within a shopping centre known as Lot 10 Shopping Centre which consists of Description an 8-storey b
Slide 51: Chengdu, China – Renhe Spring Zongbei Property
Chengdu, China – Renhe Spring Zongbei Property Address No.19, Renminnan Road, Chengdu, China A four-storey plus mezzanine level retail department store Description completed in 2003. Part of a mixed-use commercial complex comprising retail and office. Gross floor area 100,854 sq ft Number of tenants
Slide 52: Japan Properties
Japan Properties – Properties are within five minutes’ walk from nearest subway stations Harajyuku: 1) Harajyuku Secondo No. of Properties 4(1) Total Net 32,678 sq ft (1) Lettable Area Total No. of 17(2) tenants Ebisu: Title Freehold 1) Daikanyama Bldg 2) Ebisu Fort Total Valuation S$55.1 million(1)
Slide 53: References used in this presentation
References used in this presentation 1Q, 2Q, 3Q, 4Q means the periods between 1 July to 30 September; 1 October to 31 December; 1 January to 31 March and 1 April to 30 June 2Q FY15/16 means the period of 3 months from 1 October 2015 to 31 December 2015 4Q FY14/15 means the period of 3 months from 1
Slide 54: Disclaimer
Disclaimer This presentation has been prepared by YTL Starhill Global REIT Management Limited (the “Manager”), solely in its capacity as Manager of Starhill Global Real Estate Investment Trust (“Starhill Global REIT”). A press release, together with Starhill Global REIT’s unaudited financial stateme
Slide 55: YTL Starhill Global REIT Management Limited
YTL Starhill Global REIT Management Limited CRN 200502123C Manager of Starhill Global REIT 391B Orchard Road, #21-08 Ngee Ann City Tower B Singapore 238874 Tel: +65 6835 8633 Fax: +65 6835 8644 www.starhillglobalreit.com 55
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