Esr-REIT · SGX:9A4U
Esr-REIT — FY2020 Earnings Presentation
42 slides from Esr-REIT's earnings presentation, 2021
Slide 1: Financial Results Presentation FY2020
Financial Results Presentation FY2020
Slide 2: Contents
Contents A Key Highlights B 4Q2020 & FY2020 Financial Performance C Capital Management D Real Estate Highlights E Industrial Market Outlook and Strategy F Appendix 2
Slide 3: Key Highlights
Key Highlights Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 4: FY2020 at a Glance
FY2020 at a Glance Gross Net Property Core DPU Total NAV Per Unit Revenue Income (Cents) Assets (Cents) S$229.9m S$164.2m 2.800 S$3.2bn(1) 40.5 Proactive Asset Prudent Capital Financial Management Management Performance ▪ Portfolio occupancy maintained ▪ Gearing at 41.6% with 89.0% of ▪ 4Q2020 core
Slide 5: Core DPU Improved over the Course of the Pandemic
Core DPU Improved over the Course of the Pandemic Operations and cashflows have stabilised; previously retained DPU for cashflow purposes to be fully paid out 4Q2020 Core DPU Increased 5.9% Q-o-Q to 0.741 Cents FY2020 DPU Amounts to 2.800 Cents ▪ However, core DPU has shown signs of stabilisation ▪
Slide 6: Our Strategy: Enhancing Operational Stability and Rejuvenating Assets
Our Strategy: Enhancing Operational Stability and Rejuvenating Assets Ensuring assets remain relevant and positioned to capitalise on the eventual economic recovery Operational Metrics Have Remained Stable Positioning for Recovery 1. Despite COVID-19, occupancy and YTD retention rates ▪ As at 31 Dec
Slide 7: Our Strategy: Reduce Uncertainties in Capital Structure & Increasing Financial Flexibility
Our Strategy: Reduce Uncertainties in Capital Structure & Increasing Financial Flexibility for Operations ▪ In advanced discussions with lending banks to refinance all expiring debt due in FY2021 ahead of their expiries and increasing credit facilities and tenors to fund operations ✓ New loan expect
Slide 8: Our Strategy: Rejuvenating Portfolio to be Future-Ready
Our Strategy: Rejuvenating Portfolio to be Future-Ready Actively create value for Unitholders via the following organic strategies: Asset 1▪ Upcoming AEIs: Enhancement Initiatives / A Identified B 7000 Ang Mo Kio Avenue 5 Redevelopments Additional AEIs: Update: Average + ▪ S$60-70m ✓ To be developed
Slide 9: Our Strategy: Drive Portfolio Growth via Acquisitions
Our Strategy: Drive Portfolio Growth via Acquisitions We seek to create value for Unitholders via potential local and overseas acquisitions ▪ We have always believed that “Size 1 China Does Matter” and acquisitions remain an integral part of our 2 South Korea portfolio growth strategy, with the Spon
Slide 10: Supported by Committed Sponsor ESR Group
Supported by Committed Sponsor ESR Group ESR-REIT remains well-supported and can benefit from ESR Group’s operating platform, footprint, pipeline and network to create a leading Pan-Asian industrial REIT ESR Group’s Operating Platform and Capabilities ESR Group’s Regional Presence Largest APAC Large
Slide 11: 4Q2020 and FY2020 Financial Performance
4Q2020 and FY2020 Financial Performance Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 12: FY2020 at a Glance
FY2020 at a Glance Gross Net Property Core DPU Total NAV Per Unit Revenue Income (Cents) Assets (Cents) S$229.9m S$164.2m 2.800 S$3.2bn(1) 40.5 Proactive Asset Prudent Capital Financial Management Management Performance ▪ Portfolio occupancy maintained ▪ Gearing at 41.6% with 89.0% of ▪ 4Q2020 core
Slide 13: Summary of Financial Results
Summary of Financial Results 4Q2020 3Q2020 +/(-) FY2020 FY2019 +/(-) (S$ million) (S$ million) (%) (S$ million) (S$ million) (%) Gross Revenue (before rental rebates)(1) 60.0 58.9 1.9 237.3 253.0 (6.2) COVID-19 Rental Rebates(2) (0.7) (2.0) 65.0 (7.4) - n.m. Gross Revenue (after rental rebates)(1) 5
Slide 14: Financial Position
Financial Position As at As at 31 Dec 2020 31 Dec 2019 (S$ million) (S$ million) Investment Properties (1)(2) 2,889.3 2,934.4 Right-of-use of Leasehold Land (FRS 116) 229.8 227.7 Other Assets 68.3 67.6 Total Assets 3,187.4 3,229.7 Total Borrowings (Net of Debt Transaction Costs) 1,178.6 1,191.1 Leas
Slide 15: Distribution Timetable
Distribution Timetable Distribution Details Distribution Period 1 October 2020 – 31 December 2020 0.840 cents taxable income per unit comprising: Distribution Rate - A 0.741 cents Core DPU; and - B 0.099 cents retained distribution in 1Q2020 The distribution per unit for the period from 1 January 20
Slide 16: Prudent Capital Management
Prudent Capital Management Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 17: Key Capital Management Indicators
Key Capital Management Indicators ▪ Debt to Total Assets (Gearing) is 41.6% Breakdown of Debt ▪ All-in Cost of Debt reduced to 3.54% p.a. Total Debt of S$1,186.0m 4.2% ▪ 89.0% of interest rate exposure fixed for 2.0 years 11.0% ▪ Portfolio remains 100.0% unencumbered 84.7% As at As at 31 Dec 2020 31
Slide 18: Well-Staggered Debt Maturity Profile
Well-Staggered Debt Maturity Profile ▪ WADE(1) as at 31 December 2020 was 2.2 years ▪ In advanced discussions with lending banks to refinance all expiring debt due in FY2021 ahead of expiry ✓ New loan expected to lengthen WADE and reduce overall cost of debt ▪ ESR-REIT remains well-supported by 11 l
Slide 19: Real Estate Highlights
Real Estate Highlights Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 20: Well Located Portfolio Across Singapore
Well Located Portfolio Across Singapore Portfolio of 57 assets across 4 asset classes totalling S$3.1 billion(1), located close to major transportation hubs and within key industrial zones across Singapore Woodlands/ Kranji/Yishun 7000 Ang Mo Kio Avenue 5 15 Greenwich Drive 30 Marsiling Industrial E
Slide 21: Diversified Portfolio with Stabilising Fundamentals
Diversified Portfolio with Stabilising Fundamentals Occupancy Maintained and Consistently Above JTC Average YTD Rental Reversions Occupancy fluctuations due to portfolio comprising approx. 74.0% MTBs COVID-19 by rental income 90.5% 90.5% 91.1% 90.8% 91.0% 4Q2019 1Q2020 2Q2020 3Q2020 4QFY2020 Occupan
Slide 22: Proactive Lease Management
Proactive Lease Management ▪ Total lease renewals and new leases secured in FY2020 Top 10 Tenant Concentration Risk is ~40.9% more than FY2019 Top 10 tenants account for 31.0% of rental income as at ▪ Despite COVID-19, the Manager has secured 1.65 31 Dec 2020 million sq ft of new leases or 42.5% out
Slide 23: Well Staggered WALE with High Retention Rate
Well Staggered WALE with High Retention Rate ▪ Well-staggered WALE of 3.0 years YTD Tenant Retention Rate Improved to 84.6% in FY2020 against YTD tenant retention rate of ▪ Renewed 876,400 sqft of space and signed 69.6% in FY2019 215,000 sqft of new leases in 4Q2020 ‒ Total lease expiry concentratio
Slide 24: 4Q2020 Leasing Update: Over 1.1 mil sqft Renewed and Newly Leased
4Q2020 Leasing Update: Over 1.1 mil sqft Renewed and Newly Leased A General Industrial B General Industrial C High-Specs Industrial EGIS Nanotech Pte. Ltd. PSB Technologies Pte. Ltd. Cornes Singapore Pte. Ltd. Name of Tenant Location 8 Tuas South Lane 160A Gul Circle 2 Jalan Kilang Barat PSB Technol
Slide 25: Reduced Tenant Concentration Risk and Well-Diversified Trade Mix
Reduced Tenant Concentration Risk and Well-Diversified Trade Mix Top 10 Tenants Breakdown by Trade Sectors Remains stable accounting for 31.0% of Rental Income Portfolio of 343 diverse tenants in FY2020 increased and 27.9% by NLA in FY2020 against 328 tenants in FY2019 2.0% 1.9% 0.7% (1) 1.9% 1.2% L
Slide 26: AEI Update: 19 Tai Seng Avenue (19TS)
AEI Update: 19 Tai Seng Avenue (“19TS”) A Rejuvenation works commenced, on track for completion in 3Q2021 Artist’s Impression Artist’s Impression Before After Artist’s Impression +AEI +AEI Improved Drop-off Area Before After Artist’s Impression The AEI of 19TS reflects our focus to unlock value with
Slide 27: AEI Update: UE BizHub EAST (UEBH)
AEI Update: UE BizHub EAST (“UEBH”) B Rejuvenation works in good progress, on track for completion next quarter (1Q2021) Before After Artist’s Impression Rejuvenation works to enhance the competitiveness of UEBH by improving traffic flow, ease of navigation and accessibility Food Alley after AEI – “
Slide 28: Industrial Market Outlook and Strategy
Industrial Market Outlook and Strategy Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 29: Singapore Economy Outlook
Singapore Economy Outlook Key Economic Indicators 1▪ Singapore’s economy contracted 5.8% in 2020 – lower than official forecast – with overall manufacturing sector driving better performance ▪ Based on MTI’s advanced estimates for 4Q2020, Singapore’s economy contracted by 3.8% on a y-o-y basis, an i
Slide 30: Singapore Industrial Market Outlook
Singapore Industrial Market Outlook ▪ Rental and price index of industrial space in Net Supply of Industrial Space(1) 1 3Q2020 were muted, overall occupancy increased (‘000 sqm) slightly by 0.2% compared to previous quarter(1) ~1.3 million sqm of industrial stock delayed to 2021/2022 ‒ Price and ren
Slide 31: COVID-19 Updates
COVID-19 Updates ▪ As Singapore transitions into Phase Three, business operations of most tenants have resumed to pre-COVID-19 levels with safe management measures in place ▪ Rental collections for FY2020 have been over 97% since the onset of the COVID-19 pandemic ▪ Portfolio’s average security depo
Slide 32: Outlook
Outlook ▪ Overall, with the continued business uncertainties and the projected supply in 2021 and 2022, we expect the industrial market rents and prices to remain soft in the coming quarters as global demand conditions and growth recovery are very much dependent on the COVID-19 situation and vaccina
Slide 33: Conclusion
Conclusion Stabilised Portfolio Provides Opportunities to Pursue Growth ▪ Larger, diversified portfolio across four asset sub-sectors and tenant trade sectors 1 ▪ ▪ ▪ ▪ Portfolio occupancy improved from 90.5% in FY2019 to 91.0% in FY2020 Stable weighted average lease expiry (by rental income) of 3.0
Slide 34: Appendix
Appendix Top: UE BizHub EAST | Business Park Second: 7000 Ang Mo Kio Avenue 5 | High-Specs Industrial Bottom: 30 Marsiling Industrial Estate Road 8 | High-Specs Industrial
Slide 35: 57 Singapore Real Estate Portfolio Highlights
Real Estate Portfolio Highlights Located close Portfolio Occupancy 343 tenants to major transportation hubs and 91.0% Above JTC Average from different trade sectors key industrial zones Diversified of 89.6%(1) Weighted portfolio of 57 Singapore properties across Asset Valuation Average Lease Expiry
Slide 36: Key Portfolio Statistics
Key Portfolio Statistics As at As at As at 31 Dec 2020 30 Sep 2020 31 Dec 2019 Number of Properties 57 57 57 Valuation (S$ million)(1) 3,113.4 3,117.1 3,159.4 GFA (million sqft) 15.1 15.1 15.1 NLA (million sqft) 13.4 13.4 13.5 Weighted Average Lease Expiry (“WALE”) (years) 3.0 3.0 3.8 Weighted Avera
Slide 37: Singapore Industrial Market Outlook
Singapore Industrial Market Outlook Change in Net Supply of Industrial Space(1) (‘000 sqm) 2,500 2020 2021F 2022F 2023F (1Q-3Q20 + 4Q20F) 2,000 1,500 1,000 500 0 As at 4Q2019 As at 3Q2020 As at 4Q2019 As at 3Q2020 As at 4Q2019 As at 3Q2020 As at 4Q2019 As at 3Q2020 Single-user Factory Multiple-user
Slide 38: Singapore Industrial Market Outlook
Singapore Industrial Market Outlook Net Demand and Supply for Multi-user Factories Net Demand and Supply for Single-user Factories ('000 sqm) (%) ('000 sqm) (%) 850 100.0 800 100.0 750 650 80.0 80.0 600 550 60.0 60.0 450 400 350 40.0 40.0 250 200 150 20.0 20.0 50 2011 2012 2013 2014 2015 2016 2017 2
Slide 39: ESR-REIT's Competitive Strengths
ESR-REIT’s Competitive Strengths ▪ Largest APAC focused logistics real estate ▪ 57 properties valued at S$3.1 billion(1) platform with more than US$26.5 billion AUM ▪ Strategically located in key industrial zones ▪ ESR has ~ 67% stake in the REIT Manager, across Singapore 100% stake in Property Mana
Slide 40: Our Long-Term Strategy
Our Long-Term Strategy Our three-pronged strategy focuses on optimising Unitholder returns while reducing risks Organic Growth Acquisition Capital and Development Management Growth Acquisition and Organic Growth Capital Management Development Growth ▪ AEIs to unlock value and ▪ Yield-accretive, scal
Slide 41: Important Notice
Important Notice This material shall be read in conjunction with ESR-REIT’s results announcements for the full year ended 31 December 2020. Important Notice The value of units in ESR-REIT ("Units") and the income derived from them may fall as well as rise. Units are not investments or deposits in, o
Slide 42: For enquires, please contact:
For enquires, please contact: Gloria Low Lyn Ong Corporate Communications Manager Investor Relations Manager Tel: (65) 6222 3339 Tel: (65) 6222 3339 Fax: (65) 6827 9339 Fax: (65) 6827 9339 Email: gloria.low@esr-reit.com.sg Email: lyn.ong@esr-reit.com.sg