View
1
Download
0
Category
Preview:
Citation preview
FY2005/06 Full Year Results 13 April 2006
A-REIT FY05/06 Full Year Results .. 2
This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income and occupancy, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events.
Disclaimer
This Presentation is focused on comparing actual results for theyear ended 31 March 2006 versus forecasts derived on the best estimate as stated in the A-REIT Circular of 20 September 2005 and actual results in the prior corresponding period (“pcp”). This shall be read in conjunction with A-REIT’s fourth quarter for the period from 1 January 2006 to 31 March 2006 and FY2005/06 Financial Statements in the SGXNet announcement.
A-REIT FY05/06 Full Year Results .. 3
Agenda
• Key highlights
• Financial performance
• Capital and funds management
• Portfolio highlights
• Portfolio diversification
• Going forward
A-REIT FY05/06 Full Year Results .. 4
Key Highlights
• Distributable net income of S$142.63m, up 69% on pcp
• DPU of 11.68 cents, up 22.2% on pcp
• Acquired 28 properties for S$639m
• Total assets grew to S$2.8b in Mar 06 from S$2.1b in Mar 05
• S$226m of acquisitions pending completion
• First to pioneer 2 projects worth S$128m under the Warehouse Retail Scheme. Accounts for about 5% of A-REIT’s assets
• Portfolio occupancy 95.0% as at 31 Mar 06 vs 94.1% at 31 Mar 05. MTB occupancy was 91.4% vs. 89.0% respectively
• Assigned a corporate family rating of A3 by Moody’s
A-REIT FY05/06 Full Year Results .. 5
Agenda
• Key highlights
• Financial performance
• Capital and funds management
• Portfolio highlights
• Portfolio diversification
• Going forward
A-REIT FY05/06 Full Year Results .. 6
56%(12,391)(19,272)Non-property expenses
162%(8,506)(22,293)Borrowing costs
22%9.5611.68Distribution per unit
69%84,165142,633Available for distribution
75%75,217131,992Net income
173,557(53,596)227,153
Actual (1)
01/04/05 to 31/03/06(S$’000)
63%(32,873)Property operating expenses
81%
76%
% Change
96,114Net property income
128,987
Actual (1)
01/04/04 to 31/03/05(S$’000)
Gross revenue
DPU – 22% above pcp
Note:(1) Based on 64 properties as at 31 March 2006 versus 36 properties as at 31 March 2005.
A-REIT FY05/06 Full Year Results .. 7
3%11.3711.68Distribution per unit 3%138,838142,633Available for distribution
3%127,703131,992Net income
(41,566)173,558(53,595)227,153
Actual01/04/05 to
31/03/06(S$’000)
4%(51,689)Property operating expenses
3%(40,334)Non-property expenses
3%
3%
% Change
168,037Net property income
219,726
Forecast (1)
01/04/05 to 31/03/06(S$’000)
Gross revenue
DPU – 3% above Forecast(1)
Note:(1) Forecast for 1 April 2005 to 31 March 2006 are derived on a best estimate from the forecast as stated in the
circular dated 20 September 2005.
A-REIT FY05/06 Full Year Results .. 8
Balance sheet
123 cents134 cents (1)Net asset value per unit
30.2%
1.4
0.6
2.1
As at 31 Mar 05
36.9%Gearing (inclusive of deferred payments)
1.7Net assets attributable to unitholders
1.0
2.8
As at 31 Mar 06
Borrowings
Total Assets
(S$bn)
Note:(1) Based on most recent valuation or total acquisition cost.
A revaluation of the portfolio will be conducted in May 2006.
A-REIT FY05/06 Full Year Results .. 9
Financial performance growing
129
96
227
174
1723
66
50
0
30
60
90
120
150
180
210
240
Gross Revenue Net Property Income
S$m
133 days FY2003
FY2004
FY2005
FY2006
133 days FY2003
FY2004
FY2005
FY2006
A-REIT FY05/06 Full Year Results .. 10
DPU growth since listing
7.638.16
9.56
0
4
8
12
2002/03 2003/04 2004/05 2005/06
Cents
Regular and stable distributions
Notes: (1) FY2003 Actual DPU is annualised. The actual DPU was 2.78 cents for the 133 days ended 31 March 2003
+ 6.9%+ 17.0%
+ 22.2%11.68
2.92 cents in 4Q06
A-REIT FY05/06 Full Year Results .. 11
0.3
0.9
2.5
3.33.6
3.9
5.4
0.0
2.0
4.0
6.0
Bank savingsdeposits
Bank fixeddeposit (12months) (1)
CPF (ordinaryaccount) (2)
Interbankovernight
interest rate (3)
10 Yeargovernment
bond (4)
STI Index (5) A-REITannualised
yield (6)
Notes:(1) Bank fixed deposit rate (12 months) as at 31 March 2006. Source: MAS website(2) Based on interest paid on CPF ("Central Provident Fund") ordinary account from 1 January to 31 March 2006.
Source: CPF website(3) Interbank overnight interest rate as at 31 March 2006. Source: MAS website(4) As at 31 March 2006. Source: Singapore Government Securities ("SGS") website(5) Based on Bloomberg data as at 31 March 2006(6) Yield based on A-REIT's closing price of S$2.17 per unit on 31 March 2006 and FY05/06 DPU of 11.68 cents
Comparable returns%
A-REIT FY05/06 Full Year Results .. 12
Yield returns compared to 10-year bond and S-REITs
Source: IBES Estimates, Bloomberg
S-REITs yield range from low of 4.4% to high of 6.0%
6.0% 5.4%4.4% 3.6%3.6%3.6%
5.2%5.2%
0.0%
2.0%
4.0%
6.0%
8.0%
S-REIT High A-REIT S-REIT Low0.0%
2.0%
4.0%
6.0%
8.0%
Yield (LHS) 10-year bond yield (RHS) Weighted average S-REITs' yield
240 bps spread 80 bps
spread
180 bps spread
A-REIT FY05/06 Full Year Results .. 13
Distribution Details
26 May 2006Distribution payment date
26 April 2006, 5.00 pmBooks closure date
24 April 2006, 9.00 amEx-date
21 April 2006Last day of trading on “cum” basis
13 April 2006Notice of books closure date
Distribution Timetable
Distribution per unit (cents)
Distribution PeriodStock counter
2.921 Jan 06 to 31 Mar 06Ascendasreit
A-REIT FY05/06 Full Year Results .. 14
Agenda
• Key highlights
• Financial performance
• Capital and fund management
• Portfolio highlights
• Portfolio diversification
• Going forward
A-REIT FY05/06 Full Year Results .. 15
Performance to date Market cap and liquidity
Source: Bloomberg
1 Apr 05 to 31 Mar 06• 703.6 m units traded (16% of total Singapore REIT trading)• A-REIT is ranked 31st by market capitalisation on Singapore
Exchange Securities Trading Limited
2302
2523 2570
27462607
2548
23392269
2491
2782 2772 2772
1100
1500
1900
2300
2700
Apr '05
May '0
5Ju
n '05
Jul '0
5Aug
'05
Sep '0
5Oct
'05Nov
'05
Dec '0
5Ja
n '06
Feb '
06Mar
'06
0
20,000
40,000
60,000
80,000
100,000
120,000
Total Mthly Vol (‘000)
Market C
ap (S$m)
A-REIT FY05/06 Full Year Results .. 16
Capital Management
(1) Including margins and weighted swap rates for hedged debt and current floating rates on unhedged debt, and amortisation of CMBS’ establishment and annual maintenance costs
30.2%36.9%- Gearing (inclusive of deferred payments)
2.77%3.49%- Weighted average all-up funding cost (1)
9.8 times6.96 times- Interest cover ratio
S$423mS$733m• Fixed rate debt
S$556mS$973m- Total debt
31 Mar 200531 Mar 2006Debt Profile
A-REIT FY05/06 Full Year Results .. 17
Hedging of existing debt
4.30 years
88.5%
As at 31 Mar 06 As at 31 Mar 0575.9%- Fixed as a % of total debt
3.22 years- Weighted average term of fixed debt
Financial year
88 8875 70
5538
248
12 1225 30
4562
7692
0%
20%
40%
60%
80%
100%
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13
Fixed Rate Floating Rate
A-REIT FY05/06 Full Year Results .. 18
Capital Market Activities
May 2005 – Debt funding
• Second CMBS issuance of Euro 165.0 million (approximately S$350 million equivalent) under the S$1 billion programme established in August 2004
Oct 2005 – Equity raising
• Preferential offer and private placement of S$240 million at an issue price S$2.13
Dec 2005 – Corporate family rating
• Assigned an A3 rating by Moody’s Investors Services
• Enables A-REIT to increase gearing beyond 35%. Provides additional debt capacity of S$450 million before gearing reaches 45%.
A-REIT FY05/06 Full Year Results .. 19
Agenda
• Key highlights
• Financial performance
• Capital and funds management
• Portfolio highlights
• Portfolio diversification
• Going forward
A-REIT FY05/06 Full Year Results .. 20
Acquisitions made in FY2005/06
136.8Logistics and Distribution Centres
227.6Hi-Tech Industrial
64.5Business Park/Science Park
210.2Light Industrial
639.1Total
Purchase Price (S$m)
Sub-sector
A-REIT FY05/06 Full Year Results .. 21
Agreements signed
May 200620Sembawang KimtransLogistics Centre
4
May 200658Logistics 215
Nov 200662(1)Courts Megastore2
Mid-200620LabOne Building1
Mar 200766(1)Giant Hypermarket (Cold Storage)
3
226Total
Price(S$m)
Expected to complete
Properties
(1) Courts Megastore and Giant Hypermarket are 2 warehouse retail projects undertaken by A-REIT. The development cost for Courts Megastore is estimated to be between $55 million to $62 million, pending confirmation on differential premium.
A-REIT FY05/06 Full Year Results .. 22
Singapore Industrial Acquisitions Jan – Dec 05
(1) Cambridge figures are based on options signed pending completion upon IPO and are based on management estimates
Source: CBRE Research
AREIT, 49.0%
Others, 9.7%Cambridge(1),
27.0%
Mapletree Investments,
3.4%
Mapletree Logistics Trust,
10.8%
A-REIT FY05/06 Full Year Results .. 23
Warehouse Retail Scheme (WRS)
23
• S$128 m for 2 WRS projects for Courts and Cold Storage
• Facilitate integrated businesses that encompass regional headquarters, retail, warehousing and industrial activities to operate on industrial sites. At least 60% of GFA must be for industrial use
• Value on completion represents 5% of A-REIT’s asset value
• Provides opportunity to add greater value to unitholders than a typical property acquisition without significant additional risk
• Risk mitigated due to:
pre-committed leases to strong anchor tenant
typical construction risks have been minimised
A-REIT FY05/06 Full Year Results .. 24
Portfolio Highlights
6.7
151,163
53,94197,222
95.0%91.4%
As at
31 Mar 06
94.1%89.0%
A-REIT Portfolio occupancy (%)A-REIT MTB (1) occupancy (%)
102,570
39,27863,292
Total Portfolio renewals/new leases (sqm)
Total New leases/Expansions (sqm)Total Renewals (sqm)
7.4Weighted Average Lease to Expiry (years)
As at
31 Mar 05
(1) MTB = Multi-tenanted buildings
A-REIT FY05/06 Full Year Results .. 25
Sources of new demand – broad basedTenants sector by net lettable area (2H FY05/06)
General Mfg Ind25%
Transport & storage
15%
Precision Eng18%
IT12%
Chemical5%Biomedical
1%
Electronics24%
A-REIT FY05/06 Full Year Results .. 26
Sources of demand 1HFY06 vs. 2HFY06
12%
18%
15%
25%
24%
1%
5%
9%
34%
26%
2%
3%
25%
1%
0% 5% 10% 15% 20% 25% 30% 35% 40%
IT
Precision Eng
Transport & storage
General Mfg Ind
Electronics
Biomedical
Chemical
1HFY06 2HFY06
A-REIT FY05/06 Full Year Results .. 27
A-REIT Portfolio Occupancy Higher Than Market
Source: Urban Redevelopment Authority Official Statistics as at Dec 2005 ww.ura.gov.sgand Ascendas-MGM Funds Management Limited as at March 2006
96.5%
90.9%
97.3%
92.2%
87.0%
84.0%84.0%82.4%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
Business Park Light Industrial Hi-Tech Industrial Logistics
A-REIT URAO
ccup
ancy
rate
(%)
Occ
upan
cy ra
te (%
)O
ccup
ancy
rate
(%)
A-REIT FY05/06 Full Year Results .. 28
URA Industrial Rental Index
Source : Urban Redevelopment Authority: December 05
Base year
50
60
70
80
90
100
110
120
130
140
150
Q496 Q297 Q497 Q298 Q498 Q299 Q499 Q200 Q400 Q201 Q401 Q202 Q402 Q203 Q403 Q204 Q404 Q205 Q405
Indu
stria
l Ren
tal I
ndex
68
69
70
71
72
73
74
75
Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405
Rental index improved 2.5% in Q4 2005, and 4.5% for 2005.
A-REIT FY05/06 Full Year Results .. 29
Low Occupancy Buildings Improving
36.2%57.4%KA Place4
62.7%67.5%(1)The Gemini2
57.2%74.5%(2)KA Centre3
66.3%82.4%The Alpha1
As at 31 Mar 05
As at 31 Mar 06
Properties
(1): The occupancy rate for The Gemini is expected to increase to 76.2% in June 06 (2): The occupancy rate for KA Centre is expected to increase to 77.7% in April 06
A-REIT FY05/06 Full Year Results .. 30
Recent Acquisitions - Significant Improvement in Occupancy in 4Q06
94.2%
94.6%
100.0%
As at 31 Mar 06
90.8%11 Tampines Street 922
90.3%Pacific Tech Centre3
80.9%Techquest1
As at 31 Dec 05
Properties
A-REIT FY05/06 Full Year Results .. 31
Agenda
• Key highlights
• Good financial performance
• Capital and funds management
• Portfolio highlights
• Portfolio diversification
• Going forward
A-REIT FY05/06 Full Year Results .. 32
Tenant Concentration Top 10 tenants make up 33.9% of the total portfolio income
compared to 44.8% in the prior corresponding period
Top 10 Tenants by Gross Rental Income
9.2%
7.3%
3.2% 2.8% 2.3% 2.2% 1.9% 1.8% 1.7% 1.5%
0.0%
4.0%
8.0%
12.0%
SingTe
l
C&P
Siemen
sTT
Inter
natio
nal
Infine
on Te
chno
logies
Freigh
t Link
s
Honey
well HPID
S Logis
tics
IHPC
% o
f Gro
ss R
enta
l Inc
ome
A-REIT FY05/06 Full Year Results .. 33
Portfolio Diversification by Value
Hi-Tech IndustrialLight
Industrial
Business ParkLogistics &
Distribution Centres
21%
24%
29%
26%
Asset Class Diversification
Multi-tenanted Buildings
Sale & Leaseback
45% 55%
Mix of Sale & Leaseback vs Multi-tenanted Buildings
A-REIT FY05/06 Full Year Results .. 34
Weighted Average Lease Term to Expiry The lease expiry profile is well balanced.
7.4 yearsBased on 36 properties
As at 31 March 2005
6.7 yearsbased on 64 properties
As at 31 March 2006
Weighted average lease term to expiry
14.4
%
14.8
%
7.2%
3.5% 6.
6%
3.8%
1.4%
1.5%
7.7% 10
.5%
1.7%
8.9%
0.0% 4.1%
1.9%
0.0%
12.0
%
0.0%
13.4
%
12.2
%
10.7
%
7.9%
6.6%
1.2%
2.2% 6.
4% 8.0%
7.6%
5.8%
1.1%
3.2%
2.4%
2.2%
9.1%
0%
10%
20%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
>2021
Year Ending 31 Mar
36 properties @ 31 Mar 05 64 properties @ 31 Mar 06
% o
f A-R
EIT
Prop
erty
Inco
me
A-REIT FY05/06 Full Year Results .. 35
Agenda
• Key highlights
• Financial performance
• Capital and funds management
• Portfolio highlights
• Portfolio diversification
• Going Forward
A-REIT FY05/06 Full Year Results .. 36
Outlook for Singapore industrial property market• According to CB Richard Ellis 4Q2005 Singapore Real Estate
research report, the outlook for industrial property market for 2006 is positive.
• Industrial property market had bottomed out by 2005.
• Demand for industrial space has been exceeding supply since 2004Q3. As a result, occupancy rate has been on upward trend
• Demand for hi-tech and business and science park space is expected to increase, driven by government initiatives to promote new industries (eg. digital media, nanotechnology), as well as headquarter services, etc.
• Coupled with limited future new supply and continued economic growth, occupancy and rental rates are expected to improve.
• Rents for flatted factories and logistics space are expected to remain flat as there is still significant vacancies and potential new supply coming on stream.
A-REIT FY05/06 Full Year Results .. 37
A-REIT's strengths
• Well diversified:Focus in business space and industrial property sector
Four property asset classes
Well-located quality properties
Balance of long term vs short term leases provides stability and potential for positive rental reversions
No single property accounts for more than 7% of Monthly Gross Revenue
A-REIT FY05/06 Full Year Results .. 38
A-REIT's strengths• Market leader
Ascendas has a track record of more than 20 years
Committed sponsors
• Operational platformDedicated sales/marketing, leasing and property management team of over 80 people
Possess in-depth understanding of this property sector
• Customer focusTrack record of customers growing with us
High retention ratio
A-REIT FY05/06 Full Year Results .. 39
A-REIT's strategies
Optimisecapital structure
Optimisecapital structure
Yield accretiveacquisitions
Yield accretiveacquisitions
Proactive asset
management
Proactive asset
management
StabilityStability GrowthGrowth
Predictable incomePredictable income Capital stabilityCapital stabilityTotal returns
Outcome
StrategiesStrategies
Proactive and
dedicated manager
with track record
A-REIT FY05/06 Full Year Results .. 40
A-REIT will continue to deliver stable returns via:
• Pro-actively managing the portfolio
• Occupancy rates
• Rental rates
• Cost management
• Acquisition pipeline
• Significant opportunities in Singapore
• Right of first refusal from Ascendas properties in Singapore
• Properties to be sold by JTC
• Optimising capital structure
• Maintain a long-term optimal gearing of 45%
• Continue to optimise interest rate hedging profile
A-REIT's strategies
A-REIT FY05/06 Full Year Results .. 41
Q & A
A-REIT FY05/06 Full Year Results .. 42
Important NoticeThis presentation has been prepared by Ascendas-MGM Funds Management Limited as Manager for Ascendas Real Estate Investment Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain independent professional advice prior to making any decision. This Report is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in Singaporean currency unless otherwise stated. January 2006
Thank you
Recommended