3QFY2013 Results Presentation - listed...
Transcript of 3QFY2013 Results Presentation - listed...
October 2013
3QFY2013
Results Presentation
This presentation should be read in conjunction with the financial statements of Soilbuild Business Space REIT for the period from 16 August 2013 (“Listing
Date”) to 30 September 2013 (hereinafter referred to 3QFY2013).
This presentation is for information only and does not constitute an offer or solicitation of an offer to subscribe for, acquire, purchase, dispose of or sell any
units in Soilbuild Business Space REIT (“Soilbuild REIT”, and units in Soilbuild REIT, “Units”) or any other securities or investment.
Nothing in this presentation should be construed as financial, investment, business, legal or tax advice and you should consult your own independent
professional advisors.
This presentation may contain forward-looking statements that involve risks, uncertainties and assumptions. 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. You are cautioned
not to place undue reliance on these forward-looking statements, which are based on the current view of management of future events.
The value of Units and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any
of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.
Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on Singapore
Exchange Securities Trading Limited (the “SGX-ST”). It is intended that holders of Units may only deal in their Units through trading on the SGX-ST. The
listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
The past performance of Soilbuild REIT is not indicative of the future performance of Soilbuild REIT. Similarly, the past performance of SB REIT
Management Pte. Ltd. (“Manager”) is not indicative of the future performance of the Manager.
Disclaimer
1
Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and Oversea-Chinese Banking Corporation Limited are the joint global
coordinators, issue managers, bookrunners & underwriters of the initial public offering of Soilbuild REIT.
Content
Key Highlights
3QFY2013 Financial Performance
Financial Position /Capital Management
Portfolio Update
Market Update and Outlook
2
Key Highlights
Key Highlights of 3Q FY2013 Results
•Soilbuild Business Space REIT successfully listed on the SGX on 16 August 2013 (hereinafter referred to as “Listing Date”)
•IPO oversubscribed multiple times with strong support from investors amidst challenging market conditions for REITs
•Strong support shown by Soilbuild Group/Mr Lim Chap Huat with a 26% unitholding post listing
Listing of Soilbuild Business Space
REIT
•Distribution per Unit for 3Q FY2013 (Listing Date to 30 September 2013) at SGD 0.760 cents - 3.0% above the Forecast1
•Portfolio Gross Revenue and Net Property Income for 3Q FY 2013 outperformed the Forecast1 by 0.8% and 2.0% respectively
3Q 2013 Results
•75% of debt hedged. Average all-in interest cost of 3.11% as at 30 September 2013
•Conservative gearing at 29.4% as at 30 September 2013 provides debt headroom for future acquisitions
•Healthy interest cover ratio of 5.6 times
Financial Position
•Portfolio occupancy rate increased to 99.8% due to expansion by existing tenant in Eightrium
•3 lease renewals in Eightrium and Tuas Connection resulted in positive rental reversion of 7.9%.
•No further leases due for renewal for the rest of FY2013
Portfolio Update
Notes:
1. The Forecast is derived from the Forecast Year 2013 figures disclosed in the Prospectus dated 7 August 2013 (the “Prospectus”).
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3QFY2013
Financial Performance
3Q FY2013 Distribution
For the period from
Listing Date to 30 September 13 Actual Forecast Variance
(%)
Distributable Income (S$000) 6,113 5,929 3.1%
Distribution per Unit (”DPU”) (cents) 0.760 0.738 3.0%
Annualised DPU (cents)(1) 6.03 5.86 2.9%
Annualised Distribution Yield(2) 8.1%
Note:
(1) Based on 803.5 million units in issue as at 30 September 2013
(2) Based on closing price as at 30 Sep 2013 of $0.745
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3Q FY2013 Financial Results – P&L
For the period from
Actual Forecast
Variance
(%)
Listing Date to 30 September 2013
(S$000)
Revenue 8,232 8,164 0.8%
Less Property Expenses (1,323) (1,388) 4.7%
Net Property Income 6,909 6,775 2.0%
Managers Fees (611) (593) (3.0%)
Other Trust Expenses (110) (113) 2.7%
Finance Costs (1) (1,101) (1,163) 5.3%
Net Investment Income before Tax
and fair value change 5,087 4,906 3.7%
Fair value change in investment
properties 29,748 - n.m
Net income before tax 34,835 4,906 n.m
Add back Non-Tax Deductible Items(2) (28,772) 1,023 n.m
Distributable Income 6,113 5,929 3.1%
Note:
(1) Finance Costs comprise net interest expense and amortization of upfront debt financing costs.
(2) “Non-tax deductible items” comprise the Manager’s management fees, property management and lease management fees paid or payable in Units, rent free amortisation, net
change in fair value of investment properties, Trustee fees and amortisation of upfront debt financing costs.
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3Q FY2013 Distribution
Distribution Timetable 3Q FY2013
Distribution Details 3Q FY2013
Distribution Period 16 August 2013 – 30 September 2013
Distribution Amount 0.760 cent per unit
Last Day of Trading on “cum” Basis Tuesday, 5 November 2013
Ex-Date Wednesday, 6 November 2013
Books Closure Date Friday, 8 November 2013 (5.00 pm)
Distribution Payment Date Wednesday, 4 December 2013
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Financial Position/
Capital Management
3Q FY2013 Financial Results – Balance Sheet
All figures S$000 unless otherwise stated Actual
as at
30 September
2013
Pro-forma
as at
31 December
2012
Investment Properties 935,000 935,000
Other Assets 17,326 1,000
Total Assets 952,326 936,000
Current Liabilities 12,793 8,351
Bank Borrowings 274,881 274,656
Other Liabilities 21,873 13,766
Net Assets 642,779 639,227
Units in Issue (‘000) 803,469 803,469
Net Asset Value per Unit (S$) 0.80 0.80
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Capital Management
Borrowing Details
Total Debt Facility S$285 million
Total Debt Drawn Down S$280 million
Aggregate Leverage(1) 29.4%
Average All-in Interest Costs(2) 3.11%
Weighted Average Debt Maturity 2.9 years
Interest Coverage Ratio 5.6x
Debt Maturity Profile (S$ Million)
$95.0 $95.0
$90.0
2013 2014 2015 2016 2017
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% of Debt
Maturing 0% 0% 34% 34% 32%
% of Fixed Debt 0% 0% 25% 25% 25%
Note:
(1) Ratio of Debt over Deposited Properties under the Property Funds Appendix
(2) Inclusive of margins and amortisation of upfront fees
75% of Debt already hedged
75% of the initial debt drawn down at
IPO has been fixed with 2, 3 and 4 year
interest rate swaps
Weighted average swap rate is slightly
below 1%
No Near Term
Refinancing Risks
Well spread maturity
profile with weighted
average debt maturity
of 3 years
Portfolio Update
Portfolio Overview
Keppel
Terminal Sentosa
Jurong Island
Jurong Port
Second Link
(Tuas Checkpoint)
PSA
Terminal
Tuas Port
(2022)
ONE-NORTH
CHANGI SIMEI
EXPO JOO KOON
BOON LAY
PIONEER BUONA VISTA
Solaris NLA: 441,533 sq ft
Valuation: S$303.0 million
Soilbuild REIT Properties are located in key technology, media and back office hubs and logistics clusters, which are near air and sea
transportation ports such as Changi Airport, Jurong Port and the planned mega container port at Tuas expected to be operational around 2022.
Eightrium NLA: 177,286 sq ft
Valuation: S$101.0 million
NLA: 1,240,583 sq ft
Valuation: S$319.0 million
COS Printers NLA: 58,752 sq ft
Valuation: S$11.0 million
Tuas Connection NLA: 651,072 sq ft (5)
Valuation: S$125.0 million
BK Marine
NLA: 73,737 sq ft
Valuation: S$15.0 million
BizCentral
NLA: 312,375 sq ft
Valuation: S$61.0 million
( (1) As at 30 September 2013. (2) Based on the higher of CBRE and Colliers’ valuations. (3) By Gross Rental Income for the month of 30 September 2013.
(4) As at 30 September 2013; (5) NLA includes some dedicated common areas within tenants’ compounds but does not constitute GFA.
NK Ingredients
Total Valuation (2) S$935 million
Total NLA 2,955,338 sq ft
WALE (3) 3.82 years
Occupancy (4) 99.8%
IPO Portfolio Summary (1)
CBD
13
Industrial Properties
Business Park Properties
Portfolio Summary
(1) Age from issue of CSC (as at Sep 30, 2013). (2) Assumes master leases in place. (3) Phase 1 of development received CSC in July 1991 and Phase 2 of development received CSC in Aug 2007. (4) As at Sep 30, 2013.
Property Type
Lease
Arrangement
Property
Age (1)
(Years)
Remaining
Land Lease
(Years)
Occupancy
Rate(2)
as at 30 Sep 13
Occupancy
Rate as at
IPO
Purchase
Price
(S$ Million)
Solaris Business
Park
Master
Lease 2.0 55 100.0% 100.0% $293.4
West Park BizCentral Multi-User
Ramp-up
Factory
Multi
Tenanted 1.0 55 100.0% 100.0% $313.0
Eightrium Business
Park
Multi
Tenanted 6.0 52 97.4% 95.3% $91.4
Tuas Connection Multi-User
Land Based
Factory
Multi
Tenanted 3.2 37 100.0% 100.0% $122.7
NK Ingredients Single-User
Factory
Master
Lease
Ph1: 22.2
Ph2: 6.1 33 100.0 % 100.0 % $60.0
COS Printers Single-User
Factory
Master
Lease 16.7 29 100.0% 100.0% $10.3
Beng Kuang Marine Single-User
Factory
Master
Lease 13.4 43 100.0% 100.0% $14.5
Portfolio 3.6 50(4) 99.8% 99.7% $905.3
(3)
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Portfolio occupancy as at 30 Sep 2013 increased by 0.1% since IPO due to space expansion of an existing tenant
16.4%
16.2%
12.4%
11.8%
7.2%
4.6%
4.6%
4.5%
22.5%
Marine Offshore, Oil & Gas
Precision Engineering, Electrical andMachinery productsSupply Chain Management, 3rdParty Logistics, Freight ForwardingChemicals
Fabricated Metal Products
Electronics
Publishing, Printing & Reproductionof Recorded MediaConstruction
Others
Key Portfolio Metrics
Portfolio Income by Property 1
Well Spread Trade Sectors(1) 2
Diversified Tenant Base(1) 3
Balanced portfolio with Growth Upside 4
% of Occupied
NLA of 2.93
million sq ft
Eightrium @ Changi
Business Park 14%
Tuas Connection
16%
West Park BizCentral
34%
Solaris 26%
NK Ingredients 7%
COS Printers 1%
BK Marine 2%
3QFY2013
Gross
Revenue of
S$8.2 million
Multi-tenanted Properties
58%
Properties under Master
lease 42%
3QFY2013
NPI:
S$6.9
million
(1) Inclusive of underlying tenants for Solaris
Total of
104
tenants in
portfolio
(1) Inclusive of underlying tenants for Solaris
15
MNC 65%
SME 29%
Government Agency
6%
Leasing Update
16
16%
33%
12%
37%
2%
1%
1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2013 2014 2015 2016 >2016
3Q 2013 Lease expiries renewed Area up for expiry as % of total NLA
All the expiries
due in 2013 have
been renewed
3Q FY2013 Leasing Update
No of Leases up for
Renewals No of Leases Renewed
Retention rate Rental reversion
achieved (by area)
2 / (1.8% of NLA) Renewed 3 / (2.2% of NLA) (1) 100% 7.9%
TOTAL 3 / (2.2% of NLA) 100% 7.9%
(1) Inclusive of forward renewal of future lease expiries
0.0%
17.3%
33.1%
12.7%
36.8%
0.0%
15.8%
28.2%
11.5%
44.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2013 2014 2015 2016 >2016
Lease Expiry Profile By total NLA Lease Expiry Profile By Gross Income
Well Staggered Lease Expiry Profile
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No leasing risk for the remainder of 2013
100% YTD retention rate since IPO reflects proactive tenant relationship management
Tenant Lease Expiry Profile (% of total NLA & Gross Rental Income)
WALE (by occupied NLA)
3.9 years
WALE (by Gross Income)
3.8 years
26.8%
7.7%
5.6%
4.6%
2.5%
1.9%
1.8%
1.6%
1.5%
1.4%
Soilbuild(2)
NK Ingredients Pte Ltd
Schenker (Singapore) Pte Ltd
Nestle Singapore (Pte) Ltd
Barclays Technology Centre Limited
Dyson Operations Pte Ltd
PICCO Enterprise Pte Ltd
Knowledge Universe Singapore Pte Ltd
C.O.S Printers Pte Ltd
Huawei International Pte Ltd
Quality and Established Tenant Base
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Top 10 Tenants (By Gross Rental Income) (1)
Top 10 tenants (excluding Soilbuild) accounts for less than 30% of Gross Rental Income (1)
Mitigation for
Sponsor Concentration Risk:
Strong underlying tenant base of established tenants
Rentals secured with 12-months rental deposits
Best-in-class properties with strong demand
Established Sponsor with successful track record
(1) For the month of September 2013
(2) Soilbuild’s exposure includes SB Solaris (Investment) Pte.Ltd. and SB Storage Pte Ltd
.
Soilbuild(2)
Market Update
and Outlook
Median Rents of Business Space
0.00
0.50
1.00
1.50
2.00
2.50
2007 2008 2009 2010 2011 2012 1H 2013
$ p
sf
pe
r m
on
th
Islandwide West Region
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2007 2008 2009 2010 2011 2012 1H 2013
$ p
sf
pe
r m
on
th
Islandwide IBP CBP MBC and Singapore Science Park
0.00
0.50
1.00
1.50
2.00
2.50
2007 2008 2009 2010 2011 2012 1H 2013
$ p
sf
pe
r m
on
th
Islandwide West Region
0.00
0.50
1.00
1.50
2.00
2.50
2007 2008 2009 2010 2011 2012 1H 2013
$ p
sf
pe
r m
on
th
Islandwide West Region
Median Rents for Private Business Park 1
Median Rents for Private Single-user Factory 2
Median Rents for Private Multiple-user Factory 3
Median Rents for Private Warehouse 4
Source: Realis
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Market Update and Outlook
21
•Singapore’s economy grew 3.8% y-o-y in 2Q 2013 as a result of robust growth in the manufacturing, wholesale & retail trades, transportation & storage, and finance & insurance sectors
•Despite modest growth expectations for the advanced and Asian economies and concerns of future interest rate hikes, Singapore’s economy is forecast to grow between 2.5-3.5%
Singapore’s Economy
•For 1H 2013, the URA All Industrial Property price and rent index recorded slower growth of 3.8% and 0.35% respectively as a result of new government policies
•Market rents expected to remain steady for conventional industrial premises and record a marginal uptick for higher quality hi-tech and business park space
•Transactions likely to remain subdued for remainder of 2013 given the cooling policy measures and fragile economic outlook
Industrial
Property
Sector
•Nil leasing risk for the remainder of 2013 with approximately 17% of the portfolio NLA due for expiry in 2014
•Barring any unforeseen events, Management believes that Soilbuild REIT is well placed to deliver on its stated forecast distribution for this financial year
Soilbuild
REIT
Source: Ministry of Trade and Industry, URA, Colliers Research
Key Contacts:
Thank You
Shane Hagan Chief Executive Officer Tel: (65) 6415 5980
Email: [email protected]
Roy Teo Chief Operating Officer Tel: (65) 6415 5983
Email: [email protected]