FY15/16 Financial Results Presentation - Ascendas …...2016/05/05 · fav/ (unfav) Gross...

A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

FY15/16 Financial Results Presentation 5 May 2016

ONE@Changi City, Singapore

A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

Logistics Properties, Australia

A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group A-REIT is managed by Ascendas Funds Management (S) Ltd, a member of Ascendas-Singbridge Group

Disclaimers

This material shall be read in conjunction with A-REIT’s financial statements for the financial year ended 31 March 2016.

This presentation may contain forward-looking statements that involve assumptions, 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 A-REIT's future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s current view on future events.

The value of units in A-REIT (“Units”) and the income derived from them, if any, may fall as well as 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 the SGX-ST. It is intended that unitholders of A-REIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of A-REIT is not necessarily indicative of the future performance of A-REIT.

Any discrepancies between the figures in the tables and charts and the listed amounts and totals thereof are due to rounding.


Agenda

Key Highlights for FY15/16

Financial Performance

Investment Management

Capital Management

Asset Management

Portfolio Update

Portfolio Resilience

Market Outlook



Total amount available for distribution rose by 7.7% y-o-y to S$378.3m

Estimated DPU (after performance fees) grew 5.2% y-o-y to 15.357 cents from 14.600 cents in FY14/15. Excluding the effects of the performance fees, estimated DPU for FY15/16 would have been 16.053 cents, representing a growth of 10.0%.

Key performance drivers were:

• Contributions from new acquisitions: Australian Portfolio, Aperia, Kendall, Hyflux Innovation Centre and ONE@Changi City

• Increase in occupancy at certain properties, and positive rental reversion of 7.0% achieved over preceding contracted rental rates


Key Highlights for FY15/16 Assets Under Management increased 21% to S$9.9 billion

• S$1.5 billion of acquisitions in Australia and Singapore

• S$96.0 million of asset enhancement works

• S$43.9 million of development works

• S$38.7 million of divestments

Annual Property Revaluation

• Total valuation of A-REIT’s 133 properties was S$9,659 million

• Singapore portfolio capitalisation rate at 6.3% (vs 6.46% in FY14/15)

Proactive Capital Management

• Moody’s re-affirmed A-REIT’s A3 credit rating

• Healthy aggregate leverage of 37.2% with debt maturity of 3.4 years

• 71.9% of borrowings is hedged for an average term of 3.3 years


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


(S$’000) FY15/16(1) FY14/15(1) %

fav/ (unfav)

Gross revenue(2) 760,988 673,487 13.0

Net property income(2) 533,701 462,727 15.3

Total amount available for distribution 378,321 351,140 7.7

DPU after performance fees (cents)(3)(4)(5) 15.357 14.600 5.2

DPU before performance fees (cents)(4)(5) 16.053 14.600 10.0

FY15/16 vs FY14/15

(1) 133 properties as at 31 March 2016 and 107 properties as at 31 March 2015, including 1 property which is classified under finance lease as at both reporting dates.

(2) Higher revenue and NPI mainly due to contributions from (i) the acquisition of Hyflux Innovation Centre, Aperia, The Kendall, Australian Portfolio and ONE@Changi City, (ii) increase in occupancy at certain properties and (iii) positive rental reversion on renewals.

(3) Includes taxable (FY15/16: 14.929 cents, FY14/15: 14.340 cents), tax exempt (FY15/16: 0.283 cents, FY14/15: 0.200 cents) and capital (FY15/16: 0.145 cents, FY14/15: 0.060) distributions.

(4) The estimated DPU for FY15/16 has been computed after taking into consideration the Units issued as partial consideration for the acquisition of ONE@Changi City (“Consideration Units”). The Consideration Units will only be entitled to distributions from the date of their issue to the end of the semi-annual financial period in which the Consideration Units are issued, as well as all distributions thereafter.

(5) As at the date of this announcement, A-REIT has received an Exchange Notice amounting to S$14.0 million in relation to the Exchangeable Collateralised Securities (“ECS”) and new Units will be issued. Any new Units issued (or to be issued) in exchange for the ECS will rank pari passu in all respects with the Units in issue on the day immediately following the date of the Exchange Notice, including the entitlement to distributions by A-REIT for the period preceding the date of issue of the Units. The estimated DPU for FY15/16 has been computed on the basis that,no further ECS will be exchanged into Units before the books closure date. Accordingly, the actual quantum of DPU may differ if A-REIT receives additional Exchange Notices before the books closure date.


4Q FY15/16 vs 3Q FY15/16

(1) 133 properties as at 31 March 2016 and 130 properties as at 31 December 2015, including 1 property which is classified under finance lease as at both reporting dates.

(2) Higher revenue and NPI mainly due to contributions from the Australian Portfolio, as 4Q FY1516 is the first full quarter since the acquisition; and ONE@Changi City, which was acquired during the quarter.

(3) Includes taxable (4Q FY15/16: 3.247 cents, 3Q FY15/16: 3.810 cents), tax exempt (4Q FY15/16: 0.146 cents, 3Q FY15/16: 0.045 cents) and capital (4Q FY15/16: 0.017 cents, 3Q FY15/16: 0.091 cents) distributions.

(4) The estimated DPU for 4Q FY15/16 has been computed after taking into consideration the Consideration Units issued on 1 March 2016 as partial consideration for the acquisition of ONE@Changi City and on the basis that no further ECS will be exchanged into Units before the books closure date. Please refer to note 4 and 5 of the preceding slide

(5) Lower total amount available for distribution and estimated DPUs mainly due to higher interest expenses arising from the loans drawn down during the quarter to part finance the acquisition of ONE@Changi City, coupled with the full quarter impact from the loans drawn to part finance the acquisition of the Australian Portfolio.

(S$’000) 4Q

FY15/16(1)

3Q FY15/16(1)

%

fav/ (unfav)

Gross revenue(2) 204,044 193,812 5.3

Net property income(2) 143,465 142,168 0.9

Total amount available for distribution(5) 89,102 96,574 7.7

DPU before performance fee (cents)(4)(5) 3.759 4.293 14.2

DPU after performance fees (cents) (3)(4)(5) 3.410 3.946 13.6


Stock Counter Distribution Period Estimated DPU (cents) #

Taxable Income

Tax-exempt Income

Capital Total

Ascendas REIT 18 December 2015 to

31 March 2016

4.052 0.152 0.092 4.296

Ascendas REIT A

(temporary)

1 March 2016 to

31 March 2016

1.136 0.049 0.006 1.191

Distribution Details

Distribution Timetable

Last day of trading on “cum” basis 10 May 2016 (Tuesday)

Ex-distribution date 11 May 2016 (Wednesday)

Books closure date 13 May 2016 (Friday)

Distribution payment date 7 June 2016 (Tuesday)

# A-REIT paid an advanced distribution of 3.060 cents per unit on 15 January 2016 for the period from 1 October 2015 to 17 December 2015. Please refer to A-REIT’s announcements on 4 January 2016 for more details. The estimated DPU has been computed on the basis that no further ECS will be exchanged into Units before the books closure date. Accordingly, the actual quantum of DPU may differ if A-REIT receives additional Exchange Notices before the book closure date.


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


Investment Highlights in FY15/16

Country Purchase Consideration

/ Value (S$m) Completion date

Acquisitions 1,546.8

26 logistics properties in Sydney, Melbourne, Brisbane & Perth

Australia 1,047.61 23 Oct: 10 properties 18 Nov: 16 properties

6-20 Clunies Ross Street, Pemulwuy, Sydney

Australia 79.21 Feb 2016

ONE@Changi City Singapore 420.0 Mar 2016

Asset Enhancements 96.0

Sparkle (Gemini-Aries Link) Singapore 17.2 Jun 2015 Techlink & Techview Singapore 26.2 Jul 2015

Honeywell Building Singapore 4.2 Sep 2015

40 Penjuru Lane Singapore 35.7 Oct 2015

Cintech I to IV Singapore 12.7 Feb 2016

Developments 43.9

DBS Asia Hub Phase 2 Singapore 21.8 Apr 2015 A-REIT Jiashan Logistics Centre China 22.12 Mar 2016

Divestments 38.7

26 Senoko Way Singapore 24.8 Apr 2015 BBR Building Singapore 13.9 Sep 2015 1 Based on end Mar 16 exchange rate of AUD 1.00 = SGD1.0342

2 Based on end Mar 16 exchange rate of RMB1.00 = SGD 0.2097


26 modern logistics properties located in key cities: Sydney, Melbourne, Brisbane and Perth

GFA 630,947 sqm ranks A-REIT as 8th largest industrial landlord in Australia

Healthy occupancy (94.4%); Long WALE (5.1 years); Triple net leases

Purchase Consideration A$1,013m (S$1,047.6m)

Acquisition Fee to Manager A$10.13m (S$10.5m) to be paid in units

Other Transaction Costs A$54.7m (S$56.6m) includes stamp duty, professional advisory fees etc.

Total Acquisition Cost A$1,077.8m (S$1,114.7m)

Vendors Real estate arm of GIC & Frasers Property Australia Pty Limited

Valuation as at 31 Mar 16

A$966m (S$999.7m)

Land Tenure Freehold

Total Gross Floor Area (“GFA”)

630,947 sqm

Weighted Average Lease Expiry (“WALE”)

5.1 years

Occupancy Rate 94.4%

No. of leases 30

Lease structure Tenant pays all statutory outgoings & operating expenses Note: Based on end Mar 16 exchange rate of

A$1.00 = SS$1.0342

Acquisition in FY15/16: 26 properties in Australia


Acquisition in FY15/16: 6-20 Clunies Ross Street, Pemulwuy, Sydney, Australia

Purchase Consideration A$76.6m (S$79.2m)

Acquisition fee to Manager

A$0.766m (S$0.8m)

Stamp Duty and Other transaction costs

Approximately A$4.596m (S$4.7m)

Total Acquisition Cost A$82.0m (~S$84.7m)

Vendor Deka Australia One GmbH


A$79.9m (S$82.6m)

Land Tenure Freehold

Gross Floor Area (“GFA”) 38,579 sqm

WALE 5.7 years

Occupancy Rate 100%

No. of leases 2

Lease structure Tenant pays all statutory outgoings & operating expenses

A modern high clearance warehouse and a freestanding two-storey office/laboratory facility

Strategically located approx. 28km west of Sydney CBD, within the premium logistics and distribution hub (Holroyd Local Government Area and the Greystanes Industrial precinct)

Good access to major M4 and M7 motorways

6-20 Clunies Ross Street – located within 6 km –

16km from A-REIT’s existing properties in Sydney

Note: Based on End Mar 16 exchange rate of A$1.00 = S$1.0342


Acquisition in FY15/16: ONE@Changi City, Singapore Purchase Consideration

S$420.0 million

Acquisition fee to Manager

S$4.2 million

Stamp Duty and Other transaction costs

Approximately S$17.3 million (including stamp duty of about S$12.6 m)

Total Acquisition Cost S$437.3 million

Vendor Ascendas Frasers Pte Ltd


S$439.0 million

Land Tenure 53 years remaining (no annual land rent payable)

GFA 71,158 sqm

NLA 61,236 sqm

WALE 4.1 years

Occupancy Rate 97.8%

A 9-storey, high quality multi-tenanted business park building

Located next to Expo MRT station Certified Green Mark Gold Plus by

the Building & Construction Authority (BCA)

1 Changi Business Park Central 1


Completed Phase 2 block at DBS Asia Hub

Description Development of a 6-storey business park building next to the existing DBS Asia Hub, which will be fully leased to DBS Bank Ltd in 2Q 2015

Cost Approx. S$21.8 million

Valuation

as at 31 Mar 16

S$168.2 million (DBS Phase 1 and 2)

Completion

(TOP Date)

April 2015

Land Tenure 30 years remaining (with additional 30 year extension)

GFA 45,857 sqm (DBS Phase 1 and 2)

Additional 7,081 sqm in Phase 2

NLA 38,172 sqm (DBS Phase 1 and 2)

WALE 4.3 years

Occupancy Rate 100%

Development in FY15/16: DBS Asia Hub Phase 2


Property to be Developed

Single-storey logistics facility

Total Development Costs (incl land cost)

~RMB 105.2 million (~S$22.1 million)


RMB 120.0 million (S$25.2 million)

Completion (TOP Date) Mar 2016

Land Lease Expiry 50 years remaining

Land Area 57,513 sqm

Plot ratio 0.6 (1.5 permitted)

GFA 35,729 sqm

NLA 35,206 sqm

WALE Nil

Occupancy Rate 0% Under nego: 34%

Good accessibility; site is located 2km from the south western border of Shanghai, in Jiashan, Zhejiang Province

Modern logistics facility with high ceiling, floor loading and fire safety system

Targeting the growing e-commerce industry

Note: Based on end Mar 16 rate of RMB$1.00 = SS$0.2097

Development in FY15/16: A-REIT Jiashan Logistics Centre


Four Acres Singapore 26 Senoko Way

Description 2-storey light industrial bldg with a 4-storey linked extension block

Part 2-storey and part 3-storey light industrial building

Built-to-suit global development & training centre for Unilever

Remaining Land Tenure 36 years 42 years 25 years

NLA 10,725 sqm 5,421 sqm 9,170 sqm

Acquisition Year / Price 2007 / S$15.5 million 2005 / S$6.8 million 2013/ S$30.7 million

Book Value S$24.8 million (as at 31 Mar 2015)

S$9.3 million (as at 31 Mar 2015)

Finance lease S$33.4 million (as at 31 Mar 2016)

Sales Price S$24.8 million* S$13.9 million* S$34.0 million*

NPI Impact -S$1.1 million -S$0.9 million -S$4.2 million

Buyer JTC Corporation BBR Holdings (S) Ltd Unilever Asia Pacific Private Limited

Capital gains over original costs

S$9.0m S$6.8m S$0.6m

Completion Date 7 April 2015 9 September 2015 29 April 2016

BBR Building

Divestments in FY15/16 & 1QFY16/17

* In accordance to A-REIT’s Trust Deed, the Manager is entitled to a divestment fee of 0.5% of the sale price of the Property.


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


Healthy Balance Sheet

Aggregate leverage increased to 37.2% (from 33.5% in March 2015) following about S$1.5b acquisitions in FY15/16

(1) Excludes fair value changes and amortised costs. Borrowings denominated in foreign currencies are translated at the prevailing

exchange rates except for JPY/HKD-denominated debt issues, which are translated at the cross-currency swap rates that A-REIT

has committed to

(2) Excludes the amount to be distributed for the relevant period after the reporting date

(3) S$14m ECS is converted into 6.8 million new Units after 31 March 2016. Accordingly, total debt is S$3,664m, aggregate leverage is

37.1% and Units in issue is 2,672m

As at 31 Mar 16

As at 31 Dec 15

As at 31 Mar 15

Total debt (S$m) (1) 3,678 (3) 3,491 2,735

Total assets (S$m) 9,876 9,354 8,160

Aggregate leverage 37.2% (3) 37.3% 33.5%

Unitholders' funds (S$m) 5,492 5,161 5,014

Net asset value (NAV) per Unit 206 cents 206 cents 208 cents

Adjusted NAV per Unit (2) 202 cents 202 cents 201 cents

Units in issue (m) 2,666 (3) 2,504 2,406


356

- - - - - - - - - -

150*

- 165

- - - - - - - -

150*

75

306

400 442

- - - - - -

-

-

248

95 100

192 350

- 154

-

195

-

286

-

- -

-

-

-

-

-

-

-

200

400

600

800

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026and

beyondRevolving Credit Facilities Committed Revolving Credit Facilities

Term Loan Facilities Medium Term Notes

Exchangeable Collateralised Securities

Well-spread Debt Maturity Profile

Diversified

Financial

Resources

SG

D (

mil

lio

n)

Maintain a balanced debt maturity profile with no more than 20% debt maturing in a single year

Issued 2 series of Notes recently

HKD500m (S$92m) 3% 10-year Notes in Feb 2016 (MTN#12)

S$130m 2.655% 5-year Notes in Apr 2016 (MTN#13)

Average debt maturity: 3.4 years

The chart illustrates the debt profile post-issuance of MTN#13 and conversion of S$14m ECS

* S$150m term loan facility and S$150m committed revolving credit facility will expire in August and November 2016

10% 9%

37%

36%

8%

20% of total debt


Robust indicators enable A-REIT to borrow at competitive costs

Key Funding Indicators

As at 31 Mar 16

As at 31 Dec 15

As at 31 Mar 15

Aggregate Leverage 37.2% (2) 37.3% 33.5%

Unencumbered properties as % of total investment properties(1) 77.2% 75.7% 86.1%

Interest cover ratio 5.5 x 5.9 x 6.1 x

Total debt / EBITDA 7.9 x 7.6 x 6.5 x

Weighted average tenure of debt (years) 3.4 (2) 3.5 3.6

YTD weighted average all-in debt cost 2.79% 2.72% 2.68%

A-REIT’s issuer rating by Moody’s A3 stable

(1) Total investment properties exclude properties reported as finance lease receivable

(2) Post issuance of MTN#13 and conversion of S$14m ECS into new Units, aggregate leverage and weighted tenure of debt are

improved to 37.1% and 3.5 years respectively


Prudent Interest Rate Risk Management

Increase in interest rates

Decrease in distribution

(S$m)

Change as % of FY15/16 distribution

Pro forma DPU impact

(cents)(2)

50 bps 5.2 1.4% 0.19

100 bps 10.3 2.7% 0.39

150 bps 15.5 4.1% 0.58

200 bps 20.6 5.5% 0.77

71.9% (1) of borrowings is hedged for an average term of 3.3 years (1)

50 bps increase in interest rate is expected to have a pro forma impact of S$5.2 million decline in distribution or 0.19 cent in DPU

(1) Post issuance of MTN#13 and conversion of S$14m ECS into new Units, % hedge and average term of hedge improves to

75.4% and 3.4 years respectively

(2) Based on number of units in issue of 2,666 million


Annual Property Revaluation

Total valuation of A-REIT’s 133 properties was S$9,659 million @ 31 Mar 2016

Net revaluation loss of S$6.9 million, attributed to Australia

Capitalisation rate of 6.30% for Singapore portfolio (vs. 6.46% as at 31 Mar 2015)

Weighted Average Range

Business & Science Parks

6.06% 5.75% - 6.75%

Integrated Development, Amenities & Retail

6.12% 5.95% - 6.75%

High-Specifications/ Data Centres 6.21% 6.00% - 6.50%

Light Industrial/ Flatted Factories 6.89% 6.75% - 7.50%

Logistics & Distribution Centres 6.70% 6.25% - 7.25%

A-REIT’s Singapore portfolio 6.30% 5.75% - 7.50%

A-REIT’s Australia portfolio 6.58% 5.75% - 7.50%

A-REIT’s China portfolio 5.65% 5.50% - 5.75%


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


87.9%

94.7%

51.2%

87.6% 88.9% 94.4%

67.6%

89.2% 88.6%

67.3%

87.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Singapore Australia China Total

Mar-16 Dec-15 Mar-15

Overview of Portfolio Occupancy

Gross Floor Area (sqm)

2,967,778* 669,525 147,036 3,784,339

Note: - The Australia properties were acquired in 3Q FY15/16 and 4Q FY15/16. - In China, A-REIT Jiashan Logistics Centre was completed in Mar 2016 and was unoccupied. - * Gross Floor Area excludes 2Senoko which is decomissioned due to AEI.

N.A.


Singapore occupancy declined to 87.9% mainly due to the single tenant lease expiry at IDS Logistics Corporate HQ

Excluding IDS, Singapore occupancy is about 88.7% underpinned by new properties such as One@Changi City, DBS Asia Hub

Singapore Occupancy

As at 31 Mar 2016 31 Dec 2015 31 Mar 2015

Total Singapore Portfolio GFA (sqm) 2,967,777(1)(2) 2,894,439(1)(2) 2,904,336(1)

Singapore Portfolio occupancy (same store) (3) 88.9% 90.3% 90.8%

Singapore MTB occupancy (same store) (3) 85.4% 86.3% 86.5%

Occupancy of Singapore investments completed in the

last 12 months 80.5% 75.2% -

Overall Singapore portfolio occupancy 87.9% 88.9% 88.6%

Singapore MTB occupancy 83.2% 84.5% 84.0%

(1) Excludes 2 Senoko South Road which has been decommissioned for asset enhancement works. (2) Excludes BBR Building which was divested in September 2015. (3) Same store occupancy rates for previous quarters are computed with the same list of properties as at 31 Mar 2016, excluding new investments

completed in the last 12 months, divestments and changes in classification of certain buildings from single-tenant buildings to MTB.


34.9%

19.1%

17.8%

11.9%

4.8%

2.9%

2.2%

2.1%

2.0% 0.9% 0.8%

0.7%

Transport and Storage Others Food Products & Beverages

IT Biomedical Electronics

Lifestyle and Services Telecommunication & Datacentre General Manufacturing

Precision Engineering

24.9%

19.4%

18.2%

11.9%

7.8%

5.0%

4.6% 3.5%

1.6% 1.5%

1.1%

0.6%

Others

Transport and Storage

IT

Food Products & Beverages

Biomedical

Lifestyle and Services

General Manufacturing

Electronics


Telecommunication & Datacentre

Singapore: Sources of New Demand – 4Q FY15/16

By NLA By

Gross Income

Continues to attract demand from a wide spectrum of industries


28.7%

19.4%

12.0%

8.5%

7.7%

5.7%

4.7% 3.9%

2.9%

2.6% 2.5%

1.4%

Transport and Storage

Others

Electronics

IT



Biomedical

Financial Service



34.0%

16.9% 16.2%

8.7%

7.7%

4.1%

4.1%

2.2% 2.0%

1.5%

1.4% 1.0%

Transport and Storage Electronics Others

Food Products & Beverages IT Biomedical

Telecommunication & Datacentre Precision Engineering Financial Service


Singapore: Sources of New Demand – FY15/16

By NLA By

Gross Income


Singapore: Achieved Positive Rental Reversion

Multi-tenant properties (1)

Net lettable area (sqm)

Vacant space

(sqm)

4Q FY15/16 increase in

renewal rates (2)

FY15/16 increase in

renewal rates (3) As at 31 Mar 2016

Business & Science Parks

509,838 65,346 6.6% 9.6%

Hi-Specs Industrial 332,225 61,799 5.2% 4.5%

Light Industrial 309,390 30,903 2.1% 6.1%

Logistics & Distribution Centres - Singapore 549,988 131,541 7.4% 6.5%

Weighted Average 5.1% 7.0%

Achieved +7.0% rental reversion for leases renewed in FY15/16 Positive rental reversion was registered across all segments

(1) A-REIT’s Singapore portfolio only. There were no renewals in Australia in 4Q FY15/16. (2) Increase in renewal rental rates for leases renewed in 4Q FY15/16 versus previous contracted rates. (3) Increase in renewal rental rates for leases renewed in FY15/16 versus previous contracted rates.


China: Update on Properties

Location Located within Zhongguncun Software Park in Haidian District, Beijing

Located in north Jinqiao within the Jinqiao Economic and Technological Zone, in Shanghai

Located at the south western border of Shanghai in Jiashan, Zhejiang Province

Tenants Higher value-added industries such as IT and software companies e.g. Baidu, Lite-On (a Taiwan-listed electronics co.)

Higher value-added industries such as IT and software companies as well as corporate HQs of multi-national companies and large local corporations

Potential tenants are logistics providers, e-commerce companies etc.

GFA 31,427 sqm 79,880 sqm 35,729 sqm

Occupancy (as at 31 Mar 2016)

100% 56.7% Pre-commitment: 3.2% Under Nego: 3.0%

0.0% Under Nego: 34%

Other information

Revalued at ~RMB22,000 psm (+44%)

Revalued at ~RMB 12,000 psm (+6%)

Valued at ~RMB 3,400 psm

A-REIT City @Jinqiao A-REIT Jiashan

Logistics Centre Ascendas Z-link


Weighted Average Lease Expiry (By gross revenue)

WALE (years) 31 Mar 2016

Singapore 3.5

Australia 5.2

China 2.6

Portfolio 3.7

Portfolio Weighted Average Lease Expiry (WALE) maintained at 3.7 years


3.3% 2.0% 1.7% 2.1% 5.5% 1.1% 0.8% 1.6% 2.4% 1.6%

16.1% 18.5%

14.5%

9.4% 4.7%

2.4% 3.3% 1.5%

2.4%

1.1%

19.4% 20.5%

16.2%

11.5%

10.1%

3.5% 4.1%

3.1%

4.8%

0.6% 1.9% 1.1%

2.9%

0%

5%

10%

15%

20%

25%

% o

f A

-RE

IT G

ros

s R

eve

nu

e

Multi-tenant Buildings

Single-tenant Buildings

Breakdown of expiring leases for FY16/17 and

FY17/18

Portfolio Lease Expiry Profile (as at 31 March 2016)

Portfolio weighted average lease to expiry (WALE) of 3.7 years

Lease expiry is well-spread, extending beyond 2029

About 19.4% of gross revenue is due for renewal in balance of FY16/17 as at 31 March 2016

Weighted average lease term of new leases signed in 4Q FY15/16 was 3.8 years accounting for about 2.0% of total gross revenue for 4Q FY15/16

16%

28%

13%

17%

5%

17%

4% 1%

FY16/17

22%

15%

13% 13%

7%

19%

5% 6%

FY17/18

Science ParksBusiness ParksHi-Specs IndustrialLight IndustrialIDARLogisticsLogistics (Australia)Business Park (China)


Singapore: Lease expiry profile (as at 31 March 2016)

Singapore portfolio weighted average lease to expiry (WALE) of 3.5 years

Lease expiry is well-spread, extending beyond 2029 About 21.3% of Singapore gross revenue is due for renewal in

FY16/17 as at 31 March 2016


FY17/18

17%

29%

13%

18%

5.3%

18%

FY16/17

25%

17%

15%

14%

8.0%

21%

FY17/18

Science Parks

Business Parks

Hi-Specs Industrial

Light Industrial

IDAR

Logistics

3.1% 1.5% 0.8% 1.6%

5.2%

0.8% 0.9% 0.0%

18.2% 19.4%

15.7%

10.0% 4.9%

1.8%

3.8%

1.4%

2.7%

1.3%

21.3% 21.0%

16.5%

11.6%

10.1%

2.6%

4.7%

1.4%

4.7%

0.2% 1.1%

0.1% 1.3%

3.3%

0%

5%

10%

15%

20%

25%

% o

f A

-RE

IT G

ros

s R

eve

nu

e

Multi-tenant Buildings - SG

Single-tenant Buildings - SG


70.5%

29.5%

FY16/17

25.4%

1.0%

73.6%

FY17/18

Sydney

Melbourne

Brisbane

Australia: Lease expiry profile (as at 31 March 2016)

Australia portfolio weighted average lease to expiry (WALE) of 5.2 years

Lease expiry is well-spread, extending beyond 2027 7.1% of Australia portfolio is due for renewal in FY16/17


FY17/18

5.9% 7.1%

10.0%

7.1% 9.0%

4.4%

0.0%

17.0%

6.6%

4.0%

9.4%

0.0%

1.2%

2.5%

1.7%

2.4%

2.5%

8.0%

1.2% 7.1%

9.7%

11.7%

9.5%

11.5% 12.4%

17.0%

7.7%

4.0%

9.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

% o

f A

-RE

IT G

ros

s R

eve

nu

e

Multi-tenant building - AUS

Single-tenant building - AUS


Singapore: In-place rent for space due for renewal in FY16/17 and FY17/18 Current market rental rate is slightly above the weighted average passing rental

for most of the multi-tenant space due for renewal in FY16/17

Expect modest rental reversion in the low-single digit or flat for FY16/17

Left Axis: Right Axis:

*

* *

* Rates for ground floor space


Ongoing Projects: Improve portfolio quality

Estimated Value

(S$m) Estimated

Completion

Acer Building 10.7 2Q 2016

2 Senoko South Road 12.1 2Q 2016

The Kendall 1.6 3Q 2016

AzkoNobel House (New) 6.5 4Q 2016

The Aries (Part of The Aries, Sparkle & Gemini) (New)

4.7 4Q 2016

Total Asset Enhancements (AEI) 35.6


Asset Enhancement (New): AkzoNobel House

Estimated Completion

4Q 2016

Description Akzonobel is a 6-storey building located within Changi Business Park.

AEI: The enhancement work includes enhancement to reception, lobbies, canopies, restroom and drop-off point. Upgrading of M&E systems.

GFA 19,225 sqm

Occupancy 75.0%

Cost S$6.5 million

Partitioning and M&E works

Partitioning and M&E works


Asset Enhancement (New): The Aries (Part of Aries, Sparkle & Gemini)

Estimated Completion

4Q 2016

Description Aries is a 4-storey research building located within Singapore Science Park II.

AEI: The enhancement work includes facade and main lobby upgrading and improvement works to lifts and restrooms.

GFA 49,851 sqm

Occupancy The Aries, Sparkle & Gemini: 84.2%

Cost Estimated S$4.7 million

On-going works at L1 toilets

Floor tilling at corridors


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


Well Diversified Portfolio By value of Investment Properties

Single-tenant buildings

Multi-tenant buildings

Notes: • Multi-tenant buildings account for 72.6% of A-REIT’s portfolio by asset value as at 31 March 2016 • About 59% of Logistics & Distribution Centres in Singapore (by gross floor area) are multi-storey

facilities with vehicular ramp access. • A-REIT has three data centres of which, two are single-tenant. • Flatted factories are multi-tenant properties.

Business Park, 18%

Science Park, 16%

Hi-Specs Industrial,

15%

Data Centres, 5%

Light Industrial, 7%

Flatted Factories, 3%

Integrated Development, Amenities &

Retail, 7%

Logistics & Distribution Centres, 14%

Logistics and Distribution

Centres Australia, 11%

AREIT Beijing, 2%

AREIT Shanghai, 2%

Singapore, 85%

Australia, 11%

China, 4%

90.1%

9.9%

Business Park

77.1%

22.9%

Hi-Specs Industrial 56.5%

43.5% Light

Industrial

70.6%

29.4% Logistics

& Distribution

-SG

19.6%

80.4%

Logistics &

Distribution -AUS

76.7%

23.3%

Integrated Development, Amenities &

Retail

90.7%

9.3%

Science Park


Tenants’ Industry Diversification By Monthly Gross Revenue

Note: Others include research & development, manufacturing, technical service and support industries for aerospace, oil and gas, multi-media products etc.

More than 20 industries

16.8%

0.6%

0.8%

0.8%

0.9%

1.4%

1.4%

1.4%

1.5%

1.5%

2.3%

2.7%

5.0%

6.9%

7.8%

8.5%

9.1%

9.3%

10.5%

10.8%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Others

Rubber and Plastic Products

Fabricated Metal Products

Printing & Reproduction of Recorded Media

Repair and Servicing of vehicles

Construction

Textiles & Wearing Apparels

Chemical

Hotels and restaurants

Medical, Precision & Optical Instruments, Clocks

Healthcare Products


Life Science

Electronics


M&E and Machinery & Equipment

Financial

Information Technology

Distributors, trading company

3rd Party Logistics, Freight Forwarding


Low Exposure to Manufacturing

10.1% of NLA occupied by tenants engaged in manufacturing activities

Manufacturing activities include food & beverages, aeronautical auxiliary equipment, precision engineering etc.

Non-manufacturing activities include R&D, backroom offices, telecommunications & data centre, software and media consultancy services as well as transport & storage

Tenants’ business activities by

NLA

As at 31 March 2016

10.1%

89.9%

Manufacturing area

Non-manufacturing area


Quality and Diversified Customer Base

Total customer base of around 1,470 tenants

Top 10 customers (as at 31 March 2016) account for about 18.2% of portfolio gross rental income

Security deposits for single-tenant properties range from 5 to 11 months of rental income

On a portfolio basis, weighted average security deposit is about 4 months of rental income

4.7%

2.1% 2.0% 1.7%

1.5% 1.5% 1.2% 1.2% 1.2% 1.1%

SingaporeTelecommunications

Ltd

DBS Bank Ltd Citibank,N.A

WesfarmersGroup

CevaLogisticsS Pte Ltd

JPMorgan ChaseBank, N.A

SiemensPte Ltd

Hydrochem(S) Pte Ltd

BiomedicalSciencesInstitutes…

HewlettPackard

Singapore…


Aperia, 5.4%One@Changi City, 4.2%1, 3, 5 Changi Business Park Crescent, 3.1%Kim Chuan Telecommunication Complex , 2.6%31 International Business Park, 2.4%40 Penjuru Lane, 2.4%TelePark, 2.3%Neuros & Immunos, 2.3%Hyflux Innovation Centre, 2%TechPlace II, 1.8%TechPoint, 1.8%Pioneer Hub , 1.7%Nexus@One North, 1.7%Corporation Place, 1.7%TechPlace I, 1.6%Techview, 1.6%10 Toh Guan Road, 1.6%DBS Asia Hub (Phase I & II), 1.5%The Galen, 1.5%The Kendall, 1.5%Techlink, 1.5%The Capricorn, 1.4%The Gemini, 1.3%7 Grevillia Street, 1.3%Siemens Centre, 1.3%Nordic European Centre, 1.3%AREIT City @ JinQiao, 1.2%Ascendas - Z-Link, 1.2%FoodAxis @ Senoko, 1.2%Changi Logistics Centre, 1.1%HansaPoint @ CBP, 1.1%Senkee Logistics Hub (Phase I & II), 1%The Alpha, 1%138 Depot Road, 1%Giant Hypermart, 1%6-20 Clunies Ross Street, 0.9%Infineon Building, 0.9%Honeywell Building, 0.9%Cintech IV, 0.9%Acer Building, 0.9%Others, 33%

Diversified Portfolio

No single property

accounts for more than

5.4% of A-REIT’s

monthly gross

revenue


MTB Occupancy: NPI / DPU Sensitivity

Change in MTB occupancy

Expected change in annualised MTB NPI

(S$m)

Change in portfolio NPI (%)

Impact on full FY DPU (cents)*

+500 bps 27.4 5.1% 1.03

+300 bps 16.4 3.1% 0.62

+100 bps 5.5 1.0% 0.21

-100 bps -6.6 -1.2% -0.25

-300 bps -19.9 -3.7% -0.75

-500 bps -33.1 -6.2% -1.24

100 bps increase in MTB occupancy is expected to result in a 1.0% increase in portfolio net property income or about 0.21 cents increase in DPU

* Based on number of units in issue as at 31 March 2016 Note: Estimates for increase in MTB occupancy takes into account corresponding increases in variable costs. Estimates for a decline in MTB occupancy, assumes no reduction in variable costs to be conservative.


Agenda




Capital Management

Asset Management

Portfolio Update


Market Outlook


Market Outlook According to Ministry of Trade and Industry's advance estimates, Singapore’s 1Q

2016 economy grew 1.8% y-o-y. This is in line with earlier estimates of between

1.0% to 3.0%

JTC industrial property price and rental index declined by 2.5% and 2.7% q-o-q

respectively in 1Q 2016

According to the Reserve Bank of Australia, Australia’s GDP growth is forecast to be

2.5% to 3.5% in 2016 and 3% to 4% from 2017 onwards to 2018.

Approximately 19.4% of A-REIT’s revenue is due for renewal in FY16/17. Expect

modest rental reversion in the low-single digit or flat for FY16/17

With 12.4% vacancy in the portfolio, there could be potential upside in net property

income when some of these spaces are leased, the speed of which will largely

depend on prevailing market conditions

The business environment remains challenging due to ongoing economic

restructuring, government regulations on manpower and industrial land use

policies, rising operating costs as well as anemic global growth

Barring any unforeseen event and any weakening of the economic environment, the

Manager expects A-REIT to maintain a stable performance for the financial year

ending 31 March 2017


Additional Information

(1) Quarterly Results

(2) A-REIT Singapore Occupancy vs Industrial Average

(3) Singapore Industrial Property Market

(4) Completed AEI in 4Q FY15/16


Quarterly Results (For illustrative purpose)* FY15/16

Summary (S$ million) 1Q 2Q 3Q 4Q Total

Gross Revenue 181 183 193 204 761

Net Property Income 124 124 142 144 534

Total amount available for distribution

92 94# 97 89 372#

No. of units in issue (m) 2,408 2,408 2,504 2,666 2,666

Normalised Distribution Per Unit (cents)

3.841 3.889# 3.946 3.410 15.086#

For illustrative purpose only, the “Total amount available for distribution” and the “Distribution Per Unit” includes proforma adjustments for (i) a one-off distribution of taxable income from operations of S$6.5 million (DPU impact of 0.271 cents) for 2Q FY15/16 in relation to a rollover adjustment from prior years arising from a ruling by IRAS on the non-deductibility of certain upfront financing fees incurred in FY09/10 for certain credit facilities.


Source : A-REIT’s Singapore portfolio as at 31 March 2016. Market: JTC 1Q 2016 JTC statistics do not breakdown Hi-Specs Industrial and Light Industrial, ie they are treated as one category with occupancy of 90.5%

A-REIT Singapore Occupancy vs Industrial Average

88.7% 87.5%

93.3%

82.5% 81.7%

90.5% 90.5% 90.4%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Business and SciencePark

Hi-Specs Industrial Light Industrial Logistics

A-REIT JTC

Occ

up

ancy

Rat

e


Average Market Rents by Segment (Singapore)

Source : JTC

Source : CBRE for Business Park (City Fringe), Business Park (Rest of Island), Hi,Specs, Light Industrial and Logistics JTC for Business Parks (Median Rents)

$5.50

$4.20 $3.65

$3.15

$1.83

0.5

1.5

2.5

3.5

4.5

5.5

6.5

Business Park (City Fringe) Business & Science Parks (Median Rents) Business Park (Rest of Island)

Hi-Specs Light Industrial Logistics

0

20

40

60

80

100

120

Industrial Rental Index

$5.40

$4.29

$3.65

$3.10

$1.73 $1.71

0.5

1.5

2.5

3.5

4.5

5.5

6.5

Business Park (City Fringe) Business & Science Parks (Median Rents) Business Park (Rest of Island)

Hi-Specs Light Industrial Logistics


Singapore Industrial Property Market: New Supply

Total stock (net) : 44.9 million sqm, of which

• Business & Science Parks account for 2.1 million sqm (4.6%)

• Logistics & Distribution Centres account for 9.1 million sqm (20.2%)

• Remaining stock are factory space

Potential new supply (net) of about 2.8 million sqm (~6.2% of existing stock) over next 3 years

* Excludes projects under 7,000 sqm. Based on gross floor area Source: JTC, A-REIT internal research

Sector ('000 sqm) New Supply

(Total) 2016 2017 2018

Business & Science Park 152 152 0 0

% of Pre-committed (est) 50% 50% 0% 0%

Hi-Specifications Industrial 78 78 0 0


Light Industrial 1,547 862 403 282


Logistics & Distribution Centres 975 426 549 0


Total Pre-commitment 34%


Singapore Business & Science Parks: New Supply

Expected Completion

Location Developer NLA (sqm)* % Pre-

committed (est)

2016 Ayer Rajah (One-north) SHINE Systems Assets Pte Ltd 17,144 100%

2016 Science Park Ascendas Land (S) Pte Ltd. 40,500 37%

2016 Alexandra Terrace Mapletree Business City Pte Ltd 83,008 40%

2016 Vista Exchange Green BP – VISTA LLP (New) 11,480 100%

Total (2016) 152,132 50%

Source: JTC & A-REIT internal research

There are currently no Business & Science Park supply after 2016

* NLA based on 80% efficiency ratio


External Façade Cintech 3 & 4

Lobby of Cintech 3

Asset Enhancement Completed in 4Q FY15/16 : Cintech I to IV

Completion February 2016

Description Located in close proximity to Kent Ridge MRT on the circle line and accessible to West Coast Highway and Ayer Rajah Expressway (AYE).

AEI: Façade uplift, upgrading of existing lobbies and lifts. Construction of sheltered walkways

GFA Total GFA: 54,117 sqm

Occupancy Rate

Cintech I: 85.8% Cintech II: 94.4% Cintech III & IV: 95.0%

Cost S$12.7 million


Important Notice

This presentation has been prepared by Ascendas Funds Management (S) 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 presentation 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.

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