INDUSTRIAL STRENGTH/media/MIT... · 7/20/2012 · August 2011 Established a S$1.0 billion...
Transcript of INDUSTRIAL STRENGTH/media/MIT... · 7/20/2012 · August 2011 Established a S$1.0 billion...
INDUSTRIAL STRENGTH2nd Annual General Meeting
20 July 2012
AGM RESOLUTIONS
RESOLUTION 1
To receive and adopt the Trustee's Report, the Manager's Statement,
the Audited Financial Statements of MIT for the financial year ended
31 March 2012 and the Auditors' Report thereon.
RESOLUTION 2
To re-appoint PricewaterhouseCoopers LLP as Auditors and authorise
the Manager to fix the Auditors' remuneration.
RESOLUTION 3
To authorise the Manager to issue Units and to make or grant
convertible instruments.
1
AGENDA
2
Key Highlights – 1 April 2011 to 31 March 2012
Operational Updates
Financial Review
Outlook and Strategy
2
3
4
5
Overview of FY2011/20121
Question & Answer6
Overview of FY2011/2012
3
July 2011
Won Tranche 2 of JTC Corporation‟s
Second Phase Divestment Exercise
Portfolio at S$400.3 million
Successfully launched a S$176.9
million Equity Fund Raising exercise
Delivered DPU of 1.98 cents for
1QFY11/12, exceeding Forecast by
8.8%
August 2011
Established a S$1.0 billion Multi-Currency Medium Term
Note Programme
September 2011
Fitch Ratings affirmed MIT‟s „BBB+‟ Rating with a
stable outlook
October 2011
Achieved DPU of 2.05 cents for 2QFY11/12 at 10.8%
above Forecast
January 2012
Delivered DPU of 2.16 cents for 3QFY11/12,
outperforming Forecast by 14.9%
March 2012
Maiden issuance of S$125.0 million 7-year unsecured
Fixed Rate Notes
April 2012
Achieved DPU of 2.22 cents for
4QFY11/12, surpassing Forecast by 16.2%
YEAR IN BRIEF
Key Highlights – 1 April 2011 to 31 March 2012
5
MIT FY11/12 UNIT PRICE AND TRADING PERFORMANCE
6
Total Unitholder Return of 12.8% Unit Price 4.8%
Source: Bloomberg
For the period 1 April 2011 to 31 March 20121 Based on FY11/12 closing price of S$1.100 as at 31 March 2012
FY11/12 Distribution Yield 8.0%¹
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COMPARATIVE TRADING PERFORMANCE IN FY11/12
Market Capitalisation of
S$1.79 billion16.2%
Source: Bloomberg
For the period 1 April 2011 to 31 March 20121 Rebasing opening price on 1 April 2011 to 100
80
85
90
95
100
105
110
115
120
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12
Rebased MIT Price Rebased FTSE STI Rebased FTSE SREIT Index
MIT + 5.8%
STI: - 3.5%
S-REITs: - 4.8%
14.9% over Forecast¹
PERFORMANCE EXCEEDED FY11/12 FORECAST
8
Gross Revenue of S$246.4 mil
16.9% over Forecast1Net Property Income of S$171.3 mil
12.7% over Forecast1Distribution per Unit of 8.41 cents
1 The Forecast figures formed part of the Forecast Year 2011/2012 figures disclosed in the Prospectus dated 12
October 2010 (“Prospectus”). The Forecast did not include the contributions from the Flatted Factories portfolio
acquired from JTC Corporation on 26 August 2011.2 For the period 21 October 2010 to 31 March 2011
3.45
7.46
8.41
Actual FY10/11² Forecast FY11/12 Actual FY11/12
Distribution Per Unit (cents)
PROPERTY TYPE (BY NET PROPERTY INCOME)
9
56.5%20.2%
17.5%
4.6%
1.2%
FY10/11
For the period 1 April 2011 to 31 March 2012.
Note: No leases were due for renewal for Light Industrial Buildings.
POSITIVE RENTAL REVISIONS
10
Gro
ss R
en
tal R
ate
(S$
psf/
mth
)
$1.29
$3.16
$0.82
$1.08
$1.60
$3.51
$1.01
$1.30
$1.80
$3.82
$1.31 $1.38
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
Flatted Factories Business Park Buildings Stack-up/Ramp-up Buildings Warehouse
Before renewal After renewal New Leases
HEALTHY OCCUPANCY & PASSING RENTS
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OccupancyGross Rental Rate
(S$ psf/mth)
91.0% 91.0% 90.7% 90.3% 89.0% 89.0% 89.7% 90.3% 91.2% 92.3% 93.2% 94.3% 94.5% 95.1% 94.9%
$1.21
$1.23
$1.26
$1.29
$1.31 $1.31
$1.35
$1.40
$1.44 $1.45
$1.49
$1.52
$1.54 $1.53
$1.55
$1.20
$1.30
$1.40
$1.50
$1.60
$1.70
0%
20%
40%
60%
80%
100%
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Occupancy (LHS) Rental Rate (RHS)FY11/12FY10/11FY08/09 FY09/10
STABILITY FROM EXTENDED LEASES
12
Portfolio WALE by Gross Rental Income = 2.5 yearsAs at 31 March 2012
23.2%
30.3%29.0%
17.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
FY12/13 FY13/14 FY14/15 FY15/16 & beyond
Business ParkBuildings
Flatted Factories Stack-up / Ramp-upBuildings
Light industrialBuildings
Warehouse
30% take-up rate for longer leases beyond 3 years
% E
xp
irin
g L
ea
se
s
by G
ross R
en
tal In
co
me
Long Staying Tenants High Retention Rate For FY11/12
• 44.9% of the tenants have leased the properties for more than 4 years
• High tenant retention rate of 82.9% in FY11/12
Based on NLA.
Not meaningful for Light Industrial Buildings as no leases were due for renewal
STRONG TENANT RETENTION
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By number of tenants
As at 31 March 2012
77.7%73.0%
89.6%
51.7%
80.7%82.6%
63.5%
91.4%
N.A.
92.8%
82.9%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Flatted Factories Business Park Buildings
Stack-up/Ramp-up Buildings
Light Industrial Buildings
Warehouse Portfolio
FY10/11 FY11/12
Average Retention Rate
LARGE AND DIVERSE TENANT BASE
By Gross Rental Income
As at 31 March 2012
• Over 2,000 tenants
• Largest tenant contributes <4% of Portfolio‟s Gross Rental Income
• Top 10 Tenants form <19% of Portfolio‟s Gross Rental Income
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3.7%
2.8%
2.1%
1.8% 1.8%
1.4% 1.4%1.3%
1.1% 1.0%
0%
1%
2%
3%
4%
DIVERSITY OF TENANT TRADE SECTOR
15
By Revenue
As at 31 March 2012
No concentration in any single trade sector
Operational Updates
16
Customised five-storey high
specification light industrial building
for Kulicke & Soffa (“K&S”), an
existing MIT tenant:
K&S is a global leader in the design
and manufacture of semiconductor
and LED assembly equipment and
is listed on the NASDAQ Stock
Exchange
K&S will occupy an estimated 69%
of NLA
10 years lease with the option to
renew additional 10 + 10 years
Embedded annual rental escalation
Groundbreaking ceremony held on
16 May 2012
Artist’s impression of the completed development
BUILD-TO-SUIT FACILITY FOR KULICKE & SOFFA
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Located in the North-East
region of Singapore
Easily accessible via major
expressways
Located close to mature
housing estates
Well-connected by the
public transportation
network
Suitable for high-tech
industrial usage
Artist’s impression of the completed development
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Expected GFA 30,800 sq m (331,530 sq ft)
Estimated Development Cost S$50 million
Commencement Date June 2012
Expected Completion Date 2nd Half 2013
BUILD-TO-SUIT FACILITY FOR KULICKE & SOFFA
Located at 33 & 35 Marsiling Industrial
Estate Road 3
Near Woodlands MRT station and
Woodlands Bus Interchange
Close proximity to various amenities
15 minutes drive to Malaysia
Business 2 zoning
ASSET ENHANCEMENT INITIATIVES (“AEI”) –
WOODLANDS CENTRAL CLUSTER
Before Redevelopment
Woodlands Central Cluster
before redevelopment
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AEI – WOODLANDS CENTRAL CLUSTER
20
Artist’s impressions of the completed development
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Existing GFA 549,223 sq ft
Additional GFA 50,000 sq ft (estimated)
Land Tenure 60 years commencing 1 July 2008
Proposed AEI - Reposition cluster as a high-tech industrial space for
biomedical and medical technology companies
- Extension of six-storey wing, multi-storey car park and canteen
Commencement &
Completion Dates2nd Quarter 2012 to 2nd Quarter 2013 (estimated)
Located at 970, 970A & 998 Toa Payoh
North
Central location with convenient access
to various amenities
Near Braddell Mass Rapid Transit
(“MRT”) Station
Well-connected to Central Business
District via major expressways
Business 1 zoning
AEI – TOA PAYOH NORTH 1 CLUSTER
Before Redevelopment
Toa Payoh North 1 Cluster
before redevelopment
21
AEI – TOA PAYOH NORTH 1 CLUSTER
Artist’s impression of the
new high-tech building
22
Existing GFA 517,996 sq ft
Additional GFA 150,000 sq ft (estimated)
Land Tenure 30 years commencing 1 July 2008
Proposed AEI - New high-tech industrial building (on existing canteen space)
- New amenity block with multi-storey car park, showrooms,
production units and canteen (on existing open car park space)
Commencement &
Completion Dates3rd Quarter 2012 to 4th Quarter 2013 (estimated)
Financial Review
23
STATEMENT OF TOTAL RETURNS (FY11/12 VS FY10/11)
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FY11/12
(S$’000)
FY10/111
(S$’000) / ()
Gross revenue 246,371 196,492 25.4%
Property operating expenses (75,051) (61,792) 21.5%
Net Property Income 171,320 134,700 27.2%
Interest on borrowings (23,573) (43,264) (45.5%)
Trust expenses (21,410) (14,168) 51.1%
Net income before tax & distribution 126,337 77,268 63.5%
Amount available for distribution 131,699 50,602² N.M.
Distribution per Unit (cents) 8.41 3.45² N.M.
Footnotes:
1 The figures comprise the results of MIT as a private trust from 1 April 2010 to 20 October 2010 and the consolidated results of MIT Group
(i.e. results of all 70 properties in its portfolio) from Listing Date onwards.
2 Reflects actual amount available for distribution and DPU paid from 21 October 2010 (listing date) to 31 March 2012.
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FY11/12 ACTUAL VS PROSPECT STATEMENT
Actual
FY11/12
(S$’000)
Forecast1
FY11/12
(S$’000)
/ ()
Gross revenue 246,371 214,401 14.9%
Property operating expenses (75,051) (67,810) 10.7%
Net Property Income 171,320 146,591 16.9%
Interest on borrowings (23,573) (21,282) 10.8%
Trust expenses (21,410) (17,785) 20.4%
Net income before tax & distribution 126,337 107,524 17.5%
Net appreciation in the value of investment
properties94,092 NA2 N.M.
Total return for the period before tax 220,429 107,524 105.0%
Net non-tax deductible items (88,730) 1,615 N.M
Adjusted taxable income available for
distribution to Unitholders131,699 109,139 20.7%
Distribution per Unit (cents) 8.41 7.46 12.7%
Footnotes:
1 The Forecast Year 2011/2012 figures were disclosed in the Prospectus. The Forecast does not include the
contributions from the Flatted Factories portfolio acquired from JTC on 26 August 2011.
2 NA – Not available. The forecast is prepared on the assumption that there is no change in revaluation of the
properties as disclosed in the Prospectus.
HEALTHY BALANCE SHEET
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Actual
31 Mar 2012
Actual
31 Mar 2011
Total Assets (S$‟000) 2,822,205 2,308,038
Total Liabilities (S$‟000) 1,167,669 924,208
Net Assets Attributable to Unitholders (S$’000) 1,654,536 1,383,830
Net Asset Value per Unit (S$) 1.02 0.95
Aggregate Leverage Ratio (%) 37.8 36.1
Interest Coverage Ratio for FY11/12 (times) 6.4 times 6.6 times¹
¹ Reflected actual borrowing costs and interest cover ratio for the period from 21 October 2010 (listing date) to 31 March 2011.
Debt Maturity Profile
25% 30% 30% 15%
ROBUST CAPITAL STRUCTURE
27
84
251
344
126139
125
0
50
100
150
200
250
300
350
400
12/13 13/14 14/15 15/16 16/17 17/18 18/19
Gro
ss
Deb
t (S
$ m
illi
on
)
Financial Year
Bank Borrowings Medium Term Note
As at 31 March
2012
Total DebtS$1,069.2
million
Fixed as a % of Total Debt 85%
Average Borrowing Costs
for FY11/122.2%
Weighted Average Tenure
of Debt3.0 years
Assets Unencumbered as
% of Total Assets100%
MIT’s Issuer Default Rating
(by Fitch Ratings)
BBB+ with
Stable Outlook
Outlook & Strategy
28
Demand and Supply for Flatted Factories
HEALTHY MARKET DEMAND FOR FLATTED FACTORIES
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Demand and Supply for Business Parks
Source: URA/ Colliers International Singapore Research, May 2012
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
-50
0
50
100
150
200
250
2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q 2012
Net New Demand Net New SS Occupancy Rate
(„000 sq m)
20.0%
40.0%
60.0%
80.0%
100.0%
-150
-100
-50
0
50
100
150
200
250
300
350
2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q 2012
Net New Demand Net New SS Occupancy Rate
Occupancy Rate (%)(„000 sq m) Occupancy Rate (%)
OUTLOOK AND STRATEGY
30
Ministry of Trade and Industry maintained its GDP growth forecast for 2012 at
1.0% to 3.0%
Despite a challenging market environment, the Manager is optimistic that MIT will
be able to weather the uncertainty ahead with its strong and sound fundamentals
Active Asset
Management
Proactive leasing and marketing initiatives
Deliver quality service and customised solutions
Improve operational efficiency to reduce operating cost
Implement asset enhancement initiatives
Acquisition Growth and Selective Development
Identify and source acquisition and development opportunities
Conduct feasibility studies to consider impact on Unitholders and tenants
Pursue investments with the potential for long-term returns
Capital and Risk Management
Maintain a strong balance sheet
Employ appropriate capital structure
Diversify sources of funding
Active interest rate management
Potential Growth from Acquisitions and Selective Developments
Experienced Manager and Committed Sponsor
Large, Diversified and Resilient Portfolio with Market Presence
Continued Focus on Organic Growth within Portfolio
STABLE PORTFOLIO WITH GROWTH POTENTIAL
31
Question & Answer
32
Thank You