Trust Management (Suntec) Limitedsuntecreit.listedcompany.com/newsroom/20090428... · Trust...

1

SUNTEC REAL ESTATE INVESTMENT TRUST

Financial Results for the Quarter1 Jan 2009 – 31 Mar 2009

Trust Management (Suntec) Limited

1 Jan 2009 31 Mar 2009


Agenda

• Financial Highlights

• Update on Portfolio Performance

• Update on Asset Enhancement

• Acquisition Strategy & Update

Trust Management (Suntec) Limited 2

• Unit Performance

2

DPU of 2.918¢ outperformed by 15.9% y-o-y

Period: 1 Jan – 31 Mar 2009 2008 Change

Financial Summary: 1 Jan’09 – 31 Mar ’09

Period: 1 Jan 31 Mar 2009 2008 Change

Distribution income S$46.35 mil S$37.61 mil +23.2%

Distribution per unit1 2.918¢ 2.5185¢ +15.9%

Annualised distribution per unit1 11.834¢ 10.129¢ +16.8%

Annualised distribution yield 17.1%2 7.0%3 N.M


Source: ARA Trust Management (Suntec) Limited (“ARATMS”)Notes:1. Based on 1,578,765,074 units in issue as at 31 March 2009 & 9,356,638 units issuable to the Manager by 30 April 2009 as partial satisfaction of management

fee incurred for the period 1 January 2009 to 31 March 2009. Excludes 138,001,446 deferred units payable to Suntec City Development Pte Ltd, theremaining four equal installments which will be issued semi-annually from 9 June 2009 as partial satisfaction of the purchase consideration for the initialportfolio of properties

2. Based on the last traded price of $0.69 per unit as at 27 April 2009

3. Based on the closing price of $1.45 per unit as at 31 March 2008

DPU Performance

Quarterly DPU up by 15.9% y-o-y

2.5185

2.918

1.70

1.90

2.10

2.30

2.50

2.70

2.90

3.10

Jan - Mar FY08 Jan - Mar FY09

(cents)

10.129

11.834

7.007.508.008.509.009.50

10.0010.5011.0011.5012.0012.50

Jan - Mar FY08 (Annualised) Jan - Mar FY09 (Annualised)

(cents)


Jan - Mar 2009 DPU of 2.918 cents grew by 15.9% year-on-year

Source: ARATMS

Annualised DPU of 11.834 cents grew by 16.8% year-on-year

Jan - Mar FY08 Jan - Mar FY09 Jan - Mar FY08 (Annualised) Jan - Mar FY09 (Annualised)

3

2.923.00

DPU continues to grow

DPU Performance

Consistently higher DPU every quarter since listing

1.86

1.56 1.611.72

1.811.88 1.91

1.96 1.97

2.10 2.12

2.28

2.52

2.792.85 2.86

2.92

1.40

1.60

1.80

2.00

2.20

2.40

2.60

2.80

3.00

Actu

al D

PU (c

ents

)


9 Dec-Mar

FY05

Apr-Jun FY05

Jul-Sep FY05

Oct-Dec FY06

Jan-Mar FY06

Apr-Jun FY06

Jul-Sep FY06

Oct-Dec FY07

Jan-Mar FY07

Apr-Jun FY07

Jul-Sep FY07

Oct-Dec FY08

Jan-Mar FY08

Apr-Jun FY08

Jul-Sep FY08

Oct-Dec FY08

Jan-Mar FY09

5

Annualised DPU of 11.834 cents for the quarter ended 31 March 2009

Source: ARATMS

For the period 1 January – 31 March

2009(S$’000)

2008(S$’000)

Change(%)

Revenue 64 926 55 969 16 0

Financial Results : 1 Jan ’09 – 31 Mar ’09

• Cost-to-Revenue ratio of 22.4% for 4QFY08 Quarterly DPU up by 15.9% y-o-y

• Revenue grew by 16.0% y o yRevenue 64,926 55,969 16.0

Less property expenses 15,752 13,351 (18.0)

Net property income 49,174 42,618 15.4

Other income1 6,744 6,367 5.9

Less finance costs (net) 9,287 22,355 58.5

Less amortisation costs 6,380 6,525 2.2

Less net trust expenses2 7,413 7,573 2.1

Net income before tax 32,838 12,532 162.0

Non-tax deductible (chargeable) items 11,116 24,329 (54.3)

Taxable income 43 954 36 861 19 2

y-o-y

• NPI grew by 15.4% y-o-y

• Income available for distribution grew by 23.2% y-o-y

• Quarterly DPU grew by 15.9% y-o-y


Taxable income 43,954 36,861 19.2

Dividend income fr. jointly controlled entity 3,100 1,898 63.3

Less income tax expense 704 1,146 38.6

Income available for distribution 46,350 37,613 23.2

DPU (cents) 2.918 2.5185 15.9Source: ARATMS.

1. Refers to the income support received from the vendor, Cavell Limited

2. Net trust expenses include the Manager’s fee, trustee fees and administrative fees

• Cost-to-Revenue ratio of 24.3% for the quarter

4

Portfolio Distribution

Suntec City Properties contribute 87% of Total Gross Revenue1

56,56560,000

For the Period 1 Jan '09 - 31 Mar '09

5,7622,599

43,245

4,278 1,6510

10,000

20,000

30,000

40,000

50,000

Suntec City Park Mall Chijmes

S$'0

00

Revenue NPI


Source: ARATMS

1. Excluding One Raffles Quay revenue

Suntec City contributed 87% of the Total Gross Revenue1 for the period Jan - Mar 2009

Retail revenue contributed approximately 53% of the Total Gross Revenue1 for the period Jan - Mar 2009

Office revenue contributed approximately 47% of the Total Gross Revenue1 for the period Jan - Mar 2009

Debt Capital Details

Debt-to-Assets ratio 34.4%

As at 31 Mar 09

Total Debt Outstanding S$1 877 bnTotal Debt Outstanding S$1.877 bnDebt-to-Assets Ratio 34.4%Average All-in Financing Cost 3.02%Interest Coverage Ratio 4.5x• Corporate Family Rating

– CMBS Debt Rating– Unsecured Debt Rating

“Baa1”“AAA”“Baa2”


Source: ARATMS

Notes:

1. According to the MAS revised property fund guidelines, “Borrowing Limit” will be replaced with “Aggregate Leverage Limit” whichcomprises actual borrowings and deferred payments. This means that Suntec REIT’s “Aggregate Leverage Ratio” is 36.9%including the 138 million deferred units.

5


Debt-to-Assets ratio 34.4%

Apr 2009 – S$40m MTN900Debt Maturity Profile

700

May 2009 – S$85m MTN

Dec 2009 – S$700m CMBS

Feb-Apr 2011 – S$132.5m MTN

Jun 2011 – S$400m Club loan

Jun 2012 – S$50m Bi-lateral loan

Oct 2012 – S$200m Term loan

Mar 2013 – S$270m CB

700

400

200

85

270

40

0

132.5

50

0

100

200

300

400

500

600

700

800

S$ M

illio

ns


Total debt of S$1.877bn as at 31 March 2009

FY09 FY10 FY11 FY12 FY13


Debt Maturity Profile Post-Refinancing

1,000Debt Maturity Profile

700

2011 – S$132.5m MTN

2011 – S$400m Club loan

2012 – S$50m Bi-lateral loan

2012 – S$200m Term loan


2013 – S$270m CB


400

725

200

270100

132.5

50

0

100

200

300

400

500

600

700

800

900

1,000

S$ M

illio

ns


No refinancing requirement until FY 2011

FY09 FY10 FY11 FY12 FY13 FY14 & Beyond

6

Balance Sheet

Total assets under management for the Group stood at S$5.42 billion

Relevant Per Unit Statistics (Group)Balance Sheet (S$’000) Group

as at 31 Mar ’09Relevant Per Unit Statistics (Group)

Net asset value (NAV) per unit3 S$2.001

Adjusted NAV per unit(excl. income available for distribution)

S$1.972

Unit price as at 27 April 2009 S$0.69Premium/(Discount) to Adjusted NAV (65.5%)

Debt, at amortised cost

Unitholders’ Funds

Investment properties

Net assets

Total assets

Total liabilities

(S$ 000) Group

1,726,123,158Total Units2

1,862,235

3,454,691

4,352,203

3,454,691

5,419,276

1,964,585

Interest in jointly controlled entity1 948,145


Source: ARATMSNotes:1. Arising from the acquisition of a one-third interest in One Raffles Quay through the purchase of the entire issued share capital of Comina Investment Limited

2. Includes 9,356,638 units issuable to the Manager by 30 April 2009 as asset management fee payable for the period Jan-Mar 2009, and 138,001,446 deferred units payable to SuntecCity Development Pte Ltd, the remaining four equal installments which will be issued semi-annually from 9 June 2009 as partial satisfaction of the purchase consideration for the initialportfolio of properties

3. Includes DPU of S$0.02918 for the quarter ended 31 March 2009 (excluding deferred units)

, , ,ota U ts

Suntec REIT units trade Ex-Distribution on 5 May 2009

Distribution Timetable

Distribution paymentDistribution payment(for the period 1 Jan 09 to 31 Mar 09)

Amount (cents/unit) 2.918

Ex date 5 May 09

Books closure 7 May 09

Payment 29 May 09


Source: ARATMS

7

Update On Portfolio Performance

Office

Strategies to Create Value

Focus on Our Core

Strategies and Goals

RetailAcquisition


Asset Enhancement

Update On Office Portfolio Performance

Office


Focus on Our Core


RetailAcquisition


Asset Enhancement

8

Strong Office OccupancyOffice

Overall portfolio committed occupancy of 97.4%

Office

Property As at As at As at As at

O ll tf li t d t 97 4% t 31 M h 2009

31 Mar 06 31 Mar 07 31 Mar 08 31 Mar 09

Suntec Office Towers 94.4% 99.3% 100.0% 96.3%

Park Mall 86.6% 98.1% 97.1% 99.2%

One Raffles Quay - - 100.0% 100%

Suntec REIT Portfolio 93.7% 99.2% 99.8% 97.4%


Overall portfolio occupancy stood at 97.4% as at 31 March 2009

Source: ARATMS

Strong Suntec City Office Occupancy

Suntec office committed occupancy at 96.3%

Office

99.3 100.0

96.3100

83.084.5

94.496.3

70

75

80

85

90

95

9 Dec 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09

%


Committed occupancy of 96.3% as at 31 March 2009Leases secured at the average rent of S$9.96 psf pm for the quarter

Source: ARATMS

Suntec City Office (Committed)

9

Office Lease Expiry ProfileOffice

Net Lettable Area

Lease Expiry Profile excluding One Raffles Quay

Net Lettable AreaSq. ft. % of Total

FY 2009 232,063 16.3

FY 2010 428,656 30.1

FY 2011 432,011 30.4

FY 2012 185,604 13.0

FY 2013 96,220 6.8


Source: ARATMS

,

The average rent for expiring leases in 2009 is S$6.46 psf pm

Office Lease Expiry Profile

Lease Expiry Profile including One Raffles Quay1

Office

Lease Expiry as % of Total Office NLA (sf)Net Lettable Area

Sq. ft. % of Total

FY 2009 237,642 12.7

FY 2010 434,878 23.3

FY 2011 445,301 23.9

FY 2012 227,555 12.2

12.7%

23.3% 23.9%

12.2%

25.3%

5%

10%

15%

20%

25%

30%


The average rent for expiring leases in 2009 is S$6.64 psf pm

Source: ARATMSNotes:1. Assumes one third of One Raffles Quay’s total net lettable area

FY 2013 & Beyond 473,031 25.3 0%FY09 FY10 FY11 FY12 FY13 &

Beyond

10

Suntec City office rents are still below market rents

Prime Grade A Office Rental TrendOfficeOffice

16.0 15.015 5

17.5

pm)

Downturn with the onset of the Asian financial crisis in 1997, weak economic conditions triggered by the Sep 11 terrorist attacks in 2001 and the outbreak of SARS i 2003

9.0

11.1 10.0

6.3 5.6

8.0

9.6 10.4

9.0

7.1 6.2

7.9

6.6

5.5 4.6 4.8

5.9

9.6

15.0

9.3

8.0

5.5

7.5

9.5

11.5

13.5

15.5

(Prim

e G

rade

A G

ross

Ren

tal S

$psf

SARS in 2003


3.5

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

E

2010

E

Market recovery coming off a low rental rate of S$4.60 psf in 2003

Source: JLL, Nomura Research, ARATMS

Historical data – Jones Lang LaSalle (JLL)

Projected Grade A rents – Nomura Research

Update On Retail Portfolio Performance

Office


Focus on Our Core


RetailAcquisition


Asset Enhancement

11

Consistently High Occupancy Rates

Strong Retail OccupancyRetail

Property As at As at As at As at

Overall portfolio occupancy stood at 98.8% as at 31 March 2009

Mar 06 Mar 07 Mar 08 Mar 09Suntec City Mall 98.5% 94.0% 99.5% 98.6%

Park Mall 98.4% 100% 100% 99.9%

Chijmes 100% 100% 97.0% 98.7%

Suntec REIT Portfolio 98.6% 95.3% 99.4% 98.8%


Source: ARATMS

Committed retail passing rents achieved growth Year-on-Year

Steady Growth In Rental RatesRetail

10 0910.38 10.72 10.7610.92 11.05

11

12

6.136.45

7.087.63

10.090 38

9.119.71

3

4

5

6

7

8

9

10

S$ p

sf p

m Park Mall

Chijmes

Suntec City Mall


Source: ARATMS

Committed average passing rent at Suntec City Mall stood at S$11.05 psf pm as at 31 Mar 09

3Mar 06 Mar 07 Mar 08 Mar 09

12

Other Income Initiatives

Total Other Income for the quarter at S$1.64 million

Retail

2,000

Total A&P Income

1,259 1,352

1,7431,643

0200400600800

1,0001,2001,4001,6001,800,

Jan - Mar 06 Jan - Mar 07 Jan - Mar 08 Jan - Mar 09

S$'0

00


Other Income of S$1.64 million for the quarter ended 31 March 2009

Source: ARATMS

Retail Lease Expiry Profile

Lease Expiry Profile as at 31 March 09

Retail

Net Lettable AreaNet Lettable Area

Sq. ft. % of Total

FY 2009 334,200 32.0

FY 2010 293,232 28.1

FY 2011 277,728 26.6

FY 2012 62,897 6.1


Source: ARATMS

FY 2013 & Beyond 62,647 6.0

13

Update On Asset Management

Office


Focus on Our Core


RetailAcquisition


Asset Enhancement

Asset Enhancement Works for Suntec City in 2009Asset Enhancement

Works in progress for the upgrading of ground floor and basement lobbies for all five office towers at Suntec CityInstallation of escalators in Suntec City Mall, at the intersection between Galleria and Tropics zone, providing additional access to level 2Bulk of capital expenditure to be borne by the MCST


Proposed Artist Impressions. Source: ARATMS

14

Acquisition Strategy & Update

Office


Focus on Our Core


RetailAcquisition


Asset Enhancement

Assets Under Management UpdateAcquisition

5.4 5.4

Asset Size (S$ billion)

2.2 2.3

3.2

4.6

IPO Dec 04 Sep-05 Sep-06 Sep-07 Dec-08 Mar-09


Focus on our core strengthsONE RAFFLES QUAY

Source: ARATMS

15

Unit Performance

Liquidity Statistics as at 31 Mar 2009

20-day volume as percentage of free float 13.6%

Free float 88 %

Market cap S$995mil

Dividend for FY 2008 of 11.024 cents

Constituent Member of Key Indices:– FTSE NAREIT/EPRA Global Real Estate Index

– Global Property Research (GPR) 250 Index seriesMarket cap S$995mil

– FTSE Straits Times Mid Cap Index and FTSE StraitsTimes Real Estate Index

15

20

25

30

1.30

1.50

1.70

1.90

2.10

2.30

Volu

me

(Dai

ly, M

illio

ns)

Uni

t Pric

e (S

$)


Source: Bloomberg, ARATMS

1. Based on the closing price of S$0.63 per unit as at 31 March 2009

0

5

10

0.50

0.70

0.90

1.10

Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09

V

Volume traded Price

Contact

Yeo See KiatChief Executive Officerseekiatyeo@ara com hk

ARA Trust Management (Suntec) Limited

www.suntecreit.comwww.ara-asia.com

Address:#16-02 Suntec Tower 46 Temasek BoulevardSingapore 038986

Tel: +65 6835 9232Fax: +65 6835 9672

[email protected]

Richard TanFinance [email protected]

Marilyn TanInvestor Relations Manager [email protected]


Michelle HuAssistant Manager, Financial [email protected]

16

Thank You


DisclaimerThis presentation is focused on the comparison of actual results for the three months ended 31 March 2009 versus results achieved inthe three months ended 31 March 2008. It should be read in conjunction with Paragraph 8 of Suntec REIT’s financial results for theperiod 1 January 2009 to 31 March 2009 announced on SGXNET.

The information included in this release does not constitute an offer or invitation to sell or the solicitation of an offer or invitation topurchase or subscribe for units in Suntec REIT (“Units”) in Singapore or any other jurisdiction.

This presentation may contain forward-looking statements that involve assumptions risks and uncertainties Actual future performanceThis 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 economicconditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in theexpected levels of occupancy rates, property rental income, changes in operating expenses, including employee wages, propertyexpenses and governmental and public policy changes and the continued availability of financing in the amounts and the termsnecessary to support future business. Past performance is not necessarily indicative of future performance. Predictions, projections orforecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of SuntecREIT. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view ofmanagement on future events.

IMPORTANT NOTICE


1. 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, ARA Trust Management (Suntec) Limited (as the manager of Suntec REIT) (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.

2. 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 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.

3. The past performance of Suntec REIT is not necessarily indicative of the future performance of Suntec REIT.

17

Pro Forma Impact of Deferred Units Issuance Suntec City Development Pte Ltd, the vendor of Suntec City Mall and Suntec City Office Towers (both as defined in the prospectus dated 29 November 2004 (the “Prospectus”) issued in connection with the initial public offering of Units in November/December 2004 and together, the “Properties”), will be issued with 207,002,170 additional Units (the “Deferred Units”) in satisfaction of the deferred payment consideration for the purchase of the Properties. The Deferred Units will be issued in six equal installments. The first and second installments were issued on 9 June 2008 (being the date falling 42 monthsafter 9 December 2004 which is the date of completion of the sale and purchase of the Properties) and 9 December 2008

Disclaimer

respectively, and the rest of the installments will be issued semi-annually thereafter. Any change in rental rates, occupancy rates and distributable income of Suntec REIT can affect the impact of any dilution in the yields of Suntec REIT arising from the issuance of the Deferred Units in the future. The table below illustrates the pro forma impact under the scenario where the Deferred Units were entirely issued on 9 December 2004, the date of admission of Suntec REIT to the Official List of the SGX-ST (the “Listing Date”):

Distribution Per Unit S$ Actual

(1 Jan 09 – 31 Mar 09) DPU based on total number of Units entitled to the distribution (cents)

2.918

DPU assuming Deferred Units were issued on the Listing Date

2.685


g(cents)

Trust Management (Suntec) Limitedsuntecreit.listedcompany.com/newsroom/20090428... · Trust...

Documents

Transcript of Trust Management (Suntec) Limitedsuntecreit.listedcompany.com/newsroom/20090428... · Trust...