1 SUNTEC REIT FINANCIAL RESULTS FOR THE SECOND QUARTER & HALF YEAR ENDED 30 JUNE 2016 2 About Suntec REIT 3 Q2 Highlights 5 Financial Performance 7 Portfolio Performance 16 Suntec City Updates 21 177 Pacific Highway Updates 26 Looking Ahead 28 Unit Performance 30 AGENDA Slide
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1
SUNTEC REIT FINANCIAL RESULTSFOR THE SECOND QUARTER & HALF YEAR ENDED 30 JUNE 2016
2
About Suntec REIT 3
Q2 Highlights 5
Financial Performance 7
Portfolio Performance 16
Suntec City Updates 21
177 Pacific Highway Updates 26
Looking Ahead 28
Unit Performance 30
AGENDA
Slide
3
ABOUT SUNTEC REIT
QUALITY ASSETS STRATEGICALLY LOCATED IN SINGAPORE & AUSTRALIA
Singapore
Sydney
• Listed on 9 Dec 2004 on the Singapore Stock Exchange
• 4 properties strategically located in Singapore’s growth corridors of Marina Bay and the Civic and Cultural District
• 1 property in North Sydney, Australia
4
• Assets under management grew from S$2.2 bil to S$9.3 bil
• Office portfolio of 2.4 mil sq ft and retail portfolio of 1.0 mil sq ft
• Ready soon: 177 Pacific Highway - NLA of approx. 431,000 sq ft
Source: ARATMS
2.2 2.3
3.2
4.6
5.4 5.2
7.0
7.78.0
8.6 8.89.3*
0
2
4
6
8
10
Dec 04 Sep 05 Sep 06 Sep 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15
S$ bil
AUM (S$b)
Note:
*Includes S$371.8 million for 177 Pacific Highway
SINGAPORE’S 3RD LARGEST REIT BY AUM
Q2 HIGHLIGHTS
6
Q2 HIGHLIGHTS
PORTFOLIO MANAGEMENT
• Portfolio occupancy as at 30 June 2016
o Office – 98.9%
o Retail – 97.7%
FINANCIAL HIGHLIGHTS
• Distributable income of S$63.3 mil, +0.7% y-o-y
• DPU 2.501¢ in-line with 2Q FY15
CAPITAL MANAGEMENT
All-in financing cost of 2.77%
Secured S$250 mil term loan facility
No re-financing requirement till 2017
ASSET MANAGEMENT
• 177 Pacific Highway – Expected to complete in Aug 16
• Park Mall – Premises to be taken back by end Sep 16 for redevelopment
FINANCIAL PERFORMANCE
• Revenue and net property income decreased y-o-y mainly due to the divestment of Park Mall mitigated by the opening of Suntec City Phase 3.
8
FINANCIAL PERFORMANCE: 2Q FY16
1 April – 30 June 2016 2Q FY16 2Q FY15 Change
Gross Revenue S$78.9 mil S$81.4 mil -3.1%
Net Property Income S$52.7 mil S$56.9 mil -7.5%
Distributable Income S$63.3 mil S$62.9 mil 0.7%
- from operations S$55.3 mil S$56.9 mil -2.7%
- from capital S$8.0 mil S$6.0 mil 33.3%
Distribution per unit1 2.501¢ 2.500¢ 0.0%
- from operations 2.185¢ 2.261¢ -3.4%
- from capital 0.316¢ 0.239¢ 32.2%
Annualised Distribution Yield2 5.6% 5.6%
Source: ARATMS
Achieved DPU of 2.501 cents
Notes:1. Based on 2,530,135,942 units in issue as at 30 June 2016 and 3,205,418 units to be issued to the Manager by 30 July 2016 as partial satisfaction of
asset management base fee incurred for the period 1 April to 30 June 2016.2. Based on the last traded price of S$1.80 per unit as at 20 July 2016.
1 January – 30 June 2016 1H FY16 1H FY15 Change
Gross Revenue S$157.3 mil S$155.9 mil 0.9%
Net Property Income S$106.6 mil S$108.3 mil -1.5%
Distributable Income S$123.3 mil S$118.9 mil 3.8%
- from operations S$111.3 mil S$112.9 mil -1.4%
- from capital S$12.0 mil S$6.0 mil 100.0%
Distribution per unit1 4.872¢ 4.730¢ 3.0%
- from operations 4.398¢ 4.491¢ -2.1%
- from capital 0.474¢ 0.239¢ 98.3%
Annualised Distribution Yield2 5.4% 5.3%
• Net property income decreased y-o-y mainly due to the divestment of Park Mall and mitigated by the opening of Suntec City Phase 3.
9
FINANCIAL PERFORMANCE: 1H FY16
Source: ARATMS
Achieved DPU of 4.872 cents
Notes:1. Based on 2,530,135,942 units in issue as at 30 June 2016 and 3,205,418 units to be issued to the Manager by 30 July 2016 as partial satisfaction of
asset management base fee incurred for the period 1 April to 30 June 2016.2. Based on the last traded price of S$1.80 per unit as at 20 July 2016.
10
PORTFOLIO REVENUE AND NPI CONTRIBUTION
2Q FY16Composition of Revenue and NPI
Asset Revenue NPI
Suntec City• Office• Retail
S$32.5 milS$25.8 mil
S$25.6 milS$19.2 mil
Suntec Singapore• Convention• Retail
S$14.8 milS$5.8 mil
S$3.4 milS$4.5 mil
Total S$78.9 mil S$52.7 mil
Note:1. Excludes contribution from ORQ, MBFC Properties and Park Mall
• Office revenue contributed approximately 41% of the Total Gross Revenue1 for 2Q FY16
• Retail revenue contributed approximately 40% of the Total Gross Revenue1 for 2Q FY16
• Convention revenue contributed approximately 19% of the Total Gross Revenue1 for 2Q FY16
41%
40%
19%
Contribution by Revenue1
Office Retail Convention
11
DEBT-TO-ASSET RATIO STOOD AT 34.7%
Debt Metrics 30 June 2016
Total Debt Outstanding (Group) S$3.041 bil
Debt‐to‐Asset Ratio1 34.7%
All‐in Financing Cost 2.77%
Interest Coverage Ratio 3.6x
Issuer Rating “Baa2”
Note:1. Suntec REIT’s “Aggregate Leverage Ratio” as at 30 June 2016 was 36.1%. “Aggregate Leverage Ratio” refers to
the ratio of total borrowings (inclusive of proportionate share of borrowings of joint ventures) and deferred payments (if any) to the value of the Deposited Property
Source: ARATMS
0
200
400
600
800
1,000
1,200
FY16 FY17 FY18 FY19 FY20 FY21
S$ 'mil
12
Debt Maturity Profile (REIT)
S$150 mil medium term note1
S$200 mil loan facility
S$500 mil loan facility
S$500 mil loan facility2
S$105 mil medium term note
S$800 mil loan facility
S$310 mil medium term note
S$120 mil term loan
S$250 mil loan facility1
• Upon repayment of the S$150 mil medium term note the weighted average term to expiry will be
extended to 2.83 years
• No re-financing requirement for 2016
DEBT MATURITY PROFILE AS AT 30 JUNE 2016
Note:1. The S$150 million medium term note will be repaid by the S$250 million loan facility entered in May 2016.2. Under the S$500 million loan facility, S$389.8 million has been utilised.
13
S$7.8 BILLION OF FINANCING SINCE 2008
• All-in financing cost of 2.77% for 2Q FY16
870 825
1,805
270 200
1,280
1,110
105 120
250153
429 350
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 2012 2013 2014 2015 Jan 16 May-16
S$ m
il
Financing Track Record
Debt EquityGlobal Financial Crisis
14
NAV PER UNIT OF S$2.126 AS AT 30 JUNE 2016
Consolidated Balance Sheet 30 June 2016
Total Assets S$8,723 mil
Total Liabilities S$3,221 mil
Net Assets Attributable to Unitholders S$5,386 mil
NAV Per Unit1 S$2.126
Adjusted NAV Per Unit2 S$2.101
Notes:1. Based on 2,530,135,942 units in issue as at 30 June 2016 and 3,205,418 units to be issued to the
Manager by 30 July 2016 as partial satisfaction of asset management base fee incurred for theperiod 1 April to 30 June 2016.
2. After DPU adjustment of 2.501 cents for the quarter ended 30 June 2016.Source: ARATMS
15
DISTRIBUTION TIMETABLE
Source: ARATMS
Distribution Payment
Distribution Period 1 April – 30 June 2016
Amount (cents/unit) 2.501
Ex-date 27 July 2016
Books closure date 29 July 2016
Payment date 25 August 2016
PORTFOLIO PERFORMANCE
17
98.1%99.6% 100.0% 98.9%
97.5%99.5%
97.7%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Suntec Office One Raffles Quay MBFC Properties Office Portfolio Suntec City mall Marina Bay LinkMall
Retail Portfolio
STRONG OFFICE & RETAIL PORTFOLIO COMMITTED OCCUPANCY
• Achieved 98.9% committed occupancy for office portfolio1 as at 30 June 2016
• Committed occupancy for retail portfolio1 stood at 97.7% as at 30 June 2016
Note:1. Suntec REIT owns a one-third interest in One Raffles Quay and MBFC Properties
• Suntec City Office achieved committed occupancy of 98.1% versus Singapore average CBD Grade A office occupancy of 95.2%
• Leases secured for the quarter at an average rent of S$8.58 psf/mth
Source: JLL, ARATMS
18
SUNTEC CITY OFFICE ACHIEVED 98.1% COMMITTED OCCUPANCY
95.2%95.5%
96.6%
98.1%
99.1%99.5% 99.5%
98.0%
99.2% 99.5%100.0%100.0% 100.0%
99.4% 99.4% 99.7%99.2% 98.9%
99.4%100.0%
100.0% 99.6%
98.4%
99.5% 99.3%
97.5%98.1%
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16
Core CBD Occupancy Suntec City Office Occupancy
1.8%
17.4%
24.1%
14.6%
40.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2016 2017 2018 2019 2020 &Beyond
19
OFFICE LEASES EXPIRING IN FY 2016 REDUCED TO 1.8%
Note:1. Assumes one third of total office net lettable area of One Raffles Quay and Marina Bay Financial Centre Office Towers 1 and 2
Expiry Profile As at 30 Jun 16
Net Lettable Area1
Sq ft % of Total
FY 2016 42,644 1.8%
FY 2017 403,733 17.4%
FY 2018 560,586 24.1%
FY 2019 339,853 14.6%
FY 2020 & Beyond 949,403 40.9%
Lease Expiry as % of Total Office NLA1 (sq ft)
Source: ARATMS
• Balance of office leases expiring in FY 2016 reduced to 1.8%
• Signed approximately 176,000 sq ft of leases in 2Q FY 2016
• Balance of retail leases expiring in FY 2016 reduced to 7.9%
• Signed approximately 165,000 sq ft of leases in 2Q FY 2016
Notes:1. Assumes one third of total retail net lettable area of One Raffles Quay, Marina Bay Link Mall and 60.8% interest in Suntec Singapore
20
RETAIL PORTFOLIO LEASE EXPIRY PROFILE
Source: ARATMS
Expiry Profile As at 30 Jun 16
Net Lettable Area1
Sq ft % of Total
FY 2016 71,002 7.9%
FY 2017 231,065 25.6%
FY 2018 206,514 22.9%
FY 2019 233,570 25.9%
FY 2020 & Beyond 139,164 15.4%
Lease Expiry as % of Total Retail NLA1 (sq ft)
7.9%
25.6%
22.9%
25.9%
15.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2016 2017 2018 2019 2020 &Beyond
SUNTEC CITY UPDATES
PHASE 3 –Opened in June
2015
PHASE 1 –Opened in June 2013
PHASE 2 –Opened in June 2014
22
REMAKING OF SUNTEC CITY
Note:1. On a stablised basis
As at 30 June 2016
• Committed occupancy of 97.5%
• Overall committed passing rent1
stood at $11.58 psf/mth
23
• Suntec City’s digital platform to bring together the community of retailers, shoppers, PMEBs, tourists and MICE delegates.
• Over 43,000 members within 1st year of launch
SUNTEC CITY APP
MEMBERS’ PRIVILEGES
SUNTEC REWARDS
• Winner of the Loyalty & Engagement Awards 2016
o Loyalty Programme of the Year (Sliver)
o Best Loyalty Programme –Retailer (Bronze)
24
EVENTS & PROMOTIONS
25
EVENTS & PROMOTIONS
177 PACIFIC HIGHWAY UPDATES
27
DEVELOPMENT UPDATES
Dec 2013
Completed acquisition
Feb 2014
Ground breaking ceremony
Now
Construction in progressExpected to complete in
Aug 2016
LOOKING AHEAD
OUTLOOK
TRACK RECORD
Economy to remain stable
Office portfolio performance expected to remain stable
Retail contribution from Suntec City expected to remain stable
Proven track record in enhancing the performance of our property portfolio
Strong credit standing and debt financing record
Delivered 108.4 cents of DPU since IPO in December 2004
STRATEGY Proactive asset management
Prudent and proactive capital management
29
WELL POSITIONED IN SINGAPORE-REIT SECTOR
Source: ARATMS
UNIT PERFORMANCE
Notes:1. Based on the share price of S$1.77 as at 30 June 2016.2. Based on the market capitalisation as at 30 June 2016.
31
UNIT PERFORMANCE
Source: ARATMS
2Q FY2016 DPU of 2.501 cents Trading yield of 5.68%1
Market Capitalisation of S$4.5 billion1 as at 30 June 2016 35th largest company2 on SGX
0
5
10
15
20
25
0.50
0.70
0.90
1.10
1.30
1.50
1.70
1.90
2.10
2.30
Dec-04Jun-05Dec-05Jun-06Dec-06Jun-07Dec-07Jun-08Dec-08Jun-09Dec-09Jun-10Dec-10Jun-11Dec-11Jun-12Dec-12Jun-13Dec-13Jun-14Dec-14Jun-15Dec-15Jun-16
Volume (Daily, M
illions)
Uni
t Pr
ice
(S$
)
Volume Price
32
STABLE SUSTAINABLE DPU
• 2Q FY2016 DPU of 2.501 cents was in-line with 2Q FY2015
2.513 2.528 2.502
2.3162.388
2.532 2.533 2.479 2.4532.361 2.350 2.326
2.228 2.249 2.289
2.562
2.229 2.266 2.328
2.577
2.230
2.500 2.522
2.750
2.3712.501
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1Q2010
2Q2010
3Q2010
4Q2010
1Q2011
2Q2011
3Q2011
4Q2011
1Q2012
2Q2012
3Q2012
4Q2012
1Q2013
2Q2013
3Q2013
4Q2013
1Q2014
2Q2014
3Q2014
4Q2014
1Q2015
2Q2015
3Q2015
4Q2015
1Q2016
2Q2016
33
OUR TRACK RECORD
Source: ARATMS
2Q FY 16 DPU 2.501 cents
Total DPU since IPO 108.4 cents
Total Return for
IPO Unitholder
185.4%
34
#16-02 Suntec Tower 46 Temasek BoulevardSingapore 038986
Tel: +65 6835 9232Fax: +65 6835 9672
Yeo See KiatChief Executive [email protected]
Chan Kong LeongChief Operating [email protected]
Ng Ee San Director, [email protected]
Melissa ChowManager, Investor [email protected]
ARA Trust Management (Suntec) Limited
www.suntecreit.comwww.ara-asia.com
CONTACT
35
THANK YOU
36
This presentation is focused on the comparison of actual results for the quarter ended 30 June 2016 versus results achieved forthe quarter ended 30 June 2015. It should be read in conjunction with Paragraph 8 of Suntec REIT’s financial results for thequarter ended 30 June 2016 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 invitationto purchase 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 futureperformance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of anumber of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) generalindustry and economic conditions, interest rate trends, cost of capital and capital availability, competition from otherdevelopments or companies, shifts in the expected levels of occupancy rates, property rental income, changes in operatingexpenses, property expenses and governmental and public policy changes and the continued availability of financing in theamounts and the terms necessary to support future business. Past performance is not necessarily indicative of futureperformance. Predictions, projections or forecasts of the economy or economic trends of the markets are not necessarilyindicative of the future or likely performance of Suntec REIT. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management 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, orguaranteed 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.
DISCLAIMER
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