Cambridge Industrial Trust. 29 Jan 2008

Transcription

1 Cambridge Industrial Trust Full Year 2007 Results 29 Jan 2008

2 FY2007 Results Presentation Outline FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 2

3 2007 Milestone Achievements FY 2007 Results S$ m % 28.3% % 31.7% Gross Revenue Net Property Income Net Income Distributable Income Forecast Actual 3

4 2007 Milestone Achievements $0.78 NAV per unit 13.4% 1000 $m Portfolio Valuation 74.8% Annualised DPU 22.3% $0.76 $ $0.72 $0.70 $0.68 $0.66 $ $0.62 Dec 2006 Dec Dec 2006 Dec Forecast Actual 4

5 Continued strong acquisition performance $250 $m Value of Prop perties acquired (1) $200 $150 $100 $50 $ Q07 2Q07 3Q07 4Q07 1Q08 MOU (1) Value as at 31 December

6 FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 6

7 Continued Revenue Growth Driven By Acquisitions 18 S$m Top line driven by: Acquisition of 7 properties after EFR Full quarter impact of Increased rent on YCH Distripark after asset enhancement 4 2 Full quarter impact of 3Q07 acquisition 0 4Q06 1Q07 2Q07 3Q07 4Q07 Net Property Income Gross Revenue 7

8 Continuing To Deliver Growth To Unit Holders Bottom line driven by: Distribu utable income S$m Q06 1Q07 2Q07 3Q07 4Q DPU (cents) Yield-accretive acquisitions Lower cost of debt Debt-funded acquisitions going forward will be strongly accretive Accretion from 1Q08 Acquisitions is 0.03 cents per unit per quarter on a pro-forma basis Distributable Income (LHS) DPU (RHS) 8

9 FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 9

10 Capital Management Milestones 2007/2008 Target 1Q 2008 Lock in low interest rates Target 2Q 2008: Long Term Refinance Feb 2007: Bridge Loan Refinanced Oct 2007 : Successful follow-on equity offering Jan 2008 : Additional Short Term Liquidity 10

11 Milestone Equity Fund Raising Completed Equity Fund Raising completed October 18, 2007 S$193.9m raised from 51 institutions First Rule 144A placement to US investors for a Singapore REIT CIT s investor base broadened in Europe, Asia, USA, Australia Substantial placement : 54% of market capitalisation Placement 1.6x subscribed despite difficult market conditions Critical Factor we have our equity Geographic split of equity placement Middle East 9% Australia 10% Other Asia 7% Singapore 17% EU 5% USA 27% Hong Kong 25% 11

12 Additional short term funding facility Revolving Credit Facility ( RCF ) closed 14 Jan, 2008 Debt facilities and utilisation as at 28 Jan 2008 S$100m provided by HSBC Bilateral term loan Priced at 1,2,3 or 6 month SOR plus a margin 2 year term Emphasizes CIT s debt strategy Diversity of sources Market-appropriate structures S$m VFN Drawn Undrawn RCF Extend maturity profile Plan ahead Always have a Plan B S$131 million in available liquidity at 28 Jan

13 Interest Rate Risk Management SGD interest rates CIT cost of borrowing has declined as SGD base rates have declined 4.5% 4.4% 4.0% 3.5% 4.3% Continued decline in cost of CIT borrowing 4.0% 3.8% 3.5% CIT s debt margins are stable and locked in Window of opportunity to lock-in long term base rates % pe er annum 3.0% 2.5% 2.0% 1.5% 1.0% Dec 06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 1 month interbank (2) 5 year swap (1) (1)Source : Bloomberg Screen SDSW5 (2)Source : MAS Website 13

14 Clear Path To Long Term (Debt / Refinance) VFN 1 year RCF 2 years Refinance Option CMBS Club loan 14

15 De-gearing from EFR provides room for further growth Capital Structure Gearing Levels and Additional Acquisition Capacity S$ million Q06 1Q07 2Q07 3Q07 4Q07 S$ million 1, % 47.7% 48.4% 35.5% 35.1% (1) (1) 60% 40% 20% 0% Gearing % Equity Debt Additional debt capacity Gearing Ratio (1) Based on acquiring additional properties at the maximum statutory gearing level for Singapore REITs of 60% 15

16 Attractive, Secure Yield 12.00% 10.00% 8.82% 8.00% 382bps 6.00% 656bps 5.00% 4.00% 2.50% 2.26% 2.94% 2.00% 0.29% 0.83% 0.00% Banks Saving Deposits (1) Bank fixed deposit (2) CPF Ordinary Account (3) 10 year government bond (4) STI Index dividend Yield (5) S-Reit Yield (6) CIT's Annualised Yield (7) (1) Bank savings deposits as at end of Dec Source: MAS website (2) Bank FD rate (12 months) as at end of Dec Source: MAS website (3) Interest paid on Central Provident Fund ordinary account from Jan Mar Source: CPF website (4) Singapore Government Securities 10-year bond yield as at 22 January Source: SGS website (5) 2007 All Market equity yield. Source Bloomberg Screen DYSGTOTL (6) Weighted average 2007 forecast yield by market capitalization. Source: J P Morgan Asia Real Estate Summary 24 Jan 2008 (7) Based on CIT s closing price of S$0.71 per unit as at 31 Dec 2007 and 2007 DPU of cents 16

17 FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 1

18 Completed Properties in 4Q Bukit Batok Street 22 Sector: Light Industrial Purchase Price: S$18.3 m 120 Pioneer Road Sector: Industrial & Warehouse Purchase Price: S$26.5m 23 Woodlands Terrace Sector: Industrial & Warehouse Purchase Price: S$15.4m Enterprise Hub (120 out of 602 Strata units) Sector: Light Industrial Purchase Price: S$71.0m Natural Cool Building Sector: Light Industrial Purchase Price: S$5.0 m 7 Ubi Close Sector: Car Showroom Purchase Price: S$20.5m 1 Tuas Avenue 3 (with proposed A&A) Sector: Logistics & Warehouse Purchase Price: S$32.5m Total Appraised Value of approximately S$194.4m as at 31 Dec

19 Properties completed in January Tuas Bay Walk 21B Senoko Loop Awaiting prettier photo The property is a 4 storey detached Industrial and Warehouse building with a mezzanine floor The property is a 4 storey Industrial and Warehouse building with annex block Purchase price: Lease terms: DPU Accretion : S$7.0 million 10 years with 7% rental escalations on the commencement of the fourth and seventh year cents p.a. Purchase price: Lease terms: DPU Accretion : S$14.7 million 7 years with an option to renew for a further 7 years with 5% rental escalations on the commencement of the third and fifth year cents p.a. 3

20 Strategically Located New Acquisitions Existing Properties New Properties 4

21 Continued Strong Portfolio Growth Value and Number of Properties Lettable Area (sq m) 40 S$927.8m 33 S$733.4m Initial Portfolio 27 3Q S$581.8m 2007 Portfolio 426,725 4Q 2007 Portfolio 4Q 2007 Portfolio 3Q 2007 Portfolio Initial Portfolio 512, ,303 5

22 FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 6

23 Enhanced Lease Expiry Profile Initial Portfolio of 27 Properties: Weighted Remaining Lease Term: 6.3 years % of Forecast Gross Revenue (1) 50% 40% Enlarged Portfolio of 40 Properties: Weighted Remaining Lease Term: 6.7 years 30% 20% 10% 0% (1) Based on gross revenue for the month of December

24 Leases Provide Fixed And Stable Rental Growth (for 40 properties) 5, 7 & 8 Year Leases 10 & 15 Year Leases 20% Base rate 8 - year leases 7 - year leases 5 - year leases 5% 5% 5% 30% Base rate 15 - year leases 10 - year leases 7% 7% 7% 7% 0% Year 0% Year 8

25 High Security Deposit And Full Occupancy for Cashflow Stability Months % 16.5 Percentage 100% 98% 96% 94% 92% 90% 88% Market 91.7% CIT 100.0% 12 86% 84% 82% Security Deposit Level (months) Security Deposit Level (months) Total Industrial CIT's Occupancy Rate - 27 Properties - 40 Properties Market's Occupancy Rate (1) Source: URA (as at 4Q2007) 9

26 Diversified Tenant Mix Tenant Contribution by Trade Sectors (1) Initial Portfolio 3.0% 4.5% 7.3% 13.5% 51.8% Enlarged Portfolio 5.3% 2.8% 11.8% 8.5% 35.7% 19.9% 35.9% Logistics & Warehousing Light Industrial Industrial Industrial & Warehouse Self Storage Car Showroom (1) In terms of CIT s gross revenue for the month of December 2007 Diversified trade sectors reduce financial susceptibility to economic downturns in the industries of its tenants 10

27 Diversified Portfolio Of Quality Tenants Top Ten Tenants % of Gross Rent, Dec properties 0% 2% 4% 6% 8% 10% 12% 14% 16% CWT 14.0% YCH 9.7% Soon Lee Lam Soon 7.4% 7.3% Brilliant Exklusiv Jurong Districentre (1) ODC Logistics Comapct Metal StorHub 2.8% 2.8% 5.5% 5.3% 4.7% 5.1% (1) Jurong Districentre Pte Ltd, a 70%-owned subsidiary of CWT Limited 11

28 FY 2007 Milestones 4Q2007 Financial Results Capital Management Strategy Acquisition Highlights Portfolio Strengths Pipeline and Outlook 12

29 Acquisition Growth Potential In Singapore Total Industrial Space : m sq ft Office, 15.1% Retail, 7.5% Other Investment Grade Industrial 26.5% Owned by I-REITS, 8.5% Other Industrial Stock, 65% Industrial 77.5% Source : Colliers International Report commissioned by CIT for inclusion the Offering Circular dated 27 September

30 Growth In Logistics And Industrial Sectors Annual Net Formation of Transport and Storage and Manufacturing Firms Industrial Production Index vs Net New Demand of Factory Space , , , , , , Transport and Storage Source: Singstat Timeseries Online, Singapore Department of Statistics Manufacturing Net New Demand Industrial Production Index Source: Economic Development Board / Urban Redevelopment Authority 14

31 Increasing Occupancy for Industrial Properties 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% 78% (F) Occupancy Rates of Islandwide Factory Space Occupancy Rates of Islandwide Warehouse Space Source: Colliers International Singapore Research Source: Real Estate Information System, URA/Colliers International Singapore Branch 15

32 Driving Rental Rates higher $2.50 $2.30 S$ per sq ft per month $2.10 $1.90 $1.70 $1.50 $1.30 $1.10 $0.90 $0.70 $ (F) Gross Rent of Prime Factory Space (Upper Floor) Gross Rent of Prime Warehouse Space (Upper Floor) Source: Colliers International Singapore Research 16

33 Driving capital values higher $ $ $ S$ per sq ft $ $ $ $ $ (F) Capital Value for Leasehold Prime Factory Space (Upper Floor) Capital Value for Freehold Prime Warehouse Space (Upper Floor) Source: Colliers International Singapore Research 17

34 Significant Acquisition Potential in 2008 Two more acquisitions in 1Q08 S$21.7m S$125.6 million of MOUs signed as at January 28, 2008 Good acquisition potential in Singapore Offshore acquisitions Malaysia & China Tenant is key Possible within 2008 SGD 549 million dry powder 18

35 Key Value Propositions Quality Portfolio Prudent Capital Management Strong Track Record of Accretive Growth Flowing Pipeline 19

36 Important Notice The information contained in this presentation is for information purposes only and does not constitute an offer to sell or any solicitation of an offer or invitation to purchase or subscribe for units in Cambridge Industrial Trust ( CIT, and units in CIT, Units ) in Singapore or any other jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. The past performance of the Units and Cambridge Industrial Trust Management Limited (the Manager ) is not indicative of the future performance of CIT and the Manager. Predictions, projections or forecasts of the economy or economic trends of the markets which are targeted by CIT are not necessarily indicative of the future or likely performance of CIT. The value of units in CIT ( Units ) and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or RBC Dexia Trust Services Singapore Limited (in its capacity as trustee of CIT), or any of their respective affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the Manager redeem or purchase their Units while the Units are listed. It is intended that holders of Units ( Unitholders ) may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the SGX-ST ). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This release 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. 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. This presentation may contain forward-looking statements that involve 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 future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager's current view of future events. 20

37 Important Notice This presentation has been prepared by the Manager. The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the Manager or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation, nor any copy or portion of it, may be sent, taken, transmitted or distributed, directly or indirectly, in or into the United States, Japan or Canada, or to any U.S. person (as such term is defined in Regulation S under the Securities Act of 1933, as amended). It is not an offer of securities for sale into the United States. The Units may not be offered or sold into the United States, Canada or Japan or to, or for the account or benefit of, U.S. persons unless they are registered or exempt from registration. The Units have not been and will not be registered under the Securities Act or the securities laws of any state of the United States. There will be no public offer of securities in the United States. 21

38 Thank You CAMBRIDGE INDUSTRIAL TRUST MANAGEMENT LIMITED 61 ROBINSON ROAD, #12-01 ROBINSON CENTRE, SINGAPORE TEL: (65) FAX: (65) Anthony White SVP, Corporate Finance & Investor Relations DID: (65)

39 Appendices 23

40 Financial Results 4Q2007 3Q2007 Actual Actual Forecast (1) Change % Gross Revenue $13.5 m S$16.1 m S$10.8 m +49.1% Net Property Income (NPI) S$11.6 m S$13.9 m S$8.9 m +56.2% Net Income S$7.6 m S$10.4 m S$6.0 m +73.3% Distributable Income S$8.8 m S$10.0 m S$6.8 m +47.1% Distribution Per Unit (DPU) cents (2) cents (2) 1 Oct to 31 Dec 2007 Actual Actual Forecast Change % Annualised DPU cents cents (3) cents (4) +19.6% Annualised Distribution Yield: IPO price (S$0.68) 9.92% 9.22% 7.53% (4) Current price (S$0.71) (5) 9.50% 8.83% 7.21% (1) Forecast means prorated forecast figures derived from the Projection Year 2007 (from 1 Jan to 31 Dec 2007) based on exercising the Over-allotment Units in full as disclosed in the Prospectus, for the quarter ended 31 Dec (2) 0.31 cents DPU from period 1 Oct 07 to 17 Oct 07 was paid concurrent with 3Q distribution and is included in 3Q2007 results in this table (3) Annualised DPU computed by annualising cents based on 75 days from 18 Oct 2007 to 31 Dec 2007 (4) As stated in Prospectus for Projection Year 2007 based on 530,325,500 units (inclusive of 29 million over-allotment units). (5) Computed based on closing price of S$0.71 as at 31 Dec

41 Net Income 4Q2007 (1) higher than Forecast by 74.0% S$'000 Actual Forecast Variance % Gross Revenue 16,053 10, % Property expenses (2,146) (1,867) +14.9% Net Property Income (NPI) 13,907 8, % Borrowing costs (2,559) (2,143) +19.4% Other non-property expenses (910) (791) +15.0% Net income 10,438 5, % 25

42 Balance Sheet S$' Dec Dec 2006 Investment Properties 927, ,000 Current Assets 33,250 12,926 Total Assets 961, ,926 Borrowings (336,483) (192,850) Other Current Liabilities (19,973) (5,722) Total Liabilities (356,456) (198,572) Net Assets Attributable to Unitholders 604, ,354 Applicable number of Units ('000) 794, ,153 NAV Per Unit $0.76 S$

43 Distribution Timetable Period 18 Oct 2007 to 31 Dec 2007 DPU cents Last day of trading on "cum" basis 4 Feb 2008 Ex-date 5 Feb 2008 Books closure date 11 Feb 2008, 5:00pm Distribution payment date 29 Feb

44 Capital Management at end 2007 Total term loan and overdraft facilities Total debt 31 Dec 07 S$400.0 m S$337.0 m Gearing ratio 35.1% Weighted average effective interest rate FY % Interest cover FY times VFN Facility term to expiry 13 Months Net Asset Value Per Unit $ 0.76 (1) Variable Funding Note ( VFN ) Facility expires in February

45 Properties Completed In Q Tuas Ave 3 Purchase price (with proposed A&A): S$32.5 million (1) Lease terms: 8 years with an option to extend for a further term of 5 years with 7% rental escalations on the commencement of the fourth and seventh year The Property is a new 2-storey Warehouse building, a single-storey Warehouse complex, a two-storey Office building and a nine-storey Warehouse with a Warehouse annex, which will be entirely replaced with a proposed two-storey Warehouse. Outgoings: Tenant pays land rent, property tax and property maintenance (1) Upon acquisition before A&A is completed, S$26.5 million is payable and first year rental of S$2.10 million is receivable. Completion of A&A works is expected within 1 year after acquisition. 29

46 Properties Completed In Q Bukit Batok Street Woodlands Terrace The Property is a 5-storey Light Industrial building Purchase Price: $18.3 million Lease terms: Outgoings: 7 years with an option to renew for a further term of 7 years, with 5% rental escalations on the commencement of the third and fifth year Tenant pays property maintenance while the landlord pays for the land rent and property tax The Property is a 4-storey Industrial and Warehouse building. Purchase price: Lease terms: Outgoings: S$15.4 million 7 years with an option to renew for a further term of 7 years with 5% rental escalations on the commencement of the third, fifth and seventh year Tenant pays land rent, property tax and property maintenance 30

47 Properties Completed in Q Pioneer Road Enterprise Hub The Property is a part two- and a part four-storey Industrial and Warehouse building Purchase price: Lease terms: Outgoings: S$26.5 million 7 years with 5% rental escalations on the commencement of the third and fifth year Tenants pays for land rent, property tax and property maintenance The Property is a nine-storey Light Industrial building. Purchase price: S$71.0 million Lease terms: Outgoings: 7 years with 5% rental escalations on the commencement of the third and fifth year Tenants pays for property tax and property maintenance 31

48 Properties completed in Q Natural Cool Building 7 Ubi Close The Property is a 3-storey Detached factory and a proposed 4-storey block extension. Purchase price: Lease terms: Outgoings: S$5.0 million 7 years with an option to renew for a further term of 3 years with 5% rental escalations on the commencement of the third and fifth year Tenant pays land rent, property tax and property maintenance The Property is a Car showroom and Workshops building Purchase price: Lease terms: Outgoings: S$20.5 million 7 years with 5% rental escalations on the commencement of the third and fifth year Tenant pays property maintenance while the landlord pays for property tax 32

49 2007 Milestone achievements Net property income higher than Forecast (1) by 28% Distributable income higher than Forecast (1) by 49% Annual DPU of cents higher than Forecast of cents (2) by 22% Acquisition of 13 properties valued at $ million Year end portfolio of 40 properties worth $927.8million an increase of 75 % year-on year Successful equity fund raising of $193.9 million (1) Forecast means prorated forecast figures derived from the Projection Year 2007 (from 1 Jan to 31 Dec 2007) based on exercising the Over-allotment Units in full as disclosed in the Prospectus, for the year ended 31 Dec (2) As stated in Prospectus for Projection Year 2007 based on 530,325,500 units (inclusive of 29 million over-allotment units). 33