4Q FY2016 and FY2016 Financial Results Presentation 23 January 2017

Transcription

1 4Q FY2016 and FY2016 Financial Results Presentation 23 January 2017

2 Agenda Slide FY2016 Highlights 3 Financial Performance 5 Capital Management 10 Portfolio Performance 13 Market Outlook & Strategy 23 Appendix: About Cache Logistics Trust 28 2

3 1 FY2016 Highlights Financial Performance Gross Revenue S$111.3 mil, increased by 24.0% year-on-year ( yoy ) Net Property Income S$88.0 mil, a rise of 15.6% yoy Distribution per Unit cents, down by 9.1% yoy Lease Management Portfolio Occupancy 96.4% committed as at yr-end 2016 Total leases signed Approx. 1.2 mil sf in 2016 including forward renewals Lease Expiry Long WALE of 3.9 years, 5.3% of lettable area due for expiry in FY Alps Ave Holding Arrangement in place where Schenker continues to occupy Rebalancing Strategy Divested Cache Changi Districentre 3 - Part of portfolio rebalancing strategy to prudently manage and recycle capital into better-performing assets Capital Management New Financing Facility S$90 mil, 5-year unsecured loan. Extended debt maturity to 2.8 years, saved 90 bps p.a. All-in Finance Cost 3.60% Aggregate Leverage 43.1% (41.9%, if proceeds from the divestment of Cache Changi Districentre 3 were applied towards repaying debt) 3

4 2 Financial Performance CWT Commodity Hub is one of Singapore s largest warehouses and one of the largest in SE Asia. Measuring close to 2.3 million sf, the large floor plate and high ceiling height appeals to Third-Party Logistics Providers. CWT Commodity Hub

5 2 Financial Performance 4Q FY2016 Financial Performance Gross Revenue increased by 13.5% yoy to S$27.3 million due to incremental revenue from Australian acquisitions and DHL Supply Chain Advanced Regional Centre, offset for the most part by lower income received under protest for 51 Alps Ave NPI rose by 11.3% yoy to S$21.3 million DPU was cents, down 10.8%. On a like-for-like basis, excluding capital distribution from the divestment of Kim Heng Warehouse, 4Q 2016 DPU fell by a lower 3.9% yoy S$ 000 unless otherwise noted 4Q FY2016 4Q FY2015 Change (%) Gross Revenue 27,266 24, Net Property Income (NPI) 21,340 19, Income Available for Distribution - from operations - from capital (1) 16,658 15, ,571 15,453 2,118 (5.2) 2.9 (64.3) Distribution per unit (DPU) (Cents) - from operations - from capital (1) (2) (3) (10.8) (3.9) (64.6) Notes: (1) Relates to a portion of the sale proceeds from the disposal of Kim Heng Warehouse in June 2015 (2) Based on 900,450,086 issued units (3) Includes an Advanced Distribution of S$0.009 based on 785,576,123 units which was paid on 29 December 2015, and S$ based on 893,472,054 issued units which was paid on 29 February

6 2 Financial Performance FY2016 Financial Performance Gross Revenue increased by 24.0% yoy to S$111.3 million due to a full year revenue contribution from the six Australian acquisitions made throughout FY2015 and DHL Supply Chain Advanced Regional Centre, offset for the most part by lower income from 51 Alps Ave in 4Q FY2016 NPI rose by 15.6% yoy to S$88.0 million DPU fell by 9.1% to cents. On a like-for-like basis, excluding the capital distribution from the divestment of Kim Heng Warehouse, FY2016 DPU fell by a lower 5.4% yoy S$ 000 unless otherwise noted FY2016 FY2015 Change (%) Gross Revenue 111,271 89, Net Property Income (NPI) 88,014 76, Income Available for Distribution - from operations - from capital (1) Distribution per unit (DPU) (Cents) - from operations - from capital (1) 69,318 66,915 2, ,960 62,883 5, (52.7) (9.1) (5.4) (56.4) Notes: (1) Relates to a portion of the sale proceeds from the disposal of Kim Heng Warehouse in June

7 2 Financial Performance Balance Sheet In S$ 000 unless otherwise noted as at 31 December September December 2015 Investment Properties 1,210,902 1,276,736 1,307,959 Other Assets 47,404 (1) 17,621 18,331 Total Assets 1,258,306 1,294,357 1,326,290 Debt, at amortised cost (538,865) (528,988) (523,448) Other Liabilities (2) (18,303) (21,771) (16,332) Total Liabilities (557,168) (550,759) (539,780) Net Assets Attributable to Unitholders 701, , ,510 Total units in issue (3) 900,450, ,759, ,472,054 Net Asset Value (NAV) per Unit (S$) Notes: (1) Includes the divestment of Cache Changi Districentre 3 which is classified under Asset Held for Sale (2) Includes fair value changes in interest rate swaps and forward foreign currency contracts (3) Includes units issued to the Manager as partial consideration of Manager s fees for each financial period and the Manager s annual performance fees 7

8 2 Financial Performance Distribution Details SGX Stock Code Distribution Period Distribution Per Unit (S$) Payment Date K2LU 1 October 31 December cents 27 February 2017 Distribution Timetable Last day of trading on cum basis 31 January 2017 Ex-Dividend Date 1 February 2017 Books Closure Date 3 February 2017 Distribution Payment Date 27 February

9 3 Capital Management Pan Asia Logistics Centre is on a 10-year master lease to Pan Asia Logistics Singapore Pte Ltd, a global provider of integrated logistics and supply chain solutions. Pan Asia Logistics Centre, Singapore

10 3 Capital Management As at: 31 December September December 2015 Total Financing Facilities Available (1) S$602.6 mil S$609.6 mil S$608.4 mil Total Financing Facilities Drawn S$542.6 mil S$532.7 mil S$528.4 mil Undrawn Financing Facilities S$60.0 mil S$76.9 mil S$80.0 mil Aggregate Leverage 43.1% (2) 41.2% 39.8% Weighted Average Debt Maturity 2.8 years 2.4 years 3.1 years Average All-in Financing Cost (3) 3.60% 3.62% 3.25% Interest Cover Ratio (ICR) 4.0 times 4.1 times 4.8 times Notes: (1) Includes AUD loan facilities, excludes unamortised transaction costs (2) 41.9% if proceeds from the divestment of Cache Changi Districentre 3 were applied towards repaying debt (3) Includes margin and amortisation of capitalised upfront fee 10

11 3 Capital Management Loan Facilities Arranged a new S$90 mil, 5-year unsecured loan facility Savings of 90 bps p.a. No SGD refinancing required until 2H 2018 Debt maturity extended to 2.8 yrs Interest Rate Hedging 63% of borrowings hedged for 2.1 years 70% of SGD borrowings and 50% of onshore AUD borrowings are hedged Unhedged 37% Debt Maturity Profile (S$mil) Borrowings Repaid AUD borrowings SGD borrowings S$12.0 A$30.0 A$29.3 FX Hedging Hedged 63% 94% of distributable income is hedged or derived in SGD S$190.0 S$150.0 S$90.0 S$73.0 A$ SGD 89% Unhedged (AUD, RMB) 6% Hedged (AUD) 5% 11

12 4 Portfolio Performance Located within the established industrial suburb of Wacol, the property is master-leased to Western Star Trucks Australia Pty Ltd for a long WALE of 7.9 years at the time of purchase. 203 Viking Drive, Wacol Queensland, Australia

13 4 Portfolio Performance Overview of Properties CHINA 19. Jinshan Chemical Warehouse, Shanghai SINGAPORE 1. CWT Commodity Hub 2. Cache Cold Centre 3. Pandan Logistics Hub 4. Precise Two 5. Schenker Megahub 6. Hi-Speed Logistics Centre 7. Cache Changi Districentre 1 8. Cache Changi Districentre 2 9. Cache Changi Districentre 3 (1) 10.Pan Asia Logistics Centre 11.Air Market Logistics Centre 12. DHL Supply Chain Advanced Regional Centre SINGAPORE AUSTRALIA Orchard Road, Chester Hill, NSW Transport Drive, Somerton, VIC Musgrave Road, Coopers Plains, QLD Viking Drive, Wacol, QLD Viking Drive, Wacol, QLD Findon Road, Kidman Park, SA Note: (1) Divestment announced on 19 December 2016; pending completion as at 31 December

14 4 Portfolio Performance Singapore Properties Johor Causeway Link Sembawang Wharves Changi North Loyang Second Link (Tuas checkpoint) 12 Pulau Ubin Cache Changi Districentre 3 Pan Asia Logistics Centre Air Market Logistics Centre Changi North Way (1) 21 Changi North Way 22 Loyang Lane Tampines LogisPark Jurong Port Changi International Airport Airport Logistics Park ( ALPS ) Jurong Island Pasir Panjang Terminal Sentosa Keppel Terminal 12 DHL Supply Chain ARC 1 Greenwich Drive Changi South Schenker Megahub ALPS Avenue Hi-Speed Logistics Centre 40 ALPS Avenue Pandan/Penjuru/ Gul Way vv 7 Cache Changi Districentre 1 5 Changi South Lane 1 CWT Commodity Hub 24 Penjuru Road Cache Cold Centre Fishery Port Road Pandan Logistics Hub 49 Pandan Road 4 Precise Two 15 Gul Way Note: (1) Divestment announced on 19 December 2016; pending completion as at 31 December Cache Changi Districentre 2 3 Changi South Street 3 14

15 4 Portfolio Performance Australian Properties Brisbane, Queensland Musgrave Road, Coopers Plains Viking Drive, Wacol Viking Drive, Wacol Sydney, New South Wales Adelaide, South Australia Melbourne, Victoria Orchard Road, Chester Hill Findon Road, Kidman Park Transport Drive, Somerton 15

16 4 Portfolio Performance Statistics Property Portfolio Statistics As at 31 December Logistics Warehouse Properties (1) 6 Australia 12 Singapore 1 China Total Valuation (2) S$1.24 bil Gross Floor Area (GFA) 7.51 mil sf Portfolio Committed Occupancy 96.4% Average Building Age 10.8 years Weighted Average Lease to Expiry ( WALE ) 3.9 years Weighted Average Land Lease Expiry 42.2 years (3) Property Features 10 Ramp-up 2 Cargo Lift 7 Single Storey Rental Escalations built into Master Leases ~1% to 4% p.a. Number of Tenants 39 Notes: (1) Includes the divestment of Cache Changi Districentre 3 announced on 19 December 2016; pending legal completion as at 31 December 2016 (2) Includes Cache Changi Districentre 3 which is classified under Asset Held for Sale (3) For the purpose of presentation, freehold properties are computed using a 99-year leasehold tenure 16

17 4 Portfolio Performance Lease Expiry Profile 35% 30% 25% 20% 15% WALE by NLA : 3.9 years WALE by Gross Rental Income : 3.8 years 4Q FY2016: Approx. 314,000 sf of leases secured in total FY2016: Approx. 1.2 mil sf of renewal, forward and new leases secured in total, including early occupation by DHL Supply Chain within DHL Supply Chain ARC Portfolio Lease Expiry Profile By NLA 21.6% 22.0% 22.1% By Gross Rental Income 26.4% 18.9% 17.1% 32.1% 29.6% 10% 5% 5.3% 4.9% 0% and beyond Well-staggered lease expiry profile About half of all leases committed till 2020 and beyond 17

18 4 Portfolio Performance Portfolio Diversification 1. Greater Balance between Multi-tenanted and Master Lease / Single-User Lease Structures 2. Geographical Diversification beyond Singapore Multitenanted 44% FY2016 Gross Revenue Single- User 56% FY2016 Gross Revenue Australia 14% China 1% Singapore 85% 3. Credit Quality: Majority of End-Users and Tenants are Multi-national Companies (MNCs) SMEs 24% % of NLA MNCs 76% 4. End-Users from Diverse Industry Sectors 3% 2%3% 5% 2% 16% 9% 1% 2% % of NLA 57% Industrial & Consumer Goods Food & Cold Storage Healthcare Aerospace Chemicals Automotive Information Technology Materials, Engineering, Construction E-Commerce Others 18

19 4 Portfolio Performance Portfolio Rebalancing: Australia Australia - Successful Strategy Execution China 2% Australia 19% Gross Floor Area China 1% Australia 14% FY2016 Gross Revenue China 1% Australia 14% Portfolio Valuation Singapore 79% Singapore 85% Singapore 85% Longer WALE from Australian portfolio Higher NPI yield from Australian portfolio Singapore 3.4 years Portfolio 7.1% Australia 6.1 years Australia 7.4% Portfolio 3.9 years Singapore 7.1% WALE (by NLA) in years NPI Yield (%) 19

20 4 Portfolio Performance Update on 51 Alps Ave Schenker Megahub ( 51 Alps Ave Singapore ) is the largest freight and logistics property located at the Airport Logistics Park of Singapore, the free trade zone adjacent to Changi International Airport. Date Updates 30 May 2016 Cache received an originating summons from Schenker to seek the Court to declare that the Anchor Lease Agreement ( ALA ) signed between Schenker and C&P is binding on Cache, and for Cache to apply to JTC to seek approval on the ALA renewal. Cache continues to defend itself vigorously that the ALA is a contract is between C&P and Schenker 31 Aug 2016 Master Lease between Cache and C&P expired 1 Sep 2016 C&P did not deliver vacant possession of the property 7 Sep 2016 As C&P did not deliver vacant possession, Cache filed a writ against C&P claiming, amongst others, double the amount of rent payable under the Master Lease Agreement for the duration of the holding over period or damages arising as a result of Schenker remaining on the property 26 Sep 2016 Under a holding arrangement, Cache will receive a monthly payment from Schenker under protest from 1 September 2016 until resolution of Court proceedings 31 Dec 2016 Legal proceedings continue. Timely updates to the market on this matter will be provided The Manager and the Trustee will continue to vigorously defend Cache in the interest of Unitholders and seek to resolve the case expeditiously 20

21 4 Portfolio Performance Annual Valuation Property Location Number of Properties Valuation (in $ mil) Average Cap Rate Number of Properties Valuation (in $ mil) Average Cap Rate As at 31 December 2016 (2)(4) As at 31 December 2015 (3) Singapore (1) 12 S$1, % 12 S$1, % Australia 6 A$168.6 S$ % 6 A$165.7 S$ % China S$ % S$ % Overall 19 S$1, % 19 S$1, % Notes: (1) Includes Cache Changi Districentre 3 which is pending legal completion of divestment as at 31 December 2016 (2) The carrying amounts of the investment properties as at 31 December 2016 were based on the independent valuations undertaken by CBRE Pte. Ltd., Knight Frank Pte Ltd, CBRE Limited, Valuations Services (SA) Pty Ltd, CIVAS (NSW) Pty Limited, CBRE Valuations Pty Limited and Jones Lang LaSalle Advisory Services Pty Ltd (3) The amounts of the investment properties as at 31 December 2015 were based on the independent valuations undertaken by DTZ Debenham Tie Leung (SEA) Pte Ltd, DTZ Debenham Tie Leung Limited, m3property Pty Limited and JLL Adelaide, South Australia (4) Based on exchange rate of S$1.00 = A$0.9578; S$1.00 = Valuations of the Singapore properties were negatively affected by drop in market rent, shorter land tenure, lower rent under holding arrangement for 51 Alps, vacancy allowance and higher operating costs associated with the converted multi-tenanted buildings 21

22 5 Market Outlook & Strategy Cache completed its first Built-to-Suit development for DHL Supply Chain in July The logistics facility will house DHL Supply Chain s Asia Pacific Solutions & Innovation Centre, the first innovation center for DHL outside Troisdorf, Germany. DHL Supply Chain Advanced Regional Centre, Singapore

23 5 Market Outlook & Strategy Outlook Economy Based on advance estimates from the Ministry of Trade & Industry, Singapore s economy expanded by 1.8% on a yoy basis in 4Q The faster-than-expected economic growth was underpinned by strong improvements in the manufacturing and services sectors (1) The Purchasing Managers Index ( PMI ) recorded its fourth month of expansion, and increased slightly from 50.2 in November 2016 to 50.6 in December 2016 Industrial Sector Industrial rents continued to decline for the sixth consecutive quarter and leasing volume declined 18.2% yoy from Tenant enquiries picked up in the second half of 2016, relative to the first half of the year, but they were driven by consolidations of operations from multiple locations into a single development or lease renewals (2) Cache Logistics Trust Healthy portfolio statistics: Committed occupancy at 96.4%, with approx. 5.3% of leased area due for expiry in FY2017 and a long WALE of 3.9 years (3) Manager remains focused on its portfolio rebalancing strategy to prudently manage and recycle capital into higher performing assets in Australia Notes: (1) Ministry of Trade and Industry Press Release, 3 January 2017 (2) CBRE Marketview Singapore Q4 2016, Headwinds and Headways (3) As at 31 December 2016, by net lettable area 23

24 5 Market Outlook & Strategy Singapore Industrial Market 000 sqm 1, Singapore Warehouse Annual Net Completion, Absorption and Vacancy Rate (%) 3Q 2016 Island-Wide Vacancy: 10.9% (1Q 2016: 9.6%, 2Q 2016: 11.0%) % (E) 2017 (E) 2018 (E) 2019 (E) 2020 (E) Annual Net Warehouse Completion Annual Net Warehouse Absorption Average Annual Net Supply (Past 10 Years) '000 sqm LHS Singapore Warehouse Year-End Vacancy Rate (%) RHS Refers to committed supply (by GFA), Jurong Island industrial space and strata-titled properties 0.0 Source: URA REALIS for historical data, REIT websites, ARA-CWT Trust Management (Cache) Limited internal estimates, Colliers International 24

25 5 Market Outlook & Strategy Growth Drivers OUR VISION: To provide our customers high quality, best-in-class logistics real estate solutions in Asia Pacific Investment Pursuits Pursue yield accretive acquisitions conducive to the portfolio Leverage on broad Asia- Pacific mandate Be ready for Right of First Refusal properties from CWT and C&P Adopt a prudent capital and risk management OUR MISSION: Long-Term Sustainable Growth in DPU and NAV per Unit Proactive Portfolio Management Work closely with the master lessees and endusers to manage lease renewals Maintain high portfolio occupancy Secure longer-term tenure with strong creditworthy end-users Build-to-Suit Development Opportunities Leverage on strengths of experience, the Sponsor s support and relationships with endusers to further develop growth opportunities 25

26 5 Investment Merits Quality Portfolio in established logistics clusters Stable Cash Flows Strong Sponsor Support Long WALE of 3.9 years (by NLA) Professional Management High Committed Occupancy of 96.4% Resilient Earnings Sustainable Distributions 26

27 Contact Information Investor Relations Contact: Judy Tan Assistant Director, Investor Relations ARA-CWT Trust Management (Cache) Limited 6 Temasek Boulevard #16-02 Suntec Tower 4 Singapore Tel: Website: 27

28 Appendix: Overview: Cache Logistics Trust Sponsor REIT Manager Property Manager CWT Limited ARA-CWT Trust Management (Cache) Limited Cache Property Management Pte Ltd Shareholding Structure C&P Listing Date 12 April 2010 Market Capitalisation ~S$729 million (1) Mandate Asia Pacific 31.9% Public CWT ARA Distribution Policy Distribution Period SGX Stock Code 100% of Distributable Income Quarterly K2LU 93.0% 4.1% 2.9% Distribution Yield 9.5% (2) Notes: (1) Based on 900,450,086 units (2) Based on FY2016 DPU of cents and closing price of Cache at S$0.810 as at 30 December

29 Appendix: Overview: About the Manager Real estate fund manager focused on the management of publiclylisted and private real estate funds One of the largest REIT managers in Asia (ex-japan) with approximately S$30 billion assets under management Established track record of managing 10 REITs in Singapore, Hong Kong, Malaysia and South Korea Diversified portfolio spanning the office, retail, industrial/office and logistics sectors A leading solutions provider of integrated logistics and supply chain management Operate across multiple markets and geographies (in 50 countries), supporting a diverse customer base around the globe Global network connectivity to around 200 direct ports and 1,500 inland destinations Manage over 10 million square feet of global warehouse space Cache leverages on the complementary strengths of ARA and CWT ARA has established real estate and fund management expertise CWT has logistics operations as its core business 29

30 Disclaimer This presentation does not constitute an offer, invitation or solicitation of securities in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. 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, changes in operating expenses (including employee wages, benefits and training costs), 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. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of management on future events. The value of units in Cache ( Units ) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, ARA-CWT Trust Management (Cache) Limited (as the manager of Cache) (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 Singapore Exchange Securities Trading Limited (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. The past performance of Cache is not necessarily indicative of the future performance of Cache. 30