2Q FY 2008/09 Financial Results Presentation

Transcription

1 2Q FY 2008/09 Financial Results Presentation 30 October 2008 Singapore s First Listed Indian Property Trust 1

2 Disclaimers This presentation focuses on results for the financial quarter ended 30 September 2008 ( 2Q FY 2008/09 ). This shall be read in conjunction with a-itrust s announcement of results for the quarter in the SGXNet announcement, either from or 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 forwardlooking 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 other developments or companies, shifts in expected levels of property rental income and occupancy rate, changes in operating expenses (including employee wages, benefits and training, property expenses), 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 Trustee-Manager s current view on future events. 2

3 Agenda Overview Financial Results Growth Strategies Financial Indicators 3

4 Agenda Overview Financial Results Growth Strategies Financial Indicators 4

5 Key Highlights 2Q FY 08/09 DPU of 1.82 Singapore cents, being: - 23% above same period last year* - 10% above last quarter 1H FY 08/09 DPU of 3.47 Singapore cents, 18% above same period last year 1H FY 08/09 distribution reflects annualised yield of: % over the closing price of S$0.525 on 30 September % over the closing price of S$0.425 on 29 October 2008 Net Asset Value was S$750 million or S$0.99 per unit as at 30 September 2008 * Results and DPU for the first and second quarters last year were reported together, post listing of a-itrust, at 2.95 Singapore cents. For illustrative purposes, had the DPU been equal and hence Singapore cents for each quarter, 2Q FY 08/09 would have been 23% higher. 5

6 Key Highlights For 1H FY 08/09, 0.6 million sq ft of space was leased or renewed at a higher rental rate, posting a strong retention rate of 85% 98% portfolio occupancy as at 30 September 2008 During 2Q FY 08/09, 96,050 sq ft of space in ITPB was acquired and leased back to Tata Consultancy Services (TCS). This S$10 million acquisition was immediately yield enhancing Current gearing at 5% (loan to value), hence substantial debt capacity to fund future development space / acquisition 6

7 Agenda Overview Financial Results Growth Strategies Financial Indicators 7

8 Financial Results 2Q FY08/09 vs 2Q FY07/08 2Q FY08/09 2Q FY07/08 Variance Reasons (S$ 000) (S$ 000) (%) Total Property Income Net Property Income Net Profit after tax DPU (Singapore cents) 29,820 25,292 18% Income from newly completely buildings, Vega & Crest Higher rental rates One time income of S$ 2.7 million for provision of extra power by TCS s built-to-suit building amortized over 36 months from Sep 08; effect in 2Q FY08/09 minimal 15,691 15,371 2% Marketing fee for Vega & Crest 11,006 9,120 21% Lower finance cost Increased maintenance expenses due to larger portfolio Increased charges to tenant to mitigate higher utilities expenses Fair value gain on derivatives this quarter No IPO cost % Results for 1Q and 2Q last yr were announced together Total Distribution was 22.7m and DPU 2.95 cents Comparison assumes equal amt for those 2 quarters 8

9 Distribution per Unit Period 1 April 2008 to 30 September Q FY08/09 2Q FY08/ per unit 1.82 per unit 10% increase q-o-q 23% increase y-o-y 1H FY08/09 1H FY07/ per unit 2.95 per unit 18% increase over same period last FY Books Closure Date Distribution Payment Date 14 November November 2008 Distributions are paid on semi-annual basis, for the six-month periods ending 31 March and 30 September of each year 9

10 Agenda Overview Financial Results Growth Strategies Financial Indicators 10

11 External Proposed Development Organic Growth Strategy Mar 07 Operating Buildings Total Owned SBA of 4.8 mm sq ft Proposed Developments Land Available for Development Upcoming SBA of 1.5 mm sq ft Potential SBA of 2.7 mm sq ft 4.2 mm sq. ft. = 89% of current operating buildings Acquisitions Unique three-pronged acquisition strategy 11

12 Organic Growth Lease Activities From 1 April 2008 to 30 September 2008 Area (Sqft) 700, , , ,500 Forward Leasing * 73, , ,000 85% Retention 381, , , , , , , , ,000 Expired Leases Renewed Leases New Leases Renewed & New Leases Leases Concluded Over The Year * Include signed leases which have not commenced 12

13 Organic Growth - Stability Maintaining High Occupancy Rates 100% 96% 1 96% 98% 100% 98% 77% 83% ITPB ITPC The V CyberPearl Portfolio Weighted Average Occupancy as at 30 September 2008 is 98%. 1 Includes retail space. Occupancy rate for office space in ITPC is 100% a-itrust Occupancy Market Occupancy of Peripheral Area 2 2 Jones Lang Laselle Market Report as at 30 September 08 13

14 Organic Growth - Lease Expiry Profile Sq ft expiring 2,000,000 Portfolio Lease Expiry Profile 34.8% 1,500, % 1,000, % 13.6% 14.4% 7.4% 500,000 - Financial Year 2009 Financial Year 2010 Financial Year 2011 Financial Year 2012 Financial Year 2013 Financial Year 2014 & Beyond Weighted Average Lease Term 3.9 yrs as at 30 September

15 Organic Growth - Stability Geographical Diversification of Properties Strong Tenant Base Operating Buildings of a-itrust Total Number of Tenants 250 Bangalore 37.5% Hyderabad 35.5% Average space per tenant 18,462 sq. ft. Chennai 27.0% Total Owned SBA = 4.8 million sq. ft. No single tenant takes up more than 4% of the portfolio base rent As at 30 September

16 Portfolio Top 10 Tenants Portfolio - Top Ten Tenants in Alphabetical Order Affiliated Computer Services of India Pvt. Ltd. Applied Materials India Pvt. Ltd. Cognizant Technology Solution (India) Pvt. Ltd. General Motors India Pvt. Ltd. inautix Technologies India Pvt. Ltd. Invensys Development Center India Pvt. Ltd. Merrill Lynch (India) Technology Services Paprikaas Interactive Services Pvt. Ltd. Pfizer Pharmaceutical India Pvt. Ltd. ZapApp / First Indian Corporation / First Advantage Top 10 Tenants collectively accounted for about 29% of the portfolio base rent 16

17 Organic Growth - Tenant Development Tenant sector by base rental IT/ITES 9.2% ITES 17.1% Others 5.1% F&B 0.9% R&D 4.8% IT 63.0% 30 September

18 Work Live Play at the Parks Ascendas excellence ITPC Talentz & ITPB Vega inauguration THE V Livewire CyberPearl Livewire The V 18

19 Development 3 property development in the parks additional 1.5 mil sq ft Funding of S$140 million loan at SOR * + 70 basis points organised Retail Mall (ITPB) Design & construction tender completed Site preparation and barricading in progress BTS for Avestha Gengraine Technologies (ITPB) Fully pre-leased Site preparation and barricading in progress Construction scheduled to commence in 3Q FY 08/09 Zenith 3 rd building (ITPC) After value engineering, floor area increased by 13% from 708,000 sq ft as previously disclosed Marketing yet to commence, received interest indication for 30% of space 440,000 sq ft SBA mall 294,000 sq ft SBA 802,000 sq ft SBA * Citibank 6 months SOR as of 16 October 2008 was 1.69% 19

20 Development Further development in ITPB additional 2.7 million sq. ft. Completed master plan to develop balance 2.7 million sq ft of space as SEZ Building approval submission for a 536,000 sq ft multi-tenanted building in progress Proposed BTS Proposed Retail Mall Hotel Existing Incomeproducing space Amenities / Future developments SEZ 20

21 Completed Acquisition Space ITPB from Tata Consultancy Service Limited Acquired 96, sq ft of office space in International Tech Park Bangalore from Tata Consultancy Services Limited (TCS) for Rs million (S$9.8 million 1 ) Acquisition will be funded by drawing down existing loan facility at interest rate of 70 bps above Swap Offer Rate Upon this yield accretive acquisition, pro forma effect on DPU for FY ended 31 March 2008, is expected to be additional Singapore cents per unit 2 1 Based on exchange rate of Rs 1 = S$ Assuming a-itrust had purchased, held and operated the office unit for whole FY ended 31 March 08, and the Trustee-Manager had elected to receive half of base and performance fees. 21

22 Acquisition 3 pronged acquisition strategy Right of First Refusal Ascendas Land International Pte Ltd CyberVale in Chennai, an IT SEZ comprising a proposed 1.1M sq ft of SBA over 4 buildings over 18.5 acres of land Building 1 SBA (sq. ft.) 250,000 Completed and fully leased Building 2 Building 3 Building 4 280, , ,000 BTS for MindTree Consulting (completed) * Land available for development Pre committed to a single tenant and construction targeted to complete in end January 2009 * 99-year lease CyberVale represents an opportunity for a-itrust to acquire 535,000 sq ft of space and 4.4 acres of land for development 22

23 Acquisition 3 pronged acquisition strategy Right of First Refusal Ascendas India Development Trust AIDT has committed equity of S$500 mil & target investment size of S$1 billion 9.7 mil sq ft development potential identified in key cities such as Gurgaon, Pune and Coimbatore AIDT finalising further investments & will announce at appropriate stage This ROFR represents a strong acquisition pipeline for a-itrust once AIDT progressively completes the development of space 23

24 Acquisition 3 pronged acquisition strategy Acquisition from the market Trustee-Manager pursuing opportunities a-itrust has substantial debt capacity before reaching its voluntary gearing limits* Preference is to fund third-party properties acquisition or development beyond the said 1.5 mil sq ft of additional space within the portfolio via debt * Voluntary gearing limits stipulated in the trust deed. Business trusts have no gearing limit under the Business Trust Act. 24

25 Agenda Overview Financial Results Growth Strategies Financial Indicators 25

26 Substantial Debt Headroom Available Debt Capacity to 35% & 60% Leverage as at 30 September 08 S$ Million 1, % Cap About S$520 mil Debt Capacity 35% Cap About S$280 mil Debt Capacity Total Debt * Total Assets * Available Debt Capacity Current Gearing 5% * Exclude Minority Interests 26

27 Hedging Strategy To enhance the stability of distribution to Unitholders, the Trustee-Manager had put in place forward contracts to hedge a substantial portion of the forecast repatriation from India to Singapore for FY 08/09 and 1H FY 09/10 distributions The Trustee-Manager does not intend to take speculative position on the currency market and had, as a matter of policy continued to hedge at least a year prior to the planned repatriation date 27

28 Delivering Attractive Yield Yield (%) 14.0% 12.0% 10.0% 13.20% 1 / 16.3%% % a-itrust s annualised yield (30 September 2008) is 4.80% 12.47% above various indicators. a-itrust is targeted to grow its income organically, through development and acquisition. 8.0% 6.0% 4.0% 3.21% 2.40% 3.99% 3.97% 2.50% 0.73% 2.0% 0.0% a-itrust Wtd Avg S-Reit Yield 2 10-yr Govt Bond 3 5-yr Govt Bond 3 SGX Stocks 4 SGX Property Counters 5 CPF Ordinary Account 6 1 Annualised yield based on DPU 3.47 cents for 1H FY0809 and at closing price of S$0.525 per unit as at 30 September IBES Estimates, Bloomberg as at 30 September As at September Average 12 months dividend yield of total stocks listed in SGX, as at August Average 12 months dividend yield of all SGX listed property counters inclusive of REITs, as at August Prevailing CPF Ordinary Account saving rate 7 Annualised yield based on 1H FY08/09 DPU and closing price of S$0.425 per unit as at 29 October mth (S$) Fixed Deposit 3 Source: CEIC, CPF, IBES 28

29 Trading Price (Indexed) a-itrust a-itrust Property Index STI Index All Share Index REITs Index Sensex Index Dow Jones Index Bombay SE Realty Index IPO Sep 07 Dec 07 Mar 08 Jun 08 Oct 08 Data Source: Bloomberg 29

30 Trading Price vs Equities (Indexed) a-itrust a-itrust Indiabulls Real Estate Ltd DLF Ltd Unitech Ltd HDIL Ishaan Property Trust Hirco Property Trust Indiabulls Properties Investment Trust 0 IPO Sep 07 Dec 07 Mar 08 Jun 08 Oct 08 Data Source: Bloomberg 30

31 Maintain Stable Performance Total Property Income Net Property Income S$ 000 S$ ,000 28,000 26,970 27,233 28,641 29,820 18,000 16,000 15,370 15,710 16,116 16,030 15,691* 26,000 24,000 22,000 23,220 25,290 14,000 12,000 13,340 20,000 1Q 2Q 3Q 4Q 1Q 10,000 2Q 1Q 2Q 3Q 4Q 1Q 2Q FY 2007 / 08 FY 2008 / 09 * Net Property Income in SGD terms was about 2% lower as compared to last quarter due to strengthening of SGD against INR and functional currency of a-itrust being INR. In INR term, there is no change in the net property income. The exchange rates are hedged for the distribution for 1H FY 08/09 and 2H FY 08/09. 31

32 DPU Growth S$cents * 1.475* Q 2Q 3Q 4Q 1Q 2Q FY 2007 / 08 FY 2008 / 09 * DPU for first and second quarters last year were reported together, post listing of a-itrust. DPU for both quarters was 2.95 cents. For illustrative purposes, has the DPU been equal for both quarters, ie cents. 32

33 Putting things in perspective Indian investment case remains attractive: - GDP forecast to be ahead of many other economies - Large population, increasing affluence including that from a middle income class and room for further market liberalization augur well for its market potential - Current credit conditions may slowdown new supply of space - Quality labour for IT at competitive rates Countries Local Currency US Dollar India 300,000 6,200 Malaysia 35,555 10,000 China 100,000 15,000 Korea 31,537,450 24,000 Singapore 37,588 26,000 Hong Kong 200,000 26,000 Japan 3,683,078 36,000 Australia 53,525 38,000 UK 27,002 47,000 US 63,979 64,000 Source and date : PayScale (provider of global online compensation date), October

34 Putting things in perspective Portfolio well positioned to serve target market of MNCs Stable Income stream: - Low single client exposure - Less than 18% of space is due for renewal in this current financial year, and less than 13% in the next year Healthy balance sheet to leverage on growth from: - Developing land within portfolio - Tap on acquisition opportunities, be it through Right of First Refusal (ROFR) or from the market 34

35 Moving Forward The Trustee-Manager will continue to focus on enhancing the operating earnings of its assets, optimising its capital structure and growing its portfolio through development and acquisition. The Trustee-Manager is maintaining the DPU forecast of 6.85 Singapore cents for FY 2008 / 2009 provided in the listing prospectus, bearing any unforeseen circumstances. 35

36 THANK YOU Ascendas Property Fund Trustee Pte Ltd (Trustee-Manager of a-itrust) 36

37 International Tech Park Bangalore Park Statistics Site area: 69 acres Operating buildings: 1.8 mm sq ft Owned SBA Proposed Development: 744,000 sq ft SBA Land Available for Development: 24 acres or 2.7 million sq ft SBA (based on max. plot ratio of 2.5) Park Population: 24,200 people 37

38 International Tech Park Chennai Park Statistics Site area: 15 acres Operating Buildings: 1,258,000 sq ft Owned SBA Proposed Development: Up to 708,000 sq ft SBA Park Population: 12,300 people 38

39 CyberPearl Park Statistics Site area: 6 acres Operating Buildings: 431,000 sq ft Owned SBA Park Population: 5,000 people 39

40 The V Park Statistics Site area: 19 acres Operating Buildings: 1,288,000 sq ft Owned SBA Park Population: 10,500 people 40

41 Structure of Ascendas India Trust Unitholders Holding of units Distributions 100% ownership and shareholder s loan a-itrust Dividends, principal repayment of shareholder s loan Trustee s fee and management fees Acts on behalf of unitholders/ management services Ascendas Property Fund Trustee Pte. Ltd. (the Trustee-Manager), a wholly-owned subsidiary of Ascendas Pte Ltd Ascendas Property Fund (India) Pte. Ltd. (the Singapore SPV) Ownership of ordinary shares, compulsorily convertible preference shares ( CCPS ) and shareholder s loans Dividends on ordinary shares and CCPS, interest income, principal repayment of shareholder s loans and proceeds from share buyback Singapore The VCUs Information Technology Park Limited (92.8% ownership) 1 Ascendas Information Technology Park Chennai Ltd. (89.0% ownership) 1 Cyber Pearl Information Technology Park Private Limited (100.0% ownership) VITP Private Limited (100.0% ownership) India Ownership 4 Net property income The Properties ITPB ITPC Cyber Pearl The V Provides property management services Property management fees Ascendas Property Management Services (India) Private Limited (the property manager) 1 ITPB is 7.2% owned by Karnataka State Government and ITPC is 11.0% owned by Tamil Nadu State Government respectively 41

42 REIT-like characteristics enhance stability of distributions Permissible Investment Adherence to safeguarding provisions on allowable investments under Property Fund Guidelines Distributable income 100% distributions to 31 March 2009 and 90% thereafter Gearing 35% of deposited property ( 60.0% with credit rating) Tax-free distributions Distribution exempt from Singapore tax a-itrust will possess key safeguarding provisions while retaining upside potential through 20% development limit 42