Investor Presentation. September 2013

Transcription

1 Investor Presentation September 2013

2 Disclaimer This presentation is for information only and does not constitute an offer or solicitation of an offer to subscribe for, acquire, purchase, dispose of or sell any units in Soilbuild Business Space REIT ( Soilbuild REIT ), and units in Soilbuild REIT, ( Units ) or any other securities or investment. Nothing in this presentation should be construed as financial, investment, business, legal or tax advice and you should consult your own independent professional advisors. This presentation may contain forward-looking statements that involve risks, uncertainties and assumptions. 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 of future events. 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, 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 Soilbuild REIT is not indicative of the future performance of Soilbuild REIT. Similarly, the past performance of SB REIT Management Pte. Ltd. ( Manager ) is not indicative of the future performance of the Manager. Citigroup Global Markets Singapore Pte. Ltd., DBS Bank Ltd. and Oversea-Chinese Banking Corporation Limited are the joint global coordinators, issue managers, bookrunners & underwriters of the initial public offering of Soilbuild REIT. 1

3 Content Overview of Soilbuild REIT 3 Investment Highlights 7 Financial Highlights 25 Concluding Remarks 28

4 Overview of Soilbuild REIT

5 Overview of Soilbuild Business Space REIT Excellent Sponsorship Sponsor Issuer Soilbuild Group Holdings Ltd. Leading integrated property group based in Singapore with close to 40 years of experience NAV of >S$650 million as of December 31, 2012 Soilbuild Business Space REIT Best-in-Class Assets Sponsor Soilbuild Group Holdings/Lim Chap Huat 100% 26.0% 74.0% REIT Manager SB REIT Management Pte Ltd Public Unitholders Trustee DBS Trustee Ltd REIT Manager SB REIT Management Pte. Ltd. 100% Property 100% Manager Property Manager SB Property Services Pte. Ltd. SB Property Services Pte Ltd Trustee DBS Trustee Limited Assets Under Master Lease Structures IPO Portfolio (1) 7 properties with total valuation of S$935 million ( IPO Portfolio ) 2 business park properties from the Sponsor valued at S$404.0 million (43.2% of IPO Portfolio) 2 industrial properties from the Sponsor valued at S$444.0 million and 3 third-party industrial properties valued at S$87.0 million (collectively 56.8% of IPO Portfolio) Solaris NK Ingredients Eightrium COS Printers Assets Under Multi-Tenanted Leases West Park BizCentral Tuas Connection Beng Kuang Marine Business Park Properties Industrial Properties (1) Valuation based on higher of 2 independent valuations provided by Colliers International (Singapore) Pte Ltd ( Colliers ) and CBRE Pte. Ltd. ( CBRE ) 4 Overview of Soilbuild REIT

6 IPO Portfolio Overview The Properties are located in key technology, media and back office hubs and logistics clusters, which are near air and sea transportation ports such as Changi Airport, Jurong Port and the planned mega container port at Tuas expected to be operational around IPO Portfolio Summary (2) COS Printers NLA: 58,752 sq ft Valuation: S$11.0 million Total Valuation (3) S$935 million Total NLA 2,955,338 sq ft WALE (4) 3.9 years Occupancy (5) 99.7% NK Ingredients NLA: 312,375 sq ft Valuation: S$61.0 million Industrial Properties Business Park Properties Second Link (Tuas Checkpoint) BOON LAY SIMEI CHANGI PIONEER JOO KOON BUONA VISTA ONE-NORTH EXPO Tuas Connection NLA: 651,072 sq ft (1) Valuation: S$125.0 million Tuas Port (2022) Jurong Port Jurong Island PSA Terminal Sentosa CBD Keppel Terminal Eightrium NLA: 177,286 sq ft Valuation: S$101.0 million BK Marine NLA: 73,737 sq ft Valuation: S$15.0 million BizCentral NLA: 1,240,583 sq ft Valuation: S$319.0 million Solaris NLA: 441,533 sq ft Valuation: S$303.0 million (1) NLA includes some dedicated common areas within tenants compounds but does not constitute GFA. (2) As of June 30, (3) Based on the higher of CBRE and Colliers valuations. (4) By Gross Rental Income as at June 30, (5) As of June 30, 2013; Based on West Park BizCentral s committed occupancy. 5 Overview of Soilbuild REIT

7 IPO Portfolio Overview (Cont d) Portfolio Overview Property Type Lease Arrangement Property Age (1) (Years) Remaining Land Lease (Years) Occupancy Rate (2) Purchase Price (S$ Million) Portfolio Composition Breakdown by Valuation Solaris West Park BizCentral Business Park Multi-User Ramp-up Factory Master Lease Multi Tenanted % $ % $313.0 Business Park 43.2% Total Valuation: S$935.0 million Multiple- User Factory 47.5% Eightrium Business Park Multi Tenanted % $91.4 Single- User Factory 9.3% Tuas Connection Multi-User Land Based Factory Multi Tenanted % $122.7 Breakdown by Gross Revenue NK Ingredients COS Printers Single-User Factory Single-User Factory Master Lease Master Lease Ph1: 22.0 Ph2: 5.9 (3) % $ % $10.3 Business Park 38.8% FY2014 Gross Revenue: S$66.3 million Multiple- User Factory 51.1% Beng Kuang Marine Single-User Factory Master Lease % $14.5 (4) (5) Soilbuild REIT Portfolio % $905.3 Single- User Factory 10.0% Youngest Business Space Portfolio Longest Land Lease Expiry Largest Exposure to Business Park Market (1) Age from issue of CSC (as at Jun 30, 2013). (2) Assumes master leases in place. (3) Phase 1 of development received CSC in July 1991 and Phase 2 of development received CSC in Aug (4) Weighted by GFA. (5) Weighted by purchase price. 6 Overview of Soilbuild REIT

8 Investment Highlights

9 Key Investment Highlights Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders 8 Investment Highlights

10 1 Quality Portfolio With Unique Competitive Strengths Solaris West Park BizCentral Iconic award winning development offering plethora of green innovations Minutes from one-north / Buona Vista MRT stations and easy accessibility to AYE and PIE Award winning design with safety feature including traffic segregated system Individual substations for each stack providing tenants with stable power sources Changi Business Park Tuas Connection Located in Changi Business Park One of the few multiple-user One of Singapore s most sought business park properties in after business park locations Changi Business Park Enclave of detached and semidetached modern factory units, with dedicated private compounds Functional almost column free layouts with wide production spaces Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 9 Investment Highlights

11 Key Investment Highlights Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders Investment Highlights

12 2 Offers Highest Exposure to the Business Park Sector Soilbuild REIT offers the largest exposure to the business park sector compared to the other SGX-listed industrial REITs. Singapore Industrial REIT Business Park Exposure (1) (Valuation of Business Parks as a % of Total Portfolio) Low end of range 8.0% High end of range 21.0% Other Singapore Industrial REITs exposure to business park range from 8-21% 43.2% Source: Company filings, Independent Market Research Consultant (1) Excludes science parks. Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 11 Investment Highlights

13 2 Attractive Alternative to Office Space Advanced Building Specifications Comparable to Office Spaces Modern exterior building design and façade with large open landscaped spaces and various green innovations Advanced specifications including column-free space, high floor-toceiling heights, large floor plates and high-tech building equipment such as fully integrated Intelligent Building Control System Proximity to major road infrastructures and well served by the public transportation system being situated close to MRT stations Attractive Rents Relative to Office Rentals (S$ psf per month) Attractive Rentals Rates + Rental Rate Stability $6.50 Financial Crisis (30%) $5.92 Euro Zone Crisis $6.30 Self-sufficient communities offering a wide range of amenities including apartments and lifestyle and retail options to provide an unparalleled Work-Live-Play environment $4.27 $5.00 (22%) $5.50 one-north market rents: S$ psf pm CBP market rents: S$ psf pm 3.0% 4.0% $5.50 $5.00 $4.50 $3.33 $3.60 $3.90 $3.81 $3.92 $ Source: Independent Market Research Consultant. Business Park (Islandwide) Office (Central Area) Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 12 Investment Highlights

14 2 Located in Business Park Clusters that Command Premium Rents Soilbuild REIT s business park properties are located in Fusionopolis within one-north and Changi Business Park, which commands some of the highest rents among the business parks in Singapore. Major Business Parks in Singapore (S$ psf per month) Cleantech Park (50 ha) Market Rent: ~S$3.20 psf pm one-north (200 ha) Market Rent: S$ psf pm Changi Business Park (71.1ha) Market Rent: S$ psf pm WEST REGION EAST REGION CENTRAL REGION International Business Park (37 ha) Market Rent: S$ psf pm Source: Independent Market Research Consultant Singapore Science Park (65 ha) Market Rent: S$ psf pm Mapletree Business City (13.5 ha) Market Rent: ~S$6.00 psf pm One-north + MBC Location Amenities Physical Specs Usage CBP SSP / IBP Higher rents for one-north and MBC vs. SSP and IBP Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 13 Investment Highlights

15 Key Investment Highlights Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders Investment Highlights

16 3 Three Pronged Growth Strategy Soilbuild REIT is well positioned for robust growth through organic rental growth and the acquisition and development of properties. A Stability and Growing Cashflows from Master Leases B Upside Potential from Multi-Tenanted Properties C Acquisition Opportunities Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 15 Investment Highlights

17 3A Stability and Growing Cashflows from Master Leases Long Term Master Leases for over 40% of Portfolio NPI (Lease Term from Start of Master Lease Agreement) NK Ingredients 15 Years % of NPI for Forecast Year % Fixed Annual Rental Escalation of Master Leased Properties (Rental Revenue, S$ Million) $23.7 $24.4 $25.0 $ % 2.4% 3.1% 20 COS Printers 10 Years BK Marine 7 Years Solaris 5 Years Solaris NK Ingredients COS Printers Beng Kuang Marine Longer WALE vs. Average of Key Peers (1) (WALE by Rental Income, Years) Peer Average Average (Excl. Soilbuild REIT) 3.2 Expected Stable and Growing Cash Flows A B Minimal counterparty risk given 12-month rental deposits from the Master Lessees and blue chip sub-tenant base Master Leases structured on a double and triple net lease basis, minimizing expenses to Soilbuild REIT 3.9 C D 5-year maintenance and conservancy contract for West Park BizCentral with Sponsor ensures stable operating costs Minimal capital expenditure expected for the Forecast Period 2013 and Projection Year 2014 given that the Properties are relatively young and modern Source: Company filings. (1) Estimated based on latest reported weighted average lease expiry as at 30 June Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 16 Investment Highlights

18 3B Upside Potential from Multi-Tenanted Properties Rental rates for West Park BizCentral, Eightrium and Tuas Connection are below current market rents and are expected to revert positively as existing leases are renewed. West Park BizCentral (Lease Expiry by NLA as at 30 June 2013) Current Market Rent: S$1.70 psf per month (1) $1.37 $ % $1.62 $1.55 Eightrium (Lease Expiry by NLA as at 30 June 2013) $3.46 $4.39 $4.08 Current Market Rent: S$ psf per month $ % $4.72 Tuas Connection (Lease Expiry by NLA as at 30 June 2013) Current Market Rent: S$ psf per month $1.16 $1.19 $ % $1.17 $ % 16% 16% 19% 16% 20% 21% 7% 10% 5% 7% 0% 0% 0% 0% Lease Expiry by NLA Expiring Rents Lease Expiry by NLA Expiring Rents Lease Expiry by NLA Expiring Rents (1) Median rental in the Boon Lay Planning Area for multi-user factory in 4Q2012 according to the Independent Market Research Consultant. Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 17 Investment Highlights

19 3C Acquisition Opportunities ROFR assets from Sponsor with a potential GFA of 2.3 million sq ft could increase the IPO Portfolio GFA by over 72% with further upside from the acquisition of additional Business Space Properties. 1 Acquisition of ROFR Properties 2 Acquisition / Development of Business Space Properties Current ROFR pipeline of 4 industrial properties with maximum GFA (1) in excess of 2.3 million sq ft ROFR pipeline to continue growing as the Sponsor undertakes new development of business space properties + Actively seeks to undertake developments (2) that will enhance the value of Soilbuild REIT Ability to leverage on the Sponsor s experience and expertise in designing and executing of construction projects Ability to capitalize on the Sponsor s extensive network to source 3 rd party acquisition opportunities Existing ROFR Assets Bukit Batok MRT PIE PIE PIE PIE CTE Woodleigh MRT Potong Pasir MRT Bartley MRT Tai Seng MRT PIE MacPherson MRT AYE CTE Boon Keng MRT Aljunied MRT PIE Paya Lebar MRT Westview 9-storey light industrial ramp-up building (Under construction) Waterfront 5-storey light industrial building Waterview 7-storey light industrial building and a single-storey amenity ipark 3 blocks of 7-storey flatted factory and a single-storey amenity centre Max GFA: 404,000 sq ft Max GFA: 326,000 sq ft Max GFA: 575,000 sq ft Max GFA: 1,031,000 sq ft (1) GFA based on maximum allowable plot ratio. (2) Subject to the limit imposed by the Property Funds Appendix. Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 18 Investment Highlights

20 Key Investment Highlights Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders 19 Investment Highlights

21 4 Sponsorship by Leading Integrated Property Group A Leading Integrated Property Group with ~40 Years of Experience Singapore based integrated property group with an award winning portfolio of business space and residential properties One of the few Singapore construction companies graded A1 by the Building & Construction Authority ( BCA ) Allows Soilbuild to tender for public sector projects without any value limitations Strong expertise in design, build and lease/sell through years of close collaboration with JTC Corporation under the Developer Partnership Programme Committed to support Soilbuild REIT over the long term B Construction Development Lease Management Asset Management Fund / Property Management Only Industrial REIT Sponsor with End-to- End Integrated Capabilities End-to-End Construction BCA Construction Grade of A1 Multi-Discipline Team Public & Private sector Balance Sheet Focus on End Users Innovative designs Quality Tenant Retention Relationship with Brokers Dedicated Team Asset Enhancements Income Optimisation Established Relationships with Govt. Agencies Capital Management Relationship with Vendors Experienced Management Team Integrated Real Estate Management Range of Asset Classes Location C Sponsor Properties Operations cover full spectrum of value chain 3rd Party Properties > 90% of IPO Portfolio Conceived, Designed & Developed by Soilbuild Solaris West Park BizCentral Eightrium Tuas Connection NK Ingredients COS Printers Beng Kuang Marine 90.7% of valuation 9.3% of valuation 20 Investment Highlights

22 4 Proven Track Record Gross Revenue (S$ Million) $ $ $ $383.1 $ $92.1 $112.7 $ Property Development Property Investment FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Listing of Soilbuild on the SGX-ST Became 1 st private developer to partner JTC under Developer Partnership Programme Source: Company filings. Completed (i) Kranji Linc, (ii) Grosvenor View, (iii) Pinnacle 16, (iv) Cliften and (v) Senoko Food Connection Completed (i) Eightrium and (ii) Pioneer Lot Awarded project from JTC to develop a multitenanted facility for Fusionopolis Phase 2B at onenorth Completed (i) One Tree Hill Residence and (ii) Tuas Connection Solaris and West Park BizCentral awarded Green Mark Award Completed (i) Penjuru Logistics Hub, (ii) Espa, (iii) The Centrio and (iv) Leonie Parc View Awarded tender for North Point Bizhub and North Spring Bizhub Completed (i) Heritage 9, (ii) Tuas Lot, (iii) Montebleu and (iv) Solaris Delisting from SGX-ST Awarded 4 sites by JTC through rigorous tender and selection process Clinches 1 st contract with a HDB for BTO project at Tampines Completed (i) Woodlands Bizhub, (ii) West Point Bizhub and (iii)west Park BizCentral Secured design and build services contracts at Lavender and Changi Business Park Central 1 Won Mandai Link B2 and Yishun Ave 9 B1 Industrial Sites Completed (i) Mezzo, (ii) Meier Suites and (iii) North Point Bizhub Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 21 Investment Highlights

23 Key Investment Highlights Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders Investment Highlights

24 5 Experienced Board and Management Team Management Team REIT Manager Shane Hagan Chief Executive Officer 17 years of real estate experience Roy Teo Chief Operating Officer 13 years of real estate experience Russell Ng Head of Investment / Investor Relations 10 years of real estate experience Kelvin Chow Chief Financial Officer 8 years of real estate experience Property / Asset / Lease Management Investment / Development Investor Relations Corporate Finance (Debt / Equity) Finance Legal / Company Secretary / Compliance Property Manager Leo Jee Lin Director of SB Property Services Over 20 years of experience in sales and marketing for real estate Steven Leow Head, Property Management Over 20 years of real estate experience Board of Directors Chong Kie Cheong Chairman, Independent Non-Executive Director & Audit Committee Member Over 30 years in the financial industry Previously MD and Head of Group Institutional Financial Services at UOB Benedict Andrew Lim Wee Yong Independent Non-Executive Director & Audit Committee Chairman Over 17 years of real estate experience Currently Director, Head of Investments for Global Capital & Development Michael Ng Seng Tat Independent Non-Executive Director & Audit Committee Member Over 23 years of real estate experience Currently Group General Manager of United Industrial Corp and Singapore Land Lim Chap Huat Non-Executive Director Over 35 years of real estate experience Co-founder of the Sponsor Ho Toon Bah Non-Executive Director Over 20 years of banking & finance experience Executive director of the Sponsor for the past 4 years Lim Cheng Hwa Non-Executive Director Over 17 years of finance and real estate experience Currently Director of Capital and Investment Management of the Sponsor Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 23 Investment Highlights

25 5 Strong Alignment with Unitholders Management is incentivized to deliver sustainable and quality DPU growth. 1 2 Performance-Base Feature No AUM Base Fee Structure + + Incentivizes Manager to Grow DPU 3 100% of Fees in Forecast and Projection Periods to be Paid in Units Management Fee Structure and Property Management Agreement REIT Management Fee Base (1) : 10.0% of Distributable Income of Soilbuild REIT Performance (1) : 25.0% of the difference in DPU in a financial year with the DPU in the preceding financial year multiplied by the weighted average number of Units in issue for such financial year Lease Management Fee (1) : 1.0% of Gross Revenue Lease Renewal Commissions based on sliding scale depending on length of tenancy Property Management Agreement Property Management Fee (1) : 2.0% of Gross Revenue Marketing Services Commissions based on sliding scale depending on length of tenancy Property Manager to provide comprehensive operational and maintenance service for West Park BizCentral for S$75,000 per month with 3% escalation p.a. Property Manager to operate and maintain car park for West Park BizCentral and pay Trustee S$40,000 per month with 5% escalation p.a. (1) 100% of these fees paid in Units until 31 December 2014 thereafter at Manager s discretion. Quality Portfolio Exposure to Business Parks Strong Sponsor Experienced Management 24 Investment Highlights

26 Financial Highlights

27 Key Financial Parameters (as disclosed in the Prospectus) Gross Revenue (S$ Million) Distributable Income (S$ Million) $66.3 $48.5 $48.5 $35.4 (2) Forecast Period 2013 Projection Year 2014 (2) Forecast Period 2013 Projection Year 2014 Net Property Income (S$ Million) $40.4 $55.2 DPU Yield on IPO Issue Price (%) 7.5% 7.7% (2) Forecast Period 2013 Projection Year 2014 Forecast Period 2013 (Annualised) Projection Year 2014 REIT Management Fees Distribution Payout Estimated Aggregate Leverage 10% of Distributable Income / 25% of difference in DPU / 100% paid in Units until 31 December % of Distributable Income until 31 Dec 2014 and at least 90% thereafter 29.9% (1) Based on annualized growth. (2) Based on forecast for 9-months ending 31 December Financial Highlights

28 Proactive Capital Management Borrowing Details Total Debt Facility S$285 million Total Debt Drawn Down at IPO S$280 million Estimated Aggregate Leverage 29.9% Additional Debt Headroom ~S$73 million to 35% Aggregate Leverage 75% of Debt already hedged 75% of the initial debt drawn down at IPO has been fixed with 2, 3 and 4 year interest rate swaps Weighted average swap rate is slightly below 1% % of Debt Hedged into Fixed Rate 75% Average All-in Interest Costs 3.1% Weighted Average Debt Maturity 3 years Interest Coverage Ratio (est.) 6.0x Debt Maturity Profile (S$ Million) 0% 0% 33.9% 33.9% 32.2% $95.0 $95.0 $90.0 No Near Term Refinancing Risks $0.0 $ Financial Highlights

29 Concluding Remarks

30 Soilbuild REIT Premier Business Space REIT Offers Highest Exposure to the Attractive Business Park Sector With Potential for Upside Growth 3 Sponsorship by Leading Integrated Property Group 2 4 Quality Portfolio With Unique Competitive Strengths 1 5 Experienced Management Team Incentivized to Maximize Distributions to Unitholders 29 Concluding Remarks

31 Thank You Key Contacts: Shane Hagan Chief Executive Officer Tel: (65) Roy Teo Chief Operating Officer Tel: (65)