4Q & FY20 19 Results Announcement 1 2 February 20 20 1
Important Notice This document 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. 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, governmental and public policy changes, and the continued availability of financing in the amounts and 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 view of management on future events. The value of units in Prime US REIT (the “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, DBS Trustee Limited (as trustee of Prime US REIT) or any of their affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Holders of Units (the “Unitholder”) have no right to request the Manager to redeem or purchase their Units while the Units are listed. It is intended that 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 document is not to be distributed or circulated outside of Singapore. Any failure to comply with this restriction may constitute a violation of United State securities laws or the laws of any other jurisdiction. The past performance of Prime US REIT is not necessarily indicative of its future performance. DBS Bank Ltd. was the sole financial adviser and issue manager for the initial public offering (“IPO”) of Prime US REIT (the “Offering”) . DBS Bank Ltd., Merrill Lynch (Singapore) Pte. Ltd., China International Capital Corporation (Singapore) Pte. Limited, Credit Suisse (Singapore) Limited, Maybank Kim Eng Securities Pte. Ltd. and Oversea-Chinese Banking Corporation Limited were the joint bookrunners and underwriters for the Offering. 2
Contents • Financial Highlights 4 • Operational Performance 1 0 • Market Outlook 1 5 • Appendix 1 8 3
FY20 19 Financial Highlights One Washingtonian Centre, Suburban Maryland
FY20 19 Key Highlights Outperformance of NPI and DPU against IPO forecasts for FY20 19 • NPI exceeds 2.9% - US$40 .2m vs US$39.0 m • DPU exceeds 7.5% - US 3.15 cent s vs US 2.93 cents Uplift in portfolio valuation to US$1.25b • Revaluation gain of 1.5% or US$18.8m driven by improving fundamentals of U.S. office real estate • Maintained high occupancy rates of 95.8% Effective capital management with strong balance sheet to pursue growth • Average debt to maturity of 5.2 ye years at weighted average interest rate of 3.3% • Healthy gearing ratio of 33.7% positions PRIME for growth Positive outlook in operating markets evidenced by key leading indicators • Net absorption rallied the remainder of the year, with the fourth quarter posting the strongest absorption of 20 1 9 • Technology remained the top leasing sector which is favourable to PRIME with its exposure to tenants in the growing STEM/ TAMI sectors 5
Outperformance of NPI and DPU against IPO forecasts 4QFY20 19 FY20 19 1 October 20 19 to 31 December 20 19 19 July 20 19 to 31 December 20 19 Actual Forecast Variance Actual Forecast Variance (%) (%) Gross Revenue 33,528 32,869 +2.0 +2.2 60,657 59,376 Net Property 22,257 21,607 +3.0 40,170 39,031 +2.9 Income Distributable Income to 16,380 15,051 +8.8 29,176 27,189 +7.3 Unitholders Available DPU 1.77 1.62 +9.0 3.15 2.93 +7.5 (US cents) 1 (1) No distribution for the current financial period was declared. PRIME’s first distribution will be for the period from 19 July 2019 (Listing Date) to 31 December 2019, and will be paid on or before 30 March 2020. 6
Robust Balance Sheet Positioned for Growth As at 31 December 20 19 Total Assets US$1,297.2 million Available Facilities US$47.4 million Total Loans & Borrowings US$437.6 million Aggregate Leverage 33.7% Weighted Average Interest 3.3% 1 US$825.3 million Rate Units in Issue and to be 5.5x 2 Interest Coverage 926.4 million Issued Weighted Average Debt NAV per Unit US$0.89 5.2 Years Maturity (1) Based on interest expense (excluding amortisation of upfront debt-related transaction costs and commitment fees) on loans and borrowings from 19 July 2019 to 31 December 2019 taking into account the interest rate swaps (2) Calculated as net income plus tax expense, net finance expense, change in fair value of derivatives and amortisation of leasecommissions divided by interest expense and commitment fees on debt for the period from 19 July 2019 to 31 December 2019 7
Conservative Debt Profile Provides Certainty of Distributions 1 Debt Maturity Profile Breakdown of Debt Profile (US$) (US$ millions) US$53m (12%) 140 140 105 US$105m (24%) US$280m (64%) 2 53 Floating Rate Debt Fixed Rate Debt Floating Rate Debt (Fixed Through Swaps) (Unswapped) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 (1) Data as of 31 December 2019 (2) The loan maturity in 2022 is related to the revolver (3) 2019 and 2020 interest cost of 3.06% and 3.11% for both 4/5Y term loans, respectively; average interest cost of 3.43% and 3.49% for the remaining term of the 4Y and 5Y term loans, respectively (4) Based on interest expense (excluding amortization of upfront debt-related transaction costs and commitment fees) on loans and borrowings from 19 July to 31 December 2019, taking into account interest rate swaps 8
Delivering Our Commitments with Maiden DPU st distribution of US 3.15 cents per Unit for the period from 19 July 1 31 December 20 19 • Tax-exempt income: US 2.0 0 cents per Unit • Capital: US 1 .1 5 cents per Unit Annualised DPU yield of 8.0 % 1 for 4QFY20 19 and 7.9% 1 for FY20 19 Distribution Policy • 1 0 0 % of distributable income from the Listing Date to 31 Dec 20 1 9 and for FY20 20 • PRIME will distribute at least 90 % of annual distributable income for FY20 21 onwards • Distributions on a semi-annual basis Key Dates: • Distribution Ex Date: 1 9 February 20 20 • Book Closure Date: 20 February 20 20 • Date Payable: 30 March 20 20 (1) Annualised distribution yield based on IPO price of US$0.88 (2) The loan maturity in 2022 is related to the revolver (3) 2019 and 2020 interest cost of 3.06% and 3.11% for both 4/5Y term loans, respectively; average interest cost of 3.43% and 3.49% for the remaining term of the 4Y and 5Y term loans, respectively (4) Based on interest expense (excluding amortization of upfront debt-related transaction costs and commitment fees) on loans and borrowings from 19 July to 31 December 2019, taking into account interest rate swaps 9
Operational Performance 222 Main, Salt Lake City
Proactive Lease Management: Higher Certainty of Cash Flow Stable Portfolio Lease Expiry Profile 20.0% 18.0% 17.2% 17.1% 18.0% 16.3% 15.9% 15.5% 16.0% 13.5% 14.0% 11.7% 12.0% 10.1% 9.8% 10.0% 8.7% 8.4% 8.4% 7.9% 8.0% 8.0% 6.9% 6.0% 3.4% 3.3% 4.0% 2.0% 0.0% 2020 2021 2022 2023 2024 2025 2026 2027 2028 & Beyond By NLA By CRI 1 1
High Portfolio Occupancy of 95.8% Tower I at Emeryville 222 Main Village Center Station I Village Center Station II San Francisco Bay Area (Oakland) Salt Lake City Denver Denver Valuation 1 : US$125.8m Valuation 1 : US$88.5m Valuation 1 : US$220.0m Valuation 1 : US$145.8m Occupancy 2: 90.2% Occupancy 2 : 95.9% Occupancy 2 : 87.2% Occupancy 2: 100.0% Promenade I & II 101 South Hanley Tower 909 St. Louis San Antonio Dallas Valuation 1 : US$75.0m Valuation 1 : US$81.5m Valuation 1 : US$82.4m Occupancy 2 : 99.6% Occupancy 2 : 95.7% Occupancy 2 : 94.4% Reston Square 171 17th Street One Washingtonian Center CrossPoint Washington D.C Area (Suburban Virginia) Atlanta Washington D.C Area (Suburban Maryland) Philadelphia Valuation 1 : US$181.0m Valuation 1 : US$49.2m Valuation 1 : US$99.5m Valuation 1 : US$106.0m Occupancy 2 : 96.9% Occupancy 2 : 97.1% Occupancy 2 : 100.0% Occupancy 2 : 95.6% (1) Appraised value as at 31 December 2019 (2) Occupancy as at 31 December 2019. 1 2
Diversification: Capture Growth & Minimise Risks No single market No single asset contributing more than makes up more than 9 Primary Markets 11 Assets 14.6% of total CRI 17.5% of portfolio Geographic Diversification 1 Asset Diversification CRI 2 by Primary Market Asset by Valuation San Francisco Bay Area (Oakland) 171 17th Street Tower I at Emeryville Atlanta 9.0% 14.4% 10.0% 14.3% Reston Square 3.9% Salt Lake City One 222 Main 14.6% Washington DC Washingtonian 17.5% (Suburban Maryland Center and Virginia) 8.5% 13.8% CrossPoint Denver Village Center 7.9% 13.5% Station I Philadelphia 7.1% 8.6% Promenade I & II 6.0% San Antonio Village Center St Louis Tower 909 Dallas Station II 7.4% 101 South Hanley 10.9% 6.6% 7.9% 11.6% 6.5% Represents portfolio breakdown by valuation 1 3 (1) Classified by primary market (2) Data as per 31 December 2019 Cash Rental Income
Recommend
More recommend
