Review of FY14/15 Performance Annual General Meeting 29 June 2015 - PowerPoint PPT Presentation

Hyflux Innovation Centre The Kendall Aperia Review of FY14/15 Performance Annual General Meeting 29 June 2015

Disclaimers This material shall be read in conjunction with A-REIT’s financial statements for the financial year ended 31 March 2015. This presentation 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 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 A-REIT's future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s current view on future events. The value of units in A-REIT (“Units”) and the income derived from them, if any, may fall as well as 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 the SGX-ST. It is intended that unitholders of A-REIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of A-REIT is not necessarily indicative of the future performance of A-REIT. Any discrepancies between the figures in the tables and charts and the listed amounts and totals thereof are due to rounding. 2

Agenda Key Highlights for FY14/15 Financial Performance Investment Management Capital Management Portfolio Management Market Outlook for FY15/16 3

Key Highlights for FY14/15  Total Amount Available for Distribution rose by 2.7% y-o-y to S$351.1m  DPU grew 2.5% y-o-y to 14.60 cents from 14.24 cents in FY13/14  Higher portfolio occupancy of 87.7% (from 86.8% a quarter ago but lower than 89.6% a year ago)  Key performance drivers were: • Positive rental reversion of 8.3% achieved over preceding contracted rental rates • Full year contribution from Nexus @one-north and A-REIT City @Jinqiao, and • Maiden contributions from Hyflux Innovation Centre and Aperia 4

Key Highlights for FY14/15  Assets Under Management increased 10.9% to S$8.2 billion • Acquisitions S$770.6m • AEI S$60.0m • Divestment S$12.6m  Annual Property Revaluation • Capitalisation rate of 6.46% (vs. 6.57% in FY13/14) for Singapore Portfolio • Net revaluation gain of about S$47.0m @31 March 2015  Proactive capital management • Healthy aggregate leverage of 33.5% with debt maturity of 3.6 years • 68.2% of borrowings is hedged for an average term of 3.7 years 5

Regulatory Landscape New Policy Measures in 2014 Current Policy Revised Policy Can sublet up to 50% of GFA Can sublet up to 50% of GFA to non- to non-anchor tenants anchor subtenants within 5 years after obtaining TOP, and up to 30% thereafter Must sublet at least 50% of Must sublet at least 70% of GFA to GFA to anchor subtenants anchor subtenants 6

Agenda Key Highlights for FY14/15 Financial Performance Investment Management Capital Management Portfolio Management Market Outlook for FY15/16 7

Financial Highlights FY13/14 FY14/15 (Restated) S$ S$ 673.5 m Gross Revenue 613.6 m 9.8% 436.0 m 462.7 m Net Property Income 6.1% 2.7% Total Amount for Distribution 351.1 m 342.0 m 14.60 ¢ 14.24 ¢ Distribution per Unit 2.5% Note: Please refer to A-REIT’s financial announcement for the financial year ended 31 March 2015 for more information 8

Financial Highlights As at As at 31 Mar 2015 31 Mar 2014 (S$) (S$) 8,160 m 7,357 m Total Assets 10.9% 7,868 m 6,923 m Investment Properties 13.7% 5,014 m 4,849 m Net Asset Value 3.4% 208 ¢ 202 ¢ Net Asset Value per Unit 3.0% Note: Please refer to A-REIT’s financial announcement for the financial year ended 31 March 2015 for more information 9

Agenda Key Highlights for FY14/15 Financial Performance Investment Management Capital Management Portfolio Management Market Outlook for FY15/16 10

Investment Highlights in FY14/15 Completion  Acquired 3 high-grade Value (S$m ) Date properties for S$771m Acquisition 770.6 • Scaled up exposure of The Kendall 113.7 Mar-15 business/science park, Aperia 463.0 Aug-14 integrated development & Hyflux Innovation Centre 193.9 Jun-14 high-specs portfolio to 64% Asset Enhancements 60.0 • Long land lease tenure of Oasis (formerly Science Hub) 8.4 Jan-15 53-64 years The Alpha 11.1 Jan-15  Completed S$60m of 1 Changi Business Park 8.1 Nov-14 asset enhancement Crescent works Corporation Place 14.5 Aug-14 LogisTech 6.6 Aug-14 • To improve marketability and returns Techquest 4.3 Jul-14  Divested 1 Kallang Place 5 Toh Guan Road East 7.0 Jun-14 Divestment 12.6 • Recycle capital 1 Kallang Place 12.6 May-14 11

Acquisition in FY14/15: The Kendall Completion 30 March 2015 Purchase Price S$112.0m Acquisition fee to S$1.1m Manager Other transaction Approximately S$0.6m costs Total Acquisition S$113.7m Cost Vendor Singapore Science Park Ltd Valuation S$116.4m by CB Richard Ellis 50 Science Park Road (as at acquisition S$115.0m by Colliers International date) The Kendall is a 6-storey multi-tenanted TOP Date Oct 2009 building located within the Singapore Science Land Area 10,095 sqm Park II. The property is easily accessible via Land Lease Expiry 64 years remaining (no upfront land Pasir Panjang Road, and the Haw Par Villa premium or land rent required) Circle Line Station is located nearby. Plot Ratio 2.0 (fully utilised) GFA 20,190 sqm NLA 16,824 sqm Occupancy 93.2% (as at 31 Mar 2015) 12

Acquisition in FY14/15: Aperia Completion 8 August 2014 Acquisition fee to S$4.58m Manager Other transaction S$0.42m costs Land premium S$218.3m for 60 years fully paid Total Transaction S$463m Value Vendor Via acquisition of PLC8 Holdings Pte. Ltd. 8, 10 & 12 Kallang Avenue Valuation S$488m by DTZ Debenham Tie Leung Aperia is an integrated industrial mixed-use (as at acquisition date) (SEA) Pte Ltd development located in Kallang iPark, at the TOP Date June 2014 fringe of Singapore’s Central Business District. Land Area 28,348 sqm Aperia is about 5 minutes' walk to the Lavender MRT Station and the upcoming Land Lease Expiry 57 years remaining Bendemeer MRT Station Plot ratio 3.0 (of which 0.5 for white use) The property consists of two Business-1 GFA 86,696* sqm towers (GFA 72,290 sqm) and a 3-storey retail podium (GFA 14,406 sqm) NLA 68,735 sqm Lifestyle amenities include a recreational pool, Occupancy 79.7% (as at 31 Mar 2015) childcare and enrichment centres, Another 2.3% committed but yet to supermarket, shops and F&B outlets commence lease; 4.0% under offer 13 * Includes bonus GFA due to Greenmark Platinum certification

Acquisition in FY14/15: Hyflux Innovation Centre Completion 30 June 2014 Purchase Price S$170.m Acquisition fee to S$1.7m Manager Other transaction costs Approximately S$0.96m Upfront Land Premium S$21.2m (for the remaining tenure of the first 30-year lease term) Total Acquisition Cost S$193.9m Vendor Hyflux Innovation Centre Pte Ltd Valuation S$197.0m by DTZ Debenham Tie 80 Bendemeer Road (as at acquisition date) Leung (SEA) Pte Ltd TOP Date May 2012 Hyflux Innovation Centre is located Land Area 17,374 sqm within the Kallang Industrial Estate and is within three minutes’ walk to Boon Land Lease Expiry 54 years remaining Keng MRT station. Plot Ratio 2.5 (fully utilised) GFA 43,435 sqm The Property is a 10-storey high- NLA 35,071 sqm specifications building with a basement and surface car park. Occupancy 92.4% physical occupancy (as at 31 Mar 2015); 3-yrs rental support from Hyflux for vacant space 14

Divestment FY14/15 FY15/16 Realised total capital gains of S$16.2m (47%) over original costs 1 Kallang Place 26 Senoko Way BBR Building Location 1 Kallang Place 26 Senoko Way BBR Building Description 7-storey light industrial 2-storey light industrial Part 2-storey and part 3- warehouse facility bldg with a 4-storey storey light industrial linked extension block building Remaining Land Tenure 10 years 36 years 42 years NLA 12,265 sqm 10,725 sqm 5,421 sqm 2007 / S$15.5 million Acquisition Year / Price 2007 / S$12.0 million 2005 / S$6.8 million Book Value S$10.5 million (as at 31 Mar S$24.8 million (as at 31 S$9.3 million (as at 31 Mar Mar 2015) 2014) 2015) Sales Price S$12.6 million S$24.8 million S$13.9 million NPI Impact (FY14/15 vs. -S$1.1 million -S$1.1 million -S$0.9 million FY13/14) (FY15/16 vs FY14/15) Buyer Flextronics Manufacturing JTC Corporation BBR Holdings (S) Ltd (Singapore) Pte Ltd Divestment Completion 21 May 2014 (FY14/15) 7 April 2015 (FY15/16) Expected in 2Q FY15/16 Date 15