2Q20 PERFORMANCE April June 2020 Bualuang K.E. Retail Leasehold - - PowerPoint PPT Presentation

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2Q20 PERFORMANCE April June 2020 Bualuang K.E. Retail Leasehold - - PowerPoint PPT Presentation

2Q20 PERFORMANCE April June 2020 Bualuang K.E. Retail Leasehold Real Estate Investment Trust DISCLAIMER Investment involves risk. Prospective should understand the characteristics of the Trust units and study information about Bualuang K.E.


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SLIDE 1

2Q20 PERFORMANCE

April – June 2020

Bualuang K.E. Retail Leasehold Real Estate Investment Trust

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SLIDE 2

DISCLAIMER

Investment involves risk. Prospective should understand the characteristics of the Trust units and study information about Bualuang K.E. Retail Leasehold Real Estate Investment Trust (“BKER”) before making a decision to invest in the Trust units. This presentation is for information purposes only and is intended only for the initial direct attendee of the presentation. It may not be reproduced or redistributed to any other person. No part of this presentation, nor the fact of its existence, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. This presentation is not to be relied upon in any manner as legal, tax or any other advice and shall not be used in substitution for the exercise of independent judgment and each person made aware of the information set-forth hereof shall be responsible for conducting its own investigation and analysis of the information contained herein. Except where otherwise indicated, the information provided in this presentation is based on matters as they exist as of the date stated or, if no date is stated, as of the date of preparation and not as of any future date, and the information and opinions contained herein are subject to change without notice. None of the BKER nor any of its subsidiaries accepts any obligation to update or otherwise revise any such information to reflect information that subsequently becomes available or circumstances existing or changes occurring after the date

  • hereof. None of the BKER or any of its subsidiaries or any of their respective directors, officers, employees or agents shall have any liability whatsoever (in

negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation and any and all such liability is expressly disclaimed. Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as “may”, “will”, “expect” , “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based

  • n the assumptions and beliefs of BKER management in light of the information currently available to BKER. These assumptions involve risks and

uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this Presentation is, or should be relied on as promise or representation of BKER as to the future.

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SLIDE 3

Agenda

B U S I N E S S U P D A T E

01 02 03 04 05

O P E R A T I O N A L H I G H L I G H T B U S I N E S S O U T L O O K F I N A N C I A L H I G H L I G H T A P P E N D I X

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SLIDE 4

2Q20 OVERVIEW

C O V I D 1 9 i m p a c t e d p e r f o r m a n c e t h r o u g h m a l l c l o s u r e a n d r e n t a l w a i v e r / d i s c o u n t s – r e v e n u e d e c l i n e d 5 1 . 4 % Q O Q H o w e v e r , u n d e r l y i n g p e r f o r m a n c e i s h e a l t h y w i t h h i g h o c c u p a n c y r a t e s a t 9 0 . 5 % , s t a b l e r e n t a l r e v e r s i o n s , a n d h i g h r e t e n t i o n r a t e M a n a g e d s i g n i f i c a n t r e n t a l a n d s e r v i c e c o s t r e d u c t i o n s o f 2 3 . 2 % Q O Q t o c u s h i o n r e v e n u e i m p a c t C o n t i n u i n g A s s e t E n h a n c e m e n t I n i t i a t i v e s ( A E I ) a t P l e a r n a r y M a l l i n c l u d i n g m o s t c o s m e t i c w o r k d o n e

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SLIDE 5

BUSINESS UPDATE

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SLIDE 6

The Crystal Ekamai-Ramindra NLA: 30,778 Sqm. Crystal Design Center NLA: 36,021 Sqm. The Scene NLA: 6,931 Sqm. Sammakorn Place Ramkhamhaeng NLA: 10,340 Sqm. Amorini NLA: 5,092 Sqm. Plearnary Mall NLA: 11,353 Sqm. Sammakorn Place Rangsit NLA: 3,413 Sqm. The Crystal SB Ratchapruek NLA: 24,426 Sqm. I’m Park NLA: 6,601 Sqm. Sammakorn Place Ratchapruk NLA: 4,585 Sqm.

Praditmanutham Corridor Pop: 793,000 Rangsit Corridor Pop: 806,000 Chula-Samyan Pop: 97,000 Eastern Bangkok Pop: 338,000 Ratchapruek Corridor Pop: 852,000

PRIME LIFESTYLE PROPERTIES

1 0 p r i m e l o c a t i o n s w i t h w e l l - q u a l i f i e d t e n a n t s H i g h - i n c o m e a n d h i g h - g r o w t h n e i g h b o r h o o d s A v e r a g e l e a s e h o l d t e r m 2 8 y e a r s O r g a n i c g r o w t h p o t e n t i a l w i t h r e - t e n a n t i n g a n d c o s t m a n a g e m e n t

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SLIDE 7

Closure P e r i o d : A p r i l – M a y 1 6 , 2 0 2 0

Except: Supermarket Bank Pet food shop Pharmacy Convenience store Take away & Delivery F&B

C O N D I T I O N

Phase 1 (May 3) Phase 3 (June 1)

E a s i n g l o c k d o w n

Phase 2 (May 17)

  • Salon & Barber
  • Pet salon
  • F&B Sections (Restaurant,

Food court, Café)

  • Shopping Mall
  • Beauty Clinic
  • Learning Center
  • Spa
  • Fitness
  • Cinema

Phase 4 (June 15)

  • Playground
  • Game arcade

C O V I D 1 9 I M P A C T

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SLIDE 8

C O V I D 1 9 I M P A C T

Alcohol Gel Supplement Safety Signage Social Distancing

C O U R S E O F A C T I O N

Deep Cleaning Mask Wearing Requirement Screening Point

S afety measures

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SLIDE 9

Waive/Discount rental & service fee

C O V I D 1 9 I M P A C T

Tenant category % NLA April May June Education Cinema Fitness 11% 100% 100% 100% IT shop Salon 6% 100% 70% 70% F&B

(without takeaway/delivery)

14% 100% 70% 50% Furniture Fashion Service 25% 100% 50% 50% Average Portfolio 70% 64% 40%

Tenant allev iation measures

C O U R S E O F A C T I O N

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SLIDE 10

K ey measure Compared to pre -COVID 1 9 Traffic 80% Sale % N LA # 99%* Supermarket 28 F&B 21 77% Fashion 7

Fully recovered in June

Resilient performance during COVID19

C O V I D 1 9 I M P A C T

C O N S E Q U E N C E S

* Supermarket sales spiked up to 115% of average level in 1Q20 due to hoarding behavior pre-shutdown. # Net leasable area of revenue sharing tenants only

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SLIDE 11

BKER 2020 MID YEAR SALE

P eriod : June 1 6 – July 1 4 , 2 0 2 0 Join w it h 5 B ank :

Marketing & Event Campaign

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Signage

PLEARNARY REVAMP

Period: April 2020

B UDGE T: 4 MB

Landscape Guardhouse Reception Counter Interior area Paint Lighting A f t e r B e f o r e B e f o r e B e f o r e B e f o r e B e f o r e B e f o r e B e f o r e A f t e r A f t e r A f t e r A f t e r A f t e r A f t e r

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SLIDE 13

FTSE INDEX

On June 22, 2020 :

BKER is honored to be included in FTSE Global Equity Index Series (FTSE GEIS)

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SLIDE 14

OPERATIONAL HIGHLIGHT

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SLIDE 15

KEY OPERATING INDICATORS

Net Leasable Area

139,539 sqm.

Occupancy Rate 1Q20 2Q20 92.8% 90.5% Average Rental Rate

(Baht/sqm)

1Q20 2Q20 551 540 Rental Reversion Rate 1Q20 2Q20 1.80% 1.70% Retention Rate 1Q20 2Q20 81% 74% Weighted Average Lease Expiry (yrs.) 1Q20 2Q20 1.73 1.61

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SLIDE 16

PORTFOLIO PERFORMANCE

Portfolio remains healthy in the face of COVID19 crisis

Occupancy Rate declines slightly to 90.5% due to non- renewals

  • f

mainly SME tenants. ARR decreases by 2%QOQ because of the closure and lower sales amount

  • f

revenue-sharing tenants. Net ARR is 200 Baht/Sqm reflecting average discounts

  • f 63% in 2Q20.

580 551 540

92.70% 92.8% 90.5% 93.3%

50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% 200 400 600 4Q19 1Q20 2Q20 COMMITTED (As of June 30,2020)

Average rental rate (Baht/ Sqm.) Occupancy rate

Net waive/discount rental rate = 200 Baht/sqm

COMMITTED (As of June 30,2020)

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SLIDE 17

LEASING PERFORMANCE

Leases Number Sqm. Renewal 128 6,590 New 10 600 Total Portfolio 138 7,189

Reversion Rates remains similar as tenants maintain long-term

  • utlook

when renewing rental rates Retention declines slightly as impact of COVID-19

97% 81% 74% 2.90% 1.80% 1.70%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 4Q19 1Q20 2Q20 Retention rate Rental Reversion Rate

R e n t a l r e v e r s i o n r a t e R e t e n t i o n R a t e

Leasing activity is steady QOQ

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SLIDE 18

PORTFOLIO PROFILE

11.3% 14.3% 6.7% 29.6% 17.6% 19.2% 1.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% <= 12 12-24 24-36 >36 2Q20 Other Tenants Anchor Tenants

Weighted Average lease Expiry = 1.61 yrs.

M o n t h

Supermarket 8.33% Cinema 5.75% Fitness 4.48% Financial 3.25% Beauty & Health 7.98% Education 5.62% Fashion & Accessories 4.34% Food & Beverage 16.91% Home & Construction 27.93% Lifestyle 5.70% Office 7.31% Service 1.90% Other 0.50%

Well-diversified Tenant Mix focused on “Necessity” and “Experiential” tenants

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SLIDE 19

FINANCIAL HIGHLIGHT

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SLIDE 20

KEY FINANCIAL INDICATORS – Income Statement

Total Revenue (MB) 1Q20 2Q20

350.8 170.4

Net investment Income (MB) 1Q20 2Q20

148.6 14.6

Distribution Income (MB) 1Q20 2Q20

139.86

  • (Capital reduction)

Distribution per Unit (Baht) 1Q20 2Q20

0.16

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SLIDE 21

KEY FINANCIAL INDICATORS – Balance Sheet

NAV (Baht) 1Q20 2Q20

9.58 9.43

Debt/ TAV 1Q20 2Q20

0.23 0.23

Total Asset Value (MB) 1Q20 2Q20

12,258 12,112

Cash& equivalents (MB) 1Q20 2Q20

395.6 267.2

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SLIDE 22

BUSINESS OUTLOOK

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SLIDE 23

2H20 INDUSTRY OUTLOOK

R e c o v e r y b a c k t o n o r m a l i n 2 H 2 0

Retail sale (%yoy) 3Q20 4Q20 +6.2% +5.1%

S o u r c e : T r a d i n g e c o n o m i c s . c o m

P O S T - C O V I D

Dine-in Take Away Delivery Ready made Food from supermarket Groceries From supermarket

S p e n d i n g p r e f e r e n c e

  • 24%

+26% +25% +13% +41%

S o u r c e : M c k i n s e y & c o m p a n y C O V I D 1 9 M o b i l e s u r v e y

P o s i t i v e r e v e n u e s h a r i n g o u t l o o k P o s t - C O V I D G r o c e r y s h o p p i n g a t

C h a i n s u p e r m a r k e t L o c a l s u p e r m a r k e t

Frequency

% Shoppers who increase spending +6% +5% +33% +24%

S o u r c e : M c k i n s e y & c o m p a n y C O V I D 1 9 M o b i l e s u r v e y

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SLIDE 24

3Q20 OUTLOOK

2 Q 2 0 e x p e c t e d t o b e b o t t o m p o i n t f o r p e r f o r m a n c e w i t h g r a d u a l n o r m a l i t y a c h i e v e d b y e n d - o f - y e a r C o n t i n u e d f o c u s o n s t r a t e g i e s o f t e n a n t r e t e n t i o n , n e w k e y b r a n d s a t t r a c t i o n , a n d o p e r a t i n g c o s t m a n a g e m e n t E x p a n s i o n p l a n w i t h d i s c i p l i n e d a p p r o a c h – o n t r a c k w i t h 2 - 3 n e w p r o p e r t i e s e x p e c t e d t o b e a d d e d t o t h e p o r t f o l i o

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3Q20 NEW TENANTS

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3Q20 Marketing & Event Campaign

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EXPANSION PLAN

Timespan Within 1yr.

  • 1yr. to 3yrs.

Total

Prospected Projects Approximated NLA (Sqm.) Estimated Investment (MB)

2 - 3 6 - 14 8 - 17 projects 16,500 - 18,500 63,500 – 247,000 80,000 – 265,500 sqm 600 - 900 4,000 – 13,500 4,600 – 14,400 MB Investment Criteria

F i n a n c i a l s

Cash Flow Quality IRR target 9.0% Yield target 6.5-8.0%

Q u a l i t a t i v e

Location, Property Design, Tenants, Sponsor Management, Legal

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SLIDE 28

GROWTH STRATEGY

Organic Growth Inorganic Growth Operations and Tech Platform Balance Sheet Strength Portfolio Resilience

  • Active leasing and

tenant mix

  • Synergy and cost

efficiency

  • Operational excellence
  • High-quality prime

acquisitions

  • Diversification
  • YARDI ERP system
  • Streamline processes
  • Crystal Rewards platform
  • Smart capital

management

  • Strong financial structure
  • COVID-19 pandemic
  • Economic slowdown
  • Risk mitigation

3-4%

Organic Revenue Growth

S T R A T E G I C A R E A S A N D I N I T I A T I V E S T A R G E T S

4-5%

Organic NOI Growth

15-20%

Inorganic TAV Growth

4-6%

DPU Growth

Average Per Annum Growth

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SLIDE 29

APPENDIX

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SLIDE 30

GLOSSARY

Total Asset Value (TAV): Total market value of all properties in REIT Net Asset Value (NAV): The market value of all REIT’s assets less its liabilities and obligations Debt/Total Asset Value: The leverage limit is 0.35 and up to 0.60, including investment grade bond Distribution per unit (DPU): Amount of dividends a REIT investor receives for every unit holding. Net Leasable Area (NLA): The amount of floor space that can be rented out for income Occupancy Rate (OR): The proportion of rental area which are occupied Committed Occupancy: Occupancy rate based on current leases and letter of offer accepted by tenants for which a deposit fee has been paid Average Rental Rate (ARR): Rental rate charged per area (sqm.) Rental Reversion Rate (RRR): Changes in rental rate from new leases or same store rent changes Retention Rate: The proportion of leases renewed when expire Weighted Average Lease Expiry (WALE): All tenants’ remaining lease in years, weighted by tenants’ occupied area

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SLIDE 31

OCCUPANCY RATE

90.60% 99.30% 93.70% 96.30% 94.30% 85.50% 92.10% 92.50% 79.30% 87.30% 91.4% 96.8% 97.3% 85.3% 96.1% 84.2% 90.2% 95.6% 78.8% 90.6% 88.2% 95.4% 96.3% 85.0% 88.8% 82.9% 88.5% 92.2% 81.0% 86.8% 91.4% 97.7% 99.2% 89.3% 90.6% 90.6% 88.9% 92.2% 81.6% 86.8%

CDC TC TCR AMR IMP PLN SRM SRS SRP TS 4Q19 1Q20 2Q20 COMMITTED (As of June 30,2020)

Note: Occupancy rate is calculated as at the end of period

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SLIDE 32

AVERAGE RENTAL RATE

621.0 654.0 573.0 365.0 634.0 406.0 455.0 548.0 521.0 635.0

602 605 532 385 606 381 453 523 517 601 610 563 525 364 561 394 448 500 514 627

CDC TC TCR AMR IMP PLN SRM SRS SRP TS 4Q19 1Q20 2Q20

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LEASE EXPIRY PROFILE

M o n t h

2.7% 22.0% 4.7% 2.6% 25.6% 13.4% 36.8% 34.7% 27.6% 18.7% 17.0% 38.8% 30.2% 15.8% 34.7% 16.0% 19.9% 17.6% 23.2% 17.7% 39.0% 12.9% 11.3% 29.8% 1.7% 23.9% 39.8% 25.1% 35.1% 50.3% 2.8% 8.6% 10.7% 9.4% 15.3% 39.6% 22.9% 16.5% 21.9% 23.3% 10.5% 34.4% 1.6% 21.0% 51.3% 11.9% <= 12 12-24 24-36 <= 12 12-24 24-36 <= 12 12-24 24-36 <= 12 12-24 24-36 <= 12 12-24 24-36 <= 12 12-24 24-36 >36 <= 12 12-24 24-36 <= 12 12-24 24-36 <= 12 12-24 24-36 >36 <= 12 12-24 24-36 CDC TC TCR AMR IMP PLN SRM SRP SRS TS Other Tenants Anchor Tenants

Weighted Average lease Expiry (Yrs.)

1.46 158 0.81 3.23 1.60 1.52 1.92 1.24 1.82 1.31

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SLIDE 34

BALANCE SHEET

(Amounts in THB m) 31-Mar-20 30-Jun-20

Assets Investment in leasehold properties at fair value 11,368.63 11,368.63 Investment in securities and cash at financial institutions 455.26 337.04 Rental and services receivables 267.65 186.38 Other assets 166.68 179.67 Total Assets 12,258.22 12,111.72 Liabilities Trade accounts payable 38.81 43.32 Accrued expenses, and rental and services income received in advance 133.58 112.41 Deposits from rental and services 388.69 395.59 Long-term loan 2,759.20 2,759.75 Lease Liabilities 549.65 545.62 Other liabilities 11.99 9.83 Total Liabilities 3,881.92 3,866.52 Net asset value 8,376.29 8,245.20 Capital from unitholders 8,897.99 8,758.13 Discount on trust units (317.47) (317.47) Retained earnings (loss) (204.23) (195.47) Net asset value 8,376.29 8,245.20 Net asset value per unit (THB) 9.5827 9.4327

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INCOME STATEMENT

(Amounts in THB m) 1Q 2020 2Q 2020

Revenues Rental income 124.53 52.60 Services and utilities income 203.43 99.65 Interest income 0.44 0.16 Other income 22.36 17.95 Total incomes 350.77 170.35 Expenses Costs of rental and services 111.85 85.87 Fees and expenses for property management 43.15 26.13 Administration expense 8.46 5.07 Amortization of deferred expenses 5.23 5.23 Finance costs 33.49 33.48 Total expenses 202.18 155.78 Net investment income 148.59 14.57 Net loss on changes in fair value of investments in leasehold properties and securities (354.67) (5.82) Increase (Decrease) in net assets from operations (206.08) 8.76