Frasers Property Thailand Industrial Freehold & Leasehold REIT - - PowerPoint PPT Presentation

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Frasers Property Thailand Industrial Freehold & Leasehold REIT - - PowerPoint PPT Presentation

Frasers Property Thailand Industrial Freehold & Leasehold REIT 1QFY20 Results Presentation 11 February 2020 Frasers Property Logistic Center Bangplee 1, Samutprakarn Laem Chabang 2, Chonburi, Thailand Important notice This presentation is


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Frasers Property Thailand Industrial Freehold & Leasehold REIT

1QFY20 Results Presentation

11 February 2020

Laem Chabang 2, Chonburi, Thailand Frasers Property Logistic Center Bangplee 1, Samutprakarn

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Important notice

This presentation is for information purposes only and does not constitute or form part of an offer, solicitation, recommendation or invitation for the sale or purchase

  • r subscription of securities, including units in Frasers Property Thailand Industrial Freehold & Leasehold REIT (“FTREIT”, and the units in FTREIT, the “Units”) or

any other securities of FTREIT. No part of it nor the fact of its presentation shall form the basis of or be relied upon connection with any investment decision, contract or commitment whatsoever. The past performance of FTREIT and Frasers Property Industrial REIT Management (Thailand) Company Limited, as the REIT manger of FTREIT (the “Manager”), is not necessarily indicative of the future performance of FTREIT and the Manager. This presentation may contains “forward-looking statements”, including forward-looking financial information, that involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance, outcomes or achievements of FTREIT or the Manger, or industry results, to be materially different from those expressed in such forward-looking statements and financial information. Such forward-looking statements and financial information are based on certain assumptions and expectations of future events regarding FTREIT’s present and future business strategies and the environment in which FTREIT will operate. The Manager does not guarantee that these assumptions and expectations are accurate or will be realized. The Manager does not assume any responsibilities to amend, modify or revise any forward-looking statement, on the basis of any subsequent developments, information or events, or otherwise, subject to compliance with all applicable laws and regulations and/or the rules of the Securities and Exchange Commission, Thailand (“SEC”) and the Stock Exchange of Thailand (“SET”) and/or any other regulatory or supervisory body or agency The information and opinions in this presentation are subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning FTREIT. None of FPT, FTREIT, the Manager, or any of their respective holding companies, subsidiaries, affiliates, associated undertaking or controlling persons, or any of their respective directors, officers, partners, employees, agents, representatives, advisers or legal advisers makes any representation or warranty, express or implied, as to the accuracy, completeness or correctness of the information contained in this presentation or otherwise made available or as to the reasonableness of any assumption contained herein or therein, and any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation is expressly disclaimed. Further, nothing in this presentation should be construed as constitution legal, business, tax or financial advice. The value of Units and the income derived from them, if any, may fall or rise. Unit are not obligations of deposits of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they have no right to request the Manager to redeem their Units are listed. It is intended that holders of Units may only deal in their Units through trading on SET. Listing of the Units on the SET does not guarantee a liquid market for the Units. Please study relevant information carefully before making any investment decision. Investors are encouraged to make an investment only when such decision correspond with their own objective and only after they have acknowledged all risks and have been informed that the returns may be more or less than initial sum.

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Contents

▪ Performance Overview and Distribution Details ▪ Financial Review ▪ Investment and Portfolio Overview ▪ REIT Strategy and Key Objectives

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Performance Overview and Distribution Details

FPIT Bangna

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1QFY20 Highlights

THB 0.1670

DPU from 1QFY20 performance

  • High occupancy rate at 85.1%, up 2% Q-o-Q
  • Weighted average lease expiry at around 2.18 years
  • Renewal Rate is around 78%(2)

Portfolio Management Earnings and DPU Portfolio value increased to THB 39 Billion

  • Distribution per unit (“DPU”) of THB 0.1670 per unit

THB 0.1670

  • Acquired warehouses 11 buildings (24 units) from Sahathai

Property and Development (Third-party) (1)

THB 2.05 Billion

Asset Acquisition 1QFY20

85.1%

Occupancy Rate as

  • f 31 December 2019

(1) Total investment value THB 2,050 Million (exclude acquisition cost, tax, transfer fee and advisors fee). (2) Renewal rate that incurred in FY2020 (Oct’19 – Dec’19) (3) Only Debentures cost = 3.30% WAM is around 3.97 Years (4) Reference from loan agreement and debentures at the end of Dec 19 (5) Assume IBD/TAV after repayment bridging loan by using balance sheet as of 31 December 2019

Capital Management

  • IBD to total asset ratio end at 28.9%, 21.1% post repayment
  • f bridge loan(5)
  • Maintained

weighted average cost

  • f

debt at around 3.07%(3) and average weighted debt maturity 3.07 years(4) .

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0.1670 0.1670 1QFY19 1QFY20

Distribution 1QFY20

Unit : THB per Unit

1. Distribution is mean dividend and capital Reduction, 1QFY18 and 1QFY19 have not capital reuction. 2. FTREIT fiscal year is starting from 1 October to 30 September.

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Distribution per Units(2)

(1)

(Oct’18 – Dec’18) (Oct’19 – Dec’19)

(1)

Distribution Detail

Latest Distribution Details

Distribution Period 1 October 2019 – 31 December 2019 Distribution Per Unit (DPU) THB 0.1670 Ex-date (XD) 24 February 2020 Record Date 25 February 2020 Distribution Payment Date 11 March 2020

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Financial review

FPT Properties Chonburi

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Financial Performance Quarter ended December 31,2019

Unit: (THB Million) Oct’19 – Dec’19 (1QFY20)(2) Oct’18 – Dec’18 (1QFY19)(2) +/- %

Analysis

Rental and Service Income

754.2 662.9 14

  • Contribution from the third party assets acquisition total value of THB 2,050 Million(1) in

1QFY2020.

  • 1QFY2020 Occupancy rate end at 85.1%, up from 84.2% at end of 1QFY2019 (+0.9% y-o-y).

Cost of rental and Services and administration expenses

94.2 90.6 4

  • Higher cost due to transaction cost from acquired new asset in 4QFY19 and 1QFY20

Trust Management fee(4)

93.6 83.6 12

  • Trust Management fee increase from new assets that invested in 4QFY19 and 1QFY20

Finance Costs

86.4 57.2 51

  • Higher borrowing cost to finance assets acquisition in 1QFY20 and during FY2019.
  • The weighted average interest rate as of Dec’19 was 3.07% per annum and Weighted

average debt maturity is around 3.07 years.

Net Investment Income

482.5 436.0 11

  • Increased since REIT had better performance from existing assets and performance from

assets that acquired in period of 4QFY19 and 1QFY20

Distributable income to Unitholders(3)

486.3 474.0 3

  • Contributions from the 1QFY20 and 4QFY19 acquisition

Which was deducted by:

  • Higher finance costs; and
  • Higher trust management fee

DPU (THB per Unit)

0.1670 0.1670

  • (1 Asset acquisition from Sahathai Property and Development

(2) Fiscal period start from 1 October to 30 September (3) Distributable income to unitholders = Net investment income adjusted by non cash item (4) Trust management fee = Management fee + Trustee fee + Registrar fee + Professional fee

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Balance Sheet

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Unit: (THB Million) As of 31 Dec 19 As of 30 Sep 19 Change % Investment Properties 39,182.8 37,049.4 6 Investment in Securities at fair value and cash 1,318.2 1,141.8 15 Other Assets 289.1 303.7 (5) Total Assets 40,790.1 38,494.9 6 Interest Bearing Debt 11,790.9 9,740.2 21 Other liabilities 1,462.1 1,265.6 16 Total Liabilities 13,253.0 11,005.8 20.4 Net Asset Value per Unit (THB) 10.5814 10.5630 0.2 ▪ The value of investment properties increased 6% from THB 37,049.4 Million as at September 30, 2019 to THB 39,182.8 Million at December 31,2019, due mainly to: Investment ✓ Completed acquisition of warehouses from Sahathai Property and Development on November 14, 2019 ▪ Interest bearing debt increased THB 2,050 Million, to fund asset acquisition.

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800 2,100 1,300 500 1,000 380 500 1,260 600 3,352 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2028 FY2029

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Prudent Capital Management

IBD to asset Ratio 28.9% > 21.1% (Jan’20) Total Gross Borrowings(6) THB 11,790.9 million Weighted Average Cost of Borrowings 3.07% p.a.(4) Average Weighted Debt Maturity 3.07 Years(4) Debentures Proportion 72% Interest Coverage Ratio 6.66 times(1) Debt Headroom THB12,683.1 million(2) Net Asset Value per Unit (THB) 10.5814 Credit Rating A (Stable Outlook)(3)

Maintained a Well-spread Debt maturity Profile(7)

Bridging loan Debentures Unit: THB Million

1. Interest Coverage ratio = EBITDA (excluded gain from divestment)/Interest Expense. 2. Prior to reaching the 60.0% regulatory leverage limit 3. Official announcement rating by TRIS on 22 July 2019. 4. Only Debentures cost = 3.30% WAM is around 3.97 Years 5. Post repayment of bridge loan made on 27 Jan 20 6. Debentures is net with issuance cost 7. Bar graph illustrated debentures value before deducted issuance cost

As of 31 December 2019

  • Bridging loan has been repaid from issuance of new equity.
  • After repayment IBD to asset ratio will be reduced from 28.9% to around 21.1%(5)
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Investment & Portfolio Overview

Frasers logistic Bangna, Chachoengsao, Thailand

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Growth from Acquisition in 1QFY2020

Frasers Property Logistic Center Laem chabang 3 (LCB3)

24 Units 80,216 Sq. m.

Investment Highlight

✓ One of the biggest warehouse in freezone area, located near to LCB port. ✓ Connected to Highway no 7 and Motorway. ✓ Modern warehouse area with floor loading around 3.5 – 5.0 tons and height around 10.5 – 12 meters. Land Area ~125 Rai or ~50,000Sq. w. Net Leasable Area 80,216 Sq. m. (Total under roof area)(4) Asset Type Freehold Occupancy Rate 100%(1)(2) Property Ages 4.62 years(1)(3)

(1) Property ages and occupancy rate is information as of 31 December 2019 (2) Included guarantee performance from Sahathai Property and Development (3) Reference from construction permit (Aor.1) and building construction certificate (Aor.6) (4) Included custom area 204 sq.m

Tenants profile as of 31 December 2019

Suzuyo Distribution Center ALPS Logistics Michelin Siam

LCB3

[Logistics] [Logistics] [Tyre producer] Pacific Sugar [Logistics]

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Freehold 75% Leasehold 25% Factory 45% Warehouse 55%

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FTREIT Portfolio Snapshot as of 31 December 2019

Quality portfolio concentrated within major industrial and logistics markets

578

Properties/1 WALE/4

2.18 Yrs THB 39.2 bn

Portfolio Value/2

Avg Property Ages/5

10 Years 1.76 million sq m

Net Leasable Area/3

Occupancy Rate

85.1%

Frasers Property Thailand Industrial Freehold & Leasehold REIT

FTREIT listed real-estate investment trust with a quality portfolio concentrated within prime industrial and logistics market in Thailand. Remaining LH Years

24.9 Years

No of Tenants

275

Well balance portfolio by asset type, with predominately freehold land title

North 25% East 13% EEC 62%

Type

  • f Assets

Breakdown By Area

1. Factory 315 units and Warehouse 263 units (included Cold Storage 2 units)

  • 2. Value of Factory THB 19,278 million (49%) and value of warehouse THB 19,905 million (51%)
  • 3. Area of Factory 789,660 sq.m (45%) and area of warehouse 968,827 sq.m (55%) – total 1,758,487 sq.m

4. WALE refers to the weighted average lease expiry based on gross rental income (GRI), being the contracted rental income and estimated recoverable outgoings for the month of December 2019. Excludes straight lining rental adjustments.

  • 5. Factory avg ages around 13 years and Warehouse around ages 7 years

The Largest Industrial & Logistics REIT in Thailand

Breakdown By Right on assets

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Summary Performance of 1QFY20

Northern Bangkok Area/2 Eastern Bangkok Area /2 EEC Area /2

68% 69% 77% 75% 69%

71% 75%

0% 20% 40% 60% 80% 100%

Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Dec'19

59 Units

92% 96% 99% 100% 99% 100% 0% 20% 40% 60% 80% 100%

Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Dec'19

80% 80% 84% 82% 83% 85%

86%

0% 20% 40% 60% 80% 100%

Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Dec'19

Overall performance of FTREIT 1QFY20 improved from last fiscal year that came from tenants of existing assets and new assets

100%

1.Rental and service income excluded property tax income 2.Northern Bangkok area = Ayutthaya and Pathumthani, Eastern Bangkok = Samutprakarn and Prachinburi, EEC area = Chonburi, Rayong and Chachoengsao

Occupancy (%)

as of 31/12/19

Net Add (Sq.m)

1QFY2020

WALE (Years)

as of 31/12/19

Rental Revenue

1QFY20(3)

Renewal Rate

1QFY2020

Rate Reversion for agreement that expired in period 1QFY20

85.1%

(+2.0% Q-o-Q)

+102,242 2.18 Years 754 MB

(+14% Y-o-Y)

78% +0.9%

152 Units 367 Units

OCR % OCR % OCR %

  • Overall performance improve from 71% to

75% in the of 1QFY20.

  • New tenants came from Chinese automotive

and electronics producers that allocated their production capacity to Thailand.

  • Eastern Bangkok area has fully occupied.
  • Significant improve from new tenants that

leased property in EEC area and asset acquisition in 1QFY20.

  • Demand

came from Electronics and Logistics

Summary highlight Q-o-Q Summary highlight Q-o-Q Summary highlight Q-o-Q

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Tenants Industry % of GRI(1) Nationality Siam Makro Retail 4.38%

Pacific Sugar

Logistics 2.56% Leschaco Logistics 2.41% Samsung Electronics 2.15% CTD Logistics 1.86% Lazada Electronics 1.81% BJC Logistic Logistics 1.76% Suzuyo DC Logistics 1.54% DTS Automotive 1.43% Kintetsu Logistics 1.41%

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Well-diversified Tenant Base

High quality, diversified tenant base underpinned by primary industries including Automotive, logistics services, electronics, retails and e-commerce. Top 10 Tenants (GRI ~21%(2) / WALE 3.14Years(1))

Breakdown of Tenants1 2 By Industry

Automotive 25%

Logistics 24% Electronics 22% Others 18% Retails 8% E-Commerce 3% By Nationality

Japan 45% EU 19% Thais 17% Other Asian 15% US 4%

1. WALE refers to the weighted average lease expiry based on gross rental income (GRI), being the contracted rental income and estimated recoverable outgoings for the month of December 2019. Excludes straight lining rental adjustments. 2. Concentration risk has stable at around 21%.

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1QFY2020 Key Take Away

THB 486 million/1

Distributable Income

1. Distributable income = adjusted net investment income. 2. As of 31 December 2019 3. LCB3 property value is THB 2,050 Million (Exclude acquisition expenses) 4. Post repayment of bridge loan made on 27 Jan 20

85%/2.18 Yrs/2

Occupancy and WALE

Higher occupancy rate

THB 2,050 million/3

Investment in period

Portfolio value increased to approximately THB 39 bn

3.07 Years(2)

Weighted Avg Debt Maturity

72%(2)

Proportion of Debentures

28.9%(3)/21.1%(4)

IBD to Total Asset Value Retention/Reversion

78%/+0.9%

[1QFY20]

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FTREIT Strategy

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Investment Strategy and Objective

Deliver consistently growing and sustainable DPU and NAV per unit to unitholders though FTREIT business framework

Expected outcome

Operation Excellence

Operation Excellence Acquisition Assets and AEI Efficient Capital Management

Strategies to support the business framework

1

▪ Proactive leasing: Maintain high retention rate,

  • ccupancy rate, and well- diversified tenant base.

▪ Enhance tenant quality and base by leveraging on sponsor’s capabilities and networks.

Strategy Framework

Acquisition Assets + AEI

2

▪ Right of first refusal (“ROFR”) for industrial properties from Sponsor. ▪ Third-party asset acquisition. ▪ Search and propose AEI opportunity to target tenants which required additional space in same property. ▪ Divest non-core assets and redeploy capital to acquire/develop higher value-adding properties.

+Sustain ability

Sustainability

3

▪ Sustainability initiative project such as Solar Rooftop, Initiative with tenants ecological activities. Efficient Capital Management

4

▪ Optimize capital mix and prudent capital management ▪ Manage schedule of debt repayment matching with asset portfolio performance

FIRM will implement business framework to enhance performance and achieve target DPU for unitholders of FTREIT

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Frasers Property Industrial REIT Management (Thailand) Co., Ltd 22nd – 23rd Floor, Mitrtown Office Tower l 944 Rama 4 Road l Wangmai Subdistrict l Pathumwan District l Bangkok l 10330 Tel: +66 2078 1999 l Fax +66 2078 1971 l Email: FTREIT.IR@frasersproperty.com www.ftreit.co.th