Frasers Property Thailand Industrial Freehold & Leasehold REIT
1QFY19 Results Presentation
14 February 2019
Frasers Property Thailand Industrial Freehold & Leasehold REIT - - PowerPoint PPT Presentation
Frasers Property Thailand Industrial Freehold & Leasehold REIT 1QFY19 Results Presentation 14 February 2019 Important notice This presentation is for information purposes only and does not constitute or form part of an offer, solicitation,
14 February 2019
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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
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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▪ Highlight and financial review ▪ Investment and divestment ▪ Asset Performance and Capital Management ▪ REIT Strategy
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Occupancy Rate
Aggregate Leverage
Asset Acquisition
❖ Asset Performance
the Sponsor.
warehouse in Rojana Industrial Park Prachinburi at premium to investment cost.
❖ Portfolio value increased to THB 35.7 billion
bridge loan for assets acquisition.
84%/5 of borrowings at fixed rate
❖ Capital Management
1. By GRI 2. In period 1QFY19 3. New lease – terminate 4. Gearing ratio = IBD/TAV as of 31 Dec 2018
Completed
1Q19
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Overall performance 1QFY19 (Oct – Dec’18) is better than 4QFY17 (Oct – Dec’17)
TOTAL Revenue
+486/254%
Compare with
Change YoY :
+74/411%
Compare with
YoY : OPEX
Total Fee
+304/258% YoY : Net Investment Income Finance Cost
THB million/%
Change
THB million/%
+60/188% YoY :
+37/185% YoY :
Compare with THB million
Change
THB million/%
Rationale Rationale Rationale
▪ Occupancy improve from 78%>84.%
Dec’17 Dec’18
▪ Additional leased area came from assets acquisition from sponsor in period. ▪ Change policy to collect property tax(start FY18) ▪ Mainly from additional assets from PFPO and investment in FY18 – 1QFY19 ▪ Increased in IBD THB5.5bn>THB 8.8bn.
Dec’17 Dec’18
▪ Increased in COD 2.87 > 3.19%/1
1. WAM 1.71Yrs(Dec’17)>4.15yrs(Dec’18)
▪ Net investment income increased from additional assets.
[Oct – Dec’17]
THB million
[Oct – Dec’17]
4QFY17 THB million
[Oct – Dec’17]
1QFY19 THB million
[Oct – Dec’18]
THB million
[Oct – Dec’18]
THB million
[Oct – Dec’18]
4QFY17 1QFY19 4QFY17 1QFY19 ▪ Mainly from additional assets from PFPO and investment in FY18 – 1QFY19
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With total asset around THB 37 billion, FTREIT still the largest industrial and logistics REIT in Thailand.
TOTAL
ASSETS
30 Sep 18
THB million Compare with
31 Dec 18
THB million
Change
THB million/%
+2,004/6%
Interest Bearing Debt
30 Sep 18
THB million Compare with
31 Dec 18
THB million
Change
THB million/%
+1,907/28%
NAV Per Unit
30 Sep 18
THB Per Unit Compare with
31 Dec 18
THB Per Unit
Change
THB Per Unit/%
+0.0262/0.2%
▪ MK Price ▪ Premium 11.50 11.80 12.23% 9.11%
Rationale Rationale Rationale
▪ Acquired THB 1.9 billion assets from sponsor/1. ▪ Unrealized gain from new assets/2. ▪ Divested 1 FAC and 1WH
1. Investment value THB 1,907 million
▪ COD = 3.19%, WAM = 4.15 Yrs ▪ Fixed/Float : 84%:16% ▪ Increased from operation in period. ▪ Increased from asset acquisition and cash in period.
0.1600 0.1600 0.1600 1QFY2018 2QFY2018 3QFY2018 1QFY2019
Unit : THB per Unit
/1
Note : 1. Distribution = Dividend + Capital Reduction
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0.1670
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which are strategic locations for logistic hubs in Thailand. Investment Highlight and asset performance as of 30 September 2018
1. Not including conversion LH to FH at AMC (Chonburi) 28,100 Sq.m (10 Units). 2. Without guarantee OCR = 92%, 4.As of Dec’18 (with guarantee)= OCR 100%
NLA/1 OCR%/2
Quality tenants
72,775 SQ.M.
Total Inv Value
THB 1,907 Million
Located in
5 Provinces 8 Locations
S1.5 MPM Technology Kuehne+Nage W1 S1.5 Seat Metal Parts M2.5/1
3.Total asset value THB 1,907 million (including conversion assets) 5.Frasers Property (Thailand) PCL.
Tenants
Logistics Electronics Automotive Others
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1.Assets were original FTREIT properties, investment cost is THB 223 million 2.Excluding acquisition expense. 3.MIC Industry is electronics parts producer (air conditioner, electronics panel) 4.Siam Nistrans is Ground/Air/Maritime logistics provider
A1.75 W1 RP1 AMN
Sales Considerations Investment cost
Gain/5
cost = 23%]
5.Gain from divestment in PL= Sales considerations – investment cost
Gain from divestment Reduce Expenses from holding
assets
=
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Progress as of 16 January 2019
factory unit AAA14.2 at Amata City Rayong/2.
Project Completed on 16 January 2019
1. Board approved on 14 May 2018
External Internal Internal
+DPU to Unitholders
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Total Investment Property Value over THB 35,000 million with net growth by THB 1.71 bn in 1QFY19
Investment in properties at fair value 30 Sep 2018
THB million
Investment 19 Dec 2018
THB million
Divestment 1 Nov 2018
THB million
26 Nov 2018 Investment in properties at fair value 30 Dec 2018
THB million
Units [Beginning Balance] [Ending Balance]
Sales
Revalue Assets
THB million
[For conversion assets]
19 Dec 2018
Factory 48% Warehouse 52%
Freehold 73% Leasehold 27%
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Quality portfolio concentrated within major industrial and logistics markets
Properties/1 WALE/4
2.09 Yrs ~THB 35.7 bn
Portfolio Value/2
Avg Property Ages/5
10 Years ~1.6 million sq m
Net Leasable Area/3
Occupancy Rate
84%
Frasers Property Thailand Industrial Freehold & Leasehold REIT
FTREIT listed real-estate investment trust with a quality portfolio concentrated within prime industrial and logistics markets in Thailand. Remaining LH Years
~ 26 Years
No of Tenants
275
Geographically diversified, Type
predominantly freehold or long leasehold
North 26% East 14% EEC 60%
Type
Breakdown By Location
1. Factory 315 units and Warehouse 232 units
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.
The Largest Industrial & Logistics REIT in Thailand
Breakdown By land Tenure
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OCR%
Sep’18
Dec’18 WALE Sep’18
Dec’18
Weighted average by GRI
Renewal Rate
Northern Bangkok Area/1 Eastern Bangkok Area /1 EEC Area /1
OCR% Trend OCR% Trend OCR% Trend
▪ Demand came from Automotive and Electronics ▪ HDD producer expand their production capacity in Northern Bangkok area. ▪ Eastern Bangkok is the location hub for Logistics. This area is the best performance of TREIT. ▪ Most of logistics and E-Commerce choose to settle their business in this location. ▪ Overall tenants looking for factories and warehouses in EEC area due to tax benefit from government. 66% 67% 67% 68% 69%
77%
0% 20% 40% 60% 80% 100% 2016 2017 Mar'18 Jun'18 Sep'18 Dec'18
Total Unit = 151 Units Total Unit = 59 Units
92% 88% 92% 92% 96% 0% 20% 40% 60% 80% 100% 2016 2017 Mar'18 Jun'18 Sep'18 Dec'18
Total Unit = 337 Units
80% 81% 82% 80% 80%
84%
0% 20% 40% 60% 80% 100% 2016 2017 Mar'18 Jun'18 Sep'18 Dec'18
(+5.0%) [Oct – Dec’18]
TREIT can maintain high OCR at average 84% with WALE around 2 Years
99%
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Top 10 tenants of FTREIT have low concentration risk and longer WALE
Tenants Industry % of GRI(1) Siam Makro Retail 4.77% Leschaco Logistics 2.63% Lazada E-Commerce 1.98% Kintetsu Logistics 1.94% BJC Logistics 1.92% DHL Logistics 1.40% DTS Draexlmaier Automotive 1.39% Denso Automotive 1.39% Samsung Electronics 1.26% Trancy Logistics 1.23%
Top 10 Tenants1 2 (GRI 19.92%/3/WALE 3.44 Yrs)
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. Includes the New Property. 3. Concentration risk has reduced from 20.42% to 19.92%.
Breakdown of Tenants1 2
By Industry GRI%
Automotive 27% Logistics 24% Electronics 22% Others 17% Retails 8% E-Commerce 3%
By Nationality GRI%
Japan 48% EU 20% Thai 15% Other Asian 12% US 4% Other 1%
Automotive sector tenants Logistics sector tenants Electronics sector tenants Retails sector tenants
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As at 31 December 2018 Aggregate level 23.61% Total Gross Borrowings THB 8,840 million Weighted Average Cost of Borrowings 3.19% Average Weighted Debt Maturity 4.15 Years Interest Rate Exposure Fixed 84%/3 Credit Rating A (Stable Outlook)/1 Debt Maturity Profile/2
Bridging Loan Debentures
Interest Fixed/Float
84% 16%
Unit: THB Million Fixed Float
. 1. TRIS rated at 23 April 2018 2. Fiscal year ending 30 September. 3. IBD (Short term Loan)
1,400 800 2,100 1,300 1,000 380 1,260 600
DPU 1QFY2019 Payment Timeline
DPU Announcement 14 February 2019 XD 27 February 2019 Record Date 28 February 2019 Book Closing Not required Distribution Date 14 March 2019 0.1702 0.1600 0.1600 0.1600 0.1600 0.2028 0.1100 0.1600 0.1600 0.1600
0.1670
2QFY2016 3QFY2016 4QFY2016 1QFY2017 2QFY2017 3Q and Oct'17 Nov'17 - Dec'17 1QFY2018 2QFY2018 3QFY2018 1QFY2019
Sustainable Distribution Per Unit
Unit : THB per Unit /1
Distribution Policy
90% is to be determined by Board of Directors of REIT manager.
Note : 1. Distribution = Dividend + Capital Reduction
/1
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20
THB 474 million/1
Distributable Income
1. Distributable income = Adjusted net investment income 2. Divested 1 factory at Amata City Chonburi and 1 Warehouse at Rojana Industrial Park Prachinburi
84%/2.09 Yrs
Occupancy and WALE
Higher occupancy rate
THB 1,907 million
Investment in period
Portfolio value increased to approximately THB 36 bn
2 Units
Divestment
Divest vacant units /2
4.15 Years
Weighted Avg Debt Maturity
84%
Proportion of Fixed Debt
[As of 31 December 2018] [As of 31 December 2018]
23.61%
Aggregate leverage
[As of 31 December 2018]
Retention/Reversion
76%
[Oct’18 – Dec’18]
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Active Asset Management Deliver consistently growing and sustainable distributions to unitholders
Active Asset Management
Strategies to support the Principal Objective
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Investment Growth
2 ▪ Proactive leasing: Maintain high retention rate,
▪ Asset Enhancement Initiative (AEI): Assess and undertake AEI on the FTREIT portfolio to unlock further value. ▪ ROFR/1 for industrial properties from FPT’s Sponsor. ▪ Third-party asset acquisition.
1. Right of first refusal
Capital Management
3 ▪ Optimize capital mix and prudent capital management. ▪ Manage schedule of debt repayment matching with asset portfolio performance