Results Presentation for Year Ended 31 March 2004 15 April 2004 - - PowerPoint PPT Presentation

Results Presentation for Year Ended 31 March 2004

15 April 2004

This Presentation is focused on comparing actual results versus forecasts outlined in the A-REIT Prospectus of 5 November 2002. This shall be read in conjunction with A-REIT’s Full Year Financial Statement for period from 1 April 2003 to 31 March 2004 in the Masnet announcement.

This presentation may contain forward-looking statements that involve 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

• f capital and capital availability, competition from similar developments, shifts in

expected levels of property rental income, 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 future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events.

2

Agenda

• Financial Highlights
• FY 2003/2004 In Review
• Portfolio Update
• Capital Management
• Strategy Going Forward

25.8% 19.6% Gearing S$898.2 m S$1.27 S$1.0 b As at 31 Mar 04 S$444.2 m Market Capitalisation S$0.815 S$636.4 m As at 31 Mar 03 Closing Price Total Assets

Key Highlights

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Distributable Income Per Unit – 13% above forecast

+ 9 37,310 40,591 Net profit

+ 15 39,520 45,536 Available for distribution + 13 7.24 8.16 Distribution per unit

(17) (18,896) (15,604) Property operating expenses

+ 12 44,756 50,310 Net property income

+ 31 (7,446) (9,719) Non-property expenses

% Change Forecast (1) Actual

+ 4 63,652 65,914 Gross revenue

For year ended 31 March 2004 S$’000

Note: (1) The forecast for the period from 1 April 2003 to 31 March 2004 as stated in the prospectus dated 5 November 2002. Source: A-REIT unaudited Financial Statements for the year ended 31 March 2004 5

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

A-REIT’s distributable income per unit above forecast by 13% FY ended 31 Mar 04

6

1.97 2.08 2.12 1.99 8.16 1.73 1.82 1.81 1.88 7.24 1 2 3 4 5 6 7 8 9 1 Apr to 30 Jun 03 1 Jul to 30 Sep 03 1 Oct to 31 Dec 03 1 Jan to 31 Mar 04 For year ended 31 Mar 04

Actual Forecast Distributable Income (cents)

13.0 % 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full year

Source: Ascendas-MGM Funds Management Limited for year ended 31 March 2004

6.0% 17.0% 14.0% 14.0%

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

• Distributable income

S$45,536k

Represents distribution per Unit (DPU) 8.16 cents (for year ending 31 March 2004)

• Annualised trading yield

9.3%

(based on IPO price of S$0.88 per unit)

• Annualised trading yield

6.4%

(based on closing price of S$1.27 per unit

• n 31 March 2004)

Financial Highlights

7

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Balance Sheet

691,650

65,262 263,800

1,020,712

996,431* 24,281

Actual as at 31 March 2004 S$’000 + 38.8 + 60.4 % Change 498,160 Unitholders’ Equity

125,000 External Borrowings

636,369 Total Assets

13,209 607,540 28,829

Actual as at 31 March 2003 S$’000

Other Liabilities Property Portfolio Current Assets

* Includes the valuations of the 11 properties as at 31 Dec 2003 valued by Jones Lang LaSalle at S$698.4m plus total acquisition costs of the 5 properties purchased in Feb/Mar 2004. Source: A-REIT unaudited Financial Statements for the year ended 31 March 2004 8

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Balance Sheet Strength

25.8 67.8 97.6 0.95 Actual As at 31 March 2004 S$’000 19.6 Gearing (%) 78.3 Total Equity (%) 95.5 0.89 Actual As at 31 March 2003 S$’000 Total Property (%) to Total Assets Adjusted net asset value per unit (NAV) (cents)

Source: A-REIT unaudited Financial Statements for the year ended 31 March 2004 9

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Agenda

• Financial Highlights
• FY2003/2004 In Review
• Portfolio Update
• Capital Management
• Strategy Going Forward

10

Equity Raising Outcome

• 82,006,076 New Units
• Available to Singapore

Registered Unitholders

• Entitlement of 3 New Units for

every 20 existing Units held

• Non-renounceable
• 16,050,000 New Units
• Available to Singapore Retail

Unitholders

• Balloting basis
• 62,443,924 New Units
• Available to Retail and

Institutional Unitholders Preferential Offering ATM Offering Private Placement

160.5 million New Units in A-REIT

• Underwritten by

Citigroup, DBS and JPMorgan

• units listed on SGX on 4

March 2004

Equity Fund Raising

70.9 million New Units accepted 10 times subscribed 8.5 times subscribed

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

898.2 444.2 518.6 573.2 628.7 200 300 400 500 600 700 800 900 1,000

1-Mar-03 1-Jun-03 1-Sep-03 1-Dec-03 1-Mar-04

S$m + 16.7% + 10.5% + 9.68%

Market Capitalisation

+ 42.8%

Source: Ascendas-MGM Funds Management Limited as at 31 March 2004

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

31 Mar 2003 545.0 million units at S$0.82 30 Jun 2003 545.9 million units at S$0.95 30 Sep 2003 545.9 million units at S$1.05 31 Dec 2003 546.7 million units at S$1.15 31 Mar 2004 707.2 million units at S$1.27

DPU Growth

7.63 8.16 8.86 2 4 6 8 10 2002/03 2003/04 2004/05

Cents + 6.9%

• Increased earnings and distributions

FY2005 Forecast DPU

+ 8.6%

Note: (1) 2003 Actual DPU is annualised. The actual DPU was 2.78 cents for the 133 days ended 31 March 2003 Souce: Ascendas-MGM Funds Management Limited

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

2003 Actual DPU (1) FY2004 Actual DPU

Capital Growth

• A-REIT has demonstrated an ability to deliver DPU growth, which

has driven capital growth

Source: Ascendas-MGM Funds Management Limited as at 31 March 2004

S$1.15 S$1.05 S$0.82 S$0.95 S$1.27 0.50 0.70 0.90 1.10 1.30

1-Mar-03 1-Jun-03 1-Sep-03 1-Dec-03 1-Mar-04

Unit price performance FY2003/4 S$ + 54.9%

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

31 Mar 2003 30 Jun 2003 30 Sep 2003 31 Dec 2003 31 Mar 2004

For the year ended 31 Mar 2004

64.8% Total Return 54.9% Capital Appreciation 9.9%(1) Yield

Delivering Total Return of 64.8%

(1) Based on DPU of 8.16 cents and unit price of $0.82 on 1 Apr 2003

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

A-REIT Unit Price and Volume

0.95 1.01 0.97 1.15 1.21 0.82 0.83 1.05 1.03 1.05 1.22 1.27 0.70 0.80 0.90 1.00 1.10 1.20 1.30 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Unit Price $ 10 20 30 40 50 60 Volume (million)

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

External Factors

Recent budget announcement 2004:

• Corporate tax reduction to 20%
• Tax exemption for individual unitholders
• Further enhances A-REIT as an attractive investment vehicle

Inclusion in indices:

• A-REIT was included in FTSE Global Small Cap Asia Pacific Ex Japan

Index Series for meeting the FTSE hallmarks

• A-REIT was included in EPRA/NAREIT Global Real Estate Index

which is adopted by worldwide investment community

Others:

• Standard & Poor’s picked A-REIT as one of the four Singapore stocks

for its “PowerPicks” 2004 Portfolio

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FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Agenda

• Financial Highlights
• FY2003/2004 In Review
• Portfolio Update
• Capital Management
• Strategy Going Forward

FY 2003/4 Acquisitions

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Year 3-8 : 3% every 2 years Year 9-15 : 1.5% pa 8.26%* 65.8 Siemens Center 2.5% pa 7.87%* 92.0 TT International Multi-tenanted 8.35% 32.0 Trivec Building Multi-tenanted 8.54% 45.6 CILC 3 yearly market reviews with ratchet clause 8.27% 50.0 IDS Logistics

8.35%

8.85% 8.91% 9.28%*

Acquisition Yield %

351.9 TOTAL

9% every 3 years 13.5 Ghim Li Building 2.5% pa 18.0 Ultro Building 20.6% @ year 2 3.60% @ year 3 2.25% pa thereafter 35.0 OSIM Building

Rental Escalation Purchase Price $m

* Adjusted for deferred settlements

Portfolio Update

The Alpha Honeywell Building The Aries Techplace I The Gemini The Capricorn Techlink Techplace II OSIM HQ Building Ghim Li Building Ultro Building Trivec Building TT Int’l Tradepark Siemens Center Changi Int’l Logistics Centre IDS Logistics Corporate HQ

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Occupancy Highlights

12 March 2004 9 March 2004

Acquisition Date

95.0 82.0 Siemens Center 97.0 81.0 Changi Int’l Logistics Centre

As at 31 Mar 04 (%)

85.5 99.9

As at 31 Mar 04 (%) Occupancy as at Acquisition Date

68.9 89.6

As at 31 Mar 03 (%)

The Capricorn Honeywell Building

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Portfolio Highlights

88.8% 82.5% Portfolio Occupancy (%) 120,373 (12%) 36,854(1) (15%) Portfolio renewals/leasing (sqm)

(% of A-REIT total Net Lettable Area)

4.61 2.38 Weighted Average Lease to Expiry (year)

As at 31 Mar 04 As at 31 Mar 03

85.4 84.0 % of committed revenue for next FY

Note: (1) For 5 months ended 31 March 2003 Source: Ascendas-MGM Funds Management Limited

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Notes: (1) URA classified Light Industrial & Hi-tech Industrial as multiple-user space

• Business Park: Honeywell Building, Ultro Building & Science Park Properties: The Alpha, The Gemini, The Capricorn & The Aries
• Light Industrial: Techplace I & II, OSIM Building and Ghim Li Building.
• Hi-tech Industrial: Techlink and Siemens Center.
• Logistics: Properties include Trivec Building and Changi International Logistics Centre, IDS Logistics HQ & TT International

Tradepark. Source: URA: Urban Redevelopment Authority Official Statistics as at Dec 2003 www.ura.gov.sg & Ascendas-MGM Funds Management Limited

A-REIT Portfolio Occupancy

A-REIT Portfolio Occupancy as at 31 Mar 2004

A-REIT 87.1% A-REIT 82.7% A-REIT 99.2% A-REIT 82.5% URA 84.8% URA(1) 81.2% URA(1) 81.2% URA 71.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Business Park Light Industrial Hi-tech Industrial Logistics

Occupancy Level

A-REIT URA

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FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

% of NLA 29% 46% 13% 12%

82.7%

* A-REIT has an option to acquire the Infineon Building (expected to be completed by Aug/Sep 2004) Honeywell Building & Ultro Building at Changi Business Park Techlink at Kaki Bukit Ave 3 The Alpha, Aries, Capricorn and Gemini at Singapore Science Park II Techplace I at Ang Mo Kio Ave 10 and Techplace II at Ang Mo Kio Ave 5 OSIM Building at Ubi Ave 1 Ghim Li Building at Changi South Ave 2 Proposed acquisition of Infineon Building at Kallang* IDS Logistics Corporate HQ at Jalan Ahmad Ibrahim TT International Tradepark at Toh Guan Rd Siemens Center at MacPherson Changi Intl Logistics Centre at 19 Loyang Way Trivec Building at Changi North St 2

A Diverse Portfolio of 16 Properties

6 Business / Science Park properties

• The Alpha
• The Aries
• The Capricorn
• The Gemini
• Honeywell Building
• Ultro Building

4 Light Industrial properties

• Techplace I
• Techplace II
• OSIM Building
• Ghim Li Building

2 Hi-Tech Industrial properties

• Techlink
• Siemens Center

4 Distribution & Logistics Centres

• IDS Logistics Corporate HQ
• Trivec Building
• TT International Tradepark
• Changi Int’l Logistics Centre

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Hi-Tech Industrial (2) 12.0% Light Industrial (3) 41.0% Business Park (1) 47.0%

(1) Honeywell Building, The Alpha, The Aries, The Capicorn and

The Gemini

(2) Techlink Building (3) Techplace I and Techplace II (1) Honeywell Building, Ultro Building, The Alpha, The Aries, The

Capricorn and The Gemini

(2) Techlink Building and Siemens Center (3) Techplace I, Techplace II, OSIM Building and Ghim Li Building 4) CILC, IDS Logistics Corporate Headquarters, Trivec Building and TT

International Tradepark

Portfolio as at 31 Mar 2003 Portfolio as at 31 Mar 2004

• Asset class diversification by property value

Asset Class Diversification

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Hi-Tech Industrial (2) 14.1% Logistics (4) 23.2% Light Industrial (3) 31.3% Business Park (1) 31.3%

Source : Ascendas-MGM Funds Management Limited as at 31 March 2004

Weighted Average Lease to Expiry

26

• As a result of the acquisitions during the year, this improved lease

expiry profile underpins the stability of A-REIT earnings & distributions

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Weighted Average Lease To Expiry (By Income)

25.6 19.5 30.9 11.5 0.5 2.5 9.6 14.4 27.5 16.2 2.3 2.4 4.6 5.5 15.5 2.9 1.0 6.9

• 5

10 15 20 25 30 35 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Year Ending 31 Mar % of A-REIT Gross Rental Income

As at 31 Mar 2003 - 8 properties As at 31 Mar 2004 - 16 properties

Agenda

• Financial Highlights
• Recent Equity Raising
• Portfolio Update
• Capital Management
• Strategy Going Forward

27

Capital Management

• Fixed rate borrowings of S$190m (via interest

swaps) represents 72% of borrowings as at 31 March 2004

• External borrowings of $263.8m as at 31 March 2004
• Weighted average term of fixed debt is 2.87 years
• Current weighted average all-up funding cost is

2.37% as at 31 March 2004 (including margins and weighted swap

rates for hedged debt and current floating rates on unhedged debt)

28

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Capital Management

HEDGING PROFILE

50 100 150 200 250 300 M a r

• 4

J u n

• 4

S e p

• 4

D e c

• 4

M a r

• 5

J u n

• 5

S e p

• 5

D e c

• 5

M a r

• 6

J u n

• 6

S e p

• 6

D e c

• 6

M a r

• 7

J u n

• 7

S e p

• 7

D e c

• 7

M a r

• 8

J u n

• 8

S e p

• 8

D e c

• 8

M a r

• 9

$M Actual Hedges 50% Hedge Ratio 75% Hedge Ratio Facility Drawn Down TOTAL DEBT 75% HEDGE RATIO 50% HEDGE RATIO

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Capital Management

• Tax exempt for retail investors
• Low percentage of retail investors in A-REIT

Unitholder’s register – approximately 13.65%

• Increased investor interest in Singapore REITs both

locally and globally

• Increased Market Capitalisation improves Liquidity

and Visibility

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Agenda

• Financial Highlights
• Recent Equity Raising
• Portfolio Update
• Capital Management
• Strategy Going Forward

31

Strategy Going Forward

Yield Stability Growth S t a b i l i t y

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Strategy - Three Way Approach

Existing portfolio

• Increase occupancy
• Increase rental rates
• Maintain weighted average lease terms
• Diversification of property, tenants and industry

sectors Asset enhancements

• Additional GFA at properties

(eg. Techplace II project & Trivec development)

• Cost saving measures and other enhancements

when acquiring new properties Acquisition

• Infineon Building expected to be ready Aug/Sep 04
• Strategically located properties
• Occupied by tenants with well known profiles

providing stability of income

• Long term leases with stepped increase reviews

TOTAL RETURNS TO UNITHOLDERS

(Income and Growth)

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Other Build-to-Suits in the pipeline Under review S$50.9 m S$5.0 m Price Yield 8.18% 8.26%

Growth – Internal & External

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Acquisition Analysis

• Typical property yield available at 7-8%
• Debt Cost (4 year swap + margin) at 3%
• Typical Spread available at 4-5%
• A-REIT Cost of Capital at approx 6.8%
• Yield accretion achieved

FY03/04 In Review Portfolio Update Capital Management Financial Highlights Strategy Going Forward

Disclaimer

This presentation has been prepared by Ascendas-MGM Funds Management Limited as Manager for Ascendas Real Estate Investment

• Trust. The details in this presentation provide general information only. It is not intended as investment or financial advice and must not

be relied upon as such. You should obtain independent professional advice prior to making any decision. This Report is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in Singaporean currency unless otherwise stated. April 2004

Thank You