OUE Commercial REIT Investor Presentation March 2020 Important Notice
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OUE Commercial REIT Investor Presentation March 2020 Important Notice This presentation should be read in conjunction with the announcements released by OUE Commercial REIT (“OUE C-REIT”) on 30 January 2020 (in relation to its Financial Results for 4th Quarter 2019). This presentation is for information purposes only and does not constitute an invitation, offer or solicitation of any offer to acquire, purchase or subscribe for units in OUE C-REIT (“Units”). The value of Units and the income derived from them, if any, may fall or rise. The Units are not obligations of, deposits in, or guaranteed by, OUE Commercial REIT Management Pte. Ltd. (the “Manager”), DBS Trustee Limited (as trustee of OUE C-REIT) or any of its affiliates. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. The past performance of OUE C-REIT is not necessarily indicative of the future performance of OUE C-REIT. 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. These forward-looking statements speak only as at the date of this presentation. Past performance is not necessarily indicative of future performance. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions are correct. 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, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s current view of future events. Investors should note that they will have no right to request the Manager to redeem their Units while the Units are listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). It is intended that Unitholders 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 information and opinions contained in this presentation are subject to change without notice. 2 Agenda . Overview . Realised Benefits of Merger . Financial Performance and Capital Management . Commercial Portfolio . Hospitality Portfolio . Appendices 3 Overview Overview of OUE C-REIT Total assets High quality prime assets S$3.0billion(1) 7 High quality 7prime assets Market Capitalisation S$6.8billion 6 properties in Singapore and3 1 Assetproperty classes in Shanghai OUE Bayfront One Raffles Place OUE Downtown Office Lippo Plaza Mandarin Orchard Singapore Crowne Plaza Changi Airport Mandarin Gallery Income Stability Strong Sponsor OUE Limited Expanded Investment Mandate S$ million p.a. Commercial S$10.7billion 67.5 Hospitality / Hospitality-related minimum rent under hotel master Total Assets (as at 31 December 2019) lease arrangements (1) Based on unit closing price of S$0.565 as at 31 December 2019 5 Milestones Since Listing . Strategic growth track with two acquisitions and asset enhancement initiatives (“AEI”) at two properties FY2019 . Transformative merger with OUE Hospitality Trust creates one of the largest diversified S-REITs S$6.8b FY2018 AUM FY2017 FY2015 FY2016 S$4.5b AUM S$3.4b S$3.4b S$3.5b Completed FY2014 AUM AUM AUM acquisition Merger Maiden Completed Debut of OUE by way of a trust scheme issuance of S$1.6b acquisition AEI to Downtown of arrangement (effective upgrade S$150 million Office from 4 Sep 2019) AUM of One Raffles common 3.03% fixed Place areas and rate notes (67.95% restrooms due 2020 effective at Lippo Commenced AEI at interest) Plaza One Raffles Place office tower Shopping Mall with Established S$1.5 co-working operator Listed on SGX-ST Commenced AEI at billion Multi-Currency Spaces anchoring with two assets – One Raffles Place Debt Issuance the AEI OUE Bayfront and Tower 1 to Programme Lippo Plaza upgrade mechanical and engineering equipment 6 Premium Portfolio of Assets OUE Downtown Mandarin Orchard Crowne Plaza OUE Bayfront One Raffles Place Lippo Plaza Mandarin Gallery Total Office Singapore Changi Airport Description Premium Grade A office Comprises two Grade A Grade A office Grade A commercial Prime retail landmark A world class Located at Singapore NLA: building located at office towers and a retail space, a mixed-used building located in on Orchard Road – hospitality icon in Changi Airport and Office: 1,869,003 Collyer Quay between mall located in development with Huangpu, one of preferred location for Singapore since close to Changi Retail: 307,561 the Marina Bay Singapore’s CBD at offices, retail and Shanghai’s flagship stores of 1971, MOS is the Business Park with Overall: 2,176,564 downtown and Raffles Raffles Place serviced residences established core international brands largest hotel along seamless Place at Shenton Way CBD locations Orchard Road connectivity to Jewel Changi Airport 1,640 hotel rooms Attributable Office: 378,692 Office: 598,814 Office: 530,487 Office: 361,010 Retail : 126,283 1,077 hotel rooms 563 hotel rooms NLA (sq ft) Retail: 21,132 Retail: 99,370 Retail: 60,776 Occupancy(1) Office: 99.3% Office: 95.1% Office: 93.8% Office: 89.9% Retail: 98.3% - - Office: 94.6% Retail: 100.0% Retail: 98.1% Retail: 99.3% Retail: 98.5% Overall: 99.4% Overall: 95.6% Overall: 91.3% Overall: 95.2% Leasehold OUE Bayfront & OUE Office Tower 1: 99 yrs from 19 July 50 yrs from 2 July 99 yrs from 1 July 99 yrs from 1 July 74 yrs from 1 July - Tenure Tower: 841 yrs from 1 Nov 1985 1967 1994 1957 1957 2009 99 yrs from 12 Nov 2007 Office Tower 2: OUE Link: 99 yrs from 26 May 1983 15 yrs from 26 Mar 2010 75% of Retail mall: Underpass: 99 yrs from 1 Nov 1985 99 yrs from 7 Jan 2002 Valuation(2) S$1,181.0m S$1,862.0m(3) S$912.0m RMB2,950.0m / S$493.0m S$1,228.0m S$497.0m S$6,743.5m (S$2,954 psf) (S$2,667 psf) (S$1,719 psf) RMB50,409 psm (S$3,904 psf) (S$1.1m / key) (S$0.9m / key) S$570.5m(4) (S$1,353 psf) (1) Committed occupancy as at 31 December 2019 (3) Based on OUB Centre Limited’s 81.54% interest in One Raffles Place. C-REIT has an indirect 83.33% interest in OUB Centre Limited held via its wholly-owned subsidiaries 7 (2) As at 31 December 2019 (4) Based on SGD:CNY exchange rate of 1:5.171 as at 31 December 2019 Realised Benefits of Merger with OUE H-Trust 1 Increase In Market Capitalisation Increase in Market Capitalisation Market Capitalisation (as at 31 December) (S$ billion) (S$ billion) 10.7 9.1 Ranked #12 by market capitalisation, 7.9 7.7 improving 15 positions >2.0x 6.6 5.7 5.2 4.2 3.0 3.7 3.4 3.1 3.0 2.9 2.9 2.6 2.1 2.1 2.0 2.0 1.9 1.8 1.8 1.6 1.5 1.4 1.4 1.3 1.3 1.2 1.3 AIT FLT FCT FHT MLT ART CCT SPH SUN KDC CMT MCT MINT FEHT FCOT CRCT AREIT KREIT PREIT PRIME Pre merger Post merger ASCHT MNACT CDREIT SGREIT Manulife (as at (as at Cromwell ESR-REIT 31 Dec 18) 31 Dec 19) OUE C-REIT OUE C-REIT 3M ADTV (1) (S$ 38 26 40 18 18 14 15 8 14 10 6 1.4 3 7 7 7 2 1.4 3 3 3 2 1.2 4 1.2 0.5 0.8 1.5 0.8 million) As at 31 Dec 2019 OUE C-REIT as at OUE C-REIT as at 31 Dec 2019 31 Dec 2018 Source: Bloomberg. Chart on right only includes REITs and business trusts with primary listing on the SGX-ST which have a market capitalisation of at least S$1.2 billion as at 31 December 2019 (1) ADTV refers to average daily trading value 9 Increased Liquidity And Improved Trading 2 Performance Increase in Trading Liquidity (ADTV) OUE C-REIT Trading Performance Against FTSE ST Index and FTSE ST REIT Index (S$ million) (1 Jan 2019 – 31 Dec 2019) 8 Apr 2019 4 Sep 2019 Announcement of Merger Effective Date of Merger Pre Merger Post Merger +22.8% ~3.0x +11.8% 1.8 +5.0% 0.6 Value in Index Unit / Price % Change Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Pre merger (1) Post merger(2) OUE C-REIT FTSE Straits Times Index FTSE ST REIT Index Outperformed 2019 Total Return Benchmark Indices in 2019 for Unitholders(3) +22.8% +31.5% Source: Bloomberg. (1) For the year-to-date period ended 8 September 2019, the day immediately before the new Units issued pursuant to the merger were listed (2) For the period from 9 September 2019, the first day of listing of the new Units issued pursuant to the merger, to 31 December 2019 (3) Assumes reinvestment of dividends 10 Enhanced Portfolio Diversification and 3 Stronger Balance Sheet Increased income resilience from portfolio diversification Enlarged balance sheet (S$ million) The rental payment under the hotel master lease agreements comprises: Larger capital base − Minimum rent component – provides downside protection Ability to undertake larger transactions and asset enhancement initiatives − Variable rent component – upside potential Provides more flexibility for OUE C-REIT to react with greater speed Hotel master lease agreements provide 1,020 minimum rent of Ability to raise up to (2) 10% S$67.5 million S$411 million of new per annum(1) debt while maintaining 411 aggregate leverage of (2) 21% 40.3% as at 31 December 2019 Revenue Contribution Ability to raise up to S$609 million via (2) 69% equity fundraising 609 4Q 2019 Commercial Revenue 4Q 2019 Hospitality Revenue OUE C-REIT funding capacity Equity capacity(3) Debt