Altus Holdings Limited · HKEX:8149
Altus — Saizen REIT — Shareholder Meeting (October 2015)
25 slides from Altus's shareholder meeting presentation, October 2015
Slide 1: 2015 AGM Presentation
2015 AGM Presentation October 2015 www.saizenreit.com.sg
Slide 2: Disclaimer
Disclaimer • The value of units (the “Units”) in Saizen Real Estate Investment Trust (“Saizen REIT”) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, Japan Residential Assets Manager Limited as manager of Saizen REIT (the “Manag
Slide 3: Saizen REIT in Brief
Saizen REIT in Brief Only Singapore-listed REIT to offer exclusive access to Japanese residential real estate Principal investment objective - Investing in diversified portfolio of income- producing real estate in Japan which is used primarily for residential and residential-related purposes, an
Slide 4: Recent Developments
Recent Developments Evaluation Committee established in August 2015 Comprises solely independent non-executive directors of Manager Lead assessment and evaluation of proposals, including those that may involve, among others, corporate actions involving Saizen REIT’s portfolio and/or unitholdin
Slide 5: Recent Developments
Recent Developments Distribution reinvestment plan (“DRP”) established in July 2015 Provide Unitholders option to receive distributions in the form of Units, cash or combination of both DRP applied to distribution for 6-month financial period ending 30 June 2015, election rate of approximately
Slide 6: Key Financial Information
Key Financial Information Number of Units in issue as at 21 October 2015 287,024,902 NAV attributable to Unitholders as at 30 June 2015 (1) S$324 million NAV per Unit as at 30 June 2015 (1) S$1.14 Market capitalisation as at 30 June 2015 (2) S$245 million 4Q FY2015 interest cover ratio 6.0 times Gea
Slide 7: Portfolio Overview
Portfolio Overview Portfolio Region City distribution by revenue (%) Sapporo Kumamoto 17.5 Kitakyushu 10.3 Hakodate Fukuoka 6.8 Kyushu Kagoshima 3.3 Total number of Morioka Oita 0.9 properties: 136 38.8 Sendai Sapporo 24.9 Niigata Hokkaido Hakodate 0.7 Koriyama 25.6 Tokyo Sendai 9.1 Kurashiki Koriya
Slide 8: Distributions
Distributions Distribution per Unit 2.93 Singapore cents Distribution period 1 January 2015 to 30 June 2015 Payment date 28 September 2015 Singapore cents Distribution per Unit (DPU) JPY 3.50 3.50 3.00 3.00 2.50 2.50 2.00 2.00 1.50 1.50 Actual DPU (Singapore cents) 1.00 1.00 DPU in JPY-terms 0.50 0.
Slide 9: Distributions
Distributions Use of capital cash resources to offset loan principal repayment contributed to 1.45 cents out of DPU of 2.93 cents for 2H FY2015 Annual loan principal amortisation of approximately JPY 691 million at present Ability to offset loan principal repayment subject to availability of c
Slide 10: Hedging of Distribution Payments
Hedging of Distribution Payments Distributions have been hedged as follows: Distribution period 6-month period ending 6-month period ending 31 December 2015 30 June 2016 Expected payment March 2016 September 2016 Average hedge rate 87.0 84.4 (S$/JPY) Hedge instrument Forward contract Forward contr
Slide 11: FY2015 Overview
FY2015 Overview Y-o-Y revenue and net property income decreased by 1.4% and 1.9% in FY2015, due mainly to property divestments Property operations remained stable Average occupancy rate in FY2015 at 90.6% (FY2014: 91.0%) Tenant turnover rate improved in FY2015 to 17.0% (FY2014: 19.0%) Over
Slide 12: Proportion of rental reversions
FY2015 Overview Rental reversions (residential units) in FY2015 100% 19% Proportion of rental reversions 90% 31% 80% 70% 18% 60% 50% 39% Rent increase 40% Same rent 30% 63% Rent decrease 20% 30% 10% 0% 2008 and before 2009 onwards Year in which previous contracts were entered into Where previous r
Slide 13: FY2015 Overview
FY2015 Overview 2 properties divested Sun Port 6 and High Grace II divested in FY2015 at premiums of 12.8% and 16.0% respectively over valuation Debt profile strengthened, portfolio diversified with 3 new loans Loans of JPY 1,450 million in aggregate 2 new lenders, including a strategic br
Slide 14: FY2015 Overview
FY2015 Overview Weakening of JPY against S$ has weighed on Saizen REIT’s net asset value and income in S$-terms As Saizen REIT’s distributable income from operations is generated in JPY, its S$- denominated distributions are dependent on JPY-S$ cross rates Distributions for six-month financial
Slide 15: Financial Performance
Financial Performance (JPY'mln) 4,500 4,269 4,133 3,868 3,954 3,900 4,000 3,824 3,578 Gross revenue 3,485 3,500 3,000 2,914 2,782 Net property 2,657 2,727 2,674 2,487 2,536 income 2,500 2,339 Distributable 2,000 1,697 income generated 1,390 1,460 1,487 1,500 1,375 during the year 1,043 1,000 800 500
Slide 16: Occupancy Rates
Occupancy Rates Average occupancy rates have remained stable at or above 90% since Jun 08 100% 95% 90% 85% 80% 16 16
Slide 17: Stable Rental Rates
Stable Rental Rates Average rental rates maintained above JPY 1,500 / sqm (approx. S$17 / sqm) since Jun 08 2,000 1,500 1,000 Average rental rates of 500 residential units (JPY / sqm) 0 17
Slide 18: Debt Profile of TK Operators
Debt Profile of TK Operators Prevailing Loan Property Annual loan TK operator Source of Debt Maturity Guarantor Loan-to- Interest Amount Value amortisation Date Fee (%) value (%) Rate (%) (JPY’mln) (JPY’mln) (JPY’mln) GK Choan Unencumbered 750.0 GK Chosei Unencumbered 470.0 YK Shinzan Bank of Fukuok
Slide 19: Debt Profile of TK Operators
Debt Profile of TK Operators All loans are: non-recourse to Saizen REIT not cross-collateralised long-term in nature (7 to 30-year loans) secured only by specific properties of the TK operator(s) Fixed interest rates for 87% of loans outstanding 19
Slide 20: Debt Profile of TK Operators
Debt Profile of TK Operators 6.00% 12 5.00% 10 4.00% 8 WA loan 3.00% 6 interest rate 2.00% 4 Loan duration 1.00% 2 (years) 0.00% 0 After FY2023 FY2023 Nearest loan maturity in FY2022 March 2020 FY2021 Value of maturing FY2020 loans (JPY' mln) FY2015 to FY2019 0 2,000 4,000 6,000 8,000 10,000 12,000
Slide 21: Divestments since 2014
Divestments since 2014 Saumur Meinohama II Sun Port 6 168.0 Sold at 60.0 Sold at 19.0% above 12.8% above Valuation (JPY'mln) valuation valuation Sale price* (JPY'mln) 149.0 50.4 * Sale price includes consumption tax May 2014 Jul 2014 High Grace II Niken Chaya Grand Heights 366.45 Sold at 460.0 Sold
Slide 22: Property Valuations
Property Valuations 166 properties 50,000 136 properties 49,062 45,000 43,774 42,734 130 properties 43,093 39,932 41,178 40,382 42,056 40,000 36,443 32,995 35,000 35,715 35,335 35,134 33,782 34,017 33,309 32,431 32,669 30,000 Total valuation (JPY'mln) Valuation of consistent portfolio of 25,000 125
Slide 23: Near-term Challenges
Near-term Challenges Acquisitions Buoyant property market has resulted in aggressive yield compression and increased competition Premiums to be paid becoming an onerous issue in view of valuations (which can be overly conservative) and regulatory requirements Leverage Increasing leverage d
Slide 24: Long-term Plans
Long-term Plans Capital management Expand and further diversify banking relationships, lower cost of financing Headroom to increase gearing level from 35% to between 40% and 45% Ability to operate under higher gearing supported by stable rental cashflow and long- term nature of debt financin
Slide 25: Thank You
SaizenRElT ): Thank You