Altus Holdings Limited · HKEX:8149
Altus — Saizen Real Estate Investment Trust — Shareholder Meeting (October 2014)
21 slides from Altus's shareholder meeting presentation, October 2014
Slide 1: Presentation 2014 AGM
Presentation 2014 AGM October 2014 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 access exclusively to Japanese residential properties Properties targeted at mass market tenants in 14 cities Size of portfolio: JPY 41.9 billion (S$515 million1) Saizen REIT has a corporate family rating of Ba3, with a stable outlook
Slide 4: Key Financial Information
Key Financial Information Number of Units in issue as at 17 October 2014 283,611,720 NAV attributable to Unitholders as at 30 June 2014 1 S$346 million NAV per Unit as at 30 June 2014 1 S$1.22 Market capitalisation as at 30 June 2014 2 S$267 million 4Q FY2014 interest cover ratio 6.2 times Gearing 3
Slide 5: Well-diversified Portfolio
Well-diversified Portfolio Portfolio Total number of properties: 137 Region City distribution by revenue (%) Kumamoto 16.9 Kitakyushu 10.4 Fukuoka 5.9 Kyushu Kagoshima 3.4 Oita 0.9 37.5 Sapporo 24.3 Hokkaido Hakodate 0.7 25.0 Sendai 10.9 Koriyama 2.7 Tohoku Morioka 1.5 15.1 Hiroshima 14.4 Chugoku Ku
Slide 6: Distributions
Distributions Distribution per Unit 3.10 Singapore cents Distribution period 1 January 2014 to 30 June 2014 Date paid 26 September 2014 Singapore cents Distribution per Unit (DPU) JPY 3.50 3.50 3.00 3.00 2.50 2.50 2.00 2.00 Actual DPU 1.50 1.50 (Singapore cents) 1.00 1.00 DPU in JPY‐terms 0.50 0.50
Slide 7: Distributions
Distributions For 2H FY2014, the use of capital cash resources to offset loan principal repayment contributed to 1.46 cents out of the DPU of 3.10 cents At present, loan principal amortisation amounts to approximately JPY 681 million annually Going forward, such offsetting is subject to the av
Slide 8: Hedging of Distribution Payments
Hedging of Distribution Payments Distributions have been hedged as follows: Distribution period 6-month period ending 6-month period ending 31 December 2014 30 June 2015 Expected payment March 2015 September 2015 Hedge rate (S$/JPY) 81.9 85.6 Hedge instrument Forward contract Forward contract 8
Slide 9: FY2014 Overview
FY2014 Overview Growth in revenue and net property income were driven by property acquisitions Y-o-Y revenue and net property income increased by 3.4% and 2.6% in FY2014 Net income from operations increased by 15.8% due mainly to the non-recurrence of one-off refinancing-related costs incurred
Slide 10: FY2014 Overview: Proportion of rental reversions
FY2014 Overview Rental reversions (residential units) in Jan - Jun 2014 100% Proportion of rental reversions 90% 30% 80% 70% 57% 60% 50% 33% Rent decrease 40% Same rent 30% 18% Rent increase 20% 37% 10% 25% 0% 2008 and before 2009 onwards Year in which previous contracts were entered into In cases
Slide 11: FY2014 Overview
FY2014 Overview 1 property was divested Saumur Meinohama II was divested at a premium of 19.0% over its valuation Debt profile was strengthened The tenure of the existing loan from the Tokyo Star Bank Ltd was extended by a further 5 years to February 2023 (from February 2018 previously) 4
Slide 12: FY2014 Overview
FY2014 Overview The weakening of the JPY against the 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 the JPY-S$ cross rates The Management Team m
Slide 13: Occupancy Rates
80% 85% 90% 95% 100% Jun-08 Jun 08 Sep -08 Dec-08 Mar-09 Jun-09 Sep -09 Dec-09 Mar-10 Occupancy Rates Jun-10 Sep -10 Dec-10 Mar-11 Jun-11 Sep -11 Dec-11 Mar-12 Jun-12 Sep -12 Dec-12 Mar-13 Jun-13 Sep -13 Dec-13 Mar-14 Average occupancy rates remained stable above 90% since Jun-14 13
Slide 14: Stable Rental Rates
Stable Rental Rates Average rental rates maintained above JPY 1,500 / sqm (approx. S$19 / sqm) since Jun 08 2,000 Average rental rates of residential units (JPY / sqm) 1,500 1,000 500 0 Sep-08 Dec-08 Sep-09 Dec-09 Sep-10 Dec-10 Sep-11 Dec-11 Sep-12 Dec-12 Sep-13 Dec-13 Mar-09 Mar-10 Mar-11 Mar-12
Slide 15: 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 721.0 YK Shinzan Bank of Fukuoka Mar 2020 2.223 0.175 1,750.
Slide 16: 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) Interest rates for 89% of loans outstanding are fixed 16
Slide 17: Debt Profile of TK Operators
Debt Profile of TK Operators 6.00% 12 5.00% 10 4.00% 8 WA loan interest 3.00% 6 rate 2.00% 4 Loan duration 1.00% 2 (years) 0.00% 0 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 After FY2023 FY2023 Nearest loan maturity is in FY2022 March 2020 FY202
Slide 18: Property Valuations
Property Valuations 50,000 Total valuation (JPY'mln) 49,062 Valuation of consistent portfolio of 45,000 43,774 127 properties (JPY'mln) 42,734 40,495 41,178 40,382 42,056 40,000 36,443 35,000 36,200 32,995 35,599 34,242 34,482 33,769 32,837 33,101 30,000 25,000 Jun‐08 Jun‐09 Jun‐10 Jun‐11 Jun‐12 Jun
Slide 19: Strategic Review
Strategic Review Strategy adopted: To focus on capital structure enhancement, in particular, its cash management and optimal levels of leverage To seek opportunities to expand property portfolio Leverage increased with 2 new loans in July and August 2014 To continue to explore financing op
Slide 20: Upcoming plans
Upcoming plans Continued implementation of capital management and portfolio expansion Headroom to increase gearing level from 38% currently to between 40% and 45% Several S-REITs have increased their gearing in recent times to close to or above 40%, and Management believes that this is indicat
Slide 21: Thank You
SaizenREIT )r Thank You 21
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