ara asset management limited - singapore exchange · (2) as at 30 june 2016, based on publicly...
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ARA Asset Management Limited
Results for the half year ended 30 June 2016
ARA Asset Management Limited
An integrated real estate fund manager in Asia driven by a vision to be a best-of-class
investment manager, offering bespoke solutions and enduringvalue to investors and partners
ANCHORED BY OUR CORE VALUES
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1H2016
Highlights
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Group AUM of ~S$30
billion(1)
10% growth in total revenue
Recurrent management fees up 10%
to S$68.0 million
Adjusted Net Profit up 7% to S$36.5 million
Achieved ~S$1b of
new assets and capital
YTD
Notes:
(1) Based on exchange rates as at 30 June 2016 and after accounting for divestments.
1H2016 HIGHLIGHTSBusiness expansion initiatives to drive future growth
REITs: UNLOCKING VALUE WHILST SEEKING GROWTH ANDDIVERSIFICATION Amfirst REIT completed the acquisition of the Mydin HyperMall for RM250
million and the divestment of AmBank Group Leadership Centre for RM36million
Development of 177 Pacific Highway in North Sydney held by Suntec REIT isclose to completion and is expected to complete in August 2016
Established ARA-ShinYoung REIT No. 2 in July 2016, a new private KoreanREIT following the success of ARA-ShinYoung REIT
ARA PRIVATE FUNDS: NEW INVESTMENTS AND CAPITAL The SDF I made its second investment into a residential development in
Australia
The PIP completed its acquisition of two Australian office properties worthA$284 million.
On 1 July 2016, the CIP obtained additional capital commitment ofapproximately US$500 million, further enlarging the total capital of the fund tomore than US$1.3 billion to date
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1H2016 - GROUP AUM NET OF DIVESTMENTSAUM of ~S$30 billion; achieved S$1 billion increase in gross AUM YTD
Assets Under Management(1)(S$b) Jun 2016 Dec 2015 Change
REITs – Real Estate(2) 21.8 21.6 0.7%
Private Real Estate Funds – Real Estate 5.5 5.3 5.0%
Private Real Estate Funds – Capital(3) 1.5 1.1 39.3%
Real Estate Management Services(4) 0.9 0.9 -
Total 29.7 28.9 2.9%
Notes:
(1) Based on exchange rates as at 30 June 2016
(2) Comprises gross property value of REITs managed by subsidiaries, associates and joint venture
(3) Unutilised capital commitments including capital committed for projects pending completion
(4) Revenue base for real estate management services fee computation and gross property value of other properties under management
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0.6 3.5 5.6 6.4 9.7 11.9 13.2 17.1 20.3 22.7 25.6 25.8 28.9 29.70.6
3.55.6 6.4
9.711.9
13.2
17.1
21.0
24.0
28.8
32.4
37.5 38.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec-13 Dec-14 Dec-15 Jun-16
REITs - Real Estate
Private RE Funds - Real Estate
Private RE Funds - Capital
Real Estate Management Services
Total Adjusted AUM
S$b
36%
29%
18%
3%3%
3%8%
GROUP AUM UNDER MANAGEMENTBY COUNTRY
Singapore Hong KongChina MalaysiaAustralia South KoreaOthers
1H2016Total
S$29.7billion
93 properties under management across the Asia Pacific
50 million sq feet of office, retail, logistics and other assets
DIVERSIFIED ASSET MANAGEMENT PLATFORM Operational experience spanning the Asia Pacific
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22.1%
31.0%
28.5%
9.4%
5.8% 3.2%
Portfolio GFA
Singapore
China
Malaysia
Hong Kong
Australia
South Korea
1H2016Approx.49.8 m
sq ft
32.5%
32.5%
15.1%
19.9%
Portfolio GFA
Office
Retail
Logistics
Others
1H2016Approx.49.8 m
sq ft
Listing Venue SGX-ST & HKEx
SGX-ST HKEx Bursa SGX-ST HKEx Private REITs Private REITs
Listing Year 2003 2004 2005 2006 2010 2011 2007; 2010(1) 2015; 2016
Focus Suburban retail
properties in Hong Kong
Prime office & retail
properties in S’pore & Aust
Office & ind/ office
properties in Hong Kong
Commercial properties in
Malaysia
Logistics properties in
the Asia Pacific region
Commercial properties in
China
Office properties in South Korea
Residential properties in South Korea
Property Value(2) HK$36,188m S$8,846m HK$10,419m RM1,628m S$1,302m RMB40,804m KRW624,500m KRW107,000m
Description Property managementservices provider
Operations, sales and marketing services provider & consultant for convention, exhibition, meeting and
event facilities
Description Flagship strategic and opportunistic private real estate fund investing in Singapore, Hong Kong,
China, Malaysia and
other emerging
economies in Asia
2nd strategic &
opportunistic private real estate fund investing in Singapore, Hong Kong,
China, Malaysia and other emerging
economies in Asia
Core-plus private real estate fund investing in high quality office and
commercial properties
in key cities in China
Value-add private real estate fund investing in high quality office and
commercial properties primarily in Singapore and Hong
Kong
Core-plus private real estate fund investing in real estate
assets across Asia
including Australia,
Singapore,Hong Kong, China and
Japan
Separate account to manage the real estate
portfolio belonging
to The Straits Trading
Company Limited
Single-asset private real estate fund which owns the Suntec Singapore Convention & Exhibition
Centre
Private real estate fund
which owns a
portfolio of retail
properties in Malaysia
Private real estate fund established
for the redevt of Park Mall
Mandated to invest in real estate
devtsprimarily in Southeast Asia and Australia
Fund Size US$1,133m(Committed
Capital)
US$441m (Committed
Capital)
US$1,318m(3)
(Committed Capital)
US$240m(Committed
Capital)
US$325m (Committed
Capital)
S$340m(GAV)
S$668m (GAV)
RM1,773m (GAV)
S$384m (Committed
Capital)
US$80m(Committed
Capital)
Real Estate MgmtServices
Notes:(1) Two closed-end privately-held REITs with finite term of 10 years(2) As at 30 June 2016, based on publicly announced valuations. In
the case of ARA-ShinYoung REITs, value refers to estimated total development costs
(3) Received capital commitment of US$317.6 million with effect from 1 July 2015 and US$532.4 million with effect from 1 July 2016
Private Real Estate Funds
REITs ARA-NPS REITs
A RESILIENT PORTFOLIO OF FUNDS & SERVICESNine REITs and 10 private real estate funds under management
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ARA-ShinYoungREITs
1H2016
Results highlights
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1H2016 FINANCIAL HIGHLIGHTS10% growth in recurrent management fees; 7% growth in Adjusted Net Profit
Recurrent management fees as a % of total revenue at 83% in 1H2016
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61,776
67,940
58,000
60,00062,00064,000
66,00068,00070,000
1H2015 1H2016Recurrent Management Fees
S$ '000
10%
34,111
36,508
32,000
33,000
34,000
35,000
36,000
37,000
1H2015 1H2016Adjusted Net Profit
S$ '000
7%
56.7%
12.4%
14.0%
10.1%6.8%
1H2015Total
S$74.3million
53.5%
15.5%
14.2%
2.8%
13.9%REIT management fees
Portfolio management fees
Real estate managementservices
Acquisition, divestmentand performance fees
Finance income and otherincome
1H2016Total
S$81.6million
• REIT management fees of S$43.7 million driven by improved asset performance and fee contributions from new acquisitions, namelySuntec REIT’s acquisition of three floors of strata office space at Suntec Tower Two and Cache’s acquisition of three Australianproperties in the last quarter of 2015
• 38% increase in portfolio management fees to S$12.6 million arising from (i) the CIP’s acquisition of two commercial properties inChina in September and December 2015; (ii) the establishment of the Harmony III and Harmony V in August and December 2015respectively; and (iii) contribution from the PIP
• Higher real estate management fees of S$11.6 million arising mainly from higher property management fees received
• Total recurrent management fees increased 10% to S$68.0 million• Lower acquisition, divestment and performance fees as 1H2015 had included Fortune REIT’s acquisition of Laguna Plaza. Acquisition
fees received in 1H2016 were mainly in relation to AmFIRST REIT’s acquisition of Mydin HyperMall and Suntec REIT’s progressivedevelopment of 177 Pacific Highway in Australia
• Lower share of profit of associates and joint venture, net of tax as 1H2015 had included the acquisition fee recorded by Hui Xian AssetManagement Limited in relation to Hui Xian REIT’s acquisition of Metropolitan Oriental Plaza in Chongqing, China
• 7% growth in Adjusted Net Profit
Financial Highlights 1H2016 1H2015 ChangeRevenue Management fees(1) (S$’000) 67,940 61,776 10%Acquisition, divestment and performance fees(2) (S$’000) 2,318 7,529 -69%Finance income(3) (S$’000) 10,669 4,877 119%Other income (S$’000) 673 146 361%Total Revenue (S$’000) 81,600 74,328 10%Results from operating activities (S$’000) 45,618 37,907 20%Share of profit of associates and joint venture, net of tax (S$’000) 2,308 5,588 -59%Profit attributable to equity holders of the Company (S$’000) 38,678 35,412 9%Adjusted Net Profit (4) (S$’000) 36,508 34,111 7%
Notes:(1) Recurrent management fees from REIT, ARA Private Funds and real estate management services divisions(2) Primarily REIT acquisition/divestment fees and project management and consultancy fees(3) Comprises mainly distribution income, interest income, net gain on fair valuation / disposal of financial assets and net foreign exchange gain. (4) Net Profit excluding one-off adjustments comprising: (i) gain / (loss) on fair valuation / disposal of financial assets; (ii) acquisition, divestment and performance fees; (iii) bargain purchase arising from acquisition; (iv)
impairment on available for sale financial assets; (v) gain / (loss) on disposal of investments and (vi) performance-based bonuses
1H2016 FINANCIAL HIGHLIGHTS10% growth in recurrent management fees; 7% growth in Adjusted Net Profit
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Group balance sheet as at 30 June 2016S$’000 S$’000
Plant and equipment 2,590 Loan and borrowings 53,240 Intangible assets 1,218 Other payables 1,771 Associates and joint venture 15,406 Deferred tax liabilities 115 Financial assets 485,524 Deferred tax assets 703 Other receivables 4,928
Non-current assets 510,369 Non-current liabilities 55,126
Financial assets 34,882 Trade and other payables 24,861 Trade and other receivables 53,873 Loan and borrowings 25,146 Cash and cash equivalents 74,073 Current tax payable 12,945
Current assets 162,828 Current liabilities 62,952
Total liabilities 118,078
Shareholders’ equity 555,119
Total assets 673,197 Total liabilities & shareholders’ equity 673,197
1H2016 FINANCIAL HIGHLIGHTSGroup balance sheet as at 30 June 2016
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Robust balance sheet Gearing of approximately 14%
2.17 2.24 2.302.50
2.302.50
2.302.70
2.30
2.702.30
2.702.30
2.70
2.30
2.70
2.30
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16
S cents
SUSTAINED DIVIDEND POLICY
• Sustainable dividend payout of 5.0 Singapore cents per share annually barring any unforeseen circumstances
• Based on a stock price of S$1.32 (29 July 2016), dividend yield is approximately 3.8%
1-for-5 bonus issue 1-for-10 bonus issue 1-for-10 bonus issue
Interim Dividend
FY2016 Interim Dividend (S Cents) 2.30
1H2016 EPS (S Cents) 3.88
Payout Ratio (%) 59.3%
Timeline
Ex-dividend date 8 Aug 2016
Books closure date 11 Aug 2016
Payment date 23 Aug 2016
18-for-100 rights issue
TRADING PERFORMANCEOutperformed broader market index since listing
Source : Bloomberg (as at 30 June 2016)
• With its resilient business model, ARA continues to outperform the broader
market index since listing with total return of approximately 82%
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0%
50%
100%
150%
200%
250%
300%
Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15
Rel
ativ
e Pr
ice
(1 N
ov 2
007
= 1
00%
) ARA FSSTI
-24%
+82%
TODAY
Regional network of strategic partnerships
and 1,207 employees across 18 cities
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Cheung Kong
Property Holdings
The Straits Trading Company
CalPERSTeachers Retirement System of Texas
CWT
New York State
Common Retirement
Fund
Am‐InvestmtGroup Berhad
Citic Bank
Anchor Investor of PIP
NPS South Korea
Strategic Partnerships
ESTABLISHED REGIONAL NETWORKExpanding regional footprint across Asia Pacific
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PROVEN LEADERSHIPExperienced team with a proven track record
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JOHN LIMGROUP CEO
NG BENG TIONG
ASSISTANT GROUP CEO CUM CEO, PRIVATE FUNDS
Suntec REIT
YEO SEE KIATCEO
Fortune REIT
CHIU YU JUSTINACEO
Prosperity REIT
MAVIS WONGCEO
Cache Logistics Trust
DANIEL CERFCEO
AmFIRST REIT
WONG KHIM CHONCEO
Hui Xian REIT
TOM CHEUNGCEO
China Desk
NG BENG TIONGCOUNTRY HEAD
ADF I / ADF II / CIP
NG BENG TIONGCEO
Harmony II (SSCEC)
SIEW SIEW HOONCEO
MIP / PIP
DAVID KIMCEO
ARA Private Funds
HAZEL CHEWCFO
ARA Private Funds
DAVID KIMHEAD, INVESTMENTS
HEAD, PORTFOLIO MGT
ARA Private Funds
SIEW SIEW HOONHEAD, ASSET MGT
ARA Private Funds
YAP CHEW FERNHEAD, LEGAL &
COMPLIANCE
APM Singapore
ANTHONY YIPDEPUTY CHAIRMAN
APM China
MUN HON PHENGCEO
APM Malaysia
JUNE LIMCEO
Suntec Singapore
ARUN MADHOKCEO
Suntec International
ARUN MADHOKCEO
REIT DivisionJOHN LIM
CEO
Private Funds Division
NG BENG TIONGCEO
ARA-NPS REIT
ANTHONY D. KANGCEO
ARA-NPS REIT 2ANTHONY D. KANG
CEO
Real Estate MgtServices Division
Corporate Divisions
Finance & Compliance
CHERYL SEOWGROUP CFO
Corporate Office
NG BENG TIONGASSISTANT GROUP
CEO
Group HR & Corp Devt
PAULINE LIMDIRECTOR
Group Risk Mgt & IA
TANG BOON KANGDIRECTOR
Group Office Admin
SERENE YEOASSISTANT DIRECTOR
Harmony III (M’sianMalls) / SIP / SDF ITHOMAS KONG,
CEO
ARA-ShinYoungREIT
ANTHONY D. KANGCEO
Harmony V (Park Mall)
DAVID TENGFUND DIRECTOR
MOSES K. SONG
ASSISTANT GROUP CEO CUM GROUP CIO
ARA Financial
LOW POH CHOOSENIOR DIRECTOR
Group Business Devt
ALVIN LOODIRECTOR
Grp Investment Office
MOSES K. SONGGRP CIO
ARA Korea
ANTHONY D. KANGCEO
ARA Australia
DAVID BLIGHTCEO
Japan Desk
MOSES K. SONGCOUNTRY HEAD
Malaysia Desk
JUNE LIMCOUNTRY HEAD
India / GCC Desk
ALVIN LOODIRECTOR
ARA-ShinYoungREIT No. 2
ANTHONY D. KANGCEO
STRATEGIES
Driving sustainable growth…
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Product Development
Capital Raising
Investment & Capital
Management
Asset Management
Property Management
Strategic partnershipswith stakeholders
In-house Property Management subsidiary APM
Asset Management team with capabilities across various property types and geographical regions
Investment, portfolio management and fund structuring expertise
Customisedproducts to cater to investors’ needs
Country DesksARA Private FundsREITs
DRIVING SUSTAINABLE GROWTHIntegrated business model
Inherent capabilities to… …maximise value across the value chain
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• Track record of establishing, listing and managing listed REITs with 12% market share of the key Singapore and Hong Kong REIT markets
REAL ESTATE INVESTMENT TRUSTSStrong Multi-product, Multi-jurisdiction REIT Platform
REIT Development REIT Management
Investment and Capital Management
Asset and Property Management
In‐house Property ManagementDiversify
Public Listed Private
Bespoke solutions
Acquire & Grow AUM AEI
Value Creation
Growth via new REITs, and acquisitions for existing REITs
Value creation through proactive asset management initiatives
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• Investor-cum-operator philosophy
ARA PRIVATE FUNDSExpanding Suite of Private Real Estate Funds
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Capital Raising and Platform Development Private Real Estate Funds Management
Investment and Capital Management
Asset and Property Management
In‐house Property Management
Capital Structuring
ARA Asia Dragon Funds
ARA Investment Partners
Acquisitions Repositioning and AEI
ARA Harmony Funds Development Funds
Pan-Asian opportunistic “blind pool” funds
Separate accounts for select investors
Single-asset or portfolio club deals
Pan-Asian development funds
Extensive Industry Relationships
Divestments Property Development
Strategic Partnerships
Value Creation
Growth via capital raising and platform development
Value creation through proactive asset management initiatives
New Product Development
Country Desks (China, Korea, Australia)
Onshore Products
Onshore Capital
Raising capital
onshore
Australia
South KoreaChina
Hong Kong
SingaporeDeploy capital for
outbound investments
Deploy capital
onshore
COUNTRY DESKSScaling the Business Model
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Replicate ARA’s business model:ARA China, ARA Korea, ARA Australia
Target raise of onshore capital to deploy onshore or offshore
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Office35%
Retail43%
Industrial 1%
Hospitality10%
Others11%
Over 22 million sq ft of AEI work completed successfully for our properties in different countries and asset classes
Information provided as at 31 December 2015
Singapore19%
China54%
Malaysia16%
Hong Kong10%
South Korea1%
Before AEI
After AEI
Total GFA 22 msq ft
Total GFA 22 m sq ft
Strategic Differentiator: Value-Adding to our Assets Asset Enhancement Capabilities of our Real Estate Management Services Division
VISION
To be the premier real estate fund manager
in Asia
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Thank You
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DISCLAIMER
These slides may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes andresults may differ materially from those expressed in forward-looking statements as a result of a number of uncertainties, risks andassumptions. Representative examples of these factors include but are not limited to general market and economic conditions, interestrate trends, competition from other real estate investors, changes in operating expenses including employee wages and benefits,changes in government policies, and the continued availability of financing in the amounts and terms necessary to support futurebusiness. You are cautioned not to place undue reliance on the forward-looking statements in these slides, which are based on thecurrent view of management on future events. Information from external sources in these slides has not been independently verified byus nor have the external sources quoted consented to the inclusion of the information.
Global Headquarters:6 Temasek BoulevardSuntec Tower Four, #16-02Singapore 038986
Tel: (65) 6835 9232Fax: (65) 6835 9672
Website: www.ara-asia.com
ContactCheryl SeowGroup Chief Financial OfficerGroup [email protected]
Marilyn TanAssistant DirectorGroup [email protected]
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