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Frasers Property Industrial REIT
Management (Thailand) Co.,Ltd
Opportunity Day2QFY19 Results Presentation 21 May 2019
2
Important noticeThis presentation is for information purposes only and does not constitute or form part of an offer, solicitation, recommendation or invitation for the sale or purchase
or subscription of securities, including units in Frasers Property Thailand Industrial Freehold & Leasehold REIT (“FTREIT”, and the units in FTREIT, the “Units”) or
any other securities of FTREIT. No part of it nor the fact of its presentation shall form the basis of or be relied upon connection with any investment decision,
contract or commitment whatsoever. The past performance of FTREIT and Frasers Property Industrial REIT Management (Thailand) Company Limited, as the
REIT manger of FTREIT (the “Manager”), is not necessarily indicative of the future performance of FTREIT and the Manager.
This presentation may contains “forward-looking statements”, including forward-looking financial information, that involve assumptions, known and unknown risks,
uncertainties and other factors which may cause the actual results, performance, outcomes or achievements of FTREIT or the Manger, or industry results, to be
materially different from those expressed in such forward-looking statements and financial information. Such forward-looking statements and financial information
are based on certain assumptions and expectations of future events regarding FTREIT’s present and future business strategies and the environment in which
FTREIT will operate. The Manager does not guarantee that these assumptions and expectations are accurate or will be realized. The Manager does not assume
any responsibilities to amend, modify or revise any forward-looking statement, on the basis of any subsequent developments, information or events, or otherwise,
subject to compliance with all applicable laws and regulations and/or the rules of the Securities and Exchange Commission, Thailand (“SEC”) and the Stock
Exchange of Thailand (“SET”) and/or any other regulatory or supervisory body or agency
The information and opinions in this presentation are subject to change without notice, its accuracy is not guaranteed and it may not contain all material information
concerning FTREIT. None of FPT, FTREIT, the Manager, or any of their respective holding companies, subsidiaries, affiliates, associated undertaking or controlling
persons, or any of their respective directors, officers, partners, employees, agents, representatives, advisers or legal advisers makes any representation or
warranty, express or implied, as to the accuracy, completeness or correctness of the information contained in this presentation or otherwise made available or as to
the reasonableness of any assumption contained herein or therein, and any liability whatsoever (in negligence or otherwise) for any loss howsoever arising,
whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation is
expressly disclaimed. Further, nothing in this presentation should be construed as constitution legal, business, tax or financial advice.
The value of Units and the income derived from them, if any, may fall or rise. Unit are not obligations of deposits of, deposits in, or guaranteed by, the Manager or
any of its affiliates. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that
they have no right to request the Manager to redeem their Units are listed. It is intended that holders of Units may only deal in their Units through trading on SET.
Listing of the Units on the SET does not guarantee a liquid market for the Units.
Please study relevant information carefully before making any investment decision. Investors are encouraged to make an investment only when such decision
correspond with their own objective and only after they have acknowledged all risks and have been informed that the returns may be more or less than initial sum.
3
Content
▪ Highlight and financial review
▪ Completion of AEI in period
▪ Asset Performance and Capital Management
▪ REIT Strategy
Highlight and Financial Review
5
2QFY19 Highlights
82.9%Occupancy Rate
22.94%Aggregate Leverage
DPU
from 2QFY19
performance
• High Occupancy rate at 82.9%
• Weighted average lease expiry at around 2.06 years/1
• Retention rate 78.3%/2 and Reversion rate 1.05%/2
• Completion of AEI/3 1,700 sqm of factory at Amata City Rayong
❖ Asset Performance and AEI
❖ Financial Performance
❖ Capital Management
1. By GRI
2. In period 2QFY19
3. AEI = Asset Enhancement Initiative.
4. Gearing ratio = IBD/TAV as of 31 March 2019
5. Fixed = Debentures, Float = Short term loan.
• Higher net investment income of THB 463 Million for
2QFY19, up 10% from THB 420 Million a year ago
• Repayment short-term loan THB 300 Million
• Healthy balance sheet with gearing of 22.94%/4 and 87%/5 of
borrowings were at fixed rate
• Cost of borrowing is around 3.25% WAM 4.03Yrs
❖ Distribution for period 2QFY19
• DPU THB 0.1670 per unit for 2QFY2019
THB 0.1670
6
Financial Performance 2QFY19: 1 January 2019 – 31 March 2019
Overall performance 2QFY19 is better than 1QFY18 (Jan – Mar’18)/3
TOTAL
Revenue
2QFY19
718
1QFY18
640THB million
+78/+12%
Compare
with
Change
YoY :
9286 +6/+7%
Compare
with
YoY :OPEX
88Total
Fee
463420 +43/+10%YoY :
Net
Investment
Income
Finance
Cost 40
THB million THB million/%
ChangeTHB million/%
87 YoY :
70 +30/+75%YoY :
Compare
withChange
THB million/%
Rationale
Rationale
Rationale
▪ Revenue increased mainly came from new assets
value THB 3.6 bn which been transferred from
Sponsor on Aug’18 and Dec’18.
▪ OPEX increased from additional assets..
▪ Total fee slightly decreased from operation in period.
▪ Increased in IBD THB5.5bn > THB 8.5bn.Mar’18 Mar’19
▪ Increased in COD/2 2.87% > 3.25%/1
1. WAM 1.46 Yrs(Mar’18) , 4.03yrs(Mar’19)
2. COD = Cost of debt
3. FY2018 start from 1 January 2018 to 30 September 2018. FY2019 start from 1 October 2018 to 30 September 2019.
-1/-1%
Jan - Mar’18 Jan - Mar’19
1QFY18THB million
Jan - Mar’18
1QFY18THB million
Jan - Mar’18
2QFY19THB million
Jan - Mar’19
2QFY19THB million
Jan - Mar’19
▪ Net investment income increased from additional
assets.
7
Financial Performance HYFY19: 1 October 2018 – 31 March 2019
Overall performance for period (Oct’18 – Mar’19) is better than period (Oct’17 – Mar’18)/2
TOTAL
Revenue 1,395 YoY :
Oct’17 – Mar’18
THB million
+564/+68%
Compare
withChange
185
Compare
with
OPEX
Total
Fee
885Net
Investment
Income
Finance
Cost
THB million
THB million THB million
THB million/%
ChangeTHB million/%
179
127
Compare
withTHB million THB million Change
THB million/%
Rationale
Rationale
Rationale
831
103
538
120
59
Oct’18 – Mar’19
Oct’17 – Mar’18 Oct’18 – Mar’19
Oct’17 – Mar’18 Oct’18 – Mar’19
YoY : +82/+80%
YoY : +59/+49%
YoY : +68/+115%
YoY : +347/64%
1. WAM 1.46 Yrs(Mar’18) , 4.03yrs(Mar’19)
2. PFPO conversion to FTREIT completed on 20 December 2017
▪ Net investment income increased from additional
assets.
▪ Change policy to collect property tax (start FY18)
▪ Mainly from additional assets from PFPO and
investment in FY18 – 1QFY19
▪ Mainly from additional assets from PFPO and
investment in FY18 – 1QFY19
▪ Mainly from additional assets from PFPO and
investment in FY18 – 1QFY19
▪ Increased in IBD THB5.5bn > THB 8.5bn.Mar’18 Mar’19
▪ Increased in COD 2.87% > 3.25%/1
8
Healthy Balance sheet as of 31 March 2019
With total asset around THB 37 billion, FTREIT still the largest industrial and logistics REIT in Thailand.
35,433TOTALASSETS
30 Sep 18THB million
Compare
with
37,231
31 Mar 19THB million
ChangeTHB million/%
+1,798/+5%
6,933
Interest
Bearing
Debt
30 Sep 18THB million
Compare
with
8,540
31 Mar 19THB million
ChangeTHB million/%
+1,607/+23%
10.5141NAV
Per Unit
30 Sep 18THB per Unit
Compare
with
10.5643
31 Mar 19THB Per Unit
ChangeTHB Per Unit/%
+0.0502/+0.5%
▪ MK Price▪ Premium
13.7011.80
12.23% 29.68% +17.45%
+1.9/+16%
Rationale
Rationale
Rationale
1. New assets + AEI = THB 1,947 Million.
2. Additional unrealized gain from new assets.
3. Divested 1 factory and 1 warehouse, gain from divested THB 52 million.
▪ Leveraged for asset acquisition
▪ COD = 3.25%, WAM = 4.03 Yrs
▪ Fixed/Float : 87%:13%
▪ Increased from cash and receivables that
came from operation in period.
▪ Increased in investment property value
which came from investment and AEI
▪ Acquired assets from sponsor and value
increased from AEI/1.▪ Unrealized gain from new assets/2.
▪ Divested 1 FAC and 1WH/3
▪ Tenants paid property tax which accrued to
FTREIT
▪ Repaid ST-Loan 300MB
0.1600 0.1600 0.1600
0.1670 0.1670
1QFY2018 2QFY2018 3QFY2018 1QFY2019 2QFY2019
Distribution 2QFY19
Unit : THB per Unit
/1
Note : 1. Distribution = Dividend + Capital Reduction
9
• The higher DPU in 1QFY19 and 2QFY19 at THB 0.1670 per unit by 4.4% as compared to THB 0.1600 per
unit for FY2018 due to better overall performance and additional income from new assets acquisition.
Completion of AEI in period 2QFY19
11
Completion of Asset Enhancement Initiative
Project Completed on 16 January 2019
WALE for
AEI Area
+1,700 sqm
14,250 sqm
Internal
External
Height
Floor
Loading
AEI Specification
3 Tons
7 Meters
AEI Area 1,700 sqm
Total Area After AEI
15,950 sqm
7 Years
• Board of REIT Manager has approved/1 for the expansion area
1,700 SQ.M of factory unit AAA14.2 at Amata City Rayong/2.
• This investment shall increase rental income generated from the
expansion area
• long WALE of expansion area by contract will be start on
1 February 2019 and will be ended on 31 January 2026
(7 years).
1. Board approved on 14 May 2018
2. Start rent extension area on 1 Feb 2019, NLA increased from 14,250 SQ.M to 15,950 SQ.M), WALE 7 Years
3. NOI Yield% = Net operating income / Investment value.
Utilized
Area of
Assets
NOI
Yield
10.17%/3
12
Summary Investment Properties Growth in 2QFY19
Total Investment Property Value over THB 35,700 million with net growth by THB 39.7 million in 2QFY19
Investment in
properties at
fair value31 Dec 2018 35,696
THB million/1
547Units
Investment
AEI 16 Jan 2019 +40THB million /1
- Units
Investment in
properties at
fair value31 Mar 2019 35,736
THB million /1
547Units
[Beginning Balance]
[Ending Balance]
+AEI
1,629,471 sqm
+1,700 sqm
1,631,171 sqm
1. Round up value to integer
Freehold 73%
Leasehold 27%
Factory 48%
Warehouse 52%
13
FTREIT Portfolio Snapshot
Quality portfolio
within prime
Industrial and
logistics locations
547Properties/1
WALE/42.06 Yrs
~THB 35.7 bn Portfolio Value/2
Avg Property Ages/5
10 Years
~1.63 million sq m
Net Leasable Area/3
Occupancy Rate
82.9%
Frasers Property Thailand Industrial Freehold & Leasehold REITFTREIT listed real-estate investment trust with a quality portfolio located within prime industrial and
logistics locations in Thailand.
Remaining LH Years
~ 26 YearsNo of Tenants
265
Geographically
diversified, Type
of assets and
predominantly
freehold or long
leasehold
North 26%
East 14%
EEC 60%
Type
of Assets
Breakdown
By Area
1. Factory 315 units and Warehouse 232 units
2. Value of Factory THB 19,221 million (54%) and value of warehouse THB 16,515 million (46%)3. Area of Factory 790,560 sq.m (48%) and area of warehouse 840,611 sq.m (52%) – total 1,631,171 sq.m
4. WALE refers to the weighted average lease expiry based on gross rental income (GRI), being the
contracted rental income and estimated recoverable outgoings for the month of March 2019.
Excludes straight lining rental adjustments.
5. Factory avg ages 12 years and Warehouse avg ages 6.7 years
The Largest
Industrial & Logistics REIT
in Thailand
Breakdown
By Right on
assets
Asset Performance and Capital Management
15
Occupancy rate by area as of Mar’19
OCR%
Dec’18
84.2%Mar’19
WALEDec’18
2.09YMar’19
Weighted average by GRI
Renewal
Rate 78.3%
Northern Bangkok Area/1 Eastern Bangkok Area /1 EEC Area /1
OCR% Trend OCR% Trend OCR% Trend
▪ Demand came from Automotive and Electronics
▪ HDD producer expand their production capacity in
Northern Bangkok area.
▪ Eastern Bangkok is the location hub for Logistics.
This area is the best performance of TREIT.
▪ Most of logistics and E-Commerce choose to
settle their business in this location.
▪ Fully occupied 100%
▪ Overall tenants looking for factories and warehouses
in EEC area due to tax benefit from government.
▪ Some of producers relocate their production to their
built factory since business is operating-well.
66% 67% 67% 68% 69%77% 75%
0%
20%
40%
60%
80%
100%
2016 2017 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19
Total Unit = 151 Units Total Unit = 59 Units
92%88%
92% 92% 96% 100%
0%
20%
40%
60%
80%
100%
2016 2017 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19
Total Unit = 337 Units
80% 81% 82% 80% 80% 84% 82%
0%
20%
40%
60%
80%
100%
2016 2017 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19
(-1.3%)
[Jan’19 – Mar’19]
FTREIT can maintain high OCR at average 83% with WALE around 2 Years
99%
1. Northern Bangkok area = Ayutthaya and Pathumthani, Eastern Bangkok = Samutprakarn and Prachinburi, EEC area = Chonburi, Rayong and Chachoengsao
82.9% 2.06Y Reverson
Rate+1.05%
[Jan’19 – Mar’19]
Tenants Industry % of GRI(1)
Siam Makro Retail 4.84%
Leschaco Logistics 2.65%
Lazada E-Commerce 1.99%
BJC Logistics Logistics 1.94%
DTS Automotive 1.57%
Kintetsu Logistics 1.48%
Samsung Electronics 1.42%
DHL Logistics 1.41%
Denso Automotive 1.40%
Trancy Logistics 1.24%
16
Well-diversified Tenant Base
Top 10 tenants of FTREIT have low concentration risk and longer WALE
Top 10 Tenants1 (GRI 19.96%/2/WALE 3.23 Yrs)
1. WALE refers to the weighted average lease expiry based on gross rental income (GRI), being the contracted rental income and
estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments.
2. Concentration risk has stable at around 20%.
Breakdown of Tenants1 2
By Industry GRI%
Automotive
28%
Logistics
22%
Electronics
23%
Others
16%
Retails 8%E-Commerce 3%
By Nationality GRI%
Japan
47%
EU 20%
Thais 15%
Other
Asian 13%
US 4% Other 1%
Automotive sector tenants Logistics sector tenants
Electronics sector tenants Retails sector tenants
17
Capital Management
As at 31 March 2019
Aggregate level 22.94%
Total Gross Borrowings THB 8,540 million
Weighted Average Cost of Borrowings 3.25%
Average Weighted Debt Maturity 4.03 Years
Interest Rate Exposure Fixed 87%
Interest Coverage Ratio for 2Q19/HY19 7.73 times/ 8.10 times/1
Credit Rating A (Stable Outlook)/2
Debt Maturity Profile/3
Bridging Loan Debentures
Interest Fixed/Float
87%
13%Unit: THB Million
Fixed Float
1. Interest Coverage ratio = EBITDA (excluded gain from divestment)/Interest Expense.
2. Official announcement rating by TRIS on 3 May 2019.
3. Fiscal year ending 30 September.
Summary Distribution
Incl. sales Yield* Excl. sales Yield*
(FS)
Adjusted net distributable income (THB mn) 474 426
12.30
DPU (THB/unit) 100% 0.1823 5.9% 0.1638 5.3%
Option I 98% 0.1786 5.8% 0.1605 5.2%
Option II 95% 0.1732 5.6% 0.1556 5.1%
Option III 90% 0.1641 5.3% 0.1474 4.8%
Total units: 2,602,387,048 units
* Based on market price THB 12.3
DPU 1QFY2019 Payment Timeline
DPU Announcement
14 May 2019
XD
27 May 2019
Record Date
28 May 2019
Book Closing
Not required
Distribution Date
7 June 2019
0.1600 0.1600 0.1600
0.2028
0.1100
0.1600 0.1600 0.1600 0.1670 0.1670
4QFY2016 1QFY2017 2QFY2017 3Q and Oct'17 Nov'17 -Dec'17
1QFY2018 2QFY2018 3QFY2018 1QFY2019 2QFY2019
Sustainable Distribution Per Unit
Unit : THB per Unit
/1
Distribution Policy
• In line with SEC regulations, FTREIT’s policy is to distribute at least 90% of adjusted net investment income
• Distributions will be made on a quarterly basis or every calendar quarter. The actual level of distribution above
90% is to be determined by Board of Directors of REIT manager.
Note : 1. Distribution = Dividend + Capital Reduction
/1
18
19
Key Summary for HYFY19 (Oct’18 – Mar’19)
THB 938 million/1
Distributable Income
1. Distributable income = adjusted net investment income.
2. Divested 1 factory at Amata City Chonburi and 1 Warehouse at Rojana Industrial Park Prachinburi.
3. As of 31 March 2019
83%/2.06 Yrs/3
Occupancy and WALE
Higher occupancy rate
THB 1,947 million
Investment in period
Portfolio value increased to
approximately THB 36 bn
THB 275 million
Divestment value
At significant premium to
book value/2
4.03 Years
Weighted Avg Debt
Maturity
87%
Proportion of Fixed
Debt
[As of 31 March 2019] [As of 31 March 2019]
22.94%
Aggregate leverage
[As of 31 March 2019]
Retention/Reversion
77%/+1.07%[Oct’18 – Mar’19]
REIT Strategy
21
Principal Objective and Strategy
Active Asset
Management
Deliver
consistently
growing and
sustainable
distributions to
unitholders
Active Asset
Management
Strategies to support the Principal Objective
1
Investment
Growth
2
▪ Proactive leasing: Maintain high retention rate,
occupancy rate, and well- diversified tenant base.
▪ Asset Enhancement Initiative (AEI): Assess and
undertake AEI on the FTREIT portfolio to unlock
further value.
▪ ROFR/1 for industrial properties from FPT’s Sponsor.
▪ Third-party asset acquisition.
1. Right of first refusal
Capital
Management
3
▪ Optimize capital mix and prudent capital
management.
▪ Manage schedule of debt repayment matching with
asset portfolio performance