Investor Presentation - April / May 2015 - Soilbuild Business Space REIT
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Investor Presentation April / May 2015
Disclaimer This presentation has been prepared by SB REIT Management Pte. Ltd., as manager of Soilbuild Business Space REIT (“Soilbuild REIT”) (the “Manager”) solely for use at this presentation and is subject to change without notice. The presentation is being made to you on a confidential basis and solely for your information and may not be reproduced, disclosed or distributed to any other person. By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: This presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or the solicitation or invitation of any offer to buy or acquire or subscribe for any securities of Soilbuild REIT or any of its subsidiaries or affiliates in any jurisdiction or as an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not financial, legal, tax or other product advice. This presentation and the information contained herein is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the opinion. This presentation has been prepared by the Manager based on information available to them for use at a non-deal road show presentation by the Manager for selected recipients for information purposes only and does not constitute a recommendation regarding any securities of Soilbuild REIT. The information has not been independently verified by DBS Bank Ltd. and Oversea-Chinese Banking Corporation Limited (the “Banks”). None of the Banks accepts any responsibility for the contents of this presentation or the presentation materials or for any other statement made, or purported to be made, by any of the Banks. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the DBS Trustee Limited (in its capacity as trustee of Soilbuild REIT) (the “Trustee”), the Manager, the Banks or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the document. This presentation is highly confidential and being given solely for your information and for your use and may not be retained by you nor may this presentation, or any portion thereof, be shared, copied, reproduced or redistributed to any other person in any manner. This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the Manager, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of Soilbuild REIT or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this presentation are cautioned not to place undue reliance on these forward-looking statements. The statements contained in this document is based on the economic, regulatory, market and other conditions as in effect on the date hereof and speak only as at the date as of which they are made, and the Trustee, the Manager and the Banks expressly disclaim any obligation or undertaking to supplement, amend or disseminate any updates or revisions to any statements contained herein to reflect any change in events, conditions or circumstances on which any such statements are based. By preparing this presentation, none of the Manager, its management, and their respective advisers undertakes any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. This presentation has not been and will not be registered as a prospectus under the Monetary Authority of Singapore. Accordingly, this presentation is only addressed to and directed at persons in Singapore who are (i) institutional investors under Section 274 of the Securities and Futures Act (Chapter 289 of Singapore) (“SFA”), or (ii) relevant persons pursuant to Section 275(1), or any persons pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. By reviewing this presentation, you are deemed to have represented and agreed that you and any customers you represent (1) are either an institutional investor as defined under Section 4A(1) of the SFA, a relevant person as defined under Section 275(2) of the SFA or a person referred to in Section 275(1A) of the SFA, and (2) agree to be bound by the limitations and restrictions described herein. The distribution of this presentation in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. This presentation is not an offer for sale of securities in the United States or elsewhere where such offer would be unlawful. The securities of Soilbuild REIT described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered, sold or delivered within the United States or to U.S. persons (as such terms as defined in Regulation S under the Securities Act) absent from registration under or an applicable exemption from the registration requirements of the United States securities law. Neither the information contained in this presentation nor any copy hereof may be, directly or indirectly, taken or transmitted into or distributed in the U.S., Canada, Australia, Japan or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of the United States or other national securities laws. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not be accepted. By reviewing this presentation, you are deemed to have represented and agreed that you and any customers you represent are not a U.S. person and are outside of the United States and not acting for account or benefit U.S. persons. 2
About Soilbuild REIT
Overview of Soilbuild REIT
Investment Primarily in business space assets located in
Mandate Sponsor
Singapore Public
Soilbuild Group Unitholders
Holdings Ltd.
10 properties valued at S$1.09 billion(1)
Portfolio
NLA of 3.33 million sq ft 23.9%(2) 76.1%(2)
100%
Soilbuild Group Holdings Ltd.
– Leading integrated property group based in Manager
Sponsor Singapore with close to 40 years of SB REIT
experience Management Pte. Ltd.
– NAV of c.S$600 million as of 31 December
Trustee
2014
DBS Trustee Limited
Sponsor
Stake 23.9%(2)
Property Manager
Manager SB REIT Management Pte. Ltd. Property
SB Property Services
Portfolio
Credit Pte. Ltd.
Rating BBB- (Standard & Poor’s)
Note:
(1) As at 31 March 2015; (2) Pro forma sponsor stake after the close of the S$90 million private placement (refer to SGX Announcement dated 22 April 2015).
4
Overview of Soilbuild REIT
Vision
Soilbuild Business Space REIT aims to be a successful business space real estate
investment trust with a quality portfolio of assets to deliver stability and growth
Mission
To deliver stable and growing returns to Unitholders by actively managing our assets and
expanding our portfolio
Our Competitive Advantage
Integrated Sponsor
Platform Location, Quality and
Specification of Assets Differentiated
Acquisition Capability
5
Soilbuild REIT Roadmap
22 Jan 2014:
16 Jul 2014:
Assigned BBB- corporate
Awarded “Best Investor
investment grade credit
Relations” and “Best 25 Apr 2015:
rating 31 October 2014: 12 Mar 2015:
Annual Report” Set up of S$500 million
Completed KTL Offshore Announced acquisition of
acquisition for S$55.7 million Technics for S$98.1 million Medium Term Notes (“MTN”)
programme
16 Aug 2013: 22 Apr 2015:
Listed on SGX-ST 11 Feb 2015: Successful launch of Soilbuild
Solaris Greenmark REIT’s first equity fund raising of
Platinum award S$90 million via private placement
renewed
17 Mar 2015:
3Q 2014:
Agreement with JTC
Solaris awarded National Parks
to pay Solaris Land
Landscape Excellence
Premium upfront
26 May 2014: Assessment Framework Award,
Completed maiden Asia Green Building Awards and
acquisition of Tellus AIA Merit Award for Architecture
Excellence 23 Dec 2014:
Marine for S$18.2 million
Completed Speedy-Tech
acquisition for S$24.3 million
6
Compelling Credit Story
2. Strong Financial Position 3. Best-in-class portfolio 4. Favourable tenancy profile
– Aggregate leverage of 36.1%(1) – Quality building specifications and – Well-staggered lease expiry profile with
designs with established tenant WALE of 3.8 years(3) by Gross Rental
– c. 92% of debt hedged via interest rate base Income
swaps(2)
– Longest remaining land lease – Good balance between multi-tenanted
– Corporate Investment grade tenure of 48.6 years(3) and master lease properties
rating of BBB- from S&P
– High proportion of business – Well-diversified tenant base
park properties and trade sectors
– Outperformance against
– Sponsorship by the IPO Forecast for all
leading integrated – Strategically located – Portfolio occupancy of – Long-term master
six quarters portfolio
property group 100.0%(3) leases provide
with 40 years of certainty
track record
– Favourable security deposit
– Provides access to end-to-end tenure for master leases
integrated real estate capabilities
– Multi-tenanted properties anchored by
– Sponsor ROFR pipeline could further multinational companies (“MNCs”) with
expand portfolio size established track record
1. Committed Sponsor 5. Stability of cashflows
Notes:
(1) Pro forma aggregate leverage after the acquisition of 72 Loyang Way and close of the S$90 million private placement (refer to SGX Announcement dated 22 April 2015); (2) After interest rate swaps entered into on 15 April 2015; (3) As at
31 March 2015.
7
Key Credit Highlights
Best-in-class
Portfolio With
Unique Competitive
Strong Financial Strengths Favourable
Position & Prudent Tenancy & Lease
Capital Management Profile
3
4
2
Committed & Reputable
Sponsor Stability of
1 5 Cashflows
Strong Support from Experienced Sponsor
Integrated property group with 40 years track record in end-to-end construction and development
A
Provides financial strength with net asset value (“NAV”) of c. S$600 million(1)
Strong Single focus – Soilbuild REIT is the Sponsor’s first and only REIT vehicle
Sponsor
Committed to support Soilbuild REIT over the long term with Sponsor stake of 23.9%
Provides
Benefits to Sponsor pipeline of four ROFR assets with maximum potential GFA of 2.3 million sq ft
Soilbuild
REIT
B Lease Asset / Property Fund
Construction Development
Management Management Management
End-to-End Construction Balance Sheet Tenant Retention Asset Enhancements Capital Management
Only
Industrial BCA ‘A1’ grading for
general building
Focus on End Users Relationship with Brokers Income Optimisation Relationship with Vendors Integrated
REIT Real Estate
Established Relationships Experienced Management
Sponsor with Multi-Discipline Team Innovative Designs Dedicated Team
with Govt. Agencies Team
Platform
End-to-End
Public & Private Sector Quality
Integrated
Capabilities
Range of Asset Classes Location
Operations cover full spectrum of value chain
Note:
9 (1) As at 31 Dec 2014
Key Credit Highlights
Best-in-class
Portfolio With
Unique Competitive
Strong Financial Strengths Favourable
Position & Prudent Tenancy & Lease
Capital Management Profile
3
4
2
Committed & Reputable
Sponsor Stability of
1 5 CashflowsBalance Sheet Position
Unaudited Actual Audited Actual as at
All figures S$’000 unless otherwise stated
as at 31 March 2015 31 December 2014
Investment Properties 1,087,955 1,030,700
Other Assets 26,370 23,272
Total Assets 1,114,325 1,053,972
Borrowings 390,321 368,924
Other Liabilities 71,151 34,268
Net Assets 652,853 650,780
Units in Issue (‘000) 815,751 812,993
Net Asset Value per Unit (S$) 0.80 0.80
11Prudent Capital Management
Debt Maturity Profile (1)
(S$ Million)
% of Debt
22.1% 22.1% 21.0% 34.8%
Maturing
55
95 95 90 94
2015 2016 2017 2018
Debt Drawn Sponsor Interest-Free Loan
Total Bank Financing Facilities Available S$385 million Average All-in Interest Cost 3.28%
Total Bank Debt Drawn Down S$374 million % of Interest Cost fixed 92.2%(3)
Total Assets S$1,114 million Interest Coverage Ratio 4.7x
Aggregate Leverage 36.1%(2) Weighted Average Debt Maturity 2.0 years
Notes:
(1) As at 31 March 2015; (2) Pro forma aggregate leverage after the acquisition of 72 Loyang Way and close of the S$90 million private placement (refer to SGX Announcement dated 22 April 2015); (3) After interest rate swaps entered into on
15 April 2015.
12Prudent Capital Management (Cont’d)
Actual Actual as at
Financial Metrics
as at 31 March 2015 31 December 2014
Aggregate Leverage 38.5% 35.4%
Interest Coverage Ratio 4.7 5.3
Average Term to Maturity for Debt (in years) 2.0 2.1
Average All-In Cost of Debt 3.28% 3.19%
Bank debt facilities to date have been agreed on a club basis with banks such as DBS, UOB,
OCBC, HSBC, Citi and RHB Bank
Soilbuild REIT has been well supported by these banks and has ready access to S$ funding
Aggregate Leverage has been reduced to c. 36.1% after the recent private placement
The equity private placement was oversubscribed and achieved the tightest discount for
S-REITs in the past two years, confirming the support of investors
13Key Credit Highlights
Best-in-class
Portfolio With
Unique Competitive
Strong Financial Strengths Favourable
Position & Prudent Tenancy & Lease
Capital Management Profile
3
4
2
Committed & Reputable
Sponsor Stability of
1 5 CashflowsPortfolio Overview
Portfolio Summary
Valuation(1) S$1,088.0 million
Total NLA 3.33 million sq ft
Tellus Marine WALE (by GRI) 3.8 years
COS Printers
NK Ingredients NLA: 77,162 sq ft (2)
NLA: 58,752 sq ft
NLA: 312,375 sq ft Valuation: S$15.0 million (2) Occupancy 100%
Valuation: S$11.2 million
Valuation: S$62.0 million SEMBAWANG
Tuas Connection
NLA: 651,072 sq ft
Valuation: S$126.0 million
Second Link Technics Offshore
CHANGI
(Tuas Checkpoint) PIONEER SIMEI NLA: 203,459 sq ft
BOON LAY Valuation: S$97.0 million
BUONA VISTA EXPO Proposed Acquisition
JOO KOON
ONE-NORTH
announced on
12 March 2015
Jurong Port
KTL Offshore CBD
Tuas Port
NLA: 208,057 sq ft (2022) Jurong Island PSA Keppel
Valuation: S$56.0 million Terminal
Terminal Sentosa
Eightrium
NLA: 177,286 sq ft
Valuation: S$102.0 million
BK Marine Speedy-Tech Solaris
NLA: 73,737 sq ft
West Park BizCentral
NLA: 93,767 sq ft NLA: 441,533 sq ft Industrial Properties
Valuation: S$15.3 million NLA: 1,240,583 sq ft
Valuation: S$24.3 million Valuation: S$357.2 million Business Park Properties
Valuation: S$319.0 million
Notes:
(1) Based on Savills’ & Colliers’ valuations dated 31 December 2014. KTL Offshore and Speedy-Tech based on valuations carried out at the time of acquisition. The carrying value of Solaris is based on valuation report dated 17
15 Feburary 2015 by Colliers plus stamp duty on the upfront land premium incurred.
(2) NLA and Valuation excludes the construction of a new annex to Tellus Marine.Portfolio Summary
Property Remaining FY2014 Carrying
Lease Occupancy
Property Type Age(1) Land Lease(2) Gross Rental Value(3)
Arrangement Rate(2)
(Years) (Years) (S$ Million) (S$ Million)
Business Master
Solaris 3.5 53 100.0% 17.0 357.2
Park Lease
Multi-User Multi
West Park BizCentral 2.5 54 100.0% 23.4 319.0
Ramp-up Factory Tenanted
Business Multi
Eightrium @ CBP 7.5 51 100.0% 9.0 102.0
Park Tenanted
Multi-User Multi
Tuas Connection 4.7 36 100.0% 10.7 126.0
Land Based Factory Tenanted
Single-User Master Ph1: 23.7
NK Ingredients 32 100.0% 4.7 62.0
Factory Lease Ph2: 7.7 (4)
Single-User Master
COS Printers 18.2 27 100.0% 0.9 11.2
Factory Lease
Single-User Master
Beng Kuang Marine 14.9 42 100.0% 1.1 15.3
Factory Lease
Single-User Master
Tellus Marine 16.5 39 100.0% 1.2 (5) 15.0 (7)
Factory Lease
Single-User Master No. 61: 5.6
KTL Offshore 51 100.0% 3.7 (5) 56.0
Factory Lease No. 71: 5.9
Single-User Master
Speedy-Tech 11.2 35 100.0% 1.8 (5) 24.3
Factory Lease
Total Portfolio 5.6 48.6 100.0% 73.5 (6) 1,088.0
Notes:
(1) Age from issue of CSC (as at 31 Mar 2015); (2) As at 31 Mar 2015; (3) Based on Savills’ & Colliers’ valuations as at 31 December 2014. The carrying value of Solaris is based on the valuation report dated 17 February 2015 by
16 Colliers plus stamp duty on the Solaris upfront land premium incurred; (4) Phase 1 of development received CSC in Jul 1991 and Phase 2 of development received CSC in Aug 2007; (5) Annualised Gross Rental Income for FY2014;
(6) Includes annualised gross rental income for Tellus Marine, KTL Offshore and Speedy-Tech, Actual FY2014 Gross Rental Income was S$68.1 million; (7) Valuation excludes the construction of a new annex to Tellus Marine.Best-in-Class Portfolio
A Strategic Locations and Excellent Connectivity C Strong Tenant Demand
Located close to key technology, media and back office hubs, Sponsor Properties designed and constructed to offer high
logistics clusters and transportation ports specifications (e.g. Exclusivity, high power voltage, direct ramp-
up access and flexible configurations), resulting in strong tenant
Situated close to major road infrastructures and MRT stations
demand
Efficient Designs and High Quality Building One of the Youngest Portfolios of Business Space
B D
Specifications Properties
Properties well regarded and have Weighted average age of 5.6 years(1)
won multiple accolades
Longest Land Lease Expiry of 48.6 years(2)
Underlying Land Lease Tenures(3)
(Years)
48.6
46.1 45.8
43.0 40.9 40.5 38.4 37.9
30.6
AREIT MINT MLT Viva AIMS AMP CIT Sabana Cache
Notes:
(1) Age from issue of CSC; Weighted by GFA; (2) Weighted by valuation as at 31 Dec 2014; (3) Source: Phillip Securities Research Report dated 16 March 2015.
17Key Credit Highlights
Best-in-class
Portfolio With
Unique Competitive
Strong Financial Strengths Favourable
Position & Prudent Tenancy & Lease
Capital Management Profile
3
4
2
Committed & Reputable
Sponsor Stability of
1 5 CashflowsWell-Diversified Portfolio
1. Portfolio Income Spread 2. Well-spread Trade Sectors(1)
By Property By Gross Rental Income
5% 2% 12% Eightrium @ Changi Business Marine Offshore
1% 2% Park
Tuas Connection 12% Oil & Gas
1% 20%
Precision Engineering, Electrical
7% West Park BizCentral 4% and Machinery Products
15% Chemicals
Solaris
Electronics
1Q FY2015 NK Ingredients
4%
% of Monthly
14% Fabricated Metal Products
Gross
COS Printers 2% Gross Rental
Revenue Publishing, Printing & Reproduction
23% S$18.6 million 2% Income of Recorded Media
Beng Kuang Marine Information Technology
Tellus Marine Supply Chain Management, 3rd
8% 11% Party Logistics, Freight Forwarding
KTL Offshore Construction
32% Speedy-Tech 6% 11% Food Products & Beverages
6% Others
3. Diversified Tenant Base(1) 4. Balanced Portfolio with Growth Upside
By Gross Rental Income By Net Property Income
SME
26% Master Lease
48%
111 1Q FY2015
tenants in NPI
portfolio Government S$15.8 million
MNC
Agency Multi-Tenanted
69%
5% 52%
19 Note:
(1) Inclusive of underlying tenants at SolarisQuality & Diverse Tenant Base
Top 10 Tenants
By Gross Rental Income (1)
Speedy-Tech 2.5%
Dyson Operations Pte Ltd 2.8%
Nestle Singapore (Pte) Ltd 3.5%
Mediatek Singapore Pte Ltd 3.7%
Autodesk Asia Pte Ltd 4.1%
SB Storage Pte Ltd 4.3%
John, Wiley & Sons (Asia) Pte Ltd 4.5%
KTL Offshore Pte Ltd 4.7%
SPRING Singapore 4.7%
NK Ingredients Pte Ltd 6.7%
The largest tenant accounts for 6.7% of gross rental income
Included in the Top 10 tenants are well-established MNCs
Notes:
(1) For the month of March 2015 and includes underlying tenants at Solaris.
20Well Staggered Lease Expiry Profile
Portfolio Lease Expiry Profile
By % of NLA & % of Rental Income
WALE
4.0 years
(by NLA)
WALE
3.8 years
(by Gross Rental Income) 32.8%
31.1%
29.7%
25.9%
22.4%
18.4%
17.0%
16.6%
15.3%
14.1%
11.5% 11.9%
2014 2015 2016 2017 2018 >2018
Lease Renewed / Re-let Lease Expiry Profile by NLA Lease Expiry Profile by Rental Income
21Key Credit Highlights
Best-in-class
Portfolio With
Unique Competitive
Strong Financial Strengths Favourable
Position & Prudent Tenancy & Lease
Capital Management Profile
3
4
2
Committed & Reputable
Sponsor Stability of
1 5 CashflowsEmbedded Stability Mechanisms
Long-term Master Leases Provide Stability Long Security Deposits Mitigate Cashflow Risk
Lease Term from start of Master Lease Agreement No. of Months
NK Ingredients 15 Years NK Ingredients 12.0
COS Printers 10 Years COS Printers 12.0
Tellus Marine 10 Years Tellus Marine 18.0
Speedy-Tech 10 Years Speedy-Tech 6.0
BK Marine 7 Years BK Marine 12.0
KTL Offshore 7 Years KTL Offshore 12.0
Solaris 5 Years Solaris 12.0
Quality Underlying Tenants of Multi-tenanted Properties
By % of FY2014 Gross Rental Income
Eightrium Solaris West Park BizCentral
15%
Nestle
32%
15%
12% Store
Other 12%
tenants Other
55% tenants
6% 80%
Dyson
Other 7%
tenants
DBS 51%
13%
23MTN Programme Details
Overview of the MTN Programme
Issuer DBS Trustee Limited (in its capacity as REIT trustee for Soilbuild REIT) (the “Issuer”)
Programme Multicurrency Medium Term Note Programme (the “Programme”)
Programme Size S$500 million
Currency Notes may be issued in any currency agreed between the Issuer and the Dealer(s)
Purpose The proceeds can be used for refinancing, new investments and for working capital
Distribution Reg S, Sections 274 and/or 275 of the Securities and Futures Act of Singapore
Listing The Programme shall be listed on the SGX-ST
Each Series of the Notes may, if so agreed between the Issuer and the relevant Dealer(s), be listed on the
SGX-ST or any other recognized stock exchange(s) as may be agreed between parties
Negative Pledge Negative pledge applies
Financial Covenants Consolidated Total Borrowings to Consolidated Total Assets will not be at any time more than 0.60:1
Consolidated EBITDA to Consolidated Interest Expense will not be at any time less than 1.5:1
Governing Law Singapore Law
Under the S$500 million MTN Programme, the Issuer may from time to time issue
Notes or Perpetual Securities denominated in any agreed currency
25Conclusion
1 Committed Sponsor
2 Prudent Capital Management
3 Best-in-class Portfolio
4 Stable Operational Performance
26Thank You Key Contacts: Shane Hagan Lim Hui Hua Chief Executive Officer Chief Financial Officer Tel: (65) 6415 5980 Tel: (65) 6415 5985 Email: shane.hagan@soilbuild.com Email: lim.huihua@soilbuild.com
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