1q fy2007/08 financial results presentation 19 july 2007...

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1Q FY2007/08

Financial Results Presentation

19 July 2007

A-REIT FY07/08 Results .. 2

This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income and occupancy, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward looking statements, which are based on the Manager’s current view of future events.

Disclaimers

This Presentation is focused on comparing results for the three months ended 30 June 2007 versus actual results year-on-year (“yoy”). This shall be read in conjunction with A-REIT’s Results for the period from 1 April 2007 to 30 June 2007 in the SGXNet announcement.

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Agenda

• Key highlights

• Financial performance

• Capital and funds management

• Investment update

• Portfolio update

• Market outlook

• Going forward


Key Highlights

• 1Q FY07/08 net income available for distribution of $44.68 m, up 12.8%

year-on-year (yoy)

• DPU of 3.37cents, up 9.1% yoy

• Achieved organic growth of 5.2%(1) yoy

• Portfolio occupancy at 97.2% on 30 June 2007 vs 96.1% at 30 June

2006. MTB occupancy was 95.0% vs 92.1% yoy

• 57% increase in new leases/expansion compared to a year ago

• Total assets of $3.3bn as at 30 June 2007 compared to $2.9bn as at 30

June 2006

(1) Excluding 30 Tampines Industrial Avenue 3

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Distribution Details

29 August 2007Distribution payment date

31 July 2007, 5.00 pmBooks closure date

27 July 2007, 9.00 amEx-date

26 July 2007Last day of trading on “cum” basis

Distribution Timetable

3.371 Apr 07 to 30 Jun 07 Ascendasreit

Distribution per unit (cents)Distribution PeriodStock counter


Agenda

• Key highlights





• Market outlook

• Going forward

4


3.37

44,685

42,727

(4,667)

(10,636)

58,030

(19,313)

77,343

1Q FY07/08 (1)

17.4(3,975)Non-property expenses

28.1 (3)(8,304)Borrowing costs(2)

9.13.09Distribution per unit

12.839,610Available for distribution

12.737,923Net income

7.6(17,944)Property operating expenses

15.8

13.7

% Change

50,098Net property income

68,042

1Q FY06/07 (1)

Gross revenue

(S$’000)

DPU – 1QFY07/08 is 9.1% above 1QFY06/07

Notes:(1) Based on 78 properties as at 30 June 2007 versus 66 properties as at 30 June 2006(2) Borrowing costs for the first quarter ended 30 June 2007 and 30 June 2006 represents interest expense on

loans, the accretion adjustments for deferred payments and refundable security deposits and the change in the fair value of the interest rate cap.

(3) If non-cash adjustments under FRS39 and additional debt drawn down to fund new acquisitions are excluded, borrowing costs increased by 13% over the period due to higher borrowings.


3.37

44,685

42,727

(4,667)

(10,636)

58,030

(19,313)

77,343

1Q FY07/08 (1)

2.8(4,542) (2)Non-property expenses

(5.4)(11,248)Borrowing costs(3)

2.13.30Distribution per unit

4.642,724Available for distribution

7.339,812Net income

4.7(18,439)Property operating expenses

4.4

4.5

% Change

55,602Net property income

74,041

4Q FY06/07 (1)

Gross revenue

(S$’000)

DPU – 1QFY07/08 is 2.1% above 4QFY06/07

Notes:(1) Based on 78 properties as at 30 June 2007 versus 77 properties as at 31 March 2007(2) For quarter to quarter comparison, performance fees of $6.6 million were excluded from the non-property

expenses. (3) If non-cash adjustments under FRS39 are excluded, borrowing costs increased by 2.9% over the period due

to higher borrowings.

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Revenue and NPI - 18 quarters of continued growth since IPO

Gross Revenue

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$'m


Yield returns compared to 10-year bond and S-REITs

Source: IBES Estimates, Bloomberg

S-REITs yield range from low of 2.0% to high of 8.1%

2.0%

4.6%

8.1%

2.9% 2.9% 2.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

S-REIT High A-REIT S-REIT Low

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Yield (LHS) 10-year bond yield (RHS) Weighted average S-REITs' yield

522 bps

spread

-83 bps

spread

173 bps

spreadWtd avg yield = 3.6%

As at 30 June 2007

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Agenda

• Key highlights





• Market outlook

• Going forward


Balance sheet

137 cents149 centsNet asset value per unit

38.1%

1.8

1.1

2.9

As at 30 Jun 06

38.0%Aggregate Leverage

2.0Net assets attributable to unitholders

1.2

3.3

As at 30 Jun 07

Borrowings

Total Assets

(S$bn)

Available debt capacity of more than $450m to fund acquisition and development activities before optimal gearing of 45% is reached

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Capital Management

Notes:

(1) Aggregate leverage includes deferred settlements of about $50 m

(2) Including margins and weighted swap rates for hedged debt and current floating rates on unhedged debt, and

amortisation of CMBS’ establishment and annual maintenance costs

4.1 years4.4 yearsWeighted average term for fixed debt

81.4%93.0%Fixed as a % of total debt

6.1 times5.4 timesInterest cover ratio

38.1%38.0%Aggregate leverage (1)

3.46%3.42%Weighted average all-up funding cost (2)

S$733mS$1,131m• Fixed rate debt

S$1,057mS$1,216mTotal debt

30 Jun 200630 Jun 2007Debt Profile


Proactive interest rate management• Staggered maturities in hedging profile to manage interest rate risks

• Interest rate cap which expired in May 2007 has been replaced with fixed rate swaps

• At at 30 June 2007, 93% of interest exposure is fixed with a weighted average term of 4.4 years at a weighted average cost of 3.42%

• The balance 7% and any further debt drawdown will be at prevailing market rate

Fixed & floating Rates Debt Profile

27%

7% 11%23%

37%48%

72%87%

62%

93% 89%77%

63%52%

28%13%

11%

Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14

Floating Rate Cap Fixed Rate

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Agenda

• Key highlights





• Market outlook

• Going forward


Investment highlights

1Q FY2008/0932Plot 7 & 8 Changi LogisPark(North)

4Q FY2007/0864Asset enhancement of SENKEE Logistics Hub

1Q FY2008/0923Logistic & Distribution Centre at Pioneer Walk

4Q FY2007/0829HansaPoint @ CBP

148Total

Value (S$m) Expected completion

• One new property acquired for $11.2 million in 1QFY07/08

• $148m worth of investments awaiting completion as follows :

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Status of development projectsHansaPoint @ CBP (Plot 15 Changi Business Park)

• Construction commenced in Nov 2006. On schedule to complete in Q1 2008

• Pre-committed space increased from 28% to 42%

Artist impression

Dec 06 - Site

cleared for

construction

April 07 – Piling

works completed

Jul 07 –

Construction

in progress


Status of development projects Plot 7 & 8 Changi LogisPark (North)

• Partial built-to-suit logistics facility for Zuellig Pharma

• Construction commenced in Feb 2007 and expected to complete in Q1 2008

Artist impressionApril 2007 - Site

cleared for

construction

Jul 2007 – Under

construction

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Agenda

• Key highlights





• Market outlook

• Going forward


Portfolio Highlights –57% increase in new demand

6.6

82,793(2)

23,234(2)(4)

49,936(2)

97.2%

95.0%

As at/Qtr ended

30 Jun 07

96.1%

92.1%

A-REIT Portfolio occupancy

A-REIT MTB (1) occupancy

50,279(3)

14,754(3)

35,525(3)

Total Portfolio renewals/new leases (sqm)

Total New leases/Expansions (sqm)

Total Renewals (sqm)

6.3Weighted Average Lease to Expiry (years)

As at/Qtr ended

30 Jun 06

Notes : 1) MTB = Multi-tenanted buildings which accounts for about 51% portfolio value2) For the three months ended 30 Jun 073) For the three months ended 30 Jun 064) Excluding re-letting of 30 Tampines Industrial Avenue 3 which is single-tenanted

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Sources of demand for new leases – broad based

1QFY2007/08 tenants sector by net lettable area

Precision Engineering

42%

Transport and Storage

30%

Others

10% Electronics

5%

Biomedical

1%

IT

4%

General Manufacturing

8%


Subsector Performance

92.1%

91.7%

93.7%

91.6%

90.8%

Occupancy

@ 30 Jun 06

95.0%Total Portfolio (MTB)

1.2%3.4%96.3%Light Industrial

25.1%^26.9%*93.2%Logistics & Distribution Centres

96.4%

93.4%

Occupancy @ 30 Jun 07

4.4%30.1%Hi-Tech Industrial

20.2%

Incr. in new take up rates

(vs Q4 FY06/07)

18.5%

Increase in renewal

rates

Science and Business Park

Multi-tenanted properties

Significant increase in occupancy and rental rates achieved for suburban properties in 1QFY07/08

Note: the performance of the Logistics sector in this quarter is extraordinary and is not expected to be repeated because:* About 6,911 sqm of significantly under-rented space was renewed at prevailing market rate^ About 5,331 sqm of ground floor space rented with air-con fit-out (ie higher specifications) resulting in higher than normal bare space rental rate; this lease is pre-committed to take effect on 1 Mar 08 when the existing tenant vacate the space. Another 1,682 sqm on upper floor with similar air-con fit-out has also been leased at a higher than normal bare space rental rate in Apr 07

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Portfolio Diversification by Value

Asset Class Diversification

Multi-tenanted

Buildings

Sale-&-Leaseback

49% 51%

Mix of Sale-&-Leaseback vs Multi-tenanted Buildings

Science &

Business Parks

Hi-Tech

IndustrialFlatted

Factories

Logistics &

Distribution

Centres

Warehouse

Retail Facilities

Light

Industrial

27%

8%

16%

25%

20%

4%


Spilt of short term & long term leases within sectorMajority of leases in high growth sectors of science and business park and hi-tech industrial are on short term basis. Hence, potential to enjoy positive rental reversion

Light Industrial (by NLA)

16.7%

83.3%

Hi-tech Industrial (by NLA)

64.6%

35.4%

Science and Business Park (by NLA)

73.9%

26.1%

Logistics and Distribution Centres (by NLA)

31.5%

68.5%

Multi tenanted

Sale and leaseback

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Weighted Average Lease Term to Expiry

• Weighted average term to expiry remains stable at 6.6 years• Lease expiry profile is well balanced and extends beyond 2021

6.6 years

Based on 78 properties

As at 30 Jun 2007

6.3 years

Based on 66 properties

As at 30 Jun 2006

Weighted average lease term to expiry

9.3

% 13.1

%

12.5

%

10.1

%

7.1

%

1.4

%

2.1

% 6.0

% 9.5

%

7.1

%

5.2

%

1.1

%

2.9

%

2.2

%

2.0

%

8.4

%

7.1

%

12.5

%

14.8

%

10.2

%

2.1

%

2.2

%

8.6

%

9.4

%

7.1

%

8.1

%

1.6

%

2.9

%

1.3

%

1.6

%

10.7

%

0%

10%

20%

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

>2021

Year Ending 31 Mar

66 properties @ 30 Jun 06 78 properties @ 30 Jun 07

% o

f A

-RE

IT P

rop

ert

y I

nc

om

e


Breakdown of renewal by sector

Business &

Science Parks,

19.2%

Hi-tech Industrial,

32.3%Logistics, 17.8%

Light Industrial,

30.7%

• 34% of total lease in portfolio will expire in the next three years• Out of which, 32.3% are in the Hi-Tech Industrial sector and 19.2% in the

Business & Science Parks sector.

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7.2%

5.8%

2.5% 2.4% 2.3% 2.1% 2.0% 1.8% 1.7% 1.7%

0.0%

4.0%

8.0%

SingT

el

C&P

Siem

ens

Cold

Sto

rage

TT In

tern

atio

nal

Hew

lett

Packa

rd

Cour

ts

Infin

eon T

echn

ologi

es

Freig

ht Lin

ks E

xpre

ss D

istrip

ark

Pte L

td

Hone

ywell P

te L

td

Quality & Well-Diversified Tenant Base

Top 10 tenants make up 29.5% of the total portfolio income vs 33.0% at 30 June 2006


A-REIT Portfolio Occupancy Higher Than Market

URA: Urban Redevelopment Authority Official Statistics as at March 2007 www.ura.gov.sg and Ascendas-MGM Funds Management Limited (“A-MGM”) as at 30 June 2007.

98.5%

90.8%

97.9%97.7%

87.1%84.8% 84.8%

88.8%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Business Park Light Industrial Hi-Tech Industrial Logistics

A-REIT URA

Occu

pan

cy R

ate

(%

)

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Organic Growth – Rental Rate Improvements

• Built-in Rental Growth• 49% of portfolio by value are sale-&-leaseback

• Incorporates stepped annual rental increment, providing growth in earnings

• Positive Rental Reversion• 51% of portfolio are multi-tenanted buildings where rental rates are

marked to market at renewal

• Given positive market sentiments and tight office supply in the Central Business District, there could be opportunities for positive rental reversion for selected sectors such as Business & ScienceParks and Hi-Tech Industrial properties

• For 1QFY2007/08 compared with 4QFY06/07 - achieved positive overall average gross rental reversion of 26.1% and 11.2% in theBusiness & Science Parks and Hi-Tech Industrial properties, respectively


Asset Enhancement

• Asset enhancement potential for existing properties where plot ratio could be maximised

• Alpha (In progress)

• Property is located in Singapore Science Park 2. In process of constructing additional 3,527sq m of space which will be leased to FJ Benjamin upon completion, which is expected in December 2007

• Property yield expected to increase by about 0.5% after asset enhancement. Current property value = $56m

• In the pipeline:• TechPlace II, Hoya Building and Thales Building - in response to

enquiries from existing expanding tenants

• Capitalising on under-utilized plot ratio to generate growth for the portfolio

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Agenda

• Key highlights





• Market outlook

• Going forward


Recovering Industrial Property Market

URA industrial rental index improved by 4.5% in 1Q 2007 and by 16.8% since the trough in 2004

65

70

75

80

85

90

2000Q1

2000Q2

2000Q3

2000Q4

2001Q1

2001Q2

2001Q3

2001Q4

2002Q1

2002Q2

2002Q3

2002Q4

2003Q1

2003Q2

2003Q3

2003Q4

2004Q1

2004Q2

2004Q3

2004Q4

2005Q1

2005Q2

2005Q3

2005Q4

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

Ind

us

tria

l R

en

tal

Ind

ex

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$2.61

$2.04

$1.22

$1.31

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07

Ren

tal R

ate

(S

$p

sf

pm

)

Science & Business Park High-Tech Industrial

Logistics and Distribution Centres Light Industrial

Rents by Sub-sectors

• Expansion demand as well as some relocation of back office functions from more costly CBD offices helped lift rents in suburban business space

• Average signing gross rents for all Industrial space sectors rose by above 10% corresponding to the respective quarter in FY2006/07

Source : Colliers for Hi-tech Industrial, Light Industrial and Logistics & Distribution Centres rents

JTC for Science and Business Parks rents


Outlook for Industrial Property Market• General outlook positive as economy continues to grow and the

manufacturing sector remains strong

• Positive outlook for Science & Business Parks and Hi-tech Industrial sectors• Limited new supply in the next 2 – 3 years• Increasing demand due to spillover effect from backroom operations of financial

institutions currently located in CBD • New demand from MNCs setting up operations in S’pore due to government’s

continued incentives for regional headquarter and other services• 74% of science and business park sector & 65% of hi-tech industrial sector are on

short term leases

• Outlook for logistics sector subdued• Significant new supply of about 471,000 sqm in 2007• New demand rental rates may be dampened • However, 69% of lease in this sector are long term committed leases

• Outlook for light industrial sector moderate• Although new supply in next 2 years is not significant compared to logistics sector,

occupancy and rental rates performance depends on the strength of future demand

• Rental growth rate is expected to be in line with traditional sector performance• 83% of portfolio are long term committed leases

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Agenda

• Key highlights





• Market outlook

• Going forward


A-REIT's strengths

Diversity and Depth• Largest business and industrial REIT in Singapore • Solid and well diversified portfolio

� Six property asset classes

� Well-located quality properties

� Balance of long term vs short term leases provides stability and potential for positive rental reversions

� No single property accounts for more than 6% of revenue

� High predictability and sustainability in income

Market leader• Ascendas has a track record of more than 20 years• Committed sponsor and alignment of interest with A-REIT unitholders• Market leader in business space in Singapore

• 38% share of Hi-tech Industrial space • 29% share of Science and Business Parks space • 11% share of Logistics & Distribution Centres space - 30% in the Eastern region

and 12% in Western region of Singapore

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A-REIT's strengths

Development capability• Has development capability to create own assets which are more yield accretive than

acquisitions of income producing properties

Operational platform• Dedicated sales/marketing, leasing and property management team of over 80 people• Possess in-depth understanding of this property sector

Customer focus• Track record of customers growing with us• High retention ratio of 95.5%

Size advantages• Market capitalization in excess of $3.8bn (based on 29 Jun 07 closing price)• 13% of S-REIT sector• 8% of Asian REIT sector ex Japan• Accounts for about 13% of total trading volume for S-REITs for 1QFY07/08• Ranked 6th in the BT Transparency Index amongst all companies listed on SGX• Included in major indices (eg. MSCI, STI)


A-REIT's strategies

Optimise

capital structure

Optimise

capital structureValue-Adding

Investments

Value-Adding

Investments

Proactive

asset

management

Proactive

asset

management

StabilityStability GrowthGrowth

Predictable incomePredictable income Capital stabilityCapital stabilityTotal

returns

Outcome

StrategiesStrategies

Proactive

and

dedicated

manager

with track

record

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Important Notice

This presentation has been prepared by Ascendas-MGM Funds Management Limited as Manager for Ascendas Real Estate Investment Trust. The details in

this presentation provide general information only. It is not intended as investment or financial advice and must not be relied upon as such. You should obtain

independent professional advice prior to making any decision. This Report is not an offer or invitation for subscription or purchase of securities or other financial

products. Past performance is no indication of future performance. All values are expressed in Singaporean currency unless otherwise stated. January 2006

Thank you

1q fy2007/08 financial results presentation 19 july 2007...

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