4q20 performance
TRANSCRIPT
4Q20 PERFORMANCEOctober – December 2020
ALLY Leasehold Real Estate Investment Trust(Former: Bualuang K.E. Retail leasehold Real Estate Investment Trust)
DISCLAIMER
Investment involves risk. Prospective should understand the characteristics of the Trust units and study information about ALLYlLeasehold Real Estate Investment Trust (“ALLY”) before making a decision to invest in the Trust units. This presentation is for information purposes only and is intended only for the initial direct attendee of the presentation. It may not be reproduced or redistributed to any other person. No part of this presentation, nor the fact of its existence, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. 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.
This presentation is not to be relied upon in any manner as legal, tax or any other advice and shall not be used in substitution for the exercise of independent judgment and each person made aware of the information set-forth hereof shall be responsible for conducting its own investigation and analysis of the information contained herein. Except where otherwise indicated, the information provided in this presentation is based on matters as they exist as of the date stated or, if no date is stated, as of the date of preparation and not as of any future date, and the information and opinions contained herein are subject to change without notice. None of the ALLY nor any of its subsidiaries accepts any obligation to update or otherwise revise any such information to reflect information that subsequently becomes available or circumstances existing or changes occurring after the date hereof. None of the ALLY or any of its subsidiaries or any of their respective directors, officers, employees or agents 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 presentation and any and all such liability is expressly disclaimed.
Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as “may”, “will”, “expect” , “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based on the assumptions and beliefs of ALLY management in light of the information currently available to ALLY. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this Presentation is, or should be relied on as promise or representation of ALLY as to the future.
AGENDA
BUSINESS OVERVIEW 01
OPERATIONAL HIGHLIGHT 02
FINANCIAL HIGHLIGHT 03
BUSINESS OUTLOOK 04
APPENDIX 05
4Q20 OVERVIEW
Re-normalization continues strongly.
• Continuation of tenant retention and attraction strategy leads to improved occupancy rate of 93.4% at end-of-period.
• Minimum discounts still in effect as some tenants' categories begin to re-start their businesses.
• Net Income increased 5% QOQ to 139.15 MB on improving operating conditions.
• Balance sheet strength focus with increased cash position and NAV/Share.
OPTIMIZE TO CUSTOMER’S CHOICE
Meet all needs in
one place
Buy online, pick-up in store
Pursue essential
and value
buying
Close to home location
Easy access layout & parking
Balance tenant mix
Provide omnichannel
service thru SkyOS
Offer necessity products in every locations
100%
73%
108%
94%
1Q20 2Q20 3Q20 4Q20
Pre-COVID
COVID Lockdown
Post-COVID 2nd wave COVID
Outbreak
R E L A T I V E T R A F F I C
Neighborhood shopping mall is the preferred destination
BUSINESS OVERVIEW
INTRODUCTION TO ALLY REIT
10Properties
12.3 bn Total Asset Value (THB)
139,722 sqm.Net Leasable Area
93.4%Occupancy Rate
The Crystal Ekamai-Ramintra
Diversified Core PortfolioCore and core-plus properties with diversified geographies and asset mix (retail-focus, office, warehouse, net lease) across Thailand
Dedicated ManagementSpecialized REIT management team with expertise and real estate ecosystem covering investments, property management, and technology
Desirable YieldFocused asset management and property management to drive quality cash flow and yield to investors
Delivering GrowthAsset enhancement intiatives and long-term asset pipeline to ensure both organic and inorganic growth
HISTORY
8 years track record of strong performance and transformation
2013 2019 2021
• Set up CRYSTAL Property Fund as a fund raising vehicle for K.E Group
• Invested in leasehold rights of the Crystal Design Center (CDC) and The Crystal Ekamai-Ramindra
• Converted to BKER and invest in 8 additional retail properties from both K.E. Group and 5 asset owners
• Quality assets from 3rd-parties at reasonable valuation resulting in overall yield accretion of the fund
• Collaborate with BBLAM as co-REIT manager:
• Aspire to tap into other asset types with potential for growth to build sizeable yet stable portfolio
• Vision to become the largest diversified independent REIT
• Propose to expand scope of investment to include non-retail assets (i.e. office buildings, exhibition halls, marketplace, etc.) for the best benefit of unitholders
The Crystal Ekamai-Ramindra
Crystal Design Center
Amorini Ramintra I’m Park Plearnary Mall Sammakorn Place Ramkhamhaeng
Sammakorn Place Rangsit
Sammakorn Place Ratchapruek
The Crystal SB Ratchapruek
The Scene Town in Town
PORTFOLIO
Core portfolio of 10 properties located in high-income and growth areas
Crystal Design Center The Crystal Ekkamai-Ramintra The Crystal SB Ratchapruek Amorini I’m Park
Sammakorn Place Ramkamhaeng Sammakorn Place Rangsit Sammakorn Place Ratchapruek The Scene Town in TownPlearnary Mall
PORTFOLIO MIX
Two-thirds larger shopping and specialty centers; one-third smaller lifestyle malls
31%
Ekamai-Ramintra
25%
Rajapruek15%
3%
Rangsit 2%
3%
Rajapruek 2%
8%
Ramkamhang 5%6%
Shopping center
Community mall
Specialty mall
Neighborhoodmall
TENANT MIX
Beauty & Health 9%
Cinema 8%
Education 6%
Fashion 5%
Financial 4%
Fitness 6%
Food & Beverage19%
Home 18%
Lifestyle 7%
Office 6%
Service 1%Specialty 1%
Supermarket 10%
Well-balanced and diversified tenant mix in the portfolio.
OPERATIONALHIGHLIGHT
KEY OPERATING INDICATORS
Net Leasable Area
1 3 9 , 7 2 2s q m .
Occupancy Rate
9 3 . 4 %
Average Rental Rate
5 2 4b a h t / s q m
Rental Reversion Rate
0 . 1 %
Retention Rate
9 0 . 1 %
Weighted Average Lease Expiry
2 . 9 2 y r s
During the economic downturn, focus on tenant retention and adding high-
quality tenant brands.
Occupancy rate increased to 93.4% at end of year.
Average rental rate still face pressure from
lingering discounts during re-normalization.
PORTFOLIO PERFORMANCE
580551
540 539524
92.7% 92.8%
90.5%
91.4%93.4%
150
250
350
450
550
80.0%
90.0%
4Q19 1Q20 2Q20 3Q20 4Q20
Average rental rate (Baht/sqm) Occupancy rate
63
% D
isc
ou
nt
7.8
% D
isc
ou
nt
7.9
% D
isc
ou
nt
Net rate = 200
Net rate = 497 Net rate = 482
222 total renewed and new leases in 4Q20 for a
total of 32,321 sqm.
Tenant prioritization applied since 3Q20
resulted in an improved retention rate to 90.1%.
While rental reversion improved from -4.7% to
0.1% in 4Q20 as economic normalization takes effect.
LEASING PERFORMANCE
97.0%
81.0%
74.0%
89.5% 90.1%
2.9%
1.8% 1.7%
-4.7%
0.1%
-10.0%
-5.0%
0.0%
50.0%
100.0%
4Q19 1Q20 2Q20 3Q20 4Q20
Retention rate Rental reversion rate
LEASING ACTIVITY
Renewed lease80%
New lease20%
Lifestyle 2%
Other 1%
Office 1%Fashion
3%
Education 6%
Financial6%
Fashion 2%
Other 2%
Besides anchor tenants, prioritization focused onF&B, Beauty & Health, Education and Lifestyle tenants.
32,321sqm.
PORTFOLIO PROFILE
More balanced portfolio WALE with 1/3 of leases due per year over next 3 years.
5%
13%
9%
30%
20%
21%
1%0%
15%
30%
<= 12 mth 12-24 mth 24-36 mth >36 mth
Weighted Average Lease Expiry
Anchor tenant Other tenant
WALE (standard)
1.76 Years
WALE (including renewal options)
2.92 Years
FINANCIALHIGHLIGHT
BALANCE SHEET
Total Asset Value
1 2 , 2 5 1M B .
Cash & Equivalent
5 1 5M B .
Debt / TAV
0 . 2 3t i m e s
Net Asset Value
9 . 5 8 4 3B a h t / s h a r e
Solid balance sheet
As a result of profitable operations, cash &
equivalents increase 45% QOQ to 515.35 while
net asset value was up to 9.5843 baht per share.
Debt/TAV maintained at 0.23 times.
BALANCE SHEET
12
,18
9.2
9
12
,25
8.2
2
12
,11
1.7
2
12
,26
0.9
5
12
,25
0.8
7
738.35 395.60 267.18 356.11 515.35
8,6
34
.82
8,3
76
.29
8,2
45
.20
8,3
59
.94
8,3
77
.65
9.8785 9.5828 9.4328 9.5641 9.5843
0.23 0.23 0.23 0.23 0.23
(0.9000)
4.1000
9.1000
-
5,000.00
10,000.00
4Q19 1Q20 2Q20 3Q20 4Q20
Total asset value (MB) Cash&Equivalents (MB)
Net asset value (MB) NAV/share (Baht)
D/TAV (times)
INCOME STATEMENT
FY2020Total Revenue
1 , 1 3 2 . 5 0M B .
FY2020Net Investment
Income
FY2020Distribution
Income
FY2020Distribution
Per Unit
4Q20Total Revenue
4Q20Net Investment
Income
4Q20Distribution
Income
4Q20Distribution
Per Unit
4 3 4 . 4 0M B .
2 8 3 . 8 7M B .
1 3 9 . 1 5M B .
1 2 6 . 7 4M B .
0 . 1 4 5B a h t
2 8 0 . 2 3M B .
0 . 4 3 5B a h t
A property tax deducted during the year resulting in
lower 4Q20 revenue by 13%QOQ and lower cost of rental and service by
47%QOQ.
Despite a softer than normal 4Q, net investment
income increased 5%QOQ.
INCOME STATEMENT1
17
.92
35
0.7
7
17
0.3
5
32
7.5
4
28
3.8
7
54
.30
14
8.5
9
14
.57
13
2.1
2
13
9.1
5
52
.44
13
9.8
6
-
11
3.6
3
12
6.7
4
0.060
0.160
-
0.130
0.145
-
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.160
0.180
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
4Q19 1Q20 2Q20 3Q20 4Q20
Total revenue (MB) Net investment income (MB)
Distribution income (MB) Distribution per unit (Baht)
DISTRIBUTION TIMETABLE
Annualizeddistribution
yield*
Ex-dividend date (XD) / March 10, 2021Ex-capital return date(XN)
Record date March 11, 2021
Payment date March 19, 2021
* Based on annualized DPU of previous four quarters and market price of 5.60 Baht as of Feb 23, 2021
96.97% Payout ratio Total (MB.) DPU (Baht)
Distribution Income 126.74 0.145
- Dividend 48.08 0.055
- Capital reduction 78.67 0.090
7.77%
BUSINESS OUTLOOK
2021 OUTLOOK
Solid fundamentals underpin intrinsic value
• Significant levels of fixed rent revenues backed by diversified WALE and defensive tenant mix
• Upside potential from stronger than expected economic recovery and government stimulus measures
• Expansion plan remains on track supported by a broader investment universe
• Share price below NAV and an above average dividend yield amidlow interest rate environment
MARKETING & EVENTS
REBRANDING TO ALLY REIT:SYNERGY MADE GROWTH
● New name: partnership focus with investors and sponsors to create a diversified REIT with long-term vision
● Expanded asset universe including office, warehouse, and other commercial buildings
● Solidifying pipeline for new injections while maintaining prudent investment policy
● Portfolio synergies and economy of scale
● Well-utilized resources of KE Group
ASSET ENHANCEMENT INITIATIVES
PLEARNARY MALL
“Family friendly co-living space”
● Growing catchment area of new younger
families in Watcharaphol area
● Differentiation against neighboring market
with playful modernization
● Renovation of central event area under
“Bubble Ground” concept
● Addition of new “Co-Working Playground”
to activate 2nd Floor space
● Revitalizing F&B tenants (1st Floor) and
Education tenants (2nd Floor)
Objective: Occupancy and Rental Uplift
ASSET ENHANCEMENT INITIATIVES
I’M PARK
“Hub for integrated knowledge and borderless playground”
● Up and coming neighborhood with new
apartment units and offices
● Refocusing on student and parents target
group
● Renovation of common areas with new
seating and chic kiosks to encourage hang
out time
● Adding F&B tenant focus and variety of
offering on 1st Floor; education and offices
and 2nd and 3rd Floor
Objective: Occupancy Uplift
ESG INITIATIVES
SOLAR ROOFTOP PROJECT
Pilot Project at CDC before rolling out entire portfolio by YE-2021
● Drive to utilize clean and renewable
energy sources for portfolio needs
● Expected cost saving of 25% per unit cost
at CDC
ORGANIC FERTILIZER PROJECT
Clean fertilizer replacement
● Replacement of all fertilizer utilize with
organic type (without any chemicals)
INVESTMENT PIPELINE
Retail93%
Non-retail7%
NOW
Retail91%
Non-retail9%
Within1 year
Retail78%
Non-retail 22%
Within3 years
2021: 3 assets are expected to be acquired with debt financing
# Type Location
1 Retail Chiang Mai
2 Retail Nonthaburi
3 Mixed-use Hualumphong
2022-2024: Variety of assets are under due diligence and negotiation process
# Type Investment Theme # Projects
1 Lifestyle mall
Lifestyle/Community malls in affluent suburb
Bangkok surrounded by residentials or
communities with certain spending power
5 – 6
2 Enclosed mall
Landmark malls in outer Bangkok and other major
cities with low competition, serving mass
middle-income customers
2 – 3
3 Net leaseAnchored retailers with proven track record
in the affluent suburb Bangkok2 – 4
4 Office
Non-CBD and prime grade office building in
Bangkok with high take-up rate and ability to
command rental rate growth due to excess
demand in the area
3 – 5
INVESTMENT PIPELINE: PROJECTS UNDER MOU
Lifestyle Retail Mall
Chiang Mai
Term: 30Y leasehold
Approx. NLA: 6,500 sqm
Valuation: ≤ 390 MB
Approx. Yield: 7.7%
Timeline: around Q2
• Community Mall located in affluent residential area
• Good performance supermarket anchor
• Sponsor remains as property manager with performance guarantee
Mixed-Use Project
Hualumphong
Term: 21Y leasehold (approx.)
Approx. NLA: 4,300 sqm
Valuation: ≤ 180 MB
Approx. Yield: 11.0%
Timeline : around Q2
• Accessible MRT location in the upcoming Hualumphong area
• Showroom, offices, and parking building
• 85% of building leased to tenant who will commit to 10+ year term
Lifestyle Retail Mall
Nonthaburi
Term: 21Y leasehold (approx.)
Approx. NLA: 9,400 sqm
Valuation: ≤ 290 MB
Approx. Yield: 7.3%
Timeline : around Q3
• Sole Community Mall located on a major road
• Good performance supermarket anchor
• Growing neighborhood with new upscale housing projects
Projects that are under MOU have value ≤ 860 MB to be financed using debt room
KAD FARANG, Chiangmai• 30 –year leasehold, ended 2051
• Sponsored by Muen Saan Property Co.,Ltdwho guarantee 5-yr performance as PM
• Biggest modern Lanna community mall on the main road to key attractions in Chiang Mai, opened in 2014
• Surrounded by over 60 affluent housing projects, 40,000 residential units, 19 schools and airport
• Anchor tenants: Rimping supermarket, Mcdonald’s, KFC, Starbucks, Pizza hut, Mr. DIY, Premium outlet
Asset Evaluation Value390MB
JLL
390.10MB
ETC
390MB 9.3% IRR
7.7% Entry yield
ALLY
Investment Value
88%Occupancy Rate
385 Baht/Sqm.
Average Rental Rate
88%
Retention Rate
3%
Rental Reversion Rate6 yrsWALE
6,974 sqm
Net Leasable Area
Lifestyle14%
F&B49%
Financial2%
Education5%
Beauty&Health14%
Supermarket16%
T E N A N T M I X
THE CRYSTAL CHAIYAPRUEK, Nontaburi
● Drive to utilize clean and renewable
energy sources for portfolio needs
● Expected cost saving of 25% per unit cost
at CDC
● Replacement of all fertilizer utilize with
organic type (without any chemicals)
• 21 –year leasehold, expiring 2042
• Sponsored by K.E Group
• Growing neighborhood amidst new upscale housing projects, schools and hospitals
• PTT gas station (one of the highest sales station) on main outbound road draws in traffic
• Anchor tenants: TOPS supermarket, The Fitness Society, KFC, Starbucks, Mr. DIY, Yamaha Music School and Fit wash.
Asset Evaluation ValueInvestment Value
292.6MB
KTAC
294MB
JLL
280MB 9% IRR
7.7% Entry yield
ALLY
311.5 MB
IFA
T E N A N T M I X
F&B 21%
B&H7%
Lifestyle11%
Fashion6%
Office1%
Home1%
Education15%
Supermarket20%
Fitness9%
Financial 3%
Service6%
85%Occupancy Rate
415 Baht/Sqm.
Average Rental Rate
100%
Retention Rate
3%
Rental Reversion Rate
2.38 yrsWALE
9,488 sqm
Net Leasable Area
APPENDIX
GLOSSARY
Total Asset Value (TAV):
Total market value of all properties in REIT
Net Asset Value (NAV):
The market value of all REIT’s assets less its liabilities and obligations
Debt/Total Asset Value:
The leverage limit is 0.35 and up to 0.60, including investment grade bond
Distribution per unit (DPU):
Amount of dividends a REIT investor receives for every unit holding
Net Leasable Area (NLA):
The amount of floor space that can be rented out for income
Occupancy Rate (OR):
The proportion of rental area which are occupied
Committed Occupancy:
Occupancy rate based on current leases and letter of offer accepted by tenants for which a deposit fee has been paid
Average Rental Rate (ARR):
Rental rate charged per area (sqm.)
Rental Reversion Rate (RRR):
Changes in rental rate from new leases or same store rent changes
Retention Rate:
The proportion of leases renewed when expire
Weighted Average Lease Expiry (WALE):
All tenants’ remaining lease in years, weighted by tenants’ occupied area
OCCUPANCY RATE
At end-of-period 4Q19 1Q20 2Q20 3Q20 4Q20
CDC 90.6% 91.4% 88.2% 88.3% 95.8%
TC 99.3% 96.8% 95.4% 95.0% 95.4%
TCR 93.7% 97.3% 96.3% 96.4% 97.1%
AMR 96.3% 85.3% 85.0% 88.7% 88.5%
IMP 94.3% 96.1% 88.8% 83.9% 85.4%
PLN 85.5% 84.2% 82.9% 83.3% 84.6%
SRM 92.1% 90.2% 88.5% 91.2% 96.1%
SRS 92.5% 95.6% 92.2% 92.4% 93.6%
SRP 79.3% 78.8% 81.0% 80.5% 80.0%
TS 87.3% 90.6% 86.8% 87.4% 89.0%
AVERAGE RENTAL RATE
Baht/sqm. 4Q19 1Q20 2Q20 3Q20 4Q20
CDC 621 602 610 595 561
TC 654 605 563 578 590
TCR 573 532 525 530 505
AMR 365 385 364 342 367
IMP 634 606 561 544 532
PLN 406 381 394 398 340
SRM 455 453 448 441 440
SRS 548 523 500 520 500
SRP 521 517 514 516 507
TS 635 601 627 628 608
LEASE EXPIRY PROFILE
0%
15
%
6%
10
%
31
%
7%
29
% 33
%
12
%
4%
24
%
30
%
39
%
39
%
21
%
19
% 18
%
26
%
15
%
25
%
10
%
28
%
29
%
11
%
17
%
10
%
41
%
21
%
38
%
24
%
7%
43
%
14
%
23
%
40
%
10
%
25
%
18
%
25
%
2%
31
%
9%
20
%
71
%
14
%
15
%
0%
10%
20%
30%
40%
50%
60%
70%
80%
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
>3
6 m
th
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
>3
6 m
th
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
>3
6 m
th
<=
12
mth
12
-24
mth
24
-36
mth
<=
12
mth
12
-24
mth
24
-36
mth
Anchor tenant Other tenant
CDC
1.40
TC
4.67
TCR
3.44
AMR
4.16
IMP
1.52
PLN
2.73
SRM
2.62
SRS
1.55
SRP
0.82
TS
1.89
Weighted average lease expiry (yrs)
BALANCE SHEET
(Amount in THB m) 4Q19 3Q20 4Q20
ASSETS
Investment in leasehold properties at fair value 11,171.14 11,353.19 11,349.24
Investment in securities 40.00 159.82 60.00
Cash and equivalents 738.35 356.11 515.35
Rental and Service receivables 54.97 227.33 197.74
Other assets 184.83 164.50 128.54
Total Assets 12,189.29 12,260.95 12,250.87
LIABILITIES
Account payables and Accrued expenses 438.53 166.90 130.31
Deposits from rental and services 351.74 396.51 387.06
Rental and Service income received in advance 3.76 4.43 7.38
Long term loan 2,758.64 2,760.32 2,760.90
Lease liabilities - 539.93 539.19
Other liabilities 1.79 32.92 48.38
Total Liabilities 3,554.47 3,901.01 3,873.22
Net Asset Value 8,634.82 8,359.94 8,377.65
Capital from unitholders 8,897.99 8,758.13 8,644.50
Retained earning(loss) 54.30 (80.73) 50.62
Net Asset Value 8,634.82 8,359.94 8,377.65
Net Asset Value per Unit (Baht) 9.8785 9.5640 9.5843
INCOME STATEMENT
(Amounts in THB m) 4Q19 3Q20 4Q20
REVENUE
Rental and Service income 108.05 310.14 315.82
Interest income 0.62 0.09 0.14
Other income 9.25 17.32 (32.09)
Total Revenues 117.92 327.54 283.87
EXPENSE
Cost of rental and service 36.83 116.08 61.64
Property management fee 9.47 26.20 25.88
REIT management fee 4.46 12.16 12.23
Administration expense 2.93 8.30 12.29
Amortization of deferred expenses 1.49 5.29 5.29
Finance cost 8.43 27.39 27.40
Total Expenses 63.62 195.42 144.73
Net Investment Income 54.30 132.12 139.15
Net changes in fair value of investment in leasehold properties and securities - (17.38) (7.80)
Net change in Asset from Operation 54.30 114.74 131.35
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