presentation by wen khai meng ceo, capitaland singapore · 6/6/2013  · 11 capitaland presentation...

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CapitaLand Investors’ Day

Presentation by Wen Khai Meng

CEO, CapitaLand Singapore

6 June 2013

1 CapitaLand Presentation *June 2013*

• Overview

• Our Key Businesses

• Business Update

• Singapore Residential Market

• Singapore Commercial Market

• Malaysia Iskandar Region

• CapitaLand Singapore’s Strategy

Content

2 CapitaLand Presentation *June 2013*

CapitaLand Singapore Organisation

CapitaLand Singapore

Residential Commercial

CapitaCommercial Trust (CCT)

(32% owned)

Quill Capita Trust

(30% owned by CCT)

Malaysia

3 CapitaLand Presentation * June 2013*

CLS ,

$6.2b, 18%

Rest of CL

Group, $29.2b, 82%

Total Assets as at 31 March 2013CL Group = $35.4b

CLS = $6.2b

CLS contributed 29% of CapitaLand’s EBIT (1)

CLS ,

$110.8m, 29%

Rest of CL

Group , $275.3m, 71%

EBIT as at 31 March 2013CL Group = $386.1m

CLS = $110.8m

Note:

(1) EBIT – Earnings before interest and tax

4

Our Key Businesses

The Wharf Residence, Singapore

5 CapitaLand Presentation *June 2013*

CapitaLand Singapore

One of Singapore's largest office landlords and

managers

Owns/manages 13 offices and mixed-use

developments or > 5 million sq ft of NLA

Sponsor of CCT(2) (32% owned)

Commercial & Mixed Developments

One George Street,

Singapore

Leading developer of distinctive and quality

homes

Completed > 7,000 homes since 2000

Pipeline of 2,200 homes or 3.3 mil sq ft GFA (1)

Homes

Sky Habitat,

Singapore

Notes:

(1) Information as at 19 May 2013

(2) CCT = CapitaCommercial Trust, a Singapore listed REIT

d’Leedon, Singapore

CapitaGreen,

Singapore

6 CapitaLand Presentation *June 2013*

CapitaCommercial Trust (Singapore)

First Listed Commercial REIT in Singapore

~3m sq ft

NLA

~S$4.87b#

Market Capitalisation

10 Properties in CBD

~S$6.95b* Asset Size

# Market Cap Figure as at 30 April 2013

* Asset Size Figure as at 31 March 2013

Capital Tower One George Street Six Battery Road

CapitaGreen

(40% stake)

HSBC Building

Bugis Village Golden Shoe

Car Park

Raffles City Singapore

(60% stake)

Wilkie Edge

Twenty Anson

7

Business Update

Capital Tower, Singapore

8 CapitaLand Presentation *May 2013*

• Achieved S$1.3b sales in 1Q 2013 vs

S$1.3b in 2012

- 544 units (1Q 2013) vs 57 units (1Q

2012)

Sales Performance of Residential Projects

d’Leedon

The Interlace

No

of

Un

its

So

ld

CapitaLand Presentation *June 2013*

d’Leedon

9 CapitaLand Presentation *June 2013*

Singapore Residential - Sales and Construction Progress1

% Launch Sold % Completed

As at Mar 2013 As at Mar 2013

Launched in 2007

The Orchard Residences 175 175 95% 100%

Launched in 2008

The Wharf Residence 186 186 97% 100%

Latitude 127 127 100% 100%

Launched in 2009

The Interlace 1040 1040 75% 90%

Urban Suites 165 165 100% 92%

Launched in 2010

d'Leedon 1715 1500 88% 53%

Launched in 2011

Urban Resort 64 34 85% 100%

Bedok Residences 583 583 96% 14%

Launched in 2012

Sky Habitat 509 250 61% 21%

PROJECTUnits

LaunchedTotal Units

1 Figures might not correspond with income recognition

CapitaLand Presentation *June 2013*

10

Residential Outlook

• Healthy pipeline with projects in

sought-after locations

- 2,200 units (~ 3.3m sq ft GFA)

• Target to launch Marine Point and

Bishan St 14 in 2H 2013

• Continue to bid for well-located

sites via GLS tenders and private

collective sales

Pipeline# includes:

The Interlace ~ 250

d’Leedon ~ 400

Sky Habitat ~ 350

Marine Point (new) ~ 120

Bishan St 14 (new) ~ 700

# Based on total available units as at end Mar 2013

CapitaLand Presentation *June 2013*

CapitaLand Presentation *June 2013* 11

Singapore Office Portfolio Performance

• CCT signed new leases and renewals of approx 409,900

sqft for 1Q 2013 (12% new leases) compared to 459,500

sqft for FY2012 (54% new leases)

• CCT’s portfolio occupancy at 95.3% vs market occupancy

rate of 93.2%

$8.73

$8.64

$7.94 $7.84 $7.79 $7.66 $7.45 $7.39

$7.53 $7.64

$7.83

$6.50

$7.00

$7.50

$8.00

$8.50

$9.00

Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13

$p

sf

Upward trend of CCT’s monthly average office portfolio rent

12 CapitaLand Presentation * June 2013*

Commercial Projects Update

CapitaGreen

• Target completion – 4Q 2014

• Commenced marketing with opening of

CapitaGreen show suite

Westgate

• Target completion – Office: 4Q 2014

• Pre-leased: 52% Westgate Tower (office)

Westgate

CapitaGreen

13 CapitaLand Presentation * June 2013*

CapitaLand’s First Foray Into Iskandar, Malaysia

– Danga Bay A2 Island

Master-planning in progress. Expected launch 1H2014

A2 Island

Artist’s impression subject to change

• Total GDV: RM8.1 bil (~S$3.2 bil)

• A premier waterfront residential

community comprising high rise

and landed homes with a central

waterfront hub with a marina,

shopping mall, F&B outlets,

serviced residences, offices and

recreational facilities

• Freehold net land: RM811 mil

(~S$324 mil)

• Estimated total GFA: 11 mil sq ft

(Land cost RM74 psf ppr)

CapitaLand Presentation *June 2013*

14

Singapore

Residential Market

RiverGate, Singapore RiverGate, Singapore

15

181.4

100.0

140.4

112.4

177.5

133.3

213.2

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

Source: URA

Private Home Prices Stabilising

URA Price Index increased 0.6% QoQ in 1Q 2013, compared with the

1.8% increase in the previous quarter

CapitaLand Presentation*June 2013*

16

632

1,872

2,417 2,393 2,497

1,704

1,371

1,946

1,427

2,621

1,948

1,087

1,410

2,028

712

2,793

1,375

0

500

1,000

1,500

2,000

2,500

3,000

Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13

Units

Private Home Sales halved to 1,375 units in April

8 Dec 2011:

ABSD Cooling

Measure

Source: URA

+43%

12 Jan 2013:

7th Cooling

Measures

+30%

6 Oct 2012:

6th Cooling

Measures

-65%

+292%

-51%

Apr-13 developer sales and launches (ex. ECs) moderated, down 51% and 76%

MoM, to 1,375 units and 806 units, respectively, after a record high Mar-13

OCR (mass market) remained the main driver of sales with 53% of total units sold

CapitaLand Presentation*June 2013*

17

243

1,453 1,186 864

1,927

699 516 994

581 578 236 194 138

444 703 610 679 178

716

1,826 1,867

473

725

1,710 1,356

1,008 1,098 1,134

918 791 1,113 1,221 846 987

1,350

470

1,637

1,375 2,525

523

1,728 1,624

1,766 2,239

1,916

2,732 3,108

2,618

5,275

3,737 4,367

2,756

3,383

727

2,596

4,654

5,578

1,860

4,380 4,033

3,638

4,241

3,595

4,444 4,262

3,603

6,526

5,402 5,916

4,353

5,412

1,375

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q 2009

2Q 2009

3Q 2009

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

4Q 2012

1Q 2013

Apr-13

Units

Source: URA CCR RCR OCR Overall

Core Central

Region

Rest of Central

Region

Outside Central

Region

Overall

Quarterly Average for 2009 – 2012 710 1,112 2,495 4,318

Quarterly Average for 2013 (Jan to Mar) 679 1,350 3,383 5,412

Breakdown by Market Segment

15,904 16,292 14,688 22,197

Sales Breakdown By Market Segment

OCR transactions continues to lead new home sales, accounting for 61% of total YTD sales of 6,787 units, compared

to 73% registered for the whole 2012 total new homes sales

As a percentage of total new home sales, OCR transactions for the 4-year period 2009 to 2012 was 58% per quarter

Note: Sales figures based on statistics released by URA every quarter, figures will differ from monthly sales figures due to timing of submissions

by developers

6,787

18

Observations

• Given low interest rate environment, residential property

still provides a positive carry and a decent yield

• Under provision of HDB flats in last decade created

housing under-supply situation

• High HDB resale prices provide price support for private

housing

• Singapore remains attractive to foreign buyers

CapitaLand Presentation*June 2013*

19

Residential Strategy

• To continue to bid for land sales

– sites strategically located near MRT stations or

– sites with attractive attributes such as close proximity to

schools, public amenities, etc

• To broaden product range (from premium to

mass) to tap wider market demand

CapitaLand Presentation*June 2013*

20

Singapore

Commercial

Market

One George Street, Singapore

21

Singapore’s island-wide office supply

Source: Jones Lang LaSalle (4Q 2012)

CapitaLand Presentation *June 2013*

Region Area (sq ft) % of total

stock

CBD Core

- Grade A office

stock

27.5 mil

14.6 mil

43%

Rest of Central Area 10.2 mil 16%

Orchard Road 5.1 mil 8%

Marina Centre 3.8 mil 6%

Decentralised Areas 17.3 mil 27%

22

Focus on sites in CBD and developing new

regional centres East West Line North East Line Circle Line North South Line Downtown Line 1, 2, 3

(Completion 2013, 2015, 2017)

Sub-Regional Centre • Paya Lebar

• Kallang

• Marine Parade

• Toa Payoh / Bishan

Regional Centre • Tampines

• Changi Business Park

• Punggol

Regional Centre

• Jurong East

• Buona Vista / One-North

Jurong East

Tampines

Paya Lebar

CBD Fringe

• Orchard / Dhoby Ghaut

• Novena / Newton

• Bugis / Beach Road / Middle Road

Newton

Bugis Dhoby

Ghaut

Core Central Business District (CBD) • Raffles Place / Tanjong Pagar

• Marina Bay

Raffles Place

Marina Bay Tanjong Pagar

Thomson Line 1, 2, 3

(Completion 2019, 2020, 2021)

One-North

Regional Centre • Woodlands

Woodlands

Punggol

Stadium

Toa

Payoh

Westgate

CapitaGreen and

other CCT properties

23 CapitaLand Presentation *June 2013*

Island-wide new office supply not excessive;

CBD new supply back-end loaded

Note:

Source: CBRE Decentralized Office Market Report 2013 and CBRE 1Q 2013 Market Report for CBD supply

-0.4

0.1 0.3

1.5

2.9

0.9 0.8 0.7 0.6

1.8

2.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F

sq

ft

millio

n

CBD net supply CBD forecast new supply

Net supply in CBD

Central Business District (CBD)

Average annual net supply 1.1 mil sq ft (1993 – 2012)

Average annual net absorption 1.0 mil sq ft (1993 – 2012)

1.6 mil sq ft (2010 – 2012)

Forecast average annual new

supply (2013 to 2017): 1.3 mil sq ft

24

0.04

0.7 0.6 0.4

0.07 0.09

1.3

0.4 0.2

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2007 2008 2009 2010 2011 2012 2013F 2014F 2015F

sq

ft

millio

n

Forecast average annual

new supply (2013 to 2016):

0.5 mil sq ft

CapitaLand Presentation *June 2013*

Island-wide new office supply not excessive;

Decentralized new supply declining

Note:

(1) Decentralized office market supply projections exclude JEM and strata developments.

Source: CBRE Decentralized Office Market Report 2013

Decentralised Area net supply Decentralised Area forecast new supply

Net supply in Decentralised Area (1)

Decentralised Area

Average annual net supply 0.3 mil sq ft (2007 – 2012)

Average annual net absorption 0.3 mil sq ft (2007 – 2012)

25 CapitaLand Presentation * June 2013*

Singapore office market rent stabilising

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Prime Grade A

*No historical data for Grade A rents prior to 2002.

Source of data: CB Richard Ellis (Pte) Ltd (figures as at end of each quarter). CBRE no longer tracks prime rents from 3Q 2011.

S$18.80

S$4.48

S$4.00

S$9.55

Global

financial

crisis Post-SARs, Dot.com crash

S$7.50

S$8.00

Euro-zone

crisis

Mo

nth

ly g

ross r

en

t b

y p

er

sq

ua

re fo

ot

S$11.06

1Q 12 2Q 12 3Q 12 4Q 12 1Q 13*

Mthly rent

(S$ / sq ft )

10.60 10.10 9.80 9.58 9.55

% change -3.6% -4.7% -3.0% -2.2% -0.3%

26

• To broaden product mix and geographical spread

– Office, SOHO, Business Park, Medical Suites, Mixed-use

developments

• To adapt “Build & Sell” to complement “Build & Hold”

strategy

• To grow CapitaCommercial Trust through acquisitions

from CapitaLand and third parties

Commercial Strategy

CapitaLand Presentation *June 2013*

27

Malaysia Iskandar

Region

Raffles City Singapore

28 CapitaLand Presentation *June 2013*

Iskandar Malaysia – 5 Flagship Zones

Senai-Skudai

Western Gate Development

Nusajaya

Johor Bahru City Centre

Eastern Gate Development

CapitaLand Presentation *June 2013*

29 CapitaLand Presentation *June 2013*

Greater Connectivity between Singapore and Johor

• Iskandar Regional Mass Transit Network will commence construction latest by year 2015

• Expected to ease the travelling time and convenience between Singapore and Johor

• Enhance proximity of Singapore and Malaysia

CapitaLand Presentation *June 2013*

30 CapitaLand Presentation *June 2013*

CapitaLand’s JV development Location : Danga Bay A2 Island – 8 km West of Singapore-Johor Causeway

Danga Bay

A2 Island

CapitaLand Presentation *June 2013*

31 CapitaLand Presentation *June 2013*

CapitaLand’s JV in Danga Bay A2 Island

Strategy

1. Supply and Demand

Control and manage timing and supply

10 – 12 years mixed development

2. Value Creation

Enjoy value appreciation of plots in

later development as township precinct

matures

3. Capitalise on Development

Capability & Synergy

Leverage on CapitaLand Group’s

development capability of malls &

serviced residences operation

management

CapitaLand Presentation *June 2013*

Danga Bay A2 Island will feature a premier

waterfront residential community

comprising high rise and landed homes

with a central waterfront hub with a marina,

shopping mall, F&B outlets, serviced

residences, offices and recreational

facilities

32

Malaysia Strategy

• To focus primarily on Iskandar region

(leveraging on proximity to Singapore)

CapitaLand Presentation *June 2013*

Iskandar

Kuala Lumpur

Penang

33

CapitaLand

Singapore’s

Strategy

Six Battery Road, Singapore

34

• Residential Property

– Actively participating in land sales

– To broaden product range

• Commercial Property

– To broaden product mix and geographical reach

– To adapt “Build & Sell” to complement “Build and Hold” strategy

– To grow CCT through acquisitions

• Malaysia

– To focus on Iskandar region

CapitaLand Singapore’s Strategy

35

Thank You