CAPITALAND COMMERCIAL TRUSTFor Annual General Meeting to be held on 26 June 2020
4 June 2020 Scan QR code to view
CEO presentation
Important NoticeThis presentation shall be read in conjunction with CCT’s 4Q 2019 and 1Q 2020 Unaudited Financial StatementAnnouncement.
This presentation may contain forward-looking statements. Actual future performance, outcomes and results may differmaterially 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 ratetrends, cost of capital and capital availability, availability of real estate properties, competition from other developments orcompanies, shifts in customer demands, shifts in expected levels of occupancy rate, property rental income, charge outcollections, changes in operating expenses (including employee wages, benefits and training, property operating expenses),governmental and public policy changes and the continued availability of financing in the amounts and the termsnecessary to support future business.
You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current viewof management regarding future events. No representation or warranty expressed or implied is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in thispresentation. Neither CapitaLand Commercial Trust Management Limited (“Manager”) nor any of its affiliates, advisers orrepresentatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whetherdirectly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connectionwith this presentation.
The past performance of CapitaLand Commercial Trust (“CCT”) is not indicative of future performance. The listing of the unitsin the CCT (“Units”) on the Singapore Exchange Securities Trading Limited (the “SGX-ST”) does not guarantee a liquid marketfor the Units. The value of the Units and the income derived from them may fall as well as rise. Units are not obligations of,deposits in, or guaranteed by, the Manager. An investment in the Units is subject to investment risks, including the possible lossof the principal amount invested. Investors have no right to request that the Manager redeem or purchase their Units whilethe Units are listed on the SGX-ST. It is intended that holders of Units may only deal in their Units through trading on the SGX-ST.
This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for theUnits.
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3
In the way we…
Grow our portfolio
Protect and curate our environment
Build communities
Nurture our people
Shape our future
Contents
MAKING AN IMPACT
1. Steering through COVID-19 04
2. FY2019 Financial Highlights 08
3. Enhancing Sustainability Efforts 14
4. Looking Ahead 19
4
*Any discrepancies in the tables and charts between the listed figures and totals thereof are due to rounding.
CapitaGreen, Singapore
1. Steering through COVID-19
• Passing on 30% property tax rebate
• Targeted assistance provided to affected
tenants
• Including RCS and office buildings
• Rent rebates for April and May
• Passing on 100% property tax rebate
• Waiver of turnover rent for April
Office tenants
Retailtenants
Hospitality tenants
3. Monitor, engage and support tenants in more vulnerable
industry groups – approx. S$25.8 million(1) committed to
support affected tenants
Steering through COVID-19
6
1. Focus on cost management
and cash conservation
2. Ensure health & safety of
premises through best
practices and complying
with applicable policies
and regulations
Immediate
Response
Committed to the long term sustainability of CCT; and the health, safety and
well-being of our stakeholders
Note:
(1) Includes proportionate interest in joint ventures and applicable property tax rebate from the government
1
3
2
Steering through COVID-19
1. COVID-19 (Temporary Measures) Act and upcoming new Bill to support SMEs
2. Leasing and investment activities
3. Evolution of the future of office
7
Committed to the long term sustainability of CCT; and the health, safety and
well-being of our stakeholders
Ongoing
Developments
1
3
2
Capital Tower, Singapore
1. FY2019 Financial Highlights
Strong financial performance due to high occupancy, higher rents and new acquisition
9
Notes:(1) "CCT Group" refers to CCT and its subsidiaries.
(2) Joint ventures refer to CCT’s 60.0% interest in RCS Trust, 50.0% interest in OGS LLP (with effect from 20 June 2017) and 40.0% interest in MSO Trust (up to 31 August 2016).(3) Total Units in issue included 513.5 million new CCT Units issued on 26 October 2017 pursuant to a rights issue.
(4) Total Units in issue included 130.0 million new CCT Units issued on 28 May 2018 pursuant to a private placement.(5) Total Units in issue included 105.0 million new CCT Units issued on 29 July 2019 pursuant to a private placement.
337.5394.0 412.3
151.4
163.4 165.5
2017 2018 2019
CCT Group Joint Ventures
488.9
557.4577.8
Gross Revenue
(S$ million)
265.5314.6 321.2
115.3
124.4 126.8
2017 2018 2019
CCT Group Joint Ventures
380.8
448.0439.0
288.9321.7 337.6
2017 2018 2019
8.66 8.70 8.88
2017 2018 2019
Net Property Income
(S$ million)
Distributable Income
(S$ million)
Distribution per Unit
(cents)
(1) (2) (1) (2)
(5)(4)(3)
Strong balance sheet maintained through proactive and prudent capital management
10
1.741.80 1.82
2017 2018 2019
37.3
34.9 35.1
2017 2018 2019
2.4
3.9 3.8
2.6 2.62.4
0
0.5
1
1.5
2
2.5
3
0
1
2
3
4
5
6
2017 2018 2019
Average term to maturity (years)
Average cost of debt (%)
Extended average term to maturity while lowering average
cost of debt
Steady increase in adjusted net asset value per unit
Aggregate leverage to range between 30% to 40% through
property market cycles
Adjusted net asset value
per unit (S$)Aggregate Leverage (%)
Proactive leasing of CCT’s portfolio
11
Notes
S$10.18
S$11.50
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
FY 2018 FY 2019
Total new and renewal leases 1,022,000 sq ft 1,361,000 sq ft (1)
% of new leases 22% 34%
Portfolio occupancy as at 31 Dec 99.4% 98.0%
Tenant retention rate(2) 77% 82%
CCT average office rent
Grade A market rent
(1) Includes WeWork’s lease at 21 Collyer Quay (2) Tenant retention rate = Net lettable area renewed in the subject year Total net lettable area due for renewal in the subject year
Positive rent reversions over expiring rents driving steady growth in average portfolio office rent
Leasehold
properties
80%
Freehold
properties
20%
Proportion of freehold assets
Singapore
92%
Germany
8%
Predominantly Singapore focused
with 8% exposure to Germany
Expanded footprint in Germany
12
Portfolio
property value:
S$11.1 million
Main Airport Center, Frankfurt
Gallileo, Frankfurt
• Acquired second property, Main Airport Center, in Frankfurt increasing German exposure to 8% of portfolio property value
• Average occupancy of German properties at 95.9%; above Frankfurt’s office market occupancy of 92.9%
Total no of
properties:
10
Proportion of freehold assetsPredominantly Singapore focused
with 8% exposure to Germany
Announced AEIs to position portfolio for growth; development works largely on track
13
✓ HSBC’s one year extension lease ended in April 2020
✓ Upgrading works will commence post circuit breaker measures
✓ Leased to WeWork for seven years commencing 2Q 2021
✓ Standard Chartered Bank’s lease ended in January 2020 and building’s occupancy is lower
✓ AEI work commenced in January 2020; Phasing of works may be potentially delayed
✓ Leasing of upgraded space to take longer
3Q 2021 (potential delay) 1H 2021 (on track)4Q 2020 (on track)
✓ 34.8% committed occupancy as at 31 Dec 2019
✓ Construction progress is on track with structural works reaching Level 45
✓ Construction work will continue post circuit breaker measures
Expected
completion
21 COLLYER QUAYSIX BATTERY ROAD CAPITASPRING
Main Airport Center, Frankfurt, Germany
3. Enhancing Sustainability Efforts
Issued first green bond
15
Sustainability Financing Framework established for ease of future issues
• Issued first green bond of JPY10.0 billion due 2027 swapped
into approximately S$124.7 million
• Aligned with:
- 2018 Green Bond Principles
- 2018 Social Bond Principle
- 2018 Sustainability Bond Guidelines
• Framework facilitates issuance of sustainable debt to fund
investments that meet environmental and social objectives,
including select United Nations’ Sustainable Development
Goals
Continuing efforts to green portfolio and improve operational efficiency
85.7%
14.3%
BCA Green Mark GoldPLUS Award and above
BCA Green Mark Certified Award16
-21.4%-27.1% -29.6%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
5
6
7
8
9
10
11
12
13
14
15
2017 2018 2019
Energy intensity Change in intensity compared to base year 2008
-21.8%-26.9% -32.2%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
2017 2018 2019
Water intensity Change in intensity compared to base year 2008
-35.5%
-45.8% -47.3%
-100.0%
-90.0%
-80.0%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
2
2.5
3
3.5
4
4.5
5
2017 2018 2019
Carbon emissions intensity Change in intensity compared to base year 2008
Aligned with CapitaLand’s commitment to meet 2030 targets with 2008 as base year
(2030 target: -25%) (2030 target: -30%)
(2030 target: -30%)(2030 target: 100% Green Mark Certified)
Energy Intensity
Water Intensity
Carbon Emissions Intensity
Singapore properties with Green Mark Certification
Environment, Social & Governance (ESG) Recognition
17
GRESB Real Estate Assessment • Achieved GRESB 4 Star for 2019
Singapore Governance and Transparency
Index 2019• Ranked first (REIT and Business Trust Category)
Governance Index for Trusts (GIFT) 2019 • Ranked tenth
Ethical Boardroom • Winner of Best Corporate Governance –
Asia and Australasia (REITs category)
Corporate Awards
Alpha Southeast Asia's 9th Annual Institutional Investor Awards for Corporates, CCT is ranked third for the following categories:• Most Organised Investor Relations
• Strongest Adherence to Corporate Governance
• Best Strategic Corporate Social Responsibility
SIAS Investors Choice Awards 2019CCT is runner-up for two categories under REITs & Business Trust:• Sustainability Award
• Shareholder Communications Excellence Award
Institutional Investor 2019 All-Asia (ex-Japan) Executive Team rankings, Developed Markets - Small & Midcap Winners (Singapore):
18
Singapore FM Awards 2019• Best FM Building Owner/Facility Occupier of the Year Award 2019 - CapitaGreen
Property Awards
• Ranked 2nd for Honored Companies
• Ranked 3rd for Best CEO
• Ranked 3rd for Best CFO
• Ranked 2nd for Best IR program
• Ranked 2nd for Best ESG/SRI Metrics
• Ranked 2nd for Best Corporate Governance
Raffles City Singapore
4. Looking Ahead
Diverse tenant mix provides resilience
Businesses more affected by COVID-19
Travel and Hospitality 9%
Flex space operators 4%
Retail Products & Services 7%
Food and Beverage 5%
Total 25%
20
Banking, 23%
Financial Services, 13%
Energy,
Commodities,
Maritime and
Logistics, 9%
Business Consultancy, IT,
Media and
Telecommunications, 9%
Travel and Hospitality,
9%
Real Estate and Property
Services, 7%
Retail Products and
Services, 7%
Insurance, 6%
Food and Beverage, 5%
Manufacturing and
Distribution, 5%
Legal, 3%
Education and Services,
2%
Government, 2%
Committed Monthly Gross
Rental Income as at 31 March 2020
Notes:
(1) Based on committed monthly gross rental income of tenants as at 31 March 2020, including CCT’s 60.0% interest in Raffles City Singapore, 50.0% interest in One George Street and 94.9% interest in Gallileo and Main Airport Center (with effect from 18 September 2019), Frankfurt; and excluding retail turnover rent
(2) Excludes WeWork Singapore as lease expected to commence in 2Q 2021
(3) Excludes Bugis Village as the lease with the State ended on 31 March 2020
(Flexible space operators – 4%)
Monitor and support tenants in business sectors more affected by COVID-19
Frankfurt office market expected to be resilient due to lower vacancy
21Source: CBRE Research, 2019
Germany
4.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019
Banking District New Supply Banking District Take-up Banking District Vacancy Rate
6.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019
Frankfurt Office New Supply Frankfurt Office Take-up Frankfurt Office Vacancy Rate
3.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
100
200
300
400
500
600
700
800
2015 2016 2017 2018 2019
Airport Office District New Supply Airport Office District Take-up
Airport Office District Vacancy Rate
1,000 sqm Vacancy Rate (%) 1,000 sqm
1,000 sqm
Vacancy Rate (%)
Vacancy Rate (%)
Frankfurt airport
submarket
27.0
18.0
23.0
Frankfurt Banking District
44.0
19.0
34.1
Weighted average (€ / square metre / month)
Overall Frankfurt Office
44.0
7.0
21.80
Overall Frankfurt Office
Airport Office District
Banking District
Office rental range by submarket
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
Grade A office market rent hit peak of S$11.55 psf in 4Q 2019
S$18.80
S$4.48
S$11.50
Global financial crisisPost-SARs, Dot.com crash
S$8.00
Euro-zone crisisM
on
thly
gro
ss r
en
t b
y p
er
squ
are
fo
ot
S$11.06
4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20
Mthly rent (S$ / sq ft ) 9.40 9.70 10.10 10.45 10.80 11.15 11.30 11.45 11.55 11.50
% change 3.3% 3.2% 4.1% 3.5% 3.3% 3.2% 1.3% 1.3% 0.9% -0.4%
Source of data: CBRE Research (figures as at end of each quarter).
S$9.55
S$11.40
S$8.95
Singapore
S$11.55
22
0.1
-0.1
0.9
-0.7
1.31.4
1.6
2.2
0.2
0.6
0.3
-0.03
1.9 1.9
0.7
0.2
0.9
0.70.8
1.9
0.0 0.0
0.8
1.5
1.7
1.4
-0.1
-0.6
1.6
1.8
1.4
1.0
0.20.3
0.2
0.7
1.7
0.8 0.9
12.8
8.3
3.4 2.34.6
8.9
4.8
8.8 7.84.8 4.3 4.8 4.2
6.2 5.2 4.2 4.6
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q
2020
2020F 2021F 2022F 2023F 2024F
sq f
t m
illio
n
Net Supply Net Demand CBRE Core CBD Vacancy Rate (%)
Singapore office market expected annual gross new supply to average 0.7 mil sq ft (1) over 5 years
Singapore
Forecast average annual gross
new supply
(2020 to 2024): 0.7 mil sq ft
Notes: (1) Average annual supply in Singapore’s Central Area over last five to 10 years: 1.0 million sq ft(2) Central Area comprises ‘The Downtown Core’, ‘Orchard’ and ‘Rest of Central Area’(3) Supply is calculated as net change of stock over the quarter and may include office stock removed from market due to conversions or demolitions. (4) Source: Historical data from URA statistics as at 1Q 2020; Forecast supply from CBRE Research as at 1Q 2020.
Singapore Private Office Space (Central Area) (2) – Net Demand & Supply
Forecast Supply
Global Financial
Crisis
Includes CapitaSpring
23
(3)
Expiring rents are below office market rent providing resilience
8.3%
24.5%18.2%
9.37
10.68
9.14
0
2
4
6
8
10
12
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2020 2021 2022
Expiring leases as a % of office portfolio gross rental income
Expiring average gross rental rate (S$ psf)
24
Average expiring rents and contribution to office portfolio
rental income of CCT’s five key properties as at 1Q 2020
CBRE Monthly Grade A office rent (1Q 2020) $11.50 psf
Capital Tower CapitaGreen
Six Battery Road
Asia Square Tower 2
Raffles City Singapore
Committed majority of expiring 2020 leases with only 10%(1) of leases remaining
Note:
(1) Based on monthly gross rental income
• Engage and retain tenants
proactively and lift portfolio
occupancy
• Support tenants to tide over
challenging period
• Manage opex and capex
• Complete upgrading of Six Battery
Road and 21 Collyer Quay
Focus for 2020
25
Proactive portfolio and asset
management
• Keep aggregate leverage below
40% through cycles
• Maintain low average cost of debt
• Extend debt average term to
maturity
• Tap on multiple sources of funds
• Ensure at least 80% of total
borrowings on fixed interest rate
Prudent capital management
Thank youFor enquiries, please contact: Ms Ho Mei Peng , Head, Investor Relations, Direct: (65) 6713 3668
Email: [email protected] Commercial Trust Management Limited (http://www.cct.com.sg)
168 Robinson Road, #28-00 Capital Tower, Singapore 068912Tel: (65) 6713 2888; Fax: (65) 6713 2999