Keppel REIT · SGX:K71U
Keppel REIT — FY2016 Earnings Presentation
29 slides from Keppel REIT's earnings presentation, Jan 24, 2017
Slide 1: Full Year 2016 Financial Results
Full Year 2016 Financial Results 24 January 2017
Slide 2: Important Notice
Important Notice The past performance of Keppel REIT is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and assumptio
Slide 3: Outline
Outline Key Highlights 4 Financial Highlights and Capital Management 5 Portfolio Performance 13 Market Update 19 3
Slide 4: Key Highlights – FY 2016
Key Highlights – FY 2016 $208.1 mil 6.37 cents(1) 6.2% Distributable Income DPU Distribution Yield Financial Highlights & Aggregate leverage at 38.5% All-in interest ICR Capital 2.51% at 4.7x Management No refinancing requirements 75% fixed-rate loans until 2018 84% unencumbered assets Ave. signing
Slide 5: Financial Highlights & Capital Management
Financial Highlights & Capital Management 8 Exhibition Street, Melbourne
Slide 6: Financial Performance – 4Q 2016
Financial Performance – 4Q 2016 4Q 2016 4Q 2015 Change (%) Remarks Property income S$40.0m S$42.8m (6.5)% • Absence of income from 77 King Street (77KS)(1) • Lower income contribution Net property income S$31.4m S$34.8m (9.6)% from Bugis Junction Towers • Better performance from One Raffles Quay, Ma
Slide 7: Financial Performance – FY 2016
Financial Performance – FY 2016 Change FY 2016 FY 2015 Remarks (%) Property income S$161.3m S$170.3m (5.3)% • Absence of income from 77 King Street (77KS)(1) • Lower income contribution Net property income S$128.4m S$137.5 m (6.6)% from Bugis Junction Towers • Better performance from One Raffles Qua
Slide 8: Distribution Yield of 6.2%
Distribution Yield of 6.2% (2) FTSE ST REIT Index 6.3% (1) Keppel REIT 6.2% (2) FTSE ST RE Index 4.7% (2) STI 3.8% CPF Ordinary Account 2.5% 10-year SG Govt Bond 2.5% 5-year SG Govt Bond 1.9% (1) Based on market closing unit price of $1.02 as at 31 December 2016. (2) Based on Bloomberg’s dividend yi
Slide 9: Balance Sheet
Balance Sheet As at 31 December 2016 As at 31 December 2015 Total assets $7,535 mil $7,425 mil (1) Borrowings $3,329 mil $3,341 mil Total liabilities $2,637 mil $2,648 mil Unitholders’ funds $4,747 mil $4,626 mil (2) Adjusted NAV per Unit $1.43 $1.42 (3) Discount to NAV -28.7% -34.5% (1) These inclu
Slide 10: Distribution Per Unit
Distribution Per Unit Distribution Per Unit (DPU) 4Q 2016 1.48 cents FY 2016 6.37 cents Distribution Timetable Trading on “Ex” Basis Tuesday, 31 January 2017 Books Closure Date Thursday, 2 February 2017 Distribution Payment Date Tuesday, 28 February 2017 10
Slide 11: Prudent Capital Management
Prudent Capital Management As at 31 Dec 2016 As at 30 Sep 2016 Gross Borrowings $3,329 mil $3,324 mil Interest Coverage Ratio 4.7x 4.7x All-in Interest Rate 2.51% 2.53% Weighted Average Term to Maturity 3.5 years 3.7 years Aggregate Leverage 38.5% 39.0% Borrowings on Fixed-Rate (as at end-2016) % of
Slide 12: Debt Maturity Profile
Debt Maturity Profile ‒ Weighted average term to maturity at 3.5 years ‒ Completed all refinancing requirements for 2017 No refinancing requirements until 2018 28% 22% 20% 16% 14% $925m $750m $667m $473m $464m 0% $50m 2017 2018 2019 2020 2021 2022 Loan facilities 3.15% fixed-rate MTN 12
Slide 13: Portfolio Performance
Portfolio Performance David Malcolm Justice Centre, Perth
Slide 14: Proactive Leasing Efforts
Proactive Leasing Efforts Difficult year for the Singapore office market given the oncoming supply of office space and aggressive leasing efforts from newly completed buildings. 28 leases in ~621,000 sf Concluded 4Q 2016 (Attributable ~264,000 sf) Leases 136 leases in ~2.2 mil sf FY 2016 (Attributab
Slide 15: Lease Expiry Profile
Lease Expiry Profile ‒ Average rents for Singapore office leases due for renewal and review in 2017 and 2018 are at low $9s Portfolio Lease Profile (By Attributable NLA) as at 31 December 2016 50.1% 21.2% 21.2% 15.4% 11.5% 11.7% 4.0% 7.1% 6.1% 3.9% 5.2% 4.2% 4.9% 1.6% 1.7% 2017 2018 2019 2020 2021 2
Slide 16: Committed Occupancy Levels
Committed Occupancy Levels ‒ Maintained high portfolio committed occupancy of 99.2% Singapore Australia Overall 99.1% 99.4% 99.2% 99.3% 99.8% 100.0% 99.3% 100.0% 100.0% 99.2% 98.8% 93.7% (1) Singapore core CBD occupancy at 95.8% Australia total CBD occupancy at 88%(2) Bugis Junction Ocean Marina Bay
Slide 17: Portfolio WALE and Top Ten Tenants
Weighted Average Lease Expiry Weighted Average Lease Expiry (WALE) (1) Top Ten (1) Tenants(2) Top Ten Tenants - 44% of portfolio NLA - 40% of gross rental income Approx. 9.3 years (till year 2025) DBS Bank 6.2% ANZ 5.7% Western Australian Govt 5.0% Approx. 6.1 years (till year 2022) BNP Paribas 4.8%
Slide 18: Diversified Tenant Base
Diversified Tenant Base ‒ New tenants secured in 2016 were mainly from the banking, insurance and financial services, legal, real estate and property services, government agency, and TMT sectors TMT, 10% Legal, 10% Number of tenants (1) Energy, Natural 307 resources, Shipping and Marine, 9% Real est
Slide 19: Market Update
Market Update 8 Chifley Square, Sydney
Slide 20: Singapore Office Market
Singapore Office Market ‒ Singapore’s weaker economic growth and cautious sentiments continued to weigh in on the office sector ‒ Occupancy for Singapore’s core CBD office market was 95.8% ‒ Average Grade A rents eased further to $9.10 psf in 4Q 2016 ‒ New office demand was driven mainly by tenants
Slide 21: Singapore Office Demand and Supply
Singapore Office Demand and Supply Major office supply (2017 to 2020) 6 years (2010 – 2015) Ave annual net demand (1) ~1.1 mil sf 2017 Marina One (>30%(4) pre-committed) Frasers Tower & redevelopment of 2018 6 years (2010 – 2015) Ave annual net supply (1) (2) ~0.8 mil sf Robinson Towers 2019 Redevel
Slide 22: Market Outlook – Australia
Market Outlook – Australia ‒ Moderate growth at 1.8% y-o-y in 3Q 2016 amid weaker government and consumer spending on top of softer trade ‒ Official cash rate unchanged at 1.5% ‒ Full-year growth for 2016 is estimated at between 2.5% and 3.5%, with similar forecast for 2017 ‒ Australia’s national CB
Slide 23: Additional Information
Additional Information Bugis Junction Towers 23
Slide 24: Portfolio Overview
Portfolio Overview Best-in-Class Assets Largest Portfolio of Assets Under Well-Diversified in Strategic Locations Premium Office Assets Management Tenant Base 11 office towers in 8 quality 307 tenants Premium Grade and Grade A assets 3.3 million sf S$8.4 billion diversified across various in the bus
Slide 25: Premium Grade A Office Portfolio
Premium Grade A Office Portfolio ‒ 8 premium office assets with 11 office towers strategically located in the central business districts of Singapore, as well as key cities of Sydney, Melbourne, Brisbane and Perth in Australia Singapore * 89% Ocean Financial Centre Marina Bay Financial Centre One Ra
Slide 26: Best-In-Class Assets in Strategic Locations
Best-In-Class Assets in Strategic Locations 26
Slide 27: Portfolio Information: Singapore
Portfolio Information: Singapore » Keppel REIT’s AUM is approximately S$8.4 billion as at 31 December 2016 Ocean Financial Centre(2) Marina Bay Financial Centre (2) (4) One Raffles Quay(2) Bugis Junction Towers Comprises three premium Grade A A pair of 50 and 29 storey 43-storey premium Grade A Desc
Slide 28: Portfolio Information: Australia
Portfolio Information: Australia 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm Justice Centre, Sydney(3) Melbourne(4) Brisbane(3) Perth(3) 35-storey Grade A office 34-storey Grade A office 30-storey Grade A office 33-storey Grade A office tower Description tower and tower t
Slide 29: Thank You
Thank You 275 George Street, Brisbane