Keppel Dc Reit · SGX:AJBU
Keppel Dc Reit — FY2018 Earnings Presentation
29 slides from Keppel Dc Reit's earnings presentation, Jan 22, 2019
Slide 1: Fourth Quarter & Full Year 2018 Financial Results
Fourth Quarter & Full Year 2018 Financial Results 22 January 2019
Slide 2: Important Notice
Important Notice The past performance of Keppel DC 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 assump
Slide 3: Content
Content ◼ Key Highlights ◼ Financial Performance ◼ Capital Management ◼ Portfolio Review ◼ Outlook ◼ Additional Information 2
Slide 4: Key Highlights
Key Highlights
Slide 5: Key Highlights
Key Highlights ▪ Steady growth in distributable income and adjusted DPU, increasing by 16.7% to $96.1m and 5.0% to 7.32 cents respectively in FY 2018 ▪ Expanded portfolio with acquisitions in Singapore, Australia, Germany and Ireland, increasing AUM to approximately $2.0b as at 31 Dec 2018 ▪ Stable
Slide 6: Strengthened foothold in Asia-Pacific and Europe
Strengthened foothold in Asia-Pacific and Europe ◼ Acquired Keppel DC Singapore 5, largely funded by private placement of 224.0m new Units; obtained tax transparency treatment in Jan 2019 Asia Pacific ◼ Entered into agreement with Macquarie Telecom to construct Intellicentre 3 East Data Centre on va
Slide 7: Portfolio Growth since Listing
Portfolio Growth since Listing maincubes Keppel DC Intellicentre 3 Keppel DC Singapore 3 Keppel DC Dublin 2 Data Centre Singapore 5 East Data Centre1 Cardiff Data Centre Milan Data Centre 31 Dec 2018 Intellicentre 2 Data Centre 31 Dec 2017 AUM: $2.0b 31 Dec 2016 15 assets 31 Dec 2015 AUM: $1.5b 12 D
Slide 8: Financial Performance
Financial Performance
Slide 9: Distributable Income
Distributable Income +/(-) +/(-) ($’000) 4Q 2018 4Q 2017 FY 2018 FY 2017 % % Distributable Income to Unitholders 26,126 20,245 +29.0 96,096 82,320 +16.7 Comprising: Gross Revenue 48,043 36,828 +30.5 175,535 139,050 +26.2 Property Expenses (5,576) (4,180) +33.4 (17,862) (13,931) +28.2 Net Property In
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights As at As at +/(-) ($’000) 31 Dec 2018 31 Dec 2017 % Investment Properties 2,028,672 1,570,090 +29.2 Total Assets 2,252,931 1,763,282 +27.8 Gross Borrowings1 673,952 546,481 +23.3 Total Liabilities 776,937 646,780 +20.1 Unitholders’ Funds 1,444,839 1,089,716 +32.6 Units in Is
Slide 11: Aggregate Leverage
Aggregate Leverage As at As at +/(-) ($’000) 31 Dec 2018 31 Dec 2017 % Investment Properties1 1,995,206 1,536,321 +29.9 (excluding finance lease liabilities commitments) Deposited Properties1 2,187,396 1,701,350 +28.6 (excluding finance lease liabilities commitments) Gross Borrowings + Deferred Paym
Slide 12: Distribution Declared
Distribution Declared ◼ DPU of 3.70 cents declared for 2H 2018, bringing FY 2018 DPU to 7.32 cents, 2.8% higher than FY 2017’s DPU of 7.12 cents ◼ Adjusted DPU increased by 5.0%, up from 6.97 cents in FY 2017 to 7.32 cents in FY 2018 Adjusted DPU (cents) Distribution Timetable 8.04 7.04 Key dates 6.
Slide 13: Capital Management
Capital Management
Slide 14: Prudent Capital Management
Prudent Capital Management Borrowings on fixed rate ◼ Managing interest rate exposure: Interest rates of loans As at 31 Dec 2018 substantially hedged with floating-to-fixed interest rate swaps ◼ Diversifying sources of funding: Issuance of €50m floating rate Fixed notes due 2023 Rate Floating Rate 8
Slide 15: Prudent Capital Management (Cont'd)
Prudent Capital Management (Cont’d) ◼ Mitigating impact of currency fluctuations: • Hedged forecasted foreign-sourced distributions till 1H 2020 through foreign currency forward contracts • Adopted natural hedging by borrowing in currencies that match the corresponding investments Debt currency brea
Slide 16: Portfolio Review
Portfolio Review
Slide 17: Portfolio Update
Portfolio Update ◼ 67.4% of portfolio in Asia Pacific and 32.6% in Europe ◼ Long portfolio WALE of 8.3 years and strong occupancy rate of 93.1% ◼ Less than 5% of the leases expiring per year until end-2020 Portfolio AUM breakdown Lease expiry profile (by leased area) As at 31 Dec 2018 As at 31 Dec 2
Slide 18: Portfolio Update (Cont'd)
Portfolio Update (Cont’d) Rental income breakdown for the month of Dec 20181 ◼ Quality data centres that cater to the requirements of global clientele By trade sector: • Colocation facilities provide diverse client profile Internet and lease expiry enterprise Corporate 46.5% • Fully fitted and shell
Slide 19: Outlook
Outlook
Slide 20: Sound Industry Fundamentals
Sound Industry Fundamentals ◼ Demand for data centre space underpinned by increasing cloud adoption, rapid digital transformation, data centre outsourcing and data sovereignty regulations ◼ Global cloud infrastructure market is expected to grow by 25% CAGR in 2019-20231 ◼ Global co-location market i
Slide 21: Positioned for Growth
Positioned for Growth ◼ The Manager will continue to strengthen Keppel DC REIT’s presence and position it to capitalise growth opportunities in the data centre industry Ireland Keppel DC Dublin 1, Dublin Keppel DC Dublin 2, Dublin Proactive United Kingdom Asset 1 Management GV7 Data Centre, London C
Slide 22: Committed to Deliver Value
Committed to Deliver Value Vision: To be the preferred data centre real estate investment trust, serving as a trusted partner to our stakeholders. Mission: Guided by the Keppel Group’s operating principles and core values, we will create value for our investors by growing a quality portfolio of data
Slide 23: Additional Information
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Slide 24: Keppel DC REIT Structure
Keppel DC REIT Structure Keppel Telecommunications Keppel Capital & Transportation Institutional and The REIT Manager can leverage The REIT Manager can leverage Public Investors the scale and resources of a larger the Sponsor‘s expertise and track asset management platform record in this industry 50
Slide 25: Portfolio Overview (as at 31 Dec 2018)
Portfolio Overview (as at 31 Dec 2018) Attributable Asia Pacific lettable area No. of Occupancy Valuation2 WALE Location Interest (sq ft) clients1 rate (%) ($m) Lease type (years) Land lease title Leasehold Keppel DC Keppel lease / Singapore 100% 109,721 17 86.9 287.0 3.2 (Expiring 30 Sep 2025, with
Slide 26: Portfolio Overview (as at 31 Dec 2018) (Cont'd)
Portfolio Overview (as at 31 Dec 2018) (Cont’d) Attributable No. of Occupancy Valuation2 WALE Europe Location Interest lettable area Lease type Land lease title clients1 rate (%) ($m) (years) (sq ft) Cardiff, Triple-net Cardiff Data Centre United 100% 79,439 1 100.0 65.4 12.5 Freehold (Shell & core)
Slide 27: Overview of Lease Arrangements
Overview of Lease Arrangements Asia Pacific Responsibilities of Owner Maintenance Lease Property Description Insurance Arrangement Property Building Refresh Capex Opex Tax Keppel lease1 / ◼ Client: Pays rent Keppel DC Singapore 1 ✓ ✓ ✓ ✓ Colocation3 ◼ Owner: Bears all expenses; responsible for facil
Slide 28: Overview of Lease Arrangements (Cont'd)
Overview of Lease Arrangements (Cont’d) Europe Responsibilities of Owner Maintenance Lease Insurance Property Description Property Building Arrangement Refresh Capex Opex Tax Cardiff Data Centre Triple-net lease ◼ Client: Pays rent and all outgoings; responsible for facilities management - - - - GV7
Slide 29: Thank you.
Thank you. LG yt) DC REIT 28