Kore Us Reit · SGX:CMOU
Kore Us Reit — Keppel Pacific Oak US REIT — FY2024 Earnings Presentation
41 slides from Kore Us Reit's earnings presentation, Feb 4, 2025
Slide 1: FY 2024 Financial Results
FY 2024 Financial Results 04 February 2025
Slide 2: Important Notice / Content Outline
Important Notice Content Outline The past performance of Keppel Pacific Oak US REIT is not necessarily indicative of its future performance. Certain statements made in this release may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, u
Slide 3: FY 2024 Key Highlights
FY 2024 Key Highlights Bridge Crossing Tenant space Nashville, Tennessee
Slide 4: FY 2024 Key Highlights
FY 2024 Key Highlights Portfolio Committed Occupancy Portfolio Valuation Adjusted Net Property Income (NPI) 90.0% US$1.33 billion US$83.4 million as at 31 December 2024. Portfolio value remained stable year-on-year Excluding the non-cash adjustments such as Portfolio committed occupancy was 88.7% (y
Slide 5: Portfolio Valuation
Portfolio Valuation 31 December 2023 FV gain/(loss) on 31 December 2024 Change Property Capex (US$ ‘million) % Change (US$ ‘million) Investment Property (US$ ‘million) The Plaza Buildings Seattle, Bellevue CBD 307.7 13.3 (21.3) 299.7 (8.0) (2.6) Bellevue Technology Center Seattle, Eastside Bellevue
Slide 6: Financial Performance & Capital Management
Financial Performance & Capital Management 105 Edgeview Lobby Denver, Colorado
Slide 7: Financial Performance
Financial Performance (US$’000) 2H 2024 2H 2023 % Change FY 2024 FY 2023 % Change Gross Revenue 72,065 74,846 (3.7) 146,437 150,757 (2.9) Net Property Income (NPI) 36,275 42,230 (14.1) 78,290 86,100 (9.1) Adjusted NPI (excludes non-cash straight-line rent, lease 40,016 43,440 (7.9) 83,442 87,591 (4.
Slide 8: Balance Sheet
Balance Sheet As at 31 Dec 2024 As at 31 Dec 2023 % US$’000 US$’000 change Total Assets 1,387,973 1,393,676 (0.4) Investment Properties 1,326,410 1,326,310 NM Cash and 44,193 43,777 1.0 Cash Equivalents Other Assets 17,370 23,589 (26.4) Total Liabilities 671,663 670,472 0.2 Gross Borrowings 607,220
Slide 9: Financial Position
Financial Position As at 31 December 2024 Debt Maturity Profile (as at 31 December 2024) Total Debt • US$607.2 million of external loans 100% of Loans Unsecured Available Facilities • US$61.0 million of uncommitted revolving credit facility 29.6% • US$36.8 million of committed 25.5% 26.9% revolving
Slide 10: Financial Position (con’t)
Financial Position (con’t) Interest Rate Exposure Interest Coverage Ratio (ICR)(3) Sensitivity Following the revisions(4) made to paragraphs 11.1 (i) and (j) of Appendix 6 on the Code on Collective Investment Schemes Floating on 28 November 2024 to rationalise leverage requirements Debt for the Sing
Slide 11: Portfolio Performance
Portfolio Performance The Plaza Buildings Lobby lounge Seattle – Bellevue, Washington
Slide 12: Quality Portfolio In Key Growth Markets
Quality Portfolio In Key Growth Markets Popular in-migration destinations due to attractive lifestyle, culture and employment opportunities Seattle, Washington ❖ The Plaza Buildings SEATTLE ❖ Bellevue Technology Center #10 Seattle ❖ The Westpark Portfolio Austin, Texas ❖ Westech 360 #5 ❖ Great
Slide 13: Portfolio Occupancy Rates In 4Q 2024
Portfolio Occupancy Rates In 4Q 2024 13
Slide 14: KORE’s Historical Occupancy Against The US Average and Gateway Cities
KORE’s Historical Occupancy Against The US Average and Gateway Cities 100% 95% 90.0% 90% 86.2% 85% 83.4% 80% 75% 2019 2020 2021 2022 2023 2024 KORE US Average Gateway Cities Source: June and December CoStar reports for the respective years. 14
Slide 15: Healthy Leasing Performance
Healthy Leasing Performance Executed leases (by NLA) 22.8% 938,655 sf 19.6% Leased spaces for FY2024, equivalent to 19.6% of 17.8% portfolio NLA. 217,263 sf of space leased in 4Q 14.3% 13.7% 14.7% 2024, equivalent to 4.5% of portfolio NLA. Portfolio WALE of 3.8 years(2) by CRI. 7.8% 2.6% Built-in av
Slide 16: Diversified Tenant Composition Across Regions and Industries
Diversified Tenant Composition Across Regions and Industries KORE’s buildings and business campuses in ~51% of KORE’s portfolio NLA comprises the tech hubs of Seattle – Bellevue/Redmond, high-quality tenants from the growing and defensive Austin and Denver contribute ~67% of NPI(1) sectors of TAMI,
Slide 17: Low Tenant Concentration Risk
Low Tenant Concentration Risk Top 10 Tenants Sector Asset Location % of % of CRI NLA BAE Systems(1) TAMI Westmoor Center / Westpark Denver 4.0% 4.8% Comdata Inc TAMI Bridge Crossing Nashville 3.9% 3.9% KORE has over Spectrum TAMI Maitland Promenade I & II Orlando 3.5% 2.5% 390 distinct tenants Gogo
Slide 18: Last 12 Months' Rent Growth
Last 12 Months' Rent Growth Key Growth Markets Average 1.2% United States Average 1.0% 1.0% Gateway Cities Average 0.2% US Average Seattle, Bellevue CBD -0.7% Seattle, Eastside Bellevue 1.5% Seattle, Redmond 0.5% Austin, Northwest 1.2% Denver, Northwest Denver, Broomfield 1.3% 2.2% 1.2% Nashville, B
Slide 19: Projected 12-Month Rent Outlook
Projected 12-Month Rent Outlook Key Growth Markets Average United States Average 0.3% 0.6% 0.6% Gateway Cities Average -0.2% US Average Seattle, Bellevue CBD -0.2% Seattle, Eastside Bellevue 0.0% Seattle, Redmond -0.1% Austin, Northwest -1.1% Denver, Northwest Denver, Broomfield -0.6% -0.1% 0.3% Nas
Slide 20: 3-year market rent growth remained stable despite fluctuating forecasted rent growth
3-year market rent growth remained stable despite fluctuating forecasted rent growth 5.0% 4.0% 3.0% 2.0% 1.0% Forecasted 12-month Market Rent Growth for KORE's Key Growth 0.0% Markets -1.0% -2.0% Actual Average of KORE's Key Growth -3.0% Markets preceding 12-month Market Rent Growth -4.0% -5.0% Dec-
Slide 21: Market Outlook
Market Outlook Bellevue Technology Center Amenity Building Patio Seattle – Bellevue, Washington
Slide 22: U.S. Economic Updates
U.S. Economic Updates • U.S. real GDP increased by 3.1% quarter-on-quarter in 3Q 2024(1). % Unemployment Rate (3) % Labour Force Participation Rate (3) 20.0 65.0 • US job openings rose to a six-month high in 64.0 November at 8.1 million. The advance was mainly 15.0 62.5% 63.0 due to openings at prof
Slide 23: U.S. Office Sales Market Still Not In Recovery Phase
U.S. Office Sales Market Still Not In Recovery Phase • Rate cuts have resulted in more liquidity, but capital markets have not recovered. • The distress pipeline has not yet shown meaningful signs of a plateau in the near term. Office CMBS delinquency rates rose more than 250 bps since Q3, the sharp
Slide 24: Multiple Sectors Driving Leasing Recovery
Multiple Sectors Driving Leasing Recovery 30.0% 25.4% 25.0% 21.7% 20.0% 15.0% 12.4% 10.0% 7.9% 6.1% 5.8% 5.1% 4.2% 4.1% 3.8% 3.5% 5.0% 0.0% (1) TAMI refers to technology, advertising, media, and information. (2) Others includes all remaining industries tracked by Savills Research & Data Services and
Slide 25: Broad-based Leasing Recovery Supported by Return to Office and Organic Growth
Broad-based Leasing Recovery Supported by Return to Office and Organic Growth • Q4 was the first quarter of positive net absorption since Q4 2021, and the second quarter of Fortune 100 Office Attendance Policies(1) occupancy gain since the onset of the pandemic in 2020.(1). • Variance in leasing mom
Slide 26: First choice US office S-REIT focused on TAMI, medical and healthcare sectors
First choice US office S-REIT focused on the fast-growing TAMI, medical and healthcare sectors across key growth markets in the U.S. Strategic presence in Exposure to the Highly diversified Resilient operating several of the fastest fast-growing TAMI, portfolio with low metrics with built-in growing
Slide 27: Important: Submission Of Relevant Tax Forms
Important: Submission Of Relevant Tax Forms It is important for Unitholders to continue to comply with the relevant documentation requirements or they will be subject to U.S. withholding tax under the IRC, including under FATCA. • While distributions to Unitholders are expected to be suspended throu
Slide 28: Thank You
Thank You For more information, please visit www.koreusreit.com Linkedin logo | Free Icon Connect with us on: Westech 360 Austin, Texas
Slide 29: Additional Information
Additional Information The Plaza Buildings Seattle – Bellevue, Washington
Slide 30: First Choice Submarkets Outlook
First Choice Submarkets Outlook Property Submarket Last 12M Last 12M Under Last 12M Projected Submarket Vacancy Rate Vacancy Rate Deliveries Absorption Construction Rental Growth Rental Growth Property (%) (%) (sf’000) (sf’000) (sf’000) (%) (%) Seattle, Bellevue CBD 16.7 15.8 1200 823 1485(1)* (0.7)
Slide 31: Continued Exodus From America’s Gateway Cities
Continued Exodus From America’s Gateway Cities • Most of the gateway cities continue to face a tough future. 2021-2022 POPULATION CHANGE AMONG THE TOP 10 LARGEST METRO AREAS AND WASHINGTON, DC(1) ➢ New York continues to lead the country in population loss and outmigration(1) with more than 400,000 p
Slide 32: Business Migrations To The South
Business Migrations To The South Net migration of businesses across the United States, 2021(1)** • Suburban properties continue to * Florida +399 attract the most capital. North Carolina +148 ➢ In 1Q 2023, US$8.1 billion * Texas +103 was placed in suburban * Tennessee +92 assets, compared to US$2.6
Slide 33: Trends For Business Relocations
Trends For Business Relocations Headquarter Relocations(1) Top 5 markets that Top 5 markets that Number of Relocations by Reason(2) gained headquarters lost headquarters Business Climate/ Lower Taxes 110 *Austin: 66 San Francisco/ San Jose: 79 Consolidate Operations/ Portfolio Optimization 73 *Dalla
Slide 34: California Challenges Persists
California Challenges Persists • Job creation in California has slowed due mainly to the Net migration of young households number of people and businesses leaving the state because (ages 26 to 35) that earned at least USD$200k/year(2) of its economic climate(1). • Policies have driven up business an
Slide 35: Relocations Out of California
Relocations Out of California Top 10 states for California relocations (1) Rank State Known Relocations 1 Texas 132 High Costs 2 Tennessee 31 3 Nevada 25 Exorbitant Taxes 4 Florida 24 5 Arizona 21 6 Colorado 20 Overbearing Regulations 7 North Carolina 13 8 Ohio 7 • High cost of buildings driving lar
Slide 36: Investment Headquarters Increasingly Moving South
Investment Headquarters Increasingly Moving South New York City and California in the past 3 years lost firms that managed close to US$1 trillion in assets (1) • California confronted with close to US$32 billion deficit for 2023- 24, on pace to have a budget deficit of US$68 billion in 2024-25(2). I
Slide 37: Low State Personal Income Taxes
Low State Personal Income Taxes Individuals are moving to states with zero or low personal income taxes, accelerating population growth State Individual Tax Rates (as at January 1, 2024)(1) United States Average 5.18% 5.18% Gateway Cities Average 9.52% US Average Colorado 4.40% Florida Tennessee 0.0
Slide 38: Low State Corporate Income Taxes
Low State Corporate Income Taxes Companies are moving to states with zero or low corporate taxes, accelerating population growth State Corporate Income Tax Rates (as at January 1, 2024)(1) United States Average 5.85% 5.85% Gateway Cities Average 8.33% US Average Colorado 4.40% Florida Tennessee 5.50
Slide 39: 2024 Rankings for Overall State Taxes
2024 Rankings for Overall State Taxes Lower overall tax rates in KORE’s key growth markets vs gateway cities Overall State Rankings(1) Best Key Growth 24 46 Markets * Florida 4 where KORE is present * Texas 13 Gateway * Tennessee 15 Markets Colorado 27 Washington 35 Average of Key Growth Markets Mas
Slide 40: Trust Structure
Sponsors(2) Trust Structure Keppel KPA Unitholders Keppel Capital International Keppel ✓ No withholding (1) tax in relation to Section Trustee Management Management Agreement 1446(f) Services Fees Keppel Pacific Oak US REIT Trustee Management Trustee Management (Manager) ✓ Tax-efficient structure fo
Slide 41: Strong Sponsors: Keppel and KORE Pacific Advisors
Strong Sponsors: Keppel and KORE Pacific Advisors (2) • A global asset manager and operator with strong expertise in • Established commercial real estate investment manager in sustainability-related solutions spanning the areas of the US infrastructure, real estate and connectivity • Operates in mor
Keppel Pacific Oak US REIT — FY2024 Earnings Presentation on 6ix