Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Shareholder Meeting (November 2011)
29 slides from Keppel REIT's shareholder meeting presentation, Nov 10, 2011
Slide 1: The Proposed Acquisition of an Equity Interest in Ocean Properties Pte. Limited
The Proposed Acquisition of an Equity Interest in Ocean Properties Pte. Limited and Proposed Underwritten Renounceable Rights Issue Extraordinary General Meeting 10th November 2011
Slide 2: Important Notice
Important Notice This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units in K‐REIT ("Units"). This presentation is not an offer for sale of Units in the United States. The Units may not be offered or sold in the United Stat
Slide 3: Contents
Contents Ocean Financial Centre Transaction Summary Rationale and Key Benefits Summary 3
Slide 4: Ocean Financial Centre
Ocean Financial Centre
Slide 5: Key Property Information
Key Property Information Ocean Financial Centre Key Property Details Description A 43‐storey premium Grade A office development comprising: Office Tower completed in April 2011 222‐lot car park and retail podium expected to be completed by end‐2012 Approximate Office: 81,471sqm or 876,947sf Net
Slide 6: Transaction Summary
Transaction Summary
Slide 7: Transaction Summary
Transaction Summary 2 3% Distribution 2.3% i ib i Per Unit i (“ (“DPU”) ”) accretion i DPU‐Accretive To acquire an approximate 87.5% equity interest in Acquisition Ocean Properties Pte. Limited (“OPPL”), which owns Ocean Financial Centre ((“OFC OFC Interest Interest”)) for a period of 99 years Total
Slide 8: Tax Efficient Acquisition Structure
Tax Efficient Acquisition Structure Conversion provides tax transparent income to Unitholders post‐Completion Date Pre‐Acquisition Structure Post‐Acquisition Structure Straits Property Investments Pte Ltd(1) Income less 17% Tax transparent corporate ~87 5% ~87.5% ~87 5% ~87.5% income to income tax U
Slide 9: Purchase Consideration
Purchase Consideration Agreed Value of the OFC Interest is supported by two independent valuations. Agreed Value : S$2,013.1 million(1) (S$2,600psf) S ill ’ V Savills’ Valuation l ti (M (Manager’s ’ valuer) l ) : S$2 054 0 million(2) S$2,054.0 (S$2 652psf) (S$2,652psf) Knight Frank’s Valuation (Trus
Slide 10: Recent Office Transactions
Recent Office Transactions Property Floor Plate Age Tenure Transaction NLA (sf) Price psf (excl. Date rent support) Ocean Financial Centre 20,000sf to 23,000sf 0 Leasehold Oct‐11 884,957 $2,380 (87.5%)(1) (Fresh 99 years) Commerce Point 4,700 sf to 6,300 sf 14 yrs Leasehold Oct‐11 Oct 11 82,160 $2,4
Slide 11: Overview of Rental Support
Overview of Rental Support Rationale To smooth out the cash flow to Unitholders: As Ocean Financial Centre is ~80% leased For fitting‐out periods where rents are not yet received For existing i i leases l which hi h were committed i d during d i the h global l b l fi financial i l crisis ii Key term
Slide 12: Why Now
Why Now Reasonable pricing of S$2,380 net psf Unique opportunity to acquire brand new premium office asset in the heart of Singapore’s CBD 2.3% in DPU for Forecast Year 2012 8.4% DPU yield based on Rights Issue price of S$0.85 per Unit Favourable LLP ruling from IRAS(1) provides tax transparent in
Slide 13: Funding Structure
Funding Structure Net proceeds of S$976.3 million(1) 17 – for – 20 Rights Issue KLL and KCL will subscribe for their pro rata 76.3%(2) entitlements Equity Balance Rights Units fully underwritten by DBS Bank Ltd. and United Overseas Bank Limited. 17 5%(3) S$0 85 per Rights Unit is at a discount of 17
Slide 14: Transaction Rationale and Key Benefits
Transaction Rationale and Keyy Benefits
Slide 15: Transaction Rationale and Key Benefits
Transaction Rationale and Key Benefits 1. Consistent with K‐REIT’s investment and growth strategy 2. E h Enhances DPU to Unitholders U i h ld 3. Strengthens branding in the Raffles Place and Marina Bay precincts 4. Increases exposure to Singapore office market 5 5. Reduces average age of K‐REIT’s K
Slide 16: Consistent with K-REIT's Investment and Growth Strategy
1. Consistent with K‐REIT’s Investment and Growth Strategy Unique opportunity to acquire a landmark office building in the tightly‐held Singapore CBD Post‐Acquisition, K‐REIT will become the largest owner of premium offices in Singapore * The proposed Acquisition of an 87.5% equity interest in Ocean
Slide 17: Enhances DPU to Unitholders
2. Enhances DPU to Unitholders DPU accretive Acquisition is expected to provide stable and sustainable returns to Unitholders 8.4% DPU Yield based on the Rights Issue price of S$0.85 per Unit for the Forecast Year 2012. 7.6% DPU Yield based on a TERP of S$0.947(1) per Unit for the Forecast Year 2012
Slide 18: Enhances Portfolio Quality and Strengthens Branding in Raffles Place and Marina Bay
3. Enhances Portfolio Quality and Strengthens Branding in the Raffles Place and Marina Bay Precincts Singapore g p Assets in the Raffles Place and Marina Bayy Precincts to ~93%(1) Existing Properties(1) Enlarged Portfolio(1) Raffles Raffles Place Place and and Marina Marina Bay B Bay 88.3% 92.6% B
Slide 19: Increases Exposure to the Singapore Office Market
4. Increases exposure to the Singapore Office Market Proportion of Singapore property portfolio to entire property portfolio to ~93%(1) from ~90% Singapore Property Portfolio OFC Interest(2) Bugis Junction MBFC Interest ORQ Interest Prudential Tower Towers Property Australia Property Portfolio 275
Slide 20: Reduces Average Age of K-REIT's Property Portfolio
5. Reduces Average Age of K‐REIT’s Property Portfolio the average age of the properties by NLA to 4.4 years Property Portfolio Average Building Age by NLA 5.9 years 1.5 years 4.4 years Existing Properties Enlarged Portfolio 20
Slide 21: Well-Staggered Lease Profile
6. Well‐Staggered Lease Profile Portfolio weighted average lease expiry (“WALE”) at 7.0 years Weighted Average Lease Expiry (WALE) Top Ten Tenants WALE 8.3 years Portfolio WALE 7.0 years Portfolio Lease Renewal and Rent Review Profile(1) 17.5% 17.3% 13.3% 5.4% 0.03% 2011 2012 2013 2014 2015 (1) Port
Slide 22: Enhances Tenant Base
7. Enhances Tenant Base K‐REIT’s current portfolio will be enhanced with established corporations that have tenancies at Ocean Financial Centre Australia and New Zealand Banking Group Ltd Barclays y Capital p Service Limited Singapore g p Branch BHP Billiton Marketing Asia Pte Ltd BNP Paribas Pro fo
Slide 23: Manages K-REIT's Capital Structure
8. Manages K‐REIT’s Capital Structure Pro forma as at As at 30 Sep 2011 31 Dec 2011 (1) Aggregate Leverage Level 39.8% 41.6% (2) Total Borrowings S$1,454 million S$2,483 million All‐in Cost of Debt 2.48% 2.23% (3) Interest Service Ratio 4.6 times 4.3 times (4) Debt Term to Expiry 3.6 years 3.2 years
Slide 24: Increases Trading Liquidity
9. Increases Trading Liquidity Significant increase in Units in issue is expected to improve level of trading liquidity Pro forma Units in Issue (in millions) 2,519 ~85% 1,362 (1) As at 30 Sep 2011 Enlarged Unit Base (1) Based on the enlarged Unit base which includes the estimated total number of Ri
Slide 25: Summary
Summary
Slide 26: Summary
Summary The proposed Acquisition Fully Underwritten and Renounceable Rights Issue Unitholders will get to enjoy DPU in Unitholders have the choice to sell 2012 without havingg to pput in their nil‐paid p Rights g entitlement additional cash Unitholders have the option to 8.4% DPU yield based on Ri
Slide 27: Positive Feedback
Positive Feedback Moody’s y upgraded pg outlook on K‐REIT from Stable to Positive Standard & Poor’s initiated coverage on K‐REIT at BBB with ith Stable St bl outlook tl k ISS(1) recommended that investors vote in favour of both resolutions as: i. “the the acquisition is in line with the trust's trus
Slide 28: Indicative Timetable
Indicative Timetable Key Events Dates Last day of “cum‐rights” trading 11 November 2011(1) First day of “ex‐rights” trading 14 November 2011(1) Book closure date 16 November 2011(1) Commencement of “nil‐paid” rights trading 21 November 2011(1) Last day of “nil‐paid” rights trading 29 November 2011(1
Slide 29: Thank you
Thank you 29