Kore Us REIT · SGX:CMOU

Kore Us REIT — Keppel Pacific Oak US REIT — Q3 2019 Earnings Presentation

31 slides from Kore Us REIT's earnings presentation, Oct 15, 2019

  1. Slide 1: Third Quarter and Nine Months 2019 Financial Results

    Third Quarter and Nine Months 2019 Financial Results 15 October 2019

  2. Slide 2: Content Outline and Important Notice

    Content Outline • Key Highlights 3 • Financial Performance & Capital Management 5 • Portfolio Performance 9 • Market Outlook 13 Important Notice 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

  3. Slide 3: Key Highlights

    Key Highlights Proposed DPU-accretive acquisition of a grade A office complex, One Twenty Five Dallas, Texas

  4. Slide 4: Continued Growth for 9M 2019 Key Highlights

    Continued Growth for 9M 2019 Distributable Income Healthy committed US$37.2 million occupancy levels 31.0% 2.2% from end-2018 Outperformed 9M 2018 and IPO Forecast by 31.0% and ~608,000 sf of total space leased, 23.2% respectively equivalent to 14.3% of the portfolio, bringing portfolio committed oc

  5. Slide 5: Financial Performance & Capital Management

    Financial Performance & Capital Management Tenant space, Northridge I & II Atlanta, Georgia

  6. Slide 6: Financial Performance for 9M 2019

    Financial Performance for 9M 2019 Distributable income for 9M 2019 outperformed both IPO Forecast and 9M 2018 Actual Actual Forecast Actual Actual % % 9M 2019 9M 2019(1) 9M 2019 9M 2018 Change Change (US$’000) (US$’000) (US$’000) (US$’000) Gross Revenue 89,115 72,301 23.3 89,115 69,023 29.1 Property

  7. Slide 7: Healthy Balance Sheet

    Healthy Balance Sheet As at 30 September 2019 (US$’000) Total Assets 1,133,845 Investment Properties 1,098,505 Cash and Cash Equivalents 30,420 Other Assets 4,920 Total Liabilities 495,442 Gross Borrowings 436,440 Other Liabilities 59,002 Unitholders’ Funds 638,403 Units in issue and to be issued (‘

  8. Slide 8: Prudent Capital Management

    Prudent Capital Management Limited interest rate exposure with term loans significantly hedged As at 30 September 2019 Debt Maturity Profile 100% Unsecured • US$436.4 million of external loans Total Debt • 100% unsecured ▪ US$50 million of revolving credit (1) facility Available Facilities ▪ US$8 mi

  9. Slide 9: Portfolio Performance

    Portfolio Performance Tenant space at The Westpark Portfolio Seattle, Washington

  10. Slide 10: First Choice Submarkets in Key Growth US Markets

    First Choice Submarkets in Key Growth US Markets Seattle, Washington (42.7%)(1) Atlanta, Georgia (6.7%)(1) Overview 12 freehold office buildings and business campuses across 7 key growth markets The Plaza Buildings Bellevue Technology The Westpark Northridge Center Powers Ferry Occupancy: 97.3% Cent

  11. Slide 11: Continued Organic Growth, Continued Leasing Momentum

    Continued Organic Growth New Leases Renewals • Another 232,000 sf leased in 3Q 2019 for a 35.4% 61.5% total of ~608,000 sf leased for 9M 2019. • Over two-thirds of leasing activities were in its business campuses in the tech hubs of Seattle, Austin and Denver • Leasing demand mainly from the fast-gr

  12. Slide 12: Well-Diversified Tenant Base Across Key Growth Sectors

    Well-Diversified Tenant Base Across Key Growth Sectors Resilient portfolio with low tenant concentration risk • KORE’s business campuses are popular among tenants in the tech hubs of Seattle, Austin and Denver which contribute ~60% of CRI • Top 10 tenants contribute 21.2% of cash rental income and c

  13. Slide 13: Market Outlook

    Market Outlook Tenant lounge, 1800 West Loop South Houston, Texas

  14. Slide 14: Sound US Economic Fundamentals

    Sound US Economic Fundamentals 4% 7% 6% 3% 5% 4% 2% 3% 2% 1% Fitness centre, The Plaza Buildings, Bellevue, Seattle 1% US Economy at a Glance 0% 0% 2014 2015 2016 2017 2018 2Q 2014 2015 2016 2017 2018 2019 2.0% 3.5% GDP (1) 2019 Unemployment (2) Real GDP growth Low unemployment(2) in 2Q 2019(1) • GD

  15. Slide 15: Attractive US Office Outlook

    Attractive US Office Outlook Technology sector remains a key driver of leasing demand, especially in strong growth markets Overall Net Absorption(1) Deliveries & Demolitions(1) 90.0 Forecast 80.0 70.0 60.0 50.0 MSF 40.0 30.0 20.0 10.0 0.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net Absorpt

  16. Slide 16: Technology – A Key Driver of US Growth and Leasing Demand

    Tech hubs of Austin, Seattle and Denver make up ~60% of KORE’s portfolio CRI Ranking of Top 10 US Industry Sectors Gross Product (Economic Impact), 2018 est. $2,265 Manufacturing $2,264 Government Lobby, The Plaza Buildings, Seattle, Washington $1,839 Tech Industry US$ billion Technology – A Key $1,

  17. Slide 17: Suburban Neighbourhoods Becoming Tech Campuses of Choice

    Suburban Neighbourhoods Becoming Tech Campuses of Choice The Innovation Triangle: Bellevue – Kirkland – Redmond • Amazon is relocating its worldwide operations team to Bellevue(1). Its occupancy is expected to increase from 12m sf in 2019 to over 15m sf by 2024(2). • Microsoft’s Redmond Campus is be

  18. Slide 18: Apple: A True Campus Community in Austin

    Apple: A True Campus Community in Austin Apple’s Office Distribution in Austin, Texas • Apple currently occupies ~1.7m sf of office space in Austin(1) and employs ~6,200 people(2). NEW CAMPUS • On 13 December 2018, Apple announced plans to build a new US$1 billion campus in Austin, spanning 133 acre

  19. Slide 19: Denver – An Innovative Community where Aerospace and Technology Thrive

    Denver – An Innovative Community where Aerospace and Technology Thrive • A low corporate tax rate, an educated workforce and a wealth of resources make Denver business-friendly. • Colorado is home to over 500 aerospace related companies and suppliers. • Top aerospace contractors include: Ball Aerosp

  20. Slide 20: Positive Economics in KORE's Key Growth Markets

    Positive Economics in KORE’s Key Growth Markets KORE’s key growth markets outperformed national average over the last 5 years Real GDP Growth Average(1) 6.4% 2013-2017 Key Growth Markets Gateway Cities 4.7% 4.2% 4.0% 3.7% 3.3% 3.6% 3.0% 2.6% 3.0% 2.2% 2.3% 2.2% 1.3% 1.4% 1.1% 1.1% Atlanta Austin Dal

  21. Slide 21: Rising Employment in KORE's Key Growth Markets

    Rising Employment in KORE’s Key Growth Markets KORE’s key growth markets outperformed national average over the last 5 years Employment Growth Average(1) 2014-2018 Key Growth Markets Gateway Cities 4.0% 3.6% 3.0% 2.9% 3.0% 2.8% 2.8% 2.8% 2.9% 1.6% 1.9% 1.7% 1.7% 1.8% 1.3% 1.4% Atlanta Austin Dallas

  22. Slide 22: Expanding Population in KORE's Key Growth Markets

    Expanding Population in KORE’s Key Growth Markets KORE’s key growth markets outperformed national average over the last 5 years Population Growth Average(1) 2014-2018 2.9% Key Growth Markets Gateway Cities 2.5% 2.0% 2.0% 1.8% 2.0% 1.5% 1.7% 1.2% 1.0% 0.9% 0.7% 0.7% 0.3% 0.5% 0.1% -0.1% Atlanta Austi

  23. Slide 23: Positive Economic Outlook in KORE's Key Growth Markets

    Positive Economic Outlook in KORE’s Key Growth Markets KORE’s key growth markets are forecasted to outperform national average Real GDP Growth Average Forecast(1) 4.0% 2018-2022F Key Growth Markets Gateway Cities 3.5% 3.5% 3.1% 3.1% 2.9% 3.0% 3.0% 3.0% 2.7% 2.5% 2.6% 2.2% 2.2% 2.0% 2.1% 2.0% 1.8% 1.

  24. Slide 24: Positive Job Outlook in KORE's Key Growth Markets

    Positive Job Outlook in KORE’s Key Growth Markets KORE’s key growth markets are forecasted to outperform national average Employment Growth Average Forecast(1) 3.0% 2018-2022F Key Growth Markets Gateway Cities 2.6% 2.3% 2.0% 2.0% 2.0% 1.9% 1.7% 1.6% 1.5% 1.5% 1.4% 1.2% 0.9% 0.9% 1.0% 1.0% 0.7% 0.7%

  25. Slide 25: First Choice Submarkets Outlook

    First Choice Submarkets Outlook Submarket Last 12M Last 12M Average Last 12M Projected Submarket Vacancy Rate Deliveries absorption Submarket Rent Rental Growth Rental Growth Property (%) (sf’000) (sf’000) (US$ p.a.) (%) (%) Seattle, Bellevue CBD 4.5 - 358.0 52.8 10.5 10.0 The Plaza Buildings Seattl

  26. Slide 26: Delivering Stable Distributions and Long Term Value

    Delivering Stable Distributions and Long Term Value Portfolio Optimisation • Focused leasing strategy targeting growth sectors • Proactive and effective asset management • Maximise rental rates and capture positive rental reversions Value Accretive Investments • Pursue growth opportunities to create

  27. Slide 27: Thank You

    Thank You For more information, please visit www.koreusreit.com Westech 360 Austin, Texas

  28. Slide 28: Additional Information

    Additional Information Tenant space, Westmoor Center Denver, Colorado

  29. Slide 29: Financial Performance for 3Q 2019

    Financial Performance for 3Q 2019 Actual Forecast Actual Actual % % 3Q 2019 3Q 2019(1) 3Q 2019 3Q 2018 Change Change (US$’000) (US$’000) (US$’000) (US$’000) Gross Revenue 30,391 24,100 26.1 30,391 22,672 34.0 Property Expenses (11,881) (10,037) 18.4 (11,881) (9,078) 30.9 Net Property Income 18,510 1

  30. Slide 30: Tax-Efficient Structure

    Tax-Efficient Structure Sponsors(1) KPA Unitholders Keppel Keppel Capital relevant Tax-efficient structure for holding US properties Capital International entity ▪ No US corporate tax (21%) and Keppel Management US withholding tax (30%) Agreement Trustee Management Keppel Pacific Oak ▪ No Singapore

  31. Slide 31: Portfolio Overview

    Portfolio Overview NLA Committed occupancy WALE(1) Carrying Value Property City Location (sf) (by NLA) (in years) (US$m) The Plaza Buildings Seattle Bellevue CBD, one of the most active leasing submarket in 490,994 97.3% 4.4 262.1 Seattle Bellevue Technology Seattle Bellevue, one of the most active

Keppel Pacific Oak US REIT — Q3 2019 Earnings Presentation on 6ix