Keppel Ltd. · SGX:BN4
Keppel — Keppel REIT — Q1 2024 Earnings Presentation
37 slides from Keppel's earnings presentation, Apr 23, 2024
Slide 1: 1Q 2024 Key Business and Operational Updates
1Q 2024 Key Business and Operational Updates 23 April 2024
Slide 2: Outline
Outline Constituent of: ▪ 1Q 2024 Key Highlights 3 ▪ Acquisition of 50% Interest in 255 George Street, Sydney, Australia 6 FTSE ST Large & FTSE4GOOD ▪ Financial & Portfolio Highlights 14 Mid Cap Index Developed & FTSE4GOOD ASEAN 5 Index ▪ Market Review 24 ▪ Additional Information 29 FTSE EPRA Nareit
Slide 3: 1Q 2024 Key Highlights
1Q 2024 Key Highlights Property Income Net Property Income $61.3m $48.2m +6.3% y-o-y +7.2% y-o-y $61.3m $48.2m $57.7m $45.0m 1Q 2023 1Q 2024 1Q 2023 1Q 2024 % Borrowings on Aggregate Leverage All-in interest rate Fixed Rates 39.4% 3.18% p.a. 74% As at 31 Mar 2024 In 1Q 2024 As at 31 Mar 2024 3
Slide 4: 1Q 2024 Key Highlights
1Q 2024 Key Highlights High Portfolio Long Portfolio Portfolio Value Committed Occupancy WALE $9.2b 96.4% 4.6 years1 As at 31 Mar 2024 Top 10 tenants’ WALE at 8.1 years1 South Korea, 3.3% Japan, As at 31 Mar 2024 0.9% Australia, 16.5% Robust Leasing Strong Rental Activity Reversion ~279,100 sf 10.9%
Slide 5: Keppel REIT to Acquire 50% Interest in 255 George Street
Keppel REIT to Acquire 50% Interest in 255 George Street Address 255 George Street, Sydney, New South Wales Land Tenure Freehold Net Lettable Area (NLA) 38,996.8 sqm (Office: 38,805.0 sqm / Retail: 191.8 sqm) Committed Occupancy1 93.0% WALE2 6.8 years Completion Date 1985 / Major refurbishment compl
Slide 6: Acquisition of 50% Interest in 255 George Street, Sydney, Australia
Acquisition of 50% Interest in 255 George Street, Sydney, Australia
Slide 7: Key Highlights
Key Highlights Grade A Property Attractive Pricing Core Sydney CBD with Prime Stable Cash Flows and Accretive Location Specifications Acquisition • Strategically located in the • Large column free c.1,400 • High committed • Purchase consideration of highly sought after Core sqm floor plates that can
Slide 8: 255 George Street, a freehold Grade A office building
255 George Street, a freehold Grade A office building located in the heart of Sydney CBD 8
Slide 9: Strategically Located In Highly Sought After Core Precinct of Sydney CBD
Strategically Located In Highly Sought After Core Precinct of Sydney CBD ▪ An iconic building located prominently along George Street, one of the busiest roads of Sydney CBD ▪ Easily accessible by public transportation 1-min walk from Bridge Street Light Rail Station Circular Quay Railway Station 3-
Slide 10: A Future-Proof Asset with Extensive Enhancements Completed in 2022
A Future-Proof Asset with Extensive Enhancements Completed in 2022 Refurbished Office Floor Upgraded Lifts & Lift Lobby Brand New Lobby and Amenities Area End of Trip Facilities Wellness Studio Annexe for Collaboration 10
Slide 11: Prime Property with A Diversified Tenant Base and High-Quality Tenants
Prime Property with A Diversified Tenant Base and High-Quality Tenants Diversified Tenant Base1 Strengthen Portfolio Quality ▪ Grow portfolio value to $9.6b with Others, 2.3% Accounting and consultancy Australia making up c.19.3%2 of the service, 3.7% portfolio ▪ Freehold assets increase to 36.4%3 T
Slide 12: Stable Cash Flows Supported by Long WALE and Well-Spread Lease Expiries
Stable Cash Flows Supported by Long WALE and Well-Spread Lease Expiries Long ▪ The asset enjoys long WALE of 6.8 years1 WALE Lease Expiry Profile2 71.3% No significant lease expiries Well-Spread Lease Expiries 6.9% 8.6% 6.2% 5.1% 1.9% 2024 2025 2026 2027 2028 Beyond 2028 ▪ Rent guarantee on existing
Slide 13: Attractive Pricing and DPU Accretive
Attractive Pricing and DPU Accretive ▪ Purchase consideration of A$363.8m, an accretive acquisition with first-year yield that exceeds 6.0% ▪ Aggregate leverage post acquisition expected to increase to c.41%, if fully funded by debt ▪ Completion expected to be in 2Q 2024 ▪ Continue to seek opportuni
Slide 14: Financial & Portfolio Highlights
Financial & Portfolio Highlights Marina Bay Financial Centre, Singapore 14
Slide 15: Higher Net Property Income Driven by Strong Demand for Prime Office Space
Higher Net Property Income Driven by Strong Demand for Prime Office Space ▪ Property Income for 1Q 2024 increased 6.3% year-on-year due to higher rentals from Ocean Financial Centre and contribution from 2 Blue Street ▪ Notwithstanding the stronger operational performance, Distributable Income from
Slide 16: Healthy Debt Profile
As at 31 Mar 2024 Healthy Debt Profile Interest Coverage Ratio(2) 3.3x Adjusted Interest Coverage Ratio(3) 2.9x ▪ Aggregate leverage at 39.4% with 74% of borrowings on fixed rates All-in Interest Rate 3.18% p.a. Aggregate Leverage 39.4% ▪ AUD, KRW and JPY denominated loans formed ~14%, Weighted Aver
Slide 17: Diversified Portfolio of Prime Commercial Assets in Asia Pacific
Diversified Portfolio of Prime Commercial Assets in Asia Pacific $9.2b portfolio of prime quality assets anchored across different markets enhance income stability and long-term growth opportunities T Tower, Seoul KR Ginza II, Tokyo 99.4% Interest South Korea Japan 98.5% Interest Occupancy: 97.5% 3.
Slide 18: Performance Breakdown by Geography
Performance Breakdown by Geography Singapore Portfolio North Asia Portfolio 1Q 2024 64.3 1Q 2024 3.2 NPI1 7.3% NPI1 -3.0% (S$m) (S$m) 1Q 2023 59.9 1Q 2023 3.3 1Q 2024 98.8 1Q 2024 97.9 Committed Occupancy Committed Occupancy (%) (%) 4Q 2023 99.0 4Q 2023 96.4 Australia Portfolio Performance Commentar
Slide 19: 1Q 2024 Portfolio Performance
1Q 2024 Portfolio Performance (By Attributable Gross Rent) Leases Committed Leases Committed As at 31 Mar 2024: by Geography by Type Singapore, 76.7% By Committed Australia, 20.1% By Committed New, 96.4% Renewal, 36.5% Portfolio committed Attributable Attributable Gross Rent 63.5% Gross Rent occupan
Slide 20: Well-Spread Lease Expiry Profile
Well-Spread Lease Expiry Profile ▪ Average signing rent for Singapore office leases(1) concluded in 1Q 2024 was $12.30 psf pm, supported by healthy demand from diverse sectors for prime office space ▪ Average expiring rents of Singapore office leases(2) (psf pm): $11.01 in 2024, $11.13 in 2025 and $
Slide 21: Established and Diversified Tenant Base
Established and Diversified Tenant Base (By Attributable Gross Rent) ▪ Keppel REIT has a diversified tenant base of 460(1) ▪ Top 10 tenants contribute 32.8% of committed tenants, many of which are established blue-chip attributable gross rent corporations Top 10 Tenants Tenant Business Sector % Stat
Slide 22: Completion of Spec Suites at Pinnacle Office Park
Completion of Spec Suites at Pinnacle Office Park • Achieved practical completion on 15 Feb 2024, ahead of schedule • Well-received with strong leasing interest for all the suites 22
Slide 23: ESG Activities in 1Q 2024
ESG Activities in 1Q 2024 Started the year with focus on Collaboration with Muscular Dystrophy Association health and wellness, weekly (Singapore) to host a fun-filled yoga and pilates classes were crafts workshop together with the established for the tenants at beneficiaries on 14 March at Victoria
Slide 24: Market Review
Market Review 2 Blue Street, Sydney 24
Slide 25: Singapore Office Market
Singapore Office Market ▪ Average core CBD Grade A office rents increased to $11.95 psf pm with average occupancy in core CBD at 95.1% in 1Q 2024 Grade A Rent and Core CBD Occupancy Demand and Supply (million sf) 2.1 1.9 1.7 1.3 1.0 95.8% 93.8% 94.8% 95.8% 93.8% 93.3% 94.7% 94.8% 95.1% 0.8 0.8 0.9 0
Slide 26: Australia Office Market
Australia Office Market 96.0% 95.2% 85.3% 84.1% 84.6% 1,500 87.5% 88.6% 100% 90.4% 89.9% 84.0% 100% Sydney CBD 1,200 1,032 1,045 80% 1200 75.5% 79.9% 76.7% 78.4% 80% 900 930 885 919 955 956 60% North Sydney 900 676 729 688 670 693 686 60% 651 600 40% 600 40% Prime Grade 300 20% 300 20% occupancy Pri
Slide 27: Seoul Office Market
Seoul Office Market ▪ CBD Grade A vacancy remains low with occupancy at 98.3% in 1Q 2024 CBD Grade A Rent and Occupancy 97.0% 98.5% 98.3% 200,000 90.7% 100% 86.7% 89.2% 82.7% 160,000 80% 133,152 138,865 121,356 120,000 60% 92,325 97,572 98,926 91,656 80,000 40% 40,000 20% 0 0% 4Q18 4Q19 4Q20 4Q21 4Q
Slide 28: Tokyo Office Market
Tokyo Office Market ▪ Occupancy in Tokyo central 5 wards continues to be high in 1Q 2024 for Grade A office at 95.8% and Grade B office at 96.8% Tokyo Central 5 Wards Grade A Rent and Occupancy Tokyo Central 5 Wards Grade B Rent and Occupancy 99.6% 99.8% 99.1% 99.0% 99.4% 98.7% 100.0% 98.1% 97.8% 30
Slide 29: Additional Information
Additional Information Ocean Financial Centre, Singapore 29
Slide 30: Portfolio Information: Singapore
Portfolio Information: Singapore As at Marina Bay Financial Ocean Financial Centre One Raffles Quay Keppel Bay Tower 31 Mar 2024 Centre(4) Attributable NLA 697,434 sf 1,018,014 sf 441,690 sf 386,224 sf Ownership 79.9% 33.3% 33.3% 100.0% DBS Bank, BNP Paribas, TikTok, Keppel, Principal Standard Chart
Slide 31: Portfolio Information: Australia, South Korea & Japan
Portfolio Information: Australia, South Korea & Japan As at 8 Chifley 8 Exhibition Victoria Police David Malcolm 2 Blue Street(3), Pinnacle Office T Tower, KR Ginza II, 31 Mar 2024 Square, Street(4), Centre, Justice Centre, Sydney Park, Sydney Seoul Tokyo Sydney Melbourne Melbourne Perth Attributabl
Slide 32: 1Q 2024 Portfolio Performance (By Attributable NLA)
1Q 2024 Portfolio Performance (By Attributable NLA) Leases Committed Leases Committed As at 31 Mar 2024: by Geography by Type Singapore, 75.1% By Australia, 21.3% By 96.4% Committed Renewal, Committed New, Portfolio committed Attributable 66.8% Attributable 33.2% NLA NLA occupancy South Korea, 3.6%
Slide 33: Established and Diversified Tenant Base
Established and Diversified Tenant Base (By Attributable NLA) ▪ Keppel REIT has a diversified tenant base of 460(1) ▪ Top 10 tenants contribute 38.7% of committed tenants, many of which are established blue-chip attributable NLA corporations Top 10 Tenants Tenant Business Sector(2) % State of Victor
Slide 34: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Improve yield by enhancing Keppel REIT’s portfolio of quality assets through strategic acquisitions and divestments Portfolio • Provide income stability and long-term capital appreciation of portfolio, Optimisation
Slide 35: Well-Executed Portfolio Optimisation Strategy
Well-Executed Portfolio Optimisation Strategy Expanded footprint Expanded footprint to Japan: Expanded footprint to Australia: KR Ginza II (98.5%), 77 King Street (100%), Sydney, and to South Korea: T Tower (99.4%), Tokyo 275 George Street (50%), Brisbane Seoul Acquired Acquired - David three adjace
Slide 36: Continued Focus on ESG Excellence to Attract Quality Tenants
Continued Focus on ESG Excellence to Attract Quality Tenants Sustainable and Future Ready ESG Benchmarks Portfolio • MSCI ESGwith ESG Rating maintained at ‘A’ Sustainability •Excellence ISS Governance Risk Rating maintained at lowest risk level of “1” and ESG Corporate Rating maintained at “Prime” s
Slide 37: Thank you
Thank you Marina Bay Financial Centre, Singapore 37