Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Q2 2010 Earnings Presentation
34 slides from Keppel REIT's earnings presentation, Jul 19, 2010
Slide 1: Second Quarter 2010 Financial Results
SECOND QUARTER 2010 FINANCIAL RESULTS 19 July 2010 1
Slide 2: Important Notice
Important Notice The value of units in K‐REIT Asia (“Units”) and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the
Slide 3: Contents
Contents 2Q 2010 Highlights Financial Performance Portfolio Analysis Capital Management Proposed Acquisition of 77 King Street Market Review and Outlook Going Forward Additional Information 3
Slide 4: 2Q 2010 Highlights
2Q 2010 Highlights 2Q2010 Distributable income 25.5%y‐o‐y Stronger 2Q2010 Net property income 49 49.3% 3% yy‐o‐y oy Earnings i 1H 2010 Distributable income 20.0% y‐o‐y 1H 2010 Net property income 39.5% y‐o‐y Better Performan e Performance Improved portfolio committed occupancy at 97.9% A
Slide 5: 1H 2010 Distribution Per Unit
1H 2010 Distribution Per Unit Estimated Distribution Per Unit 2.97 cents Distribution Period From 1 January 2010 to 30 June 2010 Distribution Timetable Trading on “Ex” Basis Monday, 26 July 2010 Books Closure Date Wednesday, 28 July 2010 Distribution Payment Date Thursday, 26 August 2010 5
Slide 6: Financial Performance
-REITasia Financial Performance
Slide 7: 1H2010 Net Property Income 39.5% Y-o-Y
1H2010 Net Property Income 39.5% Y‐o‐Y 1H 2010 1H 2009 Change Property Income $41 4m $41.4m $30 1m $30.1m $11 3m $11.3m 37 5% 37.5% Net Property Income $32.3m $23.1m $9.2m 39.5% Distributable Income to $39.8m $33.2m $6.6m 20.0% Unitholders Distribution Per Unit (“DPU”) ‐ For the Period 2.97cts 2.49c
Slide 8: 2Q2010 Net Property Income 49.3% Y-o-Y
2Q2010 Net Property Income 49.3% Y‐o‐Y 2Q 2010 2Q 2009 Change Property Income $23 2m $23.2m $15 3m $15.3m $7 9m $7.9m 51 3% 51.3% Net Property Income $18.4m $12.3m $6.1m 49.3% Distributable Income to $22.0m $17.5m $4.5m 25.6% Unitholders Distribution Per Unit (“DPU”) ‐ For the Period 1.64cts 1.32cts
Slide 9: 2Q2010 Distributable Income 23.2% Q-o-Q
2Q2010 Distributable Income 23.2% Q‐o‐Q 2Q 2010 1Q 2010 Change Property Income $23 2m $23.2m $18 2m $18.2m $5 0m $5.0m 27 6% 27.6% Net Property Income $18.4m $13.9m $4.5m 32.4% Distributable Income to $22.0m $17.8m $4.1m 23.3%(1) Unitholders Distribution Per Unit (“DPU”) ‐ For the Period 1.64cts 1.3
Slide 10: Healthy Balance Sheet
Healthy Balance Sheet As at As at 30 June 2010 31 March 2010 Non‐current Assets $2,245.4 m $2,267.1 m Total Assets $2 373 3 m $2,373.3 $2 619 7 m $2,619.7 Borrowings $351.1 m $581.8 m Total Liabilities $390.5 m $637.2 m Unitholders’ Funds $1,982.8 m $1,982.5 m Net Asset Value (NAV) Per Unit $1.48 $1
Slide 11: Portfolio Analysis
-REITasia Portfolio Analysis
Slide 12: Portfolio Occupancy Rate
Portfolio Occupancy Rate Portfolio occupancy increased 1.9% q‐o‐q to 97.9% as at 30 June 2010 Singapore portfolio occupancy of 97 6%((1)) is higher than core CBD 97.6% CBD’ss 93 3%((1)) 93.3% Portfolio Occupancy 100.0% 99.4% 97.4% 96 6% 96.6% 97.9% 94.6% Singapore Core CBD Occupancy(2) = 93.3% B
Slide 13: Singapore Portfolio Average Rent
Singapore Portfolio Average Rent Singapore portfolio average monthly rent in June 2010: $8.19 psf Singapore Portfolio(1) Average Rent $8.13 $7.91 $8.30 $8.19 $7.91 Jun‐09 Sep‐09 Dec‐09 Mar‐10 Jun‐10 (1) The h average rentall off K‐REIT K I A Asia’s i ’ portfolio f li off properties i ini Singapore
Slide 14: Portfolio Lease Profile
Portfolio Lease Profile 100% of rent reviews due in 2010 completed Balance 3.4% 3 4% of leases expiring in 2010 due for renewal Lease expiries and rent reviews well staggered from 2010‐2013 Portfolio Lease Profile(1) by NLA 15.7% 14.1% 14.4% 9.3% 8.8% 7.8% 3.4% 2.8% 3.1% 0.0% 2010 2011 2012 20
Slide 15: Long Lease Terms Provide Income Stability
Long Lease Terms Provide Income Stability Weighted average lease term to expiry for • Portfolio: Portfolio 5.7 5 7 years ears • Top 10 tenants who account for 52% of portfolio’s NLA: 7.3 years Long lease terms(1) account for 40.5% of portfolio’s NLA Portfolio Lease Terms by NLA (1) Long lease te
Slide 16: Blue-chip Tenants
Blue‐chip Tenants Top 10 tenants comprise 52% of portfolio net lettable area Portfolio Top Ten Tenants by NLA Telstra Corporation Limited 10.4% Deutsche Bank Aktiengesellschaft 6.3% I.E.Singapore 5.7% GE Pacific Pte Ltd 5.3% UBS AG 5.1% Keppel Land International Limited 4.7% ABN AMRO Asia Pacific
Slide 17: Diverse Tenant Mix
Diverse Tenant Mix Tenant Business Sector by NLA 135 ttenants t iin various business sectors 17
Slide 18: Capital Management
-REITasia Capital Management
Slide 19: Healthy Financial Position
Healthy Financial Position 15.2% aggregate leverage as at 30 June 2010 As at As at 30 June 2010 31 March 2010 Gross Borrowings(1) $351.1m $581.1m Aggregate Leverage 15.2% 25.2% All‐in Interest Rate(2) 3.54%(3) 4.26% Interest Coverage Ratio(4) 5.4 times 3.6 times Weighted Average Term to Expiry 0.8
Slide 20: Financial Flexibility
Financial Flexibility Low aggregate leverage of 15.2% No refinancing due d e until ntil March 2011 54.3% of assets unencumbered $1bn multi‐currency Medium Term Note Programme Cash and cash equivalents of $115.1m $'mm Debt Expiry Profile 200.0 CMBS 180.0 Revolving term loan 160.0 190.1 140.
Slide 21: Acquisition of 77 King Street, Sydney
Acquisition i i i off 77 King Street Street, Sydney 21
Slide 22: Acquisition of 77 King Street
Acquisition of 77 King Street 6.6%(1) Pro forma DPU accretion Income contribution $ 3.7 million (2) Long WALE and fixed annual rental escalations provides stable and growing cashflows to Unitholders Diversifies Di ifi tenant t t base, b income i stream t and d geographical risks Strategic location a
Slide 23: 77 King Street, Sydney
77 King Street, Sydney 23‐Storey grade A commercial building Completely refurbished in September 2008 5.8 years weighted average lease expiry Fixed annual rental escalations embedded in lease agreements Tenanted by leading companies such as CapGemini Australia and Fitch Australia Key prope
Slide 24: 77 King Street, Sydney
77 King Street, Sydney Largest CBD office market in Australia li with i h over 4 million illi residents Demand for CBD offices spurred by b d b d economic broad‐based i growth h and d increase in size of white‐collar employment Strategic S i llocation i • in the heart of Sydney’s CBD • close p
Slide 25: Market Review and Outlook
-REITASI|d Market Review and Outlook
Slide 26: Sustained Economic Recovery
Sustained Economic Recovery Singapore GDP growth in 2010 to range between 13.0% to 15.0% 19.3% GDP growth in 2Q2010 y‐o‐y Positive 18.1% GDP growth in 1H2010 y‐o‐y economic Stronger than expected growth provides positive spin‐offs for office sector outlook Financial services sector boosted b
Slide 27: Office Sector Turns Positive
Office Sector Turns Positive Occupancy and rentals rise on the back of sustained economic expansion S$ psf 97.1% 96.2% 95.4% 93.1% 91.9% 93.3% 91.5% 91.2% 91.2% 18.8 18.8 16.1 16.1 15.0 12 9 12.9 12.3 10.5 10.2 8.6 8.8 8.5 8.1 8.0 75 7.5 6.8 6.7 6.9 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 M
Slide 28: Going Forward
Going Forward 28
Slide 29: Key Thrusts
Key Thrusts Active Acquisition Prudent Capital Asset Growth Management Management Pursue opportunities Manage assets and cost Attract new creditworthy for strategic structure more effectively tenants to increase acquisitions in occupancy as well as retain Singapore and Exercise prudent interest good
Slide 30: Additional Information
-REITasia Additional Information
Slide 31: Snapshot of K-REIT Asia
Snapshot p of K‐REIT Asia Manager K‐REIT Asia Management Limited Property Portfolio 6 commercial assets valued at $2.3 billion Total Portfolio NLA 1,523,068 sf (1) Listing Date 28 April 2006 on Singapore Stock Exchange Market Capitalisation $1.5 billion Unit Price $1.14 (2) $ Number of Units in Issu
Slide 32: Portfolio Information
Portfolio Information Bugis Junction Keppel Towers and As at 30 June 2010 One Raffles Quay Prudential Tower 275 George Street Towers GE Tower Attributable NLA (sf) 247,475 430,112 445,120 175,675 224,686 Ownership 100.0% 100.0% 33.3% 73.4% 50.0% Number of tenants 8 65 31 24 7 UniCredit Bank AG, IE S
Slide 33: Portfolio of Quality Assets
Portfolio of Quality Assets One Raffles Quay One Raffles Quay 275 George Street North Tower South Tower Brisbane, Australia Bugis Junction Towers Keppel Towers GE Tower Prudential Tower 33
Slide 34: Thank you
Thank you For queries, please contact Ms Casiopia Low Investor Relations & Research Tel: 6433 7622 Fax: 6835 7747 Email: casiopia.low@kreitasia.com http://www.kreitasia.com 34