Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — H1 2009 Earnings Presentation
36 slides from Keppel REIT's earnings presentation, Jul 20, 2009
Slide 1: 1H 2009 Financial Results
1H 2009 FINANCIAL RESULTS 20 Jul 2009 1
Slide 2: Contents
Contents Operations Review Portfolio Analysis Capital Management Market Review & Outlook Going Forward 2
Slide 3: Highlights
Highlights 1H 2009 distributable income 29.6% y-o-y Net property income 26.3% y-o-y Portfolio with 94.9% committed occupancy Average portfolio gross rental rate in Jun 2009 10.3% y-o-y Aggregate leverage maintained at 27.6% Debt maturity only in 2011 3
Slide 4: Operations Review
re Sla Operations Review
Slide 5: 1H 2009 Distributable Income Up 29.6%
1H 2009 Distributable Income Up 29.6% ($'000) 1H 2009 1H 2008 Change % Chg Property Income 30,142 24,495 5,647 23.1 Net Property Income 23,136 18,315 4,821 26.3 Distributable Income 33,154 25,581 7,573 29.6 to Unitholders Distribution Per Unit (cents) 5.00 3.94 1.06 26.9 (1) (2) Distribution Yield (
Slide 6: 2Q 2009 Distributable Income Up 23.4%
2Q 2009 Distributable Income Up 23.4% ($'000) 2Q 2009 2Q 2008 Change % Chg Property Income 15,357 12,989 2,368 18.2 Net Property Income 12,316 9,174 3,142 34.2 Distributable Income 17,496 14,176 3,320 23.4 to Unitholders Distribution Per Unit (cents) 2.64 2.18 0.46 21.1 (1) (2) Distribution Yield (%
Slide 7: Quarter-on-Quarter Performance
Quarter-on-Quarter Performance ($'000) 2Q 2009 1Q 2009 Change % Chg Property Income 15,357 14,785 572 3.9 Net Property Income 12,316 10,820 1,496 13.8 Distributable Income 17,496 15,658 1,838 11.7 to Unitholders Distribution Per Unit (cents) 2.64 2.38 0.26 10.9 (1) (2) Distribution Yield (%) 10.9 16
Slide 8: Rising DPUs
Rising DPUs 11 10.08 10 8.82 8.91 9 DPU (cents) 8 7 6.76 6 5 (1) FY2006 FY2007 FY2008 FY2009 (Annualised) (1) Based on annualised DPU for 1H 2009; distribution for 1H 2009 was 5.00 cents per unit 8
Slide 9: Attractive Distribution Yield
Attractive Distribution Yield As at 30 Jun 2009 10.8% 10.3% Net Yields: Local Corporates (with 10% tax) Tax Free 9.3% for 5.0% Foreign Individuals Corporates 2.6% 2.5% (with 17% tax) 8.5% 0.5% K-REIT Asia FTSE ST REIT FTSE ST RE Index 10-year Govt CPF Ordinary DBS 12-month Annualised 1H Index Yield
Slide 10: Healthy Balance Sheet
Healthy Balance Sheet Aggregate leverage maintained at 27.6% As at ($ million) 30 Jun 2009 Non-current Assets 2,021.4 Total Assets 2,080.1 Borrowings 578.0 Total Liabilities 608.8 Unitholders' Funds 1,471.3 Net Asset Value Per Unit $2.22 Adjusted Net Asset Value Per Unit (2) $2.17 (1) Source: UOBKay
Slide 11: Recent Awards
Recent Awards One Raffles Quay • BCA Green Mark Gold Award Singapore Corporate Awards 2009 • Best Annual Report Award (Silver) "Reits'' category • Best Investor Relations Award (Silver) "$300m to less than $1b market capitalisation'' category 11
Slide 12: Portfolio Analysis
ee Sla Portfolio Analysis
Slide 13: Broad Tenant Diversity
Broad Tenant Diversity Tenant Business Sector by Net Lettable Area as at 30 Jun 2009 Shipping & marine Accounting & services consultancy services 7.4% 4.0% Services 9.3% Real estate & property services 8.2% Banking, insurance & 111 tenants financial services Pharmaceuticals & 35.4% healthcare in tot
Slide 14: Blue-chip Tenants
Blue-chip Tenants Portfolio’s Top 10 Tenants by Net Lettable Area as at 30 Jun 2009 Deutsche Bank 8.0% I.E.Singapore 7.3% GE Pacific 6.8% UBS AG 6.5% ABN AMRO 5.4% Keppel Land 5.0% Total 51.8% of portfolio’s Ernst & Young 4.0% net lettable area Credit Suisse 3.1% Intercontinental Hotels 3.0% Keppel
Slide 15: Occupancy Rate
Occupancy Rate 94.9% committed occupancy of portfolio as at 30 Jun 2009 higher than core CBD occupancy of 91.5% (1) As at As at Change in K-REIT Asia’s Assets 30 Jun 2009 31 Dec 2008 Vacancy Prudential Tower 87.7% 92.3% 5,016 sf Keppel Towers and GE Tower 93.3% 99.2% 25,804 sf Bugis Junction Towers
Slide 16: Long Lease Terms Provide Stable Income
Long Lease Terms Provide Stable Income Weighted average lease term to expiry for • Portfolio: 5.4 years • Top 10 tenants who account for 51.8% of portfolio’s NLA: 7.1 years 28.2% of portfolio’s NLA accounted by long lease terms(1) % of Portfolio’s Net Lettable Area (NLA) Accounted by Long Lease Term
Slide 17: Portfolio Lease Profile
Portfolio Lease Profile Gross rental income based on committed leases for FY2009 already exceeds FY2008’s total gross rental income Lease Profile as a % of Net Lettable Area as at 30 Jun 2009 20% 16.6% 16.7% 11.5% 9.5% 9.7% 8.1% 6.3% 5.4% 2.6% 2H 2009 2010 2011 2012 2013 Lease Expiry as a Percentage
Slide 18: 2009 Lease Profile by Asset
2009 Lease Profile by Asset Only 5.4% of portfolio’s NLA up for lease expiry in 2H 2009 Net Lettable Area (NLA) As at 30 Jun Leases Expiring % of Leases Subject % of 2009 in Portfolio’s to Rent Portfolio’s Jul-Dec 09 (sf) NLA Review in NLA Jul-Dec 09 (sf) PT 18,762 1.5% - - KTGE 44,371 3.6% - - BJT
Slide 19: Improved Average Portfolio Rent
Improved Average Portfolio Rent Average portfolio rent in Jun 2009: $8.13 psf pm(1) • $7.11 psf pm, excluding 1/3 ORQ Average Portfolio Gross Rental Rates 8.13 $8.06 $7.37 $7.61 $7.43 $6.86 $6.02 $4.43 psf per month $4.28 Jun Sep Dec Mar Jun Sep Dec Mar Jun 2007 2007 2007 2008 2008 2008 2008 2009 20
Slide 20: Capital Management
ee Sla Capital Management
Slide 21: Prudent Financial Management
Prudent Financial Management Aggregate leverage will exceed 60% limit only if average portfolio valuation falls by more than 54% As at 30 Jun 2009 Gross Borrowings (1) $581.1m Aggregate Leverage 27.6% All-in Interest Rate 4.26% Interest Coverage Ratio (2) 3.18 times Weighted Average Term to Expiry 1
Slide 22: Debt Maturity Only In 2011
Debt Maturity Only In 2011 About 2/3 of total debt is unsecured $1 billion medium-term note programme in place Debt Profile as at 30 Jun 2009 Fixed-rate $190m Maturing in May 2011 mortgage loan Floating-rate $391m Maturing in Mar 2011 unsecured loan 0 100 200 300 400 22
Slide 23: Market Review and Outlook
K-REITasSia Market Review and Outlook
Slide 24: Market Sentiments Improve
Market Sentiments Improve Uncertainty in global economic outlook • Singapore office demand likely to be subdued in 2009 Some positive signs of bottoming • Collective efforts by worldwide governments prevent downturn from worsening • Singapore government revises 2009 GDP forecast upwards to between -
Slide 25: Moderation in Rents Eases in 2Q
Moderation in Rents Eases in 2Q Companies driven to relocate outside CBD may return Singapore Office Market Occupancy and Rentals(1) 97.3% 97.1% 97.6% 97.6% 97.1% 96.2% 95.4% $20 93.1% 91.5% 100% $18 80% $16 $14 60% $12 18.65 18.80 18.80 17.15 40% $10 16.00 16.10 16.10 14.90 15.00 15.00 $8 12.40 12.
Slide 26: Singapore: Key Business Destination in Longer Term
Singapore: Key Business Destination in Longer Term Singapore: • Remains a key investment market in Asia – 4th in Forbes magazine's 2009 ranking of the best countries to do business • Diversifying beyond a financial hub and establishing multi- hubs in various industry sectors • In the medium term: Po
Slide 27: Competitive Occupancy Costs in Singapore
Competitive Occupancy Costs in Singapore CBRE survey: • Singapore ranked #15 – Below Tokyo, Hong Kong, Mumbai and New Delhi – Compared to #9 a year ago CBRE’s Global 50 Index for Office Occupancy Costs, May 2009 Rank Market US$/sq ft Rank Market US$/sq ft per year per year 1 Tokyo (Inner Central), J
Slide 28: Going Forward
ee Sla Going Forward
Slide 29: Meeting Challenges Ahead
Meeting Challenges Ahead Priority on tenant retention and proactive asset management Opportunities for selective asset acquisitions 29
Slide 30: Thank You
Thank You 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 princi
Slide 31: Additional Information
ee Sla Additional Information
Slide 32: Distribution Details
Distribution Details Distribution to Unitholders Distribution Period 1 Jan 2009 – 30 Jun 2009 Distribution Rate 4.99 cents per unit - Taxable: 3.83 cents per unit - Tax-exempt: 1.16 cents per unit Timetable Last Day of Trading on "cum" Basis 24 Jul 2009, 5.00 pm Ex-dividend Date 27 Jul 2009, 9.00 am
Slide 33: K-REIT Asia's Annual Distribution Yield
K-REIT Asia’s Annual Distribution Yield 3 DPU payouts for FY2008 • Due to rights issue exercise concluded on 8 May 2008 Period (Pre-Rights Issue) DPU (cents) Ex-Dividend Date Payment Date 1 Jan 2008 – 7 May 2008 (~4 mths) 6.58 5 May 2008 18 Jun 2008 Period (Post-Rights Issue) DPU (cents) Ex-Dividend
Slide 34: Snapshot of K-REIT Asia
Snapshot of K-REIT Asia Manager K-REIT Asia Management Limited Property Portfolio 5 commercial office assets valued at $2.1 billion Listing Date 28 Apr 2006 on Singapore Stock Exchange Market Capitalisation $683 million as at 17 Jul 2009 Unit Price $1.030 Number of Units in Issue 663,283,153 Free Fl
Slide 35: Asset Portfolio
Asset Portfolio Property within/ Keppel Towers and Bugis Junction Prudential Tower(1) One Raffles Quay near Singapore CBD GE Tower Towers Net Lettable Area 10,074 39,963 22,991 41,360(2) (sm) Number of Tenants 10 61 8 32 GE Pacific IE Singapore McGraw-Hill Companies Deutsche Bank Seadrill Management
Slide 36: Asset Portfolio
Asset Portfolio Prudential Tower Keppel Towers GE Tower Bugis Junction Towers One Raffles Quay North Tower One Raffles Quay South Tower 36