Kore Us REIT · SGX:CMOU
Kore Us REIT — Keppel-KBS US REIT — Merger or Acquisition (September 2018)
28 slides from Kore Us REIT's merger presentation, Sep 24, 2018
Slide 1: Deepening Seattle Footprint with Maiden Acquisition of Westpark Portfolio
Deepening Seattle Footprint with Maiden Acquisition of Westpark Portfolio in Redmond, Washington 24 September 2018
Slide 2: Important Notice
Important Notice This presentation is for information purposes only and does not constitute or form part of an offer, invitation or solicitation of any securities of Keppel-KBS US REIT in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in conn
Slide 3: Table of Contents
Table of Contents 1 Transaction Overview 2 Market Overview 3 Key Rationale 4 Merits of Proposed Acquisition 5 Additional Information 2
Slide 4: Transaction Overview
SECTION 1 Transaction Overview Westpark Portfolio, Redmond, Seattle
Slide 5: The Westpark Portfolio Transaction Summary
Deepening Seattle Footprint with Maiden Acquisition The Westpark Portfolio Transaction Summary Agreed value of US$169.4m is lower than independent appraisals by Cushman and JLL Attractive Discount to Independent Valuations(1) US $181.4m US $178.0m US $169.4m 4.8% Discount 6.6% Discount Business
Slide 6: Overview: Westpark Portfolio
Overview: Westpark Portfolio Business campus of 21 buildings Property in Redmond, Washington Land Tenure Freehold Land Area 1,804,255 sq ft Net Lettable Area 781,966 sq ft (“NLA”) Occupancy 97.7%(1) Weighted Average 4.3 years(2) Lease Expiry (“WALE”) Refurbishment Between 2016 to 2017 Period Number
Slide 7: Overview: Westpark Portfolio - Technology-Centric Tenant Base
Overview: Westpark Portfolio Technology-Centric Tenant Base More than 30% of portfolio tenants from the high growth technology sector(1) Large number of professional services tenants provide support services to the technology sector Top 10 tenants have an average WALE of 5.3 years(1) Average
Slide 8: Market Overview
SECTION 2 Market Overview Seattle, Washington
Slide 9: Seattle, Washington: The Nation's Rising Tech Hub
Seattle, Washington: The Nation’s Rising Tech Hub Primary Economic and Cultural Center of Washington Largest metropolitan area in the Pacific Northwest Thriving economy driven by rapid growth in the software and IT services sector Anchored by tech titans such as Microsoft, Amazon and Google
Slide 10: Macroeconomic Indicators Outpace National Average
Seattle, Washington: The Nation’s Rising Tech Hub Macroeconomic Indicators Outpace National Average Young & Healthy Strong GMP educated employment growth trends workforce growth • 4.6% (1) in 2017 • 3.9 million residents • Stable growth of • Consistently above in 2017 1.1% (1) p.a. through national
Slide 11: Key Rationale
SECTION 3 Key Rationale Westpark Portfolio, Redmond, Seattle
Slide 12: Key Rationale
Key Rationale 1 Deepen Presence in High Growth Seattle Market 2 Accretive Acquisition Positioned for Long Term Growth 3 Portfolio Diversification that Enhances Income Resilience 11
Slide 13: Deepen Presence in High Growth Seattle Market
1 Deepen Presence in High Growth Seattle Market Strategic Location with Good Connectivity Appeals to technology and professional services tenants due to close proximity to Microsoft World HQ and key commercial hubs in Bellevue and Seattle. Legend Target acquisition Existing assets Key commercial a
Slide 14: Positive Growth Momentum Sustained by Strong Office Fundamentals
1 Deepen Presence in High Growth Seattle Market Positive Growth Momentum Sustained by Strong Office Fundamentals Strong rental growth in the past 5 years accompanied by improvement in vacancy rate Positive leasing activity backed by strong interest from technology corporations Projected rent g
Slide 15: Demand for High Quality Office Space Outpaces Construction
1 Deepen Presence in High Growth Seattle Market Positive Growth Momentum Sustained by Strong Office Fundamentals Demand for high quality office space outpaces construction Slow construction trends will drive prospective tenants to absorb existing spaces No new office construction planned for R
Slide 16: Well-Spread Lease Expiry Positioned for Positive Rental Reversion
1 Deepen Presence in High Growth Seattle Market Well-Spread Lease Expiry Positioned for Positive Rental Reversion 100% of leases have built-in rental escalations of 2% to 3% p.a. Westpark Portfolio Lease Expiry Profile(1) 45.7% 39.6% 20.9% 17.9% 13.7% 7.8% 12.0% 9.9% 9.9% 7.2% 8.1% 7.3% 2018 2019
Slide 17: Accretive Acquisition Positioned For Long Term Growth
2 Accretive Acquisition Positioned For Long Term Growth Pro Forma Pre- Post-Acquisition (as at 30 June 2018) Acquisition Rights Preferential Issue (1) Offering(2) Adequate debt headroom available for future growth Annualised DPU 3.82 3.64 3.86 (US Cents) Lengthen weighted average debt term to 4.
Slide 18: Diversification of Portfolio
3 Diversification of Portfolio Improves Income Resilience of Portfolio Expands Boosts Enlarges AUM tenant base portfolio occupancy US$985.5m 91.8% 441 90.3% US$816.1m 339 Existing Enlarged Existing Enlarged Existing Enlarged 17
Slide 19: Improves Tenant Diversification and Exposure to Tech Sector
3 Diversification of Portfolio Improves Tenant Diversification and Exposure to Tech Sector Increases portfolio exposure to high growth technology sector by 3.0%(1) Increases portfolio WALE(1) to 3.8 years Top 10 tenants of the enlarged portfolio will now account for 20.5% of CRI instead of 22.
Slide 20: Merits of Proposed Acquisition
SECTION 4 Merits of Proposed Acquisition Westpark Portfolio, Redmond, Seattle
Slide 21: Merits of Proposed Acquisition
Merits of Proposed Acquisition Strategic addition that creates a stronger growth platform Attractively priced acquisition with potential to benefit from the positive fundamentals in Seattle Enhances income resilience through portfolio diversification Creates long term value for Unitholders 2
Slide 22: Thank You
THANK YOU Westpark Portfolio, Redmond, Seattle
Slide 23: Additional Information
SECTION 5 Additional Information Westpark Portfolio, Redmond, Seattle
Slide 24: Keppel-KBS US REIT: Enlarged Portfolio
Keppel-KBS US REIT: Enlarged Portfolio Enlarged Portfolio Valuation of US$985.5 million from US$816.1 million Existing Portfolio Westpark Portfolio Enlarged Portfolio % Change NLA (sq ft) 3,225,739 781,966 4,007,705 ▲24.2% Valuation 816.1 169.4(1) 985.5 ▲20.8% (US$ million) WALE by NLA 3.7 4.0 3.8 ▲
Slide 25: Lease Expiry Profile
Lease Expiry Profile Well-Spread Lease Expiry Profile Lease Expiry Profile for the Existing Portfolio(1) 40.0% 35.9% 35.6% 30.0% 20.0% 15.5% 16.0% 16.0% 16.1% 14.6% 15.0% 9.1% 9.1% 8.5% 8.6% 10.0% 0.0% 2018 2019 2020 2021 2022 2023 and NLA CRI thereafter Lease Expiry Profile for the Enlarged Portfol
Slide 26: Portfolio Sector Breakdown
Portfolio Sector Breakdown Well-Diversified Tenant Base Existing Portfolio by NLA Enlarged Portfolio By NLA Technology, Professional Technology, Professional Services, 24.3% 21.3% Services, 36.4% 35.9% Media and Information, Media and 3.4% NLA: 3.2 mn sq ft Information, NLA: 4.0 mn sq ft Medical and
Slide 27: Portfolio CRI Contribution
Portfolio CRI Contribution Enlarged AUM with greater asset diversification Existing Portfolio by CRI Enlarged Portfolio By CRI Powers Ferry, Westpark, Bellevue Northridge 13.0% 3.1% Powers Ferry, Technology Center, 3.7% Bellevue 2.7% Centre, 9.9% Technology Maitland Northridge Centre, 11.4% Promenad
Slide 28: Top 10 Tenants
Top 10 Tenants Top 10 Tenants for the Existing Portfolio(1) Tenant Sector Asset % of CRI Ball Aerospace & Tech Corp Professional Services Westmoor Center 3.6% Zimmer Biomet Spine, Inc. Technology Westmoor Center 2.9% Unigard Insurance Company Finance and Insurance Bellevue Technology Center 2.5% US
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