Kore Us REIT · SGX:CMOU
Kore Us REIT — Keppel Pacific Oak US REIT — H1 2023 Earnings Presentation
39 slides from Kore Us REIT's earnings presentation, Jul 26, 2023
Slide 1: First Half 2023 Financial Results
First Half 2023 Financial Results 26 July 2023
Slide 2: Important Notice and Content Outline
Important Notice Content Outline 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 be based on historical information or facts and may be “forward-looking” statements due to a number of risks, K
Slide 3: Key Highlights
Key Highlights Bridge Crossing Nashville, Tennessee
Slide 4: 1H 2023 Key Highlights
1H 2023 Key Highlights Net Property Income (NPI) Distribution per Unit (DPU) Leasing momentum US$43.9 million 2.50 US cents ~289,057 sf Despite the disposal of the two Atlanta assets leased in the first half of 2023 Resulting from 1Q and 2Q 2023 management in 2H 2022, NPI was higher year-on-year bas
Slide 5: Financial Performance & Capital Management
Financial Performance & Capital Management Bellevue Technology Center Bellevue, Seattle, Washington
Slide 6: Financial Performance for 1H 2023
Financial Performance for 1H 2023 (US$’000) 2Q 2023 2Q 2022 % Change 1H 2023 1H 2022 % Change Gross Revenue 38,858 37,128 4.7 75,911 74,109 2.4 Net Property Income (NPI) 22,717 21,272 6.8 43,870 43,001 2.0 Adjusted NPI (excludes non-cash straight-line rent, 22,627 21,559 5.0 44,151 43,521 1.4 lease
Slide 7: Strong Balance Sheet
Strong Balance Sheet As at 30 June 2023 US$’000 Total Assets 1,516,190 Investment Properties 1,443,400 Cash and Cash Equivalents 38,250 Other Assets 34,540 Total Liabilities 675,027 Gross Borrowings 582,420 Other Liabilities 92,607 Unitholders’ Funds 841,163 Units in issue and to be issued (‘000) 1,
Slide 8: KORE Distribution For 1H 2023
KORE Distribution For 1H 2023 Distribution for the period from 1 January to 30 June 2023 Distribution Per Unit 2.50 US cents Ex-Date 2 Aug 2023 Record Date 3 Aug 2023 Payment Date 29 Sep 2023 8
Slide 9: Stable Financial Position
Stable Financial Position Prudent capital management with 100% unsecured loans provide greater financial flexibility, no long-term refinancing obligation till Q4 2024 As at 30 June 2023 Interest Rate Exposure Total Debt • US$582.4 million of external loans Sensitivity to SOFR(3) • No direct exposure
Slide 10: Portfolio Performance
Portfolio Performance The Westpark Portfolio Redmond, Seattle, Washington
Slide 11: Quality Portfolio Driven By Tech and Innovation
SEATTLE – BELLEVUE/REDMOND, Washington NASHVILLE, Tennessee Quality Portfolio The Plaza Buildings Bellevue Technology Center Occupancy: 89.0% The Westpark Portfolio Bridge Crossing Occupancy: 100% Driven By Occupancy: 87.8% Occupancy: 95.0% ORLANDO, Florida Tech and DENVER, Colorado Innovation Westm
Slide 12: Steady Income with Visible Organic Growth
Steady Income with Visible Organic Growth ~289,057sf New Renewal Expansion Leased spaces for 1H 2023, equivalent to 6.1% of portfolio NLA. Portfolio WALE of 3.6 New leasing demand and expansions from: years(1) by CRI. TAMI(2) 58.4% 19.9% ~1.6% 54.4% Leases signed Professional Services(3) 19.6% In-pl
Slide 13: Resilient Portfolio with Diversified Tenant Composition
Resilient Portfolio with Diversified Tenant Composition KORE’s buildings and business campuses in ~50% of KORE’s portfolio NLA comprises the tech hubs of Seattle – Bellevue/Redmond, high-quality tenants from the growing and Austin and Denver contribute ~68% of NPI(1) defensive sectors of TAMI, medic
Slide 14: Low Tenant Concentration Risk
Low Tenant Concentration Risk Top 10 Tenants Sector Asset Location % of CRI Comdata Inc TAMI Bridge Crossing Nashville 3.5% Ball Aerospace TAMI Westmoor Center Denver 2.9% Seattle – Lear Cooperation TAMI The Plaza Buildings 2.8% Bellevue/Redmond Gogo Business Aviation TAMI 105 Edgeview Denver 2.7% K
Slide 15: Last 12 Months Rent Growth
Last 12 Months Rent Growth 0.9% Key Growth Markets Average 1.1% United States Average 0.9% Gateway Cities Average -0.6% US Average Seattle, Bellevue CBD 0.2% Seattle, Eastside Bellevue 0.7% Seattle, Redmond 0.6% Austin, Northwest 0.0% Denver, Northwest Denver, Broomfield 0.9% 2.3% 1.1% Nashville, Br
Slide 16: Projected 12-Month Rent Outlook
Projected 12-Month Rent Outlook Key Growth Markets Average United States Average -3.2% -2.7% -2.7% Gateway Cities Average -4.2% US Average Seattle, Bellevue CBD -3.9% Seattle, Eastside Bellevue -4.2% Seattle, Redmond -4.2% Austin, Northwest -6.8% Denver, Northwest Denver, Broomfield -3.0% -2.4% -3.2
Slide 17: First Choice Submarkets Outlook
First Choice Submarkets Outlook Property Submarket Last 12M Last 12M Under Last 12M Projected Submarket Vacancy Rate Vacancy Rate Deliveries Absorption Construction Rental Growth Rental Growth Property (%) (%) (sf’000) (sf’000) (sf’000) (%) (%) Seattle, Bellevue CBD 12.2 8.4 1100 687 3,625(1)* 0.2 (
Slide 18: Market Outlook
Market Outlook 105 Edgeview Denver, Colorado
Slide 19: U.S. Economic Updates
U.S. Economic Updates (2) % Unemployment Rate (2) % Labour Force Participation Rate 20 65 64 • US real GDP increased by 2.0% 15 63 62.6% quarter-on-quarter in 1Q 2023(1), with low 62 10 unemployment rate of 3.6%(2) 61 5 3.6% 60 • Annual inflation rate slowed to 3.0% in June 59 2023(3), the lowest si
Slide 20: Key Growth Markets Continue to Outperform
Key Growth Markets Continue to Outperform Real GDP Percent Change at Annual Rate(1), 2022: Q4 – 2023: Q1 Key Growth Markets Average 2.8% 2.0% United States Average 2.0% US Average Gateway Cities Average 1.3% Seattle 3.2% Austin 3.0% 2.8% Denver 1.9% Nashville 3.5% Houston 3.0% Average of Key Dallas
Slide 21: Strength of KORE's Markets
Strength of KORE’s Markets Bellaire Park Houston, Texas
Slide 22: Business Migrations To The South
Business Migrations To The South Net migration of businesses across the United States, 2021(1) • Suburban properties continue *Florida +399 to attract the most capital. North Carolina +148 In 1Q 2023, US$8.1 billion * Texas was placed in suburban +103 assets, compared to Nevada +103 US$2.6 billion
Slide 23: Blue States Losing Taxpayers and Income
Blue States Losing Taxpayers and Income Net Gain in State Adjusted Gross Income Net Loss in State Adjusted Gross Income Due to Domestic Migration(1) Due to Domestic Migration(1) $ billion $ billion 50 0 40 -10 30 -20 20 10 -30 0 -40 2018-19 2019-20 2020-21 2018-19 2019-20 2020-21 North Carolina Ariz
Slide 24: Continued Exodus From America's Big Cities
Continued Exodus From America’s Big Cities • Most of the gateway cities continue to face a tough future. 2021-2022 population change among the top 10 largest metro areas(1) • New York continues to lead the country in population loss and outmigration(1). Phoenix Miami Saw largest annual numeric and
Slide 25: New York City Record High Levels of Felony Crimes in 2022
New York City Record High Levels of Felony Crimes in 2022 • More than 170,000 felony crimes were reported in 2022 – Rise in felony crimes in New York City the most since 2006, when such statistics became publicly (2021 to 2022)(1) available(1) . +32% 172,852 felonies reported in 2022. +27% +25% +2
Slide 26: Spike In Firms Leaving Chicago Traced Back To 2020
Spike In Firms Leaving Chicago Traced Back To 2020 • Number of people leaving Chicago continues to grow(1). List of companies that moved out of Chicago(2) Over the last five years, more people left than moved in (net loss of at least 249,000 people). Tyson Foods Only New York and San Francisco s
Slide 27: Deteriorating Situation in Downtown San Francisco
Deteriorating Situation in Downtown San Francisco Union Square Area Store Closures • San Francisco shaken by organised crime. Since 2020(3) • Residents are calling on authorities to address the increasingly Date announced Store dangerous situation. May 2023 Nordstrom • The city has become associated
Slide 28: California's Business Exits
California’s Business Exits California lost a total of 352 headquarters in the period January 1, 2018 through December 31, 2021 • Los Angeles and San Francisco counties have experienced the highest number of relocations, several to growth markets where KORE is present. California Headquarters Losses
Slide 29: Relocations Out of California
Relocations Out of California Top 10 states for California relocations (1) Overbearing Rank State Known Relocations regulations 1 Texas 132 Exorbitant 2 Tennessee 31 taxes 3 Nevada 25 4 Florida 24 High costs 5 Arizona 21 6 Colorado 20 7 North Carolina 13 • High cost of buildings are driving large co
Slide 30: Low State Personal Income Taxes
Low State Personal Income Taxes Individuals are moving to states with zero or low personal income taxes, accelerating population growth State Individual Tax Rates (as at January 1, 2023)(1) 5.47% Key Growth Markets Average 4.12% United States Average 5.47% Gateway Cities Average 9.52% US Average Col
Slide 31: Low State Corporate Income Taxes
Low State Corporate Income Taxes Companies are moving to states with zero or low corporate taxes, accelerating population growth State Corporate Income Tax Rates (as at January 1, 2023)(1) 5.99% Key Growth Markets Average 4.21% United States Average 5.99% Gateway Cities Average 8.69% US Average Colo
Slide 32: 2023 Rankings for Overall State Taxes
2023 Rankings for Overall State Taxes Lower overall tax rates in KORE’s key growth markets vs gateway cities Overall State Rankings(1) Best Key Growth 22 46 Markets Florida 4 where KORE is present Texas 13 Tennessee 14 Gateway Markets Colorado 21 Washington 28 Average of Massachusetts 34 Key Growth
Slide 33: First choice US office S-REIT focused on TAMI, medical and healthcare
Strategic presence in some of the fastest growing states in the U.S. First choice US office S-REIT Exposure to the fast-growing TAMI, medical and healthcare sectors provides income resilience. focused on the fast-growing TAMI, medical and Highly diversified portfolio with low tenant concentration ri
Slide 34: Thank You
Thank You For more information, please visit www.koreusreit.com Connect with us on: Westmoor Center Denver, Colorado
Slide 35: Additional Information
Additional Information The Plaza Buildings Seattle, Washington
Slide 36: KORE's Presence in Key Growth Markets
KORE’s Presence in • Low or no taxes • Better cost of living Key Growth Markets • • Employment opportunities Attractive lifestyle and culture SEATTLE Seattle Seattle, Washington The Plaza Buildings Bellevue Technology Center #17 The Westpark Portfolio Austin, Texas Westech 360 #4
Slide 37: 2022 Sustainability Achievements
2022 Sustainability Achievements Execute sound fiscal and asset management strategy to drive growth and long-term value for Unitholders ENVIRONMENTAL STEWARDSHIP RESPONSIBLE BUSINESS Established a dedicated Board ESG Maintain high standards of ethical Committee business conduct and compliance
Slide 38: Trust Structure
Sponsors(2) Trust Structure Keppel Capital KPA Unitholders Keppel Capital International Keppel No withholding (1)tax in relation to Trustee Management Management Agreement Section 1446(f) Services Fees Keppel Pacific Oak US REIT Trustee Management Trustee Management (Manager) Tax-efficient struc
Slide 39: Strong Sponsors: Keppel and KORE Pacific Advisors
Strong Sponsors: Keppel and KORE Pacific Advisors (2) • A global asset manager and operator with strong • Established commercial real estate investment expertise in sustainability-related solutions spanning manager in the US the areas of infrastructure, real estate and connectivity • Operates in mor
Keppel Pacific Oak US REIT — H1 2023 Earnings Presentation on 6ix