Keppel REIT · SGX:K71U
Keppel REIT — Q1 2015 Earnings Presentation
38 slides from Keppel REIT's earnings presentation, Apr 13, 2015
Slide 1: First Quarter 2015 Financial Results
First Quarter 2015 Financial Results 13 April 2015 1
Slide 2: Important Notice
Important Notice Important Notice The value of 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 princip
Slide 3: Keppel REIT: Overview
Keppel REIT: Overview S$8.2 billion 3.3 million sf (1) Assets Under Management Total attributable NLA 12 Office Towers In 9 Quality Premium Grade and Grade A assets in CBDs of Singapore and Australia 289 tenants S$3.8 billion (2) Diversified across various business sectors Market Capitalisation The
Slide 4: Premium Grade and Grade A Office Portfolio
Premium Grade and Grade A Office Portfolio » 88% of portfolio in Singapore and 12% in Australia Singapore Properties Australia Properties 8 Chifley Square, 8 Exhibition 77 King Street Ocean Financial Centre Marina Bay Financial Centre Sydney Street, Office Tower, (99.9% interest) (33.3% interest) (5
Slide 5: Youngest Commercial S-REIT in Singapore Business Hub
Youngest Commercial S-REIT in Singapore Business Hub » Strategic portfolio transformation in 2014 positioning Keppel REIT as the S-REIT with the youngest and largest portfolio of premium office assets in Singapore’s business and financial districts » Approximately 92% of Singapore properties are loc
Slide 6: 1. Key Highlights
1. Key Highlights Marina Bay Financial Centre, Singapore 6
Slide 7: 1Q 2015 Key Financial Highlights
1Q 2015 Key Financial Highlights » Distribution income 18% q-o-q to $54 mil in 1Q 2015 » 1Q 2015 DPU 13% q-o-q to 1.70 cents from 1.51 cents in 4Q 2014 Full-quarter contribution from MBFC Tower 3 and stronger performance from Bugis Junction Towers Annualised distribution yield of 5.7% » Sust
Slide 8: 1Q 2015 Key Capital Management Highlights
1Q 2015 Key Capital Management Highlights » Maiden issuance of a 7-year $50 million Medium Term Notes (MTN) at a fixed-rate of 3.15% per annum, which is due in 2022 MTN proceeds used to early refinance a $50 million bank loan due in 2016 » Completed the early refinancing of $275 million of loans
Slide 9: 1Q 2015 Key Portfolio Highlights
1Q 2015 Key Portfolio Highlights » Upward trend of office rental reversions continue to gather momentum 19% positive rental rate reversion for office leases signed, renewed and reviewed » Successfully reviewed two-thirds of leases due in 2015, all with positive rental reversions » Maintained high
Slide 10: 2. Financial Highlights
2. Financial Highlights Bugis Junction Towers, Singapore 10
Slide 11: DPU up 13% Q-o-Q
DPU 13% Q-o-Q » Distribution to Unitholders 18% q-o-q to $54 mil in 1Q 2015 » DPU 13% q-o-q to 1.70 cents in 1Q 2015 Full-quarter contribution from MBFC Tower 3 Stronger performance from Bugis Junction Towers, which contributed to improvement in both NPI and PI » Annualised distribution yi
Slide 12: Stable Distributable Income Y-o-Y
Stable Distributable Income Y-o-Y » Distributable income remained stable at $54 mil y-o-y, notwithstanding: Expiry of rental support from the 87.5% interest in Ocean Financial Centre Absence of income contribution from Prudential Tower Absence of rental support from MBFC Phase One » Continuing
Slide 13: Strong Balance Sheet
Strong Balance Sheet As at 31 Mar 2015 As at 31 Dec 2014 Non-current Assets $7,056 mil $ 7,104 mil Total Assets $7,299 mil $7,329 mil (1) Borrowings $3,544 mil $3,545 mil Total Liabilities $2,826 mil $2,870 mil Unitholders’ Funds $4,470 mil $4,457 mil (2) Adjusted NAV Per Unit $1.39 $1.40 (1) These
Slide 14: 1Q 2015 DPU
1Q 2015 DPU Distribution Per Unit (DPU) Distribution Period 1.70 cents 1 January 2015 – 31 March 2015 Distribution Timetable Trading on “Ex” Basis Friday, 17 April 2015 Books Closure Date Tuesday, 21 April 2015 Distribution Payment Date Thursday, 28 May 2015 1. Key Highlights 2. Financial Highlights
Slide 15: 3. Capital Management
3. Capital Management 8 Chifley Square, Sydney 15
Slide 16: Proactive Capital Management Strategy
Proactive Capital Management Strategy » Continue to adopt a prudent and proactive capital management strategy » Diversify funding sources with the maiden issuance of 7-year $50 mil MTN at fixed-rate of 3.15% p.a. and due in 2022 MTN proceeds used to early refinance a $50 mil bank loan due in 2016
Slide 17: Well-staggered Debt Maturity Profile
Well-staggered Debt Maturity Profile » Over 80% of loans not due for repayment till 2017 and beyond Loans Due in 2015 Loans Due in 2016 Early refinanced 48% Early refinanced 26% $275 million $125 million Million Debt Maturity Profile as at 31 Mar 2015 1,200 30% 1,000 800 21% 20% 8% 600 10% 1,045 275
Slide 18: 4. Portfolio Analysis
4. Portfolio Analysis Ocean Financial Centre, Singapore 18
Slide 19: Steady Leasing Momentum
Steady Leasing Momentum » Upward trend of office rental reversions continue to gather momentum Achieved positive reversions of approximately 19% on rental rates for all office leases signed, renewed and reviewed » Reviewed two-thirds of leases due in 2015, all of which achieved positive rental rev
Slide 20: Project Update: New Office Tower in Perth
Project Update: New Office Tower in Perth Office Tower at the Old Treasury Building site » Topping-out of a strategic landmark in Perth’s CBD on 12 March 2015 » Completion expected in 2H 2015 » 100% pre-committed to the Government of Western Australia with a 25-year lease with options for another 25
Slide 21: Strong Committed Occupancy Levels
Strong Committed Occupancy Levels » 9 out of 11 completed office towers are fully committed » Overall portfolio committed occupancy at healthy levels of 99.3% Singapore Australia Overall 99.5% 98.5% 99.3% 100.0% 98.8% 100.0% 100.0% 100.0% 100.0% 100.0% 99.3% 92.5% Singapore core CBD occupancy at 96.
Slide 22: Singapore Portfolio Occupancy above Market
Singapore Portfolio Occupancy above Market » Portfolio occupancy is consistently above Singapore’s Core CBD occupancy levels Keppel REIT Historical Occupancy 100.0% 100% 99.0% 99.5% Keppel 98.7% REIT 96.3% 95.5% 96.1%1 Singapore 95% Core CBD 90% 85% 80% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4
Slide 23: Tenants Diversified across Various Business Sectors
Tenants Diversified across Various Business Sectors » New and renewal tenants in 1Q 2015 are diversified across various sectors including the banking, insurance and financial services, real estate and property services, as well as energy and natural resources Legal, 9.8% TMT, 9.9% Number of tenants
Slide 24: Long Weighted Average Lease Expiry
Long Weighted Average Lease Expiry » Top 10 tenants account for approximately 43% of portfolio NLA » Long WALE of approximately 9 years and 6 years for top 10 tenants and portfolio respectively enhances income sustainability over the long term Weighted Average Lease Expiry (WALE) Top 10 Tenants (by
Slide 25: Healthy Lease Expiry Profile
Healthy Lease Expiry Profile » Continues to maintain a well-staggered lease profile » Close to 80% of total leases not due for renewal till 2017 and beyond Portfolio Lease Profile (by NLA) as at 31 Mar 2015 55.3% ~80% of leases not due for renewal till 2017 and beyond 17.2% 15.1% 13.8% 13.6% 6.6% 5.
Slide 26: Holistic Approach towards Environmental Sustainability
Holistic Approach towards Environmental Sustainability » All of Keppel REIT's assets bear internationally-recognised green certifications » The Manager believes that green and efficient developments will achieve tangible long-term savings for all its stakeholders. No. Property Award Year 1 Bugis Jun
Slide 27: Ongoing Community Engagement
Ongoing Community Engagement REITAS Talk CNY Performance Remembering MM Lee » Educational talk for retail » Ushered in the Lunar » Keppel REIT staff distributed umbrellas, water and tissue investors on insights into New Year with popular packs to Singaporeans and foreigners who had gathered the REIT
Slide 28: 5. Market Review and Outlook
5. Market Review and Outlook One Raffles Quay, Singapore 28
Slide 29: Office Market Review – Singapore
Office Market Review – Singapore » Average Grade A occupancy in the core CBD held firm at 96.1% » Grade A office rents continued to lead growth, rising an average of 11.2% y-o-y to reach $11.40 psf $15 96.6% 100% 95.7% 95.8% 95.7% 96.1% 95.0% 95.2% 93.2% 93.2% 93.5% 91.6% 92.2% 90.7% Average Grade A
Slide 30: Market Outlook – Singapore
Market Outlook – Singapore Singapore » Economy grew by 2.9% in 2014, with the highest growth rate recorded in the finance and insurance, followed by the information and communications sectors » Government forecast a 2% to 4% growth in 2015, on the back of modest global growth and the tightening labo
Slide 31: Market Outlook – Australia
Market Outlook – Australia Australia » Recorded an economic growth of 2.5% y-o-y in 4Q 2014 » In February 2015, the Reserve Bank of Australia reduced the official cash rate to 2.25% to ease monetary policy and encourage sustainable economic growth » Demand for office space remained relatively stable
Slide 32: Thank You
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Slide 33: Additional Information
Additional Information Marina Bay Link Mall Singapore 33
Slide 34: Singapore's Leading Office REIT
Singapore’s Leading Office REIT Vision To be a successful commercial real estate investment trust with a sterling portfolio of assets pan-Asia Mission Guided by our operating principles and core values, we will deliver stable and sustainable returns to Unitholders by continually enhancing our assets
Slide 35: Growth Record
Growth Record • Divested stake in Prudential Tower • Completed the acquisition of a • Increased interest • Acquisition of the one-third in OFC to 99.9% new office tower interest in at the Old MBFC Tower 3 • Obtained tax Treasury Building • First overseas transparency acquisition • First forward in P
Slide 36: Recent Awards and Accolades
Recent Awards and Accolades Global Real Estate Sustainability Benchmark (GRESB) 2014 » Ranked No. 1 in Asia for Office Sector » Ranked the Regional Leader in Asia for Office Sector » Top 3 in Asia across all diversified entities and sectors » Top 5% globally across all diversified entities and secto
Slide 37: Portfolio Information
Portfolio Information » Keppel REIT’s AUM is approximately $8.2 billion as at 31 March 2015 » 88% of portfolio in Singapore and 12% in Australia Marina Bay Financial Bugis Junction Towers One Raffles Quay(1) Ocean Financial Centre (2) Centre (1) Comprises of three premium A pair of 50 and 29 storey
Slide 38: Portfolio Information
Portfolio Information Office Tower being built 8 Chifley 77 King Street Office 8 Exhibition Street, 275 George Street, at the Old Treasury Square, Sydney(1) Tower, Sydney Melbourne(1) Brisbane(1) Building site, Perth(1) 33-storey Grade A office tower scheduled for 34-storey Grade A 18-storey Grade A