Keppel DC REIT · SGX:AJBU
Keppel DC REIT — CLSA ASEAN Forum in Bangkok 2019
29 slides from Keppel DC REIT's conference presentation, Mar 13, 2019
Slide 1: Investor Presentation
Investor Presentation CLSA ASEAN Forum in Bangkok 13-14 March 2019
Slide 2: Important Notice
Important Notice The past performance of Keppel DC REIT is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and assump
Slide 3: Content
Content ◼ Key Highlights ◼ Portfolio Review ◼ Capital Management ◼ Outlook ◼ Additional Information 2
Slide 4: Key Highlights
Key Highlights
Slide 5: Key Highlights
Key Highlights Steady growth in adjusted Stable income stream Low aggregate leverage DPU, increased by 5.0% to 7.32 with healthy portfolio provides financial flexibility to cents in FY 2018 occupancy and long WALE pursue growth Adjusted DPU (cents) Portfolio Occupancy Aggregate Leverage3 7.50 93.1%
Slide 6: Portfolio Growth since Listing
Portfolio Growth since Listing maincubes Keppel DC Intellicentre 3 Keppel DC Singapore 3 Keppel DC Dublin 2 Data Centre Singapore 5 East Data Centre1 Cardiff Data Centre Milan Data Centre 31 Dec 2018 Intellicentre 2 Data Centre 31 Dec 2017 AUM: $2.0b 31 Dec 2016 15 assets 31 Dec 2015 AUM: $1.5b 12 D
Slide 7: Strengthened foothold in key data hubs
Strengthened foothold in key data hubs ◼ Acquired Keppel DC Singapore 5, largely funded by private placement of 224.0m new Units; obtained tax transparency treatment in Jan 2019 Asia Pacific ◼ Entered into agreement with Macquarie Telecom to construct Intellicentre 3 East Data Centre on vacant land
Slide 8: Intellicentre 3 East Data Centre
Intellicentre 3 East Data Centre ▪ Strengthened foothold in Sydney through optimising land use in an existing asset ▪ Expected to be DPU-accretive, consistent with investment strategy ▪ Greater income stability with new 20-year triple net master lease with MT incorporating both IC2 DC and IC3 East D
Slide 9: Portfolio Review
Portfolio Review
Slide 10: Well-diversified Portfolio
Well-diversified Portfolio ◼ 67.4% of portfolio in Asia Pacific and 32.6% in Europe ◼ Long portfolio WALE of 8.3 years and strong occupancy rate of 93.1% Portfolio AUM breakdown Lease expiry profile (by leased area) As at 31 Dec 2018 As at 31 Dec 2018 Germany 65.5% Italy 6.9% 2.9% Ireland 9.2% Nethe
Slide 11: Well-diversified Portfolio (cont’d)
Well-diversified Portfolio (cont’d) Rental income breakdown for the month of Dec 20181 ◼ Quality data centres that cater to the requirements of global clientele By trade sector: • Colocation facilities provide diverse client profile and Internet lease expiry enterprise Corporate 1.6% 46.5% • Fully f
Slide 12: Capital Management
Capital Management
Slide 13: Prudent Capital Management
Prudent Capital Management Borrowings on fixed rate ◼ Diversifying sources of funding: Issued €50m in floating rate notes As at 31 Dec 2018 due 2023 in Mar 2018, and another €50m due 2026 in Feb 2019 ◼ Managing interest rate exposure: Interest rates of loans substantially Fixed hedged with floating-
Slide 14: Prudent Capital Management (Cont’d)
Prudent Capital Management (Cont’d) ◼ Mitigating impact of currency fluctuations: • Hedged forecasted foreign-sourced distributions till 1H 2020 through foreign currency forward contracts • Adopted natural hedging by borrowing in currencies that match the corresponding investments Debt currency brea
Slide 15: Outlook
Outlook
Slide 16: Sound Industry Fundamentals
Sound Industry Fundamentals ◼ Demand for data centre space underpinned by increasing cloud adoption, rapid digital transformation, data centre outsourcing and data sovereignty regulations Global co-location market Total mobile data traffic predicted expected to grow by 15-17% in to increase by 31% C
Slide 17: Positioned for Growth
Positioned for Growth ◼ The Manager will continue to strengthen Keppel DC REIT’s presence and position it to capitalise growth opportunities in the data centre industry Ireland Keppel DC Dublin 1, Dublin Keppel DC Dublin 2, Dublin Proactive United Kingdom Asset 1 Management GV7 Data Centre, London C
Slide 18: Committed to Deliver Value
Committed to Deliver Value Vision: To be the preferred data centre real estate investment trust, serving as a trusted partner to our stakeholders. Mission: Guided by the Keppel Group’s operating principles and core values, we will create value for our investors by growing a quality portfolio of data
Slide 19: Additional Information
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Slide 20: Distributable Income
Distributable Income +/(-) ($’000) FY 2018 FY 2017 % Distributable Income to Unitholders 96,096 82,320 +16.7 Gross Revenue 175,535 139,050 +26.2 Property Expenses (17,862) (13,931) +28.2 Net Property Income 157,673 125,119 +26.0 Distribution per Unit1,2 (DPU) (cents) 7.32 7.12 +2.8 Adjusted DPU2,3 (
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights As at As at +/(-) ($’000) 31 Dec 2018 31 Dec 2017 % Investment Properties 2,028,672 1,570,090 +29.2 Total Assets 2,252,931 1,763,282 +27.8 Gross Borrowings1 673,952 546,481 +23.3 Total Liabilities 776,937 646,780 +20.1 Unitholders’ Funds 1,444,839 1,089,716 +32.6 Units in Is
Slide 22: Portfolio Overview (as at 31 Dec 2018)
Portfolio Overview (as at 31 Dec 2018) Attributable Asia Pacific lettable area No. of Occupancy Valuation2 WALE Location Interest (sq ft) clients1 rate (%) ($m) Lease type (years) Land lease title Leasehold Keppel DC Keppel lease / Singapore 100% 109,721 17 86.9 287.0 3.2 (Expiring 30 Sep 2025, with
Slide 23: Portfolio Overview (as at 31 Dec 2018) (Cont’d)
Portfolio Overview (as at 31 Dec 2018) (Cont’d) Attributable No. of Occupancy Valuation2 WALE Europe Location Interest lettable area Lease type Land lease title clients1 rate (%) ($m) (years) (sq ft) Cardiff, Triple-net Cardiff Data Centre United 100% 79,439 1 100.0 65.4 12.5 Freehold (Shell & core)
Slide 24: Overview of Lease Arrangements
Overview of Lease Arrangements Asia Pacific Responsibilities of Owner Maintenance Lease Property Description Insurance Arrangement Property Building Refresh Capex Opex Tax Keppel lease1 / ◼ Client: Pays rent Keppel DC Singapore 1 ✓ ✓ ✓ ✓ Colocation3 ◼ Owner: Bears all expenses; responsible for facil
Slide 25: Overview of Lease Arrangements (Cont’d)
Overview of Lease Arrangements (Cont’d) Europe Responsibilities of Owner Maintenance Lease Insurance Property Description Property Building Arrangement Refresh Capex Opex Tax Cardiff Data Centre Triple-net lease ◼ Client: Pays rent and all outgoings; responsible for facilities management - - - - GV7
Slide 26: Keppel DC REIT Structure
Keppel DC REIT Structure Keppel Telecommunications Keppel Capital & Transportation Institutional and The REIT Manager can leverage The REIT Manager can leverage Public Investors the scale and resources of a larger the Sponsor‘s expertise and track asset management platform record in this industry 50
Slide 27: What is a Data Centre?
What is a Data Centre? ▪ As data centres support clients’ critical business operations, technical expertise and intricate understanding of the industry and clients’ needs are required Internet Connectivity Fire suppression and building monitoring systems Physical telecommunication cables brought int
Slide 28: Strong Fundamental Growth Drivers
Strong Fundamental Growth Drivers Growing data ◼ Strong growth in data creation, usage and requirements expected to continue. 1 requirements Mission-critical ◼ Data centre facilities support clients’ critical day-to-day business operations, 2 infrastructure and/or meet regulatory and compliance requ
Slide 29: Thank you
Thank you