Keppel Ltd. · SGX:BN4
Keppel — Keppel REIT — H1 2024 Earnings Presentation
35 slides from Keppel's earnings presentation, Jul 30, 2024
Slide 1: Half Year 2024 Financial Results
Half Year 2024 Financial Results 30 July 2024
Slide 2: Outline
Outline Constituent of: ▪ 1H 2024 Key Highlights 3 ▪ Financial Results 5 FTSE ST Large & FTSE4GOOD ▪ Portfolio Review 10 Mid Cap Index Developed & FTSE4GOOD ASEAN 5 Index ▪ Market Review 20 ▪ Additional Information 25 FTSE EPRA Nareit Global Developed Index IMPORTANT NOTICE: The past performance of
Slide 3: 1H 2024 Key Highlights
1H 2024 Key Highlights Property Income Net Property Income Distribution Per Unit $125.1m $96.8m 2.80 cents +8.9% y-o-y +7.7% y-o-y (3.4%) y-o-y $96.8m 2.90 cents $125.1m 2.80 cents $89.9m $114.9m 1H 2023 1H 2024 1H 2023 1H 2024 1H 2023 1H 2024 % Borrowings on Aggregate Leverage All-in interest rate
Slide 4: 1H 2024 Key Highlights
1H 2024 Key Highlights Higher Portfolio Long Portfolio Portfolio Value Committed Occupancy WALE $9.6b 97.0% 4.6 years1 As at 30 Jun 2024 Top 10 tenants’ WALE at 8.3 years1 South Korea, 3.1% Japan, As at 30 Jun 2024 0.9% Australia, 19.0% Proactive Leasing Robust Rental Strategy Reversion ~546,300 sf
Slide 5: Financial Results
Financial Results Marina Bay Financial Centre, Singapore 5
Slide 6: Higher Property Income and NPI Driven by Robust Operational Performance
Higher Property Income and NPI Driven by Robust Operational Performance and Contributions from 2 Blue Street and 255 George Street ▪ Property Income increased 8.9% year-on-year due mainly to higher occupancy of Ocean Financial Centre and KR Ginza II, as well as contributions from 2 Blue Street and n
Slide 7: Distribution Timetable
Distribution Timetable 1H 2024 Distribution Timetable Distribution Period 1 Jan to 30 Jun 2024 Distribution per Unit 2.80 cents Ex-Date 6 Aug 2024 Record Date 7 Aug 2024 Payment Date 13 Sep 2024 7
Slide 8: Healthy Balance Sheet
Healthy Balance Sheet As at 30 Jun 2024 As at 31 Dec 2023 +/(-) Deposited Property(1) $9,733m $9,421m 3.3% Total Assets $8,580m $8,259m 3.9% Borrowings(2) $4,024m $3,664m 9.8% Total Liabilities $2,873m $2,508m 14.5% Unitholders’ Funds $4,959m $5,005m (0.9%) Adjusted NAV per Unit(3) $1.27 $1.29 (1.6%
Slide 9: Proactive Capital Management
Proactive Capital Management As at 30 Jun 2024 Interest Coverage Ratio(2) 3.1x ▪ Aggregate leverage at 41.3% with 65% of borrowings Adjusted Interest Coverage Ratio(3) 2.8x on fixed rates All-in Interest Rate 3.31% p.a. ▪ AUD, KRW and JPY denominated loans formed ~18%, Aggregate Leverage 41.3% ~3% a
Slide 10: Portfolio Review
Portfolio Review 255 George Street, Sydney
Slide 11: Diversified Portfolio of Prime Commercial Assets in Asia Pacific
Diversified Portfolio of Prime Commercial Assets in Asia Pacific $9.6b portfolio of prime quality assets anchored across different markets enhance income stability and long-term growth opportunities T Tower, Seoul KR Ginza II, Tokyo 99.4% Interest South Korea Japan 98.5% Interest Occ: 100.0% 3.1% 0.
Slide 12: Performance Breakdown by Geography
Performance Breakdown by Geography Singapore Portfolio North Asia Portfolio 1H 2024 127.7 1H 2024 7.0 NPI(1) 4.1% NPI(1) 13.8% (S$m) (S$m) 1H 2023 122.7 1H 2023 6.2 2Q 2024 98.9 2Q 2024 100.0 Committed Occupancy Committed Occupancy 0.1pp 2.1pp (%) (%) 1Q 2024 98.8 1Q 2024 97.9 Australia Portfolio Pe
Slide 13: 1H 2024 Portfolio Performance
1H 2024 Portfolio Performance (By Attributable Committed Gross Rent) Leases Committed Leases Committed by Geography by Type As at 30 Jun 2024: Singapore, By Attributable Renewal, By Attributable New 97.0% Australia, 38.1% 82.8% Committed Committed Portfolio committed 61.9% Gross Rent 15.6% Gross Ren
Slide 14: Well-Spread Lease Expiry Profile
Well-Spread Lease Expiry Profile ▪ Average signing rent for Singapore office leases(1) concluded in 1H 2024 was $12.63 psf pm, supported by healthy demand from diverse sectors for prime office space ▪ Average expiring rents of Singapore office leases(2) (psf pm): $10.77 in 2024, $11.12 in 2025 and $
Slide 15: Established and Diversified Tenant Base
Established and Diversified Tenant Base (By Attributable Gross Rent) ▪ Keppel REIT has a diversified tenant base of 485(1) ▪ Top 10 tenants contribute 30.9% of committed tenants, many of which are established blue-chip attributable gross rent corporations Top 10 Tenants Tenant Business Sector % Stat
Slide 16: Singapore Portfolio Valuations (As at June 2024)
Singapore Portfolio Valuations (As at 30 June 2024) Valuation based on Variance 31 Dec 2023 30 Jun 2024 30 Jun 2024 Cap Rate (%) attributable interest S$ % Ocean Financial Centre S$2,149.3m S$2,154.9m S$5.6m 0.3% S$3,090 psf 3.40 (79.9% interest) Towers 1 & 2, and Marina Bay Financial S$1,794.0m S$1
Slide 17: Australia Portfolio Valuations (As at June 2024)
Australia Portfolio Valuations (As at 30 June 2024) Valuation based on Local Currency (A$) Variance S$ Variance Cap Rate 30 Jun 2024 attributable interest 31 Dec 2023 30 Jun 2024 A$ % 31 Dec 2023 30 Jun 2024 S$ % (%) 2 Blue Street(1) A$18,578 A$287.0m A$263.5m A$(23.5m) (8.2) S$253.3m S$236.9m S$(16
Slide 18: North Asia & Total Portfolio Valuations (As at June 2024)
North Asia & Total Portfolio Valuations (As at 30 June 2024) Local Currency (KRW/JPY) Variance S$ Variance Valuation based on KRW/JP 30 Jun 2024 Cap Rate (%) attributable interest 31 Dec 2023 30 Jun 2024 % 31 Dec 2023 30 Jun 2024 S$ % Y T Tower(1) KRW KRW KRW 24.5m - - S$316.8m S$298.1m S$(18.7m) (5
Slide 19: ESG Activities in 2Q 2024
ESG Activities in 2Q 2024 At 8 Exhibition Street, a meet & greet session was held with the “Bin it to Win it Activation” at 8 Melbourne City Mission, the Exhibition Street is designed to fundraiser for “Sleep at the ‘G”, promote behavioural change on to provide tenants an waste management through op
Slide 20: Market Review
Market Review 2 Blue Street, Sydney 20
Slide 21: Singapore Office Market
Singapore Office Market ▪ Average core CBD Grade A office rents remained at $11.95 psf pm with average occupancy in core CBD at 94.4% in 2Q 2024 Grade A Rent and Core CBD Occupancy Demand and Supply (million sf) 2.1 1.9 1.7 0.9 0.8 1.0 1.0 95.8% 0.8 0.8 0.7 0.5 $15 94.8% 93.8% 93.3% 94.7% 94.8% 95.1
Slide 22: Australia Office Market
Australia Office Market 96.0% 95.2% 92.1% 90.4% 89.9% 1,500 87.5% 88.6% 85.3% 84.1% 84.6% 83.3% 100% 79.9% 84.0% 76.7% 78.4% 79.2% 100% Sydney CBD 1,200 1,032 1,045 80% 1200 75.5% 80% 900 930 885 919 955 956 961 60% North Sydney 900 676 729 688 651 670 693 686 673 60% 641 600 40% 600 40% Prime Grade
Slide 23: Seoul Office Market
Seoul Office Market ▪ CBD Grade A vacancy remains low with occupancy at 98.4% in 2Q 2024 CBD Grade A Rent and Occupancy 97.0% 98.5% 98.3% 98.4% 200,000 90.7% 100% 86.7% 89.2% 82.7% 160,000 80% 133,152 138,865 140,496 121,356 120,000 60% 92,325 97,572 98,926 91,656 80,000 40% 40,000 20% 0 0% 4Q18 4Q1
Slide 24: Tokyo Office Market
Tokyo Office Market ▪ Occupancy in Tokyo central 5 wards continues to be high in 2Q 2024 for Grade A office at 96.4% and Grade B office at 97.0% Tokyo Central 5 Wards Grade A Rent and Occupancy Tokyo Central 5 Wards Grade B Rent and Occupancy 99.6% 99.8% 99.1% 99.0% 99.4% 98.7% 100.0% 98.1% 97.8% 97
Slide 25: Additional Information
Additional Information Ocean Financial Centre, Singapore 25
Slide 26: Attractive Comparative Yield
Attractive Comparative Yield 6.7%(1) 5.4% 5.6% 5.0% 3.2% 3.2% 2.5% Keppel REIT STI FTSE ST RE Index FTSE ST REIT CPF Ordinary 5-year SG Govt 10-year SG Govt Index Account Bond Bond Sources: Bloomberg, Monetary Authority of Singapore and Central Provident Fund. 1. Based on annualised 1H 2024 DPU and
Slide 27: Attributable NPI by Property
Attributable NPI by Property 1H 2024 1H 2023 % % $’000 $’000 Breakdown of Attributable Ocean Financial Centre 37,841 21.0 35,864 21.2 NPI by Geography (For 1H 2024) Marina Bay Financial Centre 53,814 29.9 50,989 30.1 One Raffles Quay 22,568 12.5 21,915 12.9 Keppel Bay Tower 13,524 7.5 13,960 8.3 Sin
Slide 28: Portfolio Information: Singapore
Portfolio Information: Singapore As at Ocean Financial Marina Bay Financial One Raffles Quay Keppel Bay Tower 30 Jun 2024 Centre Centre(4) Attributable NLA 697,434 sf 1,018,154 sf 442,103 sf 386,224 sf Ownership 79.9% 33.3% 33.3% 100.0% DBS Bank, BNP Paribas, TikTok, Keppel, Standard Chartered Princ
Slide 29: Portfolio Information: Australia, South Korea & Japan
Portfolio Information: Australia, South Korea & Japan As at 255 George 8 Chifley Pinnacle 8 Exhibition Victoria Police David Malcolm 2 Blue Street(3), T Tower, KR Ginza II, 30 Jun 2024 Street(4), Square, Office Park, Street(5), Centre, Justice Centre, Sydney Seoul Tokyo Sydney Sydney Sydney Melbourn
Slide 30: 1H 2024 Portfolio Performance
1H 2024 Portfolio Performance (By Attributable Committed NLA) Leases Committed Leases Committed As at 30 Jun 2024: by Geography by Type Singapore, By Australia, By New, 97.0% 74.6% Attributable 20.1% Attributable Renewal, 39.3% Portfolio committed Committed Committed NLA 60.7% NLA occupancy South Ko
Slide 31: Established and Diversified Tenant Base
Established and Diversified Tenant Base (By Attributable NLA) ▪ Keppel REIT has a diversified tenant base of 485(1) ▪ Top 10 tenants contribute 36.4% of attributable tenants, many of which are established blue-chip committed NLA corporations Top 10 Tenants Tenant Business Sector(2) % State of Victor
Slide 32: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Improve yield by enhancing Keppel REIT’s portfolio of quality assets through strategic acquisitions and divestments Portfolio • Provide income stability and long-term capital appreciation of portfolio, Optimisation
Slide 33: Well-Executed Portfolio Optimisation Strategy
Well-Executed Portfolio Optimisation Strategy Expanded footprint Expanded footprint to Australia: to Japan: Expanded footprint 77 King Street (100%), Sydney, and KR Ginza II (98.5%), to South Korea: 275 George Street (50%), Brisbane Tokyo Acquired T Tower (99.4%), - David Acquired Seoul Acquired Mal
Slide 34: Continued Focus on ESG Excellence to Attract Quality Tenants
Continued Focus on ESG Excellence to Attract Quality Tenants Sustainable and Future Ready ESG Benchmarks Sustainability Portfolio • MSCI ESGwith ESG Rating maintained at ‘A’ Focused Funding • ISS Governance Risk Rating maintained at lowest risk level of “1” and ESG Corporate Rating maintained Excell
Slide 35: Thank you
Thank you Marina Bay Financial Centre, Singapore 35