Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Q3 2010 Earnings Presentation
33 slides from Keppel REIT's earnings presentation, Oct 18, 2010
Slide 1: Third Quarter 2010 Financial Results
THIRD QUARTER 2010 FINANCIAL RESULTS 18 October 2010 1
Slide 2: Important Notice
Important Notice The value of units in K-REIT Asia (“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
Slide 3: Contents
Contents 3Q 2010 Highlights Financial performance Capital management Portfolio analysis Proposed acquisition of a one-third stake in MBFC Phase 1 and divestment of KTGE Market review and outlook Going forward 3
Slide 4: 3Q 2010 Highlights
3Q 2010 Highlights YTD Sep 2010 net property income 40.5%y-o-y Stronger YTD Sep 2010 distributable income 22.2% y-o-y Earnings 3Q 2010 net property income 42.4% y-o-y Better 3Q 2010 distributable income 26.3% y-o-y Performance Portfolio committed occupancy improves to 99.2% Singapore por
Slide 5: Financial Performance
<-REITASIA Financial Performance
Slide 6: YTD Sep 2010 Net Property Income
YTD Sep 2010 Net Property Income 40.5% YTD Sep YTD Sep Change 2010 2009 Property Income $63.2m $45.8m $17.4m 38.0% Net Property Income $49.8m $35.4m $14.4m 40.5% Distributable Income to $62.5m $51.1m $11.4m 22.2% Unitholders Distribution Per Unit (“DPU”) - For the Period 4.65cts 3.83cts(2) 0.82cts 2
Slide 7: 3Q2010 Net Property Income 42.4% Y-o-Y
3Q2010 Net Property Income 42.4% Y-o-Y 3Q 2010 3Q 2009 Change Property Income $21.8m $15.7m $6.1m 39.0% Net Property Income $17.5m $12.3m $5.2m 42.4% Distributable Income to $22.7m $18.0m $4.7m 26.3% Unitholders DPU - For the Period 1.69cts 1.35cts(2) 0.34cts 25.2% - Annualised 6.70cts 5.36cts(2) 1.
Slide 8: Distributable Income 3.2% Q-o-Q
Distributable Income 3.2% Q-o-Q 3Q 2010 2Q 2010 Change Property Income $21.8m $23.2m -$1.5m(2) -6.3 % Net Property Income $17.5m $18.4m -$0.9m(2) -4.8% Distributable Income to $22.7m $22.0m $0.7m 3.2% Unitholders DPU - For the Period 1.69cts 1.64cts 0.05cts 3.0% - Annualised 6.70cts 6.58cts 0.12cts
Slide 9: Healthy Balance Sheet
Healthy Balance Sheet As at 30 Sep 2010 Non-current Assets $2,250.0m Total Assets $2,353.7m Borrowings $351.1m Total Liabilities $383.4m Unitholders’ Funds $1,970.2m Net Asset Value (NAV) Per Unit $1.47 Adjusted NAV Per Unit (1) $1.45 (1) Excluding balance distributable income. 9
Slide 10: Capital Management
<-REITASIA Capital Management
Slide 11: Healthy Financial Position
Healthy Financial Position 15.1% aggregate leverage as at 30 Sep 2010 As at 30 Sep 2010 Gross Borrowings(1) $351.0m Aggregate Leverage 15.1% All-in Interest Rate(2) 3.4% Interest Coverage Ratio(3) 7.4 times Weighted Average Term to Expiry 1.4 years (1) Includes unamortised portion of upfront fees
Slide 12: Financial Flexibility
Financial Flexibility Low aggregate leverage of 15.1% 55.2% of assets unencumbered No refinancing due until May 2011 $1bn multi-currency Medium Term Note Programme Cash and cash equivalents of $73.7m Debt Expiry Profile $195.0 $190.1 $190.0 $185.0 $180.0 $175.0 $170.0 CMBS $165.0 $161.0 $1
Slide 13: Portfolio Analysis
<-REITASIA Portfolio Analysis
Slide 14: Portfolio Occupancy Rate
Portfolio Occupancy Rate Portfolio occupancy increased 1.3% q-o-q to 99.2% as at 30 Sep 2010 Singapore portfolio occupancy of 99.1%(1) is higher than core CBD’s 95.2%(2) Portfolio Occupancy 99.5% 99.1% 100.0% 99.6% 99.2% 96.6% Singapore Core CBD Occupancy(2) = 95.2% Bugis Junction Keppel Towers
Slide 15: Healthy Leasing Activity
Healthy Leasing Activity Leasing driven by demand from diversifed business sectors 42,993sf NLA renewed in 3Q 2010 29,100sf NLA new take-up in 3Q2010 88% are new tenants and 12% are expansion by existing tenants New tenants include: AXA Life Insurance Singapore, Cathay Pacific Airways an
Slide 16: Portfolio Lease Profile
Portfolio Lease Profile 100% of rent reviews due in 2010 completed Lease expiries and rent reviews well staggered from 2010-2014 Portfolio Lease Profile(1) (by NLA) 17.4% 14.1% 13.4% 9.3% 8.8% 7.8% 4.4% 3.1% 0.3% 0.0% 2010 2011 2012 2013 2014 Leases Expiring as a Percentage of Total Portfolio NL
Slide 17: Long Lease Terms Provide Income Stability
Long Lease Terms Provide Income Stability Weighted average lease term to expiry for • Portfolio: 5.5 years • Top 10 tenants who account for 51% of portfolio’s NLA: 7.1 years Long lease terms(1) account for 36% of portfolio NLA Portfolio with Long Lease Terms by NLA Long –term leases (1) 36.0% Sh
Slide 18: Blue-chip Tenants
Blue-chip Tenants Top 10 tenants comprise 51% of portfolio NLA Portfolio Top Ten Tenants by NLA Telstra Corporation Limited 10.3% Deutsche Bank Aktiengesellschaft 6.2% International Enterprise Singapore 5.6% GE Pacific Pte Ltd 5.3% UBS AG 5.1% Keppel Land International Limited 4.7% ABN AMRO Asia P
Slide 19: Diverse Tenant Mix
Diverse Tenant Mix Tenant Business Sector by NLA 140 tenants in various business sectors 19
Slide 20: Proposed acquisition of a one-third stake in MBFC Phase 1 and divestment of KTGE
Proposed acquisition of a one-third stake in MBFC Phase 1 and divestment of KTGE 20
Slide 21: Transaction Summary
Transaction Summary To acquire Keppel Land’s one-third interest in Proposed Acquisition Marina Bay Financial Centre Phase 1 (MBFC 1) for $1,426.8 million Proposed To divest Keppel Towers and GE Tower (KTGE) to Divestment Keppel Land for $573 million No equity fund raising required Funding Ac
Slide 22: Key Benefits
Key Benefits Generate growing and sustainable returns to Unitholders Expand and upgrade portfolio without additional equity fund raising Pro-active acquisition and portfolio optimisation Increase Singapore property portfolio in the Raffles Place and Marina Bay areas from 60% to 90% Enhance
Slide 23: Key Benefits
Key Benefits MBFC 1 Office Towers 1 & 2 fully tenanted to leading corporations Marina Bay Link Mall about 87% committed Long weighted average lease expiry of 10.3 years Top ten tenants occupy 89.7% of leased NLA One Raffles Quay Tower 1 Tower 2 Marina Bay Sands MBFC Ph 1 Marina Bay Suites Marina Bay
Slide 24: MBFC 1
MBFC 1 Acquisition comprises MBFC Towers 1 & 2 and Marina Bay Link Mall Key property information1 as at 30 September 2010 99 years Leasehold Tenure wef 2005 Agreed Value2 $1,426.8 million Total NLA 1,747,100 sf Towers 1 & 2 NLA 1,652,700 sf Marina Bay Link Mall NLA 94,500 sf Weighted Average Lease E
Slide 25: Keppel Towers & GE Tower
Keppel Towers & GE Tower Keppel Towers Key property information as at 30 September 2010 Ownership Interest 100% Keppel Towers (19 Years) Age of buildings GE Tower (17 Years) Tenure Freehold 27-storey Keppel Towers Number of storeys and 13-storey GE Tower Total NLA 430,112 sf Committed occupancy 99.1
Slide 26: K-REIT Asia Post-Transaction
K-REIT Asia Post-Transaction Accretive transaction increases DPU Forecast DPU FY2011 1 7.0 6.8 6.68 cents 6.6 10.2% 6.4 6.2 6.06 cents 6.0 5.8 5.6 5.4 5.2 5.0 Cents Existing portfolio 2 Portfolio, including 77 King Street Property and post-Transaction3 1. Based on the assumptions set out in the Mana
Slide 27: K-REIT Asia Post-Transaction
K-REIT Asia Post-Transaction Enlarged Asset Size & Improved Debt Expiry Profile $2.3 billion portfolio asset size as at $3.4 billion portfolio asset size 30 Sep 20101 Post-Transaction2 Australia Australia 10% 11% Singapore Singapore 89% 90% Debt Expiry Profile as at 30 Sep 2010 1 Debt Expiry Profile
Slide 28: K-REIT Asia Post-Transaction
K-REIT Asia Post-Transaction Enhanced portfolio weighted lease expiry profile Portfolio Lease Terms by Net Lettable Area As at 30 Sep 20101 Post-transaction2 Long-term leases(3) Short-term Short –term leases leases 36.0% Long-term 36.0% 64.0% leases(3) 64.0% Portfolio Weighted Average Lease Expiry 1
Slide 29: Market Review and Outlook
-REITASId Market Review and Outlook
Slide 30: Sustained Economic Recovery
Sustained Economic Recovery Singapore GDP on track to achieve between 13.0% to 15.0% growth in 2010 Positive 10.3% GDP growth in 3Q2010 y-o-y economic Positive economic growth in Singapore and the region sustains office sector recovery outlook New prime Grade A properties benefit from higher p
Slide 31: Going Forward
<-REITasia Going Forward
Slide 32: Key Thrusts
Key Thrusts Active Acquisition Prudent Capital Asset Growth Management Management Pursue opportunities Manage assets and Attract creditworthy tenants for acquisitions in cost structure to increase occupancy as Singapore and more effectively well as retain good existing pan-Asia tenants Exercise prud
Slide 33: Thank you
Thank you For queries, please contact Ms Casiopia Low Investor Relations & Research Tel: 6433 7622 Fax: 6835 7747 Email: casiopia.low@kreitasia.com http://www.kreitasia.com 33