Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Q1 2009 Earnings Presentation
33 slides from Keppel REIT's earnings presentation, Apr 21, 2009
Slide 1: 1Q 2009 Financial Results
1Q 2009 FINANCIAL RESULTS 21 Apr 2009 1
Slide 2: Contents
Contents Operations Review Portfolio Analysis Capital Management Market Review & Outlook Going Forward 2
Slide 3: Highlights
Highlights 1Q 2009 distributable income 37.3% y-o-y Net property income 18.4% y-o-y Portfolio with 95.8% committed occupancy Average portfolio gross rental rate in Mar 2009 17.5% y-o-y Low aggregate leverage of 27.6% No refinancing requirements until 2011 3
Slide 4: Operations Review
re Sla Operations Review
Slide 5: 1Q 2009 Distributable Income Up 37.3%
1Q 2009 Distributable Income Up 37.3% ($'000) 1Q 2009 1Q 2008 Change % Chg Property Income 14,785 11,506 3,279 28.5 Net Property Income 10,820 9,141 1,679 18.4 Distributable Income 15,658 11,405 4,253 37.3 to Unitholders (1) Distribution Per Unit (cents) 2.38 4.60 (2.22) (48.3) (2) (3) Distribution
Slide 6: Quarter-on-Quarter Performance
Quarter-on-Quarter Performance ($'000) 1Q 2009 4Q 2008 Change % Chg Property Income 14,785 14,289 496 3.5 Net Property Income 10,820 11,813 (993) (8.4) Distributable Income 15,658 17,410 (1,752) (10.1) to Unitholders Distribution Per Unit (cents) 2.38 2.67 (0.29) (10.9) (1) (2) Distribution Yield (%
Slide 7: Rising DPUs
Rising DPUs 10 9.65 8.82 8.91 9 DPU (cents) 8 7 6.76 6 5 FY2006 FY2007 FY2008 FY2009 (Annualised)(1) (1) Based on annualised distribution per unit for 1Q 2009; distribution for 1Q 2009 was 2.38 cents per unit. 7
Slide 8: Attractive Distribution Yield
Attractive Distribution Yield As at 31 Mar 2009 16.2% Net Yields: 14.1% Local Corporates (with 10% tax) Tax Free 14.6% Tax Free for for Individuals Foreign Individuals Corporates (with 17% tax) 2.0% 2.5% 13.4% 1.4% 0.6% K-REIT Asia FTSE ST REIT Index 10-year Govt 5-year Govt Bond CPF Ordinary DBS 12
Slide 9: Healthy Balance Sheet
Healthy Balance Sheet Aggregate leverage of 27.6% • Lower than S-REIT sector average of about 35%(1) As at ($ million) 31 Mar 2009 Non-current Assets 2,028.0 Total Assets 2,073.0 Borrowings 577.6 Total Liabilities 612.0 Unitholders' Funds 1,461.0 Net Asset Value Per Unit $2.22 Adjusted Net Asset Val
Slide 10: Portfolio Analysis
ee Sla Portfolio Analysis
Slide 11: Broad Tenant Diversity
Broad Tenant Diversity Tenant Business Sector by Net Lettable Area as at 31 Mar 2009 Accounting & consultancy Shipping & marine services services 7.7% 4.0% Services 9.0% Real estate & property services 8.1% Banking, insurance & 112 tenants financial services Pharmaceuticals & 35.3% in total healthca
Slide 12: Blue-chip Tenants
Blue-chip Tenants Portfolio’s Top 10 Tenants by Net Lettable Area as at 31 Mar 2009 Deutsche Bank 7.9% I.E.Singapore 7.2% GE Pacific 6.7% UBS AG 6.5% ABN AMRO 5.4% Total 51.4% Keppel Land 5.0% of portfolio’s net lettable Ernst & Young 4.0% area Credit Suisse 3.1% Intercontinental 2.9% Keppel Towers
Slide 13: Occupancy Rate
Occupancy Rate 95.8% committed occupancy of portfolio as at 31 Mar 2009 higher than core CBD occupancy of 93.1%(1) As at As at Assets 31 Mar 2009 31 Dec 2008 Prudential Tower 87.7% 92.3% Keppel Towers and GE Tower 95.9% 99.2% Bugis Junction Towers 91.5% 100% One Raffles Quay (1/3 stake) 100% 100% K-
Slide 14: Long Lease Terms
Long Lease Terms Weighted average lease term to expiry for • Portfolio: 5.5 years • Top 10 tenants who account for 51.4% of portfolio’s NLA: 7.3 years 28% of portfolio’s NLA accounted by long lease terms(1) % of Portfolio’s Net Lettable Area (NLA) Accounted by Long Lease Terms Long lease terms 28% S
Slide 15: Portfolio Lease Profile
Portfolio Lease Profile Lease Profile as a % of Net Lettable Area as at 31 Mar 2009 19.9% 16.0% 14.3% 11.5% 9.4% 9.5% 9.7% 8.1% 6.3% 2.6% 2009 2010 2011 2012 2013 Lease Expiry as a Percentage of Portfolio's Total NLA (Including 1/3 ORQ) Rent Review as a Percentage of Portfolio's Total NLA (Including
Slide 16: 2009 Lease Expiry Profile by Asset
2009 Lease Expiry Profile by Asset Net Lettable Area (NLA) As at 31 Mar 2009 Area of Leases % of Portfolio’s NLA Expiring in 2009 (sf) Prudential Tower 18,762 1.5% Keppel Towers and GE Tower 90,980 7.4% Bugis Junction Towers 2,228 0.2% One Raffles Quay (1/3 stake) 3,731 0.3% Total 115,701 9.4% 16
Slide 17: 2009 Rent Review Profile by Asset
2009 Rent Review Profile by Asset Net Lettable Area As at 31 Mar 2009 Area Subject to Rent % of Portfolio’s Review in 2009 (sf) NLA One Raffles Quay (1/3 stake) 31,915 2.6% Total 31,915 2.6% 17
Slide 18: Average Portfolio Rent Below Market Rents
Average Portfolio Rent Below Market Rents Average portfolio rent in Mar 2009: $8.06 psf pm Average Portfolio Gross Rental Rates $8.06 (1) $7.61(1) $7.43 (1) $7.37 (1) $6.86 (1) psf per month $6.02 (1) $4.43 $4.28 $4.05 Mar 2007 Jun 2007 Sep 2007 Dec 2007 Mar 2008 Jun 2008 Sep 2008 Dec 2008 Mar 2009
Slide 19: Capital Management
ee Sla Capital Management
Slide 20: Prudent Financial Management
Prudent Financial Management As at 31 Mar 2009 Gross Borrowings $581.1m Aggregate Leverage 27.6% All-in Interest Rate 4.26% Interest Coverage Ratio (1) 3.04 times Weighted Average Term to Expiry 2.0 years Corporate Rating (by Moody’s) Baa3 (1) Interest coverage ratio = Ratio of year-to-date earnings
Slide 21: No Immediate Need for Refinancing
No Immediate Need for Refinancing About 2/3 of total debt is unsecured Debt Profile as at 31 Mar 2009 Fixed-rate $190m Maturing in May 2011 mortgage loan Floating-rate $391m Maturing in Mar 2011 unsecured loan $ million 150 200 250 300 350 400 21
Slide 22: Market Review and Outlook
K-REITasSia Market Review and Outlook
Slide 23: Weak Market Sentiment
Weak Market Sentiment Global economic downturn deepens • Singapore government cut GDP forecast to between -9% and -6% in 2009 • Office demand likely to be soft for 2009 • However, collective efforts by worldwide governments prevent downturn from worsening Singapore government’s measures to cushion t
Slide 24: Office Rents Moderating
Office Rents Moderating Office Market Occupancy and Rentals(1) 96.8% 97.3% 97.1% 97.6% 97.6% 97.1% 96.2% 95.4% $20 93.1% 100% $18 80% $16 $14 60% $12 18.65 18.80 18.80 17.15 40% $10 16.00 16.10 16.10 14.90 15.00 15.00 $8 12.40 12.60 12.90 12.30 10.60 10.80 10.50 20% $6 8.60 $4 0% 31-Mar-07 30-Jun-07
Slide 25: Singapore: Key Business Destination in Longer Term
Singapore: Key Business Destination in Longer Term Singapore: • Remains a key investment market in Asia – 4th in Forbes magazine's 2009 ranking of the best countries to do business • Diversifying beyond a financial hub and establishing multi- hubs in various industry sectors • In the medium term: Po
Slide 26: Going Forward
ee Sla Going Forward
Slide 27: Meeting Challenges Ahead
Meeting Challenges Ahead Priority on tenant retention and proactive asset management Opportunities for selective asset acquisitions 27
Slide 28: Positive Factors for K-REIT Asia
Positive Factors for K-REIT Asia Low aggregate leverage of 27.6% No refinancing needs until 2011 Portfolio’s low average rent base Rental support for 1/3 interest in One Raffles Quay Portfolio valuations within the lower end of market range Strong sponsor support 28
Slide 29: Thank You
Thank You 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 princi
Slide 30: Additional Information
ee Sla Additional Information
Slide 31: Snapshot of K-REIT Asia
Snapshot of K-REIT Asia Manager K-REIT Asia Management Limited Property Portfolio 5 commercial office assets valued at $2.1 billion Listing Date 28 Apr 2006 on Singapore Stock Exchange Market Capitalisation $450 million as at 20 Apr 2009 Unit Price $0.685 Number of Units in Issue 657,543,286 Free Fl
Slide 32: Asset Portfolio
Asset Portfolio Property within/ Keppel Towers and Bugis Junction Prudential Tower(1) One Raffles Quay near Singapore CBD GE Tower Towers Net Lettable Area 10,074 39,963 22,991 41,360(2) (sm) Number of Tenants 10 62 8 32 GE Pacific IE Singapore McGraw-Hill Companies Deutsche Bank Seadrill Management
Slide 33: Asset Portfolio
Asset Portfolio Prudential Tower Keppel Towers GE Tower Bugis Junction Towers One Raffles Quay North Tower One Raffles Quay South Tower 33