Keppel Dc Reit · SGX:AJBU
Keppel Dc Reit — H1 2018 Earnings Presentation
30 slides from Keppel Dc Reit's earnings presentation, Jul 17, 2018
Slide 1: Second Quarter & First Half 2018 Financial Results
Second Quarter & First Half 2018 Financial Results 17 July 2018
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 Financial Performance Portfolio Review Capital Management Outlook Additional Information 2
Slide 4: Key Highlights
Key Highlights
Slide 5: Key Highlights
Key Highlights $ € £ DPU Declared1 Portfolio Occupancy Aggregate Leverage2 3.62 cents 92.0% 31.7% for 1H 2018 as at 30 Jun 2018 as at 30 Jun 2018 Annualised Distribution Yield Portfolio WALE Interest Coverage 5.32% 8.8 years 10.7 times based on 1H 2018’s by leased area as at 30 Jun 2018 closing pric
Slide 6: Financial Performance
Financial Performance
Slide 7: Distributable Income
Distributable Income +/(-) +/(-) ($’000) 2Q 2018 2Q 2017 1H 2018 1H 2017 % % Distributable Income to Unitholders1 23,079 20,130 +14.6 43,946 41,896 +4.9 Comprising: Gross Revenue 41,927 34,515 +21.5 79,935 66,739 +19.8 Property Expenses (3,852) (3,152) +22.2 (7,772) (6,532) +19.0 Net Property Income
Slide 8: Balance Sheet Highlights
Balance Sheet Highlights As at As at +/(-) ($’000) 30 Jun 2018 31 Dec 2017 % Investment Properties 1,987,433 1,570,090 +26.6 Total Assets 2,206,396 1,763,282 +25.1 Gross Borrowings1 678,709 546,481 +24.2 Total Liabilities 816,658 646,780 +26.3 Unitholders’ Funds 1,361,631 1,089,716 +25.0 Units in Is
Slide 9: Aggregate Leverage
Aggregate Leverage As at As at +/(-) ($’000) 30 Jun 2018 31 Dec 2017 % Investment Properties1 1,953,664 1,536,321 +27.2 (excluding finance lease liabilities commitments) Deposited Properties1 2,141,969 1,701,350 +25.9 (excluding finance lease liabilities commitments) Gross Borrowings + Deferred Paym
Slide 10: Distribution Declared
Distribution Declared DPU of 3.62 cents declared for 1H 2018, comprising: 2.77 cents for 1 Jan to 15 May 2018 (before private placement) 0.85 cents for 16 May to 30 Jun 2018 (after private placement) 1H 2018 DPU was 4.0% higher than 1H 2017’s adjusted DPU of 3.48 cents after excluding the on
Slide 11: Portfolio Review
Portfolio Review
Slide 12: Portfolio Growth since Listing
Portfolio Growth since Listing maincubes Data Centre1 Keppel DC Singapore 52 Keppel DC Singapore 3 Keppel DC Dublin 2 Milan Data Centre Cardiff Data Centre Intellicentre 2 31 Mar 2018 30 Jun 2018 Data Centre 31 Dec 2017 AUM: $1.66b AUM: $1.94b 31 Dec 2016 AUM: $1.51b 31 Dec 2015 AUM: $1.20b 15 asset
Slide 13: Strengthened Foothold in Singapore
Strengthened Foothold in Singapore Completed acquisition of 99% interest in Keppel DC Singapore 5 Pte Ltd (formerly known as Kingsland Data Center Pte Ltd) on 12 June 2018 Data centre’s IT power is fully committed to leading internet enterprise and IT services clients Acquisition largely funde
Slide 14: Strengthened Foothold in Singapore (Cont'd)
Strengthened Foothold in Singapore (Cont’d) Merits of acquisition of Keppel DC Singapore 5 : KDC SGP 5 KDC SGP 1 KDC SGP 2 & 3 DPU accretive acquisition consistent 1 with investment strategy Strengthened foothold and 2 creation of further synergy in Singapore Greater income resilience through 3 expo
Slide 15: Portfolio Update
Portfolio Update 66.7% of the expanded portfolio is in Asia Pacific while 33.3% is in Europe Portfolio WALE remained long at 8.8 years while occupancy was at 92.0% Less than 5% of the leases expiring per year until end-2020 Portfolio AUM1 breakdown Lease expiry profile (by leased area) As at 3
Slide 16: Portfolio Update (Cont'd)
Portfolio Update (Cont’d) Rental income breakdown for the month of June 20181 Quality data centres that cater to the requirements of global clientele By trade sector: Income stability with a mix of master-leased Internet facilities on long leases, as well as colocation enterprise Corporate 45.3%
Slide 17: Capital Management
Capital Management
Slide 18: Prudent Capital Management
Prudent Capital Management Managing interest rate exposure: Interest rates of loans Borrowings on fixed rate substantially hedged with floating-to-fixed interest rate swaps As at 30 June 2018 Diversifying sources of funding: Refinanced loans maturing in 2018 with issuance of €50 million floating
Slide 19: Prudent Capital Management (Cont'd)
Prudent Capital Management (Cont’d) Mitigating impact of currency fluctuations: Hedged the REIT’s forecasted foreign-sourced distributions till 2H 2019 through foreign currency forward contracts Adopted natural hedging by borrowing in currencies that match the corresponding investments Investm
Slide 20: Outlook
Outlook
Slide 21: Sound Industry Fundamentals
Sound Industry Fundamentals Digitalisation by enterprises and consumers: Demand for data centre space remains supported by both enterprises’ and consumers’ move towards digitalisation and cloud adoption Demand for quality data centres: Trend of data centre outsourcing is expected to continue as
Slide 22: 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 23: 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 24: Additional Information
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Slide 25: Keppel DC REIT Structure
Keppel DC REIT Structure Keppel Telecommunications Keppel Capital & Transportation The REIT Manager can leverage The REIT Manager can leverage the scale and resources of a larger the Sponsor‘s expertise and track Institutional and Keppel Land asset management platform record in this industry Public
Slide 26: Portfolio Overview (as at 30 June 2018)
Portfolio Overview (as at 30 June 2018) Attributable No. of Occupancy Valuation2 WALE Asia Pacific Location Interest lettable area Lease type Land lease title clients1 rate (%) ($m) (years) (sq ft) Leasehold Keppel DC Keppel lease / Singapore 100% 109,721 16 87.3 286.0 3.7 (Expiring 30 Sep 2025, wit
Slide 27: Portfolio Overview (as at 30 June 2018) (Cont'd)
Portfolio Overview (as at 30 June 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 60.6 13.0 Freehold (Shell & core
Slide 28: Overview of Lease Arrangements
Overview of Lease Arrangements Asia Pacific Responsibilities of Owner Maintenance Lease Insurance Property Description Property Building Arrangement Refresh Capex Opex Tax Keppel lease1 / Client: Pays rent Keppel DC Singapore 1 Colocation3 Owner: Bears all expenses; responsible for facil
Slide 29: 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 30: Thank you.
Thank you. LG yt) DC REIT 29