Keppel REIT · SGX:K71U
Keppel REIT — CITIC CLSA ASEAN Access Month: Zero-Carbon ASEAN 2021
49 slides from Keppel REIT's conference presentation, Mar 24, 2021
Slide 1: CITIC CLSA ASEAN Access Month: Zero-Carbon ASEAN
CITIC CLSA ASEAN Access Month: Zero-Carbon ASEAN 24 March 2021
Slide 2: Outline
Outline Constituent of: ▪ Overview and ESG 3 ▪ Portfolio Update 10 FTSE ST Large & Mid Cap Index ▪ Market Review 21 ▪ Additional Information 26 FTSE EPRA Nareit Global Developed Index IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of its future performance. Certa
Slide 3: Sustainable Pan-Asian Portfolio with Income Resilience
Sustainable Pan-Asian Portfolio with Income Resilience 97.9% occupancy 6.7 years WALE ESG Awards Grade A commercial portfolio with Long portfolio weighted average ▪ BCA Green Mark Platinum award for strong committed occupancy to an lease expiry (WALE) all Singapore assets established and diversified
Slide 4: FY 2020 Key Highlights
FY 2020 Key Highlights 5.73 cents Ongoing portfolio FY 2020 DPU optimisation Up 2.7% y-o-y; 2H 2020 DPU was Added Melbourne’s Victoria Police Centre(1) and 2.93 cents (Up 4.6% y-o-y) Sydney’s Pinnacle Office Park. Proposed acquisition of Keppel Bay Tower in Singapore $194.6m FY 2020 distributable in
Slide 5: Resilient Portfolio Anchored by Singapore CBD Assets
Resilient Portfolio Anchored by Singapore CBD Assets $8.9 billion portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 8 Chifley Square, 99.4% Interest Pinnacle Office Sydney Occupancy: 98.6% Park, Sydney S
Slide 6: Commitment to ESG Excellence
Commitment to ESG Excellence ▪ Integrated into business operations: ESG issues have been and Key Material Issues and Targets remain key considerations in Keppel REIT’s strategy formulation and business operations ▪ Communicating progress: Annual sustainability reporting in accordance with the Global
Slide 7: Commitment to ESG Excellence (Cont'd)
Commitment to ESG Excellence (Cont’d) Environmental Stewardship ▪ Keppel REIT supports the climate change agenda. ▪ Initiatives to improve energy performance include energy optimisation measures and the use of renewable energy resources: ▪ Ocean Financial Centre’s rooftop solar panel system suppleme
Slide 8: Commitment to ESG Excellence (Cont'd)
Commitment to ESG Excellence (Cont’d) Responsible Business Board Composition ▪ ESG issues are considered in key business decisions and Independent Female Directors Directors operations due to their long-term impact on the environment, community and Keppel REIT’s financial performance. 5/8 2/8 ▪ The
Slide 9: Commitment to ESG Excellence (Cont'd)
Commitment to ESG Excellence (Cont’d) People and Community ▪ Initiatives to support employee wellness, boost morale and foster collaboration during the pandemic, including virtual events such as town halls, dialogue sessions, exercise workshops and care packages. ▪ Employees were also encouraged to
Slide 10: Portfolio Update
Portfolio Update Ocean Financial Centre lit in blue in support of the #SeeItBlue campaign that highlights the importance of mental well-being and expresses gratitude to frontline workers battling the COVID-19 pandemic 10
Slide 11: Established and Diversified Tenant Base
Established and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant ▪ Top 10 tenants take up 41.5% of NLA base of 353(1) tenants, many of which are and contribute 36.7% of gross rent established blue-chip corporations Top 10 Tenants Tenant Business Sector State of Victoria 10.3% Banking,
Slide 12: Managing the COVID-19 Situation
Managing the COVID-19 Situation ▪ Keppel REIT’s quality office portfolio and high-quality tenant profile continue to provide income stability and resilience ▪ To support tenants, and in line with government measures, measures were implemented to alleviate tenants’ cashflow and cost pressures (2) (1)
Slide 13: Continuing Portfolio Optimisation
Continuing Portfolio Optimisation FY 2020 developments: ▪ Portfolio optimisation to improve yield and ▪ Commencement of Victoria Police Centre’s income contribution create long-term value for Unitholders ▪ Acquired Pinnacle Office Park to expand into Sydney’s Grade A ▪ Holding quality assets across
Slide 14: Victoria Police Centre Achieved Practical Completion
Victoria Police Centre Achieved Practical Completion ▪ Commencement of the 30-year lease for Victoria Police’s new headquarters contributes a steady income stream to Keppel REIT ▪ The Grade A office tower is powered by 100% renewable electricity as part of the City of Melbourne’s second Melbourne Re
Slide 15: Acquired Pinnacle Office Park in Sydney
Acquired Pinnacle Office Park in Sydney ▪ Acquisition completed on 31 Dec 2020 as part of ongoing portfolio optimisation to improve income resilience and portfolio yield ▪ Gains exposure to Macquarie Park, a key Australian metropolitan office market ▪ Expands into Grade A metropolitan office space t
Slide 16: Proposed Acquisition of Keppel Bay Tower
Proposed Acquisition of Keppel Bay Tower ▪ DPU-accretive acquisition of a 100% interest in Keppel Bay Tower, a Grade A office building strategically located in the HarbourFront/Alexandra submarket of Singapore ▪ Acquisition complements the REIT’s core CBD offering, and is consistent with its strateg
Slide 17: Proposed Acquisition's Investment Merits
Proposed Acquisition’s Investment Merits DPU and NPI yield accretive acquisition that 1 enhances Keppel REIT’s distributions and improves total unitholder returns Diversifies portfolio and strengthens tenant base 2 for income resilience Strategic expansion that complements the current 3 core CBD off
Slide 18: FY 2020 Portfolio Update
FY 2020 Portfolio Update New leasing demand and expansions from: Total Leases Committed Leases Committed Leases Committed by Geography(2) by Type(2) Banking, insurance and financial services 36.5% ~1,205,500 sf Australia, Renewal, Real estate and property services 34.2% (Attributable ~510,500 sf) Si
Slide 19: FY 2020 Portfolio Update (Cont'd)
FY 2020 Portfolio Update (Cont’d) ▪ Average signing rent for Singapore office leases concluded in FY 2020 was $11.02(1) psf pm ▪ Average expiring rents(2) of Singapore office leases (psf pm): $9.76 in 2021, $10.26 in 2022 and $11.00 in 2023 Lease Expiries and Rent Reviews 34.7% (Based on Committed A
Slide 20: Operating in the New Environment
Operating in the New Environment ▪ Physical offices will remain a necessity, although Safety measures to facilitate return to workplaces: the form and functions of the office will evolve Keppel REIT will continue to optimise the portfolio and calibrate its leasing strategy to meet potential shifts i
Slide 21: Market Review
Market Review 8 Chifley Square, Sydney 21
Slide 22: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents registered a decrease to $10.40 psf pm in 4Q 2020 while average occupancy in core CBD decreased slightly to 93.8% Grade A Rent and Core CBD Occupancy Demand and Supply 2.1 1.9 1.7 1.3 $15 94.8% 95.8% 93.8% 94.8% 95.8% 95.4% 94.4% 93.9% 93.8% 100
Slide 23: Australia Office Market
Australia Office Market 95.2% 94.5% 93.0% 98.2% 98.2% 92.5% 91.8% 91.3% 94.9% 96.0% 89.7% 87.5% 100% 90.1% 92.1% 94.0% 97.0% 87.9% 86.2% 100% 1,200 1,045 1,058 1,028 1,200 90% 964 1,032 80% 80% 946 Sydney CBD 900 799 930 60% Melbourne CBD 900 70% 60% 679 503 538 573 575 559 553 546 50% 600 40% 600 4
Slide 24: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy increased to 86.9% in 4Q 2020 CBD Grade A Rent and Occupancy 200,000 90.9% 91.3% 100% 87.7% 85.3% 86.9% 85.1% 85.1% 86.9% 83.1% 160,000 80% 120,000 60% 97,020 97,579 95,765 95,175 91,851 92,331 91,662 93,578 95,066 80,000 40% 40,000 20% 0 0% 4Q15 4Q16 4Q17
Slide 25: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Portfolio optimisation to improve yield, while maintaining exposure to Singapore CBD Portfolio • Hold quality assets across different markets for improved income stability Optimisation and to provide more long-term
Slide 26: Additional Information
Additional Information One Raffles Quay, Singapore 26
Slide 27: Proposed Acquisition of Keppel Bay Tower: Grade A Waterfront Business Hub
Proposed Acquisition of Keppel Bay Tower: Grade A Waterfront Business Hub Building Completion 2002 (Recently refurbished in 2019) Land Tenure 99 years expiring on 30 Sep 2096 Attributable NLA 386,600 sf(1) (18-storey office tower with a six-storey podium block and basement carpark) Committed Occupan
Slide 28: Proposed Acquisition of Keppel Bay Tower: DPU and NPI Yield Accretive
Proposed Acquisition of Keppel Bay Tower: 1 DPU and NPI Yield Accretive ▪ DPU and NPI yield accretive acquisition is part of ongoing portfolio optimisation efforts to enhance Keppel REIT’s distributions and improve total unitholder returns ▪ Consistent with Keppel REIT's strategy of strengthening an
Slide 29: Diversifies Portfolio and Strengthens Tenant Base for Income Resilience
Proposed Acquisition of Keppel Bay Tower: 2 Diversifies Portfolio and Strengthens Tenant Base for Income Resilience ▪ Reduces Keppel REIT’s exposure to any single asset and further diversifies its income streams ▪ Post-Acquisition, Keppel REIT’s AUM will grow to $8.9 billion with Grade A commercial
Slide 30: Diversifies Portfolio and Strengthens Tenant Base (Cont'd)
Proposed Acquisition of Keppel Bay Tower: 2 Diversifies Portfolio and Strengthens Tenant Base for Income Resilience (Cont’d) Keppel Bay Tower’s Tenant Mix (% of NLA) 15.3% ▪ Committed occupancy of 98.5% and WALE of 3.1 years by NLA 17.8% 8.1% ▪ Diverse mix of 29 tenants 7.1% ▪ Healthy rental collect
Slide 31: Diversifies Portfolio and Strengthens Tenant Base (Cont'd)
Proposed Acquisition of Keppel Bay Tower: 2 Diversifies Portfolio and Strengthens Tenant Base for Income Resilience (Cont’d) ▪ Headquarters to the Keppel Group ▪ 39.7% of NLA on long leases to the Keppel Group entities ▪ Keppel Group becomes one of Keppel REIT's top 10 tenants by NLA ▪ Increases inc
Slide 32: Strong Occupancy and Well-Spread Lease Expiries
Proposed Acquisition of Keppel Bay Tower: 2 Strong Occupancy and Well-Spread Lease Expiries ▪ Portfolio committed occupancy level remains high at 98.0% ▪ Portfolio WALE by NLA remains long at approximately 6.3 years while lease expiry remains well-spread Portfolio Lease Expiry Profile (Post-Acquisit
Slide 33: Strategic Expansion that Complements Core CBD Offering
Proposed Acquisition of Keppel Bay Tower: 3 Strategic Expansion that Complements Core CBD Offering ▪ Expands Keppel REIT’s offering to include quality CBD-fringe office space and meet potential shifts in occupier demand ▪ Offers more options and alternatives to tenants seeking dual locations or offi
Slide 34: HarbourFront / Alexandra: A Resilient City-Fringe Submarket
Proposed Acquisition of Keppel Bay Tower: 3 HarbourFront / Alexandra: A Resilient City-Fringe Submarket ▪ The city-fringe has shown resilience during the current COVID-19 pandemic with rents recording marginal decline of approximately 1.5% over 9M 2020 ▪ Demand continues to be supported by tenants w
Slide 35: Grade A Waterfront Office with Excellent Connectivity to CBD and Amenities
Proposed Acquisition of Keppel Bay Tower: 4 Grade A Waterfront Office with Excellent Connectivity to CBD and Amenities HarbourFront / Alexandra Precinct ▪ Well-connected by major expressways and public Central transportation nodes: Outram Business Pasir Park District Panjang Labrador Park Telok Kepp
Slide 36: Participating in the Growth of Singapore's Greater Southern Waterfront
4 Proposed Acquisition of Keppel Bay Tower: Participating in the Growth of Singapore’s Greater Southern Waterfront ▪ Strategically located in Singapore’s Gardens By the Bay Greater Southern Waterfront (GSW), (Bay East) which is positioned as a destination Pasir Panjang Terminal Keppel Bay Central fo
Slide 37: Augments Green Footprint via Renewable Energy and Technology Innovation
Proposed Acquisition of Keppel Bay Tower: 5 Augments Green Footprint via Renewable Energy and Technology Innovation ▪ Singapore’s first commercial development to be fully powered by renewable energy ▪ High-tech green building: Facial recognition for Energy-efficient air Demand control contactless en
Slide 38: Increases Free Float and Liquidity
Proposed Acquisition of Keppel Bay Tower: 6 Increases Free Float and Liquidity Free Float and Market Capitalisation(1) ($m) ▪ Total Acquisition Cost to be funded with net proceeds from the Equity Fund Raising(3) 4,095 and a draw down of the Loan Facilities 3,817 ▪ Increases Keppel REIT’s market capi
Slide 39: Financial Performance
Financial Performance Improvement in distributable income for FY 2020 due mainly to: ▪ Contributions from T Tower and Victoria Police Centre, as well as lower borrowing costs ▪ Offset by the impact of the divestment of Bugis Junction Towers in Nov 2019, COVID‐19 tenant relief measures and the cessat
Slide 40: Balance Sheet
Balance Sheet As at 31 Dec 2020 As at 31 Dec 2019 +/(-) Deposited Property(1) $8,389m $8,032m +4.4% Total Assets $7,764m $7,449m +4.2% Borrowings(2) $3,130m $2,879m +8.7% Total Liabilities $2,544m $2,286m +11.3% Unitholders’ Funds $4,498m $4,585m (1.9%) Adjusted NAV per Unit(3) $1.29 $1.35 (4.4%) (1
Slide 41: Prudent Capital Management
Prudent Capital Management ▪ All-in interest rate reduced year-on-year to 2.35% p.a. from 2.77% p.a. ▪ Strengthened sustainability-focused funding with additional A$300m of green loans ▪ Issued $300m(1) of 3.15% perpetual securities to refinance 4.98% perpetual securities(2) and increase financial f
Slide 42: Attributable NPI by Property
Attributable NPI by Property FY 2020 FY 2019 Breakdown of Attributable NPI % % $’000 $’000 by Geography (For FY 2020) Ocean Financial Centre 66,979 23.7 66,691 24.1 Marina Bay Financial Centre 95,746 33.9 101,622(4) 35.7 71.4% One Raffles Quay 39,062 13.8 37,518 13.5 Bugis Junction Towers(1) - - 14,
Slide 43: Portfolio Valuation
Portfolio Valuation ▪ Singapore portfolio valuation was 1.5% lower year-on-year due mainly to potential occupancy changes and lower rents in view of the COVID-19 pandemic and economic recession Valuation based Variance 31 Dec 31 Dec 31 Dec Cap on attributable 2019 2020 2020 Rate interest S$ % Ocean
Slide 44: Portfolio Valuation (Cont'd)
Portfolio Valuation (Cont’d) ▪ Australian building valuations, excluding David Malcolm Justice Centre, Victoria Police Centre and Pinnacle Office Park, declined by 2.0-2.3% due to potential occupancy changes at 8 Chifley Square, as well as cap rate expansion at 8 Exhibition Street and 275 George Str
Slide 45: Portfolio Information: Singapore
Portfolio Information: Singapore As at Marina Bay Ocean Financial Centre One Raffles Quay 31 Dec 2020 Financial Centre(4) Attributable 700,504 sf 1,024,065 sf 441,475 sf NLA Ownership 79.9% 33.3% 33.3% DBS Bank, BNP Paribas, Deutsche Bank, Principal Standard Chartered ANZ, Ernst & Young, tenants(1)
Slide 46: Portfolio Information: Australia & South Korea
Portfolio Information: Australia & South Korea As at 8 Exhibition Victoria Police David Malcolm 8 Chifley Square, 275 George Pinnacle Office T Tower, 31 Dec 2020 Street(3), Centre, Justice Centre, Sydney Street, Brisbane Park, Sydney Seoul Melbourne Melbourne Perth Attributable 104,055 sf 244,659 sf
Slide 47: Growth Since Listing in 2006
Growth Since Listing in 2006 Expanded footprint to Australia: Expanded footprint 77 King Street (100%), Sydney, and to South Korea: 275 George Street (50%), Brisbane T Tower (99.4%), Seoul Listed on SGX >$600m AUM 4 assets in Acquired Acquired Acquired Acquired Acquired Singapore - 8 Chifley Square
Slide 48: Keppel REIT Structure
Keppel REIT Structure Keppel Capital Keppel Land Institutional and The REIT Manager can leverage The REIT Manager can leverage Public Investors the Sponsor‘s expertise and the scale and resources of a larger 50.9% asset management platform 5.8% track record in this industry 43.3% 100% Management Act
Slide 49: Thank You
Thank You For more information, please visit: www.keppelreit.com Connect with us on: T Tower, Seoul 49
Keppel REIT — CITIC CLSA ASEAN Access Month: Zero-Carbon ASEAN 2021 on 6ix