Keppel REIT · SGX:K71U
Keppel REIT — H1 2014 Earnings Presentation
35 slides from Keppel REIT's earnings presentation, Jul 21, 2014
Slide 1: First Half 2014 Financial Results
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ First Half 2014 Financial Results 21 July 2014
Slide 2: Important Notice
Important Notice \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ The past performance of Keppel 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
Slide 3: Keppel REIT
Keppel REIT \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Portfolio of ten quality Premium Grade and Grade A office assets, tenanted to established corporate 1 tenants well-diversified across various business sectors Premium office buildings located in the prim
Slide 4: Premium Office Buildings located in the Prime CBDs of Singapore and Australia
Premium Office Buildings located in the Prime CBDs of Singapore and Australia \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Singapore Properties Ocean Financial Centre Marina Bay Financial Centre One Raffles Quay Prudential Tower (92.8% interest) Bugis Junction
Slide 5: 1. Key Highlights
1. Key Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Bugis Junction Towers, Singapore 5
Slide 6: 1H 2014 Key Financial Highlights
1H 2014 Key Financial Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Net Property Income » 18% y-o-y to $78.7 million » Stronger performance from Ocean Financial Centre and Prudential Tower, and additional contribution from 8 Exhibition Street Prope
Slide 7: 1H 2014 Key Capital Management Highlights
1H 2014 Key Capital Management Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Weighted Average Term to Maturity of Borrowings » Weighted average term to maturity at 3.6 years » As at 1H 2014, 33% and 16% of borrowings due in 2015 and 2016 respectively
Slide 8: 1H 2014 Key Portfolio Highlights
1H 2014 Key Portfolio Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Singapore Portfolio » Average committed occupancy of 99.8%, higher than the Singapore core CBD occupancy of 95.8% » Announced the divestment of its 92.8% interest in Prudential Tower
Slide 9: 1H 2014 Key Portfolio Highlights
1H 2014 Key Portfolio Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Overall Portfolio » Average committed occupancy at 99.4% » Proactive leasing strategy with forward renewals of approximately 164,000 sf of attributable NLA Tenants from the banking
Slide 10: 2. Financial Highlights
2. Financial Highlights \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Ocean Financial Centre, Singapore 10
Slide 11: Net property income up 18.0% y-o-y to $78.7 m
Net property income 18.0% y-o-y to $78.7 m \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 1H 2014 1H 2013 Property Income $94.1 m $82.6 m Net Property Income $78.7 m $66.7 m Share of Results of Associates $30.2 m $30.4 m Distributable Income to Unitholders1 $1
Slide 12: Balance Sheet
Balance Sheet \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ As at 30 June 2014 As at 31 Mar 2014 Non-current Assets $6,716 m $6,666 m Total Assets $6,884 m $6,785 m Borrowings1 $3,117 m $3,060 m Total Liabilities $2,972 m $2,893 m Unitholders’ Funds $3,910 m $3
Slide 13: 2Q 2014 Distribution Per Unit
2Q 2014 Distribution Per Unit \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Distribution Period 1 April 2014 – 30 June 2014 Distribution Per Unit (DPU) 1.90 cents Distribution Timetable Trading on “Ex” Basis Friday, 25 July 2014 Books Closure Date Wednesday, 30
Slide 14: 3. Capital Management
3. Capital Management \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 8 Exhibition Street, Melbourne 14
Slide 15: Capital Management
Capital Management \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Proactive capital management strategy Loans Due in 2015 Loans Due in 2016 Early refinanced 33% Early refinanced 16% $275 million $75 million All-in Interest Rate Weighted Average Term to Expiry
Slide 16: Capital Management
Capital Management \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ As at 30 June 2014 Gross Borrowings $3,117 m Aggregate Leverage 42.8% Interest Coverage Ratio 5.2 times Debt Maturity Profile Millions 900 800 700 275 600 500 75 400 711 715 300 550 200 404 387 35
Slide 17: 4. Portfolio Analysis
4. Portfolio Analysis \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 17
Slide 18: Portfolio Committed Occupancy
Portfolio Committed Occupancy \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Overall portfolio committed occupancy of 99.4% Singapore Australia Overall 99.8% 97.9% 99.4% 100.0% 100.0% 100.0% 99.4% 100.0% 100.0% 100.0% 99.4% 97.0% Singapore core CBD occupancy a
Slide 19: Keppel REIT Historical Occupancy
Keppel REIT Historical Occupancy \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Keppel REIT’s portfolio occupancy has strengthened 0.3% y-o-y, and is consistently above Singapore’s Core CBD occupancy levels Keppel Keppel REIT Historical Occupancy 99.4% REIT 10
Slide 20: Portfolio WALE
Lease Portfolio \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Top ten tenants, accounting for 41% of portfolio NLA, have a long WALE of 8.5 years1 Weighted Average Lease Expiry (WALE) Portfolio with Long-Term Leases3 by NLA 8.5 years1 6.2 years2 Long-term lea
Slide 21: Lease Expiry Profile
Lease Expiry Profile \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » In 2Q 2014, approximately 93,000 sf of attributable NLA were renewed and leased to tenants from the banking, insurance and financial services, telecommunications and multimedia, fund managemen
Slide 22: Tenants Diversified across Various Business Sectors
Tenants Diversified across Various Business Sectors \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Retail (Exclude F&B and Services), 0.8% Number of tenants Telecommunications & Accounting & consultancy services, mulitimedia, 8.2% 5.6% 1 262 Legal, 8.5% F&B, 1.2
Slide 23: Tenant Base
Tenant Base \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Top ten tenants account for approximately 41% of portfolio NLA, diversified across 5 buildings Top Ten Tenants Australia and Australia andNew NewZealand ZealandBanking Group Banking Ltd Group 6.8% Stan
Slide 24: New Tenants - Office
New Tenants - Office \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Some of Keppel REIT’s new tenants 24
Slide 25: New Tenants - Retail
New Tenants - Retail \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ HarriAnns Nonya Table After Before » Location: Bugis Junction Towers » Subdivided existing retail shop into two units to introduce a café serving Peranakan delights Eighty Days » Location: Marin
Slide 26: Tenant Engagement
Tenant Engagement \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Ocean Financial Centre » Venue partner for root, an art exhibition featuring local young artists and providing them opportunities to showcase their works » Monthly lunchtime performances 26
Slide 27: Community Engagement
Community Engagement \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Partnership with MINDSville@Napiri » Fifth consecutive year that Keppel REIT is reaching out to the children at MINDSville@Napiri » Equipping the children with daily skills through a two-course
Slide 28: 5. Market Review and Outlook
5. Market Review and Outlook \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Marina Bay Financial Centre, Singapore 28
Slide 29: Office Market Review – Singapore
Office Market Review – Singapore \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » Demand in the quarter was mainly from the insurance, energy and commodities, e-commerce and IT sectors » Leasing demand from Asia Pacific financial institutions continued to be rob
Slide 30: Market Outlook
Market Outlook \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Singapore » Economy is expected to grow 2.1% y-o-y in 2Q 2014 » Leasing activities and enquiries remained steady through 2Q 2014, especially in the CBD » The upside in rent is likely to continue for t
Slide 31: 7. Additional Information
7. Additional Information \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Old Treasury Building Office Tower, Perth 31
Slide 32: Growth History
Growth History \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ ///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// • Increased • Announced interest in OFC divestment of t
Slide 33: Portfolio Information
Portfolio Information \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ » AUM of more than $7.2 billion as at 30 June 2014 » More than 92% of the Singapore portfolio is located in the Raffles Place and Marina Bay precincts » 87% of portfolio in Singapore, and 13% i
Slide 34: Portfolio Information
Portfolio Information \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Office Tower to be 77 King Street 8 Exhibition 8 Chifley 275 George built at the Old Office Tower, Street, Square, Sydney Street, Brisbane Treasury Building site, Sydney Melbourne Perth 33-stor
Slide 35: Thank You
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Thank You One Raffles Quay, Singapore