Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Investor Presentation (March 2008)
18 slides from Keppel REIT's investor presentation, March 2008
Slide 1: Investor Meetings March 2008
INVESTOR MEETINGS March 2008 Contents Introduction Financial Highlights Operations Review & Portfolio Performance Market Outlook & Review Going Forward Proposed Rights Issue 2
Slide 2: Introduction
Introduction Introduction Leading pan-Asian office-focused S-REIT Asset size 210% from $677m as at end-2006 to $2.1 bil as at end-2007 Net asset value per unit 85.3% from $2.04 as at end-2006 to $3.78 as at end-2007 Full committed occupancy for portfolio as at 31 December 2007 Strong support by way
Slide 3: High Quality Portfolio of Assets
High Quality Portfolio of Assets (1) (2) Property Prudential Tower Keppel Towers and GE Tower Bugis Junction Towers One Raffles Quay (2) Net Lettable Area (sm) 10,074 40,002 22,990 41,359 Number of Tenants 13 69 12 31 KBC Bank N.V. GE Pacific IE Singapore ABN Amro Principal Tenants McGraw-Hill Compa
Slide 4: Earnings Continue to Outperform; Solid Asset Backing
Earnings Continue to Outperform Earnings driven by higher gross rental income (1) 9.8 10 58% 8 63% (1) 6.9 7.3 7.5 6 5.4 6.5 5.2 6.2 4.3 4.3 S$ m S$ m 5 4 2 0 0 4Q 4Q2006 1Q 1Q2007 2Q 2Q2007 3Q 3Q2007 4Q 4Q2007 4Q2006 4Q 1Q2007 1Q 2Q2007 2Q 3Q2007 3Q 4Q2007 4Q 2006 2007 2006 2007 Distributable incom
Slide 5: Consistent Growth in DPU; Strong Total Return Since Listing
Consistent Growth in DPU DPU 12 Annualised DPU 11.11 59% 10 8.58 8.85 8 7.18 Cents per unit 6.98 6 4 2.80 2.14 2.23 1.76 1.77 2 0 4Q 1Q 2Q 3Q 4Q 2006 2007 (1) FY2007 FY2006 (2) % Chg DPU 8.82 ¢ 6.76 ¢ 30.5% DPU Yield (1) 4.14% 3.17% 30.6% (1) Based on K-REIT Asia’s closing price of $2.13 on 31 Decem
Slide 6: Capital Management
Capital Management Debt Profile Fixed-rate mortgage loans of S$190m: 4.06% p.a. until May 2011 Floating-rate bridging loan of S$942m: 3.3% p.a. maturing in Sep 2008 Aggregate leverage expected to fall with proposed rights issue As At 31-Dec-07 31-Dec-06 Gross Borrowings $1,132.1m $190.1m (1) Aggrega
Slide 7: Significant Maiden Acquisition; Broad Tenant Diversity
Significant Maiden Acquisition Asset size 210% from $677m as at end-2006 to $2.1 bil as at end- 2007, with ORQ (1/3 interest) Completed yield- accounting for 47% of the asset size accretive acquisition of one-third interest Portfolio’s net lettable area in ORQPL 57% from 73,108 sm to on 10 December
Slide 8: Positive Rent Reversions Expected; Further Appreciation in Portfolio Rents
Positive Rent Reversions Expected Positive rent reversions Lease Profile as a Percentage of NLA* @ 31 Dec 2007 expected due to limited prime office space 25% About 44.5% of portfolio’s 20.3% net lettable area due for 20% 17.2% lease expiry from 2008 to 15% 2010 11.3% 11.9% 10% 9.0% About 21.9% of po
Slide 9: Market Outlook & Review: Upward Trend in Office Rents
Market Outlook & Review Upward Trend in Office Rents Singapore economy: 2007 GDP growth at 7.7% Strong growth in financial services and construction sectors Government expects Prime Office Occupancy economy to grow at 100% healthy 4.0 – 6.0% in 98% Core CBD Occupancy 2008 96% Prime office space 94%
Slide 10: Supply Remains Tight
Supply Remains Tight Healthy office demand expected to continue Office rents forecast to grow by 15 - 20% in 2008(1) No substantial new supply until Marina Bay Financial Centre, Phase I (>50% space already pre-committed) is completed in 2010 Islandwide Office Space Demand, Supply and Occupancy(2) 3.
Slide 11: Growth Strategy; A Pan-Asian Commercial REIT
Growth Strategy Achieve better returns through Organic proactive management and active Growth leasing of properties Seek growth acquisitions in Singapore Acquisition and overseas that will potentially value- Growth add to the portfolio Identify asset enhancement initiatives to Asset better meet the
Slide 12: Strong Keppel Land Sponsorship
Strong Keppel Land Sponsorship 1 Leading development expertise Marina Bay Ocean Financial Centre Financial Centre ♦ Leading property developer in Asia ♦ Currently has 5.2m sf NLA of prime office space in Singapore, including 3.8m sf under development in CBD and New Downtown Pan-Asian platform and ne
Slide 13: Background; Issues under Current Market Conditions
Background Acquisition of 30 Jul 2007 10 Oct 2007 10 Dec 2007 one-third interest in Announced EGM Completed ORQPL acquisition approval acquisition Convertible bonds to raise up to $400m and Proposed method of issue of new units for the remaining $566.5m financing Replaced with bridging loan of $942m
Slide 14: Rationale for Renounceable Rights Issue; Details of Proposed Rights Issue
Rationale for Renounceable Rights Issue Most appropriate means of raising equity under current market conditions Allow unitholders to participate in K-REIT Asia’s growth without dilution of proportional stake Reduce aggregate leverage To strengthen balance sheet and optimise capital structure To enh
Slide 15: Sponsor's Commitment to K-REIT Asia; Going Forward
Sponsor’s Commitment to K-REIT Asia Keppel Land remains committed to growing K-REIT Asia as separate listed platform Maintaining K-REIT Asia as platform for unlocking value from commercial developments Expanding its property fund management business Alignment of interests 29 Going Forward EGM to obt
Slide 16: Thank You; Important Notice
Thank You Important Notice The value of units in K-REIT Asia (“Units”) and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible l
Slide 17: Balance Sheet Highlights; Income Contribution by Asset
Balance Sheet Highlights As At in Non-current Assets (S$m) 31 Dec 2007 31 Dec 2006 due mainly to Non-current Assets 2,061.8 677.0 Acquisition of one-third Total Assets 2,088.0 694.9 interest in One Raffles Quay Pte Ltd Borrowings (1) 1,131.3 189.0 (ORQPL) Total Liabilities 1,154.3 202.5 Revaluation
Slide 18: One Raffles Quay – Key Information; Snapshot of K-REIT Asia
One Raffles Quay – Key Information Strategically located in new downtown at North Tower South Tower Marina Bay with direct underground access to Raffles Place MRT station. Fully occupied with blue-chip tenants with long-term leases. Close to Marina Bay Sands Integrated Resort and Formula 1 night rac