Keppel REIT · SGX:K71U
Keppel REIT — H1 2017 Earnings Presentation
23 slides from Keppel REIT's earnings presentation, Jul 18, 2017
Slide 1: Second Quarter and First Half 2017 Financial Results
Keppel REIT Second Quarter and First Half 2017 Financial Results 18 July 2017
Slide 2: Outline
Outline Key Highlights for 1H 2017 3 Financial Performance & Capital Management 6 Portfolio Performance 10 Market Updates 14 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
Slide 3: Key Highlights for 1H 2017
Key Highlights for 1H 2017 Distributable Income $95.5 mil $ Distribution per Unit 2.87 cents Aggregate Leverage 38.5% All-in Interest 2.59% Portfolio Occupancy 99.8% Tenant Retention 85% Strengthened Australian Footprint with acquisition of 50% stake in 311 Spencer Street Minimal Lea
Slide 4: Strategic Portfolio Enhancement
Strategic Portfolio Enhancement Continuous efforts to rejuvenate Keppel REIT’s portfolio. Strategic acquisition of a 50% interest in 311 Spencer Street from Australia Postal Corporation Freehold site will be developed into a Grade A office tower Fully leased to the Assistant Treasurer for the
Slide 5: Sustainable Income Growth for 30 Years
Sustainable Income Growth for 30 Years Stable average yield of 6.4%(1) per annum over the first 15 years. Stable income stream over the 30-year lease, with fixed annual rental escalations Enhances tenancy profile with the addition of a AAA-rated tenant Average property yield of BENEFITS 6.4%(1
Slide 6: Financial Performance & Capital Management
Financial Performance & Capital Management Marina Bay Financial Centre, Singapore
Slide 7: Financial Performance
Financial Performance 2Q 2017 2Q 2016 1H 2017 1H 2016 Property income $39.8 mil $40.6 mil $79.7 mil $81.7 mil Net property income $31.9 mil $32.5 mil $63.3 mil $65.4 mil Share of Results of Associates $28.3 mil $28.5 mil $59.8 mil $54.0 mil and Joint Ventures Distribution to Unitholders $47.4 mil $5
Slide 8: Balance Sheet and Capital Management
Balance Sheet and Capital Management As at As at • Total borrowings increased due to loan 30 June 2017 31 March 2017 drawdown for working capital purposes Total assets $7,658 mil $7,550 mil • All-in interest rate increased by 2bps to 2.59% due mainly to the MTN issuance Borrowings(1) $3,335 mil $3,3
Slide 9: Debt Maturity Profile
Debt Maturity Profile • Weighted average term to maturity of 3.1 years as at 30 June 2017 • Issued $75 million of 7-year Medium Term Notes (MTN) at a fixed-rate of 3.275% in April 2017 • Proceeds from the issuance were used to refinance existing borrowings No refinancing requirements until 2018 (as
Slide 10: Portfolio Performance
Portfolio Performance Ocean Financial Centre, Singapore
Slide 11: Leasing Performance Snapshot
Leasing Performance Snapshot Continued tenant centric approach in leasing efforts Committed Leases 33 Leases ~370,700 sf 0% in 1H 2017 (Attributable ~173,600 sf) Rent Reversion Tenant Retention 85% Retention Rate 99.8% in 1H 2017 High Committed Portfolio Occupancy Completed all review leases Minimal
Slide 12: Proactive Lease Management
Proactive Lease Management • Completed all review leases, with only 2% of the NLA of leases expiring for the rest of 2017 Weighted Average Lease Expiry (WALE) Top Ten Tenants WALE Top 10 Tenants Portfolio ~9 Years ~6 Years Portfolio WALE Portfolio Lease Expiry Profile (by Attributable NLA) 51.4% 21.
Slide 13: Tenant Profile
Tenant Profile Top 10 Tenants (by Attributable NLA) Well-Diversified Tenant Base(1) - 43.0% of portfolio NLA - 39.6% of gross rental income TMT DBS Bank 6.1% 10% Legal Energy, Natural 10% resources, Shipping ANZ 5.6% and Marine 9% Western Australian Govt 4.9% Real estate & BNP Paribas 4.7% Banking,
Slide 14: Market Updates
Market Updates David Malcolm Justice Centre, Perth
Slide 15: Singapore Office Market
Singapore Office Market • Economy expanded 2.5% y-o-y in 2Q 2017, supported mainly by the manufacturing sector. • On track to achieve growth forecast of between 1% and 3% in 2017. • Property consultants opined that the market is seeing early signs of recovery. • Average rental rates of Grade A offic
Slide 16: Australia Office Market
Australia Office Market • Modest y-o-y expansion of 1.7% in 1Q 2017, coming off a 2.5% growth rate for the year 2016. • RBA estimates full-year growth between 2.5% and 3.5% for 2017. • Australia’s national CBD office occupancy improved marginally q-o-q to 88.6% as at end-March 2017. • Strong demand
Slide 17: Operational Excellence
Operational Excellence Strategy in Action Long Term Sustainable Our goal is to generate sustainable income and Income create long-term value for Unitholders through achieving operational excellence in all that we do. Our foundation stems from: Our Strong Track Record Delivering sustainable income
Slide 18: Additional Information
Additional Information One Raffles Quay, Singapore 18
Slide 19: Portfolio Overview
Portfolio Overview Best-in-Class Assets Largest Portfolio of Assets Under Well-Diversified in Strategic Locations Premium Office Assets Management Tenant Base 11 office towers in 8 quality 318 tenants Premium Grade and Grade A assets 3.3 million sf S$8.3 billion diversified across various in the bus
Slide 20: Premium Grade A Office Portfolio
Premium Grade A Office Portfolio Singapore* 89% Ocean Financial Centre Marina Bay Financial Centre One Raffles Quay Bugis Junction Towers (99.9% interest) (33.3% interest) (33.3% interest) (100% interest) Australia* 11% 311 Spencer Street 8 Chifley Square, 8 Exhibition Street, 275 George Street, Dav
Slide 21: Portfolio Information
Portfolio Information SINGAPORE Ocean Financial Centre Marina Bay Financial Centre (3) One Raffles Quay Bugis Junction Towers Attributable NLA (sf) 881,192 1,026,344 443,585 244,579 Ownership 99.9% 33.33% 33.33% 100.0% ANZ, DBS Bank, Deutsche Bank, Keppel Land, Principal tenants BNP Paribas, Standar
Slide 22: Keppel REIT Structure
Keppel REIT Structure Keppel Capital Keppel Land The REIT Manager can leverage The REIT Manager can leverage the scale and resources of a larger the Sponsor‘s expertise and Institutional and asset management platform track record in this industry Public Investors 100% 46% (1) 54% Management Acting o
Slide 23: Thank You
REIT Thank You