Keppel REIT · SGX:K71U
Keppel REIT — Shareholder Meeting (April 2016)
35 slides from Keppel REIT's shareholder meeting presentation, Apr 15, 2016
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING 15 April 2016
Slide 2: Outline
Outline 1. Financial Highlights ……………………………………… 13 2. Portfolio Analysis ………………………………………… 17 3. Capital Management …………………………………… 24 4. Market Review & Outlook ……….………………….. 27 Important Notice The value of Units and the income from them may fall as well as rise. Units are not obligations of, deposi
Slide 3: Keppel REIT: Overview
Keppel REIT: Overview Largest Portfolio of Best-in-Class Assets Assets Under Well-Diversified Youngest Premium in Strategic Locations Management Tenant Base Portfolio Office Assets 11 office towers in 8 quality 296 tenants Premium Grade and Grade A assets in the 3.3 million sf S$8.2 billion diversif
Slide 4: Youngest Premium Grade A Office Portfolio
Youngest Premium Grade A Office Portfolio » 90% of portfolio in Singapore and 10% in Australia » Youngest and largest portfolio of premium Grade A office assets in Singapore’s business district Strategically located in the prime Raffles Place and Marina Bay precinct Average portfolio age of appr
Slide 5: Best-In-Class Assets in Strategic Locations
Best-In-Class Assets in Strategic Locations 5
Slide 6: Australia: Prime Grade A Office in Key Cities
Australia: Prime Grade A Office in Key Cities Northern Territory 275 George Street, Brisbane Queensland Brisbane Western Australia South Australia New South David Malcolm Justice Centre, Perth Wales Sydney Perth Victoria Melbourne 8 Chifley Square, Sydney 8 Exhibition Street, Melbourne 6
Slide 7: Celebrating 10 Years of Excellence
Celebrating 10 Years of Excellence 2006 2007 2009 2010 2011 2012 2013 2014 2015 – Mar 2016 7
Slide 8: Steady Appreciation of Current Portfolio
Steady Appreciation of Current Portfolio » Average fair value gain of approximately 30% for current portfolio, or an approximate 7% appreciation per annum to-date » Average 4.5 years portfolio holding period to-date » Compounded annual growth rate for Keppel REIT’s distributable income has been appr
Slide 9: Capturing Value for Unitholders
Capturing Value for Unitholders » As part of portfolio transformation, assets were divested at an average of 1. Key Highlights approximately 50% above original purchase prices, and an approximate 13% premium to last appraised values, excluding income earned from these assets throughout holding perio
Slide 10: Celebrating a Decade of Excellence
Celebrating a Decade of Excellence » 2016 marks Keppel REIT’s 10th anniversary since its listing in April 2006 » Over the last decade, Keppel REIT achieved an approximate 40% compounded annual growth rate for its distributable income, and has undergone a portfolio transformation to remain relevant t
Slide 11: Celebrating a Decade of Excellence
Celebrating a Decade of Excellence » As part of the portfolio transformation, Assets were divested at an average of approximately 50% above original purchase prices and an approximate 13% premium to last appraised value Average holding period was approximately 6 years » To ensure long-term incom
Slide 12: Key Highlights
Key Highlights Continue to deliver sustainable returns to Unitholders amidst a challenging environment Significant reduction of expiring leases to only a minimal 3% for the rest of 2016 99% tenant retention rate 99.4% portfolio occupancy rate Average positive rent reversion of 7% for all l
Slide 13: 1. Financial Highlights
1. Financial Highlights BRIGHTENING ENVIRONMENTS A holistic and proactive approach towards environment management helps us achieve long-term savings for all our stakeholders. Bugis Junction Towers, Singapore 13
Slide 14: Delivering Sustained Returns
Delivering Sustained Returns FY 2015 Ocean Financial Centre 1. Financial Highlights » Distributable income (DI) 5.4% y-o-y for FY 2015, despite: Lack of income from the divested Prudential Tower Absence of rental support from the 87.5% interest in Ocean Financial Centre and MBFC Phase One Du
Slide 15: Delivering Sustained Returns
Delivering Sustained Returns 1. Financial Highlights » In its report dated 4 April 2016, Moody’s reaffirmed its Baa2 corporate rating on Keppel REIT, with a stable outlook Rating reflects Keppel REIT’s ability to continue generating stable and recurring income from its quality tenant base in strat
Slide 16: Continue to Offer Attractive Yield
Continue to offer Attractive Yield 1. Financial Highlights » Keppel REIT continues to offer an attractive yield compared to other investments (1) Keppel REIT DPU Yield 6.8% 2. Portfolio Analysis (2) FTSE ST REIT Index Dividend Yield 6.3% FTSE ST RE Index Dividend Yield (2) 4.7% 3. Capital Management
Slide 17: 2. Portfolio Analysis
2. Portfolio Analysis ENGAGING TENANTS Tenants are the heart of our buildings. Keen understanding of their business and regular interactions help us create enduring partnerships. 8 Exhibition Street, Melbourne 17
Slide 18: Enhance Income Sustainability and Resilience
Enhance Income Sustainability and Resilience » Conscious efforts to sign longer leases that will provide income stability over the longer term 1. Financial Highlights » Top 10 tenants accounted for approximately 44% of portfolio NLA » Long WALE of approximately 8 years and 6 years for top 10 tenants
Slide 19: Singapore Average Net Office Demand and Supply
Singapore Average Net Office Demand and Supply » Healthy demand for office space of approximately 1.1 mil sf p.a. in the last 6 years 1. Financial Highlights » Average supply of approximately 0.7 mil sf p.a. over the next 6 years till 2021 » Limited new office supply after 2018 6 years (2010 – 2015)
Slide 20: Healthy Lease Expiry Profile
Healthy Lease Expiry Profile » Only a minimal approximate 3% of the portfolio’s total NLA due for renewal for the rest of 2016, 1. Financial Highlights a significant decrease from the approximate 14% one quarter ago » Majority of the remaining 3% of expiring leases for the rest of 2016 likely to be
Slide 21: Stable Committed Occupancy Levels
Stable Committed Occupancy Levels » Maintained high portfolio committed occupancy of 99.4% 1. Financial Highlights Singapore Australia Overall 99.3% 99.5% 99.4% 2. Portfolio Analysis 100.0% 99.8% 100.0% 100.0% 99.7% 100.0% 99.4% 98.5% 98.8% Singapore core CBD occupancy at 95.2%(1) 3. Capital Managem
Slide 22: Strong Singapore Portfolio Occupancy
Strong Singapore Portfolio Occupancy » Occupancy in Singapore’s core CBD remained stable at 95.2% in 1Q 2016 1. Financial Highlights » Keppel REIT’s Singapore portfolio occupancy has remained consistently above Core CBD occupancy levels since listing in 2006 2. Portfolio Analysis 100.0% 99.9% 99.8%
Slide 23: David Malcolm Justice Centre, Perth
David Malcolm Justice Centre, Perth 1. Financial Highlights » The office tower on the Old Treasury Building David Malcolm Justice Centre, site in Perth was named the David Malcolm Perth Justice Centre on 11 March 2016 » The Government of WA commenced its 25-year lease since end-November 2015 2. Port
Slide 24: 3. Capital Management
3. Capital Management UNRELENTING TENACITY Our steadfast discipline and prudent capital management approach propel us towards operational efficiency in all that we do. One Raffles Quay, Singapore 24
Slide 25: Prudent Capital Management
Prudent Capital Management » Continued proactive refinancing efforts saw aggregate leverage decrease to 1. Financial Highlights 39.0% as at 1Q 2016 from 39.3% as at end-2015 » Increased fixed-rate loans to over 75% as at 1Q 2016, up from 70% last quarter Provides certainty of interest expenses and
Slide 26: Well-staggered Debt Maturity Profile
Well-staggered Debt Maturity Profile » 100% of refinancing requirements completed for FY 2016 1. Financial Highlights » Continue to maintain well-staggered debt maturity profile with weighted average term to expiry at a healthy 3.6 years 2. Portfolio Analysis No refinancing requirements until second
Slide 27: 4. Market Review & Outlook
4. Market Review & Outlook EXTENSIVE EXPERIENCE We leverage our Board of Directors’ depth of experience and wealth of expertise to shape Keppel REIT’s growth into the future. 8 Chifley Square, Sydney 27
Slide 28: Market Outlook – Singapore
Market Outlook – Singapore 1. Financial Highlights Singapore » Advance estimates indicate that the economy grew 1.8% y-o-y for 1Q 2016, driven by expansions in the construction and services sectors 2. Portfolio Analysis » Growth is expected to remain muted in 2016 with full-year GDP growth at betwee
Slide 29: Market Outlook – Australia
Market Outlook – Australia 1. Financial Highlights Australia » Economy grew 2.5% in 2015, supported by healthy demand from non-mining sectors » To drive continued growth, the Reserve Bank of Australia kept its official cash rate 2. Portfolio Analysis at 2% in 1Q 2016 » Australia expects to record st
Slide 30: Celebrating a Decade of Excellence
Celebrating a Decade of Excellence Keppel REIT’s transformation in the last decade has seen it grow to become a REIT with a young portfolio of best-in-class assets on long land tenures in premium locations. Its portfolio is well-leased to a stable of creditable tenants on long leases with mark-to-ma
Slide 31: Thank You
ACTIVE LISTENING People are the cornerstone of our business. We believe in creating a cohesive workplace that nurtures and brings out the best in our talent. Thank You Ocean Financial Centre, Singapore 31
Slide 32: Additional Information
Additional Information UNDIVIDED ATTENTION Our attention to details helps ensure that we provide the best value propositions to our stakeholders Marina Bay Financial Centre, Singapore 32
Slide 33: Capturing Value. Sustaining Returns
Capturing Value. Sustaining Returns 33
Slide 34: Portfolio Information: Singapore
Portfolio Information: Singapore » Keppel REIT’s AUM is approximately $8.2 billion as at 31 March 2016 » 90% of portfolio in Singapore and 10% in Australia Ocean Financial Centre(2) Marina Bay Financial Centre (2) (4) One Raffles Quay(2) Bugis Junction Towers Comprises of three premium A pair of 50
Slide 35: Portfolio Information: Australia
Portfolio Information: Australia 8 Chifley 8 Exhibition Street, 275 George Street, David Malcolm Justice Centre(3) Square, Sydney(3) Melbourne(4) Brisbane(3) 35-storey Grade A office 34-storey Grade A office 30-storey Grade A office 33-storey Grade A office tower Description tower and tower tower an