Kore Us REIT · SGX:CMOU
Kore Us REIT — Keppel-KBS US REIT — Q1 2019 Earnings Presentation
28 slides from Kore Us REIT's earnings presentation, Apr 16, 2019
Slide 1: First Quarter 2019 Financial Results
First Quarter 2019 Financial Results 16 April 2019
Slide 2: Content Outline and Important Notice
Content Outline • Key Highlights 3 • Financial Performance & Capital Management 6 • Portfolio Overview 10 • Market Outlook 14 • Looking Ahead 23 Important Notice The past performance of Keppel-KBS US REIT is not necessarily indicative of its future performance. Certain statements made in this releas
Slide 3: Key Highlights
Key Highlights Downtown Bellevue, Washington
Slide 4: Growing to Deliver
Growing to Deliver Distributable Annualised Distribution Income Yield US$12.4m 8.7% Improved Based on the market 1Q 2019 30.7% above 1Q 2018 closing price of and 22.9% above US$0.70 per Unit Performance IPO Forecast as at the last trading day of 1Q 2019 Driven by ▪ higher gross revenue from DPU Stab
Slide 5: Key Growth Markets with Positive Fundamentals
Key Growth Markets with Positive Fundamentals Seattle, Washington Atlanta, Georgia Overview The Plaza Buildings Bellevue Technology Center The Westpark Portfolio Northridge Center I & II Powers Ferry 13 freehold office properties Occupancy rate: 94.2% Occupancy rate: 98.5% Occupancy rate: 97.8% Occu
Slide 6: Financial Performance & Capital Management
Financial Performance & Capital Management Westpark Portfolio Seattle, Washington
Slide 7: Financial Performance
Financial Performance Achieves 30.7% y-o-y increase in Distributable Income for 1Q 2019 Actual Forecast Actual Actual % % 1Q 2019 1Q 2019 1Q 2019 1Q 2018 Change Change (US$’000) (US$’000) (US$’000) (US$’000) Gross Revenue 29,444 24,100 22.2 29,444 23,710 24.2 Property Expenses (11,256) (10,039) 12.1
Slide 8: Healthy Balance Sheet
Financial Performance Healthy Balance Sheet As at 31 March 2019 (US$’000) Total Assets 1,113,037 Investment Properties 1,075,048 Cash and Cash Equivalents 30,872 Other Assets 7,117 Total Liabilities 466,629 Gross Borrowings 424,440 Other Liabilities 42,189 Unitholders’ Funds 646,408 Units in issue a
Slide 9: Capital Management
Capital Management Limited interest rate exposure with term loans significantly hedged Debt Maturity Profile As at 31 March 2019 34.1% 34.1% US$424.4 million of external loans Total debt (100% unsecured) 18.8% 11.8% ▪ US$50 million of revolving (1) 1.2% credit facility Available facilities ▪ US$20 m
Slide 10: Portfolio Overview
Portfolio Overview Aerial view of Maitland Promenade I & II Orlando, Florida
Slide 11: Healthy Leasing Momentum
Healthy Leasing Continued Organic Growth • Over half of leasing activities in 1Q 2019 were renewals Momentum • More than half of signed leases were from Seattle properties – Bellevue Technology Center, The Plaza Buildings and The Westpark Portfolio • Leasing demand mainly from the fast-growing techn
Slide 12: Well-Diversified Tenant Base
Well-Diversified Tenant Base Resilient portfolio with low tenant concentration risk • Well-diversified tenant base across key growth sectors • Top 10 tenants comprise 17.0% of portfolio NLA and contribute 19.8% of cash rental income Top 10 tenants by CRI as at 31 March 2019 Portfolio tenant base com
Slide 13: Portfolio Optimisation
Portfolio Optimisation Asset enhancement initiatives to boost leasing and competitiveness Open Café at Westmoor Center, Denver – Completed in February 2019 13
Slide 14: Market Outlook
Market Outlook Downtown Seattle Washington
Slide 15: US Economy at a glance
US Economy Sound Economic Fundamentals at a glance • Despite concerns over slowing growth, economic fundamentals in the US remain strong • Labour market continues to show strength with filings 2.9% +3.2% for US unemployment benefits falling to the lowest levels in 49 years2 Real GDP growth1 Average
Slide 16: US Market Outlook
US Market Outlook Attractive US Office Real Estate Fundamentals Overall Net Absorption(1) Deliveries & Demolitions(1) 100.0 Forecast 90.0 80.0 70.0 60.0 MSF 50.0 40.0 30.0 20.0 10.0 0.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net Absorption Overall Asking Rents & Vacancy (1) $36.00 11.5% F
Slide 17: Key Growth Markets Outlook: GDP Growth
Key Growth Markets Outlook Our Markets have Outperformed the National Average Over the Last 5 Years Real GDP Growth Average (1) 2013 - 2017 7.0% 6.4% Key Growth Markets Gateway Cities 6.0% 5.0% 4.7% 4.0% 4.0% 3.7% 3.3% 3.5% 3.0% 3.0% 3.0% 2.6% 2.2% 2.3% 2.2% 2.0% 1.3% 1.4% 1.1% 1.1% 1.0% 0.0% Atlant
Slide 18: Key Growth Markets Outlook: Employment Growth
Key Growth Markets Outlook Our Markets have Outperformed the National Average Over the Last 5 Years Employment Growth Average (1) 2014 - 2018 5.0% Key Growth Markets Gateway Cities 4.0% 4.0% 3.6% 2.9% 3.0% 3.0% 2.8% 2.8% 2.8% 2.9% 2.0% 1.9% 1.6% 1.7% 1.7% 1.8% 1.3% 1.4% 1.0% 0.0% Atlanta Austin Denv
Slide 19: Key Growth Markets Outlook: Population Growth
Key Growth Markets Outlook Our Markets have Outperformed the National Average Over the Last 5 Years Population Growth Average (1) 2013-2017 3.0% 2.9% Key Growth Markets Gateway Cities 2.4% 2.2% 2.0% 2.0% 1.8% 1.7% 1.5% 1.2% 1.2% 1.1% 1.0% 0.8% 0.7% 0.5% 0.4% 0.0% 0.0% Atlanta Austin Denver Houston O
Slide 20: Key Growth Markets Outlook
Key Growth Markets Outlook Our Markets are Forecasted to Outperform National Average Strength from the ground up • Fast growing and defensive sectors such as technology, government, medical and healthcare are driving the economies in these submarkets • Many of these submarkets including Seattle, DC
Slide 21: Growing Educated Workforce and Rising Household Income
Key Growth Markets Outlook Growing Educated Workforce and Rising Household Income Educational Attainment – % of population with at least a Bachelor’s Degree (1) • Maitland has one of the largest percentages of graduates 2013 2014 2015 2016 2017 with advanced degrees in the metro and is dominated by
Slide 22: First Choice Submarkets Outlook
First Choice Submarkets Outlook Submarket Last 12M Last 12M Average Submarket Last 12M Projected Submarket Vacancy Rate Deliveries absorption Rent Rental Growth Rental Growth Property (%) (sf’000) (sf’000) (US$ p.a.) (%) (%) Seattle, Bellevue CBD The Plaza Buildings 5.1% - 210.0 50.1 8.7% 7.4% Seatt
Slide 23: Looking Ahead
Looking Ahead Northridge Center II Atlanta, Georgia
Slide 24: Focused on Stable Distributions and Delivering Long Term Value
Focused on Stable Distributions and Delivering Long Term Value Portfolio Value Accretive Prudent Capital Optimisation Acquisitions Management ▪ Pursue growth ▪ Effective hedging to ▪ Focused leasing opportunities that create mitigate against impact strategy targeting high long term value of unfavour
Slide 25: Thank You
Thank You For more information, please visit www.kepkbsusreit.com Westech 360 Austin, Texas
Slide 26: Additional Information
Additional Information Bellevue Technology Center Seattle, Washington
Slide 27: Tax-Efficient Structure
Tax-Efficient Structure Sponsors(1) KPA Unitholders Keppel Capital relevant Keppel Capital Tax-efficient structure for holding US properties entity International ▪ No US corporate tax (21%) and Keppel Management US withholding tax (30%) Agreement Trustee Management ▪ No Singapore corporate tax (17%)
Slide 28: Portfolio Overview
Portfolio Overview NLA Committed occupancy WALE Valuation Property City Location (sf) (by NLA) (in years) (US$m)(1) The Plaza Buildings Seattle Bellevue CBD, one of the most active leasing submarket in 490,994 94.2% 3.6 253.5 Seattle Bellevue Technology Seattle Bellevue, one of the most active leasi