Kore Us Reit · SGX:CMOU
Kore Us Reit — Keppel Pacific Oak US REIT — RHB Virtual Corporate Event for Malaysian Investors (June 2020)
32 slides from Kore Us Reit's conference presentation, Jun 5, 2020
Slide 1: RHB Virtual Corporate Event for Malaysian Investors
RHB Virtual Corporate Event for Malaysian Investors 5 June 2020
Slide 2: Important Notice / Content Outline
Important Notice The past performance of Keppel Pacific Oak US REIT is not necessarily indicative of its future performance. Certain statements made in this release may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and
Slide 3: Overview
Overview Tenant lounge The Westpark Portfolio Seattle, Washington
Slide 4: About Keppel Pacific Oak US REIT (KORE)
Benefitting from Unique exposure solid US office Tax advantaged to key US real estate structure growth markets fundamentals Sponsors ▪ Keppel Capital and KPA US Asset ▪ Pacific Oak Capital Advisors LLC, also advisor for Manager Pacific Oak Strategic Opportunity REIT Indoor courtyard, Great Hills Pla
Slide 5: Over 2.5 years Track Record of Sustained Growth
Over 2.5 years Track Record of Sustained Growth Listing Date to Listing Date to Jun 2019 Dec 2019 30 Jun 2018 31 Dec 2018 Achieved DPU of Achieved DPU of 6.22 US Achieved 1H 2019 DPU of Achieved FY 2019 DPU of 3.82 US cents, 0.5% cents, 2.0% above IPO 3.00 US cents, 31.0% above 6.01 US cents, 31.2%
Slide 6: First Choice Submarkets in Key Growth Markets
First Choice Submarkets in Key Growth Markets SEATTLE, Washington (39.5%) ATLANTA, Georgia (5.7%) Overview 13 freehold office buildings The Plaza Buildings Bellevue Technology The Westpark Occupancy: 97.3% Powers Ferry Northridge Center and business campuses Center Portfolio Occupancy: 93.5% I & II
Slide 7: Driving Operational Excellence
Driving Operational Excellence Index inclusion Strong will improve rental trading Presence in reversion Stable first choice 100% portfolio liquidity of 12% submarkets in Highly unsecured committed key growth debt occupancy Added as a diversified Strong average constituent to the markets rental rever
Slide 8: Resilient Portfolio
Resilient Portfolio • Highly diversified portfolio with low tenant concentration risk • Top 10 tenants contribute only 19.5% of CRI, with the largest tenant only contributing 3.5% of CRI • KORE’s buildings and business campuses in the tech hubs of Seattle, Austin and Denver contribute ~55% of CRI To
Slide 9: 1Q 2020 Operational Updates
1Q 2020 Operational Updates Bellevue Technology Center Seattle, Washington
Slide 10: 1Q 2020: Key Financial Performance
1Q 2020: Key Financial Performance Financial Performance • Continued year-on-year improvement largely due to: • contributions from One Twenty Five, which was acquired in November 2019; and • positive rental reversions from leasing done in 2019 • Final 267A tax regulation issued and reversion to orig
Slide 11: 1Q 2020: Key Portfolio Performance
1Q 2020: Key Portfolio Performance Leasing Updates Leases Signed • Leased 104,000 sf of space - Mainly in Seattle, Atlanta Expansions and Houston 22.2% - Equivalent to about 2.2% of total portfolio New • Portfolio WALE of 4.2 years(2) 45.3% • Limited leases due for renewal Renewals for the rest of 2
Slide 12: Prudent Capital Management
Prudent Capital Management Limited interest rate exposure with term loans significantly hedged As at 31 March 2020 Debt Maturity Profile • US$480.4 million of 100% of Loans Unsecured Total Debt external loans Early refinanced ~21% of expiring loans in 2021 • 100% unsecured US$30m 30.1% • US$50 milli
Slide 13: COVID-19 Updates
COVID-19 Updates Westmoor Center Denver, Colorado
Slide 14: Navigating the COVID-19 Situation
Navigating the COVID-19 Situation Ensuring Safety is Priority Business Continuity • Precautionary health and safety measures • KORE’s income resilience supported by: implemented across all properties - Limited retail exposure of less than 2% of gross revenue • All buildings remain accessible to tena
Slide 15: Market Outlook
Market Outlook Tenant lounge, 1800 West Loop South Houston, Texas
Slide 16: Last 12 Months Rent Growth
Last 12 Months Rent Growth 7.5% Key Growth Markets Gateway Cities 7.1% 6.9% 6.7% 5.0% 5.1% 3.8% 3.6% 3.6% 4.1% 3.4% 3.3% 2.5% 2.4% 2.2% 2.4% 1.4% 1.2% 0.1% -2.3% Last 12M Rental Growth Key Growth Markets Average United States and Gateway Cities Average Source: CoStar Office Report, 1 April 2020. 16
Slide 17: Projected 12-Month Rent Outlook
Projected 12-Month Rent Outlook 3.1% Key Growth Markets Gateway Cities 2.3% 2.2% 2.0% 0.8% 0.5% 0.6% 0.0% 0.2% 0.4% -0.6% -0.5% -0.6% -0.6% -0.7% -0.7% -1.6% -1.8% -2.6% -4.0% -5.1% Projected Rental Growth Key Growth Markets Average Gateway Cities Average United States Average Source: CoStar Office
Slide 18: Positive Economics in KORE's Key Growth Markets
Positive Economics in KORE’s Key Growth Markets KORE’s key growth markets continue to outperform national average Real GDP Growth Average(1) 5.6% 5.4% 2014-2018 Key Growth Markets Gateway Cities 5.0% 4.0% 4.0% 3.9% 4.1% 3.7% 3.9% 3.2% 2.9% 2.8% 2.5% 1.8% 1.9% 1.6% 1.2% Atlanta Austin Dallas Denver H
Slide 19: Rising Employment in KORE's Key Growth Markets
Rising Employment in KORE’s Key Growth Markets KORE’s key growth markets continue to outperform national average Employment Growth Average(1) 3.8% 2015-2019 3.4% Key Growth Markets Gateway Cities 2.9% 2.8% 2.7% 2.7% 2.7% 2.4% 2.4% 1.8% 1.6% 1.5% 1.5% 1.7% 1.6% 1.4% 1.2% Atlanta Austin Dallas Denver
Slide 20: Expanding Population in KORE's Key Growth Markets
Expanding Population in KORE’s Key Growth Markets KORE’s key growth markets continue to outperform national average Population Growth Average(1) 2014-2018 Key Growth Markets Gateway Cities 2.9% 2.5% 2.0% 2.0% 1.8% 2.0% 1.5% 1.7% 1.2% 0.9% 1.0% 0.7% 0.7% 0.3% 0.5% 0.1% -0.1% Atlanta Austin Dallas Den
Slide 21: High Tax States are Losing People to Low Tax States
High Tax States are Losing People to Low Tax States Individuals are moving to zero or low income tax states, accelerating population growth in KORE’s key growth markets State Individual Tax Rates (as at July 1, 2019)(1) Key Growth Markets 13.30% 13.30% Gateway Markets 10.75% 8.82% 8.95% 8.40% 6.99%
Slide 22: Low Corporate Tax States are Attracting New Businesses
Low Corporate Tax States are Attracting New Businesses Companies are relocating to where they have the greatest competitive advantage State Corporate Income Tax Rates (as at July 1, 2019)(1) Key Growth Markets Gateway Markets 11.50% 9.50% 8.84% 8.84% 8.00% 8.25%8.51% 6.99% 6.50% 5.75% 6.25% 5.50% 4.
Slide 23: 2020 Rankings for Overall State Taxes
2020 Rankings for Overall State Taxes Lower overall tax rates in KORE’s key growth markets vs gateway cities Overall State Rankings(1) Best 22 45 Key Florida 4 Growth Texas 13 Gateway Colorado 17 Markets Washington 19 Georgia 32 Illinois 35 Key Massachusetts 36 Growth Markets Connecticut 47 Average
Slide 24: Committed to Deliver Long Term
Strategically-located assets in key growth markets with positive economic and office fundamentals Highly diversified portfolio with quality tenants from high growth and defensive sectors Continued focus Low tenant concentration and strong tenant mix that on operational Committed supports stable grow
Slide 25: Thank You
Thank You For more information, please visit www.koreusreit.com Westech 360 Austin, Texas
Slide 26: Additional Information
Additional Information Tenant space, Westmoor Center Denver, Colorado
Slide 27: First Choice Submarkets in Key Growth Markets
First Choice Submarkets in Key Growth Markets 27
Slide 28: Trust Structure
Trust Structure Sponsors(1) Unitholders Keppel Capital KPA Keppel Capital International Tax-efficient structure for holding US properties Keppel ▪ No US corporate tax (21%) and Management Agreement US withholding tax (30%) Trustee Services Management Fees ▪ No Singapore corporate tax (17%) and Singa
Slide 29: A Key Driver of US Growth and Leasing Demand: Tech Industry
Ranking of Top 10 US Occupation Jobs Added During Decade, 2010-2019 Food Preparation and Serving 2,419,416 QCEW + self-employed* Personal Care and Services 2,179,869 Transportation and Material Moving 1,972,500 2-digit SOCs Tech 1,808,837 Management 1,762,494 Business and Financial 1,713,068 Healthc
Slide 30: Class A Work Environments and Tech Campuses of Choice
Class A Work Environments and Tech Campuses of Choice The Innovation Triangle: Bellevue – Kirkland – Redmond • Driven by the tech industry, the Seattle metro added 20,800 office- using services jobs in 2019 – an all- time high for the market and the second highest growth rate in the nation(1) . • Of
Slide 31: Apple: A True Campus Community in Austin
Apple: A True Campus Community in Austin Apple’s Office Distribution in Austin, Texas • In November 2019, announced the NEW CAMPUS start of construction on its new campus in Austin, Texas, as part of its broad expansion in the city(1). • Expected to open in 2022, the new US$1 billion, 3m sf campus s
Slide 32: Denver – An Innovative Community where Aerospace and Technology Thrive
Denver – An Innovative Community where Aerospace and Technology Thrive • A low corporate tax rate, an educated workforce and a wealth of resources make Denver business-friendly. • Colorado is home to over 500 aerospace related companies and suppliers. • Top aerospace contractors include: Ball Aerosp
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