Slide 1: Second Quarter & First Half 2016 Financial Results
Second Quarter & First Half 2016 Financial Results 18 July 2016
Slide 2: Important Notice
Important Notice DBS Bank Ltd. and Standard Chartered Securities (Singapore) Pte. Limited are the Joint Financial Advisers and Issue Managers to the initial public offering of Keppel DC REIT (the “Offering”). DBS Bank Ltd., Standard Chartered Securities (Singapore) Pte. Limited and Credit Suisse (Si
Slide 3: Content
Content Key Highlights Financial Review Portfolio Performance Capital Management Outlook Additional Information 2
Slide 4: Key Highlights
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Slide 5: Key Highlights
Key Highlights $ € £ Distribution Per Unit Declared2 Portfolio Occupancy Aggregate Leverage3 3.34 cents 92.3% 29.1% 0.9% higher than IPO forecast1 as at 30 Jun 2016 as at 30 Jun 2016 Annualised Distribution Yield Portfolio WALE Interest Coverage 7.22% 8.7 years 9.5 times 6bps higher than IPO forec
Slide 6: Financial Review
Financial Review
Slide 7: Distributable Income: Actual vs Forecast
Distributable Income: Actual vs Forecast1 2Q 2016 2Q 2016 Variance 1H 2016 1H 2016 Variance ($’000) Actual Forecast1 (%) Actual Forecast1 (%) Distributable Income to 14,749 14,598 +1.0 29,496 29,196 +1.0 Unitholders2 Comprising: Gross Revenue 24,865 25,488 (2.4) 49,636 50,976 (2.6) Property Expenses
Slide 8: Distributable Income: Year-on-Year Comparison
Distributable Income: Year-on-Year Comparison 2Q 2016 2Q 2015 Variance 1H 2016 1H 2015 Variance ($’000) Actual Actual (%) Actual Actual (%) Distributable Income to 14,749 14,272 +3.3 29,496 28,478 +3.6 Unitholders1 Comprising: Gross Revenue 24,865 26,027 (4.5) 49,636 51,955 (4.5) Property Expenses (
Slide 9: Update on Property Tax
Update on Property Tax Property tax incurred in Singapore in the past quarters have been higher than forecast due to increase in annual value (AV) assessed by IRAS since IPO date Successful appeal to IRAS Appeal to IRAS was successful and reduced the AVs of the Singapore Properties A one-time
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights As at As at 30 Jun 2016 31 Dec 2015 ($’000) ($’000) Investment Properties 1,101,594 1,102,685 Total Assets 1,213,278 1,211,171 Gross Borrowings1 341,114 341,848 Total Liabilities 402,387 397,683 Unitholders’ Funds 810,491 813,114 Units in Issue (‘000) 883,115 882,977 Net Ass
Slide 11: Aggregate Leverage
Aggregate Leverage As at As at 30 Jun 2016 31 Dec 2015 ($’000) ($’000) Investment Properties1 1,070,267 1,071,358 (excluding finance lease liabilities commitments) Total Assets1 1,181,951 1,179,844 (excluding finance lease liabilities commitments) Gross Borrowings + Deferred Payment2 344,186 344,890
Slide 12: Distribution Declared
Distribution Declared Distribution per Unit of 3.34 cents declared for the period from 1 January 2016 to 30 June 2016 Annualised distribution yield was 7.22% 1 Annualised distribution yield1 Distribution Timetable 7.22% 7.00% Ex-Date Friday, 22 July 2016 Book Closure Date Tuesday, 26 July 2016 P
Slide 13: Portfolio Performance
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Slide 14: Geographical Footprint
Geographical Footprint Keppel T&T and Keppel DC REIT’s colocation assets were rebranded to streamline the naming convention and strengthen collective branding Ireland Keppel DC Dublin 1 (f.k.a. Citadel 100 Data Centre), Dublin Assets Under Management (AUM) United Kingdom GV7 Data Centre, London ~$
Slide 15: Project Update: maincubes Data Centre
Project Update: maincubes Data Centre Construction on track; Completion expected in 1H 2018 Quarterly coupons received from the Vendor since 4Q 2015 Offenbach am Main, Location Germany Land area 5,596 sqm Estimated 11,780 sqm lettable area Land tenure Freehold EUR 84.0 million Purchase (10% depo
Slide 16: Portfolio Update
Portfolio Update Improvement in portfolio’s occupancy rate to 92.3% and weighted average lease expiry (WALE) healthy at 8.7 years Lease expiry profile Portfolio Metrics As at 30 Jun 2016 As at 30 June 2016 Lettable Area 597,909 sq ft 67.8% Valuation $1.07 billion1 Occupancy 92.3% 19.1% WALE 8.7 ye
Slide 17: Portfolio Update (Cont'd)
Portfolio Update (Cont’d) Signed forward renewal of one of the major contracts expiring in late 2017 in one of the Singapore Properties Renewed contract for more than five years Secured commitment to expand by 6,800 sq ft of data centre space in two phases (half in 2H 2016, half in 2H 2017)
Slide 18: Favourable Client Profile & Lease Mix
Favourable Client Profile & Lease Mix Rental income breakdown Rental income breakdown by trade sector by lease type For the month of June 2016 For the month of June 2016 Shell & core 6.2% Corporate IT services 36.6% Lease Type WALE1 4.3% Financial Colocation 2.9 years Colocation services 68.4% 13.7%
Slide 19: Capital Management
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Slide 20: Proactive Capital Management
Proactive Capital Management Hedging of borrowing costs As at 30 June 2016 Un- Managing interest rate exposure: hedged 13% Entered into floating-to-fixed interest rate swaps to lock in interest rates of the long-term loans Hedged 87% As at 30 Jun 2016 Debt maturity profile As at 30 June 2016 ~
Slide 21: Proactive Capital Management (Cont'd)
Proactive Capital Management (Cont’d) Mitigating impact of currency fluctuations: Used foreign currency forward contracts to hedge the REIT’s foreign-sourced distribution up to end of 2017 Adopted natural hedging by borrowing in currencies that match the denomination of corresponding investmen
Slide 22: Outlook
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Slide 23: Minimal Exposure to Brexit
Minimal Exposure to Brexit GV7 Data Centre is the REIT’s only asset in the UK, contributing ~6.8% of portfolio Low occupancy risk as the entire facility is on a long master lease to a well-established client until 2027 Existing hedging policies in place against currency fluctuations Portfolio
Slide 24: Sustainable Growth
Sustainable Growth Continued growth of the data centre industry with developing technologies forming the next wave of digital revolution and data creation Internet of Things1 Connected Devices2 Cloud Market3 +17% +34% +61% CAGR from 2014 to 2020 CAGR from 2016 to 2020 CAGR from 2015 to 2020 @ Sour
Slide 25: Harnessing Strengths
Harnessing Strengths Completion of Keppel Corporation’s consolidation of 50% interest in Keppel DC REIT Management (the REIT Manager) under Keppel Capital: The REIT Manager is now a subsidiary of Keppel Capital and will be able to leverage the scale and resources of a larger asset management platf
Slide 26: Committed to Deliver Value
Committed to Deliver Value Active capital management High growth industry with Established significant track record barriers to entry Strategic location in key data centre hubs Strong global clientele To provide Unitholders with regular and stable distributions, and to achieve long-term growth in DP
Slide 27: Additional Information
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Slide 28: Keppel DC REIT Structure
Keppel DC REIT Structure Institutional and Keppel Capital Keppel T&T Keppel Land Public Investors 30.1% 4.9% 65.0% 50% 50% Management Acting on behalf services of Unitholders REIT Manager Trustee Management Keppel DC REIT Trustee’s fees fees Keppel DC REIT Perpetual (Asia) Limited Management Pte. Lt
Slide 29: Portfolio Overview (as of 30 June 2016)
Portfolio Overview (as of 30 June 2016) Asia Pacific Lettable area No. of Occupancy Carrying Value(5) WALE Property Location Interest Lease type Land lease title (sq ft) clients(1) rate (%) ($m) (years) Leasehold (Expiring 30 Keppel DC Keppel lease / 3.6(2) Singapore 100% 109,574 21(2) 85.7 275.0 Se
Slide 30: Portfolio Overview (as of 30 June 2016) (Cont'd)
Portfolio Overview (as of 30 June 2016) (Cont’d) Europe Lettable No. of Occupancy Carrying Value(5) WALE Property Location Interest area Lease type Land lease title clients(1) rate (%) ($m) (years) (sq ft) London, Triple-net Leasehold (Expiring GV7 Data Centre United 100% 24,972 1 100.0 72.3 10.6 (F
Slide 31: Overview of Lease Arrangements
Overview of Lease Arrangements Asia Pacific Responsibilities of Lessor / Owner Management Maintenance Maintenance Lease Day-to-day Insurance Property Description Property Facilities Building Arrangement Refresh Capex Opex Tax Keppel DC Singapore 1 Keppel lease(1) / Client: Pays cost of rent and al
Slide 32: Overview of Lease Arrangements (Cont'd)
Overview of Lease Arrangements (Cont’d) Europe Responsibilities of Lessor / Owner Management Maintenance Maintenance Lease Day-to-day Insurance Property Description Property Facilities Building Arrangement Refresh Capex Opex Tax GV7 Data Centre Triple-net lease Client: Pays all outgoings; responsi
Slide 33: Thank you.
Thank you. KG y-y-1) DC REIT 32