Kore Us REIT · SGX:CMOU
Kore Us REIT — Keppel Pacific Oak US REIT — H1 2022 Earnings Presentation
32 slides from Kore Us REIT's earnings presentation, Jul 27, 2022
Slide 1: First Half 2022 Financial Results
First Half 2022 Financial Results 27 July 2022
Slide 2: Important Notice and 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, Content Outline u
Slide 3: Key Highlights
Key Highlights Bridge Crossing Nashville, Tennessee
Slide 4: 1H 2022 Key Highlights
1H 2022 Key Highlights Continued Growth Stable Robust in Operating Income Income Stream Financial Position Adjusted Distributable Income (DI) Adjusted Distribution per Unit (DPU) Positive Rental Reversion 11.0% YoY 0.7% YoY 1.6% 1H 2022 actual DI of US$31.5 million was 5.4% Resulting from 2Q 2022 ma
Slide 5: Financial Performance & Capital Management
Financial Performance & Capital Management Bellevue Technology Center Bellevue, Seattle, Washington
Slide 6: Financial Performance for 1H 2022
Financial Performance for 1H 2022 (US$’000) 2Q 2022 2Q 2021 % Change 1H 2022 1H 2021 % Change Gross Revenue 37,128 33,798 9.9 74,109 68,383 8.4 Net Property Income (NPI) 21,272 20,225 5.2 43,001 40,587 5.9 Adjusted NPI (excludes non-cash straight-line rent, 21,559 20,356 5.9 43,521 40,868 6.5 lease
Slide 7: Strong Balance Sheet that Supports Growth Aspirations
Strong Balance Sheet that Supports Growth Aspirations Distribution per Unit (US cents) As at 30 June 2022 US$’000 3.16 Total Assets 1,524,483 -4.4% 3.02 Investment Properties 1,439,770 Investment Properties Held-For-Sale(1) 35,727 Cash and Cash Equivalents 30,756 Other Assets 18,230 1H 2021 1H 2022
Slide 8: KORE Distribution For 1H 2022
KORE Distribution For 1H 2022 Distribution for the period from 1 January to 30 June 2022 Distribution Per Unit 3.02 US cents Ex-Date 5 Aug 2022 Record Date 8 Aug 2022 Payment Date 30 Sep 2022 8
Slide 9: Stable Financial Position and Healthy Aggregate Leverage
Stable Financial Position and Healthy Aggregate Leverage Prudent capital management with 100% unsecured loans provide greater financial flexibility As at 30 June 2022 Debt Maturity Profile (as at 30 June 2022) Total Debt • US$567.4 million of external loans 100% of Loans Unsecured • 100% unsecured 2
Slide 10: Stable Financial Position and Healthy Aggregate Leverage (cont'd)
Stable Financial Position and Healthy Aggregate Leverage (cont’d) In July 2022, KORE entered into a new loan facility of US$180m Debt Maturity Profile (as at 30 Jun 2022) • Proceeds from the loan may be used to early refinance borrowings due in Nov 2023 and Jan 2024 in aggregate of US$130m as well 2
Slide 11: Portfolio Performance
Portfolio Performance Tenant space at The Westpark Portfolio Redmond, Seattle, Washington
Slide 12: Quality Portfolio Driven By Tech and Innovation
SEATTLE – BELLEVUE/REDMOND, Washington ATLANTA, Georgia Quality Portfolio The Plaza Buildings Bellevue Technology Center Occupancy: 95.0% The Westpark Portfolio Powers Ferry Occupancy: 67.6% Northridge Center I & II Occupancy: 81.5% Occupancy: 90.6% Driven By Occupancy: 98.3% NASHVILLE, Tennessee Te
Slide 13: Steady Income with Visible Organic Growth
Steady Income with Visible Organic Growth New Renewal Expansion New leasing demand and expansions from: ~368,063sf Leased spaces for 1H 2022, equivalent to Finance and Insurance 28.6% 7.3% of portfolio NLA. Portfolio WALE of 20.1% 3.7 years(3) by CRI. TAMI(1) 27.8% 60.8% Leases signed in 1H 2022 Pro
Slide 14: Resilient Portfolio with Diversified Tenant Composition
Resilient Portfolio with Diversified Tenant Composition KORE’s buildings and business campuses in ~48% of KORE’s portfolio NLA comprises the tech hubs of Seattle – Bellevue/Redmond, high-quality tenants from the growing and Austin and Denver contribute ~62% of NPI(1) defensive sectors of TAMI, medic
Slide 15: Low Tenant Concentration Risk
As at 30 June 2022 Low Tenant Top 10 Tenants Sector Asset Location % of CRI Comdata Inc Technology Bridge Crossing Nashville 3.4 Concentration Ball Aerospace Technology Westmoor Center Denver 3.4 Seattle – Lear Cooperation Technology The Plaza Buildings 2.7 Risk Gogo Business Technology 105 Edgeview
Slide 16: Last 12 Months Rent Growth
Last 12 Months Rent Growth 1.1% Key Growth Markets Average 1.3% United States Average 1.1% Gateway Cities Average 0.4% US Average Seattle, Bellevue CBD 0.4% Seattle, Eastside Bellevue 2.6% Seattle, Redmond 2.6% Austin, Northwest 2.3% Denver, Northwest 1.3% Denver, Broomfield Nashville, Brentwood 1.5
Slide 17: Projected 12-Month Rent Outlook
Projected 12-Month Rent Outlook Key Growth Markets Average United States Average 4.0% 3.9% 3.9% Gateway Cities Average 3.8% US Average Seattle, Bellevue CBD 3.9% Seattle, Eastside Bellevue 4.2% Seattle, Redmond 4.2% Austin, Northwest 3.3% Denver, Northwest 5.1% Denver, Broomfield Nashville, Brentwoo
Slide 18: Actual Against Projected 12-Month Market Rent Growth
Actual Against Projected 12-Month Market Rent Growth Rent growth* for the last 12 months outperformed projections for KORE’s portfolio 3.0% 2.6% 2.6% 2.5% 2.3% 1.8% 2.0% 1.4% 1.3% 1.0% 1.0% 0.7% 0.4% -0.4% -0.9% 0.0% 0.7% -1.0% -0.3% -0.9% -2.0% -1.2% -1.5% -1.8% -3.0% -2.2% -2.5% -2.9% -4.0% -4.2%
Slide 19: First Choice Submarkets Outlook
First Choice Submarkets Outlook Property Submarket Last 12M Last 12M Under Last 12M Projected Submarket Vacancy Rate Vacancy Rate Deliveries Absorption Construction Rental Growth Rental Growth Property (%) (%) (sf’000) (sf’000) (sf’000) (%) (%) Seattle, Bellevue CBD 9.4 5.8 1,100 1,100 4,267(1)* 0.4
Slide 20: Market Outlook
Market Outlook 105 Edgeview Denver, Colorado
Slide 21: US Economic Updates
US Economic Updates Subdued market economy % Unemployment Rate % Labour Force Participation Rate • US real GDP decreased by 1.6% q-o-q in 16 66 1Q 2022(1). 14 65 • Unemployment rate was 3.6% in June 12 2022, down from the high of 14.8% in April 64 2020’s recession(2). In February 2020, prior 10 to t
Slide 22: Cautious on US Economic Outlook
Cautious on US Economic Outlook Inflation, rising interest rates and geopolitical risks pose challenges to the economy Real GDP Percent Change at Annual Rate(1) First Quarter, 2022 Key Growth Markets Average -1.8% -1.6% United States Average -1.6% US Average Gateway Cities Average -1.5% Seattle -3.3
Slide 23: Outlook for Commercial Real Estate
Outlook for Commercial Real Estate Leasing activity in 1Q 2022 rose by healthy 5.4% on the back of improved clarity surrounding return-to-office timelines(1) According to Moody’s Analytics, the top three population growth Factors that affect the inflation resiliency of markets over the next two deca
Slide 24: Suburban Office Markets Recovery
Suburban Office Markets Recovery Evidenced by stronger rental growth and vacancy reduction Downtown & Suburban Office Rent Growth(1) 1.5% 1.0% 0.7% Suburban 0.5% 0.3% Downtown 0.0% -0.5% -1.0% -1.5% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 20
Slide 25: Tech Sector Demand
Tech Sector Demand No slowdown in tech job postings across suburban markets Increase in Tech Workers Jobs Pre vs. Post Pandemic by State (December 2019 – December 2021) 8.0% 7.0% 6.0% 5.0% States where KORE is present 4.0% KORE’s target 3.0% markets 2.0% 1.0% 0.0% Texas Kentucky Arkansas Arizona Mis
Slide 26: Advancing Sustainability, Creating Value
Advancing Sustainability, Creating Value Execute sound fiscal and asset management strategy to drive growth and long-term value for Unitholders PEOPLE & COMMUNITY ✓ Uplift communities wherever Installation of GHG 30% Tenant we operate reduction for needlepoint bipolar Emissions Health ionisation sys
Slide 27: First choice US office S-REIT focused on fast-growing sectors
Strategic presence in some of the fastest growing states in the US. First choice Exposure to the fast-growing TAMI, medical and healthcare sectors provides US office S-REIT income resilience. focused on the fast-growing TAMI, medical and Highly diversified portfolio with low tenant concentration ris
Slide 28: Thank You
Thank You For more information, please visit www.koreusreit.com Connect with us on: The Plaza Building Redmond, Seattle, Washington
Slide 29: Additional Information
Additional Information Iron Point Sacramento, California
Slide 30: KORE's Presence In Key Growth Markets
KORE’s Presence In Key Growth Markets Popular in-migration destinations due to attractive lifestyle, culture and employment opportunities Seattle, Washington SEATTLE ❖ The Plaza Buildings ❖ Bellevue Technology Center ❖ The Westpark Portfolio #9 #9 Seattle Austin, Texas ❖ Westech 360 #4 #
Slide 31: Trust Structure
Trust Sponsors(1) Keppel Unitholders Structure KPA Keppel Capital International Capital Keppel Management Agreement Trustee Management Services Fees Keppel Pacific Oak US REIT ✓ Tax-efficient structure for holding Trustee Trustee Management Management (Manager) US properties Fees Services • No US co
Slide 32: Strong Sponsors: Keppel Capital and KORE Pacific Advisors
Strong Sponsors: Keppel Capital and KORE Pacific Advisors (2) • Asset management arm of Keppel Corporation • Established commercial real estate investment and a premier manager in Asia manager in the US • US$31 billion(1) • US$4.0 billion Global assets under management as at end-2021 Assets under ma
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