Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — H1 2012 Earnings Presentation
37 slides from Keppel REIT's earnings presentation, Jul 16, 2012
Slide 1: First Half 2012 Financial Results
First Half 2012 Financial Results 16 July 2012
Slide 2: Important Notice
Important Notice The past performance of K-REIT Asia is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and assumptio
Slide 3: Contents
Contents 1H 2012 Highlights Financial Performance Capital Management Portfolio Analysis Market Review and Outlook Going Forward Additional Information 3 Definitively Keppel
Slide 4: 1H 2012 Highlights
1H 2012 Highlights 4 Definitively Keppel
Slide 5: 1H 2012 Highlights
1H 2012 Highlights 1H 2012 Property Income Ï 106.5% y-o-y to $75.9m 1H 2012 Net Property Income Ï 104.4% y-o-y to $59.8m 1H 2012 Distributable Income Ï 94.6% y-o-y to $98.4m 1H 2012 Distribution per unit (DPU) Ï 92.0% y-o-y to 3.84 cents Annualised 1H 2012 DPU works out to 7.72 cents, 7.8% higher th
Slide 6: 1H 2012 Highlights (cont'd)
1H 2012 Highlights (cont’d) Obtained tax transparency for MBFC Phase I via Limited Liability Partnership (LLP) structure Acquired income accretive 12.39% interest in Ocean Financial Centre Increased interest in OFC to 99.9% Additional income from OFC is tax transparent Obtained full management contr
Slide 7: 1H 2012 Distribution Per Unit
1H 2012 Distribution Per Unit Distribution Per Unit (DPU) 3.84 cents Distribution Period 1 January 2012 – 30 June 2012 Distribution Timetable Trading on “Ex” Basis Friday, 20 July 2012 Books Closure Date Tuesday, 24 July 2012 Distribution Payment Date Monday, 27 August 2012 7 Definitively Keppel
Slide 8: Key Financial Indicators
Key Financial Indicators 1H 2012 1H 2011 Change Property Income $75.9m $36.7m 106.5% Net Property Income $59.8m $29.2m 104.4% Share of Results of Associates $22.1m $14.5m 52.5% Distributable Income to $98.4m $50.5m 94.6% Unitholders(1) Distribution Per Unit (DPU) 3.84 cents 2.00 cents(2) 92.0% Annua
Slide 9: 1H 2012 Financial Performance
1H 2012 Financial Performance 9 Definitively Keppel
Slide 10: 1H 2012 Distributable Income grew 95% y-o-y to $98.4m
1H 2012 Distributable Income grew 95% y-o-y to $98.4m 1H 2012 1H 2011 Change Property Income $75.9m $36.7m $39.1m 106.5% Net Property Income $59.8m $29.2m $30.5m 104.4% Share of Results of Associates $22.1m $14.5m $7.6m 52.5% Distributable Income to Unitholders(1) $98.4m $50.5m $47.8m 94.6% (1) The
Slide 11: 1H 2012 DPU up 92% y-o-y to 3.84 cents
1H 2012 DPUÏ 92% y-o-y to 3.84 cents 1H 2012 1H 2011 Change Distribution Per Unit (DPU) - For the Period 3.84 cents 2.00 cents(1) 1.84 cents 92.0% - Annualised 7.72 cents 4.03 cents(1) 3.69 cents 91.6% Distribution Yield 7.3%(2) N.M. N.M. N.M. (1) These are restated to take into account the effect o
Slide 12: 2Q 2012 Distributable Income up 89.5% y-o-y
2Q 2012 Distributable Income Ï 89.5% y-o-y 2Q 2012 2Q 2011 Change Property Income $39.3m $18.1m $21.2m 117.5% Net Property Income $31.3m $14.3m $17.0m 118.6% Share of Results of Associates $10.9m $8.3m $2.5m 30.3% Distributable Income to Unitholders(1) $49.8m $26.3m $23.5m 89.5% (1) The distribution
Slide 13: 2Q 2012 DPU up 86.5% y-o-y to 1.94 cents
2Q 2012 DPU Ï 86.5% y-o-y to 1.94 cents 2Q 2012 2Q 2011 Change Distribution Per Unit (DPU) - For the Period 1.94 cents 1.04 cents(1) 0.90 cents 86.5% - Annualised 7.80 cents 4.17 cents(1) 3.63 cents 87.1% Distribution Yield 7.3%(2) N.M. N.M. N.M. (1) These are restated to take into account the effec
Slide 14: 2Q 2012 Distributable Income up 2.6% q-o-q
2Q 2012 Distributable Income Ï 2.6% q-o-q 2Q 2012 1Q 2012 Change Property Income $39.3m $36.6m $2.7m 7.4% Net Property Income $31.3m $28.5m $2.8m 9.7% Share of Results of Associates $10.9m $11.2m -$0.4m -3.3% Distributable Income to Unitholders(1) $49.8m $48.5m $1.3m 2.6% (1) The distribution income
Slide 15: 2Q 2012 DPU up 2.1% q-o-q
2Q 2012 DPU Ï 2.1% q-o-q 2Q 2012 1Q 2012 Change Distribution Per Unit (DPU) - For the Period 1.94 cents 1.90 cents 0.04 cents 2.1% - Annualised 7.80 cents 7.64 cents 0.16 cents 2.1% Distribution Yield 7.3%(1) 7.9%(2) -0.6% -7.6% (1) The yield is based on the market closing price of $1.065 as at the
Slide 16: Healthy Balance Sheet
Healthy Balance Sheet As at 30 Jun 2012 As at 31 Mar 2012 Non-current Assets $5,785 m $5,762 m Total Assets $5,975 m $5,887 m Borrowings(1) $2,780 m $2,523 m Total Liabilities $2,645 m $2,423 m Unitholders’ Funds $3,327 m $3,250 m Net Asset Value (NAV) Per Unit $1.27 $1.27 Adjusted NAV Per Unit(2) $
Slide 17: Capital Management
Capital Management 17 Definitively Keppel
Slide 18: Capital Management
Capital Management As at 30 Jun 2012 As at 31 Mar 2012 Gross Borrowings(1) $2,780 m(4) $2,523 m(4) Aggregate Leverage 43.9% 41.8% Average All-in Interest Rate(2) 2.00% 2.03% Interest Coverage Ratio(3) 5.3 times 5.5 times Weighted Average Term to Expiry 3.6 years(5) 2.9 years (1) These include borrow
Slide 19: Balanced Debt Maturity Profile
Balanced Debt Maturity Profile Lowered all-in interest cost to 2.00% in 2Q 2012 Well-staggered debt expiry profile with average 3.6 years(1) term to expiry Borrowings diversified across 12 lenders (1) The debt weighted average term to expiry will extend to 3.6 years when the $598 million loans due f
Slide 20: 1H 2012 Portfolio Analysis
1H 2012 Portfolio Analysis 20 Definitively Keppel
Slide 21: Portfolio Occupancy Rate
Portfolio Occupancy Rate Healthy portfolio occupancy of 97.0% Singapore property portfolio occupancy of 97.0% is higher than core CBD occupancy of 91.6% 100% 100% 99.5% 99.5% 100% 97.0% 92.3% 92.7% Singapore core CBD occupancy at 91.6%(1) Bugis Junction One Raffles Prudential MBFC Phase 1 Ocean 275
Slide 22: Portfolio Lease Profile
Portfolio Lease Profile Well-balanced lease renewal and rent review profile No more than 18% of NLA due for renewal in each year Portfolio Lease Profile (by Net Lettable Area) 17.1% 10.4% 9.0% 9.3% 8.6% 7.1% 5.4% 4.5% 1.5% 0.1% 2012 2013 2014 2015 2016 Leases Expiring as a Percentage of Total Portfo
Slide 23: Stable Lease Portfolio
Stable Lease Portfolio Top ten tenants have long WALE of 7.7 years Weighted Average Lease Expiry (WALE) Top Ten Tenants WALE 7.7 Years Portfolio WALE 6.2 Years (1) Long-term leases are those with lease terms to expiry of at least five years. 23 Definitively Keppel
Slide 24: Tenants diversified across various business sectors
Tenants diversified across various business sectors Telecom- Retail (Exclude munications & F&B & services), Accounting & multi-media, 1.0% consultancy 8.1% services, 1.8% Legal, 7.1% F&B, 1.1% (1) 212 tenants from a diversified range of Energy & natural resources, 9.5% business sectors Shipping & Ba
Slide 25: Blue-Chip Tenant Base
Blue-Chip Tenant Base Top ten tenants account for 44.0% of portfolio NLA Top Ten Tenants Australia and New Zealand Banking Group Ltd 7.9% Standard Chartered Bank 6.6% Telstra Corporation Limited 5.8% Barclays Capital Service Limited Singapore Branch 4.4% BNP Paribas 3.7% Drew & Napier LLC 3.6% Deuts
Slide 26: Asset Enhancements
Asset Enhancements Enhancement works at Prudential Tower and Bugis Junction Towers on track for completion in 4Q 2012 and 1Q 2013 respectively Prudential Tower Before After Bugis Junction Towers Before After 26 Definitively Keppel
Slide 27: Market Review and Outlook
Market Review and Outlook 27 Definitively Keppel
Slide 28: Singapore Office Market: Core CBD Occupancy
Singapore Office Market Improved demand from legal services, energy and natural resources sectors drive core CBD occupancy up to 91.6% Average Grade A office rental slips to $10.10 psf per month due to completion of new Grade A office space $15 95.2% 95.3% 94.4% 100% 91.9% 93.3% 93.1% 92.3% 91.6% 91
Slide 29: Economic and Office Markets Outlook
Economic and Office Markets Outlook Singapore Economy remained resilient in 2Q 2012, growing 1.9% year-on-year Leasing activity is concentrated in new Grade A office buildings Liberalisation of legal industry is driving legal sector demand for office space in the central business district Australia
Slide 30: Going Forward
Going Forward 30 Definitively Keppel
Slide 31: Strategic Direction
Strategic Direction Vision K-R Asia aims to be a successful commercial real estate K-REIT K investment trust with a sterling portfolio of assets pan-Asia. Mission To deliver stable and sustainable returns to Unitholders by continually enhancing our assets and expanding our portfolio. Maximising Enha
Slide 32: Additional Information
Additional Information 32 Definitively Keppel
Slide 33: About K-REIT Asia
About K-REIT Asia Quality portfolio of eight commercial Grade A office assets valued at $6.3 billion and spanning 2.8m sf NLA as at 30 June 2012. Market capitalisation of $2.9 billion(1) as at 11 July 2012. Listed on the SGX-ST in April 2006 via a distribution-in-specie to Keppel Land shareholders.
Slide 34: Growth History
Growth History AUM: S$6.3 billion Property Portfolio: 92% in Singapore 2012 8% in Australia Increased interest in Ocean Financial Centre to 99.9% Obtained tax transparency Additional 12.39% interest in for MBFC Phase 1 Ocean Financial Centre to 99.9% Obtained tax transparency for MBFC Phase 1 via LL
Slide 35: Portfolio Diversification
Portfolio Diversification 93% of Singapore assets are located in the Raffles Place and Marina Bay Precincts 92% of property portfolio is located in Singapore 35 Definitively Keppel
Slide 36: Portfolio Information
Portfolio Information Singapore Portfolio Australia Portfolio Ocean Prudential 275 George 8 Chifley Bugis Junction MBFC Financial One Raffles 77 King Street Tower Street Square Towers Interest (3) Centre Quay Interest Property Interest Property Property Interest (7) Attributable 244,978 582,080 886,
Slide 37: Thank you
Thank you Fax: 6835 7747 http://www.kreitasia.com For enquiries, please contact Ms Casiopia Low Investor Relations & Research Tel: 6433 7622 Email: casiopia.low@kreitasia.com 37 Definitively Keppel