Keppel REIT · SGX:K71U
Keppel REIT — Non-Deal Roadshow (November 2019)
32 slides from Keppel REIT's roadshow presentation, Nov 13, 2019
Slide 1: Investor Meetings in Bangkok & Kuala Lumpur
Investor Meetings in Bangkok & Kuala Lumpur 11-13 November 2019
Slide 2: Outline
Outline • Key Highlights 3 • Market Review 6 • Portfolio Optimisation 11 • Additional Information 24 IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information
Slide 3: Green and Sustainable Portfolio
Green and Sustainable Portfolio Large Portfolio of Strong Portfolio Commitment to Premium Office Assets Occupancy and WALE Sustainability High portfolio committed BCA Green Mark Platinum Approximately $8 billion of occupancy of 98.9% and long award for all Singapore assets; Grade A commercial assets
Slide 4: Pan-Asian REIT with Premium Office Portfolio
Pan-Asian REIT with Premium Office Portfolio $7.9 billion portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 311 Spencer Street, 99.38% Interest Melbourne South Korea 50% Interest Ocean Financial (Under d
Slide 5: Performance Highlights
Performance Highlights Financial Review ▪ 3Q 2019 distributable income was $47.5 million(1); 3Q 2019 DPU was up 2.9% year-on-year at 1.40 cents ▪ 9M 2019 distributable income was $142.1 million(1); 9M 2019 DPU was down 0.5% year-on-year at 4.18 cents ▪ Continued with DPU-accretive Unit buy-back prog
Slide 6: Looking Ahead
Looking Ahead Singapore CBD Skyline 6
Slide 7: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents increased to $11.45 psf pm as average occupancy in core CBD rose to 96.0% in 3Q 2019 95.7% 94.8% 95.8% 93.8% 94.8% 95.2% 95.8% 96.0% $15 100% $11.20 $10.80 $11.15 $11.30 $11.45 $12 $10.40 80% $9.10 $9.40 $9 60% $6 40% $3 20% $0 0% Dec-2014 Dec-2
Slide 8: Singapore Office Market (Cont'd)
Singapore Office Market (Cont’d) Office Demand and Supply Past average annual net demand(1): Key Upcoming Supply in CBD(2) sf 0.7 million sf Past average annual net supply(1): Forecast average annual supply(2): HD 139 84,000 1.0 million sf 0.9 million sf 4Q 2019 9 Penang Road 381,000 2.1 55 Market S
Slide 9: Australia Office Market
Australia Office Market ▪ National CBD office market occupancy was stable quarter-on-quarter at 91.7% as at end June 2019 96.0% 96.4% 95.9% 88.4% 86.8% 86.0% 89.6% 92.8% 92.1% 92.3% 100% Sydney CBD 91.8% 91.3% 94.9% 100% Brisbane CBD 89.0% 1,200 1,200 964 1,032 1,039 1,041 80% 80% Prime Grade occupa
Slide 10: Seoul Office Market
Seoul Office Market Occupancy Improvement Lack of New Supply After 2020 CBD Grade A occupancy improved from 82.5% as CBD Grade A occupancy is expected to decline at end March 2019 to 84.5% as at end June 2019 going into 2020, before rising in the subsequent years with the lack of new supply 200,000
Slide 11: Portfolio Optimisation
Portfolio Optimisation T Tower, Seoul 11
Slide 12: Completed Acquisition in Seoul
Completed Acquisition in Seoul ▪ Acquired a 99.38%(1) interest in T Tower, a freehold Grade A office building in Seoul CBD ▪ The DPU-accretive acquisition with an initial NPI yield of 4.7% is part of ongoing portfolio optimisation efforts T Tower in Seoul CBD T Tower Building Completion 2010 Attribu
Slide 13: Unlocking Value: Divestment of Bugis Junction Towers
Unlocking Value: Divestment of Bugis Junction Towers ▪ Sale of strata ownership of Bugis Junction Towers for $547.5 million ($2,200 psf), which translates to a net property income yield of 3.0%(1) ▪ Realising capital gains of $378.1 million(2) as part of ongoing portfolio optimisation strategy ▪ Pos
Slide 14: Divestment Rationale
Divestment Rationale • Attractive asset-level returns of 19.4% p.a., driven by 1 $378.1 million(1) of capital gains ▪ Unlock value of capital appreciation while maintaining 2 exposure to Singapore CBD ▪ Improved financial flexibility for ongoing portfolio 3 optimisation: o Continue DPU-accretive Uni
Slide 15: Topping Out of 311 Spencer Street
Topping Out of 311 Spencer Street ▪ Development of 311 Spencer Street in Melbourne achieved an important milestone with the topping out and completion of the building structure ▪ The freehold Grade A office building will be internally fitted out over the coming months ▪ The 30-year lease to the Vict
Slide 16: 9M 2019 Leasing Update
9M 2019 Leasing Update Total Leases Committed Leases Committed by Geography(3) ~516,400 sf 9.0% (Attributable ~221,000 sf) 91.0% Retention Rate 78% Singapore Australia New leasing demand and expansions from: Leases Committed by Type(3) Technology, media and telecommunications 31.0% Real estate and p
Slide 17: Lease Expiry Profile and Expiring Rents
Lease Expiry Profile and Expiring Rents ▪ Average expiring rents(1) of Singapore office leases: $9.59 psf pm in 2020, $9.53 psf pm in 2021 and $10.00 psf pm in 2022 Geographical Breakdown of 52.0% Expiring & Rent Review Leases(2,3) 20.8% Singapore 23.2% 22.0% Australia 2.0% 1.4% 3.2% 11.9% 19.8% 3.0
Slide 18: Proactive Leasing Strategy
Proactive Leasing Strategy ▪ Healthy portfolio committed occupancy of 98.9% ▪ Long overall portfolio WALE of 5.1 years (Singapore portfolio: 4.2 years, Australia portfolio: 9.2 years, South Korea portfolio: 2.3 years); Top 10 tenants’ WALE was 7.2 years High Portfolio Committed Occupancy Overall (as
Slide 19: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants Profile of Tenant Base 37.2% of NLA 34.7% of gross rent 355(1) tenants in total DBS 6.1% Government of GOWA Western Australia 4.9% Banking, insurance and financial services 38.5% Standard Chartered 4.2% Technology, media and telecommunications 11.9% Government
Slide 20: Commitment to Sustainability
Commitment to Sustainability ▪ Attained the Green Star Status and was ranked 6th out of 19 listed office entities in Asia at the Global Real Estate Sustainability Benchmark (GRESB) 2019 ▪ Committed to continue engaging with tenants and have a positive impact on the community Supporting blood donatio
Slide 21: Capital Management
Capital Management ▪ All-in interest rate declined for the second consecutive As at 30 Sep 2019 quarter to 2.82% p.a. Interest Coverage Ratio(1) 3.8x All-in Interest Rate 2.82% p.a. Debt Maturity Profile Aggregate Leverage 38.9% (as at 30 Sep 2019) 34% Weighted Average Term to Maturity 3.4 years $20
Slide 22: Unit Buy-Back Programme
Unit Buy-Back Programme ▪ Keppel REIT is the only Singapore REIT with Monthly Unit Buy-Back Volume an active Unit buy-back program (since initiation of programme until 3Q 2019) ▪ Buying back Units below NAV is accretive to 13.56m Unitholders and is part of proactive capital management strategy 7.85m
Slide 23: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Ongoing portfolio optimisation to improve yield, while maintaining exposure to Singapore CBD Portfolio • Hold quality assets across different markets for improved income stability and Optimisation to provide more lo
Slide 24: Additional Information
Additional Information David Malcolm Justice Centre, Perth 24
Slide 25: Milestones since Listing
Milestones since Listing Acquired Listed on Increased Acquired 87.5% of Acquired 50% of David SGX Stake in 50% of Ocean Malcolm Justice Centre Acquired Acquired 50% of Expanded footprint to with over Prudential 8 Chifley Financial in Perth and three retail units at 311 Spencer Street South Korea wit
Slide 26: Financial Performance
Financial Performance 3Q 2019 3Q 2018 +/(-) 9M 2019 9M 2018 +/(-) Property Income $42.4 m $36.7 m +15.6% $122.3 m $128.0 m (4.5%) (1) Net Property Income (NPI) $33.2 m $28.2 m +17.6% $95.5 m $102.6 m (6.9%) Less: Attributable to Non-controlling Interests ($4.2 m) -* Nm ($12.4 m) -* Nm NPI Attributab
Slide 27: Income Contribution
Income Contribution Breakdown by Geography 9M 2019 % 9M 2018 % (for 9M 2019) Ocean Financial Centre(1) 49,413 26.7 73,457 36.2 Marina Bay Financial Centre 63,833 34.6 61,364 30.2 One Raffles Quay 18,432 10.0 19,269 9.5 77.6% Bugis Junction Towers 11,596 6.3 11,951 5.9 8 Chifley Square 9,632 5.2 9,77
Slide 28: Balance Sheet
Balance Sheet As at 30 Sep 2019 As at 30 Jun 2019 +/(-) Deposited Property(1) $8,510 m $8,512 m (0.02%) Total Assets $7,926 m $7,936 m (0.1%) Borrowings(2) $3,311 m $3,267 m +1.3% Total Liabilities $2,720 m $2,684 m +1.3% Unitholders’ Funds $4,625 m $4,672 m (1.0%) Adjusted NAV per Unit(3) $1.35 $1.
Slide 29: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Bugis Junction Towers(7) Financial Centre(4) Attributable NLA 700,323 sf 1,024,988 sf 442,224 sf 248,853 sf Ownership 79.9% 33.3% 33.3% 100.0% BNP Paribas, DBS Bank, Deutsche Bank, Enterprise Singapore, Principal ten
Slide 30: Portfolio Information: Australia & South Korea
Portfolio Information: Australia & South Korea 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm 311 Spencer Street, T Tower, Sydney Melbourne(3) Brisbane Justice Centre, Perth Melbourne Seoul (Under development) Attributable NLA 104,070 sf 244,491 sf 244,542 sf 167,784 sf 358,
Slide 31: Keppel REIT Structure
Keppel REIT Structure Keppel Capital Keppel Land Institutional and The REIT Manager can leverage The REIT Manager can leverage Public Investors the Sponsor‘s expertise and the scale and resources of a larger 51.7% asset management platform 4.8% track record in this industry 43.5% 100% Management Act
Slide 32: Thank You
Thank You COU REIT 2