Keppel REIT · SGX:K71U
Keppel REIT — H1 2020 Earnings Presentation
28 slides from Keppel REIT's earnings presentation, Jul 20, 2020
Slide 1: Second Quarter & Half Year 2020 Financial Results
Second Quarter & Half Year 2020 Financial Results 20 July 2020
Slide 2: Outline
Outline ▪ 1H 2020 Key Highlights 3 ▪ Navigating the COVID-19 Situation 4 ▪ Financial Results 7 ▪ Portfolio Review 12 ▪ Market Update 18 ▪ Additional Information 23 IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of its future performance. Certain statements made i
Slide 3: 1H 2020 Key Highlights
1H 2020 Key Highlights ▪ 2Q 2020 distributable income was $47.5 million(1), bringing 1H 2020 distributable income to $94.8 million(1) AUM by Geography (As at 30 Jun 2020) ▪ 2Q 2020 DPU was 1.40 cents; 1H 2020 DPU amounted to 2.80 cents ▪ Aggregate leverage was 36.3% and all-in interest rate was 2.48
Slide 4: Navigating the COVID-19 Situation
Navigating the COVID-19 Situation Developments on the ground Across Keppel REIT’s portfolio: ▪ Gradual return of tenants to offices after the two-month “Circuit Breaker”; site visits by (3) SMEs in portfolio prospective tenants can resume with adherence to social distancing requirements ▪ On 5 June
Slide 5: Facilitating Return to Workplaces
Facilitating Return to Workplaces Examples of measures in place: ▪ Temperature scanning and ▪ Regular purging of air contact tracing measures from building ▪ Interlinked building card access ▪ Maintaining good air and lift destination control quality with advanced systems facilitate contactless air
Slide 6: Office Remains a Necessity
Office Remains a Necessity ▪ Physical offices will remain a necessity, although the form and functions of the office will evolve ▪ Many firms will likely incorporate work-from-home Keppel REIT will continue to optimise the Varying considerations in their future office planning. However, many portfol
Slide 7: Financial Results
Financial Results T Tower in Seoul CBD 7
Slide 8: Financial Performance
Financial Performance 2Q 2020 2Q 2019 +/(-) 1H 2020 1H 2019 +/(-) Property Income $36.8 m $39.9 m (7.9%) $75.5 m $79.9 m (5.6%) Net Property Income (NPI) $28.8 m(1) $31.1 m (7.2%) $59.0 m $62.4 m (5.4%) Less: Attributable to Non-controlling Interests ($4.1 m) ($4.2 m) (2.4%) ($8.4 m) ($8.3 m) +2.2%
Slide 9: Income Contribution
Income Contribution 1H 2020 1H 2019 % % $’000 $’000 Breakdown by Geography (For 1H 2020) Ocean Financial Centre 33,365 29.3 32,796 27.0 Marina Bay Financial Centre 38,241 33.6 42,373 34.9 73.8% One Raffles Quay 12,468 10.9 12,313 10.1 Bugis Junction Towers(1) - - 8,003 6.6 8 Chifley Square 6,362 5.6
Slide 10: Balance Sheet
Balance Sheet As at 30 Jun 2020 As at 31 Mar 2020 +/(-) (1) Deposited Property $8,078 m $8,013 m +0.8% Total Assets $7,482 m $7,437 m +0.6% Borrowings(2) $2,932 m $2,898 m +1.2% Total Liabilities $2,349 m $2,312 m +1.6% Unitholders’ Funds $4,556 m $4,545 m +0.2% Adjusted NAV per Unit(3) $1.33 $1.33
Slide 11: Prudent Capital Management
Prudent Capital Management ▪ All-in interest rate reduced year-on-year from 2.86% to 2.48% ▪ Approximately $938m of undrawn credit facilities available, including $369m of committed facilities ▪ Capital gains available from past divestments to enhance stability of distributions As at 30 Jun 2020 Deb
Slide 12: Portfolio Review
Portfolio Review Ocean Financial Centre lit in blue in support of the #SeeItBlue campaign that highlights the importance of mental well-being and expresses gratitude to frontline workers battling the COVID-19 outbreak 12
Slide 13: 311 Spencer Street Achieves Practical Completion
311 Spencer Street Achieves Practical Completion ▪ Commencement of the 30-year lease for Victoria Police’s new headquarters contributes a steady income stream to Keppel REIT ▪ The Grade A office tower is designed to be an eco-icon in Melbourne and is powered by 100% renewable electricity as part of
Slide 14: 1H 2020 Leasing Update
1H 2020 Leasing Update Total Leases Committed Leases Committed by Geography(4) 7.5% ~623,200 sf 19.8% (Attributable ~267,800 sf) 72.7% Retention Rate 71%(3) Singapore Australia South Korea Leases Committed by Type(4) New leasing demand and expansions from: Real estate and property services 41.9% Ave
Slide 15: Lease Expiry Profile and Expiring Rents
Lease Expiry Profile and Expiring Rents ▪ Only 2.2% of leases expiring and 0.5% due for rent review for the remainder of 2020(1) ▪ Average expiring rents(2) of Singapore office leases (psf pm): $10.45 in 2020, $9.73 in 2021 and $10.22 in 2022 32.2% Lease Expiries and Rent Reviews (Based on Committed
Slide 16: High Occupancy and Long WALE
High Occupancy and Long WALE ▪ HSBC Singapore’s 10-year lease at Marina Bay Financial Centre commenced in May 2020 ▪ High portfolio committed occupancy of 98.6% ▪ Long overall portfolio WALE of 4.6 years (Singapore portfolio: 3.5 years, Australia portfolio: 8.5 years, South Korea portfolio: 1.9 year
Slide 17: Resilient and Diversified Tenant Base
Resilient and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant ▪ Top 10 tenants take up 37.9% of NLA base of 340(1) tenants, many of which are and contribute 34.9% of gross rent established blue-chip corporations Top 10 Tenants Tenant Business Sector DBS 6.6% Banking, insurance and fin
Slide 18: Market Update
Market Update 8 Chifley Square, Sydney 18
Slide 19: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents registered a decrease to $11.15 psf pm in 2Q 2020 while average occupancy in core CBD decreased to 94.4% Grade A Rent and Core CBD Occupancy Demand and Supply 2.1 1.9 1.9 1.7 94.8% 95.8% 94.8% 95.8% 95.4% 94.4% 1.1 $15 93.8% 100% 0.8 0.8 0.7 0.8
Slide 20: Australia Office Market
Australia Office Market ▪ National CBD office market occupancy decreased slightly quarter-on-quarter from 91.7% as at end December 2019 to 91.6% as at end March 2020 94.9% 96.0% 95.2% 94.5% 92.8% 91.5% 89.2% 91.8% 91.3% 100% 86.8% 86.0% 89.6% 100% 1,200 1,200 1,032 1,045 1,058 80% 80% 964 Sydney CBD
Slide 21: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy improved from 90.7%(1) as at end December 2019 to 91.2% as at end March 2020 CBD Grade A Rent and Occupancy (1) 200,000 90.7% 91.2% 100% 87.5% 84.9% 86.5% 82.7% 160,000 80% 120,000 60% 95,618 95,164 91,484 93,498 91,704 92,148 80,000 40% 40,000 20% 0 0% 4Q
Slide 22: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • 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 long-term
Slide 23: Additional Information
Additional Information One Raffles Quay, Singapore 23
Slide 24: 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 in Acquired Acquired 50% of Expanded footprint to with over Prudential 8 Chifley Financial Perth and three retail units at 311 Spencer Street South Korea wit
Slide 25: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Financial Centre(4) Attributable NLA 700,504 sf 1,024,238 sf 441,424 sf Ownership 79.9% 33.3% 33.3% BNP Paribas, DBS Bank, Deutsche Bank, Principal tenants(1) ANZ, Standard Chartered Bank, Ernst & Young, Drew & Napie
Slide 26: Portfolio Information: Australia & South Korea
Portfolio Information: Australia & South Korea 311 Spencer Street, 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm Melbourne T Tower, Sydney Melbourne(3) Brisbane Justice Centre, Perth (Practical completion on Seoul 9 July 2020) Attributable NLA 104,055 sf 244,659 sf 224,537
Slide 27: 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 50.9% asset management platform 5.5% track record in this industry 43.6% 100% Management Act
Slide 28: Thank You
Thank You Cy] REIT 23 ff