Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — 3Q2006 Earnings Presentation
30 slides from Keppel REIT's earnings presentation, Oct 18, 2006
Slide 1: Financial Results for the Period from 26 Apr to 30 Sep 2006
Financial Results for the Period from 26 Apr to 30 Sep 2006 18 October 2006 1
Slide 2: Content
Content • Highlights • Financial Results • Portfolio Performance • Market Review and Outlook • Going Forward 2
Slide 3: Highlights
Highlights Financial Results (26 Apr to 30 Sep 2006) ¾ Distributable income outperformed forecast by 21% to reach $6.9m ¾ Distribution per unit (DPU) of 2.87 cents, 22% above forecast Annualised DPU of 6.63 cents, 22% higher than forecast of 5.43 cents (1) On track to deliver higher distribution
Slide 4: Financial Results
K-REITaSla Financial Results
Slide 5: Distributable Income Exceeded Forecast
Distributable Income Exceeded Forecast Distributable income of $6.9m, 21% higher than forecast (1) 3Q2006 26 Apr to 30 Sep 2006 (2) (3) ($'000) Actual Actual Forecast % Chg Property Income 8,769 14,759 13,671 8.0 Property Expenses (2,507) (4,159) (4,121) 0.9 Net Property Income 6,262 10,600 9,550
Slide 6: DPU Better than Forecast
DPU Better than Forecast DPU of 2.87 cents outperformed forecast by 22% ¾ Annualised DPU of 6.63 cents versus forecast of 5.43 cents (1) 3Q2006 (2) From 26 Apr to 30 Sep 2006 Actual Actual (3) Forecast (4) % Chg Distribution Per Unit (DPU) 1.71 ¢ 2.87 ¢ 2.35 ¢ 22.1% Annualised DPU 6.78 ¢ 6.63 ¢ 5.
Slide 7: DPU Growth
DPU Growth On track to deliver higher distribution for 2006 relative to forecast (1) DPU Consistently Outperform Forecasts 6.63 ¢ (Annualised) 5.43 ¢ 2.87 ¢ 2.35 ¢ 1.16 ¢ 0.982 ¢ 26 Apr - 30 Jun 2006 26 Apr - 30 Sep 2006 2006 Actual Forecast 7 (1) Forecast DPU of 5.43 cents as disclosed in the Int
Slide 8: Interest Rate Exposure Capped
Interest Rate Exposure Capped Locked in fixed rate loans to mitigate interest rate risk ¾ 100% fixed for five years until May 2011 As At (1) 30-Sep-06 30-Jun-06 30 Sep 05 Borrowings $190.1m $190.1m $190.6m Gearing (2) 29.5% 29.6% 30.0% Interest Coverage Ratio (3) 2.7 times 2.5 times 2.3 times All-
Slide 9: Portfolio Performance
K-REITaSla Portfolio Performance
Slide 10: High Portfolio Occupancy
High Portfolio Occupancy Committed occupancy hit Close to 100% Com m itted Occupancy 99.7% at end-Sep 2006 98.4% 99.7% 100% 95.5% ¾ Substantially higher vs 92.9% 95% 89% a year ago 90% ¾ Ahead of Core CBD occupancy of 95.5% 85% (Source : CBRE) 80% 30-Jun-06 30-Sep-06 ¾ Prudential Tower (1) now K-R
Slide 11: Committed Occupancy on the Rise
Committed Occupancy on the Rise 100% 95% 90% 85% 80% 30-Jun-06 30-Sep-06 Keppel Tow ers & GE Tow er 98.2% 99.8% Bugis Junction Tow ers 98.5% 99.4% Prudential Tow er (1) 99.0% 100.0% (1) Approximately 44% of strata area of the building 11
Slide 12: Steady Growth in Portfolio Rentals
Steady Growth in Portfolio Rentals Steady rise in Im provem ent in Portfolio Gross Rentals occupancy and rental $3.70 rates $3.69 ¾ Renewals signed at 17% above $3.65 preceding rents $3.64 ¾ Average gross rents about 3% higher 26 Apr - 30 Jun 2006 $3.60 3Q2006 than forecast 12
Slide 13: Favourable Lease Renewal Cycle
Favourable Lease Renewal Cycle Well balanced lease Lease Expiry as a Percentage of NLA @ 30 Sep 2006 expiry profile 45% 40.4% ¾ About 60% of net 40% lettable area due for 35% renewal from now 30% 22.4% 22.1% until 2009 25% 20% 14.6% ¾ Higher reversionary 15% rentals expected on 10% sustained deman
Slide 14: Broad Tenant Diversity
Broad Tenant Diversity Top 10 Tenants : 53% of NLA (73,108 sm ) @ 30 Sep 2006 International Enterprise Singapore 10.8% GE Pacific 10.1% Keppel Land Int'l 6.6% Sw an Trustees 5.9% J.V. Fitness 4.1% Prudential Assurance Co. S'pore 3.6% Singapore Business Federation 3.2% InterContinental Hotels Group (
Slide 15: Close to 100% Retention Rate
Close to 100% Retention Rate High tenant retention rate of 99.3%, reflecting good tenant relationships As at 30 Sep 2006 Area Renewed (sm) Tenant Retention Rate Prudential Tower (1) 2,219 100% Keppel Towers & GE Tower 4,314 97.9% Bugis Junction Towers 6,876 100% Overall Portfolio 13,409 99.3% (1)
Slide 16: Market Review and Outlook
K-REITaSla Market Review and Outlook
Slide 17: Growing Office Demand
Growing Office Demand Sustained high demand for Prim e Office Occupancy and Rentals prime office space pushed $7 100% up rentals significantly ¾ Average prime rents rose $6 95% further to $6.90 psf at end- Sep 2006, up 15% q-o-q (Source : CBRE) $5 90% ¾ Prime rents forecast to reach $7.30 psf by e
Slide 18: Supply Remains Tight
Supply Remains Tight No major new supply until Future Supply of Office Space completion of Marina Bay Mil sf 1.8 1.65 Financial Centre (Phase 1.6 1.53 1.4 One) in 2010 1.2 10-15 yr average annual take-up 1.0 ¾ Conversion and 0.8 ORQ : 100% pre-com m itted redevelopment to further 0.6 cut CBD offic
Slide 19: Going Forward
K-REITaSla Going Forward
Slide 20: Grow into a Pan-Asian Commercial REIT
Grow into a Pan-Asian Commercial REIT Identify and pursue good quality, well-located properties in Singapore and around the region Diversify risks across countries, riding on different market cycles Target Assets Under Management (AUM) of S$2 bln within the next few years 20
Slide 21: Thank You
K-REITaSla Thank You
Slide 22: Additional Slides
K-REITaSla Additional Slides
Slide 23: Snapshot of K-REIT Asia
Snapshot of K-REIT Asia Manager K-REIT Asia Management Limited Property Portfolio Four quality office buildings valued at $630.7m Listing and Trading Date 28 April 2006 on Singapore Stock Exchange (1) Market Capitalisation $482.0 million (as at 17 Oct 2006) Unit Price $2.00 (closing price on 17 Oct
Slide 24: Property Portfolio
Property Portfolio (1) Prudential Tower Keppel Towers GE Tower Bugis Junction Towers Total Lettable Area (sm) 10,074 40,044 22,990 Car Park Lots - 288 - Number of Tenants 14 66 13 - The McGraw-Hill - International Enterprise Companies, Inc. - GE Pacific Pte Ltd Singapore Principal Tenants - The Exec
Slide 25: Gross Revenue by Asset
Gross Revenue by Asset From 26 Apr to 30 Sep 2006 17.5% 35.2% (1) (2) Actual Forecast % Chg (3) Prudential Tower 2,578 2,120 21.6 Keppel Towers & GE Tower 6,985 6,363 9.8 Bugis Junction Towers 5,196 5,188 0.2 47.3% Total Property Income 14,759 13,671 8.0 Prudential Tow er Keppel Tow ers & GE Tow er
Slide 26: Net Property Income by Asset
Net Property Income by Asset 5,000 Forecast Actual From 26 Apr to 30 Sep 2006 (1) (2) 4,000 Actual Forecast % Chg (3) Prudential Tower 1,948 1,482 31.4 3,000 $'000 Keppel Towers & GE Tower 4,844 4,291 12.9 2,000 Bugis Junction Towers 3,808 3,777 0.8 Total Net Property Income 10,600 9,550 11.0 1,000
Slide 27: Balance Sheet Highlights
Balance Sheet Highlights As At (1) ($m) 30-Sep-06 30-Jun-06 30 Sep 05 Non-current Assets 630.7 630.7 630.7 Total Assets 643.7 641.4 635.2 Borrowings 189.0 188.8 189.3 Total Liabilities 201.8 200.8 196.6 Unitholders' Funds 441.9 440.6 438.6 Net Asset Value Per Unit $1.83 $1.83 $1.82 Adjusted NAV Per
Slide 28: Total Returns
Total Returns Total returns of 36.2% since listing (1) Total Returns, Distribution Yield and Unit Price $5 50% 40% $4 30% $3 20% 10% $2 0% $1 -10% $0 -20% 8-May-06 16-May-06 23-May-06 30-May-06 6-Jun-06 13-Jun-06 20-Jun-06 27-Jun-06 4-Jul-06 11-Jul-06 18-Jul-06 25-Jul-06 4-Oct-06 11-Oct-06 6-Sep-0
Slide 29: Comparable Returns
-20% -10% 0% 10% 20% 30% 40% 50% 5/2/2006 5/12/2006 5/22/2006 As at 17 Oct 2006 6/1/2006 Source : Bloomberg 6/11/2006 6/21/2006 K-REIT Asia 7/1/2006 7/11/2006 7/21/2006 % Returns 7/31/2006 STI Index 8/10/2006 8/20/2006 8/30/2006 9/9/2006 9/19/2006 SES Prop Index 9/29/2006 Comparable Returns 10/9/200
Slide 30: This release may contain statements which are subject to risks and uncertainties that could
This release may contain statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. You are cautioned not to place undue reliance on such statements, which are based in the current views of Management on future developments and