Keppel REIT · SGX:K71U
Keppel REIT — FY2018 Earnings Presentation
27 slides from Keppel REIT's earnings presentation, Jan 21, 2019
Slide 1: Fourth Quarter & Full Year 2018 Financial Results
Fourth Quarter & Full Year 2018 Financial Results 21 January 2019
Slide 2: Outline
Outline Key Highlights 3 Financial Performance & Capital Management 4 Portfolio Review 9 Looking Ahead 18 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 informa
Slide 3: FY 2018: Key Highlights
FY 2018: Key Highlights ▪ Distributable Income $189.0 m(1) $ ▪ Distribution per Unit 5.56 cents ▪ Aggregate Leverage 36.3% ▪ All-in Interest Rate 2.81% p.a. ▪ Leases Committed 2,853,100 sf (Attributable area ~1,227,100 sf) ▪ Portfolio Committed Occupancy 98.4% ▪ Portfolio WALE 5.9 years ▪ Tenant Ret
Slide 4: Financial Performance & Capital Management
Financial Performance & Capital Management Marina Bay Financial Centre, Singapore 4
Slide 5: Financial Performance
Financial Performance 4Q 2018 4Q 2017 FY 2018 FY 2017 Property Income $37.8 m $44.4 m $165.9 m $164.5 m Net Property Income $30.5 m $36.2 m $133.2 m $131.2 m Share of Results of Associates $23.9 m $27.4 m $103.9 m $115.8 m and Joint Ventures Distribution to Unitholders $46.2 m(1) $48.2 m $189.0 m(1)
Slide 6: Income Contribution by Asset & Geography
Income Contribution Income Contribution* by Asset & Geography (for FY 2018) Marina Bay Financial Centre, 31.6% One Raffles Quay, 8.9% 81.3% Bugis Junction Towers, 6.7% 18.7% Singapore Australia David Malcolm Justice Centre, 5.3% Ocean Financial Centre, 8 Chifley Square, 34.1% 5.2% 275 George Street,
Slide 7: Balance Sheet
Balance Sheet As at As at 31 Dec 2018 31 Dec 2017 % of Assets Unencumbered Total Assets $7,784 m $7,604 m 83% Unencumbered (1) Borrowings $3,044 m $3,375 m Total Liabilities $2,449 m $2,689 m Unitholders’ $4,757 m $4,763 m Funds 17% Adjusted NAV Encumbered $1.39 $1.40 per Unit(2) (1) Included borrow
Slide 8: Capital Management
Capital Management ▪ Lowered aggregate leverage to 36.3% after loan 31 Dec 2018 repayment with part of divestment proceeds Interest Coverage Ratio 3.9x ▪ Received commitments to refinance certain loans All-in Interest Rate 2.81% p.a. due in 2019 Aggregate Leverage 36.3% ▪ Purchased and cancelled 28.
Slide 9: Portfolio Review
Portfolio Review 8 Chifley Square, Sydney 9
Slide 10: Unlocking Capital Gains
Unlocking Capital Gains ▪ Divested 20% stake in Ocean Financial Centre to Allianz ▪ Keppel REIT maintains controlling stake of 79.9% ▪ Unlocking capital gains while maintaining exposure to strengthening Singapore Grade A office market 20% of Ocean Financial Centre Sale Price(1) $537.3 m Purchase Pri
Slide 11: Progress in Australia
Progress in Australia ▪ 311 Spencer Street: 30-year lease to Development at the Victoria Police will commence in 311 Spencer Street, Melbourne 1H 2020 and contribute steady income ▪ 275 George Street: Initiatives carried out to enhance and rejuvenate asset ▪ 8 Exhibition Street: Initiatives to impro
Slide 12: Proactive Leasing Strategy
Proactive Leasing Strategy Leasing Updates for FY 2018 130 ~2,853,100 sf 98.4% Committed Leases Portfolio Committed Leases (Attributable ~1,227,100 sf) Occupancy Tenant Retention 83% ~5.9 years ~8.2 years & WALE Retention Rate Portfolio WALE Top 10 Tenants’ WALE Leases Committed in FY 2018 Breakdown
Slide 13: Proactive Leasing Strategy (Cont'd)
Proactive Leasing Strategy (Cont’d) ▪ Average signing rent for the Singapore office leases in FY 2018 was ~$11.10(1) psf pm, above Grade A core CBD market average of $10.26(2) psf pm ▪ New leasing demand and expansions mainly contributed by: 1) Banking and financial services sector 2) Government age
Slide 14: Proactive Leasing Strategy (Cont'd)
Proactive Leasing Strategy (Cont’d) ▪ Committed occupancies for the Singapore and Australia assets remain healthy and above market average ▪ The Manager will continue to strive for an optimal balance between achieving high occupancy levels and maximising returns from the assets High Portfolio Commit
Slide 15: Well-Spread Lease Expiry
Well-Spread Lease Expiry ▪ WALE for the portfolio and top 10 tenants remained long at approximately 5.9 years and 8.2 years respectively ▪ Of the leases expiring and due for review in 2019, majority of the Singapore office leases range between $9.10 and $12.00 psf pm Portfolio Lease Expiry Profile (
Slide 16: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants(1,2) Profile of Tenant Base(1,2) Occupies 40.1% of portfolio NLA Number of Tenants: 336(3) Contributes 37.8% of gross rental income DBS 6.6% Western Australian Govt 5.3% Standard Chartered 4.6% Ernst & Young 4.1% Enterprise Singapore 4.1% BNP Paribas 4.0% Banki
Slide 17: Portfolio Valuation
Portfolio Valuation 31 Dec 2017 31 Dec 2018 31 Dec 2018 Variance Cap Rate ($’m) ($’m) ($’psf) ($’m) Ocean Financial Centre 2,623.0 2,099.0(1) 2,994 (524.0) (1) 3.60% (79.9% interest) (1) Marina Bay Financial Centre Phase 1: 1,693.0 1,695.3 2,928 2.3 3.65% (33.3% interest) Tower 3: 1,300.3 1,297.0 2,
Slide 18: Looking Ahead
Looking Ahead Ocean Financial Centre, Singapore 18
Slide 19: Singapore Office Market
Singapore Office Market ▪ Continued improvement in average Grade A office rents through FY 2018, with average Grade A office rents increasing to $10.80 psf pm as occupancy in the core CBD rose to 94.8% in 4Q 2018 ▪ Office market outlook remains largely positive, supported by a tightening supply pipe
Slide 20: Australia Office Market
Australia Office Market ▪ Quarterly net absorption at its highest level in more than a decade ▪ National CBD office average occupancy rose to 90.9% ▪ Business conditions remain generally positive across Australia. However, global trade and geopolitical uncertainties could potentially impact future l
Slide 21: Additional Information
Additional Information 8 Exhibition Street, Melbourne 21
Slide 22: Portfolio Overview
Portfolio Overview Best-in-Class Assets Largest Portfolio of Assets Under Management in Strategic Locations Premium Office Assets 9 quality Premium Grade and Grade A assets 3.5 million sf in the business and financial districts S$8.1 billion(1) total attributable NLA(1) of Singapore and Australia(1)
Slide 23: Premium Grade A Office Portfolio
Premium Grade A Office Portfolio Singapore* 85% Ocean Financial Centre Marina Bay Financial Centre One Raffles Quay Bugis Junction Towers (79.9% interest) (33.3% interest) (33.3% interest) (100% interest) Australia* 15% 8 Chifley Square, 311 Spencer Street, 8 Exhibition Street, 275 George Street, Da
Slide 24: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre(3) One Raffles Quay Bugis Junction Towers Financial Centre(5) Attributable NLA 701,011 1,025,522 442,576 248,853 (sf) Ownership 79.9% 33.33% 33.33% 100.0% BNP Paribas, DBS Bank, UBS, Enterprise Singapore, Principal Drew & Napier, Sta
Slide 25: Portfolio Information: Australia
Portfolio Information: Australia David Malcolm 311 Spencer Street, 8 Chifley Square, 8 Exhibition Street, 275 George Street, Justice Centre, Melbourne Sydney Melbourne(3) Brisbane Perth (Under construction) Attributable NLA 104,070 245,651 224,693 167,784 358,683 (sf) Ownership 50.0% 50.0% 50.0% 50.
Slide 26: Keppel REIT Structure
Keppel REIT Structure Keppel Capital Keppel Land The REIT Manager can leverage The REIT Manager can leverage the scale and resources of a larger the Sponsor‘s expertise and Institutional and asset management platform track record in this industry Public Investors 100% 3.9% 43.5% 52.6% Management Act
Slide 27: Thank You
REIT Thank You