Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — H1 2007 Earnings Presentation
28 slides from Keppel REIT's earnings presentation, Jul 18, 2007
Slide 1: 1H2007 Financial Results
1H2007 FINANCIAL RESULTS (1 January to 30 June 2007) 18 July 2007 1
Slide 2: Contents
Contents Highlights Financial Results Portfolio Performance Market Review and Outlook Going Forward 2
Slide 3: Highlights
Highlights Financial Results (1 Jan to 30 Jun 2007) Distribution Per Unit (DPU) of 3.91 cents (7.88 cents annualised) 99.6% committed occupancy as at 30 June 2007, higher than Core CBD occupancy of 97.3% and Fringe CBD occupancy of 96.2% Total return of 16.0%(1) for 1H2007 and 183.2% since listing (
Slide 4: Financial Results
K-REI!ITasla Financial Results
Slide 5: Strong Performance
Strong Performance Distributable Income of $9.5m in 1H2007 outperforms 1H2006 by 36.8% 1H2007 1H2006 2Q2007 2Q2006 (1) (1) ($'000) Actual Pro forma % Chg Actual Pro forma % Chg Property Income 18,718 15,907 17.7 9,852 8,039 22.6 Property Expenses (4,973) (4,758) 4.5 (2,569) (2,456) 4.6 Net Property
Slide 6: DPU Climbs
DPU Climbs DPU of 3.91 cents for 1H2007 (annualised at 7.88 cents) DPU of 2.14 cents for 2Q2007 (annualised at 8.58 cents), up 20.9% from 1.77 cents for 1Q2007 1H2007 2Q2007 1Q2007 Actual Actual Actual % Chg Distribution Per Unit (DPU) 3.91 ¢ 2.14 ¢ 1.77 ¢ 20.9% (1) Annualised DPU 7.88 ¢ 8.58 ¢ 7.18
Slide 7: Balance Sheet Highlights
Balance Sheet Highlights As At ($m) 30-Jun-07 31-Mar-07 31-Dec-06 Non-current Assets (1) 677.0 677.0 677.0 Total Assets 696.5 690.6 694.9 Borrowings 189.2 189.1 189.0 Total Liabilities 202.8 202.2 202.5 Unitholders' Funds 493.6 488.4 492.4 Net Asset Value Per Unit $2.04 $2.02 $2.04 Adjusted NAV Per
Slide 8: Gross Revenue Breakdown
Gross Revenue Breakdown 17% Gross Revenue by Asset for 2Q2007 33% Prudential Tower Keppel Towers & GE Tower Bugis Junction Towers 50% 1H2007 1H2006 2Q2007 2Q2006 ($ '000) Actual Pro forma % Chg Actual Pro forma % Chg (1) Prudential Tower 3,286 2,663 23.4 1,654 1,370 20.7 Keppel Towers & GE Tower 8,9
Slide 9: Net Property Income Breakdown
Net Property Income Breakdown 16% Net Property Income by Asset for 2Q2007 34% Prudential Tower Keppel Towers & GE Tower Bugis Junction Towers 50% 1H2007 1H2006 2Q2007 2Q2006 ($ '000) Actual Pro forma % Chg Actual Pro forma % Chg (1) Prudential Tower 2,450 1,972 24.2 1,167 979 19.2 Keppel Towers & GE
Slide 10: Capital Management
Capital Management Fixed rate loans locked in to mitigate risk of interest rate hike 100% fixed for five years until May 2011 As At 30-Jun-07 31-Mar-07 31-Dec-06 Borrowings $190.1m $190.1m $190.1m (1) Gearing 27.3% 27.5% 27.4% (2) Interest Coverage Ratio 3.3 times 3.0 times 2.7 times All-in Interest
Slide 11: Portfolio Performance
K-REI!ITasla Portfolio Performance
Slide 12: Broad Tenant Diversity
Broad Tenant Diversity Top 10 Tenants : 51.4% of NLA (73,078 sm ) @ 30 Jun 2007 International Enterprise Singapore 10.8% GE Pacific 10.1% Keppel Land Int'l 6.7% J.V. Fitness 4.1% Seadrill Management 3.9% Prudential Assurance Co. S'pore 3.6% Intercontinental Hotels Group 3.4% Singapore Business Feder
Slide 13: Diverse Tenant Mix
Diverse Tenant Mix Wide tenant base A total of 95 tenants from various different industries Financial and business services Hospitality Government agencies Pharmaceuticals and healthcare IT services and consultancy Income diversification to reduce risk Top tenant by NLA contributes less than 15% of
Slide 14: Consistent Upward Trend in Rents
Consistent Upward Trend in Rents Average Portfolio Gross Rentals Rising $4.40 Average portfolio gross $4.28 rents continue to rise in $4.05 $4.20 2Q2007 $4.00 $3.80 $3.80 $3.71 $3.65 Potential for further $3.60 increase in new and $3.40 renewal rates $3.20 30 Jun 06 30 Sep 06 31 Dec 06 31-Mar-07 30-
Slide 15: Occupancy Surpasses Core CBD
Occupancy Surpasses Core CBD 99.7 100 99.4 99.6 100% 98.4 97.3 Committed occupancy of 95.5 96.4 96.8 99.6% as at 30 Jun 2007 95% 92.9 Ahead of Core CBD 90% occupancy of 97.3% and Fringe CBD occupancy of 85% 96.2% (Source : CBRE) 80% 30-Jun-06 30-Sep-06 31-Dec-06 31-Mar-07 30-Jun-07 K-REIT portfolio
Slide 16: Opportunity for Rental Growth
Opportunity for Rental Growth Lease Expiry as a Percentage of NLA @ 30 Jun 2007 K-REIT Asia positioned to 28.4% 29.6% 30% capitalise on rising rents 25.8% 25% About 70% of NLA due for 20% renewal from 2007 to 2010 14.5% 15% Higher reversionary rents 10% expected on sustained 5% demand 1.3% 0% 2007 2
Slide 17: Market Review and Outlook
K-REI!ITasla Market Review and Outlook
Slide 18: Strong Demand for Quality Space
Strong Demand for Quality Space Robust economy with advance GDP estimate of 8.2% in 2Q2007 Government’s current GDP estimate of 5 – 7% for 2007 expected to be revised upwards Continued demand for office space supports rents and occupancies 18
Slide 19: Office Rents Continue Uptrend
Office Rents Continue Uptrend Prim e Office Occupancy and Rentals $11 100% Office rents supported by $10 98% higher occupancies from $9 96% sustained demand $8 94% $7 Average prime rents up 92% $6 from $8.60 psf in 1Q2007 90% $5 to $10.50 psf in 2Q2007* $4 88% 30-Dec-05 31-Mar-06 30-Jun-06 30-Sep-06
Slide 20: Going Forward
K-REI!ITasla Going Forward
Slide 21: Forward Strategy
Forward Strategy Continue search for potential acquisitions that will value- add to the portfolio Achieve better returns for unitholders through proactive management and active leasing Identify possible asset enhancement initiatives through continuous evaluation of property portfolio to better meet
Slide 22: A Pan-Asian Commercial REIT
A Pan-Asian Commercial REIT Target Assets Under Management of $2 bn within the next few years Grow the portfolio by identifying and pursuing quality assets in Singapore and other Asian growth cities Ride on different market cycles to allow for diversification of risks across countries 22
Slide 23: Additional Information
K-REI!ITasla Additional Information
Slide 24: Total Return
Total Return Total return of 183.2% since listing (1) Total Returns, Distribution Yield and Unit Price $/% % 5 150 140 130 120 4 110 100 90 3 80 70 60 50 2 40 30 20 10 1 0 -10 -20 0 -30 11-Jul-06 25-Jul-06 13-Feb-07 15-Mar-07 29-Mar-07 1-Mar-07 16-May-06 30-May-06 13-Jun-06 27-Jun-06 16-Jan-07 30-Ja
Slide 25: Comparable Returns
Comparable Returns % Total Return 240% 220% 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% -20% 10/20/06 11/14/06 4/28/06 5/23/06 6/17/06 7/12/06 8/31/06 9/25/06 12/9/06 1/28/07 2/22/07 3/19/07 4/13/07 6/27/07 8/6/06 1/3/07 5/8/07 6/2/07 K-REIT Asia STI Index SES Prop Index Source : Bloomberg As a
Slide 26: Property Portfolio
Property Portfolio (1) Prudential Tower Keppel Towers GE Tower Bugis Junction Towers Total Lettable Area (sm) 10,074 40,014 22,990 Car Park Lots - 288 - Number of Tenants 14 69 12 McGraw-Hill Companies GE Pacific IE Singapore Principal Tenants The Executive Centre Seadrill Management J.V. Fitness KB
Slide 27: Snapshot of K-REIT Asia
Snapshot of K-REIT Asia Manager K-REIT Asia Management Limited Property Portfolio Four quality office buildings valued at $677 mil Listing and Trading Date 28 Apr 2006 on Singapore Stock Exchange (1) Market Capitalisation $702.8 million (as at 17 Jul 2007) Unit Price $2.90 (closing price on 17 Jul 2
Slide 28: Thank You
Thank You Important Notice The value of units in K-REIT Asia (“Units”) and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible l