Keppel REIT · SGX:K71U

Keppel REIT — H1 2006 Earnings Presentation

29 slides from Keppel REIT's earnings presentation, Jul 20, 2006

  1. Slide 1: Financial Results for the Period from 26 Apr to 30 Jun 2006

    Financial Results for the Period from 26 Apr to 30 Jun 2006 20 July 2006

  2. Slide 2: Content

    Content • Highlights • Financial Results • Portfolio Performance • Market Review and Outlook • Going Forward 2

  3. Slide 3: Highlights

    Highlights 1st Interim Results (26 Apr to 30 Jun 2006) Ø Distributable income of $2.8m exceeded forecast by 17.5% Ø DPU of 1.16 cts is 18% higher than forecast of 0.98 cts * Annualised DPU of 6.42 cts is higher than forecast of 5.43 cts Ø Net Property Income of $4.3m outperformed forecast by 9% Ø 5­

  4. Slide 4: Financial Results

    K-REITaSia Financial Results

  5. Slide 5: Distributable Income

    Distributable Income • Distributable income exceeded forecast by 17.5% Actual * Forecast ^ % Chg ($'000) ($'000) Property Income 5,990 5,710 4.9 Property Expenses (1,652) (1,721) (4.0) Net Property Income 4,338 3,989 8.7 Non­Property Expenses (2,284) (2,270) 0.6 Net Profit 2,054 1,719 19.5 Distribut

  6. Slide 6: Distribution to Unitholders

    Distribution to Unitholders • DPU up 18% from forecast of 0.98 cts to 1.16 cts ^ * Annualised DPU of 6.42 cts is higher than forecast of 5.43 cts ^^ Actual Forecast Chg Distribution Per Unit 1.16 cts 0.98 cts +18% Annualised Distribution Per Unit 6.42 cts 5.43 cts +18% # Distribution Yield 4.98% 4.2

  7. Slide 7: Net Property Income Breakdown

    Net Property Income Breakdown • Net Property Income of $4.3m outperformed forecast by 9% * 2,000 1,500 9% Forecast Actual 4% $'000 1,000 500 20% 0 Prudential Tower Keppel Towers & Bugis Junction Property GE Tower Towers * 9% is the overall increase in Net Property Income from Prudential Tower Proper

  8. Slide 8: Active Capital Management

    Active Capital Management • Secured 5­year fixed­rate term loans of $190.1m at an interest rate of about 3.9% per annum 30­Jun­06 30­Sep­05 Actual Pro Forma Borrowings ($m) 190.1 190.6 * Gearing (%) 29.6 30.0 ** Interest Coverage Ratio (times) 2.5 2.3 *** All­in Interest Rate (%) 4.06% 3.96% * Geari

  9. Slide 9: Portfolio Performance

    K-REITaSia Portfolio Performance

  10. Slide 10: Positive Occupancy and Rental Trends

    Positive Occupancy and Rental Trends • Committed occupancy rate of 98.4% at end­Jun 2006, higher than average occupancy of 92.9% for Core CBD (Source : CBRE) • Average rental rates on upward trend for next renewal cycle Overall Committed Occupancy on the Rise Average Rentals on Consistent Growth 100

  11. Slide 11: Rental Renewal Cycle Benefits Lease Expiry Profile

    Rental Renewal Cycle Benefits Lease Expiry Profile Expiry Leases as a Percentage of NLA 25% 23.5% 23.6% 20% 17.0% 15% 13.9% 10.8% 10% 6.1% 5% 3.5% 0% 2H2006 2007 2008 2009 2010 2011 2012 As at 30 June 2006 • Strong demand and tight supply will lead to higher rentals across the board 11

  12. Slide 12: Good Tenant Mix

    Good Tenant Mix Top 10 Tenants : 53% of Total NLA (73,322 sm) International Enterprise Singapore 10.8% GE Pacif ic Pte Ltd 10.1% Keppel Land International Ltd 6.6% Sw an Trustees Ltd 5.9% J.V. Fitness Pte Ltd 4.1% Prudential Assurance Company Singapore (Pte) Ltd 3.6% Singapore Business Federation 3.

  13. Slide 13: High Tenant Retention

    High Tenant Retention 1H2006 Area Renewed (sm) 7,922 * Tenant Retention Ratio 99% * Another 2,594 sm is available for renewal for 2H2006. 13

  14. Slide 14: Market Review and Outlook

    K-REITaSia Market Review and Outlook

  15. Slide 15: Sustainable Demand Growth

    Sustainable Demand Growth Million s f 92% 1.5 Ave Occupancy Annual Demand • Strong economic growth drives demand 90% Annual Supply 1.0 88% 0.5 * Average occupancy of 92.9% in CBD at 1H06 86% 0.0 84% * Average rentals up to $6 psf at 1H06 (0.5) 82% * Estimated take­up of >2 mil sf for 2006 80% (1.0)

  16. Slide 16: Limited Future Supply

    Limited Future Supply • Average new office Future Supply of Office Space supply of 0.7 mil sf per 1.8 mil sf 1.65 annum from 2006 to 2010 1.6 1.53 1.4 • Declining existing stock 1.2 10­15 yr average annual take­up due to conversion to 1 ORQ : Almost 100% pre­committed other use 0.8 * More than 800,0

  17. Slide 17: Going Forward

    K-REITaSia Going Forward 17

  18. Slide 18: Growth Strategy

    Growth Strategy • Target AUM of about S$2 bln within next few years • Identify and pursue prime properties for acquisition in Singapore and the region 18

  19. Slide 19: Geographical Focus

    Geographical Focus • Grow into a pan­Asian commercial Reit focusing on key growth cities in Asia • Diversify risks by cross­country exposure, riding on cycles and market conditions 19

  20. Slide 20: Leveraging KLL's Regional Network

    Leveraging KLL’s Regional Network • KLL’s representation in major Asian markets South Korea Myanmar Vietnam 20

  21. Slide 21: Active Asset Enhancement

    Active Asset Enhancement • Active leasing and asset enhancement of portfolio • Rentals optimization through pro­active marketing • Focus on increasing operational efficiency to lower costs • Potential addition of net lettable area • Selective upgrading of assets to enhance marketability 21

  22. Slide 22: Thank You

    K-REITaSia Thank You 22

  23. Slide 23: Additional Slides

    K-REITaSia Additional Slides

  24. Slide 24: Snapshot of K-REIT

    Snapshot of K­REIT Manager K­REIT Asia Management Limited Portfolio Four Quality Office Buildings Listing and Trading Date 28 Apr 2006 on Singapore Stock Exchange Market Capitalisation $310.3 million (as at 19 Jul 2006) * Gearing 29.6% (as at 30 Jun 2006) Unit Price $1.29 per unit (closing price on

  25. Slide 25: Property Portfolio

    Property Portfolio Prudential Tower Property * Keppel Towers GE Tower Bugis Junction Towers Total Lettable Area (sm) 10,076 40,083 22,990 Car Park Lots ­ 288 ­ Number of Tenants 12 65 12 ­ The McGraw­Hill ­ International Enterprise Companies, Inc. ­ GE Pacific Pte Ltd Singapore Principal Tenants ­ T

  26. Slide 26: Distributable Income

    Distributable Income • Distributable income almost doubled to $2.8m ^ Actual * Pro Forma % Chg ($'000) ($'000) Property Income 5,990 4,881 22.7 Property Expenses (1,652) (1,890) (12.6) Net Property Income 4,338 2,991 45.0 Non­Property Expenses (2,284) (2,246) 1.7 Net Profit 2,054 745 175.7 Distribut

  27. Slide 27: Balance Sheet

    Balance Sheet 30­Jun­06 30­Sep­05 * As at Actual ($'000) Pro Forma ($'000) Investment Properties 630,700 630,700 Cash & Cash Equivalents 9,366 4,457 Other Assets 1,348 3 Total Assets 641,414 635,160 Borrowings ^ 188,829 189,300 Other Liabilities 11,941 7,270 Total Liabilities 200,770 196,570 Unithol

  28. Slide 28: Office Rental Cycle in Asia

    Office Rental Cycle in Asia Jakarta GROWTH SLOWING RENTS FALLING Hong Kong 7 years or more Taipei 5 years Beijing Shanghai 3 years Singapore Bangkok Bangalore Tokyo Mumbai Kuala Lumpur Manila Chennai Delhi Seoul RENTS RISING DECLINE SLOWING 28 Source : JLL Singapore 1Q2006 report

  29. Slide 29: 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

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