Keppel REIT · SGX:K71U
Keppel REIT — Q3 2019 Earnings Presentation
31 slides from Keppel REIT's earnings presentation, Oct 16, 2019
Slide 1: Third Quarter & Nine Months 2019 Financial Results
Third Quarter & Nine Months 2019 Financial Results 16 October 2019
Slide 2: Outline
Outline • Performance Highlights 3 • Financial Review 5 • Portfolio Optimisation 10 • Looking Ahead 19 • Additional Information 25 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 ba
Slide 3: Performance Highlights
Performance Highlights Financial Review ▪ 3Q 2019 distributable income was $47.5 million(1); 3Q 2019 DPU was up 2.9% year-on-year at 1.40 cents ▪ Continued with DPU-accretive Unit buy-back programme ▪ All-in interest rate down from 2.86% p.a. to 2.82% p.a. Topped out 311 Spencer Street in Melbourne
Slide 4: Portfolio Anchored by Singapore CBD Assets
Portfolio Anchored by Singapore CBD Assets $7.9 billion portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 311 Spencer Street, 99.38% Interest Melbourne South Korea 50% Interest Ocean Financial (Under dev
Slide 5: Financial Review
Financial Review Marina Bay Financial Centre, Singapore 5
Slide 6: Financial Performance
Financial Performance 3Q 2019 3Q 2018 +/(-) 9M 2019 9M 2018 +/(-) Property Income $42.4 m $36.7 m +15.6% $122.3 m $128.0 m (4.5%) (1) Net Property Income (NPI) $33.2 m $28.2 m +17.6% $95.5 m $102.6 m (6.9%) Less: Attributable to Non-controlling Interests ($4.2 m) -* Nm ($12.4 m) -* Nm NPI Attributab
Slide 7: Income Contribution
Income Contribution Breakdown by Geography 9M 2019 % 9M 2018 % (for 9M 2019) Ocean Financial Centre(1) 49,413 26.7 73,457 36.2 Marina Bay Financial Centre 63,833 34.6 61,364 30.2 One Raffles Quay 18,432 10.0 19,269 9.5 77.6% Bugis Junction Towers 11,596 6.3 11,951 5.9 8 Chifley Square 9,632 5.2 9,77
Slide 8: Balance Sheet
Balance Sheet As at 30 Sep 2019 As at 30 Jun 2019 +/(-) Deposited Property(1) $8,510 m $8,512 m (0.02%) Total Assets $7,926 m $7,936 m (0.1%) Borrowings(2) $3,311 m $3,267 m +1.3% Total Liabilities $2,720 m $2,684 m +1.3% Unitholders’ Funds $4,625 m $4,672 m (1.0%) Adjusted NAV per Unit(3) $1.35 $1.
Slide 9: Capital Management
Capital Management ▪ Continued with DPU-accretive Unit buy-back programme, As at 30 Sep 2019 purchasing and cancelling 13.6 million Units in 3Q 2019 Interest Coverage Ratio(1) 3.8x ▪ All-in interest rate declined for the second consecutive All-in Interest Rate 2.82% p.a. quarter to 2.82% p.a. Aggreg
Slide 10: Portfolio Optimisation
Portfolio Optimisation T Tower, Seoul 10
Slide 11: Unlocking Value: Divestment of Bugis Junction Towers
Unlocking Value: Divestment of Bugis Junction Towers ▪ Sale of strata ownership of Bugis Junction Towers for $547.5 million ($2,200 psf), which translates to a net property income yield of 3.0%(1) ▪ Realising capital gains of $378.1 million(2) as part of ongoing portfolio optimisation strategy ▪ Pos
Slide 12: Divestment Rationale
Divestment Rationale • Attractive asset-level returns of 19.4% p.a., driven by 1 $378.1 million(1) of capital gains ▪ Unlock value of capital appreciation while maintaining 2 exposure to Singapore CBD ▪ Improved financial flexibility for ongoing portfolio 3 optimisation: o Continue DPU-accretive Uni
Slide 13: Topping Out of 311 Spencer Street
Topping Out of 311 Spencer Street ▪ Development of 311 Spencer Street in Melbourne achieved an important milestone with the topping out and completion of the building structure ▪ The freehold Grade A office building will be internally fitted out over the coming months ▪ The 30-year lease to the Vict
Slide 14: 9M 2019 Leasing Update
9M 2019 Leasing Update Total Leases Committed Leases Committed by Geography(3) ~516,400 sf 9.0% (Attributable ~221,000 sf) 91.0% Retention Rate 78% Singapore Australia New leasing demand and expansions from: Leases Committed by Type(3) Technology, media and telecommunications 31.0% Real estate and p
Slide 15: Lease Expiry Profile and Expiring Rents
Lease Expiry Profile and Expiring Rents ▪ Average expiring rents(1) of Singapore office leases: $9.59 psf pm in 2020, $9.53 psf pm in 2021 and $10.00 psf pm in 2022 Geographical Breakdown of 52.0% Expiring & Rent Review Leases(2,3) 20.8% Singapore 23.2% 22.0% Australia 2.0% 1.4% 3.2% 11.9% 19.8% 3.0
Slide 16: Proactive Leasing Strategy
Proactive Leasing Strategy ▪ Healthy portfolio committed occupancy of 98.9% ▪ Long overall portfolio WALE of 5.1 years (Singapore portfolio: 4.2 years, Australia portfolio: 9.2 years, South Korea portfolio: 2.3 years); Top 10 tenants’ WALE was 7.2 years High Portfolio Committed Occupancy Overall (as
Slide 17: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants Profile of Tenant Base 37.2% of NLA 34.7% of gross rent 355(1) tenants in total DBS 6.1% Government of GOWA Western Australia 4.9% Banking, insurance and financial services 38.5% Standard Chartered 4.2% Technology, media and telecommunications 11.9% Government
Slide 18: Commitment to Sustainability
Commitment to Sustainability ▪ Attained the Green Star Status and was ranked 6th out of 19 listed office entities in Asia at the Global Real Estate Sustainability Benchmark (GRESB) 2019 ▪ Committed to continue engaging with tenants and have a positive impact on the community Supporting blood donatio
Slide 19: Looking Ahead
Looking Ahead Singapore CBD Skyline 19
Slide 20: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents increased to $11.45 psf pm as average occupancy in core CBD rose to 96.0% in 3Q 2019 95.7% 94.8% 95.8% 93.8% 94.8% 95.2% 95.8% 96.0% $15 100% $11.20 $10.80 $11.15 $11.30 $11.45 $12 $10.40 80% $9.10 $9.40 $9 60% $6 40% $3 20% $0 0% Dec-2014 Dec-2
Slide 21: Singapore Office Market (Cont'd)
Singapore Office Market (Cont’d) Office Demand and Supply Past average annual net demand(1): Key Upcoming Supply in CBD(2) sf 0.7 million sf Past average annual net supply(1): Forecast average annual supply(2): HD 139 84,000 1.0 million sf 0.9 million sf 4Q 2019 9 Penang Road 381,000 2.1 55 Market S
Slide 22: Australia Office Market
Australia Office Market ▪ National CBD office market occupancy was stable quarter-on-quarter at 91.7% as at end June 2019 96.0% 96.4% 95.9% 88.4% 86.8% 86.0% 89.6% 92.8% 92.1% 92.3% 100% Sydney CBD 91.8% 91.3% 94.9% 100% Brisbane CBD 89.0% 1,200 1,200 964 1,032 1,039 1,041 80% 80% Prime Grade occupa
Slide 23: Seoul Office Market
Seoul Office Market Occupancy Improvement Lack of New Supply After 2020 CBD Grade A occupancy improved from 82.5% as CBD Grade A occupancy is expected to decline at end March 2019 to 84.5% as at end June 2019 going into 2020, before rising in the subsequent years with the lack of new supply 200,000
Slide 24: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Ongoing 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 lo
Slide 25: Additional Information
Additional Information David Malcolm Justice Centre, Perth 25
Slide 26: Young and Green Commercial Assets
Young and Green Commercial Assets Large Portfolio of Strong Portfolio Commitment to Premium Office Assets Occupancy and WALE Sustainability High portfolio committed BCA Green Mark Platinum Approximately $8 billion of occupancy and long WALE award for all Singapore assets; Grade A commercial assets p
Slide 27: 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 Acquired Acquired 50% of Expanded footprint to with over Prudential 8 Chifley Financial in Perth and three retail units at 311 Spencer Street South Korea wit
Slide 28: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Bugis Junction Towers(7) Financial Centre(4) Attributable NLA 700,323 sf 1,024,988 sf 442,224 sf 248,853 sf Ownership 79.9% 33.3% 33.3% 100.0% BNP Paribas, DBS Bank, Deutsche Bank, Enterprise Singapore, Principal ten
Slide 29: Portfolio Information: Australia & South Korea
Portfolio Information: Australia & South Korea 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm 311 Spencer Street, T Tower, Sydney Melbourne(3) Brisbane Justice Centre, Perth Melbourne Seoul (Under development) Attributable NLA 104,070 sf 244,491 sf 244,542 sf 167,784 sf 358,
Slide 30: 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 51.7% asset management platform 4.8% track record in this industry 43.5% 100% Management Act
Slide 31: Thank You
Thank You COU REIT 31