Keppel REIT · SGX:K71U
Keppel REIT — FY2023 Earnings Presentation
33 slides from Keppel REIT's earnings presentation, Jan 30, 2024
Slide 1: Second Half & Full Year 2023 Financial Results
Second Half & Full Year 2023 Financial Results 30 January 2024
Slide 2: Outline
Outline Constituent of: ▪ FY 2023 Key Highlights 3 ▪ Financial Results 4 FTSE ST Large & FTSE4GOOD ▪ Portfolio Review 8 Mid Cap Index Developed & FTSE4GOOD ASEAN 5 Index ▪ Market Review 21 ▪ Additional Information 26 FTSE EPRA Nareit Global Developed Index IMPORTANT NOTICE: The past performance of K
Slide 3: FY 2023 Key Highlights
FY 2023 Key Highlights Strong Operating Performance and Robust Balance Sheet Higher Net Property Income Healthy Aggregate Leverage Distribution to Unitholders $182.4m 38.9% $218.7m 3.7% higher than FY 2022 As at 31 Dec 2023 High Portfolio Occupancy All-in interest rate FY 2023 DPU 97.1% 2.89% p.a. 5
Slide 4: Financial Results
Financial Results Keppel Bay Tower, Singapore 4
Slide 5: Keppel REIT Achieves FY2023 Distribution to Unitholders of $218.7m on Higher NPI
Keppel REIT Achieves FY2023 Distribution to Unitholders of $218.7m on Higher NPI ▪ NPI for FY 2023 was 3.7% higher due mainly to higher rentals and occupancy for the Singapore properties. ▪ FY 2023 Distribution to Unitholders was 1.0% lower year-on-year at $218.7m, due mainly to increased borrowing
Slide 6: Robust Balance Sheet
Robust Balance Sheet As at 31 Dec 2023 As at 31 Dec 2022 +/(-) Deposited Property(1) $9,421m $9,395m +0.3% Total Assets $8,259m $8,881m -7% Borrowings(2) $3,664m $3,606m +1.6% Total Liabilities $2,508m $3,016m -16.8% Unitholders’ Funds $5,005m $5,119m -2.2% Adjusted NAV per Unit(3) $1.29 $1.34 -3.7%
Slide 7: Healthy Debt Profile
As at 31 Dec 2023 Healthy Debt Profile Interest Coverage Ratio(2) 3.4x Adjusted Interest Coverage Ratio(3) 3.0x ▪ Aggregate leverage at 38.9% with 75% of borrowings on fixed rates All-in Interest Rate 2.89% p.a. Aggregate Leverage 38.9% ▪ AUD, KRW and JPY denominated loans formed ~15%, Weighted Aver
Slide 8: Portfolio Review
Portfolio Review Ocean Financial Centre, Singapore 8 Photo Credit: Central Narcotics Bureau
Slide 9: Diversified Portfolio of Prime Commercial Assets in Asia Pacific
Diversified Portfolio of Prime Commercial Assets in Asia Pacific $9.2b portfolio of prime quality assets anchored across different markets enhance income stability and long-term growth opportunities T Tower, Seoul KR Ginza II, Tokyo 99.4% Interest South Korea Japan 98.5% Interest Occupancy: 95.8% 3.
Slide 10: FY 2023 Portfolio Performance
FY 2023 Portfolio Performance Leases Committed Leases Committed (1) (1) by Geography by Type As at 31 Dec 2023: Australia, New, 29.6% 52.5% Singapore, 57.3% South Korea, 97.1% 9.9% Renewal, Portfolio committed 47.5% Japan, occupancy 3.2% Total Leases Committed New leasing demand and expansions from:
Slide 11: Well-spread Lease Expiry Profile
Well-spread Lease Expiry Profile ▪ Average signing rent for Singapore office leases(1) concluded in FY 2023 was $12.41 psf pm, supported by healthy demand from diverse sectors for prime office space ▪ Average expiring rents of Singapore office leases(2) (psf pm): $11.19 in 2024, $11.13 in 2025 and $
Slide 12: Established and Diversified Tenant Base
Established and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant base of 459(1) ▪ Top 10 tenants take up 38.0% of NLA and contribute tenants, many of which are established blue-chip 32.7% of gross rent corporations Top 10 Tenants Tenant Business Sector % Banking, insurance and financia
Slide 13: Asset Enhancement Initiatives at One Raffles Quay: Arrival Experience
Asset Enhancement Initiatives at One Raffles Quay: Elevate Arrival Experience and Promote Collaboration and Networking Before After • Garden plaza, North Elevate arrival and South Tower experience at garden lobbies will be plaza enhanced to elevate arrival experience • New seating areas at North and
Slide 14: Asset Enhancement Initiatives at One Raffles Quay: Food & Beverage Offerings
Asset Enhancement Initiatives at One Raffles Quay: Expand Food & Beverage Offerings Before After • Food & beverage New F&B offerings at offerings will be North Tower expanded to enrich the building’s amenities and provide more dining options • Asset enhancement initiatives to commence in 1Q 2024 and
Slide 15: Completion of Refurbishment at Pinnacle Office Park Lobby
Completion of Refurbishment at Pinnacle Office Park Lobby • Refurbishment at Pinnacle Office Park (Building B) lobby was completed in Jan 2024 • Refreshed ground floor lobby, café area and lift lobby to elevate arrival and tenant experience • A convertible clubhouse lounge and meeting rooms were add
Slide 16: Singapore Portfolio Valuations (As at 31 December 2023)
Singapore Portfolio Valuations (As at 31 December 2023) Valuation based on Variance Cap Rate 30 Jun 2023 31 Dec 2023 31 Dec 2023 attributable interest (%) S$ % Ocean Financial Centre S$2,140.5m S$2,149.3m S$8.8m 0.4 S$3,082psf 3.40 (79.9% interest) Towers 1 & 2, and Marina Bay Financial S$1,793.0m S
Slide 17: Overseas Property Valuations (As at 31 December 2023)
Overseas Property Valuations (As at 31 December 2023) Valuation based on Local Currency (A$/KRW/JPY) Variance S$ Variance Cap Rate 31 Dec 2023 Keppel REIT’s interest 30 Jun 2023 31 Dec 2023 A$/KRW/JPY % 30 Jun 2023 31 Dec 2023 S$ % (%) 2 Blue Street(1, 2) A$20,235 A$295.0m A$287.0m A$(8.0m) (2.7) S$
Slide 18: ESG Activities in 4Q 2023
ESG Activities in 4Q 2023 As part of community As part of National Recycling engagement efforts, 158 Week in Australia, an activity was children from Care Corner hosted at David Malcolm Justice Singapore Ltd Student Care Centre to share with the office Centres were invited to attend a community on t
Slide 19: Advancing ESG Agenda
Advancing ESG Agenda Environmental Responsible People and Stewardship Business Community All Singapore assets have >5% reduction in Scope 1 and 2 100% of Keppel REIT’s achieved the WELL Health- emissions1 properties are certified2 Safety rating >2% reduction in energy usage1 64% sustainability-focus
Slide 20: Continued Focus on ESG Excellence to Attract Quality Tenants
Continued Focus on ESG Excellence to Attract Quality Tenants Sustainable and Future Ready ESG Benchmarks Portfolio • MSCI ESGwith ESG Rating maintained at ‘A’ Sustainability •Excellence ISS Governance Risk Rating maintained at lowest risk level of “1” and ESG Corporate Rating maintained at “Prime” s
Slide 21: Market Review
Market Review Marina Bay Financial Centre, Singapore 21
Slide 22: Singapore Office Market
Singapore Office Market ▪ Average core CBD Grade A office rents increased to $11.90 psf pm with average occupancy in core CBD at 94.8% in 4Q 2023 Grade A Rent and Core CBD Occupancy Demand and Supply (million sf) 2.1 1.9 1.7 1.3 1.0 95.8% 93.8% 94.8% 95.8% 93.8% 93.3% 94.7% 94.5% 94.8% 95.3% 94.8% 0
Slide 23: Australia Office Market
Australia Office Market 95.2% 1,500 94.9% 96.0% 87.5% 88.6% 85.3% 85.7% 85.1% 84.1% 84.1% 100% 92.1% 90.4% 89.9% 84.0% 83.0% 79.0% 100% Sydney CBD 1,200 80% 1200 75.5% 79.9% 75.8% 76.7% 80% 964 1,032 1,045 930 919 934 947 947 955 North Sydney 900 885 60% 900 729 670 686 684 684 693 60% 641 676 688 6
Slide 24: Seoul Office Market
Seoul Office Market ▪ CBD Grade A vacancy remains low with occupancy at 98.5% in 4Q 2023 CBD Grade A Rent and Occupancy 97.0% 98.5% 98.1% 96.6% 98.5% 200,000 90.7% 100% 86.6% 86.7% 89.2% 82.7% 160,000 80% 133,152 121,356 124,110 126,629 130,553 120,000 60% 97,572 98,926 91,845 92,325 91,656 80,000 4
Slide 25: Tokyo Office Market
Tokyo Office Market ▪ Occupancy continues to be high in 4Q 2023 for Grade A office in Tokyo central 5 wards at 95.4% and Grade B office occupancy at 96.3% Tokyo Central 5 Wards Grade A Rent and Occupancy Tokyo Central 5 Wards Grade B Rent and Occupancy 99.6% 99.8% 99.1% 99.0% 99.4% 98.7% 100.0% 98.1
Slide 26: Additional Information
Additional Information Keppel Bay Tower, Singapore 26
Slide 27: Attributable NPI by Property
Attributable NPI by Property FY 2023 FY 2022 % % $’000 $’000 Breakdown of Attributable NPI by Geography Ocean Financial Centre 73,601 21.4 67,127 21.2 (For FY 2023) Marina Bay Financial Centre 102,109 29.7 92,977 29.4 One Raffles Quay 44,090 12.8 39,587 12.5 Singapore, 71.7% Keppel Bay Tower(1) 27,2
Slide 28: Portfolio Information: Singapore
Portfolio Information: Singapore As at Marina Bay Financial Ocean Financial Centre One Raffles Quay Keppel Bay Tower 31 Dec 2023 Centre(4) Attributable NLA 697,434 sf 1,017,638 sf 441,690 sf 386,224 sf Ownership 79.9% 33.3% 33.3% 100.0% DBS Bank, BNP Paribas, TikTok, Keppel Group, Principal Standard
Slide 29: Portfolio Information: Australia, South Korea & Japan
Portfolio Information: Australia, South Korea & Japan As at 8 Chifley 8 Exhibition Victoria Police David Malcolm 2 Blue Street(3), Pinnacle Office T Tower, KR Ginza II, 31 Dec 2023 Square, Street(4), Centre, Justice Centre, Sydney Park, Sydney Seoul Tokyo Sydney Melbourne Melbourne Perth Attributabl
Slide 30: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Improve yield by enhancing Keppel REIT’s portfolio of quality assets through strategic acquisitions and divestments Portfolio • Provide income stability and long-term capital appreciation of portfolio, Optimisation
Slide 31: Well-Executed Portfolio Optimisation Strategy
Well-Executed Portfolio Optimisation Strategy Expanded footprint Expanded footprint to Japan: Expanded footprint to Australia: KR Ginza II (98.5%), 77 King Street (100%), Sydney, and to South Korea: T Tower (99.4%), Tokyo 275 George Street (50%), Brisbane Seoul Acquired Acquired - David three adjace
Slide 32: To Distribute an Additional $100m Over Five Years to Celebrate 20th Listing Anniversary
To Distribute an Additional $100m Over Five Years to Celebrate Keppel REIT’s 20th Listing Anniversary in 2026 • Accumulated capital gains through successful execution of portfolio optimisation since listing in 2006 • As announced on 25 October 2022, to celebrate Keppel REIT’s 20th anniversary in 202
Slide 33: Thank you
Thank you One Raffles Quay, Singapore 33