Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — H1 2011 Earnings Presentation
35 slides from Keppel REIT's earnings presentation, Jul 18, 2011
Slide 1: First Half 2011 Financial Results
First Half 2011 Financial Results 18 July 2011 Building Strengths. Defining Distinction.
Slide 2: Important Notice
Important Notice The past performance of K-REIT Asia is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and assumptio
Slide 3: Contents
Contents 1H2011 Highlights Financial Performance Capital Management Portfolio Analysis Proposed Acquisition of a 50% Interest in 8 Chifley Square, Sydney, Australia Market Review and Outlook Going Forward Additional Information 3
Slide 4: 1H2011 Highlights
1H2011 Highlights 1H2011 Distribution per unit 25.3% y-o-y to 3.72 cents 1H2011 Distributable income 27.0% y-o-y to $50.5 million 2Q2011 Distribution per unit 17.7% y-o-y to 1.93 cents 2Q2011 Distributable income 19.7% y-o-y to $26.3 million Overall portfolio average occupancy improves to 97.9% from
Slide 5: 1H2011 Highlights
1H2011 Highlights Income-accretive forward purchase of a 50% interest in 8 Chifley Square, Sydney, Australia Maiden investment in a premium development project is expected to increase Distribution Per Unit by 1.1%(1) Stable income throughout development period with 5 years rental guarantee if the bu
Slide 6: 1H 2011 Distribution Per Unit
1H 2011 Distribution Per Unit Distribution Per Unit (“DPU”) 3.72 cents Distribution Period 1 January 2011 – 30 June 2011 Distribution Timetable Trading on “Ex” Basis Monday, 25 July 2011 Books Closure Date Wednesday, 27 July 2011 Distribution Payment Date Friday, 26 August 2011 6
Slide 7: Financial Performance
K-REIT Financial Performance
Slide 8: 1H2011 Distributable Income up 27.0% y-o-y to $50.5m
1H2011 Distributable Income 27.0% y-o-y to $50.5m 1H 2011 1H 2010 Change Property Income $36.7m $41.4m -$4.7m -11.4% Net Property Income $29.2m $32.3m -$3.0m -9.4% Share of Results of $14.5m $ 4.5m $10.0m 224.1% Associated Companies Distributable Income to Unitholders $50.5m $39.8m $10.7m 27.0% Dist
Slide 9: 2Q2011 Distributable Income up 19.7% y-o-y to $26.3m
2Q2011 Distributable Income 19.7% y-o-y to $26.3m 2Q 2011 2Q 2010 Change Property Income $18.1m $23.2m -$5.2m -22.2% Net Property Income $14.3m $18.4m -$4.1m -22.2% Share of Results of $8.3m $2.4m $6.0m 250.5% Associated Companies Distributable Income to Unitholders $26.3m $22.0m $4.3m 19.7% Distrib
Slide 10: 2Q2011 DPU up 7.8% q-o-q to 1.93 cents
2Q2011 DPU 7.8% q-o-q to 1.93 cents 2Q 2011 1Q 2011 Change Property Income $18.1m $18.7m -$0.6m -3.3% Net Property Income $14.3m $14.9m -$0.6m -4.3% Share of Results of $8.3m $6.2m $2.2m 35.5% Associated Companies Distributable Income to Unitholders $26.3m $24.3m $2.0m 8.4% Distribution Per Unit - F
Slide 11: Healthy Balance Sheet
Healthy Balance Sheet As at As at 30 Jun 2011 31 Mar 2011 Non-current Assets $3,174.1m $3,043.7m Total Assets $3,257.5m $3,112.1m Borrowings(1) $1,116.0m $1,002.6m Total Liabilities $1,209.9m $1,089.1m Unitholders’ Funds $2,047.6m $2,023.0m Net Asset Value (NAV) Per Unit $1.51 $1.49 Adjusted NAV Per
Slide 12: Capital Management
Capital Management 12
Slide 13: Healthy Financial Position
Healthy Financial Position As at 30 Jun 2011(4) As at 31 Mar 2011 Gross Borrowings(1) $1,419 m $1,306 m Aggregate Leverage 39.2% 37.4% Average All-in Interest Rate(2) 2.61% 2.74% Interest Coverage Ratio(3) 4.6 times 4.4 times Weighted Average Term to Expiry 4.0 years 3.9 years (1) Includes borrowing
Slide 14: Balance Debt Maturity Profile
Balance Debt Maturity Profile Approximately $3.0 billion of assets equivalent to 82% of AUM unencumbered Low exposure to interest rate risk with majority of debt hedged to fixed rates Well-staggered debt expiry profile with 4.0 years(1) term to expiry Borrowings comprise term loans and a revolving c
Slide 15: Portfolio Analysis
K-REIT Portfolio Analysis
Slide 16: Portfolio Occupancy Rate
Portfolio Occupancy Rate Healthy portfolio occupancy of 97.9% Singapore property portfolio occupancy of 98.6% is higher than core CBD occupancy of 94.6% Portfolio Occupancy 100.0% 100.0% 97.6% 100.0% 97.9% 97.4% 88.0% Singapore core CBD occupancy = at 94.6%(2) (1) Bugis Junction Towers One Raffles Q
Slide 17: Portfolio Lease Profile
Portfolio Lease Profile Well-balanced lease renewal and rent review profile Portfolio Lease Profile (by Net Lettable Area) 14.6% 12.6% 10.5% 7.5% 7.60% 7.40% 5.0% 4.5% 3.8% 0.0% 2011 2012 2013 2014 2015 Leases Expiring as a Percentage of Total Portfolio NLA Rent Reviews as a Percentage of Total Port
Slide 18: Stable Lease Portfolio
Stable Lease Portfolio Portfolio of long leases provides income stability Weighted Average Lease Expiry (WALE) Top Ten Tenants WALE 8.51 years Portfolio WALE 7.20 years Portfolio with Long-term Leases1 by NLA Short-term Long-term leases leases1 41.0% 59.0% 1. Long-term leases are those with lease te
Slide 19: Blue-Chip Tenant Base
Blue-Chip Tenant Base Top Ten Tenants account for 53.0% of portfolio NLA Top Ten Tenants Standard Chartered Bank 9.5% Telstra Corporation Limited 8.5% Barclays Capital Service Limited Singapore Branch 6.5% Deutsche Bank Aktiengesellschaft 5.1% I.E.Singapore 4.3% BHP Billiton Marketing Asia Pte Ltd 4
Slide 20: Tenants diversified across various business sectors
Tenants diversified across various business sectors Telecommunica Retail (Exclude tions & multi- F&B and Accounting & Legal 2.3% media Services) consultancy New leases signed in 2Q2011: F&B 9.6% 1.4% services 1.1% 2.6% Energy & Prudential Tower natural Savills (Singapore) resources 7.7% Profile Sear
Slide 21: Enhancement of MBFC Tower 1 Plaza complete
Enhancement of MBFC Tower 1 Plaza complete The Plaza in front of MBFC Tower 1 was officially opened on 1 July 2011 The area is tenanted by F&B tenants Akari Restaurant Boulevard Bayfront Brawn Steakhouse and Harry’s Bar After New oasis provides diners with an expansive view of the Marina Bay waterfr
Slide 22: Proposed acquisition of a 50% interest in 8 Chifley Square, Sydney
Proposed acquisition of a 50% interest in 8 Chifley Square, Sydney, Australia 22
Slide 23: Proposed Acquisition of a 50% interest in 8 Chifley Square, Sydney
Proposed Acquisition of a 50% interest in 8 Chifley Square, Sydney, Australia 1.1%(1) Pro forma DPU accretion FY2010 Tax efficient investment structure Quarterly income distribution throughout the development period Stable income and long-term potential for capital appreciation Located in the heart
Slide 24: Chifley Square - Location
8 Chifley Square - Location ST ST YOUNG LOFTUS Governor Philip Tower Royal STREET Governor Botanic Gardens Macquarie STREET Tower Aurora GEORGE Place Chifley Tower Macquarie 8 House Chifley Chifley State Chifley Square Plaza Library Square STREET STREET CASTLEREAGH ST ST ST MACQUARIE PITT Deutsche N
Slide 25: 8 Chifley Square
8 Chifley Square Key project details Building description 30-storey Premium grade office building Target interest 50.0% Purchase Between A$154.4m and A$169.8m(1) or consideration S$203.0m to S$223.3m(2) Grade Premium Grade Net lettable area Approximately 205,700 sf (19,106 sm) Parking Lots Estimated
Slide 26: Sydney Office Market
Sydney Office Market Sydney CBD office space Largest CBD office market in Australia with 4.8 million sqm of office space Grade D Premium 4.3% Grade Future supply is constrained with just over 13.9% 1.1 million sqm of new supply expected to be Grade C 13.3% completed over the next decade Australian e
Slide 27: Market Review and Outlook
K-REIT Market Review and Outlook
Slide 28: Singapore Office Market
Singapore Office Market Office rentals continue to strengthen $30 120% $25 96.2% 95.4% 95.2% 95.3% 94.4% 94.6% 100% 93.1% 91.5% 91.2% 91.2% 91.9% 93.3% Average Rentals ($ psf pm) Core CBD Occupancy (%) $20 $18.80 80% $15 $16.10 60% $9.90 $10.30 $10.60 $10 $9.00 40% $8.00 $8.45 $8.30 $8.60 $8.80 $5 $
Slide 29: Economic & Office Market Outlook
Economic & Office Market Outlook Singapore Singapore’s economy expanded 0.5% in 2Q2011 and the Government forecasts full year GDP growth to be around 5% to 7% for 2011 Office rentals and average occupancy rates continue to hold up despite significant amounts of new supply entering the market in 1H20
Slide 30: Going Forward
Going Forward 30
Slide 31: Key Thrusts
Key Thrusts Active Acquisition Prudent Capital Asset Growth Management Management Pursue opportunities Manage assets and cost Attract creditworthy tenants for acquisitions in structure more effectively to increase occupancy as Singapore and well as retain good existing pan-Asia Exercise prudent inte
Slide 32: Additional Information
Additional Information 32
Slide 33: Singapore's Leading Office REIT
Singapore’s Leading Office REIT Overview Listed on the SGX-ST in April 2006 with a market cap of $1.8bn(1) as at 30 June 2011. Quality portfolio of six commercial Grade A office assets valued at approximately $3.6bn and spanning 1.9m sf NLA as at 30 June 2011. High quality property portfolio with bl
Slide 34: Portfolio Information
Portfolio Information Bugis Junction Prudential Tower 77 King Street As at 30 Jun 2011 MBFC 1(2) One Raffles Quay 275 George Street Towers Property Office Tower Attributable NLA (sf) 246,238 581,472 445,120 223,722 224,686 148,033 Ownership 100% 33.3% 33.3% 92.8% 50.0% 100% Number of tenants 11 76 2
Slide 35: Thank you
Thank you Fax: 6835 7747 http://www.kreitasia.com For enquiries, please contact Ms Casiopia Low Investor Relations & Research Tel: 6433 7622 Email: casiopia.low@kreitasia.com 35