Keppel REIT · SGX:K71U
Keppel REIT — H1 2021 Earnings Presentation
30 slides from Keppel REIT's earnings presentation, Jul 27, 2021
Slide 1: Half Year 2021 Financial Results
Half Year 2021 Financial Results 27 July 2021
Slide 2: Outline and Important Notice
Outline Constituent of: ▪ 1H 2021 Key Highlights 3 ▪ Financial Results 4 FTSE ST Large & Mid Cap Index ▪ Portfolio Review 8 ▪ Market Update 19 ▪ Additional Information 24 FTSE EPRA Nareit Global Developed Index IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of it
Slide 3: 1H 2021 Key Highlights
1H 2021 Key Highlights 2.94 cents 96.7% 1H 2021 DPU(1) High portfolio committed occupancy as at 30 Jun 2021 Up 5.0% y-o-y; Comprises advanced distribution of 0.94 cents paid on 31 Mar 2021 and 2.00 cents to be paid on 27 Aug 2021 6.2 years $105.7m Long portfolio weighted average lease expiry (WALE)
Slide 4: Financial Results
Financial Results Pinnacle Office Park, Sydney 4
Slide 5: Financial Performance
Financial Performance Achieved year-on-year growth in distributable income for 1H 2021 due mainly to: ▪ Contributions from Victoria Police Centre, Pinnacle Office Park and Keppel Bay Tower, as well as higher one-off income ▪ Offset by the impact of lower portfolio occupancy Distributable Income ($m)
Slide 6: Balance Sheet
Balance Sheet As at 30 Jun 2021 As at 31 Dec 2020 +/(-) Deposited Property(1) $9,124m $8,386m +8.8% Total Assets $8,529m $7,764m +9.8% Borrowings(2) $3,553m $3,130m +13.5% Total Liabilities $2,987m $2,544m +17.4% Unitholders’ Funds $4,819m $4,498m +7.1% Adjusted NAV per Unit(3) $1.29 $1.29 - (1) Inc
Slide 7: Prudent Capital Management
Prudent Capital Management ▪ All-in interest rate reduced year-on-year to 1.97% p.a. from 2.48% p.a. ▪ Interest coverage ratio(1) improved year-on-year to 4.0x from 3.1x(2) ▪ Aggregate leverage remained healthy at 38.9%(3) after loans were drawn to partially fund the acquisition of Keppel Bay Tower
Slide 8: Portfolio Review
Portfolio Review Ocean Financial Centre, Singapore 8 Photo Credit: Central Narcotics Bureau
Slide 9: Continuing Portfolio Optimisation
Continuing Portfolio Optimisation Developments in 1H 2021: ▪ Portfolio optimisation strategy to enhance income ▪ Acquired Keppel Bay Tower, a Grade A resilience and deliver sustainable total return to Unitholders office building in the Keppel Bay waterfront precinct in HarbourFront on 18 May 2021 ▪
Slide 10: Unlocking Value with Divestment of Brisbane Asset
Unlocking Value with Divestment of Brisbane Asset ▪ Sale of 50% interest in 275 George Street is part of continuing portfolio optimisation and expected to complete in 3Q 2021 ▪ Before redeployment to strategic and higher yielding growth opportunities, the divestment proceeds will be used to repay de
Slide 11: Sustainable Pan-Asian Portfolio of Grade A Assets
Sustainable Pan-Asian Portfolio of Grade A Assets $8.7b portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 8 Chifley Square, 99.4% Interest Pinnacle Office Park, Sydney Occupancy: 100% Sydney South Korea
Slide 12: 1H 2021 Portfolio Update
1H 2021 Portfolio Update New leasing demand and expansions from: Banking, insurance and financial services 32.6% Manufacturing and distribution 29.5% Total Leases Committed Leases Committed Leases Committed Technology, media and telecommunications 20.3% by Geography(2) by Type(2) ~721,500 sf Energy,
Slide 13: 1H 2021 Portfolio Update (Cont'd)
1H 2021 Portfolio Update (Cont’d) ▪ Average signing rent for Singapore office leases(1) concluded in 1H 2021 was $10.73 psf pm ▪ Average expiring rents of Singapore office leases(2)(psf pm): $10.03 in 2021, $10.26 in 2022 and $10.90 in 2023 Lease Expiries and Rent Reviews 38.7% (Based on Committed A
Slide 14: Established and Diversified Tenant Base
Established and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant ▪ Top 10 tenants take up 40.2% of NLA base of 385(1) tenants, many of which are and contribute 35.6% of gross rent established blue-chip corporations Top 10 Tenants Tenant Business Sector State of Victoria 9.5% Banking, i
Slide 15: Portfolio Valuation
Portfolio Valuation ▪ Excluding Keppel Bay Tower, Singapore building valuations remained largely stable with a 0.9% decrease in Marina Bay Financial Centre Tower 3’s valuation due mainly to potential occupancy changes and lower rental assumptions Valuation based on Variance 31 Dec 2020 30 Jun 2021 3
Slide 16: Portfolio Valuation (Cont'd)
Portfolio Valuation (Cont’d) ▪ Valuation increase of 0.5-5.4% at certain Australian properties due mainly to cap rate compression ▪ Valuation of T Tower in Seoul increased 1.8% due to cap rate compression Local currency S$ Valuation based on Variance Variance 30 Jun 2021 Cap Rate Keppel REIT’s inter
Slide 17: Meeting Diverse Tenant Needs
Meeting Diverse Tenant Needs Robust portfolio of Grade A office properties that caters to tenants’ diverse business needs Quality Workplaces with Fitted/Flexible Strong ESG Focus Solutions Grade A office buildings that are well managed with Providing greater tenant flexibility sustainable and techno
Slide 18: Commitment to Sustainability
Commitment to Sustainability ▪ Supporting climate change agenda, adopting energy optimisation measures and use of renewable energy resources ESG Awards ▪ Strengthening sustainability-focused fundings with green loans ▪ BCA Green Mark Platinum award for representing approximately 31% of Keppel REIT’s
Slide 19: Market Update
Market Update One Raffles Quay, Singapore 19
Slide 20: Singapore Office Market
Singapore Office Market ▪ Average core CBD Grade A office rents increased slightly to $10.50 psf pm in 2Q 2021 while average occupancy in core CBD decreased to 92.1% Grade A Rent and Core CBD Occupancy Demand and Supply 2.1 1.9 1.7 1.3 95.8% 93.8% 94.8% 95.8% 93.8% 93.9% 0.8 0.8 0.9 1.0 $15 92.1% 10
Slide 21: Australia Office Market
Australia Office Market 94.9% 96.0% 95.2% 94.0% 97.0% 98.2% 91.3% 87.5% 87.5% 86.4% 100% 92.1% 86.2% 85.0% 100% 84.8% 1,200 1,032 1,045 1,200 964 80% 80% Sydney CBD 900 799 930 915 895 60% Melbourne CBD 900 60% 503 538 573 546 542 532 600 40% 600 448 40% Prime Grade occupancy 300 20% Prime Grade occ
Slide 22: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy increased to 87.8% in 2Q 2021 CBD Grade A Rent and Occupancy 200,000 100% 90.9% 85.3% 86.9% 86.9% 87.2% 87.8% 83.1% 160,000 80% 120,000 60% 95,169 97,572 98,508 98,406 91,845 92,325 91,656 80,000 40% 40,000 20% 0 0% 4Q16 4Q17 4Q18 4Q19 4Q20 1Q21 2Q21 CBD G
Slide 23: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Portfolio optimisation to improve yield, while maintaining exposure to Singapore CBD Portfolio • Hold quality assets across different markets for improved income stability Optimisation and to provide more long-term
Slide 24: Additional Information
Additional Information Keppel Bay Tower, Singapore 24
Slide 25: Distribution Timetable
Distribution Timetable ▪ The upcoming distribution to Unitholders of 2.00 cents per Unit is for the period from 1 Mar 2021 to 30 Jun 2021 ▪ This excludes the advanced distribution of 0.94 cents per Unit for the period from 1 Jan 2021 to 28 Feb 2021 that was paid to eligible Unitholders on 31 Mar 202
Slide 26: Attributable NPI by Property
Attributable NPI by Property 1H 2021 1H 2020 % % Breakdown of Attributable NPI $’000 $’000 by Geography Ocean Financial Centre 33,321 20.9 33,365 25.7 (For 1H 2021) Marina Bay Financial Centre 48,862 30.6 47,563 36.5 One Raffles Quay 18,386 11.5 18,378 14.1 64.9% Keppel Bay Tower(1) 3,079 1.9 - - 8
Slide 27: Portfolio Information: Singapore
Portfolio Information: Singapore As at Marina Bay Ocean Financial Centre One Raffles Quay Keppel Bay Tower 30 Jun 2021 Financial Centre(4) Attributable NLA 699,340 sf 1,023,448 sf 441,159 sf 386,600 sf Ownership 79.9% 33.3% 33.3% 100.0% BNP Paribas, DBS Bank, Deutsche Bank, Keppel Group, Principal A
Slide 28: Portfolio Information: Australia & South Korea
Portfolio Information: Australia & South Korea As at 8 Exhibition Victoria Police 275 George Street, David Malcolm 8 Chifley Square, Pinnacle Office Brisbane T Tower, 30 Jun 2021 Street(3), Centre, Justice Centre, Sydney Park, Sydney (pending divestment Seoul Melbourne Melbourne completion) Perth At
Slide 29: 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 53.7% 6.1% track record in this industry asset management platform 40.2% 100% Management Act
Slide 30: Thank You
Thank You For more information, please visit: www.keppelreit.com Connect with us on: Victoria Police Centre, Melbourne 30