Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Investor Presentation (June 2012)
42 slides from Keppel REIT's investor presentation, Jun 29, 2012
Slide 1: Investor Meeting Slides
Investor Meeting Slides 29 June 2012
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 About K-REIT Asia Update on Ocean Financial Centre Update on MBFC Phase I 1Q 2012 Highlights Financial Performance Capital Management Portfolio Analysis Market Review and Outlook Going Forward Additional Information 3 Definitively Keppel
Slide 4: About K-REIT Asia
About K-REIT Asia 4 Definitively Keppel
Slide 5: Singapore's Leading Office REIT
Singapore’s Leading Office REIT Overview Listed on the SGX-ST in April 2006 with a market cap of $2.6 bn(1) as at 25 June 2012. Quality portfolio of eight commercial Grade A office assets valued at approximately $6.3 bn and spanning 2.8m sf NLA as at 25 June 2012. High quality office property portfo
Slide 6: Property Portfolio
Property Portfolio Singapore Properties Ocean Financial Centre MBFC(1) Towers 1 and 2 Bugis Junction One Raffles Quay Prudential Tower (99.9% interest) and Marina Bay Link Mall Towers (33.3% interest) (92.8% interest) (33.3% interest) Australia Properties 275 George Street 77 King Street 8 Chifley S
Slide 7: Growth History
Growth History AUM: S$6.3 billion Property Portfolio: 92% in Singapore 2012 8% in Australia Increased interest in Ocean Financial Centre to 99.9% Obtained tax transparency Additional 12.39% interest for MBFC Phase 1 in Ocean Financial Centre Obtained tax transparency for MBFC Phase 1 via LLP structu
Slide 8: Update on Ocean Financial Centre
Update on Ocean Financial Centre 8 Definitively Keppel
Slide 9: Ocean Financial Centre
Ocean Financial Centre Key Property Details A 43-storey premium Grade A office development Description Office tower completed in April 2011 222-lot car park and retail podium expected to be completed by mid-2013 Ownership Interest1 Approximately 99.9% Net Lettable Area 887,423 sf (100% interest)
Slide 10: Update on Ocean Financial Centre
Update on Ocean Financial Centre Successfully converted interest in Ocean Financial Centre (OFC) into a Limited Liability Partnership (LLP) Unitholders benefit from tax transparent property income Steadily increased committed occupancy to 91% Leased an additional 98,000sf Committed Occupancy 6% 90.6
Slide 11: Acquisition of 12.39% in OFC
Acquisition of 12.39% in OFC Transaction Summary Ownership Interest Approximately 12.39% Net Lettable Area 109,952 sf. (12.39% interest) (NLA) Title Leasehold estate of 99 years expiring 13 December 2110 Acquisition Price $261.6 million or $2,380 psf $24.1 million or approximately $219 psf Rental Su
Slide 12: Acquisition Benefits
Acquisition Benefits Immediate DPU accretion Additional income from OFC is tax transparent Full management control of OFC Reduces average age of K-REIT Asia’s property portfolio from 5.1 years to 4.9 years Partial funding via placement increases free float from 22.8% to 24.6% Strengthens K-REIT Asia
Slide 13: Update on MBFC Phase 1
Update on MBFC Phase 1 13 Definitively Keppel
Slide 14: MBFC Phase 1 Obtains Tax Transparency
MBFC Phase 1 Obtains Tax Transparency Successfully converted holding structure of Marina Bay Financial Centre Phase 1 into a Limited Liability Partnership (LLP) Unitholders benefit from tax transparent property income Increased rental revenue potential 14 Definitively Keppel
Slide 15: 1Q 2012 Highlights
1Q 2012 Highlights 15 Definitively Keppel
Slide 16: 1Q 2012 Highlights
1Q 2012 Highlights Distribution per unit 97.9% y-o-y to 1.90 cents Distributable income 100.2% y-o-y to $48.5 million Net property income 90.8% y-o-y to $28.5 million Share of results of associates 82.6% y-o-y to $11.2 million All-in interest rate to 2.03% for 1Q 2012 from 2.35% for 4Q 201
Slide 17: Key Financial Indicators
Key Financial Indicators 1Q 2012 1Q 2011 Change Property Income $36.6m $18.7m 96.0% Net Property Income $28.5m $14.9m 90.8% Share of Results of Associates $11.2m $6.2m 82.6% Distributable Income to $48.5m $24.3m 100.2% Unitholders(1) Distribution Per Unit (DPU) 1.90 cents 0.96 cents(2) 97.9% Annuali
Slide 18: Quarterly Distribution Payment
Quarterly Distribution Payment Quarterly DPU distribution will take effect from 3Q 2012 More frequent income distributions to Unitholders Quarterly distributions will improve returns to investors taking into account the time value of money In line with objective to deliver stable and sustainable ret
Slide 19: 1Q 2012 Financial Performance
1Q 2012 Financial Performance 19 Definitively Keppel
Slide 20: 1Q 2012 Distributable Income doubled y-o-y to $48.5m
1Q 2012 Distributable Income doubled y-o-y to $48.5m 1Q 2012 1Q 2011 Change Property Income $36.6m $18.7m $17.9m 96.0% Net Property Income $28.5m $14.9m $13.6m 90.8% Share of Results of Associates $11.2m $6.2m $5.1m 82.6% Distributable Income to Unitholders(1) $48.5m $24.3m $24.3m 100.2% $48.5m $36.
Slide 21: 1Q 2012 DPU up 97.9% y-o-y to 1.90 cents
1Q 2012 DPU 97.9% y-o-y to 1.90 cents 1Q 2012 1Q 2011 Change Distribution Per Unit (DPU) - For the Period 1.90 cents 0.96 cents(1) 0.94 cents 97.9% - Annualised 7.64 cents 3.89 cents(1) 3.75 cents 96.4% Distribution Yield 7.9%(2) 3.0%(3) 4.9% 163.3% 7.64 cents 7.9% 3.89 cents 1Q 2011 1Q 2011 1Q 201
Slide 22: 1Q 2012 Distributable Income up 35.9% q-o-q
1Q 2012 Distributable Income 35.9% q-o-q 1Q 2012 4Q 2011 Change Property Income $36.6m $22.6m $14.0m 61.8% Net Property Income $28.5m $17.8m $10.8m 60.6% Share of Results of Associates $11.2m $12.0m -$0.8m -6.2% Distributable Income to Unitholders(1) $48.5m $35.7m $12.8m 35.9% $48.5m $36.6m $35.7m
Slide 23: 1Q 2012 DPU up 35.7% q-o-q
1Q 2012 DPU 35.7% q-o-q 1Q 2012 4Q 2011 Change Distribution Per Unit (DPU) - For the Period 1.90 cents 1.40 cents(1) 0.50 cents 35.7% - Annualised 7.64 cents 5.55 cents 2.09 cents 37.7% Distribution Yield 7.9%(2) 6.7%(3) 1.2% 17.9% 7.64 cents 7.9% 5.55 cents 6.7% 4Q 2011 1Q 2012 4Q 2011 1Q 2012 1.
Slide 24: Capital Management
Capital Management 24 Definitively Keppel
Slide 25: Healthy Financial Position
Healthy Financial Position As at 31 Mar 2012 As at 31 Dec 2011 Gross Borrowings(1) $2,523 m(4) $2,495 m(4) Aggregate Leverage 41.8% 41.6% Average All-in Interest Rate(2) 2.03% 2.35% Interest Coverage Ratio(3) 5.5 times 5.5 times Weighted Average Term to Expiry 2.9 years 3.1 years (1) Includes borrow
Slide 26: Balanced Debt Maturity Profile
Balanced Debt Maturity Profile Well-staggered debt expiry profile with average 2.9 years(1) term to expiry All-in interest cost of 2.03% achieved in 1Q 2012 Borrowings diversified across 12 lenders $' mn Debt Maturity Profile When the $535 million loans due for refinancing on $1,000 31 December 2012
Slide 27: 1Q 2012 Portfolio Analysis
1Q 2012 Portfolio Analysis 27 Definitively Keppel
Slide 28: Portfolio Occupancy Rate
Portfolio Occupancy Rate Healthy portfolio occupancy of 96.1% Singapore property portfolio occupancy of 96.3% is higher than core CBD occupancy of 90.7% 100% 100% 100% 98.1%(3) 98.7% 96.1% 90.6%(2) Singapore core CBD occupancy at 90.7%(1) 88.0% Bugis Junction One Raffles Prudential MBFC Phase 1 Ocea
Slide 29: Portfolio Lease Profile
Portfolio Lease Profile Well-balanced lease renewal and rent review profile Only 1.9% of portfolio NLA due for rent review and renewal for the rest of 2012 Portfolio Lease Profile (by NLA) 15.7% 10.0% 9.8% 8.9% 8.9% 7.4% 5.6% 4.3% 1.6% 0.3% 2012 2013 2014 2015 2016 Leases Expiring as a Percentage of
Slide 30: Stable Lease Portfolio
Stable Lease Portfolio Top ten tenants have long WALE of 7.9 years Weighted Average Lease Expiry (WALE) Top Ten Tenants WALE 7.9 Years Portfolio WALE 6.4 Years (1) Portfolio with Long-Term Leases by NLA Short-Term Leases 47% Long-Term Leases 53% (1) Long-term leases are those with lease terms to exp
Slide 31: Tenants diversified across various business sectors
Tenants diversified across various business sectors Retail (Exclude F&B and Telecommunications Services) Accounting & & multi-media 1.0% consultancy services 8.0% 1.8% Legal 6.8% F&B 1.1% 208(1) tenants from Energy & natural a diversified range of resources 9.3% business sectors Shipping & marine se
Slide 32: Blue-Chip Tenant Base
Blue-Chip Tenant Base Top ten tenants account for 44.4% of portfolio NLA Top Ten Tenants Australia and New Zealand Banking Group 7.2% Standard Chartered Bank 6.9% Telstra Corporation 6.1% Barclays Capital Service 4.6% Deutsche Bank Aktiengesellschaft 3.7% BNP Paribas 3.4% Drew & Napier 3.3% Ocean Fi
Slide 33: Staying Competitive
Staying Competitive Enhancement works at Bugis Junction Towers will complete in 1Q2013 Before After 33 Definitively Keppel
Slide 34: Staying Competitive
Staying Competitive Enhancement works at Prudential Tower will complete in 4Q2012 Before After 34 Definitively Keppel
Slide 35: Market Review and Outlook
Market Review and Outlook 35 Definitively Keppel
Slide 36: Singapore Office Market
Singapore Office Market Average Grade A office rental slips to $10.60psf per month due to new supply $15 95.2% 95.3% 100.0% 93.1% 93.3% 94.4% 93.1% 91.5% 91.2% 91.2% 91.9% 92.3% 91.2% 90.7% $12.30 $11.06 $11.00 80.0% $10.15 $10.30 $10.60 $10.60 $9.90 Average Rentals ($ psf pm) $10 $9.00 $8.80 $8.45
Slide 37: Economic and Office Markets Outlook
Economic and Office Markets Outlook Singapore Economy remains on track to achieve growth of between 1% to 3% in 2012 Positive leasing activity continues at new premium Grade A office buildings Occupiers maintain flight-to-quality in relocating to newer and better specified buildings Australia Occupa
Slide 38: Going Forward
Going Forward 38 Definitively Keppel
Slide 39: Strategic Direction
Strategic Direction Enhancing Assets Improving buildings' performance and efficiency Maintaining a balanced tenancy profile Attracting quality and creditworthy tenants Reinforcing relationships to retain good tenants Executing prudent lease strategies Maximising Performance Strengthening property ma
Slide 40: Additional Information
Additional Information 40 Definitively Keppel
Slide 41: Portfolio Information
Portfolio Information Singapore Portfolio Australia Portfolio Ocean Prudential 275 George 8 Chifley Bugis Junction MBFC Financial One Raffles 77 King Street Tower Street Square Towers Interest (2) Centre Quay Interest Property Interest Property Property Interest (6) Attributable 244,978 581,653 886,
Slide 42: 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 42 Definitively Keppel