Keppel REIT · SGX:K71U
Keppel REIT — Non-Deal Roadshow (July 2019)
33 slides from Keppel REIT's roadshow presentation, Jul 22, 2019
Slide 1: Canada and US Non-Deal Roadshow
Canada and US Non-Deal Roadshow 22 - 24 July 2019
Slide 2: Outline
Outline • Key Highlights 3 • Market Review 5 • Portfolio Optimisation 10 • Proactive Capital Management 17 • Additional Information 22 IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of its future performance. Certain statements made in this presentation may not b
Slide 3: Pan-Asian REIT with Premium Office Portfolio
Pan-Asian REIT with Premium Office Portfolio $8.4b portfolio of 10 prime commercial assets in key business districts of Singapore, Australia and South Korea T Tower, Seoul 99.38% Interest 311 Spencer Street, (Completed on Melbourne 27 May 2019) South Korea Ocean Financial 50% Interest (Under develop
Slide 4: 1H 2019 Performance Updates
1H 2019 Performance Updates Key Highlights • 2Q 2019 distributable income (DI) of $47.3 million(1), • Completed acquisition of bringing 1H 2019 DI to $94.6 million(1). T Tower in Seoul CBD • 2Q 2019 Distribution per Unit (DPU) was • Continued with DPU-accretive 1.39 cents; 1H 2019 DPU amounted to 2.
Slide 5: Market Review
Market Review Singapore CBD Skyline 5
Slide 6: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents increased to $11.30 psf pm as average occupancy in core CBD rose to 95.8% in 2Q 2019 $ psf pm 95.7% 94.8% 95.8% 93.8% 94.8% 95.2% 95.8% $15 100% $12 $11.20 $10.80 $11.15 $11.30 80% $10.40 $9.10 $9.40 $9 60% $6 40% $3 20% $0 0% Dec-2014 Dec-2015
Slide 7: 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 2H 2019 9 Penang Road 381,000 2.1 1.9 1.8 Oxl
Slide 8: Australia Office Market
Australia Office Market AUD AUD 91.8% 91.3% 94.9% 96.0% 96.4% 89.6% 92.8% 92.1% 100% psm/year 89.0% 100% psm/year 88.4% 86.8% 86.0% Sydney CBD Brisbane CBD 1,200 1,200 1,032 1,039 80% 964 80% Prime Grade occupancy 799 Prime Grade occupancy 900 60% 900 60% 620 679 rose to 96.4% rose to 92.1% 600 40%
Slide 9: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy is expected to decline going into 2020, before rising in the subsequent years with the lack of new supply sm 400,000 85.4% 89.1% 87.5% 84.9% 86.6% 87.5% 90.0% 100% 82.7% 83.2% 81.9% 85.0% 80% 300,000 267,905 60% 200,000 122,718 40% 105,796 109,534 100,000
Slide 10: Portfolio Optimisation
Portfolio Optimisation T Tower, Seoul 10
Slide 11: 311 Spencer Street in Progress
311 Spencer Street in Progress ▪ Development of 311 Spencer Street is progressing in Melbourne ▪ The freehold Grade A office building will be fully leased to the Victoria Police for 30 years upon completion expected in 1H 2020 Average NPI Yield: 6.4%(1) Stable income stream: 30-year lease with fixed
Slide 12: Completed Acquisition in Seoul
Completed Acquisition in Seoul ▪ Acquired a 99.38%(1) interest in T Tower, a freehold Grade A office building in Seoul CBD ▪ Entry into Seoul which has a deep office market with favourable fundamentals ▪ The DPU-accretive acquisition with an initial NPI yield of 4.7% is part of ongoing portfolio opt
Slide 13: 1H 2019 Leasing Update
1H 2019 Leasing Update Leases Committed by Geography(3) Total Leases Committed 11.4% ~272,900 sf 88.6% (Attributable ~112,600 sf) Singapore Australia Leases Committed by Type(3) New leasing demand and expansions from: Technology, media and telecommunications 40.5% 39.6% Average signing rent for Bank
Slide 14: Proactive Leasing Strategy
Proactive Leasing Strategy ▪ Portfolio committed occupancy improved to 99.1% High Portfolio Committed Occupancy Overall (as at 30 Jun 2019) 99.1% Singapore Australia South Korea 98.9% 99.5% 100.0% 98.6% 99.6% 97.0% 100.0% 98.5% 100.0% 100.0% 100.0% 100.0% 99.1% Singapore’s core CBD Australia’s natio
Slide 15: Well-Spread Lease Expiry Profile
Well-Spread Lease Expiry Profile Based on committed attributable NLA ▪ Long overall portfolio WALE of 5.3 years (Singapore portfolio: 4.2 years, Australia portfolio: 9.4 years, South Korea portfolio: 2.5 years) 42.6% ▪ Top 10 tenants’ WALE was 7.5 years Expiring leases 21.7% Rent review leases 17.8%
Slide 16: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants Profile of Tenant Base 37.2% of NLA 34.8% of gross rent 354(1) tenants in total DBS 6.1% Government of GOWA 4.9% Banking, insurance and financial services 38.6% Western Australia Standard Chartered 4.2% Technology, media and telecommunications 11.9% Government
Slide 17: Proactive Capital Management
Proactive Capital Management Marina Bay Financial Centre, Singapore 17
Slide 18: Capital Management
Capital Management ▪ Completed refinancing of loans due in 2019 Managing interest rate exposure ▪ Issued $200.0 million of 5-year convertible bonds at coupon rate of 1.9% p.a. 8% (1) ▪ Obtained $505.0 million green secured loan facility Fixed-Rate Borrowings As at 30 Jun 2019 Floating-Rate (2) Borro
Slide 19: Capital Management (Cont'd)
Capital Management (Cont’d) ▪ Extended weighted average term to maturity from 3.3 years to 3.7 years Debt Maturity Profile Refinanced part of 2022 loans with (as at 30 Jun 2019) green secured loan facility Completed refinancing of 2019 loans 34% $200m Bank loans $75m $50m 7-year MTN at 3.15% 9% (Iss
Slide 20: Unit Buy-Back Programme
Unit Buy-Back Programme ▪ Buying back Units below NAV is accretive to Monthly Unit Buy-Back Volume Unitholders and is part of proactive capital (since initiation of programme until 2Q 2019) management strategy 13.56m ▪ Received Unitholders’ approval at the Annual General Meeting on 23 April 2019 to
Slide 21: Green and Sustainable Portfolio
Green and Sustainable Portfolio Commitment to Young Portfolio with Strong Emphasis on Environmental, Sustainability Occupancy and WALE Social and Governance (ESG) BCA Green Mark Platinum award Part of the iEdge SG ESG High portfolio committed occupancy for all Singapore assets; Transparency Index an
Slide 22: Additional Information
Additional Information David Malcolm Justice Centre, Perth 22
Slide 23: 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 24: Australia Office Market
Australia Office Market ▪ Improvement of national CBD office market occupancy from 91.4% as at end December 2018 to 91.7% as at end March 2019 ▪ Occupancy is expected to remain healthy on the back of stable leasing activity Source: JLL Research, 1Q 2019. 24
Slide 25: Seoul Office Market
Seoul Office Market 3 Key Business Districts in Seoul ▪ South Korea is Asia’s fourth largest economy(1) Central Business District (CBD): The traditional CBD, a well-established market ▪ Seoul had the fourth highest volume of commercial real estate investment globally in 2018(2) Gangnam Business Dist
Slide 26: Sustainability and Tenant Engagement
Sustainability and Tenant Engagement ▪ In conjunction with Earth Day: Earth Hour was observed at all of Keppel REIT’s properties in Singapore and Australia ▪ In support of World Water Day: Eco-roadshows were held in collaboration with Public Utilities Board to encourage water conservation at Ocean F
Slide 27: Financial Performance
Financial Performance 2Q 2019 2Q 2018 +/(-) 1H 2019 1H 2018 +/(-) Property Income $39.9 m(1) $51.7 m (22.7%) $79.9 m(1) $91.4 m (12.5%) Net Property Income (NPI) $31.1 m $43.2 m (28.1%) $62.4 m $74.4 m (16.2%) Less: Attributable to Non-controlling Interests ($4.2 m) -* Nm ($8.3 m) -* Nm NPI Attribut
Slide 28: Income Contribution
Income Contribution Breakdown by Geography 1H 2019 % 1H 2018 % (for 1H 2019) Ocean Financial Centre(1) 32,796 27.0 54,719 38.4 Marina Bay Financial Centre 42,373 34.9 41,394 29.0 One Raffles Quay 12,313 10.1 13,506 9.5 78.6% Bugis Junction Towers 8,003 6.6 7,959 5.6 8 Chifley Square 6,214 5.1 6,507
Slide 29: Balance Sheet
Balance Sheet As at 30 Jun 2019 As at 31 Mar 2019 +/(-) Deposited Property(1) $8,512 m $8,206 m +3.7% Total Assets $7,936 m $7,616 m +4.2% Borrowings(2) $3,267 m $2,930 m +11.5% Total Liabilities $2,684 m $2,321 m +15.6% Unitholders’ Funds $4,672 m $4,714 m (0.8%) Adjusted NAV per Unit(3) $1.36 $1.3
Slide 30: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Bugis Junction Towers Financial Centre(4) Attributable NLA 699,945 sf 1,024,370 sf 442,224 sf 248,853 sf Ownership 79.9% 33.3% 33.3% 100.0% BNP Paribas, DBS Bank, Deutsche Bank, Enterprise Singapore, ANZ, Principal t
Slide 31: 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 construction) Attributable NLA 104,070 sf 244,491 sf 224,693 sf 167,784 sf 358
Slide 32: 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 52.0% asset management platform 4.6% track record in this industry 43.4% 100% Management Act
Slide 33: Thank You
Thank You COU REIT 3