Keppel REIT · SGX:K71U

Keppel REIT — K-REIT Asia — FY2006 Earnings Presentation

34 slides from Keppel REIT's earnings presentation, Jan 22, 2007

  1. Slide 1: FY2006 Financial Results

    FY2006 FINANCIAL RESULTS (26 April to 31 December 2006) 22 January 2007 1

  2. Slide 2: Contents

    Contents ƒ Highlights ƒ Financial Results ƒ Portfolio Performance ƒ Market Review and Outlook ƒ Going Forward 2

  3. Slide 3: Highlights

    Highlights Financial Results (26 Apr to 31 Dec 2006) ¾ Distribution Per Unit (DPU) of 4.63 cents (6.76 cents annualised) exceeds forecast by 24.5% ¾ 100% occupancy, higher than Core CBD occupancy of 96.4% and Fringe CBD occupancy of 93.1% ¾ Total return of 70.9% since listing (1) (1) Total return is

  4. Slide 4: Financial Results

    K-REITaSla Financial Results

  5. Slide 5: Outperformed: Distributable Income

    Outperformed: Distributable Income „ Distributable Income surpasses forecast by 23.9% to reach $11.2m 4Q2006 26 Apr to 31 Dec 2006 (1) ($'000) Actual Actual Forecast % Chg Property Income 9,102 23,861 21,632 10.3 Property Expenses (2,888) (7,047) (6,521) 8.1 Net Property Income 6,214 16,814 15,111 1

  6. Slide 6: Outperformed: DPU

    Outperformed: DPU „ DPU of 4.63 cents exceeds forecast by 24.5% ¾ Annualised DPU of 6.76 cents versus forecast of 5.43 cents (1) 4Q2006 From 26 Apr to 31 Dec 2006 Actual Actual Forecast (2) % Chg Distribution Per Unit (DPU) 1.76 ¢ 4.63 ¢ 3.72 ¢ 24.5% Annualised DPU 6.98 ¢ 6.76 ¢ 5.43 ¢ 24.5% Distrib

  7. Slide 7: Continual Growth in DPU

    Continual Growth in DPU „ Achieved higher distribution for FY2006 relative to forecast (1) DPU Consistently Outperform ed Forecast 6.76 ¢ 5.43 ¢ 4.63 ¢ 3.72 ¢ 2.87 ¢ 2.35 ¢ 1.16 ¢ 0.982 ¢ 26 Apr - 30 Jun 26 Apr - 30 Sep 26 Apr -31 Dec Annualised 2006 2006 2006 Actual Forecast 7 (1) Forecast DPU of 5

  8. Slide 8: Balance Sheet Highlights

    Balance Sheet Highlights As At (2) ($m) 31-Dec-06 30-Sep-06 30-Jun-06 30 Sep 05 Non-current Assets (1) 677.0 630.7 630.7 630.7 Total Assets 694.9 643.7 641.4 635.2 Borrowings 189.0 189.0 188.8 189.3 Total Liabilities 202.5 201.8 200.8 196.6 Unitholders' Funds 492.4 441.9 440.6 438.6 Net Asset Value

  9. Slide 9: Gross Revenue by Asset

    Gross Revenue by Asset From 26 Apr to 31 Dec 2006 17.5% (1) 34.8% Actual Forecast % Chg (2) Prudential Tower 4,187 3,354 24.8 Keppel Towers & GE Tower 11,364 10,069 12.9 Bugis Junction Towers 8,310 8,209 1.2 47.6% Total Property Income 23,861 21,632 10.3 Prudential Tow er Keppel Tow ers & GE Tow er

  10. Slide 10: Net Property Income by Asset

    Net Property Income by Asset $ '000 Forecast 8,000 From 26 Apr to 31 Dec 2006 Actual 7,000 (1) Actual Forecast % Chg 6,000 (2) Prudential Tower 3,166 2,345 35.0 5,000 4,000 Keppel Towers & GE Tower 7,824 6,791 15.2 3,000 Bugis Junction Towers 5,824 5,975 (2.5) 2,000 Total Net Property Income 16,814

  11. Slide 11: Capital Management

    Capital Management „ Fixed rate loans locked in to mitigate risk of interest rate hike ¾ 100% fixed for five years until May 2011 As At (1) 31-Dec-06 30-Sep-06 30-Jun-06 30 Sep 05 Borrowings $190.1m $190.1m $190.1m $190.6m Gearing (2) 27.4% 29.5% 29.6% 30.0% Interest Coverage Ratio (3) 2.7 times 2.7

  12. Slide 12: Portfolio Performance

    K-REITaSla Portfolio Performance

  13. Slide 13: Occupancy Hits 100%

    Occupancy Hits 100% 100% Com m itted Occupancy 99.7% 100.0% „ Committed occupancy hit 100% 98.4% 96.4% 100% at end-Dec 2006 95.5% 95% 92.9% ¾ Ahead of Core CBD 90% occupancy of 96.4% and Fringe CBD occupancy of 85% 93.1% (Source : CBRE) 80% 30-Jun-06 30-Sep-06 31-Dec-06 K-REIT portfolio Core CBD Occ

  14. Slide 14: Committed Occupancy on the Rise

    Committed Occupancy on the Rise 100% 99% 98% 97% 96% 95% 30-Jun-06 30-Sep-06 31-Dec-06 Keppel Tow ers & GE Tow er 98.2% 99.8% 100.0% Bugis Junction Tow ers 98.5% 99.4% 100.0% Prudential Tow er (1) 99.0% 100.0% 100.0% (1) Approximately 44% of strata area of the building 14

  15. Slide 15: Continued Rental Growth

    Continued Rental Growth Im provem ent in Average Portfolio Gross Rentals $3.85 „ Steady rise in average $3.80 $3.80 portfolio gross rentals $3.75 $3.71 $3.70 „ Potential for further $3.65 $3.65 increase in renewal rates $3.60 $3.55 30 Jun 06 30 Sep 06 31 Dec 06 15

  16. Slide 16: Favourable Lease Renewal Cycle

    Favourable Lease Renewal Cycle „ Lease expiry profile is well balanced Lease Expiry as a Percentage of NLA @ 31 Dec 2006 ¾ About 53% of net lettable area 25% 22.2% (NLA) due for renewal from 2007 to 2009, during which 19.4% new supply averages less than 20% 600,000 sf per annum 16.3% 14.6% 14.7% 15%

  17. Slide 17: Broad Tenant Diversity

    Broad Tenant Diversity Top 10 Tenants : 53% of NLA (73,108 sm ) @ 31 Dec 2006 International Enterprise Singapore 10.8% GE Pacific 10.1% Keppel Land Int'l 6.7% Sw an Trustees 5.9% J.V. Fitness 4.1% Prudential Assurance Co. S'pore 3.6% Singapore Business Federation 3.2% InterContinental Hotels Group (

  18. Slide 18: Broad Tenant Diversity

    Broad Tenant Diversity ƒ Wide tenant base ¾ A total of 95 tenants from various different industries ƒ Financial and business services ƒ Hospitality ƒ Government agencies ƒ Pharmaceuticals and healthcare ƒ IT services & consultancy ƒ Income diversification to reduce risk ¾ The top tenant by net letta

  19. Slide 19: Retention Rate Near 100%

    Retention Rate Near 100% „ High tenant retention rate of 99.5%, reflecting good tenant relationships As at 31 Dec 2006 Area Renewed (sm) Tenant Retention Rate Prudential Tower (1) 2,219 100% Keppel Towers & GE Tower 7,393 98.6% Bugis Junction Towers 6,876 100% Overall Portfolio 16,488 99.5% (1) Appr

  20. Slide 20: Market Review and Outlook

    K-REITaSla Market Review and Outlook

  21. Slide 21: Bright Economic Outlook

    Bright Economic Outlook „ 2006 Advance GDP growth estimate at 7.7% Real GDP Growth „ Strong growth in biomedical % 14 manufacturing, transport, 12 engineering and banking and 10 8 financial sectors 6 4 „ Government expects economy to 2 0 grow at healthy 4 – 6% in 2007 -2 * 1975 1976 1977 1978 1979 1

  22. Slide 22: Surging Office Demand

    Surging Office Demand Prim e Office Occupancy and Rentals „ High demand for prime office space $8 100% drove rentals significantly higher 98% ¾ Average prime rents reached $7.81 $7 psf at end-Dec 2006, up 50.2% y-o-y* 96% „ Estimated new office demand of 2.2 $6 94% mln sf for 2006* 92% $5 „ Strong o

  23. Slide 23: Supply Remains Tight

    Supply Remains Tight „ No substantial new supply until Marina Bay Financial Future Supply of Office Space 2.4 Centre (Phase I) comes on 2.2 2.0 1.94 stream in 2010 1.8 0.29 1.6 1.53 ¾ CBD office stock reduced by 1.4 0.21 10-15 yr ave rage annual tak e -up about 1.3 mln sf from 2007 1.2 1.0 1.00 onwa

  24. Slide 24: Limited Potential Supply

    Limited Potential Supply Year Development NFA (sf) 2006 One Raffles Quay 1,322,534 Parakou Building 64,000 55 Market Street - Addition 78,000 SIF Building 68,000 SUBTOTAL 1,532,534 2007 LKN Building Redevelopment 80,800 VisionCrest 139,940 Central 179,000 SUBTOTAL 399,740 2008 Selegie Road Developme

  25. Slide 25: Going Forward

    K-REITaSla Going Forward

  26. Slide 26: Growing Beyond

    Growing Beyond „ Proactive management and continuous active leasing to achieve better returns for unitholders „ Ongoing evaluation of property portfolio to identify value- adding asset enhancements to better meet the needs of tenants and grow asset value 26

  27. Slide 27: A Pan Asian Commercial REIT

    A Pan Asian Commercial REIT „ Grow the portfolio by identifying and pursuing quality assets in Singapore and other Asian growth cities. „ Able to ride on different market cycles to allow for diversification of risks across countries „ Target Assets Under Management of S$2 bln within the next few yea

  28. Slide 28: Additional Information

    K-REITaSla Additional Information

  29. Slide 29: Snapshot of K-REIT Asia

    Snapshot of K-REIT Asia Manager K-REIT Asia Management Limited Property Portfolio Four quality office buildings valued at $677.0m Listing and Trading Date 28 Apr 2006 on Singapore Stock Exchange (1) Market Capitalisation $625.8 million (as at 19 Jan 2007) Unit Price $2.59 (closing price on 19 Jan 20

  30. Slide 30: Property Portfolio

    Property Portfolio (1) Prudential Tower Keppel Towers GE Tower Bugis Junction Towers Total Lettable Area (sm) 10,074 40,044 22,990 Car Park Lots - 288 - Number of Tenants 14 68 13 GE Pacific Pte Ltd IE Singapore McGraw-Hill Companies, Inc. Swan Trustees Principal Tenants J.V. Fitness Pte Ltd The Exe

  31. Slide 31: Total Return

    Total Return „ Total return of 70.9% since listing (1) $/% Total Returns, Distribution Yield and Unit Price % 5 90 80 4 70 60 50 3 40 30 2 20 10 1 0 -10 0 -20 11-Jul-06 18-Jul-06 25-Jul-06 4-Jul-06 16-May-06 23-May-06 30-May-06 13-Jun-06 20-Jun-06 27-Jun-06 8-May-06 6-Jun-06 13-Sep-06 20-Sep-06 27-S

  32. Slide 32: Comparable Returns

    -20% 0% 20% 40% 60% 80% 100% 4/28/2006 5/5/2006 5/12/2006 5/19/2006 5/26/2006 As at 29 Dec 2006 6/2/2006 Source : Bloomberg K-REIT Asia 6/9/2006 6/16/2006 6/23/2006 6/30/2006 7/7/2006 7/14/2006 7/21/2006 7/28/2006 8/4/2006 STI Index 8/11/2006 8/18/2006 8/25/2006 9/1/2006 9/8/2006 % Total Return 9/15

  33. Slide 33: This release may contain statements which are subject to risks and uncertainties that could

    This release may contain statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. You are cautioned not to place undue reliance on such statements, which are based in the current views of Management on future developments and

  34. Slide 34: Thank You

    Thank You Important Notice The value of units in K-REIT Asia (“Units”) and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible l

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