Keppel REIT · SGX:K71U
Keppel REIT — 3Q 2016 Earnings Presentation
39 slides from Keppel REIT's earnings presentation, Oct 18, 2016
Slide 1: 3Q 2016 Financial Results
3Q 2016 Financial Results 18 October 2016 1
Slide 2: Outline
Outline Key Highlights 5 Financial Highlights 7 Portfolio Analysis 12 Capital Management 24 Market Review & Outlook 27 Awards & Engagement Activities 30 Important Notice The value of Units and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by
Slide 3: Overview
Overview Best-in-Class Assets Largest Portfolio of Assets Under Well-Diversified Youngest in Strategic Locations Premium Office Assets Management Tenant Base Portfolio 11 office towers in 8 quality 307 tenants Premium Grade and Grade A assets in 3.3 million sf S$8.3 billion diversified across Approx
Slide 4: Premium Grade A Office Portfolio
Premium Grade A Office Portfolio ‒ 8 premium office assets with 11 office towers strategically located in the central business districts of Singapore, as well as key cities of Sydney, Melbourne, Brisbane and Perth in Australia Singapore 90% Ocean Financial Centre Marina Bay Financial Centre One Raff
Slide 5: Key Highlights
Key Highlights Marina Bay Financial Centre, Singapore 5
Slide 6: Key Highlights – 3Q 2016
Key Highlights – 3Q 2016 Financial Stable PI & NPI* 1.60 cents 5.8% DPU Annualised yield 100% leased for all properties 98% tenant retention rate achieved in Raffles Place and Marina Bay Overall Average portfolio Rent reversion of ~3% committed rent occupancy Portfolio YTD Sep 2016 $9.85 psf 99.5% E
Slide 7: Financial Highlights
Financial Highlights One Raffles Quay, Singapore 7
Slide 8: Creditable Performance
Creditable Performance ‒ Continued to perform creditably despite cyclical headwinds in the office market ‒ Excluding contribution from 77 King Street which was divested in 1Q 2016, PI and NPI were stable for 3Q 2016 ‒ Share of results of associates and joint ventures increased to $24.7m and $7.9m fo
Slide 9: Attractive Yield
Attractive Yield ‒ Keppel REIT continues to offer an attractive yield for Unitholders (1) Keppel REIT DPU Yield 5.8% (2) FTSE ST REIT Index Dividend Yield 5.6% (2) FTSE ST RE Index Dividend Yield 4.3% (2) STI Dividend Yield 3.9% CPF Ordinary Account 2.5% 10-year SG Govt Bond Yield 1.8% 5-year SG Gov
Slide 10: Resilient Balance Sheet
Resilient Balance Sheet As at 30 September 2016 As at 30 June 2016 Non-current Assets $7,164 mil $7,154 mil Total Assets $7,458 mil $7,442 mil 1 Borrowings $3,324 mil $3,320 mil Total Liabilities $2,635 mil $2,624 mil Unitholders’ Funds $4,670 mil $4,666 mil 2 Adjusted NAV Per Unit $1.41 $1.41 (1) T
Slide 11: 3Q 2016 Distribution Per Unit
3Q 2016 Distribution Per Unit Distribution Per Unit (DPU) Distribution Period 1.60 cents 1 July 2016 – 30 September 2016 Distribution Timetable Trading on “Ex” Basis Monday, 24 October 2016 Books Closure Date Wednesday, 26 October 2016 Distribution Payment Date Friday, 25 November 2016 11
Slide 12: Portfolio Analysis
Portfolio Analysis Ocean Financial Centre, Singapore 12
Slide 13: Proactive Leasing Efforts
Proactive Leasing efforts ‒ All of Keppel REIT’s properties in Raffles Place and Marina Bay (Ocean Financial Centre, Marina Bay Financial Centre Towers 1, 2 and 3 as well as One Raffles Quay North and South Towers) are 100% leased ‒ All leases expiring in 2016 completed ‒ Achieved 98% tenant retenti
Slide 14: Robust Leasing Activities
Robust Leasing Activities ‒ Concluded 39 leases or approximately 635,000 sf of prime office space in 3Q 2016 ‒ New tenants secured in 2016 were mainly from the banking, financial and insurance, legal, real estate and property services, TMT, government agency as well as energy, natural resources, shi
Slide 15: Singapore Office Demand and Supply
Singapore Office Demand and Supply ‒ Healthy take-up of office space in the upcoming supply ‒ Very limited new office supply in the CBD expected between 2019 and 2021 ‒ Average annual net demand of approximately 1.1 mil sf p.a. in the last 6 years 2.8 Marina One and DUO’s pre- 2.5 commitments of ~0.
Slide 16: Healthy Lease Expiry Profile
Healthy Lease Expiry Profile ‒ All leases expiring in 2016 completed ‒ Proactive forward renewal efforts brought down expiring leases to a minimal of approximately 5% for 2017 and 2018 respectively ‒ Average rents for leases due for renewal and review in 2017 and 2018 are at low $9s psf Portfolio Le
Slide 17: Strong Track Record of Above Market Rents
Strong Track Record of Above Market Rents ‒ Continued to command above-market rents for Singapore leases, achieving average committed rent of $9.85 psf for new, renewal and forward renewal leases for YTD Sep 2016, higher than CBRE’s average Grade A rent of $9.30 psf $16.00 $20.00 $18.00 $15.00 $16.0
Slide 18: Strong Singapore Portfolio Occupancy
Strong Singapore Portfolio Occupancy ‒ Keppel REIT’s Singapore portfolio occupancy was 99.5% compared to core CBD occupancy of 95.9% in 3Q 2016 • Consistently above core CBD occupancy levels since listing in 2006 100.0% 99.9% 99.8% 99.3% 99.3% 99.5% 99.0% 98.5% 97.0% 97.6% 95.0% 96.4% (1) 94.1% 95.7
Slide 19: High Committed Occupancy Levels
High Committed Occupancy Levels ‒ All properties in Raffles Place and Marina Bay are 100% leased ‒ Maintained almost full portfolio occupancy Singapore Australia Overall 99.5% 99.5% 99.5% 100.0% 100.0% 100.0% 99.7% 100.0% 100.0% 99.5% 98.8% 95.0% Singapore core CBD occupancy at 95.9%(1) (2) Australi
Slide 20: Long Weighted Average Lease Expiry
Long Weighted Average Lease Expiry ‒ WALE further extended to 8.5 years for top Weighted Average Lease Expiry (WALE) 10 tenants and 6.1 years for the overall portfolio, up from 8 years and 6 years respectively in 2Q 2016 Approx. 8.5 years Top Ten Tenants WALE (till year 2025) • Long leases in Singap
Slide 21: Well-Diversified Tenant Base
Well-Diversified Tenant Base ‒ Continue to maintain well-diversified tenant base from various business sectors Legal, 10% TMT, 10% Number of tenants Energy, natural (1) resources, shipping and 307 marine, 9% Banking, insurance & Government agency, 8% financial services, 45% Real estate & property se
Slide 22: Steady Appreciation of Current Portfolio
Steady Appreciation of Current Portfolio » Average fair value gain of approximately 30% for current portfolio, or an approximate 6.5% appreciation per annum to-date » Approximate 4.5 years portfolio holding period to-date Singapore Portfolio Australia Portfolio S$412m S$522m A$42m A$34m A$36m A$33m
Slide 23: Capturing Value for Unitholders
Capturing Value for Unitholders » As part of portfolio transformation, assets were divested at an average of approximately 50% above original purchase prices, and an approximate 13% premium to last appraised values, excluding income earned from these assets throughout holding period » Average holdin
Slide 24: Capital Management
Capital Management Bugis Junction Towers, Singapore 24
Slide 25: Prudent Capital Management
Prudent Capital Management ‒ Aggregate leverage remained stable at 39% as at 3Q Borrowings on Fixed-Rate 2016 ‒ Completed all refinancing requirements for 2016 and 74% 2017, with no refinancing requirements until 2H 2018 Fixed-Rate ‒ Weighted average term to maturity remained healthy at Borrowings 2
Slide 26: Well-staggered Debt Maturity Profile
Well-staggered Debt Maturity Profile ‒ Completed all refinancing requirements for 2016 and 2017, with weighted average term to maturity remained healthy at 3.7 years No refinancing requirements until 2H 2018 28% 22% 20% $100m 14% 16% $55m $925m $750m $562m $473m $464m 0% 0% $45m $50m 2016 2017 2018
Slide 27: Market Review & Outlook
Market Review & Outlook 8 Chifley Square, Sydney 27
Slide 28: Market Outlook – Singapore
Market Outlook – Singapore ‒ Advance estimates from the Ministry of Trade and Industry indicate the Singapore economy grew by 0.6% y-o-y in 3Q2016, lower than the 2% expansion in 2Q2016 ‒ MTI expects growth in 2016 to be muted and has narrowed its full-year GDP growth forecast to between 1% and 2% i
Slide 29: Market Outlook – Australia
Market Outlook – Australia ‒ The Australian economy maintained its growth momentum, achieving a 3.3% y-o-y growth in 2Q2016, mainly due to expansion in public sector investment and exports ‒ In August 2016, the RBA cut the official cash rate further from 1.75% to a historic low of 1.5% to further st
Slide 30: Awards & Engagement Activities
Awards & Engagement Activities David Malcolm Justice Centre, Perth 30
Slide 31: Lauded for Sustainability
Lauded for Sustainability ‒ Keppel REIT garnered top accolades at the internationally-recognised GRESB 2016 Retained pole position as the Regional Sector Leader for the Office Sector in Asia for three consecutive years Ranked 2nd globally across all 733 diversified entities and sectors as well a
Slide 32: Lauded for Sustainability
Lauded for Sustainability ‒ One Raffles Quay was conferred the highest BCA Green Mark Platinum Award by the Building and Construction Authority of Singapore, an improvement from its previous certification of BCA Green Mark Gold Award ‒ Together with Ocean Financial Centre, Marina Bay Financial Centr
Slide 33: Engagement Efforts
Engagement Efforts \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ ///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// 31 August 2016 : S-REITs Media Roundtable 8 September
Slide 34: Thank You
Thank You 8 Exhibition Street, Melbourne 34
Slide 35: Additional Information
Additional Information 275 George Street, Brisbane 35
Slide 36: Capturing Value. Sustaining Returns
Capturing Value. Sustaining Returns 36
Slide 37: Best-In-Class Assets in Strategic Locations
Best-In-Class Assets in Strategic Locations 37
Slide 38: Portfolio Information: Singapore
Portfolio Information: Singapore » Keppel REIT’s AUM is approximately $8.3 billion as at 30 September 2016 Ocean Financial Centre(2) Marina Bay Financial Centre (2) (4) One Raffles Quay(2) Bugis Junction Towers Comprises three premium Grade A A pair of 50 and 29 storey 43-storey premium Grade A Desc
Slide 39: Portfolio Information: Australia
Portfolio Information: Australia 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm Justice Centre, Sydney(3) Melbourne(4) Brisbane(3) Perth(3) 35-storey Grade A office 34-storey Grade A office 30-storey Grade A office 33-storey Grade A office tower Description tower and tower t