Keppel Ltd. · SGX:BN4
Keppel — Keppel REIT — Merger or Acquisition (April 2024)
17 slides from Keppel's merger presentation, Apr 1, 2024
Slide 1: Acquisition of 50% Interest in 255 George Street, Sydney, Australia
Acquisition of 50% Interest in 255 George Street Sydney, Australia 1 April 2024
Slide 2: Outline
Outline Constituent of: ▪ Transaction Overview 3 FTSE ST Large & FTSE4GOOD ▪ Investment Merits 7 Mid Cap Index Developed & FTSE4GOOD ASEAN 5 Index IMPORTANT NOTICE: This presentation should be read in conjunction with the announcement of Keppel REIT titled “Acquisition of A 50% Interest In An Office
Slide 3: Transaction Overview
Transaction Overview Core Sydney CBD Location • Located in the highly sought after Core Precinct of Sydney CBD which enjoys healthy office outlook that benefits from flight-to-quality • High prominence and visibility from George Street, one of the busiest roads in Sydney CBD • Highly accessible by m
Slide 4: 255 George Street, a freehold Grade A office building in Sydney CBD
255 George Street, a freehold Grade A office building located in the heart of Sydney CBD 4
Slide 5: A Future-Proof Asset with Extensive Enhancements Completed in 2022
A Future-Proof Asset with Extensive Enhancements Completed in 2022 Refurbished Office Floor Upgraded Lifts & Lift Lobby Brand New Lobby and Amenities Area End of Trip Facilities Wellness Studio Annexe for Collaboration 5
Slide 6: 255 George Street, Sydney
255 George Street, Sydney Address 255 George Street, Sydney, New South Wales Land Tenure Freehold Net Lettable Area (NLA) 38,996.8 sqm (Office: 38,805.0 sqm / Retail: 191.8 sqm) No. of Floors 29-level Grade A office tower Committed Occupancy1 93.0% WALE2 6.8 years Completion Date 1985 / Major refurb
Slide 7: Investment Merits
Investment Merits
Slide 8: Investment Merits
Investment Merits Strategically Located In Highly Sought After Core Precinct of Sydney CBD Prime Property that Enjoys Long WALE and High-Quality Tenants Stable Cash Flows Supported by Long WALE and Well-Spread Lease Expiries Enhance Portfolio Tenant Diversification Strengthen Portfolio Quality with
Slide 9: Strategically Located In Highly Sought After Core Precinct of Sydney CBD
Strategically Located In Highly Sought After Core Precinct of Sydney CBD • An iconic building located prominently along George Street, one of the busiest roads of Sydney CBD • Easily accessible by public transportation 1-min walk from Bridge Street Light Rail Station Circular Quay Railway Station 3-
Slide 10: Core Precinct is Best Performing Area Within Sydney CBD
Core Precinct is Best Performing Area Within Sydney CBD Sydney CBD Office Vacancy Rate By Precinct 1 ✓ Flight-to-quality and flight-to-prime locations are 22% driving office demand 20% ✓ Strong return to office trend observed in Sydney where physical attendance is at 75%2 of pre-Covid levels as more
Slide 11: Healthy Outlook on Sydney CBD Office Market
Healthy Outlook on Sydney CBD Office Market Sydney CBD Office Sydney CBD Prime Office Net Supply vs Net Absorption1 Gross Incentives and Net Face Rent 1 250,000 1,800 37.0% 200,000 1,600 33.0% Incentives (%) A$ psm 150,000 1,400 100,000 29.0% sqm 1,200 50,000 1,000 25.0% 0 2021 2022 2023 2024F 2025F
Slide 12: Prime Property with A Diversified Tenant Base and High-Quality Tenants
Prime Property with A Diversified Tenant Base and High-Quality Tenants Diversified Tenant Base1 Quality Tenants Others, 2.3% Accounting and consultancy Key tenants include: service, 3.7% • Australian Taxation Office Technology, media and Banking, telecommunications, 7.1% insurance and • Bank of Quee
Slide 13: Stable Cash Flows Supported by Long WALE and Well-Spread Lease Expiries
Stable Cash Flows Supported by Long WALE and Well-Spread Lease Expiries Long • The asset enjoys long WALE of 6.8 years1 WALE Lease Expiry Profile2 71.3% No significant lease expiries Well-Spread Lease Expiries 6.9% 8.6% 6.2% 5.1% 1.9% 2024 2025 2026 2027 2028 Beyond 2028 • Rent guarantee on existing
Slide 14: Enhance Portfolio Tenant Diversification
Enhance Portfolio Tenant Diversification Enhance tenant diversification, top 10 tenants: • Gross rental income contribution decreases from 32.7% 1 to 31.1%2 • NLA occupied decreases from 38.0% 1 to 36.1%2 Top 10 Tenants (By gross rental income) State of Victoria 6.3% 5.9% 4.8% DBS 4.6% 3.7% Govt of
Slide 15: Strengthen Portfolio Quality with an Addition of a Freehold Grade A Asset
Strengthen Portfolio Quality with an Addition of a Freehold Grade A Asset • Freehold assets increase to 36.4%1 of the portfolio from 33.2%2 • Portfolio continues to be Singapore centric with assets predominantly located in Asia Pacific’s key business districts Singapore, 79.1% Singapore, 76.5% Austr
Slide 16: Attractive Pricing and DPU Accretive
Attractive Pricing and DPU Accretive • Purchase consideration of A$363.8m, Accretive acquisition with first-year yield that exceeds 6.0% • Completion expected to take place within the next two quarters • Aggregate leverage post acquisition expected to increase to c.41%, if fully funded by debt • Con
Slide 17: Thank You
Thank You For more information, please visit: www.keppelreit.com Connect with us on: 17