Keppel REIT · SGX:K71U
Keppel REIT — Q1 2019 Earnings Presentation
28 slides from Keppel REIT's earnings presentation, Apr 17, 2019
Slide 1: First Quarter 2019 Financial Results
First Quarter 2019 Financial Results 17 April 2019
Slide 2: Outline
Outline • Key Highlights 3 • Financial Review 4 • Portfolio Update 11 • Looking Ahead 18 IMPORTANT NOTICE: The past performance of Keppel REIT is not necessarily indicative of its future performance. Certain statements made in this presentation may not be based on historical information or facts and
Slide 3: 1Q 2019 Key Highlights
1Q 2019 Key Highlights • Delivered distributable income (DI) of Portfolio Statistics (1) $47.3 million and distribution per Unit (DPU) of 1.39 cents High Committed Occupancy • Lowered aggregate leverage to 35.7% and 98.7% extended weighted average term to maturity to 3.3 years(2) Long Weighted Avera
Slide 4: Financial Review
Financial Review 8 Chifley Square, Sydney
Slide 5: Financial Performance
Financial Performance 1Q 2019 1Q 2018 +/(-) Property Income $40.0 m(1) $39.7 m +0.7% Net Property Income (NPI) $31.3 m $31.2 m +0.3% Less: Attributable to Non-controlling Interests ($4.1 m) -* NPI Attributable to Unitholders $27.2 m(2) $31.2 m (12.6%) Share of Results of Associates $26.4 m(3) $28.5
Slide 6: Income Contribution
Income Contribution Breakdown by Geography (for 1Q 2019) 1Q 2019 % 1Q 2018 % Ocean Financial Centre(1) 16,129 26.0 21,479 32.6 79.9% Marina Bay Financial Centre 22,266 35.9 21,074 32.0 One Raffles Quay 6,173 9.9 6,928 10.5 Bugis Junction Towers 4,997 8.1 3,735 5.7 8 Chifley Square 3,084 5.0 3,233 4.
Slide 7: Balance Sheet
Balance Sheet As at 31 Mar 2019 As at 31 Dec 2018 +/(-) Total Assets $7,616 m $7,784 m (2.2%) Borrowings(1) $2,930 m $3,044 m (3.7%) Total Liabilities $2,321 m $2,449 m (5.2%) Unitholders’ Funds $4,714 m $4,757 m (0.9%) Adjusted NAV per Unit(2) $1.37 $1.39 (1.4%) (1) Included borrowings accounted fo
Slide 8: Capital Management
Capital Management ▪ Received commitments to refinance the remaining loans due in 2019 Managing interest rate ▪ Extended weighted average term to maturity from 2.8 years(1) exposure to 3.3 years(2) 9% ▪ Lowered aggregate leverage from 36.3%(1) to 35.7% after repayment of loans through working capita
Slide 9: Convertible Bonds
Convertible Bonds ▪ Issued 5-year convertible bonds on 10 April 2019 at coupon rate of 1.9% to lower Debt Maturity Profile (as at 31 Mar 2019, assuming convertible bonds were issued in 1Q 2019) interest costs and diversify funding sources ▪ Financing option that brings estimated interest 31% savings
Slide 10: Unit Buy-Back Programme
Unit Buy-Back Programme Monthly Unit Buy-Back Volume (since initiation of programme) ▪ Buying back Units below NAV is accretive to Unitholders and is part of proactive capital 13.56m management strategy ▪ Purchased and cancelled 34.0 million issued Units since the initiation of Unit buy-back program
Slide 11: Portfolio Update
Portfolio Update Marina Bay Financial Centre, Singapore
Slide 12: 1Q 2019 Leasing Update
1Q 2019 Leasing Update Leases Committed by Geography(3) ~136,400 sf 0 100% (Attributable ~57,100 sf) Leases Committed Singapore Australia 69% Leases Committed by Type(3) Retention Rate Average signing rent for Singapore office leases (1) 49.9% 50.1% ~$12.03 psf 98.7% above Grade A core CBD market av
Slide 13: Leasing Update
Leasing Update ▪ New leasing demand and expansions mainly contributed by: 1) Technology, media and telecommunications sector 2) Banking and financial services sector 3) Energy sector New leases committed (in 1Q 2019) 44.1% 32.6% 22.3% 0.9% 0.1% Technology, media and Banking, insurance and Energy, na
Slide 14: Proactive Leasing Strategy
Proactive Leasing Strategy ▪ Committed occupancies remain healthy and above market average High Portfolio Committed Occupancy (as at 31 Mar 2019) Singapore Australia Overall 98.5% 99.4% 98.7% 98.6% 99.2% 96.1% 100.0% 99.3% 99.0% 100.0% 100.0% 98.7% Singapore’s core CBD Australia’s national CBD (1) a
Slide 15: Well-Spread Lease Expiry Profile
Well-Spread Lease Expiry Profile Based on committed attributable NLA ▪ Long overall portfolio WALE of 5.7 years (Singapore portfolio: 4.5 years, Australia portfolio: 9.6 years) ▪ Top 10 tenants’ WALE was 8.0 years 45.2% Expiring leases Rent review leases 16.8% 19.4% 8.1% 7.6% 7.7% 6.5% 4.4% 2.7% 0.4
Slide 16: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants Profile of Tenant Base 40.0% of NLA 36.6% of gross rent 338(1) tenants in total DBS 6.6% Government of Western 5.3% Australia Australia Banking, insurance and financial services 41.2% Standard Chartered 4.5% Government agency 11.4% Ernst & Young 4.1% Technology
Slide 17: Progress in Australia
Progress in Australia Development: 311 Spencer Street, Melbourne ▪ Construction of freehold Grade A office tower is ongoing in Melbourne ▪ Commencement of 30-year lease to the Victoria Police expected in 1H 2020 Development continues to Artist’s Impression progress 17
Slide 18: Looking Ahead
Looking Ahead Singapore CBD Skyline
Slide 19: Singapore Office Market
Singapore Office Market ▪ Continued growth in the Singapore office sector, with average Grade A office rents increasing to $11.15 psf as average occupancy in core CBD rose to 95.2% 95.2% 95.1% 95.9% 95.8% 95.6% 94.1% 92.5% 93.8% 94.1% 94.1% 94.6% 94.8% 95.2% 100% $14 $12 80% $10.45 $10.80 $11.15 $10
Slide 20: Singapore Office Market (Cont'd)
Singapore Office Market (Cont’d) ▪ Office market outlook remains positive, supported by limited supply which could further tighten in the medium term if older buildings are redeveloped in view of URA’s CBD incentive scheme Office Demand and Supply Key Upcoming Supply in CBD(2) sf Past average annual
Slide 21: Australia Office Market
Australia Office Market ▪ Healthy leasing activity and strong net absorption reported ▪ National CBD office market occupancy continued its upward trend from 90.9% as at end September 2018 to 91.4% as at end December 2018 ▪ Vacancy rates expected to remain low Brisbane CBD - Occupancy rose to 86.8% -
Slide 22: Additional Information
Additional Information David Malcolm Justice Centre, Perth
Slide 23: Young and Green Commercial Assets
Young and Green Commercial Assets Large Portfolio of Prime Assets in Commitment to Premium Office Assets Strategic Locations Sustainability Grade A assets located in prime $8.1 billion of 9 premium BCA Green Mark Platinum award for all business districts of Singapore and commercial assets with 3.5 m
Slide 24: Pan-Asia REIT with Premium Office Portfolio
Pan-Asia REIT with Premium Office Portfolio Ocean Financial Centre 311 Spencer Street, 79.9% Interest Melbourne 50% Interest (Under development) Marina Bay 8 Exhibition Street, Melbourne Singapore Financial Centre 33.3% Interest 50% Interest 275 George Street, Brisbane 50% Interest Australia 85.5% O
Slide 25: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Bugis Junction Towers Financial Centre(4) Attributable NLA 699,868 sf 1,024,611 sf 442,576 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 26: Portfolio Information: Australia
Portfolio Information: Australia 311 Spencer Street, 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm Melbourne Sydney Melbourne(3) Brisbane Justice Centre, Perth (Under construction) Attributable NLA 104,070 sf 244,491 sf 224,693 sf 167,784 sf 358,683 sf Ownership 50.0% 50.0%
Slide 27: 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 52.3% asset management platform 4.4% track record in this industry 43.3% 100% Management Act
Slide 28: Thank You
Thank You COU REIT 2