Keppel REIT · SGX:K71U
Keppel REIT — Investor Presentation (March 2020)
34 slides from Keppel REIT's investor presentation, March 2020
Slide 1: Investor Presentation
Investor Presentation March 2020
Slide 2: Outline
Outline • Key Highlights 3 • Market Review 6 • Portfolio Optimisation 11 • Additional Information 26 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
Slide 3: Green and Sustainable Portfolio
Green and Sustainable Portfolio Large Portfolio of Strong Portfolio Commitment to Premium Office Assets Occupancy and WALE Sustainability High portfolio committed BCA Green Mark Platinum Approximately $8 billion of occupancy and long WALE award for all Singapore assets; Grade A commercial assets pro
Slide 4: Pan-Asian REIT with Premium Office Portfolio
Pan-Asian REIT with Premium Office Portfolio $7.9 billion portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 311 Spencer Street, 99.38% Interest Melbourne South Korea 50% Interest Ocean Financial (Under d
Slide 5: Performance Highlights
Performance Highlights Financial Review Portfolio Updates ▪ 4Q 2019 distributable income was $47.1 million(1); ▪ High portfolio committed occupancy of 99.1% 4Q 2019 DPU was up 2.9% y-o-y at 1.40 cents and long portfolio weighted average lease expiry (WALE) of 4.9 years ▪ FY 2019 distributable income
Slide 6: Market Review
Market Review Singapore CBD Skyline 6
Slide 7: Singapore Office Market
Singapore Office Market ▪ Average Grade A office rents increased to $11.55 psf pm. Average occupancy in core CBD decreased slightly to 95.8% in 4Q 2019 95.7% 94.8% 95.8% 93.8% 94.8% 95.2% 95.8% 96.0% 95.8% $15 100% $11.20 $11.15 $11.30 $11.45 $11.55 $12 $10.40 $10.80 80% $9.10 $9.40 $9 60% $6 40% $3
Slide 8: 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 0.8 million sf Past average annual net supply(1): Forecast average annual supply(2): HD 139 84,000 1.0 million sf 0.8 million sf 55 Market Street (AEI) 76,000 2020 30 Raffles
Slide 9: Australia Office Market
Australia Office Market ▪ National CBD office market occupancy rose slightly quarter-on-quarter from 91.7% as at end June 2019 to 91.9% as at end September 2019 96.4% Brisbane CBD 88.4% 86.8% 86.0% 89.6% 92.8% 92.1%92.3% 93.2% 100% Sydney CBD 91.8% 91.3% 94.9% 96.0% 95.9% 95.2% 100% 89.0% 1,200 1,20
Slide 10: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy improved from 84.5% as at end June 2019 to 85.1% as at end September 2019 Occupancy Improvement Lack of New Supply After 2020 200,000 89.1% 100% 91.1% 93.7% 87.5% 84.9% 86.5% 82.7% 82.5% 84.5% 85.1% 85.4% 89.1% 87.5% 84.9% 86.6% 82.7% 87.6% 86.7% 88.5% 100
Slide 11: Portfolio Optimisation
Portfolio Optimisation T Tower, Seoul 11
Slide 12: Active Portfolio Optimisation
Active Portfolio Optimisation ▪ Portfolio optimisation in FY 2019 to improve yield and create long-term value for Unitholders ▪ Holding quality assets across different markets improves income diversification and growth opportunities in the long term Portfolio Optimisation in FY 2019 May 2019: Acquis
Slide 13: Acquisition in Seoul CBD
Acquisition in Seoul CBD ▪ Acquisition of T Tower, a freehold Grade A office building in Seoul CBD, complements Keppel REIT’s Singapore-centric portfolio ▪ The DPU-accretive acquisition with an initial NPI yield of 4.7% is part of portfolio optimisation efforts T Tower in Seoul CBD T Tower Building
Slide 14: Unlocking Value from Bugis Junction Towers
Unlocking Value from Bugis Junction Towers ▪ Sale of strata ownership of Bugis Junction Towers for $547.7 million(1) ($2,200 psf), which translates to a net property income yield of 3.0%(2) ▪ Realised approximately $378.4 million(3) of capital gains while maintaining exposure to Singapore CBD ▪ Prov
Slide 15: Major Lease Commencements Expected in 2Q 2020
Major Lease Commencements Expected in 2Q 2020 Marina Bay Financial Centre in Singapore: 311 Spencer Street in Melbourne: Fit-out work ongoing for HSBC Singapore’s 30-year lease to the Victoria Police is new headquarters before its 10-year lease expected to commence upon starts in May 2020 completion
Slide 16: FY 2019 Leasing Update
FY 2019 Leasing Update Total Leases Committed Leases Committed by Geography(3) ~831,200 sf 6.4% (Attributable ~343,500 sf) 93.6% Retention Rate 75% Singapore Australia Leases Committed by Type(3) New leasing demand and expansions from: Technology, media and telecommunications 38.0% Real estate and p
Slide 17: Lease Expiry Profile and Expiring Rents
Lease Expiry Profile and Expiring Rents ▪ Average expiring rents(1) of Singapore office leases (psf pm): $9.69 in 2020, $9.74 in 2021 and $10.20 in 2022 ▪ Majority of the Singapore office leases expiring and due for review in 2020 range between $9.30 and $11.70 psf pm 37.3% Geographical Breakdown of
Slide 18: Proactive Leasing Strategy
Proactive Leasing Strategy ▪ High portfolio committed occupancy of 99.1% ▪ Long overall portfolio WALE of 4.9 years (Singapore portfolio: 3.8 years, Australia portfolio: 9.0 years, South Korea portfolio: 1.9 years); Top 10 tenants’ WALE was 7.0 years High Portfolio Committed Occupancy Overall (as at
Slide 19: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants Profile of Tenant Base 37.8% of NLA 34.4% of gross rent 340(1) tenants in total DBS 6.6% Government of GOWA 5.3% Western Australia Banking, insurance and financial services 40.0% Standard Chartered 4.3% Technology, media and telecommunications 12.8% Legal 8.9%
Slide 20: Portfolio Valuation
Portfolio Valuation Valuation based on 31 Dec 2019 31 Dec 2018 31 Dec 2019 +/(-) Cap Rate Keppel REIT’s interest (psf) Ocean Financial Centre (79.9% interest) $2,099.0 m $2,099.8 m $0.8 m $2,998 3.50% Towers 1 & 2, and Marina Bay Financial Centre $1,695.3 m - $2,928 3.63%(3) MBLM(2): $1,695.3 m (MBF
Slide 21: Portfolio Valuation (Cont'd)
Portfolio Valuation (Cont’d) Valuation based on Local currency S$ 31 Dec 2019 Cap Rate Keppel REIT’s interest 31 Dec 2018 31 Dec 2019 +/(-) 31 Dec 2018 31 Dec 2019 +/(-) 8 Chifley Square(1) A$24,827 A$247.5 m A$240.0 m (A$7.5 m) S$249.3 m S$222.2 m (S$27.1 m) 4.75% (50% interest) psm 8 Exhibition St
Slide 22: Commitment to Sustainability
Commitment to Sustainability ▪ Remains part of two key iEdge SG ESG Indices – the iEdge SG ESG Transparency Index and the iEdge SG ESG Leaders Index ▪ Attained Prime status in ISS-oekom’s ESG corporate rating and the Green Star Status at the Global Real Estate Sustainability Benchmark (GRESB) 2019 ▪
Slide 23: Proactive Capital Management
Proactive Capital Management ▪ Lowered aggregate leverage to 35.8% and reduced As at 31 Dec 2019 all-in interest rate to 2.77% p.a. as at end 2019 Interest Coverage Ratio(1) 3.8x ▪ Increased sustainability-focused funding with two green All-in Interest Rate 2.77% p.a. loan facilities obtained in FY
Slide 24: Unit Buy-Back Programme
Unit Buy-Back Programme ▪ Executed DPU-accretive Unit buy-back programme as part of proactive capital management strategy Monthly Unit Buy-Back Volume Total Units Purchased and (since initiation of programme until 4Q 2019) Cancelled 23.55m In 4Q 2019 37.9m 13.56m In FY 2019 67.1m 10.02m 7.85m 5.80m
Slide 25: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Portfolio optimisation to improve yield, while maintaining exposure to Singapore CBD Portfolio • Hold quality assets across different markets for improved income stability and Optimisation to provide more long-term
Slide 26: Additional Information
Additional Information David Malcolm Justice Centre, Perth 26
Slide 27: 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 28: Financial Performance
Financial Performance 4Q 2019 4Q 2018 +/(-) FY 2019 FY 2018 +/(-) Property Income $41.7 m $37.8 m +10.4% $164.1 m $165.9 m (1.1%) Net Property Income (NPI) $33.4 m $30.5 m +9.3% $128.9 m $133.2 m (3.2%) Less: Attributable to Non-controlling Interests ($4.4 m) ($0.9 m) Nm ($16.8 m) ($1.1 m) Nm NPI At
Slide 29: Income Contribution
Income Contribution Breakdown by Geography FY 2019 FY 2018 (for FY 2019) % % $’m $’m Ocean Financial Centre(1) 66,691 27.4 93,691 35.5 Marina Bay Financial Centre 81,935 33.6 81,008 30.7 76.7% One Raffles Quay 23,852 9.8 24,793 9.4 Bugis Junction Towers 14,371(2) 5.9 16,145 6.1 8 Chifley Square 12,8
Slide 30: Balance Sheet
Balance Sheet As at 31 Dec 2019 As at 31 Dec 2018 +/(-) Deposited Property(1) $8,032 m $8,380 m (4.2%) Total Assets $7,449 m $7,784 m (4.3%) Borrowings(2) $2,879 m $3,044 m (5.4%) Total Liabilities $2,286 m $2,449 m (6.7%) Unitholders’ Funds $4,585 m $4,757 m (3.6%) Adjusted NAV per Unit(3) $1.35 $1
Slide 31: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre One Raffles Quay Financial Centre(4) Attributable NLA 700,504 sf 1,024,442 sf 441,995 sf Ownership 79.9% 33.3% 33.3% BNP Paribas, DBS Bank, Deutsche Bank, Principal tenants(1) ANZ, Standard Chartered Bank, UBS, Drew & Napier Barclays
Slide 32: 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 development) Attributable NLA 104,055 sf 244,490 sf 224,537 sf 167,784 sf 358,
Slide 33: 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 51.0% asset management platform 5.1% track record in this industry 43.9% 100% Management Act
Slide 34: Thank You
Thank You COU REIT 34