Keppel Reit · SGX:K71U
Keppel Reit — 1Q 2023 Earnings Presentation
28 slides from Keppel Reit's earnings presentation, Apr 19, 2023
Slide 1: 1Q 2023 Key Business and Operational Updates
1Q 2023 Key Business and Operational Updates 19 April 2023
Slide 2: Outline
Outline Constituent of: ▪ 1Q 2023 Key Highlights 3 ▪ Financial & Portfolio Highlights 4 FTSE ST Large & FTSE4GOOD Mid Cap Index Developed & ▪ Market Review 14 FTSE4GOOD ASEAN 5 Index ▪ Additional Information 19 FTSE EPRA Nareit Global Developed Index IMPORTANT NOTICE: The past performance of Keppel
Slide 3: 1Q 2023 Key Highlights
1Q 2023 Key Highlights A Resilient Portfolio of Strong Operating Prudent Capital Metrics Management Prime Commercial Assets Anchored in key business districts of High Portfolio Occupancy Healthy Aggregate Singapore, Australia, South Korea and 96.3% Leverage Japan As at 31 March 2023 38.7% As at 31 M
Slide 4: Financial & Portfolio Highlights
Financial & Portfolio Highlights Keppel Bay Tower, Singapore 4
Slide 5: Stronger NPI Supported by Healthy Operational Performance
Stronger NPI Supported by Healthy Operational Performance ▪ 1Q 2023 NPI was 1.3% higher year-on-year due to higher rentals achieved on leases committed in 2022 and higher portfolio occupancy of 96.3% as at 31 March 2023 as compared to 95.1% as at 31 March 2022 ▪ 1Q 2023 Distributable Income from Ope
Slide 6: Prudent Capital Management
Prudent Capital Management As at 31 Mar 2023 Interest Coverage Ratio(2) 3.7x ▪ Aggregate leverage maintained at a healthy 38.7% Adjusted Interest Coverage Ratio(3) 3.2x All-in Interest Rate 2.86% p.a. ▪ 75% of borrowings are on fixed rates Aggregate Leverage 38.7% ▪ AUD, KRW and JPY denominated loan
Slide 7: Diversified Portfolio of Prime Commercial Assets in Asia Pacific
Diversified Portfolio of Prime Commercial Assets in Asia Pacific $9.1b portfolio of prime quality assets anchored across different markets enhance income stability and long-term growth opportunities T Tower, Seoul KR Ginza II, Tokyo 99.4% Interest South Korea Japan 98.5% Interest Occupancy: 96.1% 3.
Slide 8: 1Q 2023 Portfolio Performance
1Q 2023 Portfolio Performance Leases Committed Leases Committed As at 31 Mar 2023: (1) (1) by Geography by Type Singapore, Renewal, 96.3% 75.7% New, 100.0% 24.3% Portfolio committed occupancy 10.3 years New leasing demand and expansions from: Top 10 tenants’ WALE Total Leases Committed Banking, insu
Slide 9: Well-spread Lease Expiry Profile
Well-spread Lease Expiry Profile ▪ Average signing rent for Singapore office leases(1) concluded in 1Q 2023 was $12.05 psf pm, reflecting steady demand for prime office space ▪ Average expiring rents of Singapore office leases(2) (psf pm): $11.66 in 2023, $11.04 in 2024 and $11.13 in 2025 Lease Expi
Slide 10: Established and Diversified Tenant Base
Established and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant ▪ Top 10 tenants take up 39.5% of NLA and base of 433(1) tenants, many of which contribute 33.6% of gross rent are established blue-chip corporations Top 10 Tenants Tenant Business Sector % Banking, insurance and financia
Slide 11: Blue & William Achieved Practical Completion
Blue & William Achieved Practical Completion ▪ Blue & William achieved practical completion on 3 April 2023 and will start contributing income ▪ Secured first anchor tenant, Equifax, in December 2022 ▪ The developer is providing a three-year rental guarantee on unlet space from practical completion
Slide 12: Driving Sustainability
Driving Sustainability 8 Exhibition Street achieved Waste Management the highest recognition of Platinum rating for To encourage recycling, WiredScore certification, the initiatives such as putting second property, after up of waste management Keppel Bay Tower, within signage and recycling bins Kepp
Slide 13: Sustainable and Future Ready Portfolio with ESG Excellence
Sustainable and Future Ready Portfolio with ESG Excellence Keppel REIT’s ESG Targets ESG Benchmarks Environmental Stewardship • MSCI ESG Rating maintained at ‘A’ • ISS Governance Risk Rating maintained at lowest risk level of “1” and ESG ▪ Halve Scope 1 and 2 emissions by 2030 from Corporate Rating
Slide 14: Market Review
Market Review Marina Bay Financial Centre, Singapore 14
Slide 15: Singapore Office Market
Singapore Office Market ▪ Average core CBD Grade A office rents increased to $11.75 psf pm and average occupancy in core CBD decreased to 94.5% in 1Q 2023 Grade A Rent and Core CBD Occupancy Demand and Supply (million sf) 2.1 1.9 1.7 1.3 95.8% 93.8% 94.8% 95.8% 93.8% 93.3% 94.7% 94.5% 0.8 0.8 0.9 0.
Slide 16: Australia Office Market
Australia Office Market 94.9% 96.0% 95.2% 85.7% 1,500 87.5% 88.6% 85.3% 100% North Sydney 90.8% 92.1% 89.9% 84.0% 86.5% 100% Sydney CBD 1,200 1,045 80% 1200 90.4% 75.5% 79.9% 80% 964 1,032 919 934 930 885 900 900 60% 676 729 688 670 686 60% 580 641 651 Prime Grade 600 40% Prime Grade 600 40% 300 20%
Slide 17: Seoul Office Market
Seoul Office Market ▪ CBD Grade A occupancy increased to 98.5% in 1Q 2023 CBD Grade A Rent and Occupancy 97.0% 98.5% 200,000 90.7% 100% 86.6% 86.7% 89.2% 82.7% 160,000 80% 121,356 124,110 120,000 60% 97,572 98,926 91,845 92,325 91,656 80,000 40% 40,000 20% 0 0% 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 1Q23 CBD
Slide 18: Tokyo Office Market
Tokyo Office Market ▪ Occupancies for both Grade A and Grade B office in Tokyo central 5 wards decreased to 95.2% and 95.8% respectively in 1Q 2023 Tokyo Central 5 Wards Grade A Rent and Occupancy Tokyo Central 5 Wards Grade B Rent and Occupancy 99.6% 99.8% 99.1% 99.0% 99.4% 98.7% 100.0% 97.7% 98.1%
Slide 19: Additional Information
Additional Information Pinnacle Office Park, Sydney 19
Slide 20: Committed to Delivering Stable Income & Sustainable Returns
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Improve yield by enhancing Keppel REIT’s portfolio of quality assets through strategic acquisitions and divestments Portfolio • Provide income stability and long-term capital appreciation of portfolio, Optimisation
Slide 21: Well-Executed Portfolio Optimisation Strategy
Well-Executed Portfolio Optimisation Strategy Expanded footprint Expanded footprint to Japan: Expanded footprint to Australia: KR Ginza II (98.5%), 77 King Street (100%), Sydney, and to South Korea: T Tower (99.4%), Tokyo 275 George Street (50%), Brisbane Seoul Acquired Acquired - David three adjace
Slide 22: To Distribute an Additional $100m Over Five Years
To Distribute an Additional $100m Over Five Years to Celebrate Keppel REIT’s 20th Listing Anniversary in 2026 • Accumulated capital gains through successful execution of portfolio optimisation since listing in 2006 • To celebrate Keppel REIT’s 20th anniversary in 2026, we will distribute $100m of An
Slide 23: Advancing ESG Agenda in FY 2022
Advancing ESG Agenda in FY 2022 Environmental Responsible People and Stewardship Business Community All Singapore assets have 16.8% reduction in Scope 1 and 2 Established Board ESG achieved the WELL Health-Safety emissions1 Committee in Sep 2022 rating 100% of Keppel REIT’s 28.7% reduction in water
Slide 24: Singapore Portfolio Valuations (As at 31 December 2022)
Singapore Portfolio Valuations (As at 31 December 2022) Valuation based on Variance 31 Dec Cap Rate 30 Jun 2022 31 Dec 2022 attributable interest 2022 (%) S$ % Ocean Financial Centre S$2,086.2m S$2,140.5m S$54.3m 2.6 S$3,067psf 3.40 (79.9% interest) Towers 1 & 2, and Marina Bay Financial S$1,757.0m
Slide 25: Overseas Property Valuations (As at 31 December 2022)
Overseas Property Valuations (As at 31 December 2022) ▪ Valuation for Blue & William increased by 16.0% due to construction progress Valuation based on Local Currency (A$/KRW/JPY) Variance S$ Variance Cap 31 Dec 2022 Keppel REIT’s interest 30 Jun 2022 31 Dec 2022 A$/KRW/JPY % 30 Jun 2022 31 Dec 2022
Slide 26: Portfolio Information: Singapore
Portfolio Information: Singapore As at Marina Bay Financial Ocean Financial Centre One Raffles Quay Keppel Bay Tower 31 Mar 2023 Centre(4) Attributable NLA 697,892 sf 1,019,008 sf 441,496 sf 386,223 sf Ownership 79.9% 33.3% 33.3% 100.0% BNP Paribas, DBS Bank, TikTok, Keppel Group, Principal Drew & N
Slide 27: Portfolio Information: Australia, South Korea & Japan
Portfolio Information: Australia, South Korea & Japan Blue & William(3), As at 8 Exhibition Victoria Police David Malcolm 8 Chifley Square, Pinnacle Office Sydney T Tower, KR Ginza II, 31 Mar 2023 Street(4), Centre, Justice Centre, Sydney Park, Sydney (Under Seoul Tokyo Melbourne Melbourne Perth Dev
Slide 28: Thank you
Thank you Ocean Financial Centre, Singapore 28