Kore Us REIT · SGX:CMOU
Kore Us REIT — Keppel-KBS US REIT — Investor Presentation (August 2019)
37 slides from Kore Us REIT's investor presentation, August 2019
Slide 1: Keppel-KBS US REIT Investor Meetings August 2019
Keppel-KBS US REIT Investor Meetings August 2019
Slide 2: Content Outline and Important Notice
Content Outline • Overview 3 • Outlook on the US and Key Growth Markets 6 • Performance Updates for 1H 2019 18 • Looking Ahead 26 Important Notice The past performance of Keppel-KBS US REIT is not necessarily indicative of its future performance. Certain statements made in this release may not be ba
Slide 3: Overview
Overview Tenant lounge The Westpark Portfolio Seattle, Washington
Slide 4: About Keppel-KBS US REIT
Benefitting from Exposure to solid US office Tax advantaged key growth real estate structure markets in the US fundamentals Investment ▪ To invest in a diversified portfolio of income-producing mandate commercial assets and real estate-related assets in key growth markets of the US with favourable e
Slide 5: Key Growth Markets – Driven by Innovation and Technology
Key Growth Markets – Driven by Innovation and Technology Seattle, Washington (42.2%) Atlanta, Georgia (7.0%) Overview 13 freehold office buildings and The Plaza Buildings Bellevue Technology The Westpark Northridge Center Powers Ferry business campuses across Occupancy: 96.5% Center Portfolio I & II
Slide 6: Outlook on the US and Key Growth Markets
Outlook on the US and Key Growth Markets Tenant lounge 1800 West Loop South Texas, Houston
Slide 7: Sound US Economic Fundamentals
Sound US Economic Fundamentals 3% 7% 6% 5% 2% 4% 3% 1% 2% Indoor courtyard, Great Hills Plaza, Austin, Texas 1% US Economy at a Glance 0% 0% 2014 2015 2016 2017 2018 2Q 2014 2015 2016 2017 2018 Jun-19 2.1% 3.7% GDP (1) 2019 Unemployment (2) Real GDP growth Low unemployment(2) in 2Q 2019(1) • US cont
Slide 8: Attractive US Office Outlook
Attractive US Office Outlook Positive overall net absorption, rent growth and lower vacancy Overall Net Absorption(1) Deliveries & Demolitions(1) 100.0 Forecast 90.0 80.0 70.0 60.0 MSF 50.0 40.0 30.0 20.0 10.0 0.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net Absorption Overall Asking Rents
Slide 9: Technology – A Key Driver of US Growth and Leasing Demand
Tech hubs of Austin, Seattle and Denver make up ~60% of KORE’s portfolio CRI Ranking of Top 10 US Industry Sectors Gross Product (Economic Impact), 2018 est. $2,265 Manufacturing $2,264 Government Lobby, The Plaza Buildings, Seattle, Washington $1,839 Tech Industry US$ billion Technology – A Key $1,
Slide 10: Notable Tech Occupiers in Seattle
Notable Tech Occupiers in Seattle Seattle is a choice office location for tech giants and one of only two major tech markets in the US Apple, Google, Uber, Facebook, Compass and Cruise Automation: Opening Seattle offices in 2019(1) Map data ©2019 Google Note: Shaded areas depict the territory where
Slide 11: Suburban Neighbourhoods Becoming Tech Campuses of Choice
Suburban Neighbourhoods Becoming Tech Campuses of Choice The Innovation Triangle: Bellevue – Kirkland – Redmond • Amazon is relocating its worldwide operations team to Bellevue(1). Its occupancy is expected to increase from 12m sf in 2019 to over 15m sf by 2024(2). • Microsoft’s Redmond Campus is be
Slide 12: Apple: A True Campus Community in Austin
Apple: A True Campus Community in Austin • Apple currently occupies ~1.7m sf Apple’s Office Distribution in Austin, Texas of office space in Austin(1) and employs ~6,200 people(2). • On 13 December 2018, Apple announced plans to build a new NEW CAMPUS US$1b campus in Austin, spanning 133 acres and a
Slide 13: Positive Economics in KORE’s Key Growth Markets
Positive Economics in KORE’s Key Growth Markets KORE’s key growth markets have outperformed the national average over the last 5 years Real GDP Growth Average (1) 7.0% 6.4% 2013-2017 Key Growth Markets Gateway Cities 6.0% 5.0% 4.7% 4.0% 4.0% 3.7% 3.3% 3.5% 3.0% 3.0% 3.0% 2.6% 2.2% 2.3% 2.0% 2.2% 1.3
Slide 14: Rising Employment in KORE’s Key Growth Markets
Rising Employment in KORE’s Key Growth Markets KORE’s key growth markets have outperformed the national average over the last 5 years Employment Growth Average (1) 5.0% 2014-2018 Key Growth Markets Gateway Cities 4.0% 4.0% 3.6% 2.8% 3.0% 3.0% 2.8% 2.9% 2.8% 2.9% 2.0% 1.6% 1.7% 1.9% 1.7% 1.8% 1.3% 1.
Slide 15: Expanding Population in KORE’s Key Growth Markets
Expanding Population in KORE’s Key Growth Markets KORE’s key growth markets have outperformed the national average over the last 5 years 4.0% Population Growth Average (1) 2014-2018 Key Growth Markets Gateway Cities 3.0% 2.9% 2.5% 2.0% 1.8% 2.0% 1.9% 1.5% 1.7% 1.2% 0.9% 1.0% 1.0% 0.7% 0.7% 0.3% 0.5%
Slide 16: Positive Outlook in KORE’s Key Growth Markets
Positive Outlook in KORE’s Key Growth Markets KORE’s key growth markets are forecasted to outperform national average 4.0% Real GDP Growth Average Forecast (1) 2018-2022F Strength from the ground up 3.0% 3.0% • Fast growing and defensive sectors such as technology, government, medical and 2.0% 2.1%
Slide 17: First Choice Submarkets Outlook
First Choice Submarkets Outlook Submarket Last 12M Last 12M Average Submarket Last 12M Projected Submarket Vacancy Rate Deliveries absorption Rent Rental Growth Rental Growth Property (%) (sf’000) (sf’000) (US$ p.a.) (%) (%) Seattle, Bellevue CBD The Plaza Buildings 4.2% - 137.0 51.3 9.4% 7.8% Seatt
Slide 18: Performance Updates for 1H 2019
Performance Updates for 1H 2019 Tenant outdoor space The Westpark Portfolio Seattle, Washington
Slide 19: Continued Positive Growth in 1H 2019
Continued Positive Growth in 1H 2019 Distributable Income Healthy committed US$24.8 million occupancy levels 30.9% 2.4% from end-2018 Outperformed 1H 2018 and IPO Forecast by 30.9% and 23.1% ~376,000 sf of total space leased in respectively 1H 2019, equivalent to 8.8% of the portfolio, bringing port
Slide 20: Deepening Presence in Key Growth Markets
Deepening Presence in Key Growth Markets Driving growth with value accretive acquisitions The Westpark Portfolio Maitland Promenade I Seattle, Washington Orlando, Florida • Completed on 30 November 2018 • Completed on 16 January 2019 • 21 building business campus in Redmond, Washington • Adjacent to
Slide 21: Financial Performance for 1H 2019
Financial Performance for 1H 2019 Distributable income for 1H 2019 outperformed both IPO Forecast and 1H 2018 Actual Actual Forecast Actual Actual % % 1H 2019 1H 2019(1) 1H 2019 1H 2018 Change Change (US$’000) (US$’000) (US$’000) (US$’000) Gross Revenue 58,724 48,201 21.8 58,724 46,351 26.7 Property
Slide 22: Healthy Balance Sheet
Healthy Balance Sheet As at 30 June 2019 (US$’000) Total Assets 1,125,830 Investment Properties 1,086,026 Cash and Cash Equivalents 35,606 Other Assets 4,198 Total Liabilities 473,521 Gross Borrowings 424,440 Other Liabilities 49,081 Tenant space, Westmoor Center, Denver, Colorado Unitholders’ Funds
Slide 23: Prudent Capital Management
Prudent Capital Management Limited interest rate exposure with term loans significantly hedged Debt Maturity Profile As at 30 June 2019 100% Unsecured US$424.4 million of external loans Total debt 34.1% 34.1% (100% unsecured) 18.8% 11.8% ▪ US$50 million of revolving credit facility 1.2% (1) Availabl
Slide 24: Continued Organic Growth
Continued Organic Growth • Another 173,000 sf leased in 2Q 2019 for a total of New Leases ~376,000 sf leased in 1H 2019, equivalent to about 25.5% 8.8% of portfolio • Over two-thirds of leasing activity was in the tech hubs of Seattle, Austin and Denver. • Leasing demand mainly from the fast-growing
Slide 25: Well-Diversified Tenant Base Across Key Growth Sectors
Well-Diversified Tenant Base Across Key Growth Sectors Resilient portfolio with low tenant concentration risk • KORE’s business campuses are popular among tenants in the tech hubs of Seattle, Austin and Denver which contribute ~60% of cash rental income. • Top 10 tenants contribute 20.4% of cash ren
Slide 26: Looking Ahead
Looking Ahead Tenant space, Great Hills Plaza Austin, Texas
Slide 27: Focused on Delivering Stable Distributions and Long Term Value
Focused on Delivering Stable Distributions and Long Term Value Portfolio Optimisation ➢ Focused leasing strategy targeting growth sectors ➢ Proactive and effective asset management ➢ Maximise rental rates and capture positive rental reversions Value Accretive Investments ➢ Pursue growth opportunitie
Slide 28: Thank You
Thank You For more information, please visit www.kepkbsusreit.com Westech 360 Austin, Texas
Slide 29: Additional Information
Additional Information Café, Westmoor Center, Denver, Colorado
Slide 30: Tax-Efficient Structure
Tax-Efficient Structure Sponsors(1) KPA Unitholders Keppel Keppel Capital relevant Tax-efficient structure for holding US properties Capital International entity ▪ No US corporate tax (21%) and Keppel Management US withholding tax (30%) Agreement Trustee Management ▪ No Singapore corporate tax (17%)
Slide 31: Portfolio Overview
Portfolio Overview NLA Committed occupancy WALE Carrying Value Property City Location (sf) (by NLA) (in years) (US$m) The Plaza Buildings Seattle Bellevue CBD, one of the most active leasing submarket in 490,994 96.5% 3.5 258.8 Seattle Bellevue Technology Seattle Bellevue, one of the most active lea
Slide 32: Positive Fundamentals in KORE’s Key Growth Markets
Positive Fundamentals in KORE’s Key Growth Markets Growing educated workforce and rising household income Educational Attainment – % of population with at least a Bachelor’s Degree (1) • Maitland has one of the largest percentages of graduates 2013 2014 2015 2016 2017 with advanced degrees in the me
Slide 33: First Choice Submarkets: West Coast
First Choice Submarkets : West Coast Central Seattle 53.0% 31.0% Seattle, Washington Sacramento, California • Strong economic and population growth, largely driven • The capital of California and benefits from a by technology and aerospace manufacturing industries diversified economy (e.g. education
Slide 34: First Choice Submarkets: Central
East Coast 12.5% First Choice Submarkets: Central Denver, Colorado Austin, Texas Houston, Texas • Young and educated workforce, • Major technology hub in Texas which • Fifth largest MSA in USA, and home Denver strong population growth and low benefits from a highly educated to the Texas Medical Cent
Slide 35: First Choice Submarkets: East Coast
Atlanta Orlando First Choice Submarkets: East Coast Orlando, Florida Atlanta, Georgia • Robust metropolitan area and a major hub for • Third most Fortune 500 company headquarters in the East Coast aerospace companies with thriving technology, US, with a steady stream of business relocations and 12.5
Slide 36: The Westpark Portfolio, Seattle, Washington Bellevue Technology Center, Seattle, Washington 1800 West Loop South,
The Westpark Portfolio, Seattle, Washington Bellevue Technology Center, Seattle, Washington 1800 West Loop South, Houston, Texas 36
Slide 37: Westech 360, Austin, Texas Great Hills Plaza, Austin, Texas Westmoor Center, Denver, Colorado
Westech 360, Austin, Texas Great Hills Plaza, Austin, Texas Westmoor Center, Denver, Colorado 37
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