Keppel REIT · SGX:K71U
Keppel REIT — UOB Kay Hian-REITAS Seminar 2019
29 slides from Keppel REIT's conference presentation, Mar 5, 2019
Slide 1: Investor Presentation
Investor Presentation UOB Kay Hian-REITAS Seminar 5 March 2019
Slide 2: Outline
Outline Overview & Key Highlights 3 Portfolio Optimisation 13 Looking Ahead 18 Additional Information 23 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 informat
Slide 3: Young & Green Commercial Assets
Young & Green Commercial Assets Prime Assets Large Portfolio of Commitment to in Strategic Locations Premium Office Assets Sustainability $8.1 billion of 9 premium BCA Green Mark Platinum commercial assets in Singapore 3.5 million sf award for all Singapore assets and Australia’s key business total
Slide 4: Milestones since Listing
Milestones since Listing Portfolio rejuvenation and diversification to create long-term value for Unitholders 2006 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Bugis One Raffles Prudential 275 George 8 Chifley Ocean David MBFC 8 Exhibition 77 King 311 Spencer Ocean Junction Quay Tower Stre
Slide 5: Pan-Asia REIT with Premium Office Portfolio
Pan-Asia REIT with Premium Office Portfolio Singapore 85% Ocean Financial Centre Marina Bay Financial Centre One Raffles Quay Bugis Junction Towers (79.9% interest) (33.3% interest) (33.3% interest) (100% interest) Australia 15% 8 Chifley Square, 8 Exhibition Street, 275 George Street, David Malcolm
Slide 6: Anchored by Singapore Core CBD Assets
Anchored by Singapore Core CBD Assets Income Contribution* by Asset & Geography (for FY 2018) Marina Bay One Raffles Financial Centre, Quay, 31.6% 8.9% 81.3% 18.7% Singapore Bugis Junction Towers, Australia 6.7% David Malcolm Justice Centre, Ocean Financial 5.3% Centre, 8 Chifley Square, 34.1% 5.2%
Slide 7: FY 2018 Key Highlights
FY 2018 Key Highlights ▪ Distributable Income $189.0 m(1) $ ▪ Distribution per Unit 5.56 cents ▪ Aggregate Leverage 36.3% ▪ All-in Interest Rate 2.81% p.a. ▪ Leases Committed 2,853,100 sf (Attributable area ~1,227,100 sf) ▪ Portfolio Committed Occupancy 98.4% ▪ Portfolio WALE 5.9 years ▪ Tenant Rete
Slide 8: Diversified Tenant Base
Diversified Tenant Base Top 10 Tenants(1,2) Profile of Tenant Base(1,2) Occupies 40.1% of portfolio NLA Number of Tenants: 336(3) Contributes 37.8% of gross rental income DBS 6.6% Western Australian Govt 5.3% Standard Chartered 4.6% Ernst & Young 4.1% Enterprise Singapore 4.1% BNP Paribas 4.0% Banki
Slide 9: High Occupancy
High Occupancy ▪ Committed occupancies for the Singapore and Australia assets remain healthy and above market average ▪ The Manager will continue to strive for an optimal balance between achieving high occupancy levels and maximising returns from the assets High Portfolio Committed Occupancy (as at
Slide 10: Well-Spread Lease Expiry
Well-Spread Lease Expiry ▪ WALE for the portfolio and top 10 tenants remained long at approximately 5.9 years and 8.2 years respectively ▪ Average signing rent for the Singapore office leases in FY 2018 was ~$11.10(1) psf pm, above Grade A core CBD market average of $10.26(2) psf pm Portfolio Lease
Slide 11: Proactive Capital Management
Proactive Capital Management 31 Dec 2018 ▪ Lowered aggregate leverage to 36.3% after loan repayment with part of divestment proceeds Interest Coverage Ratio 3.9x ▪ Received commitments to refinance certain All-in Interest Rate 2.81% p.a. loans due in 2019 Aggregate Leverage 36.3% Weighted Average Te
Slide 12: Commitment to Sustainability
Commitment to Sustainability Governance & Disclosure ▪ Keppel REIT: 4th in the REIT and business trust category of the Singapore Governance and Transparency Index (SGTI) Sustainability & Environmental Performance ▪ Keppel REIT: Green Star Status at the Global Real Estate Sustainability Benchmark (GR
Slide 13: Portfolio Optimisation
Portfolio Optimisation Marina Bay Financial Centre, Singapore 13
Slide 14: Unlocking Capital Gains
Unlocking Capital Gains ▪ Divested 20% stake in Ocean Financial Centre to Allianz ▪ Keppel REIT maintains controlling stake of 79.9% ▪ Unlocking capital gains while maintaining exposure to strengthening Singapore Grade A office market 20% of Ocean Financial Centre Sale Price(1) $537.3 m Purchase Pri
Slide 15: 311 Spencer Street Development
311 Spencer Street Development ▪ Construction of freehold Grade A office tower is in progress in Melbourne ▪ 30-year lease to the Victoria Police will commence in 1H 2020 and contribute steady income Artist’s Impression Development in Progress ▪ Yield accretive: 6.4%(1) ▪ Stable income stream: 30-ye
Slide 16: Future-Proofing Assets
Future-Proofing Assets Before After 275 George Street, Brisbane Initiatives carried out to enhance and rejuvenate asset Artist’s impression after foyer upgrade 8 Exhibition Street, Melbourne Initiatives to improve amenities commencing in 1H 2019 Artist’s impression after foyer upgrade Artist’s impre
Slide 17: Unit Buy-Back Programme
Unit Buy-Back Programme ▪ Initiated Unit buy-back programme in Monthly Unit Buy-Back Volume 3Q 2018 with intention to buy back up to 1.5% of issued Units over rolling 13.56m six-month period ▪ Part of proactive capital management strategy given that the stock is trading at a discount to NAV 5.36m 4.
Slide 18: Looking Ahead
Looking Ahead 8 Chifley Square, Sydney 18
Slide 19: Singapore Office Market
Singapore Office Market ▪ Continued improvement in average Grade A office rents through FY 2018, with average Grade A office rents increasing to $10.80 psf pm as occupancy in the core CBD rose to 94.8% in 4Q 2018 ▪ Office market outlook remains largely positive, supported by a tightening supply pipe
Slide 20: Australia Office Market
Australia Office Market ▪ Quarterly net absorption at its highest level in more than a decade ▪ National CBD office average occupancy rose to 90.9% ▪ Business conditions remain generally positive across Australia. However, global trade and geopolitical uncertainties could potentially impact future l
Slide 21: Ability to Tap Overseas Offices
Ability to Tap Overseas Offices Leverage on-the-ground presence and expertise of Keppel’s overseas offices South Korea Japan China Legend India Taiwan Myanmar Keppel Group real estate offices Philippines Vietnam Keppel REIT assets Malaysia Singapore Indonesia Australia 21
Slide 22: Thank You
REIT Thank You
Slide 23: Additional Information
Additional Information Ocean Financial Centre, Singapore 23
Slide 24: Financial Performance
Financial Performance 4Q 2018 4Q 2017 FY 2018 FY 2017 Property Income $37.8 m $44.4 m $165.9 m $164.5 m Net Property Income $30.5 m $36.2 m $133.2 m $131.2 m Share of Results of Associates $23.9 m $27.4 m $103.9 m $115.8 m and Joint Ventures Distribution to Unitholders $46.2 m(1) $48.2 m $189.0 m(1)
Slide 25: Balance Sheet
Balance Sheet As at As at 31 Dec 2018 31 Dec 2017 % of Assets Unencumbered Total Assets $7,784 m $7,604 m 83% Unencumbered (1) Borrowings $3,044 m $3,375 m Total Liabilities $2,449 m $2,689 m Unitholders’ $4,757 m $4,763 m Funds 17% Adjusted NAV Encumbered $1.39 $1.40 per Unit(2) (1) Included borrow
Slide 26: Portfolio Information: Singapore
Portfolio Information: Singapore Marina Bay Ocean Financial Centre(3) One Raffles Quay Bugis Junction Towers Financial Centre(5) Attributable NLA 701,011 1,025,522 442,576 248,853 (sf) Ownership 79.9% 33.33% 33.33% 100.0% BNP Paribas, DBS Bank, UBS, Enterprise Singapore, Principal Drew & Napier, Sta
Slide 27: Portfolio Information: Australia
Portfolio Information: Australia David Malcolm 311 Spencer Street, 8 Chifley Square, 8 Exhibition Street, 275 George Street, Justice Centre, Melbourne Sydney Melbourne(3) Brisbane Perth (Under construction) Attributable NLA 104,070 245,651 224,693 167,784 358,683 (sf) Ownership 50.0% 50.0% 50.0% 50.
Slide 28: Portfolio Valuation
Portfolio Valuation 31 Dec 2017 31 Dec 2018 31 Dec 2018 Variance Cap Rate ($’m) ($’m) ($’psf) ($’m) Ocean Financial Centre 2,623.0 2,099.0(1) 2,994 (524.0) (1) 3.60% (79.9% interest) (1) Marina Bay Financial Centre Phase 1: 1,693.0 1,695.3 2,928 2.3 3.65% (33.3% interest) Tower 3: 1,300.3 1,297.0 2,
Slide 29: Keppel REIT Structure
Keppel REIT Structure Keppel Capital Keppel Land The REIT Manager can leverage The REIT Manager can leverage the scale and resources of a larger the Sponsor‘s expertise and Institutional and asset management platform track record in this industry Public Investors 100% 3.9% 43.5% 52.6% Management Act