Kore Us Reit · SGX:CMOU
Kore Us Reit — Keppel Pacific Oak US REIT — SGX-REITAS Webinar 2020
31 slides from Kore Us Reit's conference presentation, Sep 8, 2020
Slide 1: SGX-REITAS Webinar
SGX-REITAS Webinar 8 September 2020
Slide 2: Important Notice
Important Notice The past performance of Keppel Pacific Oak US REIT is not necessarily indicative of its future performance. Certain statements made in this release may not be based on historical information or facts and may be “forward-looking” statements due to a number of risks, uncertainties and
Slide 3: Overview
Overview Tenant lounge The Westpark Portfolio Seattle, Washington
Slide 4: About Keppel Pacific Oak US REIT (KORE)
Benefitting from Unique exposure solid US office Tax advantaged to key US real estate structure growth markets fundamentals Sponsors ▪ Keppel Capital and KPA US Asset Manager ▪ Pacific Oak Capital Advisors LLC, also advisor for Tenant lounge, Bellevue Technology Center, Seattle, Washington Pacific O
Slide 5: Growth Trajectory since IPO
Growth Trajectory since IPO Delivered Growth since IPO Strengthened Foothold in the Listed on SGX Distributable Income (US$ million) Strong Maitland Portfolio value: US$0.83b submarket IPO with 11 office buildings Maitland 50.8 & business campuses Promenade 1 38.6 26.0 across 7 key growth Orlando, F
Slide 6: First Choice Submarkets in Key Growth Markets
First Choice Submarkets in Key Growth Markets SEATTLE, Washington ATLANTA, Georgia Overview 13 freehold office buildings Powers Ferry Northridge The Plaza Bellevue Technology The Westpark and business campuses Buildings Center Portfolio Occupancy: 93.8% Center I & II Occupancy: 100.0% Occupancy: 85.
Slide 7: KORE Strengths
KORE Strengths Index inclusion Strong will improve rental trading Presence in reversion Stable first choice 100% portfolio liquidity of 14.7% submarkets in Highly unsecured committed key growth debt occupancy Constituent to the diversified Strong average MSCI Singapore markets rental reversion portf
Slide 8: Resilient and Highly Diversified Portfolio
Resilient and Highly Diversified Portfolio KORE’s buildings and business campuses in Highly diversified tenant base, with exposure to the tech hubs of Seattle, Austin and Denver the growth and defensive sectors of technology, contribute ~54% of CRI as well as medical and healthcare Geographic Divers
Slide 9: Low Tenant Concentration Risk
Low Tenant Concentration Risk Top 10 tenants contribute only 19.5% of CRI, with the largest tenant only contributing 3.5% of CRI Top 10 tenants as at 30 June 2020 Tenant Sector Asset % CRI Ball Aerospace Technology Westmoor Center 3.5 Oculus VR Technology Westpark Portfolio 2.4 Lear Technology The P
Slide 10: Positive Economics and Rising Employment
Positive Economics and Rising Employment KORE’s key growth markets continue to outperform national average 5.4% Real GDP Growth Average(1) 2014-2018 5.6% Key Growth Markets 5.0% Gateway Cities 4.0% 4.0% 3.9% 4.1% 3.7% 3.9% 3.2% 2.9% 2.8% 1.8% 1.9%2.5% 1.6% 1.2% Atlanta Austin Dallas Denver Houston O
Slide 11: Low Taxes in KORE's Key Growth Markets
Low Taxes in KORE’s Key Growth Markets Individuals and corporations are moving to states with zero or low income and corporate taxes, accelerating population growth State Individual Tax Rates (as at July 1, 2019)(1) 13.30% 13.30% Key Growth Markets Gateway Markets 10.75% 8.82% 8.95% 6.99% 8.40% 5.75
Slide 12: Expanding Population in KORE's Key Growth Markets
Expanding Population in KORE’s Key Growth Markets KORE’s key growth markets continue to outperform national average 2.8% Population Growth Average(1) 2015-2019 Key Growth Markets 2.3% Gateway Cities 1.9% 1.7% 1.6% 1.8% 1.5% 1.5% 1.1% 0.8% 0.5% 0.6% 0.6% 0.1% 0.3% -0.2% -0.1% Atlanta Austin Dallas De
Slide 13: Operational Updates
Operational Updates Enhanced health and safety protocols across KORE’s properties
Slide 14: 1H 2020 Results Highlights
1H 2020 Results Highlights Continued Growth Stable Robust in Operating Income Income Stream Financial Position Distributable Income Strong Early Refinanced US$29.1 mil Rental Reversion All 2021 Loans 17.6% YoY 14.7% 3.4 years in WATM (3) DI of US$29.1 million for 1H 2020 was 17.6% Continued positive
Slide 15: Portfolio Performance
Portfolio Performance • Committed total of ~196,000 sf of space in 1H 2020 • Equivalent to 4.2% of portfolio NLA, and mainly in Seattle, Atlanta and Houston • Achieved strong rental reversion of 14.7% for the whole portfolio • Rental collections for April, May and June 2020 were ~98%, ~96% and ~93%
Slide 16: Navigating the COVID-19 Pandemic & Facilitating the Safe Return to Offices
Navigating the COVID-19 Pandemic & Facilitating the Safe Return to Offices ✓ Income resilience and operational excellence • Healthy rent collections of ~100% in 1Q 2020 and ~96% in 2Q 2020(1) • Minimal exposure to retail (<2.0% of CRI) and co-working (~ 2.0% of CRI) • Highly diversified tenant base
Slide 17: The Essential but Ever Changing Office
The Essential but Ever Changing Office Potential Office Paradigm Shifts • Higher levels of remote working and a gradual transition to a more ✓ KORE is well-positioned to benefit flexible working culture from the shift towards well-connected - Employees welcome the flexibility to work from home, but
Slide 18: Market Outlook
Market Outlook Tenant lounge, 1800 West Loop South Houston, Texas
Slide 19: US Economy at a Glance
US Economy at a Glance % GDP Growth % Labour Force Participation 5 67 0 66 -5 65 -10 64 -15 63 -20 62 -25 61 -30 60 -35 59 2015 2016 2017 2018 2019 1Q 2020 2Q 2020 Feb-15 Jul-07 Jan-14 Mar-16 Jul-20 Dec-12 Apr-17 Aug-08 Nov-11 Oct-10 Sep-09 May-18 Jun-19 Great Hills Plaza, Austin, Texas (1) GDP Grow
Slide 20: Technology – A Key Driver of US Growth and Employment
Technology – A Key Driver of US Growth and Employment Ranking of Top 10 US Occupation Jobs Added During Decade, 2010-2019 Food Preparation and Serving 2,419,416 QCEW + self-employed* Personal Care and Services 2,179,869 Transportation and Material Moving 1,972,500 2-digit SOCs Tech 1,808,837 Managem
Slide 21: First Choice Submarkets Outlook
First Choice Submarkets Outlook Property Submarket Last 12M Last 12M Average Last 12M Projected Submarket Vacancy Rate Vacancy Rate Deliveries Absorption Submarket Rent Rental Growth Rental Growth Property (%) (%) (sf’000) (sf’000) (US$ p.a.) (%) (%) Seattle, Bellevue CBD 2.7 4.3 - (31.4) 53.9 2.8 (
Slide 22: Last 12 Months Rent Growth
Last 12 Months Rent Growth Key Growth Markets Gateway Cities 5.3% 4.7% 3.9% 3.2% 2.9% 2.6% 2.8% 2.7% 2.1% 2.1% 2.3% 2.2% 2.4% 0.7% 0.7% 0.7% 1.4% 1.1% 0.3% -1.3% -2.2% Last 12M Rental Growth Key Growth Markets Average Gateway Cities Average United States Average Source: CoStar Office Report, 2 July
Slide 23: Projected 12-Month Rent Outlook
Projected 12-Month Rent Outlook KORE’s in-place rents are on average, 10.8% below asking rents Key Growth Markets Gateway Cities -2.5% -2.8% -4.3% -4.9% -4.7% -5.5% -6.0% -6.1% -5.3% -5.6% -6.2% -5.4% -5.0% -5.1% -6.3% -6.6% -7.0% -7.4% -7.4% -7.4% -8.4% Projected Rental Growth Key Growth Markets Av
Slide 24: Committed to Deliver Long-Term Value
Strategically-located assets in key growth markets Constituent of: Highly diversified portfolio with tenants from high growth and defensive sectors • MSCI Singapore Small Cap Index Committed Income resilience supported by low tenant concentration and strong tenant mix to Deliver Long-Term • FTSE All
Slide 25: Thank You
Thank You For more information, please visit www.koreusreit.com Connect with us on: Westech 360 Austin, Texas
Slide 26: Additional Information
Additional Information Tenant space, Westmoor Center Denver, Colorado
Slide 27: Trust Structure
Trust Structure Tax-efficient structure for holding US properties ▪ No US corporate tax (21%) and US withholding tax (30%) ▪ No Singapore corporate tax (17%) and Singapore withholding tax (10%) ▪ Subject to limited tax(2) Leverage Sponsors' expertise and resources to optimise returns for Unitholders
Slide 28: Financial Performance for 2Q & 1H 2020
Financial Performance for 2Q & 1H 2020 2Q 2020 2Q 2019 % 1H 2020 1H 2019 % (US$’000) (US$’000) Change (US$’000) (US$’000) Change Gross Revenue 35,174 29,280 20.1 70,500 58,724 20.1 Property Expenses (14,253) (11,292) 26.2 (28,628) (22,548) 27.0 Net Property Income 20,921 17,988 16.3 41,872 36,176 15
Slide 29: Capital Management
Capital Management Low aggregate leverage and 100% unsecured loans provide greater financial flexibility As at 30 June 2020 Debt Maturity Profile Total Debt • US$500.4 million of external loans • 100% unsecured 100% of Loans Unsecured 28.9% Committed Available • US$55.0 million of (1) 22.9% 24.0% Fa
Slide 30: Capital Management (cont'd)
Capital Management (cont’d) • In July 2020, KORE announced the early refinancing of borrowings due in November 2021 • Loans obtained during the Initial Public Offering in November 2017 • Restructured the interest rate swap in relation to these borrowings • No long term refinancing requirement until
Slide 31: Healthy Balance Sheet
Healthy Balance Sheet As at 30 June 2020 US$’000 Total Assets 1,337,395 Investment Properties 1,272,936 Cash and Cash Equivalents 58,620 Other Assets 5,839 Total Liabilities 582,231 Gross Borrowings 500,440 Other Liabilities 81,791 Unitholders’ Funds 755,164 Units in issue and to be issued (‘000)(1)