Keppel REIT · SGX:K71U
Keppel REIT — K-REIT Asia — Investor Presentation (April 2010)
32 slides from Keppel REIT's investor presentation, April 2010
Slide 1: Investor Meetings April 2010
INVESTOR MEETINGS April 2010 1
Slide 2: Important Notice
Important Notice The value of units in K-REIT Asia (“Units”) and the income from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the
Slide 3: Agenda
Agenda Overview of K-REIT Asia Financial Performance Capital Management Singapore Office Sector Outlook Going Forward Appendices 3
Slide 4: Overview of K-REIT Asia
Overview of K-REIT Asia K-REITAaSia
Slide 5: K-REIT Asia at a Glance
K-REIT Asia at a Glance Who we are Singapore-based REIT that invests in commercial real estate assets in Singapore and across Asia Listed on the SGX on 28 Apr 2006 Market cap of S$1.5bn as at 15 March 2010 Managed by K-REIT Asia Management Limited(1) Sponsor Sponsored by Keppel Land Limite
Slide 6: Singapore Property Portfolio
Singapore Property Portfolio Property Portfolio as at 31 December 2009(1) Attributable NLA 1.3mm sf Committed occupancy 95.0% Average portfolio rental S$8.16 psf pm Valuation S$2,098 mm Number of tenants 119 Downtown Core of Singapore 1. Includes the increased stake in Prudential Tower, Singapore bu
Slide 7: Quality Asset Portfolio
Quality Asset Portfolio Bugis Junction Towers Keppel Towers and GE Tower Prime 15-storey office tower Keppel Towers: Prime Part of Bugis Junction - an integrated 27-storey office building development comprising a retail mall and the five-star InterContinental Singapore GE Tower: Prime Hotel
Slide 8: Quality Asset Portfolio (cont'd)
Quality Asset Portfolio (cont’d) Prudential Tower Property One Raffles Quay 30-storey Grade-A building Grade-A office building strategically Located in the CBD, within a 5-minute located at the heart of the business walk from Raffles Place MRT station and financial district Winner of office/
Slide 9: Stake in Prudential Towers raised to 73.4%
Stake in Prudential Towers raised to 73.4% K-REIT Asia completed acquisition of six additional strata floors in Prudential Tower on 2 November 2009 Purchase price of S$106.3mm at 14.7% discount to appraised value of S$124.5mm Guaranteed net property income yield of 5.2% for 5 years and income
Slide 10: Brisbane CBD, Australia
Brisbane CBD, Australia State capital city of Queensland Third largest CBD office market in Australia Economic growth in Queensland is expected to trend above the national average for the next few years Demand for CBD offices is driven by the increase in size of population, white-collar empl
Slide 11: 50% stake in 275 George Street, Brisbane, Australia
50% stake in 275 George Street, Brisbane, Australia 30-storey freehold Grade-A building newly completed in April 2009 Long weighted average lease expiry of 9.4 years 99.4% leased with fixed annual rental escalations embedded in the lease agreements Income support of up to A$1.8 million until
Slide 12: Diverse Blue-chip Tenant Base
Diverse Blue-chip Tenant Base Broad tenant diversity Blue-chip tenant base Tenant Business Sector by NLA Portfolio Top 10 Tenants by NLA 119 tenants in various business sectors Top 10 tenants comprise 48.9% of the portfolio Accounting & consultancy Deutsche Bank Aktiengesellschaft 7.6% Shipping
Slide 13: Strong Portfolio Fundamentals
Strong Portfolio Fundamentals K-REIT Asia’s portfolio occupancy rate is higher Long term leases(2) account for more than 30% than the market average of the portfolio’s NLA Portfolio weighted average lease term to expiry Occupancy % (“WALE”): 5.2 years 100% 100.0% WALE of top 10 tenants: 6.7 year
Slide 14: Awards & Accolades
Awards & Accolades Singapore Corporate Awards 2009 • Best Investor Relations Award (Silver) “$300m to less than $1b market capitalisation” category • Best Annual Report Awards (Silver) “REITs and Business Trusts” category BCA - Green Mark Gold Award • Awarded to One Raffles Quay ISO 14000 cert
Slide 15: Financial Performance
Financial Performance K-REITAaSia
Slide 16: FY 2009 Financial Results
FY 2009 Financial Results FY 2009 Distributable Income 21.1% FY 2009 FY 2008 Change Property Income $62.8m $52.6m $10.2m 19.4% Net Property Income $48.9m $39.7m $9.2m 23.2% Distributable Income to Unitholders $70.5m $58.2m $12.3m 21.1% Distribution Per Unit 5.28cts 4.41cts(1) 0.87cts 19.7% Distribut
Slide 17: 4Q 2009 Financial Results
4Q 2009 Financial Results 4Q 2009 Distributable Income 11.5% 4Q 2009 4Q 2008 Change Property Income $17.0m $14.3m $2.7m 18.9% Net Property Income $13.4m $11.8m $1.6m 13.6% Distributable Income to $19.4m $17.4m $2.0m 11.5% Unitholders Distribution Per Unit - For the period 1.45cts 1.32cts(1) 0.13cts
Slide 18: Balance Sheet
Balance Sheet Unitholders’ funds to $2 bn after recent rights issue As at 31 Dec 2009 As at 31 Dec 2008 Non-current Assets $2,044.6m $2,038.7m Total Assets $2,631.6m $2,092.3m Borrowings $578.9m $577.1m Total Liabilities $629.0m $606.7m Unitholders’ Funds $2,002.7m $1,485.7m Adjusted NAV Per Unit $1
Slide 19: Capital Management
Capital Management K-REITAaSia
Slide 20: Capital Position
Capital Position Aggregate Leverage improved to 25.2%(1) as at 1 March 2010 No debt maturing until March 2011 As at As at 31 Dec 2009 31 Dec 2008 Gross Borrowings(2) $581.1m $581.1m Aggregate Leverage 27.7% 27.6% All-in Interest Rate 4.23% 3.19% Interest Coverage Ratio(3) 3.19 times 2.97 times Weigh
Slide 21: Long-term Capital Management
Long-term Capital Management The Manager adopts a prudent capital management strategy Established sources of funding and added flexibility to manage capital requirements • Established S$1 bn MTN Programme in January 2009 • Completed Renounceable 1-for-1 Rights Issue in November 2009 No immediate
Slide 22: Fund Asset Enhancement Initiatives to Optimise Rental Income
Fund Asset Enhancement Initiatives to Optimise Rental Income Proposed asset enhancement initiatives at Keppel Towers and GE Tower Alteration and renovation of reception lobbies, lift car interiors, washrooms, pantries, etc. Potential conversion of existing 4th storey roof garden to an office pod
Slide 23: Singapore Office Sector Outlook
Singapore Office Sector Outlook 23
Slide 24: Improvement in Singapore's Economic Prospects
Improvement in Singapore’s Economic Prospects Singapore GDP Growth in 2010 to range between 4.5% - 6.5% Singapore ‘s Government forecast of 4.5 – 6.5% GDP growth in 2010 economy 2009 contracted less than expected at -2% recovers Singapore’s quarterly GDP turned positive in the second quarter o
Slide 25: Pace of Decline in Rentals Easing
Pace of Decline in Rentals Easing Occupancy and rents to improve as business confidence returns 18.0% 17.5% 13.3% S$ psf Grade A Rental 8.0% Decline Mar-09 Jun-09 Sep-09 Dec-09 97.1% 97.6% 97.6% 97.1% 96.2% 95.4% 93.1% 91.5% 91.2% 91.2% 18.7 18.8 18.8 17.2 16.0 16.1 16.1 14.9 15.0 15.0 12.6 12.9 12.
Slide 26: Singapore: Key Business Destination
Singapore: Key Business Destination Singapore remains a key investment market in Asia World’s easiest place to do business “Doing Business 2009” ranking by World Bank for 4th consecutive year World’s most open economy for International Trade and Investment “The Global Enabling Trade Report 2009”
Slide 27: Going Forward
Going Forward K-REITAaSia
Slide 28: Key Strengths
Key Strengths Prime assets Portfolio of six strategically located commercial office properties in Singapore and Australia with blue-chip Diversed stable of creditworthy tenants tenants Above-market portfolio occupancy of 95% as at 31 Dec 2009 Stable income underpinned by long term leases (WA
Slide 29: Three-pronged Growth Strategies
Three-pronged Growth Strategies Key Strategies Track Record Initiatives Portfolio occupancy Attract new creditworthy tenants consistently above market to increase occupancy as well as Active asset levels retain good existing tenants management Identify potential asset Steady growth of averag
Slide 30: Appendices
Appendices K-REITAaSia
Slide 31: Key Portfolio Statistics
Key Portfolio Statistics Bugis Junction Keppel Towers and As at 31 Dec 2009 One Raffles Quay Prudential Tower(2) 275 George Street(3) Towers GE Tower Attributable NLA (sf) 247,475 430,162 445,120 175,663 224,686 Ownership 100.0% 100.0% 33.3% 73.4% 50.0% Number of tenants 9 58 31 21 7 UniCredit Bank
Slide 32: Prudent Approach to Portfolio Valuation
Prudent Approach to Portfolio Valuation 31 Dec 08 31 Dec 09 Change Total Singapore Portfolio Value (S$ million) 2,102 1,973(1) (6.1%) Total Value psf (S$) 1,707 1,603(1) 1,400 2,500 2,213 1,200 2,062 2,066 2,000 1,894 1,000 (S$ million) 1,500 (S$) 800 1,347 1,265 1,229 600 1,100 1,000 985 935 400 58