Fourth Quarter & Full Year 2019 Financial Results 22 January 2020
Outline • Performance Highlights 3 • Financial Review 5 • Portfolio Optimisation 11 • Looking Ahead 23 • Additional Information 29 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 information or facts and may be “forward - looking” statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments or shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes, and the continued availability of financing in the amounts and terms necessary to support future business. Prospective investors and unitholders of Keppel REIT (“Unitholders”) are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of Keppel REIT Management Limited, as manager of Keppel REIT (the “Manager”) on future events. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained in this presentation. None of the Manager, the trustee of Keppel REIT or any of their respective advisors, representatives or agents shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. The value of units in Keppel REIT (“Units”) and the income derived 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 principal amount invested. Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (“SGX - ST”) . Listing of the Units on SGX-ST does not guarantee a liquid market for the Units. 2
Performance Highlights Financial Review Portfolio Updates ▪ ▪ 4Q 2019 distributable income was $47.1 million (1) ; High portfolio committed occupancy of 99.1% 4Q 2019 DPU was up 2.9% y-o-y at 1.40 cents and long portfolio weighted average lease expiry (WALE) of 4.9 years ▪ FY 2019 distributable income was $189.3 million (1) ; ▪ FY 2019 DPU was up 0.4% y-o-y at 5.58 cents Acquisition of T Tower and divestment of Bugis Junction Towers as part of portfolio optimisation ▪ Lowered aggregate leverage to 35.8% and all-in interest rate to 2.77% p.a. Active Portfolio Optimisation May 2019: Acquisition of Nov 2019: Divestment of On track for 2Q 2020: Completion of T Tower in Seoul Bugis Junction Towers in Singapore 311 Spencer Street in Melbourne (1) Includes distribution of capital gains of $4.0 million for 4Q 2019 and $12.0 million for FY 2019. 3
Portfolio Anchored by Singapore CBD Assets $7.9 billion portfolio in key business districts of Singapore, Australia and South Korea enhances income diversification and long-term stability T Tower, Seoul 311 Spencer Street, 99.38% Interest Melbourne South Korea 50% Interest 3.8% Ocean Financial (Under development) Centre 79.9% Interest 8 Exhibition Street, Melbourne 50% Interest Singapore Marina Bay 275 George Street, Financial Centre 80.5% Australia Brisbane 33.3% Interest 50% Interest 15.7% David Malcolm Justice Centre, One Raffles Quay Perth 33.3% Interest 8 Chifley Square, 50% Interest Sydney 50% Interest Note: Based on assets under management as at 31 December 2019. 4
Financial Review Marina Bay Financial Centre, Singapore 5
Financial Performance 4Q 2019 4Q 2018 +/(-) FY 2019 FY 2018 +/(-) Property Income $41.7 m $37.8 m +10.4% $164.1 m $165.9 m (1.1%) $33.4 m $30.5 m +9.3% $128.9 m $133.2 m (3.2%) Net Property Income (NPI) Less: Attributable to Non-controlling Interests ($4.4 m) ($0.9 m) Nm ($16.8 m) ($1.1 m) Nm $29.0 m (1) $29.6 m (2.0%) $112.1 m (1) $132.1 m (15.2%) NPI Attributable to Unitholders Share of Results of Associates $24.4 m (2) $23.9 m +2.1% $106.4 m (2) $103.9 m +2.4% and Joint Ventures $47.1 m (3) $46.2 m (4) $189.3 m (3) $189.0 m (4) Distribution to Unitholders +2.1% +0.1% DPU (cents) 1.40 1.36 +2.9% 5.58 5.56 +0.4% (1) Reflects amount attributable to Unitholders based on an interest of 79.9% in Ocean Financial Centre Distribution Timetable following the divestment of a 20% stake in December 2018, as well as an interest of 99.38% in T Tower in Seoul which was acquired in May 2019. Ex-Date: Thu, 30 Jan 2020 (2) Share of results of associates was higher year-on-year due mainly to higher rentals and one-off income. Share of results of joint ventures was lower year-on-year due mainly to depreciation of Australian dollar Books Closure Date: Fri, 31 Jan 2020 against Singapore dollar. (3) Includes distribution of capital gains of $4.0 million for 4Q 2019 and $12.0 million for FY 2019. Payment Date: Fri, 28 Feb 2020 (4) Includes distribution of capital gains of $3.0 million for 4Q 2018 and FY 2018. 6
Income Contribution Breakdown by Geography FY 2019 FY 2018 % % (for FY 2019) $’m $’m Ocean Financial Centre (1) 66,691 27.4 93,691 35.5 Marina Bay Financial Centre 81,935 33.6 81,008 30.7 One Raffles Quay 23,852 9.8 24,793 9.4 76.7% 14,371 (2) Bugis Junction Towers 5.9 16,145 6.1 8 Chifley Square 12,832 5.3 13,019 4.9 11,825 4.9 11,157 4.2 8 Exhibition Street 275 George Street 11,019 4.5 11,135 4.2 19.9% 12,703 5.2 13,169 5.0 David Malcolm Justice Centre 3.4% T Tower (3) 8,165 3.4 - - Singapore Australia South Korea Total 243,393 100.0 246,117 100.0 (1)Reflects the amount attributable to Unitholders with consideration of the divestment of a 20% stake in December 2018 (before: 99.9%; after: 79.9%). (2)For the period from 1 January 2019 to 29 November 2019 (date of divestment). (3)Reflects the amount attributable to Unitholders based on an interest of 99.38% acquired on 27 May 2019. 7
Balance Sheet +/(-) As at 31 Dec 2019 As at 31 Dec 2018 Deposited Property (1) (4.2%) $8,032 m $8,380 m Total Assets $7,449 m $7,784 m (4.3%) Borrowings (2) (5.4%) $2,879 m $3,044 m Total Liabilities (6.7%) $2,286 m $2,449 m Unitholders’ Funds $4,585 m $4,757 m (3.6%) Adjusted NAV per Unit (3) $1.35 $1.39 (2.9%) (1) Included interests in associates and joint ventures. (2) Included borrowings accounted for at the level of associates and excluded the unamortised portion of upfront fees in relation to the borrowings. (3) For 31 December 2019 and 31 December 2018, these excluded the distributions to be paid in February 2020 and paid in February 2019 respectively. 8
Proactive Capital Management ▪ Lowered aggregate leverage to 35.8% and reduced As at 31 Dec 2019 all-in interest rate to 2.77% p.a. as at end 2019 Interest Coverage Ratio (1) 3.8x ▪ Increased sustainability-focused funding with two green All-in Interest Rate 2.77% p.a. loan facilities obtained in FY 2019 Aggregate Leverage 35.8% 38% Debt Maturity Profile Weighted Average Term to Maturity 3.4 years (as at 31 Dec 2019) $200m Unencumbered Assets 78% $75m 17% Managing interest rate exposure 14% 13% $818m 10% 8% $50m $479m $400m (2) $375m $246m $236m Sensitivity to SOR (3) 76% Every 50 bps in SOR 2020 2021 2022 2023 2024 2025 Borrowings on translates to $50m 7-year MTN at 3.15% Bank loans Fixed Rates (Issued in February 2015) ~0.09 cents in DPU $200m 5-year convertible bonds at 1.9% $75m 7-year MTN at 3.275% (Issued in April 2019) (Issued in April 2017) (1) Computed as EBITDA (including share of results of associates and joint ventures) over borrowing costs, after adjusting for non-cash items including but not limited to management fees paid in Units and fair value changes of derivatives. (2) As at the date of announcement, we have received commitments to refinance loans that are due in FY 2020. (3) Based on the Group’s borrowings including those accounted for at the level of associates, and number of Units in issue as at 31 December 2019. 9
Unit Buy-Back Programme ▪ Executed DPU-accretive Unit buy-back programme as part of proactive capital management strategy Monthly Unit Buy-Back Volume Total Units Purchased and (since initiation of programme until 4Q 2019) Cancelled 23.55m 37.9m In 4Q 2019 13.56m In FY 2019 67.1m 10.02m 7.85m Since initiation of Unit 5.80m 5.36m 4.08m 4.20m 4.35m buy-back programme in 95.3m 2.50m 3.25m 3.50m 3.35m 2.19m 1.78m 3Q 2018 till 4Q 2019 - - - Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 10
Portfolio Optimisation T Tower, Seoul 11
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