Investor Presentation March 2020
Outline • Key Highlights 3 • Market Review 6 • Portfolio Optimisation 11 • Additional Information 26 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
Green and Sustainable Portfolio Large Portfolio of Strong Portfolio Commitment to Premium Office Assets Occupancy and WALE Sustainability BCA Green Mark Platinum High portfolio committed Approximately $8 billion of award for all Singapore assets; occupancy and long WALE Grade A commercial assets 5 Stars NABERS Energy rating provides income resilience pan-Asia for most Australian assets Marina Bay One Raffles Ocean Financial Financial Centre Quay Centre 3 3
Pan-Asian REIT with Premium Office Portfolio $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
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. 5
Market Review Singapore CBD Skyline 6
Singapore Office Market ▪ Average Grade A office rents increased to $11.55 psf pm. Average occupancy in core CBD decreased slightly to 95.8% in 4Q 2019 95.8% 95.8% 96.0% 95.7% 95.2% 95.8% 94.8% 94.8% 93.8% $15 100% $11.55 $11.45 $11.30 $11.20 $11.15 $12 $10.80 80% $10.40 $9.40 $9.10 $9 60% $6 40% $3 20% $0 0% Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Mar-2019 Jun-2019 Sep-2019 Dec-2019 Average Grade A Rent ($ psf pm) Core CBD Average Occupancy (%) Source: CBRE, 4Q 2019. 7
Singapore Office Market (Cont’d) Office Demand and Supply Key Upcoming Supply in CBD (2) sf Past average annual net demand (1) : 0.8 million sf Forecast average annual supply (2) : HD 139 84,000 Past average annual net supply (1) : 0.8 million sf 55 Market Street (AEI) 76,000 1.0 million sf 2020 30 Raffles Place 313,000 Afro-Asia i-Mark 140,000 2.1 1.9 1.9 79 Robinson Road 514,000 1.7 1.1 CapitaSpring 635,000 2021 0.8 0.8 0.8 0.7 Hub Synergy Point Redevelopment 128,000 0.4 0.4 0.0 0.0 0.02 -0.04 Central Boulevard Towers 1,258,000 2022 Guoco Midtown 650,000 2015 2016 2017 2018 9M 2019 2020 2021 2022 2023 2024 Net Supply Net Demand Forecast Supply 1) Based on URA data on historical net demand and supply of office space in Downtown Core and Rest of Central Area. Supply is calculated as net change of stock over the year and may include office stock removed from market due to demolitions or change of use. 2) Based on CBRE data on CBD Core and CBD Fringe. 8
Australia Office Market ▪ National CBD office market occupancy rose slightly quarter-on-quarter from 91.7% as at end June 2019 to 91.9% as at end September 2019 89.0%91.8%91.3%94.9% 96.0% 96.4% 95.9% 95.2% Brisbane CBD 88.4% 86.8% 86.0% 89.6% 92.8% 92.1%92.3% 93.2% Sydney CBD 100% 100% 1,200 1,200 80% 964 1,032 1,039 1,041 1,041 80% Prime Grade occupancy Prime Grade occupancy 900 900 799 60% 60% 679 rose to 93.2% 620 was lower at 95.2% 600 600 410 403 406 40% 40% 397 396 400 389 386 300 20% 300 20% Leasing demand to Leasing demand to 0 0% 0 0% improve and vacancy to remain positive amidst 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 3Q19 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 3Q19 steadily decline over the upcoming supply Prime Gross Effective Rent (AUD psm/year) Prime Gross Effective Rent (AUD psm/year) short term Prime Grade Occupancy (%) Prime Grade Occupancy (%) 89.7% 90.1% 92.1%94.0%97.0%97.6%97.5% 97.9% 85.1% 76.5% 77.7% 81.4% 84.0% 84.7% 85.1% 85.6% 100% Melbourne CBD 100% Perth CBD 1,200 1,200 80% 80% 900 Prime Grade occupancy 900 60% 60% Prime Grade occupancy 562 563 538 539 544 491 503 447 447 447 447 rose to 97.9% 448 431 435 600 600 392 406 40% rose to 85.6% 40% 300 300 20% 20% Vacancy to remain tight as Vacancy to reduce with 0 0% 0 0% majority of upcoming projects 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 3Q19 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 3Q19 minimal supply pipeline have been pre-committed Prime Gross Effective Rent (AUD psm/year) Prime Gross Effective Rent (AUD psm/year) Prime Grade Occupancy (%) Prime Grade Occupancy (%) Source: JLL Research, 3Q 2019. 9
Seoul Office Market ▪ CBD Grade A occupancy improved from 84.5% as at end June 2019 to 85.1% as at end September 2019 Occupancy Improvement Lack of New Supply After 2020 85.4% 89.1% 87.5% 84.9% 86.6% 82.7% 87.6% 86.7% 88.5% 91.1% 93.7% 200,000 89.1% 100% 100% 87.5% 86.5% 84.9% 84.5% 85.1% 82.7% 82.5% 160,000 80% 80% 100,000 120,000 60% 81,041 60% 96,540 95,618 95,164 91,704 92,148 91,665 89,514 88,623 80,000 40% 40% 37,122 32,003 33,134 20% 40,000 20% 15,670 16,011 10,330 0 0% 0 0% 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F 4Q14 4Q15 4Q16 4Q17 4Q18 1Q19 2Q19 3Q19 CBD Grade A Net Effective Rent (KRW per py pm) CBD Grade A Supply (py) CBD Grade A Occupancy (%) CBD Grade A Occupancy (%) Source: JLL Research, 3Q 2019. 10
Portfolio Optimisation T Tower, Seoul 11
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