Webinar with Syfe 13 August 2020
Sustainable Pan-Asian Portfolio with Income Resilience 98.6% Strong committed occupancy with long weighted average lease expiry of 4.6 years Marina Bay One Raffles Ocean Financial Financial Centre Quay Centre (1) 5.1% Annualised distribution yield of Grade A commercial portfolio Green Awards BCA Green Mark Platinum award for all Singapore assets; 5 Stars NABERS Energy rating for most Australian assets Note: Data as at 30 June 2020. 2 (1) Based on an annualised DPU and the market closing price of $1.10 per Unit as at 30 June 2020. 2
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 311 Spencer Street, T Tower, Seoul Melbourne 99.4% Interest 50% Interest South Korea (Achieved practical completion Ocean Financial 3.7% on 9 July 2020) Centre 79.9% Interest 8 Exhibition Street, Melbourne 50% Interest Singapore Marina Bay 275 George Street, Financial Centre 80.0% Australia Brisbane 33.3% Interest 50% Interest 16.3% 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 30 June 2020. 3
Resilient and Diversified Tenant Base ▪ Keppel REIT has a diversified tenant ▪ Top 10 tenants take up 37.9% of NLA base of 340 (1) tenants, many of which are and contribute 34.9% of gross rent established blue-chip corporations Top 10 Tenants Tenant Business Sector 6.6% DBS Government of Banking, insurance and financial services 40.3% 5.3% GOWA Western Australia Technology, media and telecommunications 13.3% 4.4% Standard Chartered Legal 8.8% Energy, natural resources, shipping and marine 8.0% 4.2% Ernst & Young Government agency 7.9% 4.1% BNP Paribas Real estate and property services 6.4% Marina Bay Accounting and consultancy services 5.9% 3.4% Telstra Financial Centre Services 4.4% David Malcolm 2.6% UBS Manufacturing and distribution 2.3% Justice Centre Retail and food & beverage 1.8% 2.5% One Raffles Quay Drew & Napier Hospitality and leisure 0.1% 8 Exhibition Street 2.5% Others 0.8% ANZ Ocean Financial Centre Total 100% 275 George Street 2.3% Deutsche Note: All data as at 30 June 2020 and based on portfolio committed NLA. 4 (1) Tenants with multiple leases were accounted as one tenant.
2Q 2020 Key Highlights AUM by Geography ▪ 2Q 2020 Distribution per Unit (DPU) was 1.40 cents, an increase of 0.7% (As at 30 Jun 2020) compared to 2Q 2019 and stable compared to 1Q 2020 ▪ Implemented tenant support measures during the COVID-19 outbreak 3.7% Singapore 16.3% Australia ▪ Borrowing cost was lower with South Korea all-in interest rate of 2.48% p.a., 80.0% down from 2.86% year-on-year ▪ Building occupancy remains high with a committed occupancy of Committed NLA by Asset Type 98.6% and a long portfolio (As at 30 Jun 2020) weighted average lease expiry of 4.6 years 1.8% Office ▪ Achieved practical completion of Retail 311 Spencer Street development in Melbourne on 9 July 2020 311 Spencer Street 98.2% (Artist’s Impression) 5 (1) Includes capital gains distribution of $5.0 million for 2Q 2020
Navigating the COVID-19 Situation Across Keppel REIT’s portfolio: Developments on the ground SMEs (2) in portfolio ▪ Gradual return of tenants to offices after the two- month “Circuit Breaker”; site visits by prospective tenants can resume with adherence to social distancing requirements 5.6% ▪ On 5 June 2020, the COVID-19 (Temporary Measures) (Amendment) Bill was of portfolio NLA passed in Parliament and provides for co-sharing of rental waiver to eligible small and medium enterprises (SMEs) by the government and the landlord: Tenant relief measures (2) Singapore o Eligible retail SMEs, gyms and clinics: two-month rental waiver by landlord, Approx. $12.5m in addition to the pass-through of the 100% property tax rebate and cash grant from the government which amounts to approximately two months of rental including estimated $9.2m of government property tax rebates o Eligible office SMEs: one-month rental waiver by landlord, on top of the and cash grant pass-through of the 30% property tax rebate and cash grant from the government which amounts to approximately one month of rental Rental collection ▪ Facilitating return of tenants to offices as restrictions are gradually eased in most 98% states in 2Q 2020 Australia ▪ “Mandatory Code of Conduct” issued by the National Cabinet, focusing on SMEs with turnover below $50m, which seeks to protect eligible tenants from termination of Rental deferrals leases and entitles eligible tenants (1) to rent waivers and deferrals $1.6m ▪ South Most tenants have been operating from T Tower, with adherence to social distancing as at 30 Jun 2020 Korea advisory (1) Only applicable to SMEs with turnover of $50m or less, and who are eligible for the federal Jobkeeper program. One of the main criteria for a business to be eligible for the program is a projected reduction of revenue by more than 30% due to COVID-19. Rent reductions may consist of a combination of waivers and deferrals where 6 6 rental waiver must be no less than 50% of the total rent reduction. (2) Estimates as at 30 June 2020. Final tenant eligibility will be dependent on the assessment by the authorities.
Facilitating Return to Workplaces Examples of measures in place: ▪ Temperature scanning and ▪ Regular purging of air contact tracing measures from building ▪ Maintaining good air ▪ Interlinked building card access quality with advanced and lift destination control air filtration systems systems facilitate contactless entry and social distancing High Safe distancing reminders on indoor air Thermal scanning at entrances patrolling RoboGuard Safe access quality Increased Technologically disinfection -sound environment ▪ ▪ Increased cleaning frequency of Equipped with appropriate high contact areas broadband network infrastructure to support Hand sanitisers at Safe distancing Disinfection of high ▪ Hand sanitisers at common areas lift lobbies reminders at gantries contact areas internet bandwidth for tenants’ video conferencing and meeting facilities 7
Office Remains a Necessity ▪ Physical offices will remain a necessity, although the form and functions of the office will evolve Keppel REIT will continue to optimise the ▪ While firms will likely incorporate work-from-home, Varying adoption portfolio and calibrate its leasing strategy to many functions will still require office space for social of telecommuting interaction, client engagement and collaboration. meet potential shifts in occupier demand ▪ Space required for each employee may need to Reversal of increase to incorporate social distancing, reversing the densification densification trend in the last two decades. Robust Best-in-class, portfolio in safe and quality well- technologically ▪ Impact on office demand will likely be at a measured networked -sound work Shifts at pace as existing leases are typically three to five years locations environments measured pace in duration. ▪ Ongoing developments may be delayed by social Proactive tenant Potential deferral distancing restrictions at construction sites. Future engagement to find of supply developments may also be deferred or changed to solutions that best non-office use. support occupier needs 8
Singapore Office Market ▪ Average Grade A office rents registered a decrease to $11.15 psf pm in 2Q 2020 while average occupancy in core CBD decreased to 94.4% Grade A Rent and Core CBD Occupancy Demand and Supply 2.1 1.9 1.9 1.7 1.1 95.8% 95.8% 95.4% 94.8% 94.8% 94.4% 93.8% 0.8 0.8 $15 100% 0.8 0.7 0.5 0.4 0.4 0.3 0.0 0.02 $11.55 $11.50 $11.15 $12 80% $10.80 $10.40 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $9.40 $9.10 (1) (1) (2) Net Supply Net Demand Forecast Supply $9 60% Key Upcoming Supply in CBD (2) sf $6 40% 2H 2020 Afro-Asia i-Mark 140,000 CapitaSpring 635,000 $3 20% 2021 Hub Synergy Point Redevelopment 131,200 Central Boulevard Towers 1,258,000 $0 0% 2022 Guoco Midtown 650,000 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Dec-2019 Mar-2020 Jun-2020 2023 - Average Grade A Rent ($ psf pm) 2024 Keppel Towers Redevelopment 541,600 Core CBD Average Occupancy (%) (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 Source: CBRE, 2Q 2020. 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. 9
Committed to Delivering Stable Income & Sustainable Returns Portfolio Optimisation • Portfolio optimisation to improve yield, while maintaining exposure to Singapore CBD Portfolio Optimisation • Hold quality assets across different markets for improved income stability and to provide more long-term growth opportunities Asset Performance Asset Performance • Drive individual asset performance with proactive leasing and cost management strategies • Implement initiatives to future proof assets and enhance sustainability Capital Efficiency Capital Efficiency • Optimise capital structure to reduce borrowing costs and improve returns • Manage debt maturities and hedging profiles to reduce risk 10
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