Keppel REIT's 4Q 2015 distributable income grew 17.8% y-o-y

Gearing reduced significantly to 39.3% and High portfolio occupancy of 99.3% as at end-2015

Key Financial Highlights
 
• Income distributed to Unitholders for the fourth quarter of 2015 ("4Q 2015") and full year 2015 (FY 2015) rose 17.8% and 5.4% year-on-year ("y-o-y"), and remained constant on a quarter-on-quarter ("q-o-q") basis
• Higher distributable income was achieved despite the lack of income from Prudential Tower, as well as the absence of rental support from Ocean Financial Centre and Marina Bay Financial Centre ("MBFC") Phase One
• Improvement in distributable income was due mainly to higher property income from all assets in Singapore and Australia, as well as higher contributions from share of results of associates and share of results of joint ventures
• Distribution per unit ("DPU") of 1.68 cents for 4Q 2015, amounting to a total of 6.80 cents for FY 2015

Key Capital Management Highlights
 
• Gearing level reduced significantly by approximately 8% to 39.3%, considerably lower than the Monetary Authority of Singapore's (MAS) revised gearing limit of 45%
• Maintained fixed-rate loans at 70% which safeguards against interest rate volatility and provides certainty of interest expenses as well as financial and operational flexibility
• Average cost of debt remained stable at 2.5% and interest coverage ratio at a healthy 4.4 times
• Completed almost 100% of refinancing requirements in 2016, and maintained well-staggered debt maturity profile with weighted average term to expiry at a healthy 3.7 years
• Almost 100% of income from Australia hedged up till the third quarter of 2016 ("3Q 2016")

Key Portfolio Highlights

• Concluded a total of 114 leases, equivalent to approximately 1.6 million sf (attributable space of approximately 800,000 sf) of prime office space in 2015, bringing overall portfolio occupancy to a high of 99.3%
• Of the total new leases signed during the year, half were from tenants who were new to Keppel REIT's portfolio, one quarter from tenants new to Singapore and the remaining one quarter were expansions by existing tenants
• Approximately 30% (32 leases) or 480,000 sf (attributable space of approximately 222,000 sf) of space was committed in 4Q 2015
• Tenants from the telecommunications, media and technology ("TMT") sector accounted for half of the new leases signed during the quarter
• Achieved high tenant retention rate of 90% as at end-2015, and positive rent reversion averaging 13% for all new and renewed office leases in Singapore
• For leases expiring in 2016, the Manager is already in advanced negotiations with these tenants and is likely to achieve high retention
• For leases expiring in 2017, the Manager is also proactively engaging these tenants and is likely to renew most of these leases as the majority of these tenants are in their first renewal cycle
• Approximately 75% of total leases not due for renewal till 2018 and beyond, when limited new office supply is expected
• The Government of Western Australia (WA) commenced its 25-year lease at the office tower on the Old Treasury Building site in Perth in November 2015
• Announced divestment of interest in 77 King Street in Sydney for A$160 million or S$160 million, which is approximately 40% and 27% above the original purchase price and latest valuation respectively

Unaudited Results of Keppel REIT for the Third Quarter and Nine Months Ended 30 September 2015

Keppel REIT's distributable income for 3Q 2015 rose 4.6% y-o-y

A resilient portfolio and the Manager's continued focus on tenant retention see
high retention rate of 90% and positive rental reversion of 16% on average

• Recorded a 4.6% and 1.8% year-on-year ("y-o-y") growth in distributable income for 3Q 2015 and year-to-date 2015 ("YTD 2015") respectively, as well as sustained levels of distributable income on a quarter-on-quarter ("q-o-q") basis
• Higher distributable income was due mainly to better performance from Ocean Financial Centre, Bugis Junction Towers and 8 Chifley Square in Sydney
• Distribution per unit ("DPU") of 1.70 cents for the third quarter 2015 ("3Q 2015")
• Increased fixed-rate loans to over 70%, which will insulate against interest rate fluctuations
• Average cost of debt remained constant at 2.5% and interest coverage ratio at a healthy 4.4 times
• Hedged almost 100% of distribution payment from Australia up till the first quarter of 2016 ("1Q 2016")
• Continued to maintain low refinancing obligations, with close to 100% of total borrowings not due for repayment till 2017
• Concluded a total of 82 leases or approximately 1.1 million sf of office space to-date
• Of the new office leases secured in 3Q 2015, one-third were from tenants setting up presence and operations in Singapore, one-third were from first-time entrants into Keppel REIT's portfolio and the remaining one-third were expansions by existing tenants
• Notwithstanding the supply of office spaces from both upcoming and existing buildings, the Manager completed 100% of all leases due for review and almost all leases due for renewal in 2015. With this, approximately 70% of total leases are not due for renewal till 2018 and beyond
• Despite challenging leasing market conditions, the Manager has achieved a positive rent reversion averaging 16% for office leases signed, renewed and reviewed year-to-date
• Overall portfolio occupancy declined slightly q-o-q from 99.3% to 98.5%
• Gained strategic control of the office and retail components at 8 Exhibition Street in Melbourne with the successful acquisition of the three remaining prime street-fronting retails units
• Achieved Certificate of Practical Completion for the office tower on the Old Treasury Building site in Perth, and the Government of Western Australia (WA) will commence its 25-year long lease in the fourth quarter of 2015 ("4Q 2015")

Keppel REIT Unaudited Results for the First Quarter 2015

Keppel REIT's 1Q 2015 distribution income up approximately 18% q-o-q

Achieves DPU growth of 13% q-o-q,
Upward trend of office rental reversion gathers momentum
with 19% growth in rental rates in 1Q 2015

• Sustained level of distributable income year-on-year ("y-o-y") notwithstanding the expiry of rental support from the 87.5% interest in Ocean Financial Centre in January 2015, the absence of income contribution from Prudential Tower and the absence of rental support from Marina Bay Financial Centre ("MBFC") Phase One
• Distribution per Unit ("DPU") grew 13% quarter-on-quarter ("q-o-q") to 1.70 cents due to a full-quarter contribution from MBFC Tower 3 and stronger performance from Bugis Junction Towers
• Successfully reviewed two-thirds of the leases due in 2015, all with positive rent reversions
• Achieved positive rental rate reversion of 19% for all office leases signed, renewed and reviewed in 1Q 2015
• High tenant retention rate of approximately 96% in 1Q 2015
• Close to 80% of total leases are not due for renewal till 2017 and beyond
• Maintained high committed portfolio occupancy of 99.3%, with nine of 11 completed office towers in Singapore and Australia fully committed
• Proactive capital management strategy saw the maiden issuance of a seven-year $50 million fixed-rate Medium Term Notes, which is due in 2022
• Over 80% of borrowings are not due for repayment till 2017 and beyond
• Continuing the upward trend of office rental reversions, Keppel REIT's current strong portfolio will continue to deliver sustainable distributions for FY2015

Keppel REIT's Net Property Income grows 16.1% year-on-year Achieves positive rental reversion of 32.3% in 3Q 2014 and Maintains healthy annualised distribution yield of 6.4%

• Net property income for the first nine months of 2014 ("YTD Sept 2014") rose 16.1% year-on-year ("y-o-y") to $117.2 million
• Achieved positive rental reversion of 32.3% in 3Q 2014
• Attained high tenant retention rate of 92% in 3Q 2014
• Strategic rejuvenation of property portfolio with the proposed acquisition of a one-third interest in Marina Bay Financial Centre ("MBFC") Tower 3 on 18 September 2014 and the successful divestment of its 92.8% stake in Prudential Tower on 26 September 2014
• With the portfolio upgrade, credit rating agencies Moody's and Standard & Poor's have both reaffirmed Keppel REIT's rating at "Baa2" and "BBB" respectively with a stable outlook
• All-in interest rate remains at 2.2%
• Proactive leasing strategy with forward renewals of approximately 175,000 sf for YTD Sept 2014
• Maintained strong committed portfolio occupancy of 99.3%, with seven of 11 office towers fully committed

Unaudited Results of Keppel REIT for the Second Quarter and Half Year Ended 30 June 2014

Keppel REIT's Distributable Income for 1H 2014 grew 3.0% year-on-year
Achieved distribution yield of 6.1%

• Property income rose 14.0% year-on-year ("y-o-y") to $94.1 million for 1H 2014 due to improved performance from Ocean Financial Centre and Prudential Tower, as well as additional income from 8 Exhibition Street in Melbourne, which was acquired in August 2013.
• Net property income increased 18.0% y-o-y to $78.7 million.
• Distributable income rose to $108.3 million, an increase of 3.0% y-o-y.
• Distribution per unit ("DPU") of 1.90 cents for 2Q 2014, making it 3.87 cents for 1H 2014.
• Divestment of 92.8% interest in Prudential Tower for $512 million announced, which is 4.5% above the property's valuation of $490 million and a 46.7% premium over the original purchase price.
• Completed successfully the early renewal of some key leases to ensure income certainty over a longer term.
• Achieved overall tenant retention rate of 87% for 1H 2014.

Keppel Reit posts record quarterly distributable income

KEPPEL Reit on Monday announced a record quarterly distributable income of S$55.1 million, up 5.5 per cent year-on-year, for its first quarter ended March 31, 2014.

This translated to a distribution per unit (DPU) of 1.97 Singapore cents for the quarter, unchanged from a year ago.

The Reit said this was due to improved performance from Ocean Financial Centre and Prudential Tower, as well as the additional income from 8 Exhibition Street in Melbourne which was acquired in August 2013.

Net property income rose 14.7 per cent to S$39.5 million, thanks to the better performance of its properties

Ocean Financial Centre achieves full occupancy

All of Keppel REIT’s Singapore properties are now 100% occupied

Keppel REIT Management Limited (Keppel REIT Management), as Manager of Keppel REIT, is pleased to announce that both the office and newly completed retail space at Ocean Financial Centre are fully committed.

With this, all of Keppel REIT's five Singapore properties are now 100% occupied, up from its Singapore portfolio average occupancy of 99.5% as at end-September 2013. This is also higher than the average Singapore CBD occupancy of 93.5%¹ for the third quarter of 2013.

Ms Ng Hsueh Ling, CEO of Keppel REIT Management, said, "We have steadily signed on tenants to achieve full occupancy, from approximately 80% when we acquired Ocean Financial Centre in December 2011. This attests to Ocean Financial Centre as one of Singapore's premium office properties with an enviable location at the heart of the Raffles Place and Marina Bay precincts.

"We will continue to focus on maintaining a strong portfolio of established tenants, as well as delivering steady performance and value to our Unitholders."

The latest tenants at Ocean Financial Centre include those from the energy, human resources as well as legal service sectors, namely Linc Energy, BGC Group and Olswang Asia LLP. They add to the stellar line-up of multinational companies such as Australia and New Zealand Banking Group Ltd (ANZ), BNP Paribas, Gazprom and Drew & Napier, all of whom have made Ocean Financial Centre their choice business address.

Strategically located at the intersection of the prime Raffles Place and Marina Bay precincts, the 43-storey Ocean Financial Centre has a total net lettable area of approximately 885,000 sf. Phase 2, which comprises a seven-storey carpark and retail annexe, was completed in November 2013. The approximate 8,600 sf of retail space is leased to F&B tenants such as Paul café, Starbucks, and Cedele.

As part of Phase 2 development, the underground pedestrian network (UPN) linking Ocean Financial Centre to Raffles Place MRT Interchange Station has been completed. The UPN also connects Ocean Financial Centre to all of Keppel REIT's properties in the Raffles Place and Marina Bay precincts, including Marina Bay Financial Centre Towers 1 & 2, Marina Bay Link Mall and One Raffles Quay. Tenants will also enjoy greater connectivity when the Downtown MRT Station, which is directly linked to Marina Bay Link Mall, opens on 22 December 2013.

In keeping with Keppel's commitment to contribute to the cityscape with sustainable properties, Ocean Financial Centre features a green wall which spans approximately 23,000 sf, or the equivalent of approximately eight tennis courts. The green wall was awarded the Guinness World Record for the World's Largest Vertical Garden and recently clinched the Skyrise Greenery Award (Excellence) by the National Parks Board.

To enrich the arts and cultural landscape in Singapore's central business district, three art pieces by internationally acclaimed artists - "Tall Tree in the Eye" by Anish Kapoor, "School of Fish" by Jane Cowie and "Singapore Soul" by Jaume Plensa, were specially commissioned at the public plaza of Ocean Financial Centre.

Temasek sells KReit stake for $125m

Placement works out to 3.74% of KReit that Temasek received as dividend

By

Lisa Lee lisalcc@sph.com.sg

         

MBFC: KReit's key properties in Singapore include the Ocean Financial Centre, Marina Bay Financial Centre (above) and One Raffles Quay. - FILE PHOTO

TEMASEK Holdings has sold its entire direct stake in office landlord Keppel Reit (KReit) in a share placement that started on Monday evening, sources close to the deal said yesterday.

The deal involved 103,994,321 shares offered at a price range of between $1.195 and $1.21 per share, the sources said. This represents a 1.6-1.8 per cent discount to the trust's last closing price of $1.23 on Oct 21. The placement offer amounted to an estimated $125 million.

By the market close on Tuesday, some 163 million shares worth $194.4 million had changed hands, market data from the Singapore Exchange showed.

Temasek's share sale works out to 3.74 per cent of KReit, representing the stake it had received from the dividend in specie distributed by Keppel Corp to its shareholders during its FY2012 final results announced on Jan 24, 2013.

Keppel REIT's Total Return before Tax for YTD Sep 2013 Grew 14.6% Year-on-Year

• Total Return before Tax increased 14.6% year-on-year ("y-o-y") to $115.9 million
• Net Property Income for YTD Sep 2013 increased 9.9% y-o-y to $100.9 million due mainly to improved performance from Ocean Financial Centre and the additional contribution from 8 Exhibition Street, a premium freehold Grade A office building in prime central business district ("CBD") of Melbourne, Australia
• Share of Results of Associates for YTD Sep 2013 registered an improvement of 33.2% y-o-y to $46.4 million due to improved performance from Marina Bay Financial Centre Phase 1 and One Raffles Quay
• Distributable Income for YTD Sep 2013 rose 6.1% y-o-y to $159.1 million
• Overall committed portfolio occupancy increased from 99.1% to 99.4%

Keppel Reit issues 95m new units to raise S$119.7m

By

Lee Meixian

         

 

 

Keppel Reit on Friday announced that it has successfully raised gross proceeds of S$119.7 million in an issuance of 95 million new units to institutional and other investors - KEPPEL CORP

Keppel Reit on Friday announced that it has successfully raised gross proceeds of S$119.7 million in an issuance of 95 million new units to institutional and other investors.

The money raised will be used to buy a 50-per-cent stake in 8 Exhibition Street, a property in Melbourne, Australia, it said, confirming an earlier online report from BT.

The issue price of S$1.26 per unit carried a 2.58 per cent discount to its adjusted volume weighted average price of S$1.2934 for trades done on Thursday.

DBS Bank Ltd is Keppel Reit's placement agent.

Keppel REIT delivers 6.1% Distribution Yield for 1H 2013

• Distributable Income for 1H 2013 rose by 6.8% year-on-year ("y-o-y") to $105.1 million, surpassing $104 million for two consecutive half-year distributions
• Distribution Per Unit ("DPU") for 1H 2013 increased by 2.6% y-o-y to 3.94 cents
• Annualised DPU for 1H 2013 rose by 3.0% y-o-y to 7.95 cents
• Net Property Income ("NPI") for 1H 2013 increased 11.5% y-o-y to $66.7 million due mainly to improved performance from Ocean Financial Centre ("OFC") and 77 King Street
• Property Income for 1H 2013 registered an improvement of 8.9% y-o-y to $82.6 million
• Share of Results of Associates for 1H 2013 increased 37.5% y-o-y to $30.4 million and increased 48.9%  y-o-y to $16.2 million for 2Q 2013 due to higher contribution from Marina Bay Financial Centre Phase 1 ("MBFC Phase 1") and One Raffles Quay ("ORQ")
• Overall committed portfolio occupancy increased from 98.8% to 99.1%

Keppel Reit acquires 50% stake in Aussie office building

By

Mindy Tan

         

 

8 Exhibition Street: 100% leased to tenants in the financial, aviation, tax and transaction services sectors - PHOTO: KEPPEL CORPORATION LIMITED

KEPPEL Reit has acquired a 50 per cent stake in a freehold office building, 8 Exhibition Street in Australia, for A$160.2 million (S$192.4 million).

Located in the prime part of the Melbourne central business district, the 35-storey freehold commercial building has a total net lettable area of about 480,309 sq ft with 3,304 sq ft of ancillary retail space on the ground floor.

The building has a 4.5 star NABERS energy rating.

"This is a rare opportunity to acquire a freehold premium grade office building in the most prime part of Melbourne's CBD and will add to Keppel Reit's sterling portfolio of commercial assets in Singapore and in the key cities of Australia," said Ng Hsueh Ling, chief executive officer of Keppel Reit Management, the manager of the real estate investment trust.

Keppel Corporation: Sells 6.7% of Keppel REIT at S$1.555/unit

Keppel Corporation (KEP) announced that its wholly owned subsidiary, Keppel Real Estate Investment Pte Ltd, has entered into a sale and purchase agreement with Goldman Sachs (the placement agent) for the sale of 180m units of Keppel REIT (6.7% of total issued units of KREIT) for S$1.555/unit.


The aggregate cash consideration of S$279.9m took into account KREIT’s last transacted price of S$1.605/unit as at 20 May 2013 and the 30-day VWAP of S$1.5129.

This is at a premium to the book value and NTA/share of S$1.31 and S$1.28, respectively, as at 31 Mar 2013. Upon completion of the sale (expected 27 May), KEP’s interest in KREIT remains substantial (from 58.2% to 51.5%)

Keppel REIT's Net Property Income Increased 20.7% Year-on-year

• Net Property Income ("NPI") increased 20.7% year-on-year ("y-o-y") to $34.4 million primarily due to improved performance from Ocean Financial Centre ("OFC") and 77 King Street.
• Property Income registered an improvement of 13.2% y-o-y to $41.4 million.
• Share of Results of Associates increased 26.4% y-o-y to $14.2 million due to higher contribution from Marina Bay Financial Centre Phase 1 ("MBFC Phase1").
• Distributable income for 1Q 2013 was $52.2 million, an increase 7.6% y-o-y.
• Annualised 1Q 2013 Distribution Per Unit ("DPU") rose by 4.6% y-o-y to 7.99 cents.
• All refinancing for 2013 is completed, and weighted average term to expiry has been extended from
  3.1 years to 3.2 years.
• Completed the acquisition of the new office building to be built on the Old Treasury Building site
  in Perth, Western Australia.
• Overall committed portfolio occupancy increased to approximately 99%.
• Four out of seven completed properties are 100% occupied.

Keppel Reit's Sydney property over 56% pre-committed

By

Lee Meixian

         

                  

Keppel Reit on Monday said the total pre-commitment at its jointly-owned property with Mirvac Group in Sydney, 8 Chifley Square, is more than 56 per cent, after it signed on a new tenant, QBE Insurance Group.

Under the 10-year lease agreement, QBE will occupy about 30,000 square feet of prime office space on the top four levels of 8 Chifley Square, alongside law firm, Corrs Chambers Westgarth, Keppel Reit said.

8 Chifley Square is a 34-storey office building in Sydney's central business district, comprising about 206,000 square feet of netlettable area.