KLCCP Stapled Group Analyst Briefing 4 th Quarter ended 31 December - - PowerPoint PPT Presentation

KLCCP Stapled Group

Analyst Briefing 4th Quarter ended 31 December 2013 FYE 2013

KLCCP Stapled Group Corporate Day 24 January 2014

Disclaimer

These materials contain historical information of the Company which should not be regarded as an indication of future performance or results. These materials also contain forward-looking statements that are, by their nature, subject to significant risks and uncertainties. These forward-looking statements reflect the Company’s current views with respect to future events and are not a guarantee of future performance or results. Actual results, performance or achievements of the Company may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future, and must be read together with such assumptions. No part of these materials shall form the basis of, or be relied upon in connection with, any investment decision whatsoever.

1

KLCCP Stapled Group

KLCC PROPERTY HOLDINGS BERHAD KLCC REAL ESTATE INVESTMENT TRUST Stapled Securities Comprising the stapling of 1,805,333,083

• rdinary shares of RM1.00 each in

KLCCP and 1,805,333,083 in KLCC REIT

Traded as a single security under KLCC REIT on Bursa (5235SS)

KLCC PROPERTY HOLDINGS BERHAD

KLCCP Stapled Group

Stapled Group Financial Highlights

FYE 2013

Financial Results Overview – FYE 2013

Statement of Comprehensive Income 31 Dec’13 RM’mil 31 Dec’12 RM’mil % Variance Revenue 1,279 1,178 8.6 Operating Profit 962 878 9.6 Profit Before Tax 875 802 9.1 Profit for the year 763 593 28.7 Profit Attributable to Equity Holders of KLCCP and KLCC REIT 626 382 63.9 Statement of Financial Position Total Assets 16,265 15,790 3.0 Total Liabilities 2,858 2,798 2.1 Equity Attributable to Holders

• f KLCCP and KLCC REIT

11,695 8,434 38.7

200 400 600 800 1000 1200 1400 591 439 165 140 (56) 1,279 521 391 174 106 (14) 1,178 RM'Mil

REVENUE

2013 2012

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS

DPU

200 400 600 800 1000

461 339 21 59 (5) 875 447 296 27 33 (1) 802 RM'Mil

PROFIT BEFORE TAX

(excluding fair value adjustments)

2013 2012

Dividend/Income Distribution for 2013

Total Stapled Dividend/Income distribution per stapled security Securities (sen) Pre Listing Q1, 2013 Q2, 2013 Q3, 2013 Q4, 2013 Annualised Total KLCCP 1,805,333,083 4.50 4.26 3.42 3.87 15.40 16.05 KLCC REIT 1,805,333,083

• 3.19

4.86 4.84 17.19 12.89

Total

4.50 7.45 8.28 8.71 32.59 28.94

FY2013, KLCCP Stapled Group has committed on the 95% payout ratio, as disclosed in the prospectus, commencing from the listing of the Stapled

• Securities. Annualised distribution per staple security post listing is 32.59
• sen. Total distribution for FY2013 per stapled security is 28.94 sen

17

Post listing

Record dividend per share/unit

3.5% 2.9% 3.7% 3.4% 3.7% 4.2% 3.6% 4.3% 2.5% 3.6% 3.5% 3.3% 3.6% 4.2% 2.6% 4.9% 5.2% 6.2% 6.3% 6.5% 7.1% 7.9% 9.8% 17.2% 8.70 10.44 10.50 11.00 12.00 13.33 16.50 28.94

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FP2011 FY2012 FY2013

Sen Per Share

Net Dividend / Avg. Share Price

Net Dividend Per Share and Yield on Share Prices Since Listing Net Dividend / Average Share Price Net Dividend / Year End Share Price Net Dividend / Issue Price Net Dividend [Interim + Final] (sen)

43.87% 44.02% 42.96% 44.64% 40.35% 92.00% 10.50 11.00 12.00 13.33 16.50 28.94

• 4.00

8.00 12.00 16.00 20.00 24.00 28.00 32.00 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% FY08/09 FY09/10 FY10/11 FP2011 (9 months) FY2012 FY2013

Dividend payout ratio

Profit After Tax & NCI (Group) - excluding FV adj Net Dividend [Interim + Final] (sen)

Significant increase in Dividend payout ratio

The Growth Story

Delivering Significant Growth & Stable Distribution

Creating a Growth Story of Stable Distribution and Significant Growth

• Built-in step up rents

for ~70% of rental income

• Asset enhancement

initiatives / potential

• Significant growth from

management of retail

• perations
• In-house property and

facilities management and services, and leasing services

• Potential for injection /

acquisition of properties partially

• wned by KLCCP into

KLCC REIT and realise tax benefits

• Significant potential

from low-risk and non- speculative development / redevelopment

• pportunities
• Right of First Refusal

(ROFR) from KLCCH

• Significant debt

headroom of > RM5 billion to overall 50% gearing for the KLCCP Stapled Group

Inorganic Growth from ROFR and 3rd Parties Growth from In-built Pipeline Substantial Embedded Organic Growth

• Unique prime

commercial assets with strong stable

• perational performance
• 15-year triple-net leases

with built-in step up rates from PETRONAS for PETRONAS Twin Towers and Menara 3 PETRONAS

• Stable cash flows with

growth

• Ownership of attractive

premier assets

• Assets with significant

potential for redevelopment / enhancement

• Prime land earmarked

for development

• Low-risk development

KLCC REIT KLCCP KLCCP STAPLED GROUP

Unparalleled Platform for Growth Active Asset Management Acquisition Growth

Inherent Organic Growth Strategy

Optimise rental, occupancy rates and NLA of properties

To improve returns from property portfolio

Triple Net Lessee Initiatives

Support Petronas to embark on green initiatives to preserve the pristine condition of the property invariably for continuity towards longer tenancy prospects

Strong capability in retail management

Optimise and sweat the retail asset by having the right tenant-mix Right-tenant-right-location to refresh retail mix and offering Effective marketing initiatives

Active Asset Management Effective Leasing Initiatives

Mitigating risk by entering into triple net leases – mitigates risk of uncertainty vis-a-vis the property operating expenses Long term and higher degree of certainty in rental Planning towards a triple net lease for Kompleks Dayabumi to prepare for longer term tenancy

Acquisition Growth : KLCCP properties to provide platform for growth

Capitalises on opportunities for future income and NAV growth Realises tax benefits to the REIT Stimulates growth

Acquisitions of assets within KLCCP

Enhance REIT positioning Re-rating catalyst Provide vibrant mix to the property portfolio

Asset Enhancement potential

Unlock commercial potential Enhance Group’s competitive position, maximise asset value and yield rental growth Refurbishment and redevelopment of existing properties with potential to add value

Assets with JV partners

Add value to the KLCC precinct New longer term income stream Agreement with strategic partner to be secured

Growth from In- built Pipeline

1

Refurbishment of common areas – lift lobbies, toilets

• f Menara Dayabumi.

Status : Partly Completed –

MISC Recreational Club & common areas Menara Dayabumi. Full completion by Oct 2014

2

KOMPLEKS DAYABUMI

Refurbishment & Redevelopment

1 2

KOMPLEKS DAYABUMI

Refurbishment & Redevelopment

Addition & Alteration – Corporate Lobby & renovation of retail area/new retail area of Menara Dayabumi Status : Physical Completion

by Feb 2014. Launching of Corporate Lobby

• n 27 Jan 2014

1 2

KOMPLEKS DAYABUMI

Refurbishment & Redevelopment

Redevelopment of Citypoint Podium (mixed development) Status : BOD approved

redevelopment Development Order obtained Construction Commencement by early 2015

• Slated for mixed development comprising office

and retail

• 1.3 mil. sq. ft. GFA

LOT D1 (Vacant Land)

Acquisition Growth : Right of First Refusal (ROFR) from KLCCH Group

Inorganic Growth from ROFR & 3rd party acquisitions

• Acquisition of existing and future assets predominantly

for office or retail of KLCCH or any KLCCH entity

• Lots potentially available – Lot 185/K/176; Lot 91; Lots

L/LI/M/N

L L1 M N LOT 91 LOT 185, K, 176

Acquisition Growth : Third party acquisitions

Inorganic Growth from 3rd party acquisitions

• 3rd party acquisitions which fit investment criteria &
• bjectives

1

Capital Growth

• Sizeable debt headroom of approximately RM5b to

acquire properties

Sizeable debt headroom for future acquisitions

Capacity to fund single asset acquisition of up to RM1 billion. The Group seeks to optimize its capital structure and debt funding through efficient capital and risk management.

Capacity to fund single asset acquisition of up to RM1 billion. The Group seeks to optimize its capital structure and debt funding through efficient capital and risk management.

Market Outlook

Office Market Outlook

 Top quartile position  Locked in tenancies  High quality tenants  100% occupancy for REIT assets Existing Development Re-development for Kompleks Dayabumi to unlock further commercial potential

• Approx 0.5m sqft NLA office tower
• Planning towards entry into Triple

Net Lease to prepare for longer term tenancy

Resilient

Q3 2013 Vacancy (85%

• ccupancy) & Rental rates

unchanged (RM6.13psf prime rents)

Short Term

Dependant on ability to absorb new completions

10m sqft expected to be completed from 2014-2016

Medium Term

Substantial pipeline supply

Rental rates & occupancy will be under pressure Developers may face high cost of funds with end of QE

Long Term

Future Development

• Non-speculative
• To secure anchor tenant before

commencement of development

Retail Market Outlook

 Suria KLCC Premier shopping destination  98.5% occupancy  Medium term leases : 3-5 years  Moving Average Turnover : RM2 billion  Average customer count : 43 million  Menara 3 retail : 94.4% occupancy Continuous strategic reinventions

• Refreshed retail mix & offerings
• Right-tenant-right-location
• Optimise & sweat asset with right

tenant mix

• Effective marketing initiatives

Favourable position - located within mixed development with ready captured market

Slower growth pace

Q3 2013 : 3.1% vs 4.8% ( Q3 2012) Occupancy : 92% Retail stock : 23m sqft

Driven by domestic demand

6.15m sqft NLA (8 malls) expected to come on stream from 2014-2017

Challenging year for 2014

Increase in prices of good & services Decreased purchasing power Pre-implementation of GST

Tourism industry to contribute positively for sustained growth in retail assets

Hospitality Market Outlook

 MOKUL Rate & RevPar leader in the city  ARR : RM640  Occupancy : 62%  RevPar : RM438  Achieved 18 awards in 2013 (Best Hotel in KL, Best Hotel in M’sia & Top 100 in the World, Awards of Excellence & ASEAN Green Hotel)

• Pursuing value-for-money approach

to deliver superlative experience

• In midst of master plan refurbishment
• f entire hotel

2011/2012 :Club Floor, Lobby Lounge, all-day dining & chinese restaurant 2013 : Hotel ballroom & lobby 2014 : Guestrooms & corridors 2016 : Full completion & ready to compete with next wave of competitors

One of top tourist country

Tourist arrivals grew 7.9% to RM12.5m (1H2013) vs 11.6m (1H2012)

Supply, Occupancy Rate, ARR (1H2013)

Expected pressures in room rates and occupancy

Stronger growth for 1H2014

St Regis : 2014 The Regent : 2015 Four Seasons Place : 2016 W Kuala Lumpur : 2016

Minimal Impact of Assessment Tax Hike & Electricity on KLCCP Stapled Group

A “TRIPLE NET LEASE” is a long term lease arrangement especially common in United Kingdom in which the Lessor receives a NET rental from the Lessee and hand-over the building’s maintenance and operational responsibility to the Lessee. The costs that the Lessee is responsible for are :- cost for the maintenance and operational of the building (operational cost for common areas including utilities bills which are recouped through collection of service charges from sub-lessees); insurance, and property taxation (annual assessment and quit rent).

• The performance of the Group would not be significantly

affected by future increases in costs, given that majority of leases are based on TRIPLE NET LEASE Tenants meet all

• utgoings

including property assessment and electricity charges

Thank You