Year-end results For the year ended 31 December 2016
Overview Financial review Portfolio review Summary Appendix KWE proven business model Unlocking value of under-resourced real estate Real estate operators 1. 2. Bottom up Active asset Excellent Expert investment & portfolio relationships local presence strategy management Unlocking Value 3. 4. Asset Rigorous repositioning capital management Strong Debt and pricing equity discipline synergies 1 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix KWE investment proposition - 2016 achievements Successful capital Growing income Diversified cash flows recycling through asset underpin robust management dividends 89 + 11.4 % £ 163.7 m Ahead of passing rent on 1 No. of asset sales Topped-up NOI 2 previously occupied space + 31.8 % + 3.1 % 7.1 / 8.9 Disposals ROC Ahead of valuers’ ERV WAULT to break/expiry (years) + 4.8 % £ 14.5 m 48 p Premium to BV Target incremental NOI from FY 16 DPS paid on disposals selected asset management 1 Comprising 86 assets completed and 3 assets exchanged in 2016 2 Annualised topped-up NOI at 31 December 2016 includes expiration of rent-free periods and contracted rent steps over the next two years 2 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Successful capital management – net neutral, as guided £ 413.1 m 1 Disposals ` £ 391.1 m Capital uses £ 184.4 m Acquisitions £ 106.7 m Capex £ 100.0 m Share buyback 1 Comprising £377.5m of asset sales completed and £35.6m of asset sales exchanged in 2016 3 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Growing income through asset management Material upside in passing rents of £47 psf Completed reception & Sky Lobby at 111 BPR, Victoria, SW1 4 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Diversified cash flows underpin robust dividends Continue to diversify asset base and income across Europe 44% Euro assets 37% Euro income £ 2,882.2 m £ 163.7 m UK: 56% UK: 63% Ireland: 31% Ireland: 26% Portfolio value Portfolio NOI 1 Spain: 7% Italy: 6% Italy: 6% Spain: 5% 1 Annualised topped-up NOI at 31 December 2016 includes expiration of rent-free periods and contracted rent steps over the next two years 5 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix 2016 highlights Financial Net investments 2016 1,216 p + 3.5 % 7.6 % £ 413.1 m 21 mths Disposals Adjusted NAV YoY change Accounting return Avg. hold 1 period per share 180 bps + 23.2 % -£ 8.6 m - 0.3 % NOI growth Total valuation YoY change Yield spread movement (FY 16 vs FY 15) (YOC vs exit yield) 3.0 % 55.2 p +15.2% £ 184.4 m Adjusted earnings YoY change Cost of debt Acquisitions per share (FY 16 vs FY 15) 1 Comprising £377.5m of asset sales completed and £35.6m of asset sales exchanged in 2016 6 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Operational achievements Portfolio AM transactions £ 2,882 m 9.2 % + 11.4 % Ahead of passing rent on Portfolio value Under-rented portfolio previously occupied space 2015: £2,793m (Based on 2016 ERVs) 95 % 223 + 3.1 % Ahead of valuers’ ERV Occupancy Number of assets 2015: 96% 2015: 302 140 +1.1m sq ft No. commercial AM transactions 7 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Strong double digit growth Income statement highlights YoY change 2016 2015 (%) Net operating income (£m) 160.3 130.1 +23.2 Adjusted earnings (£m) 74.1 65.0 +14.0 47.9 Adjusted earnings (p per share) 55.2 +15.2 Dividends (p per share) 48.0 35.0 +37.1 8 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Delivering an attractive stable dividend 180 160 -11.6 140 2016 adjusted earnings (£m) -16.3 120 100 Dividend cover: 1.1x +6.1 80 160.3 -57.1 74.1 -7.3 60 64.4 48p/share 40 20 0 NOI Admin costs Investment Net finance Tax EPRA Adjusted Dividends paid management cost adjustments earnings fee 9 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Positive NAV growth Balance sheet highlights YoY change 2016 2015 (%) 2,792.7 Portfolio value (£m) 2,882.2 +3.2 Cash (£m) 456.5 326.5 +39.8 721.8 841.3 -14.2 Secured debt (£m) 594.8 Unsecured debt (£m) 969.5 +63.0 LTV (%) 42.8 39.7 +3.1pp Adjusted NAV (p per share) 1,215.9 1,174.5 +3.5 10 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Accretive share buyback NAV summary Adj. NAV (LHS) Adj. NAV per share (RHS) 1,800 1,250.0 1,215.9pps 1,200.0 1,174.5pps Movement in adjusted NAV (£m) 1,700 Adjusted NAV (pence per share) +82.6 1,150.0 +74.1 1,600 -64.4 -8.6 1,100.0 +27.6 1,500 1,596.5 -100.0 1,050.0 1,533.7 ≈ ≈ 1,400 1,000.0 Adjusted NAV Valuation Retained Dividends paid Share buyback FX / Other Adjusted NAV 31 Dec 15 movement earnings 31 Dec 16 Gain on sale: £8.5m 11 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Active debt management Margin Total cost Term Facilities % £m (bps) (bps) (years) Fixed 71 1,202 – 340 6.8 Floating 29 489 197 214 4.3 Total 100 1,691 197 303 6.1 600 500.0 469.4 500 Debt expiry (£m) 375.1 400 2 year extension 300 options 206.4 206.4 200 161.7 68.6 70.7 100 45.7 ≈ 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030+ Secured - Floating Secured – Floating with extension option Secured - Fixed Unsecured bond – Fixed 12 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Significant liquidity £456.5m cash £681.5m total liquidity (£m) 2016 2015 Cash 456.5 362.5 Undrawn facilities 225.0 225.0 Total liquidity 681.5 551.5 EUR cash: 36% €189.3m GBP cash: 64% £294.9m 13 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Our story so far – 2016 asset management becomes dominant focus 1 Capex Acquisitions Disposals Portfolio value £1,489.0m Portfolio value £2,792.7m Portfolio value £2,882.2m No. of assets 111 No. of assets 302 No. of assets 223 +4.9 1,400 +57.0 900 +1,402.5 111 assets +1,135.5 £m 226 assets 400 +106.7 +184.4 7 assets -100 -126.6 35 assets -413.1 89 assets 2 -600 2014 2015 2016 1 Includes original purchase of loan portfolios; excludes Asset Via Loan (AVL) conversions 2 Comprising 86 asset sales completed and 3 asset sales exchanged in 2016 14 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Consolidating and improving NOI – focus on larger lot sizes Top 103 assets ► £2,554.1m portfolio value 91 % £5-20m £20m + Portfolio value 23% of portfolio 68% of portfolio 69 assets 34 assets 99 % Capex spend <£1m £1-5m <1% of portfolio 8% of portfolio £ 3.1 m 22 assets 88 assets Incremental income delivered in 2016 Bottom 110 assets ► £260.5m portfolio value Note: Direct real estate portfolio, excluding loans 15 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Asset management focus – 3 key pillars Progressing Intensive Smart key projects, day to day recycling development AM of capital & refurbs Bartley Wood, Hook 111 BPR, Victoria, London MXL Centre, Banbury Theta House, Camberley Pioneer Point, Ilford Icon, Stevenage 16 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Intensive day to day asset management Theta, Camberley (Artemis portfolio) 1.1m sq ft of leases signed Before After 140 £ 4.0 m No. commercial Incremental leases signed income 3.1 % 11.4 % Completed refurbishment Ahead of valuers’ Ahead of rent on ERV space previously Pre-let ground floor to NHS 1 occupied Re-gear + new letting to existing tenant Amer Sports 2 £ 1.9 m 10.5 % 6.8 / 8.5 £ 18.3 m Total capex Stabilised YOC post capex Avg. Lease length / Contracted rent term extension per annum 1 to break/expiry (years) 1 Total annualised rent from all leasing transactions completed during 2016 17 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
Overview Financial review Portfolio review Summary Appendix Substantial progress on key projects Practical completion Work in progress Concept / design / planning 111 BPR, Victoria , London Moraleja Green , Madrid Leisureplex , Co. Dublin Portmarnock , Co. Dublin Stillorgan, Co. Dublin Norfolk House, Croydon Block K, Vantage , Dublin 18 Pioneer Point , Ilford Leavesden Park , Watford 9 Puerta del Sol , Madrid Baggot Plaza , Dublin 4 Fairmont , St. Andrews 18 Kennedy Wilson Europe Real Estate Plc / Year-end results 2016
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