Singapore office landlord Keppel REIT.Singapore office landlord Keppel REIT.

Singapore-listed office real estate investment trust Keppel REIT (SGX:K71U) has announced a distribution per unit (DPU) of 1.85 Singapore cents for the 3Q 2014 financial period, a 6.09% decline as compared to the 1.97 Singapore cents paid out in the corresponding period for 2013.

Net property income (NPI) and income available for distribution were recorded at SGD38.5 million and SGD52.0 million, representing a drop of 12.3% and 3.7% respectively as compared to the same quarter from 2013. This despite property income for the period coming in at SGD47.6 million, an 8.43% growth compared to to the SGD43.9 million recorded for 3Q 2013.

However when Keppel REIT presents its results in the year-to-date (YTD) format, NPI for YTD September 2014 sees a 16.1% year-on-year growth to SGD117.2 million while property income for the same period also rose 12.0% SGD141.8 million.

Keppel REIT attributes the better year-to-date numbers mainly to better performance from Ocean Financial Centre and contribution from the 50% interest in 8 Exhibition Street in Australia, which was acquired on 1 August 2013. The REIT did not elaborate on the results from a quarterly perspective in its results announcement.

Aggregate leverage for the REIT decreased to 42.1% as at 30 September 2014, with approximately 72% of borrowings on fixed-rate. The year-to-date all-in interest rate stood at 2.2% as at 30 September 2014, while the weighted average term to expiry is 3.5 years. Interest coverage ratio is at 5.1 times.

Keppel REIT’s committed occupancy level for its entire portfolio across Singapore and Australia stands at 99.3% with seven of 11 office towers fully committed. The portfolio has a weighted average lease expiry (WALE) of 8.2 years and 6.2 years for its top ten tenants (by net lettable area) and the entire portfolio respectively.

Units of Keppel REIT ended the trading day 1.26% lower from its previous close on the Singapore Exchange at SGD1.17.

Keppel REIT
Keppel REIT has reported a 6% year-on-year drop in DPU for its 3Q2014.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.