Singapore-listed office REIT, Keppel REIT, announced on 14 April that it has achieved a distribution per unit (DPU) of 1.68 Singapore cents for its 1Q 2016, a fall of some 1.2% from the 1.7 cents paid in the corresponding period of 2015.

Gross property income came in at SGD41.1 million, a fall of about 2.9% from the SGD42.4 million in 2015 while net property income slipped by about 4.8% to SGD32.9 million.

However excluding contribution from 77 King Street, which was divested in January 2016, property income for the current portfolio would have improved 2.5% year-on-year, while NPI would have increased by 1.6%, said the REIT.

Portfolio occupancy for the period was at 99.4% with 3% of the portfolio’s total net lettable area due for renewal for the rest of 2016. Weighted average lease expiry (WALE) is approximately eight years for Keppel REIT’s top ten tenants and six years for the overall portfolio.

Aggregate leverage during the quarter was 39% with an average cost of debt at 2.58% and interest coverage ratio at a 4.5 times.

“The Singapore office market is expected to remain challenging these two years given the impending new supply”, said the REIT in a statement on the results.

“For Keppel REIT, 85% of total leases is not due for renewal till 2018 and beyond, and approximately 80% of total leases is not due for renewal till 2019 and beyond, when limited new office supply is expected”, it said, adding that efforts are ongoing to engage tenants with leases expiring in the next two years.

Units of Keppel REIT finished about 1.01% higher from its previous close on the Singapore Exchange to end at SGD1.00.