Singapore-listed Keppel REIT has announced a DPU of 1.48 Singapore cents for its 4Q 2016, 11.9% lower from the 1.68 cents achieved in the corresponding period of 2015.

Gross revenue for the quarter came in 6.5% lower at SGD40 million (USD28 million), while net property income dipped by 9.7% to come in at SGD31.4 million.

Subsequently DPU for FY 2016 came in at 6.37 cents, a fall of some 6.3% from the 6.8 cents achieved in the previous financial year.

“2016 was a difficult year for the Singapore office market given the oncoming supply of office space and aggressive leasing efforts from newly completed buildings”, said the office REIT in a statement on the results.

“In navigating the challenging environment, the manager continued its proactive approach to renew and forward renew leases to retain tenants and mitigate leasing risk”, the REIT added.

Keppel REIT’s aggregate leverage was 38.5% as at end-2016, with an average cost of debt of 2.51%.

Committed occupancy for Keppel REIT’s portfolio was at 99.2%, with occupancy for the REIT’s properties in Singapore and Australia at 99.1% and 99.4% respectively.

“Looking ahead, the challenging global economic environment is expected to have a continued dampening effect on the Singapore office leasing market especially in 2017”, said the REIT.

“While Keppel REIT’s portfolio of quality assets and its high committed occupancy as at end-2016 will help the REIT weather the supply and demand imbalance in the office sector, Keppel REIT’s rental income is not immune to the general decline in rents in the Singapore office market”, it added.

Units of Keppel REIT finished the trading day about 0.5% higher from its previous close on the Singapore Exchange to end at SGD1.045.