Keppel REIT announced on 19 April that it has recorded a DPU of 1.45 Singapore cents for its 1Q 2017, a fall of some 13.6% year-on-year from the 1.68 cents achieved in the corresponding period of 2016.

However the office REIT noted that its DPU for 1Q 2016 included distribution gains from other sources, of 0.09 cents per unit.

Without this additional component, DPU for 1Q 2017 would have declined by 8.8% year-on-year.

Gross revenue and net property income (NPI) for 1Q 2017 also fell correspondingly by 3.2% and 4.6% year-on-year to SGD39.8 million (USD28 million) and SGD31.4 million respectively.

Accordingly, distributable income for the quarter came in 11.6% lower compared to 1Q 2016.

The REIT has attributed the fall in numbers mainly to absence of income from 77 King Street in Sydney that was divested in January 2016, and lower income contribution from Bugis Junction Towers.

“In managing the office space glut over the last few years, the manager has been adopting a tenant-centric approach in its leasing efforts”, said Keppel REIT, adding that these efforts have nonetheless resulted in a portfolio tenant retention rate of 87% for 1Q 2017.

Keppel REIT’s aggregate leverage as at the end of the quarter was at 38.4% with an all-in interest rate of 2.57%.

“Looking ahead, the manager remains cognisant of the uncertain global economic environment and competitive office leasing landscape in Singapore. The manager will continue its proactive and disciplined approach to renew leases so as to retain tenants and mitigate leasing risk”, it added.

Units of Keppel REIT finished the trading day about 1.4% higher from the previous close on the Singapore Exchange to end at SGD1.07.