Keppel-KBS US REIT beats DPU forecast by 23% in 2Q 2019

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Keppel-KBS US REIT has reported a distribution per unit (DPU) of 1.50 US cents for its 2Q 2019, beating forecast for the period made during its IPO by 23%.

The REIT achieved distributable income of USD12.4 million for 2Q 2019, exceeding its IPO forecast for the same period by 23.4%, and 31.2% higher than what was achieved in 2Q 2018.

Keppel-KBS US REIT has attributed the performance to contributions from the two acquisitions – the Westpark Portfolio in Seattle, Washington, in November 2018 and Maitland Promenade I in Orlando, Florida, in January 2019.

The REIT also saw healthy leasing momentum, especially at the business campuses in the tech hubs of Seattle, Austin and Denver, and positive rental reversions of 8.6% for the portfolio.

The REIT’s DPU for 1H 2019 came in at 3.00 US cents, and unitholders will receive their semi-annual distributions on 25 September 2019.

On a like-for-like basis and assuming the same enlarged unit base for all periods, 1H 2019 DPU of 3.00 US cents would have been 23.0% above the IPO forecast of 2.44 US cents, and 31.0% higher than actual 1H 2018 adjusted DPU of 2.29 US cents.

As at 30 June 2019, Keppel-KBS US REIT’s weighted average lease expiry (WALE) by cash rental income for its portfolio and top 10 tenants was 3.8 years and 4.9 years respectively.

Its portfolio committed occupancy was at 94.0% as at 30 June 2019.

Aggregate leverage and interest coverage ratio was 37.7% and 4.6 times respectively.

Based on Keppel-KBS US REIT’s last done price, it is currently giving a yield of 6.67% according to the Singapore REITs fundamentals table.

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