Keppel REIT's Ocean Financial Centre, in which a stake was sold to Allianz Real Estate in 2018. (Photo: REITsWeek)Keppel REIT's Ocean Financial Centre, in which a stake was sold to Allianz Real Estate in 2018. (Photo: REITsWeek)

Keppel REIT has reported a distribution per unit (DPU) of 1.39 cents for its 2Q 2019, a decrease of 2.1% from 2Q 2018.

Distributable income for 2Q 2019 was SGD47.3 million, which includes capital gains distribution of SGD3.0 million.

This brought distributable income for 1H 2019 to SGD94.6 million, lower than 1H 2018’s SGD96.6 million.

Keppel REIT has attributed this mainly to lower one-off income received from the early surrender of leases, absence of rental support in 2Q 2019, and the impact from the divestment of a 20% stake in Ocean Financial Centre.

The decrease was partially offset by income contribution from the newly acquired T Tower in Seoul CBD, as well as capital gains distribution of SGD6.0 million for 1H 2019, the REIT added.

The REIT’s aggregate leverage has increased to 38.4% following the issuance of SGD200.0 million of convertible bonds, and the drawdown of a loan of KRW126.4 billion to fund the acquisition of T Tower.

During the quarter, Keppel REIT purchased and cancelled a total of approximately 9.7 million issued units from the market.

In 1H 2019, Keppel REIT committed total leases of approximately 272,900 square feet, bringing its portfolio committed occupancy to 99.1% as at 30 June 2019.

Almost all leases concluded in 1H 2019 were in Singapore, and the average signing rent for the Singapore office leases committed in 1H 2019 was approximately SGD11.93 4 psf pm, above the Grade A core CBD market average of SGD11.305 psf pm.

The REIT’s annualised distribution yield was 4.4% based on Keppel REIT’s market closing price of SGD1.26 as at 30 June 2019.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.