SINGAPORE (July 18): Keppel REIT Management, the manager of Keppel REIT has declared a DPU of 1.42 cents for 2Q17 ended June, an 11.8% decrease from the previous year when it reported a DPU of 1.61 cents.
Distribution to unitholders decreased 9.7% in 2Q17 to $47.4 million from $52.5 million the previous year. Net property income fell 1.7% to $31.9 million in 2Q17 from $32.5 million in 2Q16 due to lower property income and net property income from Bugis Junction Towers, lower share of results of joint ventures, lower rental support, lower interest income, higher trust expenses, as well as changes in fair value of derivatives.
These were partially offset by higher share of results of associates, lower amortisation expense and lower borrowing costs.
As at the end of 2Q17, Keppel REIT’s all-in interest rate increased by 2 basis points to 2.59% due mainly to the MTN issuance. Interest coverage ratio was 4.4 times, while the weighted average term to maturity of borrowings was 3.1 years and aggregate leverage at 38.5%.
In 2Q17, proactive lease management efforts saw all review leases completed, with only 2% of the NLA of leases remaining for the rest of 2017. Portfolio retention rate was 85% for 1H17.
During the quarter, occupancies at Ocean Financial Centre, Marina Bay Financial Centre Phase 1 and Bugis Junction Towers increased, improving the committed occupancy of the REIT’s Singapore portfolio to 99.8%, above Singapore’s core CBD occupancy4 of 94.1% as at 2Q 2017.
Meanwhile, committed occupancy of the Australian portfolio remained constant at 99.7%, above Australia’s national CBD office market rate4 of 88.6%. Overall committed occupancy for Keppel REIT’s portfolio increased to 99.8% as at end-June 2017.
As at the end of 2Q17, the WALE for Keppel REIT’s top 10 tenants and overall portfolio stood at nine years and six years respectively.
Units in Keppel REIT closed 1 cent higher at $1.17 on Tuesday.
