SINGAPORE (Oct 16): The manager of Keppel REIT has declared distribution per unit (DPU) of 1.40 cents for the 3Q19 ended September, some 2.9% higher than DPU of 1.36 cents a year ago.
Distributable income for 3Q19 grew 2.5% to $47.5 million, including capital gains distribution of $2.0 million.
This brings total distributable income for the first nine months of 2019 to $142.1 million, some 0.5% lower than the distributable income of $142.9 million in 9M18.
3Q19 property income rose 15.6% to $42.4 million, from $36.7 million a year ago.
The increase was led by the maiden full quarter contribution of $4.3 million from newly-acquired T Tower in Seoul, as well as higher property income contribution from Ocean Financial Centre, which grew 8.7% to $25.9 million.
Property expenses climbed 9.0% to $9.2 million during the quarter, from $8.5 million a year ago.
Consequently, net property income (NPI) was 17.6% higher at $33.2 million for 3Q19, compared with $28.2 million a year ago.
As at end-September, cash and cash equivalents stood at $89.6 million.
Keppel REIT’s portfolio committed occupancy was healthy at 98.9% as at end-September, long portfolio weighted average lease expiry (WALE) of 5.1 years.
Looking ahead, the manager says it remains focused on delivering stable and sustainable distributions to unitholders, and on achieving long-term growth, amid the current uncertain macro-economic environment.
It adds that it will continue its ongoing portfolio optimisation strategy.
In line with this, Keppel REIT has earlier this month announced it is divesting its strata ownership of Bugis Junction Towers, which it has held since its listing in 2006, for a sale price of $547.5 million.
Based on the building’s net lettable area (NLA), this translates to a price of $2,200 per square foot.
The sale price is 6.3% above the latest valuation of $515.0 million as at Aug 8, and 243.2% above the purchase price of $159.5 million in 2006.
Keppel REIT is expected to recognise an estimated accounting gain of some $18.3 million from the divestment.
See: Keppel REIT selling Bugis Junction Towers for $547.5 mil
With the divestment proceeds, the manager will continue its DPU-accretive unit buy-back programme, seek higher yielding opportunities for growth in Singapore, Australia and South Korea, as well as pare down debt.
In 3Q19, a total of approximately 13.6 million issued units were purchased and cancelled under Keppel REIT’s DPU-accretive unit buy-back programme
The manager says it will also work to enhance stability of distribution to unitholders while continuing with its ongoing portfolio optimisation initiatives and proactive efforts to mitigate occupancy voids.
Units in Keppel REIT closed flat at $1.24 on Wednesday, before the results announcement.
