SINGAPORE (Jan 23): The manager of Keppel REIT has reported a distribution per unit (DPU) of 1.43 cents for the quarter ended Dec 2017, down 3.4% on-year from 1.48 cents in 4Q16 after factoring in nearly $11 million of net tax and other adjustments.
The latest set of results represents a fourth straight quarter of DPU decline for the full year, and brings the trust’s FY17 DPU to 5.7 cents, down 10.5% from 6.37 cents the year before.
Keppel REIT’s decline in 4Q DPU comes in spite of higher net property income for the quarter, which grew 15.3% on-year to $36.2 million compared to $31.4 million a year ago due to higher contributions from Bugis Junction Towers and Ocean Financial Centre.
Total return before tax for 4Q was $83.8 million, an 18% improvement from $71 million the year before due to growth registered across property income, net property income, share of results of joint ventures, interest income and fair value gain on investment properties – coupled with lower amortisation & trust expenses.
These were however partially offset by lower rental support, lower share of results of associates, higher borrowing costs, net foreign exchange differences, as well as net change in fair value of derivatives.
Additionally, Keppel REIT saw net tax and other adjustments double over the quarter to $21.8 million compared to $10.9 million a year ago. Included in this segment was negative $51.7 million of net change in fair value of investment properties, net of non-controlling interest, as compared to negative $29.1 million in 4Q16.
In its latest portfolio review, the REIT manager highlights its portfolio committed occupancy of 99.7% and portfolio retention rate of 95% as at end-Dec, which it attributes to continuous tenant engagement efforts.
The high committed occupancy rates, as well as the tenant profile of Keppel REIT’s new committed leases, are testament to the portfolio’s quality and relevance in meeting tenants’ evolving business needs, it adds.
Keppel REIT’s manager further expects the upcoming addition of 311 Spencer Street, a freehold Grade ‘A’ office tower development which it acquired a 50% stake in last year, to enhance stability of the REIT’s income stream over the long term.
Looking ahead, the manager says it remains focused on providing stable and sustainable distributable income to unitholders, and intends to continue pursuing strategic portfolio enhancements while maintaining a proactive tenant and lease management approach, as well as a prudent capital management strategy to maximise the REIT’s performance.
Units in Keppel REIT closed flat at $1.32 on Tuesday.
