Keppel Reit 9M distributable income rises 24.4% to S$179.9 million

[SINGAPORE] Keppel Reit reported that its distributable income from operations for the nine months ended Sep 30 rose 24.4 per cent to S$179.9 million, from S$144.6 million in the year-ago period, driven by stronger portfolio performance and contributions from acquisitions.

After including a S$5 million anniversary distribution, distributable income for the period rose 22.1 per cent to S$194.9 million, from S$159.6 million the year before.

Excluding its recent acquisitions, distributable income from operations would have increased 3.6 per cent, reflecting positive organic portfolio growth, said the real estate investment trust (Reit) manager on Wednesday (Oct 28).

Its recent acquisitions are Australian retail property Top Ryde City Shopping Centre and a one-third interest in Marina Bay Financial Centre (MBFC) Tower 3.

The Reit manager said that following its recent divestments, an additional S$15 million in capital will be distributed to unitholders in three semi-annual tranches. The distributions will start from the second half of FY2027, after the anniversary distribution concludes for the half-year period ending Jun 30, 2027.

Its recent divestments include freehold office buildings KR Ginza II in Japan and T Tower in South Korea.

The manager said the Reit intends to use up to S$25 million of net sale proceeds from the divestments for unit buybacks on the open market.

Net property income grew 12.7 per cent year on year to S$181.8 million for the nine-month period, from S$161.3 million.

Meanwhile, property income rose 16.5 per cent to S$238.2 million, from S$204.5 million previously. The rise in both figures were attributed to contributions from Top Ryde City Shopping Centre.

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The Reit’s share of results of joint ventures increased 33.3 per cent year on year, mostly due to contributions from the additional one-third interest in MBFC Tower 3, higher rentals and lower borrowing costs.

Portfolio occupancy stood at 96 per cent, with positive rental reversion of 12 per cent.

In terms of debt, the Reit’s aggregate leverage stood at 40.5 per cent, with 64 per cent of total borrowings on fixed rates as at Sep 30.

The manager added that its debt maturity profile remained “well-staggered”, with a weighted average term to maturity of 2.5 years.

The weighted average cost of debt was 3.32 per cent per annum and the interest coverage ratio was 2.8 times.

As at Sep 30, Keppel Reit has a total portfolio value of S$11.7 billion. On a pro forma basis, assuming the divestment of T Tower and acquisition of Keppel South Central, Keppel Reit’s portfolio value would increase to S$12.1 billion.

Units of Keppel Reit ended 1.2 per cent or S$0.01 lower at S$0.805 on Tuesday.