Keppel Reit declares marginally higher DPU of 1.4 Singapore cents for Q1

KEPPEL Reit (real estate investment trust) has declared a distribution per unit (DPU) of 1.4 Singapore cents for the first quarter ended March 31, up a marginal 0.7 per cent from a DPU of 1.39 Singapore cents in the year-ago period, the reit's manager announced on Wednesday after market close.

Distributable income for the quarter was steady at S$47.3 million, including capital gains distribution of S$5 million.

This was despite net property income attributable to unitholders falling 5.2 per cent to S$25.8 million, from S$27.3 million in the year-ago period.

Despite the absence of rental support for Marina Bay Financial Centre Tower 3 and lower income contribution after the divestment of Bugis Junction Towers last November, distributable income was maintained, due mainly to the acquisition of T Tower in May 2019, higher capital gains distribution and lower borrowing costs, said the reit.

As at the end of Q1, the majority of loans due in 2020 were refinanced, with commitments received for the rest. This lengthened the weighted average term to maturity to 3.8 years. Aggregate leverage was 36.2 per cent.

At the end of Q1, portfolio's committed occupancy was 98.9 per cent, with weighted average lease expiry of 4.7 years for the portfolio and 6.7 years for the top 10 tenants.

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In its results release, the reit highlighted precautionary measures taken at the start of the Covid-19 outbreak, including temperature screening and increased frequency of cleaning of the common areas. "Keppel Reit's properties in Singapore, Australia and South Korea remain accessible to tenants who are operational during the outbreak," it noted.

In Singapore, the reit has extended some S$9.5 million in support to tenants, including the full pass-through of property tax rebates of 30 per cent to office tenants and 100 per cent to retail tenants, as well as a full rental waiver for the month of April for eligible retail tenants. Eligible retail tenants will also be able to use one month's security deposit to offset their rent payment.

"As for Keppel Reit's overseas markets, support measures in line with the relevant government advisories issued will also be extended to all qualifying tenants," said the reit.

The DPU for the quarter is payable on May 29, with a record date of April 30.

Keppel Reit units closed down 1 Singapore cent or 1 per cent at S$0.99 on Wednesday before the results.