Keppel Reit DPU down 4.9% at 1.36 Singapore cents

KEPPEL Reit's distribution per unit was down 4.9 per cent at 1.36 Singapore cents for the fourth quarter ended Dec 31, 2018, compared to 1.43 Singapore cents in the year-ago period. This was on the back on a 4.3 per cent fall in distributable income to S$46.2 million, compared to S$48.2 million in the year-ago period, according to the real estate investment trust's (Reit) results on Monday.

Net property income for the quarter was down 15.8 per cent year on year at S$30.5 million, compared to S$36.2 million. This reflected a 14.8 per cent fall in property income to S$37.8 million from S$44.4 million.

The fourth-quarter results took full-year distributable income to S$189 million, down 0.9 per cent from S$190.7 million in the previous year. The full-year DPU was 5.56 Singapore cents, down from 5.7 Singapore cents the previous year.

In the fourth quarter, about 967,200 sq ft of leases with an attributable area of 371,200 sq ft was committed, bringing total committed space across the portfolio to about 2.9 million sq ft, with an attributable area of about 1.2 million sq ft.

In 2019, 4.2 per cent of leases by attributable net lettable area will be expiring and 0.4 per cent are due for review, Of these, the majority of the Singapore office leases range between S$9.10 and S$12 per sq ft per month. Keppel Reit said that it "will continue to strive for an optimal balance between achieving high occupancy levels and maximising returns from the assets".

In its results announcement, Keppel Reit noted its portfolio optimisation efforts such as divesting a 20 per cent stake in Ocean Financial Centre for S$537.3 million, with S$77.1 million of capital gains realised. The partial divestment allowed it to unlock part of the capital gains while maintaining continued exposure to the office market through its remaining controlling stake.

In Australia, the development of 311 Spencer Street in Melbourne is in progress and the property is expected to contribute a steady income stream with fixed annual rental increases when its 30-year lease to the Victoria Police begins in the first half of 2020. Enhancement plans have also been planned for 8 Exhibition Street in Melbourne, to start in the first half of 2019.