Keppel Reit posts H1 DPU of 2.94 cents, up 5%

KEPPEL Reit K71U : K71U 0% on Tuesday reported a distribution per unit (DPU) of 2.94 Singapore cents for the first-half ended June 30, up 5 per cent from 2.8 cents a year ago.

DPU comprised 2 cents, which will be paid on Aug 27, and advanced DPU of 0.94 cent that was paid on March 31 in connection with the private placement that was launched on Feb 18.

Distributable income increased 11.5 per cent to S$105.7 million, which the manager attributed mainly to contributions from Victoria Police Centre in Melbourne, Pinnacle Office Park in Sydney and Keppel Bay Tower in Singapore, as well as higher one-off income.

However, this was partially offset by the impact of lower portfolio occupancy.

Net property income attributable to unitholders rose 50.3 per cent to S$76 million during the half-year.

As at June 30, the Reit's portfolio had a committed occupancy of 96.7 per cent; portfolio and top 10 tenants' weighted average lease expiry (WALE) were 6.2 years and 11.2 years respectively. The Reit had a tenant retention rate of 60 per cent during the half-year.

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On the leasing front, a total of 721,500 square feet (sq ft), with an attributable area of about 319,000 sq ft, was committed in H1.

The majority of the leases concluded were in Singapore and the average signing rent for the Singapore office leases was S$10.73 per sq ft per month.

The Reit's "portfolio optimisation strategy" during the half-year included the acquisition of Keppel Bay Tower in Singapore, which augments the Reit's green footprint, and the divestment of a 50 per cent interest in 275 George Street in Brisbane, which unlocked value from the Reit's first Australian asset.

The adjusted consideration for the Australian assets of A$264 million (S$264.16 million) is 7.8 per cent above the last valuation and 59 per cent above the original purchase price.

Aggregate leverage stood at 38.9 per cent after loans were drawn to partially fund the acquisition of Keppel Bay Tower. Weighted average term to maturity of borrowings as at June 30 was 3.1 years; 68 per cent of Keppel Reit's total borrowings are at fixed rates.

All-in interest rate as at June 30 was reduced to 1.97 per cent per annum compared to 2.48 per cent per annum a year ago. Interest coverage ratio improved year on year from 3.1 times to 4.0 times.

The manager said it has obtained loan facilities to refinance all outstanding loans maturing this year.

The counter ended flat at S$1.20 before results were out.