Keppel Reit Q1 distributable income from operations down 6.7% on higher borrowing costs

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Tan Nai Lun

Published Wed, Apr 19, 2023 · 06:35 PM

Ginza 2-chome, a freehold boutique office building in Tokyo, in which Keppel Reit has acquire an effective interest of 98.47%. The inclusion of an anniversary distribution of S$5 million brings the Reit’s total distributable income for Q1 to S$55.2 million. PHOTO: KEPPEL REIT

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KEPPEL Reit posted a distributable income from operations of S$50.2 million for its first quarter ended Mar 31, 2023, down 6.7 per cent from S$53.8 million in the same period a year earlier.

This was mainly due to higher borrowing costs, the Reit’s manager said in a business update on Wednesday (Apr 19).

However, the Reit will also be distributing an anniversary distribution of S$5 million for the quarter, in celebration of its 20th anniversary in 2026. The manager earlier announced that the Reit would distribute a total of S$100 million of the anniversary distribution over a five-year period.

This brings the Reit’s total distributable income for the quarter to S$55.2 million, up 2.6 per cent from the year-ago period.

Property income was up 5.9 per cent to S$57.7 million for the quarter, from S$54.5 million the year before.

Net property income (NPI) attributable to unitholders grew 1.3 per cent on year to S$40.5 million, from S$40 million a year earlier.

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The Reit recorded higher NPI for the majority of its properties in the quarter, due to higher rentals achieved on leases committed in 2022 as well as a higher portfolio occupancy, its manager said.

Keppel Reit’s portfolio committed occupancy stood at 96.3 per cent, and its portfolio weighted average lease expiry stood at 5.8 years as at Mar 31.

Its aggregate leverage was 38.7 per cent, with no major refinancing requirements in 2023.