Keppel Reit Q1 distributable income up 22% to S$51.6m

KEPPEL real estate investment trust (Reit) reported a 22 per cent rise in distributable income to S$51.6 million for the first quarter of 2021, up from S$42.3 million in the year-ago period.

In a quarterly update on Wednesday, the Reit manager attributed the increase to contributions from Victoria Police Centre in Melbourne and Pinnacle Office Park in Sydney, higher one-off income, as well as lower borrowing costs.

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

As of March 31, 2021, Keppel Reit's portfolio had a committed occupancy of 96.5 per cent and long portfolio weighted average lease expiry of 6.7 years.

On the leasing front, a total of approximately 309,800 square feet were committed in the first quarter. Most of the leases concluded were in Singapore. The average signing rent for the Singapore office leases was approximately S$10.64 per square foot per month.

Net property income attributable to unitholders for the quarter rose 40.5 per cent year on year to S$36.4 million.

Keppel Reit successfully launched a S$270 million private placement on Feb 18, 2021 that was approximately 4.6 times covered, the Reit manager said.

Part of the proceeds from the placement will be used to partially fund the acquisition of Keppel Bay Tower in Singapore, which is targeted to complete in Q2 2021. The property, being Singapore's first zero-energy commercial building fully powered by renewable energy, will augment Keppel Reit's green footprint, the manager said.

As at end-March 2021, green loans represented approximately a quarter of Keppel Reit's attributable share of total borrowings, including an additional A$50 million green-loan facility obtained in the first quarter.

The manager has obtained loan facilities to refinance all outstanding loans that are maturing in 2021.

The Reit's aggregate leverage stood at 35.2 per cent with a weighted average term to maturity of three years. All-in interest rate was reduced year on year to 2.01 per cent per annum, down from 2.58 per cent.

Interest coverage ratio was 3.7 times and 85 per cent of the Reit's total borrowings are at fixed rates.

As at end-March 2021, Keppel Reit had approximately S$1.06 billion of undrawn credit facilities available, including S$592 million of committed facilities.

The Reit manager said: "As countries around the world make progress in managing the Covid-19 pandemic, the manager remains focused on ensuring stable and sustainable distributions to unitholders, as well as achieving long-term growth.

Keppel Reit's high portfolio committed occupancy, long WALE (weighted average lease expiry) and established tenants from diverse sectors will continue to support the Reit's income resilience."

Units in Keppel Reit closed flat at S$1.21 on Wednesday.