THE distributable income of Keppel real estate investment trust (Reit) grew 3.4 per cent year on year to S$165.4 million over the first three quarters of 2022, ending on Sep 30.
The increase was mainly driven by the acquisition of Keppel Bay Tower in May 2021 and adjustments of income tax expense for previous years. This was partially offset by the divestment of 275 George Street in Brisbane in July 2021 and lower contribution from 8 Chifley Square, said Keppel Reit in a bourse filing on Tuesday (Oct 25).
To celebrate the Reit's 20th anniversary in 2026, Tan Swee Yiow, chairman of Keppel Reit's manager, announced that it will distribute an additional S$100 million out of its accumulated capital gains over the next five years, as a reward for unit holders.
Net property income attributable to unitholders went up 2.7 per cent to S$119.9 million between Q1 and Q3 of this year, from S$116.8 million over same period last year.
Keppel Reit's assets under management grew from about S$600 million to approximately S$9 billion as at Sep 30.
More than 78 per cent of these assets are in Singapore; 18.2 per cent are in Australia and 3 per cent, in South Korea.
The committed occupancy across its portfolio grew from 95.5 per cent a quarter ago to 96.8 per cent as at Sep 30. The weighted average lease expiry is at 6.1 years.
For the first three quarters of the year, the committed leases amounted to a total lease area of 1.7 million sq ft, with companies in the technology, media and telecommunications sector accounting for the biggest portion of new leasing demand and expansion. The tenant retention rate was 82 per cent.
The weighted average signing rent for the Singapore office leases rose to approximately S$11.47 per sq ft per month across the nine months, from S$11.43 for the first half of this year.
Keppel Reit also said that its aggregate leverage remained healthy at 38.4 per cent. The all-in interest rate is 2.1 per cent per annum and interest coverage ratio is 3.6 times the first nine months of 2022.
Borrowings on fixed rate stayed at around 72 per cent to mitigate the impact of rising interest costs, and weighted average term to maturity of the borrowings was 2.8 years, with no loans maturing for the rest of this year. It added that it achieved sustainability-focused funding for 50 per cent of its total borrowings.
Keppel Reit believes that its portfolio of Grade-A commercial properties is well-positioned to benefit from tenants' growing preference for better-quality assets and to ride on the positive leasing momentum in Singapore.
"The Manager remains focused on reducing the impact of rising costs, in particular, interest costs, while continuing with its portfolio optimisation strategy and maintaining a disciplined approach to investment to deliver long-term sustainable returns to unitholders," the filing said.