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Lower one-off income hits Keppel Reit’s Q2 DPU

KEPPEL Reit's second-quarter distribution per unit (DPU) slipped 2.1 per cent to 1.39 Singapore cents,  due mainly to lower one-off income from Ocean Financial Centre and lower revenue and net property income from Bugis Junction Towers.

The real estate investment trust (Reit) had received lower one-off income due to the early surrender of leases and absence of rental support top-up payments for its one-third interest in Marina Bay Financial Centre Tower 3. The  rental support had been fully drawn in the preceding quarter. 

The lower one-off income was also a result of the divestment of a 20 per cent stake in Ocean Financial Centre, announced late last year. 

"Whilst the operating performance of 275 George Street has improved year-on-year, a weaker Australian dollar contributed to the decrease in property income and net property income of this property. 

“This is partially offset by income contribution from T Tower (acquired on May 27, 2019) and higher net property income from 8 Exhibition Street," the Singapore-listed office landlord said.

For the three months ended June 30, 2019, income available for distribution fell by a similar percentage of 2.1 per cent to S$47.3 million.

Net property income attributable to unitholders fell 37.8 per cent to S$26.9 million, on the back of a 22.7 per cent decline in property income to S$39.9 million.

In the first half of this year, the Reit manager had committed total leases of about 272,900 sq ft, bringing Keppel Reit’s portfolio committed occupancy to 99.1 per cent as at end-June 2019. 

Almost all leases concluded in the first half were in Singapore. The average signing rent for the Singapore office leases committed was about S$11.93 per square foot (psf) per month, above the Grade A core CBD market average of S$11.30 psf per month, according to CBRE.

The distribution will be paid on Aug 27; the books closure date is July 23.

Units of Keppel Reit ended one Singapore cent or 0.8 per cent higher at S$1.26.