Keppel REIT has reported a distributable income of $144.6 million for the 9MFY2025 ended Sept 30, 0.6% lower y-o-y.
Including the anniversary distribution, the REIT will distribute $159.6 million for the nine-month period, also 0.6% lower y-o-y.
As the manager has elected to receive 25% of its management fees in cash starting from FY2025, Keppel REIT’s distributable income would have risen by 6.7% y-o-y to $155.3 million if 100% of management fees were paid in cash.
9MFY2025 property income grew by 5.5% y-o-y to $204.5 million driven by contribution from 255 George Street and higher occupancy at 2 Blue Street.
Net property income (NPI) was up by 8.6% y-o-y to $161.3 million for the same reason.
Share of results of associates increased by 15.4% y-o-y to $75.4 million as Marina Bay Financial Centre and One Raffles Quay continued to record higher rentals and lower borrowing costs.
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Share of results of joint ventures, referring to the REIT’s 50% interests in 8 Chifley Square and David Malcolm Justice Centre, stood flat y-o-y at $17.8 million.
Borrowing costs rose by 5% y-o-y to $68.3 million due to increased borrowings from the acquisition of 255 George Street in May 2024. The higher costs were also attributed to the refinancing of borrowings at market interest rates.
As at Sept 30, portfolio committed occupancy stood at 96.3%, up from 97.6% as at Sept 30, 2024 and up from 95.9% a quarter ago.
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Portfolio weighted average lease expiry (WALE) stood at 4.7 years as at end September, down from 4.8 years last quarter and up from 4.6 years during the same period last year.
Aggregate leverage as at Sept 30 stood at 42.2% while interest coverage ratio stood at 2.6 times.
“Our prime commercial portfolio continues to deliver outstanding performance, sustaining a high committed occupancy of 96.3% and recording a strong rental reversion of 12.0%. We are also beginning to see the positive impact of easing benchmark rates, with our weighted average cost of debt reducing from 3.51% in 1HFY2025 to 3.45% in 9MFY2025,” says Chua Hsien Yang, CEO of the manager.
Chua also noted the REIT’s first investment in a pure-play retail asset, Top Ryde City Shopping Centre in Sydney.
“This strategic diversification into the retail sector is supported by strong fundamentals of the Australian retail market and steady growth in consumption. We believe this acquisition will strengthen the resilience of our portfolio and drive long-term returns for our unitholders,” he adds.
Units in Keppel REIT closed at $1.07 on Oct 28.
