KEPPEL Real Estate Investment Trust (Reit)‘s distributable income fell 1.9 per cent year-on-year to S$160.6 million for the first nine months of the fiscal year mainly due to higher borrowing costs, said the Reit manager on Tuesday (Oct 22).
This includes an anniversary distribution of S$15 million, unchanged from the same period last year.
Net property income (NPI) for the first nine months grew 10.8 per cent on the year to S$148.5 million, from S$134 million.
The growth was attributed to strong operational performance with higher occupancy at Singapore’s Ocean Financial Centre and Tokyo’s KR Ginza II as well as contributions from the Reit’s office buildings namely 2 Blue Street and 255 George Street in Sydney, Australia.
Koh Wee Lih, chief executive officer of the manager said committed occupancy remained high at 98.9 per cent for Keppel Reit’s Singapore portfolio while its NPI for the first nine months of the fiscal year grew 3.8 per cent year-on-year.
Meanwhile, for its Australia portfolio, committed occupancy continued to improve in 3Q 2024 to 95 per cent from 93.6 per cent in 2Q 2024, while NPI for the first nine months of the fiscal year recorded a solid increase of 17.4 per cent year-on-year.
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Its two properties in North Asia have also maintained 100 per cent occupancy and recorded a strong 15.5 per cent year-on-year growth in NPI, said Koh.
“Looking ahead, we remain focused on proactive asset management while maintaining a prudent and flexible capital structure to deliver sustainable long-term total return to the unitholders,” he added.
Higher borrowing costs
Keppel Reit’s aggregate leverage increased to 41.9 per cent as at September, 2024. Its borrowings on fixed rates constituted 68 per cent of total borrowings. Weighted average term to maturity of borrowings stood at 2.9 years.
Meanwhile, its all-in interest rate was 3.38 per cent per annum with adjusted interest coverage ratio at 2.7 times and sustainability-focused funding formed 81 per cent of total borrowings, its manager noted.
“Adopting a disciplined and prudent approach towards capital management, most of the loans maturing in 2024 have been refinanced and there are no significant refinancing requirements for the rest of 2024,” it said.
Keppel Reit’s manager added that the majority of borrowings due in 2025 will mature in 1H 2025 with refinancing discussions commencing with the lenders.
Units of Keppel Reit closed Monday flat at S$0.94.
