Keppel REIT reports 4Q18 net property income fell nearly 16 percent, missing Daiwa forecasts

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Keppel REIT reported on Monday its net property income for the fourth quarter fell 15.8 percent on-year to S$30.53 million on lower property income from Ocean Financial Centre, 275 George Street and 8 Exhibition Street, partially offset by higher property income from Bugis Junction Towers.

Property income, excluding expenses, fell 14.8 percent on-year in the quarter ended 31 December to S$37.82 million, it said in a filing to SGX after the market close on Monday.

The distribution per unit (DPU) for the quarter was 1.36 Singapore cents, down 4.9 percent on-year from 1.43 Singapore cents in the year-ago period, it said.

Daiwa had forecast DPU of 1.42 Singapore cents, down 1.0 percent on-year, for the quarter, with revenue down 11.6 percent on-year at S$39.2 million and net property income off 13.5 percent on-year at S$31.4 million.

For the full year, Keppel REIT posted net property income up 1.5 percent on-year at S$133.16 million, with property income up 0.8 percent at S$165.86 million. For the full year, it posted a DPU of 5.56 Singapore cents, down 2.5 percent on-year from 5.70 Singapore cents in the previous financial year.

For the full year, DBS had forecast net property income of S$135 million and gross revenue of S$170 million.

JPMorgan estimated full-year DPU at 5.7 Singapore cents, with net property income of S$130 million and revenue of S$162 million.

In an early January note, DBS said it expected spot office rents would recover this year, which would lead Keppel REIT’s DPU to improve for the first time in more than five years.

In Singapore, Keppel REIT has a 79.9 percent interest in Ocean Financial Centre, a one-third interest in Marina Bay Financial Centre’s office towers 1, 2 and 3 and the subterranean Marina Bay Link Mall, a one-third interest in One Raffles Quay and 100-percent interest in Bugis Junction Towers, it said.

In Australia, the REIT’s portfolio includes a 50 percent interest in Sydney’s 8 Chifley Square, a 50 percent interest in the office building at 8 Exhibition Street in Melbourne and 100 percent interest in three retail units there, a 50 percent interest in 275 George Street in Brisbane and a 50 percent interest in David Malcolm Justice Centre in Perth. It also has a 50 percent stake in an office tower under construction at 311 Spencer Street in Melbourne.


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