Keppel REIT reports 2Q19 net property income dropped on lease surrenders, divestment

Keppel REIT’s Ocean Financial CenterKeppel REIT’s Ocean Financial Center. Photo taken pre-Covid.

Keppel REIT reported Monday its second quarter net property income dropped 28.1 percent on-year to S$31.06 million amid the divestment of a 20 percent stake in Ocean Financial Centre and the early surrender of leases.

Property income for the quarter ended 30 June was S$39.91 million, down 22.7 percent on-year, the REIT said in a filing to SGX after the market close.

In addition, while the 275 George Street property posted better performance on-year, a weaker Australian dollar contributed to the decline in property income, the REIT said.

The decrease was partly offset by contributions from the newly acquired T Tower in Seoul, South Korea, the REIT said.

The distribution per unit (DPU) was 1.39 Singapore cents for the quarter, down 2.1 percent from 1.42 Singapore cents in the year-ago quarter, the REIT said.

The results were broadly in line with a Daiwa forecast for net property income of S$31.2 million on revenue of S$39.6 million, with a DPU forecast of 1.40 Singapore cents.

For the first half, Keppel REIT reported net property income fell 16.2 percent on-year to S$62.37 million, on property income of S$79.93 million, down 12.5 percent on-year. The first-half DPU was 2.78 Singapore cents, down 2.1 percent from 2.84 Singapore cents in the year-ago half-year, the REIT said.

Overall portfolio occupancy improved to 99.1 percent as of 30 June, the REIT said.

Keppel REIT’s portfolio has 10 commercial assets across Singapore, Australia and South Korea, the filing said.

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