Keppel REIT 3Q19 net property income rose nearly 18 percent, but missed Daiwa’s forecast slightly

Keppel REIT’s Ocean Financial CenterKeppel REIT’s Ocean Financial Center

Keppel REIT reported Wednesday its third quarter net property income increased 17.6 percent on-year to S$33.17 million. The results missed Daiwa’s forecasts slightly.

Gross property income for the quarter ended 30 September increased 15.6 percent on-year to S$42.38 million, the REIT said in a filing to SGX.

The distribution per unit (DPU) was 1.40 Singapore cents, up 2.9 percent from 1.36 Singapore cents in the year-ago quarter, the REIT said.

Daiwa had forecast net property income of S$35.2 million on revenue of S$43.8 million, with a DPU of 1.43 Singapore cents.

“The improved performance was due mainly to a full quarter contribution from T Tower in Seoul, higher average portfolio rentals, capital gains distribution of S$2.0 million for the third quarter of 2019, and the DPU-accretive unit buy-back program,” the REIT said. “The increase was partially offset by the absence of rental support and lower contribution from Ocean Financial Centre following the divestment of a 20 percent stake.”

Rental support for Marina Bay Financial Centre Tower 3 was fully drawn in the first quarter of this year, the filing said. In the third quarter, around 13.6 million units were purchased and cancelled under the REIT’s unit buy-back program, it added.

Committed occupancy for the portfolio was “healthy” at 98.9 percent as of end-September, the REIT said.

For the nine-month period, Keppel REIT reported net property income fell 6.9 percent on-year to S$95.54 million on gross property income of S$122.31 million, down 4.5 percent on-year. The decrease was mainly due to year-earlier one-off income for the early surrender of leases, the filing said.

The DPU for the January-to-September period was 4.18 Singapore cents, down 0.5 percent from 4.20 Singapore cents in the year-ago period, the REIT said.

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