Keppel Reit Q1 distributable income falls 3.5% to S$48.4 million

[SINGAPORE] Keppel Reit reported on Wednesday (Apr 23) that its distributable income from operations fell 3.5 per cent to S$48.4 million on the year in Q1 2025, from S$50.2 million previously.

Including an annual S$20 million anniversary distribution, distributable income fell 3.2 per cent year on year to S$53.4 million, from S$55.2 million. However, as the Reit manager said that it had elected to receive 25 per cent of its management fees in cash from FY2025, it noted that the Reit’s distributable income (including its anniversary distribution) would have grown 3.2 per cent if management fees were fully payable in units.

Borrowing costs jumped 23.4 per cent on the year to S$23.1 million from S$18.7 million, following the acquisition of 255 George Street in Sydney in May 2024, as well as the refinancing of borrowings in FY2024, the Reit manager said.

Despite this, net property income (NPI) grew 13.3 per cent year on year to S$54.6 million in Q1 from S$48.2 million.

The manager said these increases were due to better performance of its Singapore and Australia properties.

Relating to the Reit’s interests in One Raffles Quay and Marina Bay Financial Centre, Keppel Reit posted an 11 per cent increase in share of results of associates to S$24.3 million year on year, from S$21.9 million.

The Reit’s aggregate leverage stood at 42.1 per cent, with 65 per cent of total borrowings on fixed rates, and an interest coverage ratio of 2.5 times, the manager said. The Reit’s sustainability-focused funding accounted for 82 per cent of total debt, the manager noted.

Its portfolio occupancy was 96 per cent, while weighted average lease expiry stood at 4.7 years.

In the Reit’s business update, the manager said the Reit’s diversified portfolio of assets – anchored by prime Central Business District assets across different markets – would enhance long-term growth opportunities, while bringing income stability. The Reit’s portfolio is currently worth S$9.5 billion, with 78.6 per cent of its assets in Singapore.

Due to higher rentals, NPI of the Singapore portfolio grew 3.3 per cent year on year, while committed occupancy fell 2 percentage points from the previous quarter. Its Australian portfolio, which comprises 17.6 per cent of the Reit’s assets, increased 20.8 per cent year on year due to the acquisition of 255 George Street and higher occupancy at 2 Blue Street – both of which are office buildings in Sydney.

The manager said new leasing demand and expansions in the quarter came largely from the technology, media and telco sector at 47.7 per cent of attributable gross rent, followed by the banking, insurance and financial services sector.

“We remain focused on proactive management of our properties and leases, prudent capital management, and staying agile to adapt to the evolving landscape,” said Chua Hsien Yang, chief executive of the manager.

Units of Keppel Reit were trading higher at S$0.01 or 1.21 per cent higher at S$0.84 on Wednesday at 11.30 am.