Keppel REIT’s distribution per unit (DPU) in 2HFY2020 ended December rose 4.6% y-o-y to 2.93 cents, and in FY2020, DPU was 2.7% higher y-o-y to 5.73 cents. Historic distribution yield based on the closing price of $1.18 as at Jan 25 is 4.85%, while the annualised yield is 4.97%.

Distributable income in 2HFY2020 was $99.8 million bringing FY2020’s  distributable income to $194.6 million, up 2.8% y-o-y.  The REIT’s manager says the improvement in distributable income for FY2020 was due mainly to contributions from T Tower and Victoria Police Centre in Australia, as well as lower borrowing costs. In addiiton, the Australian dollar firmed against the Singapore dollar in the past couple of months.

SEE: Keppel DC REIT increases limit of multicurrency medium term note programme to $2 bil

The increase was partially offset by the absence of income from Bugis Junction Towers, which was divested in November 2019, the impact of Covid-19 tenant relief measures and the cessation of rental support.

Keppel REIT’s all-in interest rate was lower at 2.35% last year compared to 2.77% per annum in 2019.  Aggregate leverage was 37.3% with a weighted average term to maturity of 3.2 years. Interest coverage ratio was 3.4 times and the interest rates of 74% of total borrowings are fixed.

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In Melbourne, Keppel REIT completed the acquisition of the Victoria Police Centre at 311 Spencer Street, which serves as the headquarters for the Victoria Police, completed on July 9 2020. Contributions to net property income in 2021 could be boosted by the acquisition of a 100% interest in Pinnacle Office Park, a freehold Grade A commercial property within Macquarie Park in Sydney, completed on Dec 31, 2020. In Singapore, the acquisition of Keppel Bay Towers, which is an interested party acquisition, and has yet to complete.

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Because of non-renewals at One Raffles Quay and Marina Bay Financial Centre, Keppel REIT’s retention rate was 72% last year. More than half of the non-renewed spaces have since been committed to new and expanding tenants, the manager says.

Units in Keppel REIT closed flat at $1.18 on Jan 25.