The manager of Keppel REIT has reported a distribution per unit (DPU) of 2.95 cents for the 2HFY2022 ended Dec 31, 2022. The DPU for the second half of the FY2022 stood 2.4% higher than 2HFY2021’s DPU of 2.88 cents.
The REIT’s DPU for the FY2022, meanwhile, grew by 1.7% y-o-y to 5.92 cents, up from last year’s DPU of 5.82 cents.
During the 2HFY2022, the REIT’s property income fell by 1.2% y-o-y to $109.5 million mainly due to the absence of contribution from 275 George Street in Australia. The property was divested in July 2021. The drop in property income was also attributable to the lower property income and net property income from the REIT’s Australia properties and T Tower. These were partially offset by higher property income and net property income from Ocean Financial Centre and Keppel Bay Tower.
Accordingly, net property income (NPI) for the six-month period fell by 1.9% y-o-y to $86.5 million.
Interest income for the 2HFY2022, which consists mainly of interest income from advances to associates, surged by 109% y-o-y to $16.2 million.
Share of results of associates and share of results of joint ventures (JVs) fell by 21.6% and 20.9% y-o-y respectively to $33.2 million and $11.2 million respectively.
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Distribution to unitholders for the 2HFY2022 increased by 3.7% y-o-y to $110.4 million.
In the FY2022, Keppel REIT’s property income increased by 1.2% y-o-y to $219.3 million due mainly to a full year of contribution following the acquisition of Keppel Bay Tower in May 2021 and contribution following the acquisition of KR Ginza II in November 2022. The higher property income was also contributed by higher property income and net property income from Ocean Financial Centre and Pinnacle Office Park. This was offset partially by the lack of contribution from 275 George Street following its divestment.
NPI for the full year increased by 2.0% y-o-y to $175.9 million.
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Interest income for the full year grew by 61.9% y-o-y to $25.3 million.
Share of results of associates and share of results of JVs for the FY2022 fell by 12.6% and 22.5% y-o-y respectively to $77.8 million and $22.9 million respectively.
Distribution to unitholders for the FY2022 grew by 4.1% y-o-y to $220.9 million. The amount includes the first tranche of the anniversary distribution of $10 million. The REIT previously announced that it will distribute a total of $100 million to celebrate its 20th anniversary in 2026. The amount will come from the REIT’s accumulated capital gain over the next five years. An amount of $20 million will be paid annually with such distributions to be made semi-annually.
As at Dec 31, 2022, the REIT’s portfolio occupancy stood at 96.3%. Its weighted average lease expiry (WALE) came in at 6.0 years.
Its aggregate leverage also stood at 38.4% as at the end of December last year.
As at Dec 31, 2022, cash and cash equivalents stood at $175.0 million.
Looking ahead, the manager says it will remain focused on delivering long-term sustainable returns to the REIT’s unitholders despite the uncertain macro-economic environment.
It adds that it “will continue to manage the impact of rising interest costs as well as drive operational excellence and ensure a disciplined approach in executing its portfolio optimisation strategy”.
Units in Keppel REIT closed 3.5 cents higher or 3.74% up at 97 cents on Jan 27.