SINGAPORE (Apr 22): The manager of Keppel REIT has reported distribution per unit (DPU) of 1.40 cents for 1QFY2020 ended March, some 0.7% higher than DPU of 1.39 cents a year ago. 

Distributable income for the quarter remained unchanged at $47.3 million. 

The group noted that despite the absence of rental support and lower income contribution following the divestment of Bugis Junction Towers in November 2019, distributable income remained stable year-on-year due primarily to the acquisition of T Tower in May 2019, as well as a combination of higher capital gains distribution and lower borrowing costs.

Property income slipped 3.3% to $38.7 million from $40.0 million in 1QFY2019. This was mainly attributable to lower one-off income, lower property income from the group’s properties at 275 George Street and 8 Exhibition Street, and the absence of property income from the divestment of Bugis Junction Towers. 

However, this was partially mitigated by higher contributions from Ocean Financial Centre and T Tower. 

Property expenses for the quarter fell 1.8% to $8.5 million from $8.7 million a year ago, attributable to a 13.6% fall in property tax expenses to $2.8 million. 

Consequently, net property income for the quarter under review fell 3.7% to $30.1 million from $31.3 million the previous year. 

Keppel REIT says that its portfolio occupancy stood at 98.9% as at end-March, while the weighted average lease expiry (WALE) of its portfolio and top 10 tenants’ stood at 4.7 years and 6.7 years respectively. 

The group also noted that for 1QFY2020, it had a tenant retention rate of 50% due mainly to non-renewals at 275 George Street in Brisbane, as well as at Marina Bay Financial Centre and One Raffles Quay in Singapore. 

As at end-March, cash and cash equivalents stood at $88.1 million. 

Earnings per unit fell to 0.63 cents from 0.86 cents in 1QFY2019, while net asset value per unit came in at 1.34 cents, up marginally from 1.36 cents last year. 

Looking ahead, the manager of Keppel REIT notes that while the Covid-19 pandemic presents unprecedented challenges to the business community, its impact on the global economy has yet to be fully assessed. 

However, the REIT is remaining focused on maintaining stable and sustainable distributions to unitholders, and achieving long-term growth. 

“Keppel REIT’s portfolio of established tenants from diversified sectors, high portfolio committed occupancy and long WALE will continue to support the REIT’s income resilience,” says Keppel REIT. 

Units in Keppel REIT closed one cent lower, or down 1%, at 99 cents on Wednesday prior to the announcement.