CFA Society Singapore
SINGAPORE (Jan 21): The manager of Keppel REIT has declared a 4Q18 distribution per unit (DPU) of 1.36 cents, representing a 4.9% decline from its quarterly DPU of 1.43 cents a year ago.
This brings the trust’s FY18 DPU to 5.56 cents, down 2.5% from its DPU of 5.7 cents in FY17.
Property income for the latest quarter under review fell 14.8% to $37.8 million from $44.4 million previously due to lower income contributions from Ocean Financial Centre, 275 George Street and 8 Exhibition Street.
Share of results of associates and joint ventures declined 14.7% and 7.7%, respectively, to $16.6 million and $7.3 million compared to $19.5 million and $7.9 million in the previous year.
Borrowing costs grew 5.2% on-year to $17.6 million from $16.7 million due to higher interest expenses on term loans and revolving loans, as well as higher amortisation of capitalised transaction costs.
As such, net property income (NPI) for 4Q fell 15.8% to $30.5 million compared to $36.2 million previously, while income available for distribution fell 4.3% to $46.2 million from $48.2 million in 4Q17.
Looking ahead, Keppel REIT’s manager believes Singapore’s office market outlook remains largely positive due to a tightening supply pipeline and diverse demand drivers in spite of macroeconomic risks.
“Amidst a volatile macroeconomic environment, the manager remains focused on delivering stable and sustainable distribution through ongoing portfolio optimisation, as well as driving operational excellence in its asset and capital management efforts,” it adds.
Units in Keppel REIT closed flat at $1.18 on Monday.