Keppel Reit’s nine-month operating distributable income climbs 24.4%

Keppel Reit recorded S$179.9 million in distributable income from operations for the nine-month period ending September 30, up 24.4 per cent from S$144.6 million a year earlier. Its manager attributed the increase to improved portfolio performance and acquisitions.

Including a S$5 million anniversary distribution, distributable income reached S$194.9 million, a 22.1 per cent increase from S$159.6 million. The manager said on October 28 that operating distributable income would have risen 3.6 per cent without the recent acquisitions.

Those purchases comprise Australia’s Top Ryde City Shopping Centre and a one-third stake in Marina Bay Financial Centre Tower 3. Contributions from the shopping centre helped lift property income by 16.5 per cent to S$238.2 million and net property income by 12.7 per cent to S$181.8 million.

Following divestments, the manager said unitholders will receive an additional S$15 million of capital through three semi-annual payments beginning in the second half of FY2027. These will follow the anniversary distribution, which concludes with the half-year ending June 30, 2027.

The divestments include KR Ginza II, a freehold office building in Japan, and T Tower in South Korea. The Reit intends to allocate up to S$25 million of net divestment proceeds to buying back units on the open market.

Portfolio occupancy was 96 per cent, while rental reversion was positive at 12 per cent. Aggregate leverage was 40.5 per cent at September 30, when fixed-rate borrowing accounted for 64 per cent of total borrowings. The weighted average borrowing cost was 3.32 per cent annually.

The portfolio was valued at S$11.7 billion as at September 30. Assuming T Tower’s divestment and the acquisition of Keppel South Central, its pro forma value would reach S$12.1 billion.