Keppel REIT distributable income rose 6.8% in first half of 2013

As occupancy improved across many assets.

In a release, Keppel REIT Management Limited announced that Keppel REIT’s distributable income for 1H 2013 has increased 6.8% y-o-y to $105.1 million, representing a DPU yield of 6.1% based on the market closing price of $1.295 as at 28 June 2013. This surpasses $104 million for two consecutive half-year distributions.

In 1H 2013, Keppel REIT registered an increase of 11.5% and 8.9% y-o-y in NPI and property income to $66.7 million and $82.6 million respectively due mainly to improved performance from OFC and 77 King Street.

Keppel REIT increased its interest in OFC from 87.5% to 99.9% on 25 June 2012. The additional 12.4% of tax transparent income from OFC and the improved occupancy of the property accounted for the increased contribution from the asset in 1H 2013.

Share of result of associates for 2Q 2013 increased 48.9% y-o-y to $16.2 million. This was due to the higher contribution from both MBFC Phase 1 and ORQ. The improved performance of both assets were attributed to a combination of an increase in occupancy, positive rental reversions and the conversion of MBFC Phase 1 to a Limited Liability Partnership (LLP) in mid-June 2012. The conversion to a LLP enabled income contribution from MBFC Phase 1 to be passed on to Unitholders on a tax transparent basis.

Following the completion of all its refinancing due in 2013, the Manager commenced early refinancing on borrowings which will be due in 2014. To-date, $425 million or approximately 60% of borrowings due next year have been successfully refinanced and termed out for five years. Weighted average term to expiry of borrowings has been extended from 3.2 years to 3.6 years. Keppel REIT also managed to maintain a low all-in interest rate of 2.16% and a healthy interest coverage ratio of 4.8 times as at 2Q 2013.