Keppel REIT NPI dropped 7.2% to $28.81m in Q2

The REIT’s distribution per unit (DPU) inched up 0.7% to $0.14.

Keppel REIT’s net property income (NPI) fell 7.2% YoY to $28.81m in Q2 from $31.06m Q2 2019, an announcement revealed. NPI attributable to unit holders dropped 8% to $24.72m from $26.86m a year ago.

Meanwhile its distribution per unit (DPU) inched up 0.7% YoY to $0.14 in Q2 from $0.139 in Q2 2019. This translated to an annualised distribution yield of 5.1% based on the market closing price of $1.10 per unit as at 30 June.

For H1, NPI slid 5.4% YoY to $58.98m from $62.37m in H1 2019. NPI attributable to unitholders shrank 6.6% YoY to $50.54m from $54.12m in the same period a year ago. Meanwhile, DPU grew 0.7% YoY in H1 to $0.28 from $0.278 in H1 2019. The firm also noted that distributable income for H1 rose to $94.78m from $94.6m.

Distributable income for H1 was maintained due mainly to contributions from T Tower, commencement of major leases in the Singapore portfolio, higher capital gains distribution, and lower borrowing costs. This is despite the impact of the tenant relief measures, the cessation of rental support and lower income contribution following the divestment of BugisJunction Towers in November 2019,

Further, Keppel REIT notes that all of its 2020 loans have been refinanced. The all‐in interest rate was lower at 2.48% per annum compared to 2.86% per annum for the same period in 2019. Aggregate leverage was 36.3% with a weighted average term to maturity of 3.6 years whilst interest coverage ratio was 3.5 times and the interest rates of 79% of total borrowings are fixed.

Moreover, Keppel REIT had approximately $938m of undrawn credit facilities available, including $369m of committed facilities as well as capital gains available from prior divestments that could be used to enhance the stability of distributions.