Keppel REIT's net property income up 6% to $39.5m

Boosted by Ocean Financial Centre's growth.

According to Barclays Research, Keppel REIT's 1Q14 gross revenue fell 1% q/q to S$46.8mn due to slightly lower contribution from Australian portfolio. However NPI grew 6% q/q to S$39.5mn on back of strong contribution from Ocean Financial Centre (OFC). Distributable income remained flat q/q despite higher NPI due to lower rental support and higher amortization expense.

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1Q14 gross revenue and NPI grew 13% y/y and 15% y/y respectively due to higher property income from OFC and Prudential Tower, as well as 8 Exhibition Street, which was acquired on 1 August 2013.

Occupancy is maintained at 100% for its Singapore portfolio and 99.8% for the entire portfolio. In Sydney, 8 Chifley Square, which opened on 29 October with 95% occupancy, had signed on its latest tenant Natixis, which improved the building’s occupancy to 97%.

Gearing slightly increased to 42.4% (vs. 42.1% in 4Q13), while borrowing cost also drifted higher to 2.18% from 2.15%, as the percentage of fixed debt decreased to 68% from 70% q/q.

A total of S$275mn and S$75mn of borrowings due in 2015 and 2016 have also been refinanced early, extending the weighted average term to expiry of borrowings to 3.9 years.