Improved returns from CBD offices lift Keppel Reit's Q2 income

A better showing from Ocean Financial Centre (left) and Prudential Tower in the central business district (CBD) lifted earnings for Keppel Reit in the second quarter, the trust said on Monday, July 21, 2014. -- PHOTO: KEVIN LIM AND KEPPEL R
A better showing from Ocean Financial Centre (left) and Prudential Tower in the central business district (CBD) lifted earnings for Keppel Reit in the second quarter, the trust said on Monday, July 21, 2014. -- PHOTO: KEVIN LIM AND KEPPEL REIT

SINGAPORE - A better showing from Ocean Financial Centre and Prudential Tower in the central business district (CBD) lifted earnings for Keppel Reit in the second quarter, the trust said on Monday.

However, its distribution per unit (DPU) for the period fell 3.6 per cent to 1.9 cents.

Net property income for the three months to June 30 shot up 21.5 per cent to $39.2 million from the preceding year.

Income available for distribution rose 0.7 per cent to $53.2 million while gross rent grew 13.7 per cent to $45.9 million.

Keppel Reit said the increase was due to "better performance" from Ocean Financial Centre and from Prudential Tower, as well as contributions from its 50 per cent stake in a property in Melbourne.

"The limited pipeline of new Premium Grade and Grade A office supply coupled with the relatively high islandwide occupancy should underpin the office leasing market especially in the central business district," the reit manager said in a statement on Friday.

The contributions from Prudential Tower were from before Keppel Reit sold its 92.8 per cent stake in the building in May this year.

It sold its stake for $512 million, which was 4.5 per cent above the property's latest valuation of $490 million as at April 28 this year, it said.

That sale price was also 46.7 per cent higher than Keppel Reit's original purchase price of $349.1 million for the property.

Keppel Reit's manager said that it "intends to utilise a substantial amount of the sale proceeds to repay existing debt so as to provide Keppel REIT with greater financial flexibility".

Its units closed one cent higher at $1.28 on Monday.