Keppel Reit DPU falls 9.5%; Frasers trust rises 7%

Keppel Reit's net property income fell 11.4 per cent to $34.7 million, owing to the absence of income from the divested Prudential Tower, as well as the lack of rental support from Marina Bay Financial Centre Phase One and its 87.5 per cent interest
Keppel Reit's net property income fell 11.4 per cent to $34.7 million, owing to the absence of income from the divested Prudential Tower, as well as the lack of rental support from Marina Bay Financial Centre Phase One and its 87.5 per cent interest in Ocean Financial Centre (above).ST FILE PHOTO

Quarterly results show both office landlords achieving healthy occupancy

Office landlords Keppel Reit and Frasers Commercial Trust yesterday turned in a mixed performance for the quarter ended June 30.

Keppel Reit posted a 9.5 per cent drop in distribution per unit (DPU) to 1.72 cents for its second quarter, compared with the 1.9 cents it paid out for the same period a year ago.

Net property income fell 11.4 per cent to $34.7 million, owing to the absence of income from the divested Prudential Tower, as well as the lack of rental support from Marina Bay Financial Centre Phase One and its 87.5 per cent interest in Ocean Financial Centre, said the Reit manager in a statement.

Income available for distribution grew 3 per cent to $54.8 million, while total property income slipped 9.3 per cent to $43 million.

For the half year, DPU was down 11.6 per cent to 3.42 cents, while net property income sank 11.9 per cent to $69.3 million.

  • AT A GLANCE

  • KEPPEL REIT

  • GROSS REVENUE:
    $43 million (-9.3%)

    NET PROPERTY INCOME:
    $34.7 million (-11.4%)

    DISTRIBUTION PER UNIT:
    1.72 cents (-9.5%)

  • FRASERS COMMERCIAL TRUST

  • GROSS REVENUE:
    $34.7 million (+17%)

    NET PROPERTY INCOME:
    $24.3 million (+6.1%)

    DISTRIBUTION PER UNIT:
    2.35 cents (+7.3%)

The Reit manager said it has completed all its refinancing requirements for this year. It has commenced early refinancing for some 70 per cent of its loans due next year, and for loans due in 2017.

To date, the Reit has achieved a positive rental reversion of 18 per cent on average, a tenant retention rate of about 84 per cent and a portfolio occupancy of 99.3 per cent.

Separately, Frasers Commercial Trust, which also announced its results yesterday, logged a 7 per cent rise in DPU for its third quarter to 2.35 cents over that for the same period the year before.

Net property income climbed 6 per cent to $24.3 million, thanks to higher contribution from the underlying leases of Alexandra Technopark as well as from China Square Central and 55 Market Street, said the trust's manager. But this was partially offset by the effects of the weakening Australian dollar on the income from its Australian properties and lower occupancy rate for Central Park in Sydney, it added.

Income available for distribution rose 9 per cent to $16.1 million, while gross revenue jumped 17 per cent to $34.7 million. For the nine months to June 30, DPU increased 14 per cent to 7.19 cents, while net property income grew 12 per cent to $74.5 million.

The trust said its portfolio continues to achieve a healthy average occupancy rate of 95.1 per cent.

Mr Low Chee Wah, chief executive of the trust's manager, said the trust is on track to entering into the $44.8 million building agreement for China Square Central Hotel by Oct 1, which will help it "achieve long-term growth".

Keppel Reit closed half a cent up at $1.125, while Frasers Commercial Trust closed one cent up at $1.55.

A version of this article appeared in the print edition of The Straits Times on July 21, 2015, with the headline 'Keppel Reit DPU falls 9.5%; Frasers trust rises 7%'. Print Edition | Subscribe