Lower rental support and smaller contributions from associates were among a range of factors that hit Keppel Reit's third-quarter performance.
The Reit has declared a lower distribution per unit (DPU) of 1.4 cents for the three months ended Sept 30 - down 12.5 per cent from the 1.6 cents in the same period a year earlier.
Income available for distribution fell 10.4 per cent to $47 million, while revenue climbed 2.3 per cent to $40.4 million.
Net property income inched up 0.3 per cent to $31.7 million, propped up by higher contributions from Bugis Junction Towers, 275 George Street and 8 Exhibition Street, said the manager in a filing to the Singapore Exchange yesterday.
Income available for distribution for the nine months to Sept 30 was down 10.6 per cent to $142.5 million, while net property income shrank 2.1 per cent to $95 million.
Total return before tax slipped 4.2 per cent to $40.1 million in the third quarter, mainly on the back of lower rental support, reduced interest income, a smaller share of results of associates and higher borrowing costs, said the manager.
Rental support, for instance, dropped 22.4 per cent to $3.2 million, and contributions from associates fell 17.1 per cent to $20.4 million.
AT A GLANCE
NET PROPERTY INCOME:
$31.7 million (+0.3%)
INCOME AVAILABLE FOR DISTRIBUTION:
$47 million (-10.4%)
DISTRIBUTION PER UNIT:
1.4 cents (-12.5%)
Quarterly earnings per unit eased to 1.1 cents from 1.16 cents previously. Net asset value per unit stood at $1.42 as at Sept 30, down slightly from $1.44 as at Dec 31 last year.
The manager said the Reit's aggregate leverage remained stable quarter on quarter at 38.8 per cent, while its weighted average term to maturity of borrowings was three years.
The overall committed occupancy for the Reit's portfolio remained healthy at 99.6 per cent, while the weighted average lease expiry stood at six years.
During the quarter, Keppel Reit started construction on its newly acquired premium office tower at 311, Spencer Street in Melbourne, which will be the Victoria Police headquarters when completed in the fourth quarter of 2019. "The addition of an AAA-rated tenant on a 30-year lease at 311, Spencer Street will enhance the stability of Keppel Reit's income stream over the long term," said the manager.
Keppel Reit had assets under management of around $8.5 billion as at the end of the quarter, comprising interests in nine premium office assets in the central business districts of Singapore and the key Australian cities of Sydney, Melbourne, Brisbane and Perth.
Its assets in Singapore include Ocean Financial Centre, Marina Bay Financial Centre, One Raffles Quay and Bugis Junction Towers.
Keppel Reit units finished 0.8 per cent or one cent higher at $1.195 yesterday, before the results were announced.