Its property income from 275 George Street crashed 26.5% to $3.74m.
It was an unexciting first quarter for Keppel REIT as its net property income (NPI) dipped by 0.6% YoY from $31.39m to $31.22m. According to its financial statement, distributable income slightly rose 0.2% to $48.23m, whilst distribution per unit (DPU) dipped 2.1% to 1.42 cents per share.
The variances were mainly attributable to lower property income and net property income from 275 George Street. These were partially offset by higher property income and net property income from Bugis Junction Towers, Ocean Financial Centre and 8 Exhibition Street.
Amongst its properties, Bugis Junction Towers contributed $5.08m (+10.7%) to income, 8 Exhibition Street gave $4.8m (+13.5%), whilst Ocean Financial Centre gave $26.11m (+0.6%). The contribution of 275 George Street crashed 26.5% to $3.74m.
"Looking ahead, challenges remain amidst a volatile macro environment," the REIT said, "The Manager will continue to drive stable portfolio performance through ongoing proactive tenant and lease management so as to deliver sustainable distributable income to Unitholders. A prudent capital management strategy will be maintained to optimise the REIT’s performance in a rising interest rate environment."
Keppel REIT added that it signed leases of approximately 674,100 sqft in 1Q 2018. Of the total leases signed by attributable area, 23.3% are new leases, 10.5% are renewal leases and 66.2% are review leases. Average signing rent for the Singapore office leases was approximately $10.05 psf.
"On the whole, new leasing demand during the quarter came from diverse sectors," it said, "In Singapore, the majority of leases were expansions in the legal sector, whilst in Australia, demand came from a government agency taking up space at 275 George Street in Brisbane. "
As at end March 2018, portfolio committed occupancy remained high at 99.4% and portfolio tenant retention rate for the quarter was 93.0%. Committed occupancies for the Singapore and Australian portfolios were 99.8% and 97.9% respectively, above the average of 94.1% for Singapore’s core in the Central Business District (CBD) and 89.6%
for Australia’s national CBD.
The WALE for Keppel REIT’s top 10 tenants and overall portfolio remained long at approximately 7.9 years and 5.3 years respectively.
"Meanwhile, the development project at 311 Spencer Street in Melbourne is progressing as planned," Keppel REIT said, "Piling works were completed in end 2017, and construction of the core and perimeter basement walls have also been completed to-date."
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