Keppel Reit H2 2024 DPU falls 3.4% to S$0.028 on lower distributable income.

Keppel REIT Reports 13.6% Increase in Net Property Income

The manager of Keppel real estate investment trust (Reit) reported a 13.6 per cent increase in second-half 2024 net property income to S$105.1 million from S$92.5 million a year prior.

Key Highlights

• Net property income increased 13.6% to S$105.1 million in H2 2024
• Distribution per unit fell 3.4% to S$0.028 in H2 2024
• Net property income grew 10.7% to S$201.9 million in FY2024
• Distributable income fell 2.1% to S$194.5 million in FY2024

Reasons for Increase in Net Property Income

The increase in net property income was attributed to higher property income from T Tower, KR Ginza II, 2 Blue Street, and 255 George Street. This was partially offset by lower net property income from Ocean Financial Centre and 8 Exhibition Street due to higher property tax and a lower one-off income for 8 Exhibition Street.

Factors Affecting Distribution Income

Despite the increase in property income, distribution income for H2 2024 fell 2.1% to S$97.6 million from S$99.7 million in H2 2023. This was driven by lower fair value gain on investment properties in H2 2024 compared with H2 2023, as well as lower rental support, net foreign exchange differences, higher management fees, and higher borrowing costs.

Full-Year 2024 Performance

For the full 2024 fiscal year, net property income grew 10.7% to S$201.9 million from S$182.4 million in FY2023. Distributable income for FY2024 fell 2.1% to S$194.5 million from S$198.7 million in FY2023. Including the anniversary distribution, FY2024 distributable income fell 1.9% to S$214.5 million from S$218.7 million.

CEO’s Comment

“Looking ahead, our focus remains on proactive asset management to capitalise on the flight-to-quality trend, and we continue to be disciplined in capital management to deliver sustainable long-term total return to the unitholders,” said Chua Hsien Yang, CEO of the manager.

Conclusion

Keppel REIT’s performance in H2 2024 was driven by higher property income from certain properties, but was partially offset by lower net property income from other properties. Despite the increase in property income, distribution income fell due to various factors. The REIT’s focus on proactive asset management and disciplined capital management will be key to delivering sustainable long-term returns to unitholders.

FAQs

Q: What was the increase in net property income in H2 2024?
A: The net property income increased 13.6% to S$105.1 million in H2 2024.

Q: What was the reason for the increase in net property income?
A: The increase was attributed to higher property income from T Tower, KR Ginza II, 2 Blue Street, and 255 George Street, partially offset by lower net property income from Ocean Financial Centre and 8 Exhibition Street.

Q: What was the impact of fair value gain on investment properties on distribution income?
A: The fair value gain on investment properties in H2 2024 was lower compared with H2 2023, which contributed to the decline in distribution income.

Q: What is the REIT’s focus for the future?
A: The REIT’s focus remains on proactive asset management to capitalise on the flight-to-quality trend, and disciplined capital management to deliver sustainable long-term total return to unitholders.