Keppel REIT - Strong Start To FY22
- In its 1Q22 business update, Keppel REIT (SGX:K71U) reported gross revenue of S$54.5m, +6.7% y-o-y, while distributable income from operations grew 4.3% y-o-y to S$53.8m. 1Q22 distributable income from operations was in line at 24.7% of our FY22F forecast.
- We believe portfolio committed occupancy is likely to trend up in coming quarters. Keppel REIT renewed/leased 475k sqft of space in 1Q22 at an average rental uplift of about +7.9%. An estimated 81% of leasing activities were renewals.
- Meanwhile, Keppel REIT guided that the impact of higher utilities rates is mitigated in the near term as in-place energy contracts are due for renewal only by end-2022 to 2024.
- With its strong balance sheet, we believe Keppel REIT is in a strong position to continue to evaluate accretive inorganic growth opportunities, particularly in Australia and Singapore.
- We leave our FY21-23F DPU estimates for Keppel REIT unchanged and retain our DDM-based target price of S$1.29.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LOCK Mun Yee CGS-CIMB Research | EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2022-04-20 2022-04-20
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