Keppel REIT (SGX:K71U) surprised shareholders with the declaration of S$100m from accumulated capital gains to be distributed over the next five years leading up to its 20th anniversary in 2026. S$20m per annum translates to ~0.5 cents per share.
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We believe this is a bold (and rare) move from management to reward and share its years of gains accumulated from its asset recycling strategy with shareholders, especially in such a challenging environment. We believe this is a strong testament from management that it is exercising duty of care and loyalty to all stakeholders who have been supportive of the company.
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Gearing inched up marginally to 38.4% vs 37.9% in 2Q22 and the interest rate hedge ratio remained stable at 72% vs 73% 2Q22.
Keppel REIT's all-in cost of debt has risen above 2% at 2.13% in 3Q22 vs 1.93% in 2Q22 due to rising interest rates. There is no debt refinancing remaining in FY22 and management expects to refinance debt expiries (19% of total debt) by early next year.
Income from Australia and South Korea is hedged for up to 18 months.
Riding on strong Singapore office upcycle and locking in leases as quickly as possible.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
