Keppel REIT - DBS Research 2022-10-26: Santa Is Coming Early Next 5 Years!

• 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.
• Read this at SGinvestors.io -
• 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.

• Read more at SGinvestors.io.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.