Keppel REIT - RHB Invest 2023-01-30: Laggard Proxy To Resilient Office Sector; BUY

Keppel REIT - Laggard Proxy To Resilient Office Sector; BUY

Published:
KEPPEL REIT (SGX:K71U) | SGinvestors.ioKEPPEL REIT (SGX:K71U)
  • Keppel REIT’s FY22 results were slightly below estimates, with earnings meeting 96% of our full-year forecast.
  • Despite the ongoing technologysector and economic slowdown, Singapore’s office market is expected to stay resilient on low supply and flight-to-quality trends.
  • - Read this at SGinvestors.io -
  • Valuations are reasonably attractive, at 0.7x book value with a FY23F yield of 6.2%.

Keppel REIT’s FY22 results slightly below estimates

  • Keppel REIT (SGX:K71U)'s 2H22/FY22 DPU rose 2.4%/1.4% y-o-y, aided by the first tranche of the anniversary dividend distribution of S$10m . Operational DPU (2H) was lower by 4% y-o-y on higher interest expenses, lower JV & associates income, and a weaker AUD.
  • - Read this at SGinvestors.io -
  • Portfolio value rose 1.7% h-o-h, with Singapore assets (+2.3% h-o-h) more than offsetting the weakness from assets abroad.
  • About 76% of debt is hedged, with every 50bps rise in interest rates affecting Keppel REIT's DPU by 2%.
  • Blue & William’s first anchor tenant, Equifax, will consolidate its office space to occupy one-third of the building (~4,350sqm). Management noted signing rental rates were in line with development assumptions of ~900 – 1,100psm pa. The building is on track to be completed by mid-2023. The developer, Lendlease, has been providing 4.5% annual coupon payments during the current development phase, and has also committed to a 3-year rental guarantee on any unlet space after practical completion.

Slightly disappointing Japan entry.

  • Read more at SGinvestors.io.



Above is an excerpt from a report by RHB Securities Research.
Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.



Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-01-30



Read also RHB's most recent report:
2025-02-03 Keppel REIT - Still A Bargain; BUY.

Previous report by RHB:
2024-10-22 Keppel REIT - Healthy Office Momentum Continues; BUY.

Price targets by 3 other brokers at Keppel REIT Target Prices.

Listing of research reports at Keppel REIT Analyst Reports.

Relevant links:
Keppel REIT Share Price History,
Keppel REIT Announcements,
Keppel REIT Dividend Payout Dates & Corporate Actions,
Keppel REIT News






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