Keppel REIT (SGX:K71U) reported 1H23 DPU of S$0.029 -1.7% h-o-h/-2.4% y-o-y and at 48.7% of our FY23E. Stable operating performance was more than offset by lower margins and higher borrowing cost. Committed occupancy was stable while reversion was high-single-digit positive.
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Valuation at 0.7x FY23E P/B is attractive. Maintain BUY.
Resilient operations offset by higher funding costs
Gross revenue and NPI rose by 4.7% and 0.4% y-o-y. Higher revenue was due to higher rentals and portfolio occupancy. NPI margin dipped 75bps h-o-h and ~300bps y-o-y on back of higher utilities expenses and completion of Blue & William (B&W) in Australia.
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With mixed impact from anniversary distributions and higher units, Keppel REIT's 1H23 DPU was down 1.7% h-o-h/2.4% y-o-y.
Stable leasing momentum, weaker AU office values
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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