Keppel REIT - OCBC Investment 2024-04-24: Strong Rental Reversions But Borrowing Costs To Remain Elevated

Keppel REIT - Strong Rental Reversions But Borrowing Costs To Remain Elevated

Keppel REIT (SGX:K71U) | SGinvestors.ioKeppel REIT (SGX:K71U)
  • Keppel REIT (SGX:K71U)’s 1H24 property income and net property income (NPI) increased 6.3% and 7.2% y-o-y to S$61.3m and S$48.2m, respectively, while its NPI attributable to unitholders rose 7.1% to S$43.4m.

Distributable income from operations was flat y-o-y at S$50.2m in 1Q24; actual DI also unchanged y-o-y at S$55.2m

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  • Including an anniversary distribution of S$5.0m, actual distributable income stood at S$55.2m, which was also unchanged on a y-o-y basis. This was within our expectations, as Keppel REIT's 1Q24 distributable income constituted 24.9% of our initial forecast.

Another quarter of strong positive rental reversions

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  • Keppel REIT achieved another quarter of solid rental reversions, which came in at +10.9% on an overall portfolio basis in 1Q24, an acceleration compared to FY23’s +9.9% rental uplift. This can be broken down into +10.1% in Singapore and +16.4% in Australia.
  • Average signing rents for Keppel REIT’s Singapore office leases in 1Q24 were S$12.30 per square foot per month (psf pm), sustaining above CBRE Research’s core CBD Grade A office market rent of S$11.95 psf pm during the same period.
  • Management of Keppel REIT sounded upbeat on its leasing outlook, and raised its guidance for a high-single digit positive rental reversion for its FY24 office lease renewals in Singapore, versus mid-to high-single digit previously.

Aggregate leverage ratio is poised to increase above 40% post-completion of proposed acquisition in Sydney, Australia

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Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @

OCBC Research Team OCBC Investment Research | 2024-04-24

Previous report by OCBC:
2024-01-31 Keppel REIT - Slight Decline In FY23 DPU As Expected.

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 Dividends & Corporate Actions,
Keppel REIT News Articles


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