Keppel REIT’s healthy set of 3Q24 numbers were in line. Portfolio occupancy improved q-o-q, aided by improvements in its Australian assets with a strong double-digit rent reversion – indicating office market conditions continue to remain healthy. Financing costs inched up during the quarter but are likely to peak by 1Q25.
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3Q24/9M24 distributable income from operations fell 2% y-o-y
Keppel REIT's 3Q24/9M24 distributable income from operations fell 2% y-o-y, mainly due to higher borrowing costs which increased 33% y-o-y year-to-date. NPI (9M24) rose 11% y-o-y with growth seen across all its markets driven by both organic and inorganic growth.
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Portfolio occupancy improved 0.6ppt q-o-q
Keppel REIT's portfolio occupancy improved 0.6ppt q-o-q to 97.6%, with an increase in leasing volumes (+21% q-o-q) signed during the quarter and higher proportion of new leases (~43% of total), indicating healthy office demand across its portfolio.
Occupancy improvements came mainly from its Australian assets – 8 Exhibition Street, Melbourne and Pinnacle office Park, Sydney while the Singapore portfolio remained relatively stable. Demand came mainly from financial services, legal, and real estate sectors.
BNP Paribas, one of Keppel REIT’s top 10 tenants, has slightly downsized its footprint in the Ocean Financial Centre and management noted that a third of this space has been backfilled by a legal tenant with positive rent reversions.
Healthy double-digit rent reversions
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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/.
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