Keppel REIT Annualised DPU Fall for 2015

Keppel REIT Logo

Keppel REIT announces its results for 4Q2015 on 18th January 2016. Although 4th quarter Distribution Per Unit (DPU) increased 11.26% to 1.68 cents as compared to 1.51 cents for the same period last year, the annualised DPU fell 5.85% to 6.8 cents as compared to 7.23 cents a year ago.

If we take the market closing price of S$0.93 on 31st December 2015, the yield for Keppel REIT will be 7.3%. This is pretty decent to me. At the point of writing this post, the closing price is S$0.89.

4Q2015
(S$’000)
4Q2014
(S$ ‘000)
YoY(%)
Property Income 42,795 43,337 (1.25)
Net Property Income 34,771 34,253 1.51
Distributable Amount 54,031 45,848 17.85
Distribution Per Unit (“DPU”) (cents) 1.68 1.51 11.26
Annualised DPU (cents) 6.8 7.23 (5.85)

Debt Maturity Profile

Keppel REIT completed almost 100% of refinancing requirements in 2016. It continues to maintain a well-staggered debt maturity profile with weighted average term to expiry at a healthy 3.7 years.

Weighted Average Lease Expiry

The top 10 tenants accounted for 43% of portfolio whereby the tenants have a long WALE of approximately 8 years and 6 years.

Keppel REIT Top 10 Tenants

Things to Note

Netflix

Netflix is one of its new tenant.

Government of Western Australia

Government of Western Australia commenced its 25-year lease in November 2015. The effective return is 7.15%. It has a fixed annual rental escalation throughout lease term, with options for another 25 years.

Limited Office Supply After 2018

We are expecting limited office supply after 2018. Thus, we should be investing in Keppel REIT based on long term rather than short term.