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Keppel REIT DPU Decreased but Manager Management Fees Increase

Keppel REIT Logo

I held 7% of office REITs in my stock portfolio, mainly made up of Keppel REIT and Frasers Commercial Trust at 5% and 2% respectively.

Keppel REIT has announced its 4Q2016 financial results on 24th January 2017. A set of pretty disappointing results which reflects the weakness and headwinds in office REITs in current economy. I expect headwinds but didn’t expect results to be so bad. This is in consideration that Keppel REIT sold its 77 King Street asset at 40% profit at A$160 million. Where is the profit attributed to share holders? (Read point number 6 under Investment Risks below)

Gearing ratio as at 31st December 2016 is at 38.5%. Perhaps most of the profit from the sale of 77 King Street has been used to repay its debt.

Although the portfolio occupancy is at 99.2%, Keppel REIT achieved an average signing rent of $9.60 per square foot for its Singapore offices. This is slightly higher than the current rent of $9.10 per square foot for Grade A office rental rate. (more…)

Summary of REITs Financial Results in 1Q2016

Most or all of the REITs in my portfolio have completed announcing their 1Q2016 results. There are some hits and some misses. As shown in the table I summarized below, Distribution Per Unit (“DPU”) increases for 6 out of 11 REITS I am holding while DPU fell for the other 5.

DPU fell for those REITs that focuses on a single industry sector such as industrial, retail or office. REITs like Suntec REIT which has a combination of office and retail survived the economy downturn. Mapletree Commercial Trust did fairly well too as it has a combination of office and retail (Vivocity).

Those with overseas assets did well too. Frasers Commercial Trust has both Singapore and Australian properties. Lippo Malls Indonesia Retail Trust did well as its malls are in Indonesia.

Having said so much, I just want to highlight the importance of diversification of portfolio.

Stock Name

Date Of Release

Of

Financial Results

Dividend Per Unit (DPU)

Increase or Fall

Frasers Commercial Trust Wednesday, 20 January 2016 DPU Increase
CapitaMall Trust Friday, 15 April 2016 DPU Increase
Keppel Reit Thursday, 14 April 2016 DPU Fall
Soilbuild Business Reit Thursday, 14 April 2016 DPU Fall
Suntec REIT Thursday, 21 April 2016  DPU Increase
Mapletree Commercial Trust Tuesday, 26th April 2016   DPU Increase
Parkway Life Reit Tuesday, 26th April 2016   DPU Fall
Far East Hospitality Trust Wednesday, 27th April 2016   DPU Increase
Cambridge Industrial Trust Thursday, 28th April 2016   DPU Fall
Lippo Malls Indonesia Retail Trust Tuesday, 3rd May 2016   DPU Increase
OUE Hospitality Trust Friday, 6th May 2016 DPU Fall

Keeping Track of 1st Quarter 2016 Financial Results

Golden-Egg-255x300

Below are the REITS I currently hold in my portfolio. Most of them will be announcing their 1st Quarter 2016 financial results. To keep track of the date of release of the 1st quarter 2016 financial results, I have decided to track them using the table below.

So far, only CapitaMall Trust have reported an increase in DPU. Keppel Reit and Soilbuild Business Reit have reported a fall in DPU.

Stock Name

Date Of Release

Of

1st Quarter 2016 Financial Results

Dividend Per Unit (DPU)

Increase or Fall

Frasers Commercial Trust Wednesday, 20 January 2016 DPU Increase
CapitaMall Trust Friday, 15 April 2016 DPU Increase
Keppel Reit Thursday, 14 April 2016 DPU Fall
Soilbuild Business Reit Thursday, 14 April 2016 DPU Fall
Suntec REIT Thursday, 21 April 2016  Pending
Mapletree Commercial Trust Tuesday, 26 April 2016   Pending
Parkway Life Reit Tuesday, 26 April 2016   Pending
Far East Hospitality Trust Wednesday, 27 April 2016   Pending
Cambridge Industrial Trust Thursday, 28 April 2016   Pending
Lippo Malls Indonesia Retail Trust Tuesday, 3 May 2016   Pending

 

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