Keppel REIT sold Australia Asset 77 King Street

Keppel REIT 77 King Street Sydney

Keppel REIT announces on 17th January 2016 that it has divested 100% of its interest in 77 King Street, Sydney, Australia  for A$160 million. The news came one day before Keppel REIT announces its financial results on 18th January 2016.

77 King Street is a freehold Grade A commercial building in Sydney’s Central Business District. 77 King Street comprises 18 levels of offices and two basement levels of retail space. Its tenants include Apple, Facebook and Capgemini.

According to the news released on Keppel REIT website, the sale was 40% of the original purchase price of A$116 million in year 2010. The buyer is ARE Noble Pty Ltd, a wholly-owned subsidiary of Invesco Asia Core Fund. The proceeds from the sale will be used to pay off existing debts and used for future investment opportunities.

With the divestment of 77 King Street, below is the updated portfolio of Keppel REIT.

Singapore

  • Bugis Junction Towers
  • Marina Bay Financial Centre
  • One Raffles Quay
  • Ocean Financial Centre

Australia

  • 8 Chifley Square, Sydney
  • 8 Exhibition Street, Melbourne
  • 275 George Street, Brisbane
  • Office Tower on the Old Treasury Building site, Perth

Some positive points to note from 3Q2015 results (Keppel REIT announces DPU of 1.70 cents for 3Q2015).

They are:

  • 70% of total leases are not due for renewal till 2018 and beyond.
  • Positive rent reversion averaging 16% for office leases signed, renewed and reviewed year‐to‐date
  • 25‐year long lease in the fourth quarter of 2015 (“4Q 2015”) for Old Treasury Building site in Perth. The tenant is the Government of Western Australia (WA).

In my personal opinion and observation, as compared to year 2014, the full year DPU for Keppel REIT is expected to be lower in 2015.

Chief Operating Officer and Chief Financial Officer for Cambridge Industrial Trust Quits

Resignation

Today, on 15th January 2016, Cambridge Industrial Trust announces the resignation of Mr David Mason who is the Chief Operating Officer and Chief Financial Officer for Cambridge Industrial Trust. He will remain in the company until April 2016 to facilitate a smooth transition.

The above news came sudden, a day after Cambridge Industrial Trust announces a fall in DPU (Cambridge Industrial Trust DPU Fall for 4QFY15). The news may or may not cause further fall in current closing share price of S$0.53, depending on investor’s confidence.

Cambridge Industrial Trust is currently, facing headwinds caused by vacancies and earnings weakness arising from property conversions from single-tenanted to multi-tenanted.

Cambridge Industrial Trust DPU Fall for 4QFY15

Cambridge Industrial Trust Logo

Cambridge Industrial Trust announces its results for 4QFY15 on 14th January 2016. DPU fell 9% to 1.139 cents as compared to 1.252 cents the same period last year. This brought the full year DPU for year 2015 to 4.793 cents which is a fall of 4.2% as compared to 5.004 cents in year 2014.

Enough of the bad news, there are some good points about Cambridge Industrial Trust. Cambridge Industrial Trust achieves positive rental reversion of 9.1%. It also have a well-staggered debt maturity profile with 97.4% of interest rates fixed for the next 3 years and thus further Fed rate hikes will have minimal impact on Cambridge Industrial Trust. Read More