Goodbye Keppel REIT

Keppel REIT Logo

It is another sell transaction for me this month as I divested Keppel REIT from my stock portfolio. Total profit including dividends collected was 26.7%.

After Keppel REIT announced a set of disappointing results on 18th July 2017 due to softening office rents, the share price did not decline as badly. Distribution per Unit (“DPU”) fell 12.77% from 3.29 cents in 1H2016 to 2.87 cents in 1H2017.

Looking at the chart for Keppel REIT share price, it has been on an uptrend over the past 3 months. This proves that the stock market can be irrational. Read More

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. Read 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


Financial Results

Dividend Per Unit (DPU)

Increase or Fall

Frasers Commercial TrustWednesday, 20 January 2016DPU Increase
CapitaMall TrustFriday, 15 April 2016DPU Increase
Keppel ReitThursday, 14 April 2016DPU Fall
Soilbuild Business ReitThursday, 14 April 2016DPU Fall
Suntec REITThursday, 21 April 2016 DPU Increase
Mapletree Commercial TrustTuesday, 26th April 2016  DPU Increase
Parkway Life ReitTuesday, 26th April 2016  DPU Fall
Far East Hospitality TrustWednesday, 27th April 2016  DPU Increase
Cambridge Industrial TrustThursday, 28th April 2016  DPU Fall
Lippo Malls Indonesia Retail TrustTuesday, 3rd May 2016  DPU Increase
OUE Hospitality TrustFriday, 6th May 2016DPU Fall