Keppel REIT distributable income rises 24.4% to S$179.9 million
Key Facts
Keppel REIT's distributable income from operations rose 24.4% to S$179.9 million in the nine months ended Sept. 30, 2026, from S$144.6 million in the same period a year earlier, according to the fund's financial highlights. Including an annual distribution of S$15 million, total distributable income reached S$194.9 million, up 22.1% from S$159.6 million a year earlier. The total separates operating income from the additional annual distribution, as the 24.4% increase applies to income from operations alone. The company said growth remained positive even after excluding contributions from acquisitions. According to the manager, distributable income from operations would have risen 3.6% year on year without the acquisitions, pointing to organic portfolio growth.
Property results reflected a 16.5% increase in portfolio income to S$238.2 million from S$204.5 million a year earlier, while net property income rose 12.7% to S$181.8 million from S$161.3 million. The company attributed the increase mainly to the contribution from Top Ryde City Shopping Centre in Australia. The acquisition record also includes an additional one-third interest in Marina Bay Financial Centre Tower 3. The fund's share of results from joint ventures rose 33.3% to S$124.2 million. The company linked the increase mainly to ownership of the additional interest in the tower, as well as higher rents and lower borrowing costs.
The portfolio was 96% occupied during the nine months, and rents recorded positive rent reversions of 12%, the company said. The weighted average rent for leases signed in the fund's offices in Singapore's Central Business District was about S$13.27 per square foot per month. The average rent for leases expiring in the fourth quarter of 2026 and in 2027 was S$11.94 and S$11.44 per square foot per month, respectively. In the broader market, the company cited CBRE as saying that the average rent for Grade A offices in the Central Business District was S$12.75 per square foot per month in the third quarter of 2026. Average occupancy for those offices remained at 97.4% in the same quarter.
The fund committed to about 1,569,600 square feet of leases in the first nine months of 2026. Banking, insurance and financial services accounted for 58.6% of the cited demand for new or expansion space. Each of the energy and natural resources, shipping and maritime, and technology, media and telecommunications sectors contributed 8.8% of demand. The chief executive said, "Growth remained positive even after excluding contributions from acquisitions," linking the strength of the Singapore market to continued business demand, tenants' preference for higher-quality space and limited new supply. This demand places the occupancy and rental indicators recorded by the fund within an office market the company described as strong.
Keppel REIT's portfolio was valued at S$11.7 billion as of Sept. 30, 2026. On a pro forma basis that includes the sale of T Tower and the proposed acquisition of Keppel South Central, the portfolio value would have risen to S$12.1 billion. The fund intends to allocate up to S$25 million of net divestment proceeds to buy back its units in the open market. The plan runs alongside the portfolio reshaping through divestments and acquisitions, while the S$12.1 billion figure remains a pro forma estimate based on those two assumptions. Debt figures show gross leverage of 40.5% as of Sept. 30, with 64% of borrowings at fixed rates.
The weighted average debt maturity was 2.5 years, its average cost was 3.32% a year, and the interest coverage ratio was 2.8 times as of Sept. 30. The fund's units closed Tuesday, Oct. 27, down 1.2%, or S$0.01, at S$0.805 per unit. The decline came in the session before the results announcement, and the available information does not include a closing price for Oct. 28. The nine-month results combine growth in operating income, acquisition contributions and improved rental indicators, alongside a plan to buy back units using divestment proceeds. The company's announcement does not specify a later date for the buybacks.