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Keppel REIT's property income up 14% to S$94 million

The rise was mainly attributed to an improved performance from Ocean Financial Centre and Prudential Tower, as well as additional income from 8 Exhibition Street in Melbourne.

SINGAPORE: Keppel REIT, one of the largest real estate investment trusts listed on the Singapore Exchange Securities Trading, has seen its property income rise 14 per cent year-on-year to S$94.1 million in the first half of 2014.

This was mainly attributed to an improved performance from Ocean Financial Centre and Prudential Tower, as well as additional income from 8 Exhibition Street in Melbourne, which was acquired in August 2013.

Keppel's annual distributable income increased 3 per cent to S$108.3 million.

Total return before tax rose 10.1 per cent on-year to S$82.9 million, as a result of higher net property and interest income, as well as lower amortisation and trust expenses. However, the gains were diminished by lower rental revenue and higher borrowing costs and management fees due to an enlarged portfolio compared to a year ago.

For the office market, Keppel says that the limited supply of new Premium offices, coupled with the relatively high islandwide occupancy, should underpin the office leasing market, especially in the central business district.

According to CBRE, an American commercial real estate company, the average Grade A office rents increased by approximately 3.4 per cent quarter-on-quarter to S$10.60 per square foot per month in the second quarter of 2014, due largely to stable demand amid tightening vacancies.

Industry experts are of the opinion that the pick-up in office rents is likely to continue for the rest of this year and 2015.

Keppel has attained an overall tenant retention rate of 87 per cent and maintained a strong occupancy level of 99.4 per cent for its entire portfolio for the past six months.

In Singapore, it owns 99.9 per cent interest in Ocean Financial Centre, one-third of interest in Marina Bay Financial Centre Phase One and One Raffles Quay, another 92.8 per cent interest in Prudential Tower, and all of Bugis Junction Towers.
 

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