Keppel REIT

Keppel REIT: Announced 2Q13 results which was largely in line as the REIT posted a DPU of 1.97¢ (+2% y/y, +0.2% q/q) and Net property income (NPI) of $32.2m (+3.1% y/y, -6.3% q/q). Result brings 1H13 DPU to 3.9¢, +2.6% and NPI to $66.7m, +11.5%. Top-line was supported by improved performance from OFC and 77 King Street. Meanwhile, share of Associates for 1H13, +38% y/y to $30.4m, due to higher contributions from MBFC Phase 1 and One Raffles Quay. Grp’s overall committed portfolio occupancy increased from 98.8% to 99.1%. REITS aggregate gearing stands at 44.2%, with an extended 3.6 years average debt expiry profile after refinancing 60% of its 2014 debt. At current price, grp trades at 1x P/B and 5.7% yield. SCB downgrade the stock to U/p from in-line, as the house expects KREIT to raise $400mn of equity to fund two acquisitions at $1.35bn in 2H13. KREIT has paid a deposit to buy 8 Exhibition St in Melbourne for $192m by 1 Aug13 and also expect K-Land to sell its 1/3 stake in MBFC Tower 3 to KREIT in 2H13 for $1.15b. Latest broker ratings as follow: CIMB maintains Neutral with $1.32 TP Nomura maintains Reduce with $1.23 TP UOB Kay Hian maintains Hold with $1.46 TP