K-REIT Asia reports 37.3% on-year jump in Q1 distribution income

K-REIT Asia, a real estate investment trust sponsored by Keppel Land, reported a 37.3 per cent on-year jump in distribution income for the first quarter on positive rental reversions.

Distribution income for the three months ended 31 March totalled some S$15.7 million.

K-REIT attributed the increase to higher rentals achieved for new and renewed leases.

For the first quarter, shareholders can expect distribution per unit of 2.38 cents per share, compared to 4.6 cents a year ago.

K-REIT says net property income for the quarter rose by 18.4 per cent on-year to S$10.8 million.

The growth was a result of higher gross rentals from its portfolio of office properties like Keppel Towers, GE Towers, Prudential Tower and Bugis Junction Towers.

Income contributions from its one-third interest in One Raffles Quay also registered a 2.5 per cent increase at S$11.2 million.

Despite the challenging economic environment, K-REIT says its portfolio still enjoys positive rental reversions and its share of interest in One Raffles Quay remains sustainable with income support lasting until end-2011.

K-REIT adds that its average lease term to expiry for its portfolio of 5.5 years and those for its top 10 tenants of 7.3 years provide stability for its rental income.

Going forward, it will focus on tenant retention and seek to improve operational and cost efficiencies.

Source : Channel NewsAsia – 21 Apr 2009

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