SINGAPORE – Keppel Reit posted net property income (NPI) of $48.2 million for the first quarter ended March 31, up 7.2 per cent from $45 million in the first quarter of financial year 2023.

This was mainly due to higher rentals and contributions from 2 Blue Street, a 10-storey office building in Sydney, said the real estate investment trust’s (Reit) manager in a business update on April 23.

This brought property income to $61.3 million, up 6.3 per cent from $57.7 million the year before.

NPI attributable to unit holders also grew, rising by 7.1 per cent to $43.4 million from $40.5 million.

The Reit’s higher NPI for the quarter was partly attributed to the strong demand for prime office space.

The manager added that Keppel Reit’s acquisition of a 50 per cent interest in 255 George Street, a freehold Grade A office building in Sydney’s Central Business District, will provide a first-year yield of more than 6 per cent. Its distribution per unit accretion would stand at 1.4 per cent on a pro forma basis, assuming the acquisition was completed on Jan 1, 2023.

The manager announced in 2022 that it will distribute $100 million over a five-year period – $10 million semi-annually – to celebrate the Reit’s 20th anniversary in 2026.

The Reit’s distributable income for the quarter was flat at $50.2 million. Including its anniversary distribution, it also remained flat year on year at $55.2 million due to higher borrowing costs.

The Reit’s portfolio occupancy was 96.4 per cent, and its portfolio weighted average lease expiry stood at 4.6 years as at March 31, based on committed attributable gross rent.

Units of Keppel Reit closed one cent, or 1.18 per cent, higher at 86 cents on April 23. THE BUSINESS TIMES