Keppel REIT (K71U) H1 2026 earnings summary

Executive summary

• Prime office demand remains resilient, driven by technology, finance, and professional services, with a continued flight to quality and preference for premium, well-located office assets.

• Achieved strong financial performance in 1H 2026, with significant growth in net property income (NPI), distributable income, and portfolio occupancy, supported by resilient demand in Singapore and Australia and strategic portfolio management.

• Completed the divestment of KR Ginza II in Tokyo at a 28.4% premium to purchase price and 9.7% premium to latest valuation, demonstrating effective capital recycling and value creation.

• Maintained high portfolio occupancy and proactive leasing, with a diversified tenant base and continued focus on ESG excellence, including Green Mark Platinum certifications for all Singapore properties.

• Portfolio value reached $11.8 billion as of 30 June 2026, spanning Singapore, Australia, South Korea, and Japan.

Financial highlights

• Net property income (NPI) rose 13.1% year-over-year to $122.5 million, mainly from Top Ryde City; excluding Top Ryde, NPI increased 2.5%.

• Share of results from joint ventures increased 37.2% year-over-year to $83.8 million, primarily due to the additional 1/3 interest in MBFC Tower 3.

• Distributable income from operations grew 25.2% year-over-year to $119.6 million; including Anniversary Distribution, distributable income was $129.6 million, up 22.8%.

• DPU for 1H 2026 was 2.61 cents, down 4.0% year-over-year due to enlarged unit base; annualized yield at 6.1%.

• Aggregate leverage reduced to 40.0% as of June 30, 2026; adjusted NAV per unit at $1.22.

Outlook and guidance

• Weighted average cost of debt guided to remain between 3%-3.3% for 2026; 62% of borrowings on fixed rates.

• Portfolio optimization, proactive leasing, and sustainability initiatives to drive stable income and long-term capital appreciation.

• No guidance provided for rental reversions for the remainder of the year; most leasing for 2026 already completed.

• Focus remains on divestments and debt reduction, with share buybacks considered after further divestments; no plans to raise equity or pursue major acquisitions until leverage is further reduced.