Keppel REIT (K71U) H2 2025 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2025, with NPI up 6.9% to $215.9 million, driven by strategic acquisitions (75% of Top Ryde City and additional one-third of MBFC Tower 3) and higher occupancy, raising Singapore exposure to 79.8%.

• Portfolio occupancy improved to 96.7%, with rental reversion at 11.5% and WALE at 4.4 years.

• Focus for 2026 is on organic growth, rental uplift, proactive cost management, and reducing borrowing costs, with no immediate plans for further acquisitions or equity fundraising.

Financial highlights

• Net property income rose 6.9% year-on-year to $215.9 million, mainly from 255 George Street and higher occupancy at 2 Blue Street.

• Share of results from associates and JVs increased 13.3% year-on-year to $124.6 million, supported by Singapore office demand and lower borrowing costs.

• Distributable income from operations was $192.4 million, down 1.1% year-on-year due to management fees paid in cash; would have increased 6.3% if paid in units.

• DPU for FY 2025 was 5.23 cents, a 6.6% decrease year-on-year due to enlarged unit base and timing of acquisitions.

• Adjusted NAV per unit as at 31 Dec 2025 was $1.27.

Outlook and guidance

• Full contribution from recent acquisitions expected from 2026, enhancing income resilience.

• Targeting cost of debt between low 3% and 3.3% for 2026, leveraging refinancing momentum and lower interest rates.

• Focus on asset management, rental growth, and potential strategic divestments before considering new acquisitions.

• Double-digit rental reversions remain an aspiration for 2026, supported by strong demand for quality office space.