Keppel DC Reit ( former K-Reit Asia )

[winston]

not vested

Time: 5:04PM
Exchange: SGX
Stock: Kep REIT(K71U)
Signal: Bearish MACD Crossover
Last Done: $1.235

Source: UOBKH

[winston]

not vested

Temasek sells KReit stake for $125m

Placement works out to 3.74% of KReit that Temasek received as dividend.

Temasek Holdings has sold its entire direct stake in office landlord Keppel Reit (KReit) in a share placement that started on Monday evening, sources close to the deal said yesterday.

The deal involved 103,994,321 shares offered at a price range of between $1.195 and $1.21 per share, the sources said. This represents a 1.6-1.8 per cent discount to the trust's last closing price of $1.23 on Oct 21. The placement offer amounted to an estimated $125 million.

Temasek continues to hold 21 per cent in Keppel Corp which in turn holds 54.6 per cent in Keppel Land. Keppel itself has less than a 1 per cent stake in KReit following its two rounds of dividend in specie, while Keppel Land remains KReit's largest shareholder at 44.86 per cent.

Besides Keppel group, the other significant shareholders are Capital Group, Franklin Resources, Goldman Sachs and Aberdeen.

With the Temasek share placement, KReit's free float will rise to more than 55 per cent from 24.4 per cent in January.

KReit recently posted a 9.9 per cent increase in net property income to $100.9 million for the nine months to Sept 30, 2013. Distributable income rose 6 per cent to $159 million, while distribution per unit rose 1.9 per cent to 5.91 cents.

Management had said that its total portfolio value was more than $6.8 billion. Average portfolio committed occupancy rose to 99.4 per cent, with six out of eight existing buildings fully occupied.

Key properties in Singapore include the Ocean Financial Centre, Marina Bay Financial Centre, One Raffles Quay, Prudential Tower and Bugis Junction Towers.

Source: AmFraser

[winston]

not vested

Keppel REIT (S$1.155, unchanged) has announced 4Q FY13 DPU of 1.97 cents (total of 7.88 cents for FY13), which represent an annualised yield of 6.8% based on last closing price.

In FY13, KREIT registered a 10.9% yoy increase for both the property income and net property income to $174.0 mln and $138.3 mln respectively. This is mainly due to improved performance from Ocean Financial Centre and 77 King Street, and the additional income from the acquisition of 8 Exhibition Street in Melbourne.

The REIT has successfully completed the early refinancing of all loans due in 2014 and a further $60 mln due in 2015. We understand that KREIT has no more refinancing requirements for the next 22 months. Its average all-in interest rate stood at 2.15% with an aggregate leverage of 42.1% as at 31 Dec 2013.

With interest rate set to rise, the Manager has also fixed about 70% of total borrowings. However, with its overall portfolio average occupancy rate already at 99.8% in 4Q 2013, this suggests that any DPU growth may be relatively weak going forward.

Source: Lim & Tan

[winston]

vested

Keppel REIT: HOLD; S$1.17; KREIT SP
Sound operations
Price Target : 12-Month S$ 1.29

• DPU stable y-o-y at 1.97 Scts, in line
• Portfolio fully occupied; REIT to benefit from rising demand for space at Marina Bay area
• Maintain HOLD, TP S$1.29


Highlights

1Q14 results. KREIT booked S$47m revenue (+13% y-o-y), S$39m NPI (+15%), and S$55m distribution income (+5.5%) for the quarter.

Topline growth was driven by
(a) better performance at Ocean Financial Centre (OFC) and Prudential Tower, and
(b) new contribution from 8 Exhibition Street (acquired In Aug-13).

There was also higher contribution from MBFC Phase 1, leading to 13% growth in associate income. Financing costs rose 13% to S$14.5m due to an expanded portfolio. DPU was flat at 1.97 Scts on a larger share base after several equity fund-raising (EFR) exercises in FY13.

Marina Bay: positive leasing momentum to ease negative impact of loss of income support. KREIT will see 3.1% and 6.3% of NLA due for renewal and rent review, respectively. We understand the majority of these leases are for OFC and MBFC Phase 1 where passing rents are lower than market currently. Given healthy office leasing momentum in the Marina Bay area, we expect 10-15% uplift in those rents. This should mitigate the slight drop in rental income as income support from MBFC Phase 1 had expired last quarter. Income support from OFC also fell to S$10.5m due to larger share of retail leases and other ancillary income (advertising and signage).

Our View
Early debt refinancing to stabilise interest cost. KREIT continued to be proactive in capital management by refinancing S$350m of debt due in FY15 (38% of total debt) and FY16 (16%), terming out debt to 3.9 years from 3.5, while maintaining fairly low all-in interest cost of 2.18% (vs 2.15%). In addition, the REIT has hedged 68% of total borrowings with fixed rate debt to minimise risk to rising rates in the near term.

High acquisition hurdle. Given high gearing of 42%, future acquisitions would have to be financed via EFR, which will be difficult to execute given high implied yields compared to market. Despite the availability to acquire MBFC Phase 2 from its Sponsor Keppel Land, K-REIT would be hard pressed to make any DPU accretive acquisitions at this point given that cap rates for office assets in Singapore are c.4% currently.

Recommendation
Maintain HOLD, TP S$1.29. We like K-REIT for their quality prime Grade A portfolio. Further clarity on the planned acquisition of MBFC Phase 2 and funding could be re-rating catalysts.


Source: DBS

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not vested

Keppel REIT is divesting its 92.8% interest in Prudential Tower to a consortium comprising subsidiaries of Lian Beng Group, KSH Holdings, KOP Limited and Centurion Global for $512.0m.

Prudential Tower, a 30-storey 99-year leasehold Grade A office building prominently located on the corner of Cecil Street and Church Street near Raffles Place, is approximately 16-years old and presently fully occupied.

The sale price is 4.5% above the latest valuation of the Property of $490.0m. It also represents a 46.7% premium over Keppel REIT’s original purchase price of the
Property of $349.1m.

Assuming that the proceeds are utilized towards debt repayment, we estimate DPU is estimated to drop c. 3.5% (mainly due to low interest rates (c.2.2% for its debt facilities in Singapore). However, we believe that it is not an optimal scenario for the trust.

We believe that this sale will be the first of few steps that K-REIT will take towards funding the highly anticipated purchase of MBFC Tower 3 from its sponsor Keppel land. As such, proceeds from the sale of Prudential Towers will come handy as it will mean that K-REIT will not need to raise as much equity as previously expected and it will also lower the overall funding cost for K-REIT without gearing up overexcessively.

Our estimates and HOLD call is maintained pending the completion of this sale in Sept’14 and/or further updates.

Source: DBS

[winston]

not vested

Q3 distribution dips 6.1% to 1.85 cents a unit

Keppel Reit's DPU dipped 6.1% to 1.85 cents for the third quarter ended Sept 30, due to factors such as higher borrowing costs and trust expenses.

For its fiscal third quarter, Keppel Reit's net property income grew 12.4% year on year to S$38.52mil given better performance at Ocean Financial Centre and 8 Exhibition Street in Melbourne.

Keppel Reit's leverage level stood at 42.1% as at Sept 30 and it has no refinancing requirements for the next 14 months.

The Reit manager is staggering the distribution payout, with the first 1.8 cents per share to be distributed on Nov 12 and the remaining 0.05 cent on Nov 28.

Source: AmFraser

[behappyalways]

Keppel DC REIT to commence trading today after oversubscribed IPO
http://sbr.com.sg/information-technolog ... cribed-ipo

[behappyalways]

(with falling energy costs, Keppel DC Reit will benefit from it as one of the main costs for data centers is energy price)


Keppel DC Reit has high hopes for growth prospects
http://video.cnbc.com/gallery/?video=3000338617

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Keppel REIT - Subdued outlook

KREIT’s FY14 distributable profit was in line with expectations, making up 94% of our full-year forecast.

4Q14 earnings were hit by the lack of contribution from Prudential Tower and the later-than-expected completion of the acquisition of MBFC Tower 3.

While we remain positive on the office sector, we note that the 3.9m sq ft of new office supply coming into Singapore in 2016 could limit the pace of KREIT’s rental growth.

To factor in a slightly earlier-than-expected drop off in income support at OFC, we have lowered our FY15 DPU forecast by c.1.1%.

We maintain our Hold rating with an unchanged DDM-based (discount rate: 8.3%) target price of S$1.22.

Source: CIMB

[behappyalways]

Keppel DC REIT declares higher than forcasted maiden DPU of 3.56 cents
http://sgx.i3investor.com/servlets/fdnews/52380.jsp