Keppel REIT’s Second Half 2022 in Line; Shares Undervalued

Keppel REIT’s second-half 2022 results were largely in line with our expectations, with net property income decreased by 1.9% year on year to SGD 86.5 million on the back of a 1.2% decrease in revenue to SGD 109.5 million. The decline is mainly driven by lower income contribution from Pinnacle Office Park and T Tower, and the weaker Australian dollar and South Korean won. Nevertheless, second-half distributable income and distribution per unit, or DPU, increased 3.7% and 2.4%, respectively, year on year, to SGD 110.4 million and SGD 0.0295 after including a distribution top up of SGD 10 million.