Singapore-based Office S-REITs report stronger operational performance
According to data from JLL, leasing activities in quality office developments in Singapore improved in 4Q 2024. Rental and capital values are expected to stay stable in the first half of 2025 and recover in the latter half of the year.
CBRE predicts a modest rise in Core CBD Grade A rents in 2025 due to tentative demand, limited supply, and continued flight to quality.
We preview this earnings season as four of six Singapore-based office S-REITs have reported.
1. $KEPPEL REIT(K71U.SI)$
Keppel REIT reported stronger FY2024 property income and net property income (NPI) increasing by 12.2% and 10.7% year-on-year respectively. This growth was driven by better performance at Ocean Financial Centre, T Tower and KR Ginza II, as well as contributions from 2 Blue Street and 255 George Street.
Keppel REIT achieved a rental reversion of 13.2% in FY2024, up from 9.9% in FY2023, and maintained a portfolio committed occupancy of 97.9% as at 31 December 2024, an improvement from 97.1% in FY2023.
Despite a robust operational performance, distributable income and distribution per unit (DPU) have both dipped, due to higher borrowing costs. 2H 2024 DPU was 2.80 cents with FY2024 DPU at 5.60 cents.
Looking ahead, Keppel REIT aims to capitalise on the flight-to-quality trend, ensuring sustainable long-term returns for unitholders amidst a global growth forecast of 3.3% in 2025 and stable local office rental market conditions.
2. $Mapletree PanAsia Com Tr(N2IU.SI)$
Mapletree Pan Asia Commercial Trust (MPACT) reported lower 3Q FY24/25 gross revenue and NPI decreasing by 7.4% and 8.5% year-on-year respectively, due to the divestment of Mapletree Anson and lower overseas contributions dampened by the strong Singapore dollar. However, its Singapore properties showed resilience, with a 0.2 per cent year-on-year revenue increase, led by VivoCity’s robust performance. Its 3Q FY24/25 DPU dipped 9.1% to 2.00 Singapore cents.
MPACT’s Singapore portfolio demonstrated strength, with rental reversions ranging from 2.0% at Mapletree Business City to 16.9% at VivoCity. As of 31 December 2024, the portfolio was 90.0% committed, with increases across most markets except China and South Korea. MPACT’s core stability remains anchored by Singapore’s dominant position.
3. $OUEREIT(TS0U.SI)$
OUE REIT achieved a 3.7% year-on-year revenue growth for FY2024 but a 0.4% dip in NPI. Revenue for 2H 2024 increased by 1.7% year-on-year mainly attributable to the stable operational performance of its Singapore office portfolio and the successful asset enhancement of Crowne Plaza Changi Airport which saw its RevPAR grow 25.5%.
Amount available for distribution for 2H 2024 grew by 3.7% year-on-year and including the release of the remaining capital distribution from the 50% divestment of OUE Bayfront, DPU rose 8.7% year-on-year to 1.13 Singapore cents.
OUE REIT’s Singapore office portfolio maintained a 94.6% occupancy rate as at 31 December 2024 with full year positive rent reversion of 10.7%. Following the divestment of non-core asset Lippo Plaza Shanghai, OUE REIT’s assets are now exclusively in Singapore.
4. $Suntec Reit(T82U.SI)$
Suntec REIT reported a 1.6% year-on-year decline in distributable income and 2.3% lower DPU for FY2024. Suntec REIT noted that its Singapore office and retail portfolios continued to perform and achieved strong rent reversions across all the quarters of the year. For 2025, positive rent reversion is expected to be modest in the range of 1 to 5%, supported by healthy occupancy.
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- AuntieAaA·02-05GoodLikeReport