Keppel REIT's 4Q 2015 distributable income grew 17.8% y-o-y

Gearing reduced significantly to 39.3% and High portfolio occupancy of 99.3% as at end-2015

Key Financial Highlights
 
• Income distributed to Unitholders for the fourth quarter of 2015 ("4Q 2015") and full year 2015 (FY 2015) rose 17.8% and 5.4% year-on-year ("y-o-y"), and remained constant on a quarter-on-quarter ("q-o-q") basis
• Higher distributable income was achieved despite the lack of income from Prudential Tower, as well as the absence of rental support from Ocean Financial Centre and Marina Bay Financial Centre ("MBFC") Phase One
• Improvement in distributable income was due mainly to higher property income from all assets in Singapore and Australia, as well as higher contributions from share of results of associates and share of results of joint ventures
• Distribution per unit ("DPU") of 1.68 cents for 4Q 2015, amounting to a total of 6.80 cents for FY 2015

Key Capital Management Highlights
 
• Gearing level reduced significantly by approximately 8% to 39.3%, considerably lower than the Monetary Authority of Singapore's (MAS) revised gearing limit of 45%
• Maintained fixed-rate loans at 70% which safeguards against interest rate volatility and provides certainty of interest expenses as well as financial and operational flexibility
• Average cost of debt remained stable at 2.5% and interest coverage ratio at a healthy 4.4 times
• Completed almost 100% of refinancing requirements in 2016, and maintained well-staggered debt maturity profile with weighted average term to expiry at a healthy 3.7 years
• Almost 100% of income from Australia hedged up till the third quarter of 2016 ("3Q 2016")

Key Portfolio Highlights

• Concluded a total of 114 leases, equivalent to approximately 1.6 million sf (attributable space of approximately 800,000 sf) of prime office space in 2015, bringing overall portfolio occupancy to a high of 99.3%
• Of the total new leases signed during the year, half were from tenants who were new to Keppel REIT's portfolio, one quarter from tenants new to Singapore and the remaining one quarter were expansions by existing tenants
• Approximately 30% (32 leases) or 480,000 sf (attributable space of approximately 222,000 sf) of space was committed in 4Q 2015
• Tenants from the telecommunications, media and technology ("TMT") sector accounted for half of the new leases signed during the quarter
• Achieved high tenant retention rate of 90% as at end-2015, and positive rent reversion averaging 13% for all new and renewed office leases in Singapore
• For leases expiring in 2016, the Manager is already in advanced negotiations with these tenants and is likely to achieve high retention
• For leases expiring in 2017, the Manager is also proactively engaging these tenants and is likely to renew most of these leases as the majority of these tenants are in their first renewal cycle
• Approximately 75% of total leases not due for renewal till 2018 and beyond, when limited new office supply is expected
• The Government of Western Australia (WA) commenced its 25-year lease at the office tower on the Old Treasury Building site in Perth in November 2015
• Announced divestment of interest in 77 King Street in Sydney for A$160 million or S$160 million, which is approximately 40% and 27% above the original purchase price and latest valuation respectively