Keppel REIT

For full-year 2025, property income increased 4.9% year on year and NPI increased 6.9% year on year, driven mainly by 255 George Street and higher occupancy at 2 Blue Street. Share of results of associates and joint ventures increased 13.3% year on year, while DI from operations fell 1.1% year on year to $192.4 million, mainly because 25% of management fees were paid in cash; if management fees had been paid fully in units, DI would have increased 6.3% year on year. Full-year 2025 DPU was $0.0523, adjusted NAV per unit was $1.27, committed occupancy was 96.7%, rental reversion was 11.5% for the portfolio and 10.7% for Singapore, leverage was 47.9% at year-end before the pref proceeds were used, weighted average cost of debt was 3.41%, and interest coverage ratio was 2.6x. Management guided 2026 cost of debt at low 3% to 3.3%, with full contributions from Top Ryde City and MBFC Tower 3 expected from 2026; approximately $890 million of equity bridge loans were repaid on 20 January 2026.

The CEO framed 2025 as a year of strategic portfolio expansion and stronger operating fundamentals. He emphasized that Top Ryde City adds first-time retail diversification and that MBFC Tower 3 deepens exposure to Singapore’s core CBD, with both assets contributing fully from 2026. His tone was constructive and opportunistic, but disciplined: focus in 2026 is on organic growth, cost control, and lowering borrowing costs rather than rushing into new equity fundraising or large acquisitions.

The CFO highlighted the main financial drivers behind the year: property income up 4.9%, NPI up 6.9%, and share of results from associates and JVs up 13.3%, partly offset by higher borrowing costs and the cash payment of 25% of management fees. He noted that borrowing costs rose 2% year on year because of higher loan principal, while the weighted average cost of debt was 3.41% and leverage was 47.9% at 31 December before the preference-offering proceeds were used to repay the equity bridge loans. He also pointed to the balance sheet details: fixed-rate borrowings were 53% of total debt, sustainability-focused funding was 67%, ICR was 2.6x, and the 2026 cost of debt target remains low 3% to 3.3%.

Analysts focused on 2026 priorities, the potential for more acquisitions or divestments, leasing momentum, interest-rate savings, and whether management would consider assets like Marina One or Keppel South Central. Management said the first half of 2026 is mainly for asset management and organic growth, with possible divestments before any new acquisitions; Marina One was acknowledged as something they would look at, but the size makes a full takeout challenging. On leasing, management said 8 Exhibition Street secured two new leases with gross and net reversion more than double the outgoing rents, 2 Blue Street is still being leased up with a small potential downside when the rental guarantee ends in April 2026, and OFC remains supported by expansion demand. They also said share buybacks could be considered after divestments, and that the tax transparency work for MBFC Tower 3 has started and should take around 6 months.