Keppel REIT (KREVF) AI Stock Analysis

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Positive Factors

Net Property Income

Broad-based growth in Singapore and overseas contributed to a 10.7% year-over-year growth in Net Property Income in 2H24.

Occupancy and Leasing

KREIT renewed or leased approximately 260,000 square feet of space, with demand coming from several key sectors.

Rental Reversion

Positive rental reversion continues, with a 1Q25 rental reversion at +10.6%.

Negative Factors

Interest Costs

1Q25 distribution income was 3.2% lower year-over-year due to higher interest costs and payment of 25% of management fees in cash.

Market Risks

Key risks to the positive view are a prolonged economic downturn and potential second wave of COVID-19, which could impact rents and vacancies.

Occupancy Levels

Occupancy at Ocean Financial Centre (OFC) dipped 3.7ppt qoq to 94.7% due to BNP Paribas returning several floors.

Keppel REIT (KREVF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.61B

Dividend Yield6.23%

Average Volume (3M)215.00

Price to Earnings (P/E)34.7

Beta (1Y)0.58

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees25

SectorReal Estate

Sector Strength60

IndustryREIT - Office

Share Statistics

EPS (TTM)N/A

Shares Outstanding3,880,485,400

10 Day Avg. Volume55

30 Day Avg. Volume215

Financial Highlights & Ratios

PEG Ratio-1.12

Price to Book (P/B)0.81

Price to Sales (P/S)0.00

P/FCF Ratio17.76

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$0.84

Price Target Upside25.37% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Keppel REIT Business Overview & Revenue Model

Company DescriptionListed by way of an introduction on 28 April 2006, Keppel REIT is one of Asia's leading REITs with a portfolio of Grade A commercial assets in key business districts pan-Asia. Keppel REIT's objective is to generate stable income and long-term growth for Unitholders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and pan-Asia. The REIT has assets under management of over $8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea. Keppel REIT is sponsored by Keppel Land Limited, one of Asia's leading property companies. It is managed by Keppel REIT Management Limited, a wholly-owned subsidiary of Keppel Capital Holdings Pte Ltd (Keppel Capital). Keppel Capital is a premier asset manager in Asia with a diversified portfolio in real estate, infrastructure and data centre properties in key global markets.

How the Company Makes Money

Keppel REIT Earnings Call Summary

Earnings Call Date:Apr 16, 2025

(Q2-2024)

% Change Since: 9.84%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with significant growth in property income and high occupancy rates being notable positives. However, these were offset by concerns over decreased distributable income, increased borrowing costs, and currency impacts affecting joint ventures. The sentiment reflects a cautious outlook with both achievements and challenges ahead.

Q2-2024 Updates

Positive Updates

Increase in Property Income and Net Profit

Property income grew 9% year-on-year to $125 million, and net profit income grew 7.7% year-on-year to $96.8 million.

High Portfolio Occupancy

Portfolio committed occupancy increased to 97% from 96.4% in the previous quarter.

Successful Leasing Activities

546,000 square feet of space committed with a portfolio rental reversion of 9.3%.

Increased Portfolio Valuation

Overall portfolio valuation increased by 3.3% in Singapore dollar terms.

Sustainability Initiatives

Various activities were organized to promote sustainability, including a significant upcycling initiative.

Negative Updates

Decrease in Distributable Income and DPU

Distributable income and DPU for the first half of 2024 decreased 1.9% and 3.4% year-on-year to $106.9 million and $0.028, respectively.

Higher Borrowing Costs

Borrowing costs increased 29.8% year-on-year due to the high interest rate environment.

Currency Impact on Joint Ventures

Decrease in share of results of joint ventures due to a weaker Australian dollar against the Singapore dollar.

Asset Valuation Concerns in Australia

Excluding 255 George Street, the valuation of the Australia portfolio decreased by 4.4% due to softer cap rates.

Company Guidance

During the Q2 2024 earnings call for Keppel REIT, several key metrics were highlighted. Property income rose by 9% year-on-year to $125 million, while net property income increased by 7.7% to $96.8 million. Despite these gains, the distribution per unit (DPU) decreased to $0.028 due to higher borrowing costs. The financial position remained strong with an aggregate leverage of 41.3% and an all-in interest rate of 3.31% per annum for the first half of 2024. Rental reversion was recorded at 9.3%, and portfolio committed occupancy improved to 97%. The portfolio's weighted average lease expiry (WALE) was stable at 4.6 years, and the top 10 tenants had a WALE of 8.3 years. Keppel REIT's portfolio valuation stood at SGD 9.6 billion, with Singapore accounting for 77% of this value. Additionally, borrowing costs increased by 29.8% year-on-year, reflecting the high-interest-rate environment. The call also mentioned efforts to maintain a high occupancy rate across properties and the potential for asset recycling to manage leverage levels.

Keppel REIT Financial Statement Overview

Summary

Overall, Keppel REIT shows a stable financial position with strong gross and EBITDA margins and a solid balance sheet. However, the decline in revenue and net profit margins, along with negative free cash flow growth, highlight potential areas of concern. The company must focus on reversing revenue declines and maintaining profitability to ensure continued financial health.

Income Statement

Positive

The income statement reveals a mixed performance. The gross profit margin and EBITDA margin are strong, indicating efficient cost management. However, the net profit margin has declined from the previous year, signaling possible challenges in profitability. The revenue growth rate is negative, showing a decrease in total revenue year-over-year, which could be concerning for future profitability.

Balance Sheet

Positive

The balance sheet is relatively strong, with a solid equity base and a reasonable debt-to-equity ratio, suggesting financial stability. The equity ratio is high, indicating a strong capital structure. However, there has been an increase in total liabilities compared to previous years, which could pose a risk if it continues to rise.

Cash Flow

Positive

The cash flow statement is stable, with a positive operating cash flow to net income ratio, indicating good cash generation relative to net income. However, the free cash flow growth rate is negative, reflecting decreased cash flow from operations and capital expenditures. This could impact the company’s ability to finance new investments or return capital to shareholders.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
282.89M	336.86M	219.29M	216.61M	170.22M
	Gross Profit
158.18M	286.17M	175.94M	172.53M	135.48M
	EBIT
0.00	223.79M	496.90M	330.91M	44.74M
	EBITDA
217.70M	273.04M	496.93M	330.93M	44.75M
	Net Income Common Stockholders
108.44M	178.03M	414.84M	241.17M	279.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
83.87M	141.58M	174.96M	178.68M	146.02M
	Total Assets
8.46B	8.26B	8.88B	8.49B	7.76B
	Total Debt
2.66B	2.34B	2.85B	2.73B	2.38B
	Net Debt
2.58B	2.21B	2.68B	2.55B	2.23B
	Total Liabilities
2.82B	2.51B	3.02B	2.90B	2.54B
	Stockholders Equity
5.19B	5.00B	5.42B	5.17B	4.80B
Cash Flow		Free Cash Flow
188.98M	200.51M	162.22M	108.55M	93.73M
	Operating Cash Flow
188.99M	208.06M	162.23M	113.67M	104.46M
	Investing Cash Flow
-250.92M	492.82M	-46.38M	-383.13M	-219.88M
	Financing Cash Flow
2.15M	-742.27M	-111.42M	303.35M	140.88M

Keppel REIT Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KREVF		$2.61B	34.69	2.02%	6.23%	―	―
Sector *	61 Neutral	$2.83B	10.92	0.41%	8438.90%	5.75%	-21.03%
ACDSF		$9.22B	15.64	7.61%	5.66%	―	―
MAPIF		$4.28B	16.65	6.85%	6.90%	―	―
PRKWF		$2.05B	27.16	6.39%	3.54%	―	―
SURVF		$2.58B	30.20	1.86%	5.31%	―	―
TS0U	55 Neutral	S$1.54B	8.06	-1.97%	4.04%	-1.51%	-135.46%

* Real Estate Sector Average

Performance Comparison

KREVF

Keppel REIT

0.67

0.07

11.67%

ACDSF

CapitaLand Ascendas REIT

1.74

0.02

1.16%

MAPIF

Mapletree Industrial

1.47

-0.05

-3.29%

PRKWF

Parkway Life Real Estate Investment

3.15

0.55

21.15%

SURVF

Suntec Real Estate Investment

0.88

0.13

17.33%

SG:TS0U

OUE Commercial Real Estate Investment Trust

0.28

0.03

12.00%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.