Keppel REIT has maintained a ‘buy’ rating from UOB Kay Hian, with a target price of S$1.18, reflecting a 21.6% upside from its current share price of S$0.97. The real estate investment trust, which focuses on premium grade A office buildings across Asia Pacific, reported a positive rental reversion of 12.3% for the first half of 2025, driven by strong demand in Singapore and Australia.
The REIT’s portfolio, valued at S$9 billion, includes properties in key financial districts in Singapore, Australia, South Korea, and Japan. Notably, Keppel REIT has successfully backfilled vacancies at Ocean Financial Centre in Singapore and 255 George Street in Sydney, contributing to a net property income growth of 13.4% year-on-year in Australia.
Keppel REIT’s strategic positioning benefits from Singapore’s growing stature as a financial hub, with the city-state’s reciprocal tariffs and trade agreements enhancing its appeal. The REIT’s portfolio occupancy remains stable at 95.9%, with a weighted average lease expiry of 4.8 years, indicating long-term tenant commitments.
The REIT’s financial metrics remain robust, with a distribution yield of 6.9% projected for 2026, and a price-to-net asset value ratio of 0.80x. The management, led by CEO Chua Hsien Yang, is considering equity fundraising for potential acquisitions in Japan to further optimise its leverage.
Keppel REIT’s continued focus on high-quality assets and strategic market positioning is expected to support its growth trajectory, with full-year contributions from recent acquisitions anticipated to enhance its financial performance.
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