Keppel REIT: Solid 1Q Growth and High Occupancy Support Buy Rating Despite Trimmed DPU Forecasts

CGS International analyst Lock Mun Yee reiterated a Buy rating on Keppel REIT yesterday and set a price target of S$1.09.

Lock Mun Yee has given his Buy rating due to a combination of factors, including Keppel REIT’s solid first-quarter performance, where both revenue and net property income posted high single- to mid-teens year-on-year growth, driven by new contributions, stronger occupancy and firm rental trends. He also notes that distributable income expanded at an even faster pace, supported by the increased stake in Marina Bay Financial Centre Tower 3 and underpinned by a manageable leverage profile and slightly lower funding costs.

At the same time, he highlights that portfolio occupancy has edged up to a high level with robust leasing demand and double‑digit positive rental reversions, while utility expenses are largely hedged, helping to stabilise margins. Although his dividend per unit forecasts have been trimmed and the target price reduced accordingly, he believes the REIT still offers attractive value, with upside potential from further occupancy gains and rent growth, outweighing risks such as potential vacancies from tenant movements or structural shifts in office demand.

In another report released yesterday, DBS also reiterated a Buy rating on the stock with a S$1.05 price target.

KREVF’s price has also changed moderately for the past six months – from S$1.020 to S$0.910, which is a -10.78% drop .