Keppel REIT, the Singaporean co-owner of the 8 Chifley Square office tower with Mirvac, has reported net property income for the first quarter of $S34.4 million ($27 million), up 20.7 per cent on the previous corresponding period.
The rise, which equated to annualised distribution per unit of S7.99¢, came from an increase in occupancy from its 77 King Street property, and the near completion of the Marina Bay Financial Centre and the Ocean Financial Centre in Singapore. It will also receive a boost next year when rents come in from the new lease by QBE Insurance at 8 Chifley Square.
Keppel REIT now owns four premium assets in Australia - the office tower at 77 King Street and a 50 per cent interest in 8 Chifley Square, a half-share in 275 George Street in Brisbane, as well as a 50 per cent interest in the new office tower to be built on the site of the Old Treasury Building in Perth. Its directors said Keppel REIT would look to expand its presence in Australia through the acquisition of premium-grade assets. The group said the Australian economy had registered stronger than expected growth in employment. "In the Sydney CBD office market, increased demand and removal of some existing office buildings for redevelopment have contributed to the relatively stable occupancy rates," the directors said.
They said rental rates for prime offices had held firm at $811 per square metre a year.
Property analysts have estimated QBE would pay about $1300 per square metre for its new four floors of the 30-storey site, but that could include as much as 30 per cent in rental incentives. The property is due for completion later this year.