Broker: UOB Kay Hian
Date of Report: 22 April 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Stock: Keppel REIT (KREIT SP)
- Action: BUY (Maintained)
- Target Price: S\$1.13 (previously S\$1.15)
- Key Ideas:
- Keppel REIT reported resilient 1Q26 results, with distributable income up 17.8% year-on-year, driven by new retail acquisitions and higher joint venture income.
- The REIT will prioritize divestment over acquisition due to slightly elevated leverage (aggregate leverage at 40.2%). Share buyback may be considered after reducing gearing.
- Portfolio occupancy improved to 97.1%, with strong rental reversion of 17.2% in 1Q26. The Singapore CBD office market remains favourable, with limited new supply and continued demand from financial services and technology tenants.
- 2026 distribution yield is attractive at 6.0%. The stock is trading at 0.72x P/NAV, a 28% discount to NAV per unit.
- KREIT intends to remain office-focused and Singapore-centric, capping retail exposure at 20% of portfolio valuation.
- Actionable Insight: Maintain BUY with 24.2% upside to target price S\$1.13. Investors may consider entry based on resilient income, attractive yield, and potential capital appreciation as leverage normalises.
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