Persistently elevated gearing puts Keppel REIT under threat

Its gearing stands at 42.4%.

Keppel REIT is under threat from its persistently elevated gearing level of 42.4%, a report by Barclasys revealed.

Barclays noted that KREIT's gearing level will leave little wiggle room should SREITs be subject to a single-tier leverage limit of 45% , as stated in the Monetary Authority of Singapore (MAS)'s consultation paper in October 2014.

KREIT's prospects are also clouded by lower-than-expected underlying rents at Ocean Financial Centre (OFC) and the fast exhaustion of rental support.

"With rental support from OFC dropping off and underlying rents yet to catch up, we are also concerned about its high gearing," stated the report.

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