Keppel REIT share price to explode with special dividends?

My last article on Keppel REIT share price was in October 2019. Obviously, that was before the implosion of COVID-19 pandemic. Since then, the landscape has changed drastically and Keppel REIT share price was not spared from the unfolding events.

Recently, the management team provided a business update to the local finance bloggers community. I had the privilege to attend the briefing and had the opportunity to gain a deeper insight into this leading commercial REIT. For the longest time, I have been interested in investing in an S-REIT. In this article, I will share the investment merits and cons of Keppel REIT share price.

Keppel REIT share price

In the previous update, I have shared that the management had been aggressively buying back units from the market. Since then, the management went on to conduct even more units buybacks in 2020. The amount of units buybacks was truly breath-taking – at 95.3 million units since 3QFY2018. The massive units buybacks provided critical support for the stock as Keppel REIT share price bounced from $0.90 on 24 March to a high of $1.20 on 10 June 2020.

While it is very common for listed companies to conduct shares buybacks, I believe Keppel REIT is the only S-REIT to do units buybacks. Even if it is not the only one, I don’t see the other S-REITs buying back their units on such a massive scale. However, since March 2020, the management has halted the units buybacks. Going forward, what will be the outlook for Keppel REIT share price? Will COVID-19 weigh on the demand for Grade A office space and dampen the office rental rates and will Keppel REIT share price surge with potential special dividends?

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Keppel REIT before. Whether Keppel REIT share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions

Keppel REIT share price ready to fly?

Looking back, the past 5 years had been an absolute nightmare for Keppel REIT as the Group navigated through a challenging period which saw an oversupply of premium offices from 2015 to 2017. The onset of trade war between USA and China in 2017 didn’t help the situation either. Due to these factors, the Singapore Grade A office rent plunged to a low of $8.95 psf pm in June 2017. But from March 2018 onwards, the rental rates climbed steadily to reach $11.55 psf pm in December 2019. As a result, Keppel REIT share price [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: November 21, 2020 — 9:32 pm

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