Keppel Pacific Oak US REIT (KORE), which has suspended distribution payments since 2HFY2023, has resumed distributions ahead of schedule with a distribution per unit of 0.25 US cents for 2H FY2025.
For the financial year ended Dec 31, 2025, KORE has reported a y-o-y drop in net distributable income by 9.6% to US$43.0 (54.7) million for the financial year ended Dec 31, 2025.
Gross revenue in the same period strengthened y-o-y by 2.5% to around US$150.2 million, with adjusted net property income (NPI) rose 0.3% y-o-y to US$83.7 million.
Adjusted NPI excludes non-cash straight-line rent, lease incentives and amortisation of leasing commissions rising. The slight increase in NPI was attributed to higher other operating income, recoveries income and reduction in property taxes, but partially offset by lower cash rental income from higher free rents due to timing differences in leases completed for the respective periods.
Finance and other trust expenses increased y-o-y by 6% to US$33.0 million. Although KORE enjoyed lower floating interest rates during the year, this was not enough to offset the effects of expiration of interest rate swaps in 2025, higher professional fees and accrued withholding tax resulting from the suspension of distribution.
According to KORE, the securing of term loan securities that addresses its 2025 and 2026 term loan maturities allowed the REIT to restart distributions. The payout quantum was determined after “careful consideration” of cash flow position, capital commitments, and liquidity needs. KORE adds that it plans to start with a “conservative” payout ratio with the aim of increasing it to a “sustainable level” aligned with “long-term” portfolio performance.
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Prior to the financial year-end, KORE secured an additional term loan facility of US$37.5 million, bringing total term loan facilities obtained from the fourth quarter to-date to US$152.5 million. It has no term-loan maturities until 2027 following the execution of these term loan facilities.
As at Dec 31, 2025, the REIT’s aggregate leverage stood at 44.1%. Interest coverage ratio stood at 2.5 times and the weighted average term to maturity was 1.5 years. According to KORE, assuming the loans were refinanced as at 31 December 2025, KORE’s weighted average term to maturity would have been extended to 2.1 years. Approximately 64.4% of loans have been hedged with floating-to-fixed interest rate swaps.
KORE’s portfolio committed occupancy stood at 87.2% at the end of the financial year. Rental reversion was positive at 6.8% for the year, while rental reversion for 4Q 2025 was -0.6% mainly due to a new lease at One Twenty Five that immediately replaced an expiring tenant without tenant improvements or free rent.
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The portfolio’s weighted average lease expiry (WALE) by cash rental income (CRI) was 3.8 years, and 3.3 years for its top 10 tenants, who collectively account for only 29.5% of CRI.
KORE highlights that it has more than 390 tenants across multiple regions and industries, with 51.1% of net lettable area occupied by high-quality tenants from growing and defensive sectors such as technology, advertising, media, information, medical and healthcare.
After an independent valuation of its 13 properties, KORE says that the portfolio value remained stable y-o-y at US$1.3 billion as at Dec 31, 2025. A net fair value loss of US$40.5 million was recognised for FY2025, after capital expenditure and tenant improvements spending of US$39.5 million which was capitalised during the year.
With effect from Feb 5, 2026, Keppel Pacific Oak US REIT Management will be renamed KORE US REIT Management and Keppel Pacific Oak US REIT will be renamed KORE US REIT.
KORE US REIT's manager, announced on Feb 3 the Form 8-K filed by Pacific Oak Strategic Opportunity REIT, Inc (Pac Oak REIT) dated Jan 22 (Form 8-K) with the United States Securities and Exchange Commission, titled “Item 1.01 Entry Into a Material Definitive Agreement”. Pac Oak REIT indirectly holds approximately 6.14% stake in KORE. With reference to the “Pursuit of Plan of Liquidation” disclosed in Form 8-K, Pac Oak REIT has agreed to pursue a plan of liquidation, subject to approval of its board and stockholders. The Manager said that Pac Oak REIT has reached out to the Manager, and the Manager has put Pac Oak REIT in touch with a financial institution for further discussions for the potential sale of KORE units.
KORE shares declined slightly by 0.5 US cents, or 2%, to 24 US cents on Feb 2.
