Keppel Pacific Oak US REIT (KORE) has reported a distributable income of US$9.6 million ($12.6 million) for the 1QFY2025 ended March 31, 19.3% lower y-o-y.
Gross revenue dipped by 0.5% y-o-y to US$36.9 million while net property income (NPI) fell by 6.2% y-o-y to US$19.7 million.
Adjusted NPI, which excludes non-cash straight-line rent, lease incentives and amortisation of leasing commissions, fell by 6.5% y-o-y to US$20.2 million. The drop in NPI was mainly due to lower rental income from higher free rents, due to the differences in timing for leases completed for the respective periods, KORE explains.
KORE’s distributions have been halted since the 2HFY2023. According to the REIT manager in its February 2024 announcement, distributions will be suspended through to the 2HFY2025 that would otherwise be paid in the 1HFY2026. The decision at the time was supposed to provide “significantly more capital” for KORE over the next two years compared to the capital that an equity fund raising exercise can raise at the time.
As at March 31, KORE has a total of US$607.2 million of external loans with 100% of its loans unsecured. Its aggregate leverage stood at 43.7%. The REIT has an interest coverage ratio of 2.5 times as at March 31.
As at the same period, a 50 basis point change in the Secured Overnight Financing Rate (SOFR) will translate to about US$1.1 million income available for distribution. The figure is based on its proportion of floating debt, its US$34 million in uncommitted revolving credit facility drawn which is unhedged, and the total number of units in issue as at March 31.
See also: Keppel DC REIT reports 1QFY2025 DPU of 2.503 cents, 14.2% higher y-o-y
KORE’s portfolio occupancy rate as at March 31 fell by 1 percentage point y-o-y or 0.9 percentage points q-o-q to 89.1%. Portfolio weighted average lease expiry (WALE) stood at 3.5 years by net lettable area (NLA).
As at 11.23am, units in KORE are trading 0.5 US cents lower or 2.75% down at 17.7 US cents.
