Kore, Prime US Reit unlikely to hit gearing limit even as US office assets face waning valuations

LEVERAGE ratios should remain below the mid-40 per cent levels at Keppel Pacific Oak US Reit : CMOU 0% (Kore) and Prime US Reit : OXMU 0%, according to market watchers. Both are Singapore-listed real estate investment trusts (S-Reits) with office assets in the United States, where occupancy ratios remain below pre-pandemic levels on average.

Peer Manulife US Reit : BTOU 0% last week raised alarm bells, when it disclosed that its gearing level had hit 49 per cent.

Now just a whisker shy of the 50 per cent regulatory limit, the increase in Manulife US Reit’s aggregate leverage comes after a 10.9 per cent drop in its portfolio valuation.