Hot stock: Kore drops as much as 25% on news of portfolio devaluation, results delay

UNITS of Keppel Pacific Oak US Reit (Kore) fell on Wednesday (Jan 31) morning the day after its manager announced that the real estate investment trust’s (Reit) portfolio valuation as at end-2023 fell 6.8 per cent to US$1.3 billion.

The counter slid as much as US$0.08 or 25 per cent to US$0.24 as at 9.52 am, amid heavy trading volumes with 4.3 million of its units changing hands, which is well above the Reit’s daily average volume of 2.6 million.

It later recovered slightly to trade at US$0.26 at the midday break, down 18.8 per cent or US$0.06, after 7.8 million units were transacted.

The counter ended the day US$0.04 or 12.5 per cent lower at US$0.28, after 13.4 million units were transacted.

Other Singapore-listed US office Reits were trading lower as well.

Manulife US Reit closed US$0.004 or 6.3 per cent lower at US$0.06, after losing as much as US$0.007 or 10.9 per cent to US$0.057 in the morning.

Prime US Reit retreated 13 per cent or US$0.024 in early trade to touch a low of US$0.159, before clawing its way back up to US$0.167 at the close, representing a decline of 8.7 per cent or US$0.016. 

To recap, Kore’s manager on Tuesday attributed a majority of Kore’s portfolio valuation decline to four of the Reit’s 13 properties, namely: The Plaza Buildings, Westmoor Center, Bellevue Technology Center and Iron Point.

This was largely due to an increase in capitalisation and discount rates, as well as higher vacancy rates assumed for 2024.

The manager concurrently announced that Kore’s results release for the second-half and full-year ended Dec 31, 2023, would also be delayed beyond the initially announced Jan 31 deadline.