Keppel Pacific Oak US Reit posts 12.5% fall in adjusted distributable income for Q1

KEPPEL Pacific Oak US Reit (KORE) posted an adjusted distributable income of US$13.1 million for its first quarter ended Mar 31, 2023, down 12.5 per cent from US$14.9 million a year earlier.

This was mainly due to the divestment of properties Northridge Center I and II, and Powers Ferry in the second half of 2022, the Reit’s manager said in a business update on Tuesday (Apr 18). All three properties are freehold office buildings in Atlanta, Georgia.

The manager noted that financing costs had risen as a result of rising interest rates.

The distributable income for Q1 2022 was adjusted to assume that the base fees for that quarter were paid in cash rather than units, given that the Reit’s manager had chosen to receive all its base fees for Q1 2023 in cash.

This was “to provide a like-for-like comparison to Q1 2023 actual results”, the manager said.

Otherwise, the income available for distribution for Q1 2023 is down 21.2 per cent from Q1 2022’s US$16.6 million.

Gross revenue inched up 0.2 per cent to US$37.1 million for the quarter, from US$37 million a year earlier.

Net property income (NPI) fell 2.7 per cent to US$21.2 million, from US21.7 million in the same period last year.

KORE’s aggregate leverage stood at 38.7 per cent, with no long-term refinancing requirements until Q4 2024. Its weighted average term to maturity of its debt was 3.4 years.

SEE ALSO

S-Reits losing appeal: Average yield of 6% is not good enough

All eyes on how S-Reits navigate rate hikes as earnings season looms

Kore manager sees silver lining in ‘minor’ Big Tech layoffs even as H2 DPU falls 12.6%

The Reit posted a negative 6.5 per cent rental reversion in the quarter, largely due to tenant Spectrum’s renewal and expansion in Maitland, Orlando, where the asking rents were significantly below the in-place rent.

Portfolio weighted average lease expiry by cash rental income was 4.4 years, while committed occupancy stood at 91.9 per cent as at the end of March.

Units of KORE closed 1.4 per cent lower at US$0.365 on Tuesday.