Keppel Pacific Oak US Reit posts Q4 DPU of 1.51 US cents

KEPPEL Pacific Oak US Reit (KORE), previously known as Keppel-KBS US Reit, on Tuesday posted a fourth-quarter restated distribution per unit (DPU) of 1.51 US cents, higher compared with the restated DPU of 1.25 US cents in the same period a year ago.

DPU for the three months ended Dec 31, 2019 came in 2.7 per cent above forecast, notwithstanding the rights issue completed on Nov 26, 2018 that enlarged the unit base.

Distributable income was up 32.8 per cent to US$13.6 million, and was 35.5 per cent higher than the forecasted figure.

Gross revenue was US$33.8 million, 37.8 per cent higher than a year ago. This was largely due to contributions from The Westpark Portfolio, Maitland Promenade I and One Twenty Five. The Westpark Portfolio was acquired on Nov 30, 2018, while Maitland Promenade I and One Twenty Five were acquired on Jan 16, 2019 and Nov 1, 2019 respectively.

Property expenses rose 38.9 per cent to US$13.7 million as a result of the enlarged portfolio. Net property income was US$20.1 million, up 37.1 per cent from a year ago.

Net asset value per unit was US$0.80 as at Dec 31, 2019, unchanged from a year ago.

Weighted average term to maturity of KORE's debt was 2.9 years with an all-in average cost of debt of 3.69 per cent per annum as at end-2019. Aggregate leverage was 36.9 per cent and interest coverage ratio was 4.8 times.

Portfolio committed occupancy was 93.6 per cent as at end-2019. During the year, KORE had a positive portfolio rental reversion of 14.3 per cent due to sustained rent increases.

The Reit saw bright spots in the fast-growing tech hubs of Seattle and Austin, where there was positive office demand and expansion of tenants at its buildings and business campuses. Over 36 per cent of tenants were in the key growth sectors of technology and healthcare.

"The Manager will continue its strategy of pursuing value-accretive acquisitions in first-choice submarkets, in key US growth markets with strong visible organic growth opportunities supported by positive rental reversion opportunities," said KORE.

KORE, which declares its distributions semi-annually, will be paying out DPU of 1.06 US cents for the period from Oct 29, 2019 to Dec 31, 2019. Books close on Jan 31, 2020 and the payout date is March 30, 2020.

KORE units closed at 76.5 US cents on Tuesday, down two US cents or 2.55 per cent.