Keppel Pacific Oak US Reit’s portfolio valuation falls 6.8% to US$1.3 billion; delays H2 results

KEPPEL Pacific Oak US Reit’s portfolio valuation as at Dec 31, 2023, fell 6.8 per cent to US$1.3 billion, from US$1.4 billion previously, based on the latest independent valuation.

This comes as the real estate investment trust’s (Reit) manager announced that its financial results for the second half and full year ended Dec 31, 2023, will be released at a later date. Its results were originally set to be released on Jan 31.

The manager said in a separate bourse filing on Tuesday (Jan 30) that four of the Reit’s 13 properties – The Plaza Buildings, Westmoor Centre, Bellevue Technology Centre and Iron Point – contributed to approximately 84 per cent of the portfolio’s valuation decline.

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

The Plaza Buildings’ valuation fell 9.5 per cent against the preceding year’s valuation to US$307.7 million, while Westmoor Centre’s valuation declined 18.8 per cent to US$105.7 million.

Bellevue Technology Centre’s valuation dipped 9.3 per cent to US$140.6 million, while Iron Point’s valuation tumbled 21.7 per cent to US$38.2 million.

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As at Dec 31, 2023, Keppel Pacific Oak US Reit’s aggregate leverage stood at 43.2 per cent, while its adjusted interest coverage ratio is at 3.1 times.

Despite the decline in portfolio valuation, the Reit’s aggregate leverage is still within the regulatory limit of up to 50 per cent of the value of its total assets, and there has been no breach of bank covenants, said the manager. This is in view of its adjusted interest coverage ratio.

Units of Keppel Pacific Oak US Reit closed 1.6 per cent or US$0.005 higher at US$0.32 on Tuesday before the announcement.