Kore posts 8.1% decline in Q3 distributable income

OFFICE-FOCUSED Keppel Pacific Oak US Reit (Kore) posted a 8.1 per cent decline in income available for distribution to US$14.6 million for the third quarter ended Sep 30, 2022, down from US$15.9 million in the same period the year before.

This was despite a rise in gross revenue by 3.2 per cent to US$37.2 million, from US$36 million a year earlier.

In its Q3 business update released on Wednesday (Oct 26), the real estate investment trust’s (Reit) manager said that it has elected to receive its full base fee of US$1.7 million in cash for Q3 2022.

Assuming its base fee was also paid fully in cash in the same period last year, the adjusted income available for distribution would have risen by 2.1 per cent from US$14.3 million in Q3 of last year.

The manager noted that this year-on-year rise was supported by the acquisitions of Bridge Crossing, a three-storey office building in Nashville, Tennessee, and 105 Edgeview, a four-storey office building in Denver, Colorado, which were completed in August 2021.

It added that it has aggregate leverage of 37.5 per cent with no long-term refinancing requirements until the fourth quarter of 2024. It also had cash and undrawn facilities of US$136.6 million as at Sep 30, 2022.

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As at Sep 30, 2022, the Reit’s average cost of debt stood at 2.88 per cent per annum; its all-in average cost of debt, including amortisation of upfront debt financing costs, stood at 3.1 per cent per annum. The Reit’s interest coverage stood at 4.4 times, while weighted average term to maturity stood at 3.9 years.

Portfolio committed occupancy as at Sep 30, 2022 stood at 92.5 per cent, Kore’s manager said.

Units of Kore rose 1.9 per cent or US$0.01 to close at US$0.54 on Wednesday, before the business update was released.