The manager of Keppel Pacific Oak US REIT (KORE) has reported a lower adjusted distributable income of US$13.1 million ($17.93 million) for 3QFY2023 ended Sept 30, down 10.7% y-o-y.
This is due to higher financing costs as a result of rising interest rates, says the REIT.
For 9MFY2023, adjusted distributable income stood at US$39.2 million, down 15.2% y-o-y from $46.2 million in the same period a year ago.
KORE’s gross revenue grew 3.3% y-o-y to US$38.4 million for the 3QFY2023, and 2.7% y-o-y for the 9MFY2023 to US$114.3 million.
The REIT’s net property income (NPI) grew by 3.7% y-o-y to US$22.1 million for the 3QFY2023, and 2.6% y-o-y to $65.9 million for the 9MFY2023.
Excluding non-cash straight-line rent, lease incentives and amortisation of leasing commissions, KORE’s adjusted NPI grew by 5% y-o-y to US$22.7 million for the 3QFY2023, and 2.6% to US$66.8 million for the 9MFY2023.
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As at Sept 30, KORE’s portfolio occupancy was 91.4%, while portfolio weighted average lease expiry (WALE) came in at 3.6 years.
For the 9MFY2023, KORE leased about 539,179 square foot (sf) of spaces, equivalent to 11.3% of portfolio net lettable area (NLA).
The REIT’s total debt as at Sept 30 stood at US$594.9 million, and 76% of its non-current loans have been hedged through floating-to-fixed interest rate swaps.
KORE’s aggregate leverage stood at 39.1%, while its average cost of debt came in at 3.95% per annum (p.a.), as at Sept 30. There are no long-term financing requirements until 4Q2024, says the manager.
For this 3QFY2023, about 0.4% of KORE’s in-place rents are below asking rents. Meanwhile, KORE has a negative 0.6% rental reversion for the 9MFY2023, skewed by Spectrum’s renewal/expansion at Maitland Promenade I & II, one of the few buildings where asking rents are significantly below in-place rents.
KORE’s adjusted rental reversion excluding Spectrum’s lease was about 3.9%.
The manager says that KORE, as at Sept 30, has a strong balance sheet with significant liquidity. Cash and undrawn facilities stood at US$106.2 million.
Units in KORE closed 0.5 cents higher or 2.5% up at 20.5 US cents.
