REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Sunday, October 22, 2023

Keppel Pacific Oak US REIT Review @ 22 October 2023

Basic Profile & Key Statistics
  • Main Sector(s): Office
  • Country(s) with Assets: United States
  • No. of Properties (exclude development/associate/fund): 13

Key Indicators

Performance Highlight
Despite improvements in gross revenue and NPI, income available for distribution declined due to higher interest costs. 

Rental Reversion

Rental revision for 3q is at positive 3.8%.

Related Parties Shareholding

  • REIT Sponsor's Shareholding: Below median by 20% or more
  • REIT Manager's Shareholding: Above median by 10% or more
  • Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: ± 10% from median
  • Highest Lease Expiry within 5 Years: Below median by 20% or more; Falls in 2027
  • Weighted Average Land Lease Expiry: 100% Freehold Properties

Debt Profile

  • Gearing Ratio: ± 10% from median
  • Cost of Debt: ± 10% from median
  • Fixed Rate Debt %: ± 10% from median
  • Unsecured Debt %: 100%
  • WADM: ± 10% from median
  • Highest Debt Maturity within 5 Years: Below median by 10% or more; Falls in 2028
  • Interest Coverage Ratio: ± 10% from median

Diversification Profile

  • Top Geographical Contribution: Below median by 20% or more
  • Top Property Contribution: Below median by 10% or more
  • Top 5 Properties' Contribution: ± 10% from median
  • Top Tenant Contribution: Below median by 20% or more
  • Top 10 Tenants' Contribution: Below median by 20% or more

Key Financial Metrics

  • Property Yield: Above median by 10% or more
  • Management Fees over Operating Distributable Income: Below median by 20% or more; $ 9.01 distribution for every dollar paid 
  • Operating Distributable Income on Capital: Above median by 10% or more
  • Operating Distributable Income Margin: Below median by 10% or more
  • Operating Distribution Proportion: 100%

DPU Breakdown

  • TTM DPU Breakdown
    • 100% from Operation


  • Flat: DPU from Operation, NAV per Unit, Committed Occupancy, Property Yield, Operating Distributable Income Margin
  • Slight Downtrend: Operating Distributable Income on Capital
  • Downtrend: Interest Coverage Ratio

Relative Valuation

  • Dividend Yield: Above +2SD for 1y, 3y & 5y
  • P/NAV: Below -1SD for 1y; Below -2SD for 3y & 5y

Author's Opinion

 FavorableLess Favorable
High Directors of REIT Manager's ShareholdingLow REIT Sponsor's Shareholding
Well Spread Lease ExpiryLow Operating Distributable Income Margin
100% Freehold PropertiesInterest Coverage Ratio Downtrend
100% Unsecured Debt 
Well Spread Debt Maturity 
Low Top Geographical Contribution 
Low Top Property Contribution 
Low Top Tenant & Top 10 Tenants' Contributions 
High Property Yield 
Competitive Management Fees 
High Operating Distributable Income on Capital 
100% Operating Distribution Proportion

The performance is similar to the previous quarter. In terms of debt, there is a 1.7% maturity this year from uncommitted revolving credit facilities drawn and 12.6% maturing in 2024. Coupled with the moderate fixed rate debt at 76%, the near-term impact of further interest rate increases should be minimal. 

From the slides for Decoding KORE's Strategy to Navigate the Volatile US Market (Hosted by REITAS) dated 19th Oct, the portfolio valuation would need to fall by approx. 23% to reach the 50% gearing limit. The interest coverage ratio of 3.3 is also well above the loan covenant’s minimum of 1.5.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.

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