Keppel-KBS US REIT’s 1Q19 net property income rose 24 percent on acquisitions

Keppel Pacific Oak US REIT‘s Maitland Promenade I in Orlando, Florida. Source: the company.Keppel Pacific Oak US REIT’s Maitland Promenade I in Orlando, Florida. Source: the company.

Keppel-KBS US REIT reported on Tuesday that its first quarter net property income rose 23.7 percent on-year to US$18.19 million, beating its IPO prospectus forecast for US$14.06 million, after the REIT’s acquisitions in Seattle, Washington, and Orlando, Florida.

Revenue for the quarter ended 31 March rose 24.2 percent on-year to US$29.44 million, above the IPO prospectus forecast for US$24.10 million, the REIT said in a filing to SGX after the market close on Tuesday.

The distribution per unit (DPU) for the quarter was US$1.50, unchanged from a year earlier, but below the forecast of US$1.58 from its IPO prospectus, the filing said. The DPU missed the forecast due to a higher number of units after after a rights issue, the REIT said.

Keppel-KBS US REIT, or KORE,  said its improved performance was mainly on contributions from the acquisition of the Westpark portfolio in Seattle, Washington, and the Maitland Promenade I in Orlando, Florida, in November and January, respectively.

“The combination of low unemployment, rising wages and low inflation, in addition to the Federal Reserve’s more dovish stance and lower 10-year Treasury yields, points to a favorable operating environment for REITs,” KORE said in the filing. “This is further evidenced by the single digit US office vacancies recorded for the first time since the early 2000s.”

KORE’s portfolio has 13 properties in seven U.S. markets.


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