Keppel Pacific Oak US REIT, or KORE, reported Tuesday its third quarter net property income rose 36.2 percent on-year to US$18.5 million, beating the forecast from its IPO prospectus by 31.6 percent.
Gross revenue for the quarter ended 30 September increased 34 percent on-year to US$30.39 million, coming in 26.1 percent above its IPO forecast, KORE said in a filing to SGX.
The increases in gross revenue and net property income were due to contributions from The Westpark portfolio, acquired in November 2018, and the Maitland Promenade I property, acquired in January of this year, KORE said.
The distribution per unit (DPU) for the quarter was 1.50 U.S. cents, unchanged on-year, but below the 1.58 U.S. cents forecast in its IPO prospectus, the filing said.
Based on the actual number of units as of 30 September, the DPU for the third quarter of 2018 would have been 1.15 U.S. cents, the filing said; the variance was due to a rights issue in November 2018 increasing the total number of units.
KORE said leasing momentum remained strong, with around 232,000 square feet leased in the third quarter, while year-to-date, 608,000 square feet were leased, equivalent to around 14.3 percent of the portfolio.
The portfolio’s committed occupancy was at 93.8 percent at end-September, the REIT said.
Strong office demand and rent growth pushed the portfolio’s rental reversion to 19.2 percent in the third quarter, resulting in a nine-month rental reversion rate of 13.4 percent.
“Leasing demand in the third quarter of 2019 came mainly from the tech and professional service sectors, with over two-thirds of leasing activities occurring within KORE’s business campuses in the fast-growing tech hubs of Seattle, Austin and Denver,” the REIT said.
For the nine-month period, the REIT reported net property income rose 29.9 percent on-year to US$54.69 million on gross revenue of US$89.12 million, up 29.1 percent on-year. The DPU for the nine-month period was 4.50 U.S. cents, unchanged on-year, KORE said.
In its outlook, KORE pointed to a “firm” U.S. economy, with office vacancy rates there at their lowest in more than a decade.
In a separate filing, KORE said unitholders overwhelmingly voted to approve the REIT’s proposed acquisition of the One Twenty Five property located in Dallas, Texas.