SINGAPORE – Keppel Pacific Oak US Reit (Kore) posted a distributable income of US$11.9 million (S$16.2 million) for its first quarter ended March 31, down 8.8 per cent from US$13.1 million the previous year.

The fall was mainly due to increased financing costs resulting from higher interest rates, said the manager of the office-focused real estate investment trust (Reit) in a business update on April 17.

Gross revenue for Q1 stood at US$37.1 million, unchanged from the year before. Net property income for the quarter declined 0.8 per cent to US$21 million, from US$21.2 previously.

Kore recorded an aggregate leverage of 43 per cent, which is the Reit’s total borrowings and any deferred payments as a percentage of its total assets. Its weighted average term to maturity of its debt was 2½ years.

The Reit posted a negative 1.4 per cent rental reversion for the quarter. This was mainly affected by tenant renewals at Bellevue Technology Center and Westmoor, said the Reit manager.

Committed occupancy stood at 90.1 per cent as at end-March, a 0.2 percentage point decrease from 90.3 per cent in Q4 2023.

The manager said the Reit’s three-year market rental growth remained stable despite fluctuating forecast growth in rent.

Kore’s rent growth was up 0.4 per cent across its key markets over the past 12 months, below the average of 0.7 per cent growth across the US.

The manager projects a 1.3 per cent decrease in rental growth across its key markets over the next 12 months, in line with an estimated 1.1 per cent decrease across the US.

Units of Kore closed 0.1 cent, or 0.71 per cent, lower at 13.9 US cents on April 17. THE BUSINESS TIMES