Keppel Pacific Oak US REIT's distributable income drops 14.8% in 9M

Leasing demand across its portfolio was driven by technology and professional services sectors.

Keppel Pacific Oak US REIT’s income available for distribution declined by 14.8% to US$30.4m in the first nine months of the year.

Its gross revenue was nearly unchanged at $112.1m over the same period, whilst its adjusted net property income dropped 2.2% to $63.2m, which the company mainly attributed to the lower cash rental income from higher free rents due to timing differences in leases completed for the respective periods.

The lower NPI was also driven by the increase in finance and other trust expenses primarily attributable to higher costs as well as higher tax and professional fees.

Meanwhile, its office portfolio saw stable leasing activity, vacancy decline, and stable occupancy rate for the first nine months, sustaining a leasing momentum of 449.772 square footage of office spaces or 9.4% net leasable area (NLA).

Leasing demand across its portfolio were driven by technology and professional services sectors, accounting for 41.5% and 13.5%, respectively, it said.

Occupancy remained stable at 88% as it was supported by the leasing volume. Occupancy consistently above 85% since listing in November 2017, Keppel said, outperforming the US average and gateway cities of 85.9% and 83.1%, respectively.

Meanwhile, 51% of industries occupying Keppel’s portfolio include “growing sectors” of technology, advertising, media, and information, medical, and healthcare. The REIT has over 390 tenants.