Keppel Pacific Oak US REIT (KORE) has posted distributable income of US$14.9 million for the 1QFY2021 ended March, some 3.6% higher than the US$14.4 million posted in the 1QFY2020.

The higher figure was mainly attributable to the new and expansion leases from the tech hubs of Bellevue and Redmond in Seattle, as well as Denver, says the REIT.

Gross revenue stood 2.1% lower y-o-y at US$34.6 million, while net property income (NPI) fell 2.8% y-o-y to US$20.4 million.

Adjusted NPI excluding non-cash straight-line rent, lease incentives and amortisation of leasing commissions, on the other hand, increased 2.7% y-o-y to US$20.5 million.

As at March 31, the REIT has a low gearing of 37.5% with no long-term refinancing requirements till November 2022.

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It has cash and undrawn facilities of US$93.5 million as at March 31.

For more stories about where the money flows, click here for our Capital section

The REIT also reported a portfolio committed occupancy of 91.6% as at March 31 with a weighted average lease expiry (WALE) of 3.7 years by cash rental income (CRI).

Some 128,000 sq ft of space were leased during the quarter, equivalent to 2.7% of the portfolio’s net lettable area (NLA).

Of the leases signed in 1QFY2021, 24% were new, while 61.3% were renewal contracts. Another 14.7% were expansions.

The REIT, in its 1Q business update, revealed that leasing activities were driven mainly by demand from professional services, finance and insurance, as well as tech.

Over 37% of KORE’s portfolio by NLA comprises high quality tenants from the growing and defensive sectors of technology and medical/healthcare.

SEE:DBS remains positive on US Office S-REITs on US recovery

In its 12-month rent outlook, KORE has estimated around -3.0% in its key growth markets average, -3.5% for its US average and -4.8% for its average among its gateway cities.

The REIT is also optimistic on the US’s gradual return to the workplace amidst the rollout of the Covid-19 vaccine.

By December 2021, around 91% of executives and 77% of employees expect that half of the office workforce will be back on-site.

Units in KORE closed 0.5 cent lower or 0.7% down at 73.5 US cents on April 19.