Keppel Pacific Oak US REIT - DBS Research 2025-02-06: Green Shoots, But Dividend Payout Still A Year Away

• Keppel Pacific Oak US REIT's 4Q24 results unveiled a few positives. In 2H24, revenue and net property income (NPI) fell by 3.7% y-o-y and 7.9% y-o-y to US$ 72.1mil and US$ 40.0mil, respectively. The higher drop in NPI on y-o-y basis was mainly due to amortisation of straight-line rent, lease incentives and leasing commissions.
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• For the full year, Keppel Pacific Oak US REIT's revenues and net property income decreased by 2.9% and 9.1% y-o-y respectively to US$ 146.4mil and US$ 78.3mil. Adjusted NPI was 4.7% y-o-y lower at US$ 83.4mil, in line with our projections.

No distribution for FY24

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• The plan is to keep distributions on hold for FY25, with resumption expected the following year. That said, depending on market conditions, distributions could resume earlier than planned, though we are not factoring in this for now.

Financials remain stable, refinancing of loans a positive indication that liquidity is returning.

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Derek TAN DBS Group Research | Dale LAI CMT DBS Group Research | https://www.dbs.com/insightsdirect/ 2025-02-06 SGinvestors.io

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