KORE US REIT (SGX:CMOU)'s 1Q26 gross revenue rose 5.1% y-o-y to US$38.7mil, NPI increased 13.6% y-o-y to US$22.3mil and adjusted NPI climbed 15.9% y-o-y to US$23.4mil, boosted by one-off income from a tenant restoration income. This drove income available for distribution improved 4.3% y-o-y to US$10.0mil, which is ~25% of our FY26 estimates.
Firmer performance in 1Q26.
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The manager remains focused on AEIs and spec-suite conversions to drive further absorption, with the repositioned lobby at 10800 The Plaza Building now completed and a new full-floor spec suite, The Post, slated for 3Q26 completion.
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Our views
Looking ahead, continued leasing execution will be a key catalyst for the KORE US REIT, which the manager is seeing improved leasing demand in the coming quarter. The strategy of allocating capital on delivering more spec suites – where move-in ready and amenity rich offerings - will continue to gain traction, targeting occupancy rate to recover towards the 87%-88% level.
That said, while operations appear to have improved, the improved cashflow will be dampened by higher expected finance costs (~ expected 50-70bps higher through 2026-2027).
KORE US REIT's share price is undemanding at 0.3x P/B, forward yields of 4.5%-5.5%, while low, offers multiple avenues for upgrades, in our opinion, if the US office market continues to show signs of improvement.
Catalysts
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
