Broker: DBS Group Research
Date of Report: 29 July 2026
Excerpt from DBS Group Research report.
Report Summary
Keppel Pacific Oak US REIT (KORE) | Ticker: KORE SP
- Action: BUY
- Target Price: USD 0.40
- The report assigns a BUY rating on Keppel Pacific Oak US REIT (KORE) with a 12-month target price of USD 0.40, implying a significant upside from the last traded price of USD 0.18.
- The target price is based on a DCF valuation, suggesting an implied FY27F target yield of 4.3% (assuming a 50% payout policy) and a Price/Book ratio of 0.60x.
- KORE is expected to resume distributions in 2026 with an initial payout ratio of around 21%, increasing progressively as operational and liquidity conditions improve. Each 10% increment in payout ratio could boost distribution yield by approximately 20%.
- Key drivers include improved liquidity, a recovering US office market, and resilient occupancy rates (c.85.3% with positive rental reversion), with further improvements expected in 2H26.
- KORE’s financial metrics remain stable with aggregate leverage at 43.3%, interest coverage of 2.5x, and over half of borrowings hedged. The REIT has secured a new USD 40mn revolving credit facility and faces no major debt maturities in 2026; refinancing 2027 debt will be crucial for further confidence and higher payouts.
- Key risks include lower-than-expected rental income due to economic slowdown, inflation, or recession, which could impact office demand.
Key Financial Data:
- FY26-27F distribution yields projected at 4.8% and 9.3% respectively.
- Book value per unit steady at USD 0.7; P/B trades at 0.3x.
Call to Action: Investors seeking exposure to US office REITs with improving fundamentals and attractive valuations may consider accumulating KORE at current levels, targeting a re-rating as market conditions stabilize and payout ratios rise.
Above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can access the full research report from the broker’s website: DBS Group Research research website.
