On 15 February 2024, Keppel Pacific Oak US REIT (“KORE”) have announced their full year result for 2023 and their recapitalisation plans. Not unexpectedly, the fundamentals have continued to worsen this quarter. However, it has not worsened to the state to require an emergency action from management, as detailed further in the article. Therefore the earlier news has caught me unawares. It does reinforce a point that we should be wary of any REIT trading above 40% gearings as they can take similar actions if the need arises.

For disclosure, I am a unitholder of KORE. In my previous articles I did expect DPU to drop as well as gearing to increase and that KORE is the highest risk in my portfolio given the US office exposure. What I did not expect was for KORE management to pre-emptively suspend distribution for 2 years citing managing fundamentals as a reason. The