Jonathan Koh, an analyst from UOB Kay Hian, maintained the Buy rating on Keppel Pacific Oak US REIT. The associated price target is $0.24.
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Jonathan Koh’s rating is based on the Keppel Pacific Oak US REIT’s strategic positioning in growth cities driven by innovation and technology, which has allowed it to achieve a positive rental reversion of 3.3% in the second quarter of 2025. The REIT’s management has guided for a portfolio occupancy rate in the mid-to-high 80% range by the end of 2025, indicating a stable tenant base and potential for income growth.
Additionally, the REIT is expected to gradually increase its payout ratio, with projections of a 30% payout in 2026, rising to 45% in 2027. This anticipated increase in distribution yield, which is projected to be 5.3% for 2026 and 7.8% for 2027, makes the REIT an attractive investment. Furthermore, the expansion of leases by technology companies, accounting for 17.1% of leases signed in the first half of 2025, underscores the REIT’s appeal to high-growth sectors.