Company Coverage
KORE US REIT (KORE SP): 1H26: Record Leasing Volume; Payout Ratio At 21%
BUY (Maintained)
Current price:
Target price:
Upside:
US$0.173
US$0.25
+44.5%
Analyst
Highlights
- NPI and distributable income grew 6.1% and 2.1% yoy respectively in 1H26. The results included a one-off termination fee of US$2.7m and restoration fee of US$2.3m. DPU of 0.4 US cents represented a payout ratio of 21%.
- Leasing momentum accelerated in 2Q26 with 492,365sf signed, of which 90.6% were renewals. KORE secured new 10-year lease for 32,000sf of Westpark Portfolio in Redmond with a life sciences instrumentation tenant.
- KORE plans to progressively increase its payout ratio towards a sustainable level. Maintain BUY with target price of US$0.25.
Analysis
- KORE US REIT (KORE) delivered a strong 1H26 DPU of 0.40 US cents, representing a payout ratio of 21%, which was slightly above our expectation. Management expects a similar distribution quantum in 2H26.
- Boost from one-off termination fee and restoration fee. Gross revenue rose 2.8% yoy to US$76.6m in 1H26 while NPI increased 6.1% yoy to US$43.1m. Excluding non-cash straight-line rent, leasing incentives and leasing commission amortisation, adjusted NPI grew 10.2% yoy to US$45.6m, driven by higher cash rental income, a one-off termination fee (US$2.7m) and other operating income (one-off restoration fee of US$2.3m). Distributable income increased 2.1% yoy to US$20.4m despite higher borrowing costs following the expiry of interest-rate swaps.
- Record leasing performance. KORE signed 550,522sf of leases in 1H26, representing 11.5% of its portfolio NLA and the strongest 1H leasing since its listing. Leasing momentum accelerated in 2Q26 with 492,365sf signed, of which 90.6% were renewals, significantly reducing near-term lease expiry risks. Portfolio rental reversion remained positive at 1.5% in 2Q26, while built-in annual rental escalation increased to 2.6%. Committed portfolio occupancy improved 0.2ppt qoq to 85.3% in 2Q26 despite the earlier Meta vacate at The Westpark Portfolio. Management is targeting portfolio occupancy to recover to 2025’s level of 87.2% by end-26 through active leasing and vacancy backfilling initiatives.
Highlights
- NPI and distributable income grew 6.1% and 2.1% yoy respectively in 1H26. The results included a one-off termination fee of US$2.7m and restoration fee of US$2.3m. DPU of 0.4 US cents represented a payout ratio of 21%.
- Leasing momentum accelerated in 2Q26 with 492,365sf signed, of which 90.6% were renewals. KORE secured new 10-year lease for 32,000sf of Westpark Portfolio in Redmond with a life sciences instrumentation tenant.
- KORE plans to progressively increase its payout ratio towards a sustainable level. Maintain BUY with target price of US$0.25.
Analysis
- KORE US REIT (KORE) delivered a strong 1H26 DPU of 0.40 US cents, representing a payout ratio of 21%, which was slightly above our expectation. Management expects a similar distribution quantum in 2H26.
- Boost from one-off termination fee and restoration fee. Gross revenue rose 2.8% yoy to US$76.6m in 1H26 while NPI increased 6.1% yoy to US$43.1m. Excluding non-cash straight-line rent, leasing incentives and leasing commission amortisation, adjusted NPI grew 10.2% yoy to US$45.6m, driven by higher cash rental income, a one-off termination fee (US$2.7m) and other operating income (one-off restoration fee of US$2.3m). Distributable income increased 2.1% yoy to US$20.4m despite higher borrowing costs following the expiry of interest-rate swaps.
- Record leasing performance. KORE signed 550,522sf of leases in 1H26, representing 11.5% of its portfolio NLA and the strongest 1H leasing since its listing. Leasing momentum accelerated in 2Q26 with 492,365sf signed, of which 90.6% were renewals, significantly reducing near-term lease expiry risks. Portfolio rental reversion remained positive at 1.5% in 2Q26, while built-in annual rental escalation increased to 2.6%. Committed portfolio occupancy improved 0.2ppt qoq to 85.3% in 2Q26 despite the earlier Meta vacate at The Westpark Portfolio. Management is targeting portfolio occupancy to recover to 2025’s level of 87.2% by end-26 through active leasing and vacancy backfilling initiatives.
BUY (Maintained)
Current price:
Target price:
Upside:
US$0.173
US$0.25
+44.5%
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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