I know that there is the US Iran War which is creating chaos in global stock markets. But the sudden collapse of Keppel Pacific Oak US REIT ("KORE") from US$0.235 per unit a month ago to US$0.182 per unit as of 19 March 2026 is more than the overall correction in REITs market pricing. The sudden huge decline of <-23%> over the past 1 month is appalling. There seems to be a lack of information with regard to the sudden decline and I could not find any useful announcement released by KORE on SGX.
Online search for recent news relating to KORE that may have an adverse impact on its market price.
A quick search online unveiled the following event that may explain the rationale for the substantial decline in market pricing:
(i) Potential sale by a major unitholder. This is the most important factor right now. A substantial unitholder — Pacific Oak Strategic Opportunity REIT (around 6.1% stake) — is planning to liquidate its assets, which includes its KORE units due to excessive high borrowings that need to be repaid to bankers.
(ii) The management of Pacific Oak Strategic Opportunity REIT has explicitly said they expect a “substantial – if not complete – sale” of these units
(iii) Even if the sale hasn’t fully happened yet, market seems to be pricing in the expected surge in supply of units being put up for sales in the open market. This stake is likely to be sold via block trades or market sales, creating an “overhang” on price. In addition, traders seems to be front-run the selling thus creating persistent downward pressure
Parting Thoughts
It has been very painful holding on to KORE especially for many existing retail investors like myself. While the market price is way below the Net Asset Value per unit, the question is how reliable is the valuation of the current fair value by valuers of KORE with regard to its investment properties. Are there any other skeleton in the closet that retail investors are unaware of?
For folks still holding on to KORE, what are your thoughts? Will you all hold on to your existing units or buy more with units with the dip? Or is KORE dying and time to bite the bullet?
Well, after the management suspended dividend instead of rights issue, we saw the share price plunge from 0.5 to 0.1.
ReplyDeleteWhile the intention is prudent, I feel this management really sucks at communication.
P.S. I bought the dip.
Hi Damn, thanks for dropping by. Yup, i think the communication sucks for a reason to keep plans ambiguous as the management wrestle with the high leverage ratio and while there is some recovery, the US Iran war is creating lots of uncertainty such as high oil prices and an upcoming US recession. KORE may be struggling for an extended period before it can realize its full NAV with more certain macro economic outlook.
DeleteThink if you are in for the long term, buying the dip now will reap a handsome return eventually. On my side, I am seriously contemplating a full direct exit as there are currently various stocks that have been hammered down and represent a more virtual certainty of lesser opportunity costs.
I thought they just resume paying dividends?
ReplyDeleteHi Bro BF, good to see you here. Yup, KORE has resumed dividends a full 6mths ahead of schedule. However, the issue is that it is not a full restoration of the usual payout as CAPEX funding and the out of whack aggregate leverage ratio structure may mean a full restoration will only come FY2027 or even FY2028. Additionally, opportunity cost comes into consideration at this juncture with many attractive investment option given the oil crisis and beaten down global stock markets.
DeleteIf you sell now, where would you put the money?
ReplyDeleteHi Bro, Link REIT and Alibaba etc.
Delete