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2 Things Investors Should Know About Keppel-KBS US REIT Now

Keppel-KBS US REIT (SGX: CMOU) invests primarily in income-producing commercial and real-estate assets in key growth markets of the U.S. Currently, it has 13 office properties located in seven key growth markets in the U.S.

Today we’re looking at the REIT’s latest financial performance and valuation.

Financial performance

Here are a few key numbers from Keppel-KBS’s financial performance for the fiscal year ending 31 December 2018 (FY18).

Source: Keppel-KBS Result Presentation

Keppel-KBS REIT reported a more or less mixed performance for the year ended 31 December 2018.

The higher net property income (compared to its forecast) was thanks to the acquisition of new property. Yet, distribution per unit (DPU) was 8.4% lower than the forecast as a result of rights issues. Excluding the effects of new acquisitions and rights issues, DPU would have been 0.6% higher than the forecasted number.

As of 31 December 2018, the REIT’s gearing stood at 35.1%, and its committed occupancy rate stood at 91.6%.

Valuation

There are two useful valuation metrics for assessing REITs: the price-to-book ratio and the distribution yield. The table below shows what both of these numbers are for Keppel KBS as well as the respective averages for the two valuation metrics for the 41 REITs in Singapore’s stock market.

Source: Stock Facts on SGX.com

Keppel-KBS is trading at a discount to the market average thanks to its low price-to-book ratio and high distribution yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.