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Treasury & Capital Markets
Keppel Pacific Oak US Reit to acquire two assets for US$105.1 million
Nashville and Denver office buildings 100% leased to mainly technology tenants
The Asset 28 Jul 2021

Keppel Pacific Oak US Reit (KORE) has agreed to acquire two office buildings for US$105.1 million, as part of its strategy to focus on the growth and defensive technology sector in key growth markets in the United States. The properties are Bridge Crossing in Nashville, Tennessee, for US$46.0 million and 105 Edgeview in Denver, Colorado, for US$59.1 million.

Nashville and Denver are two of the six new favourite “boomtowns” for young talent pool in the US, highly coveted destinations due to their lifestyle, culture and employment opportunities. Besides Nashville and Denver, other so-called 18-hour cities include Seattle and Austin, where KORE has a presence. Bridge Crossing and 105 Edgeview are 100% leased to tenants mainly in the fast-growing and defensive technology sector.

David Snyder, chief executive officer and chief investment officer of KORE’s manager, says: “Nashville and Denver are key growth markets with positive economic and office fundamentals, as well as significant tech investments. Top companies from different sectors have set up their headquarters or regional offices in these growth markets, especially tech companies in recent years, drawn by factors including the availability of a young and highly educated workforce, a business-friendly environment, as well as proximity to various retail, dining and lifestyle amenities.”

The proposed acquisitions are expected to be completed in the third quarter of 2021. Following the completion of the proposed acquisitions, KORE’s portfolio will consist of 15 freehold office buildings and business campuses across nine key growth markets driven by innovation and technology in the US.

The manager intends to finance the proposed acquisitions with proceeds from a proposed private placement to institutional and other investors of new KORE units and debt financing. Post-acquisition, KORE’s pro-forma aggregate leverage as at June 30 2021 is expected to be 37.4%. The issuance of new units will increase KORE’s market capitalization, free float and trading liquidity. It is also expected to enhance KORE’s weightage in existing indices and is a step towards further index inclusions.

KORE is listed on the main board of the Singapore Exchange Securities Trading Limited (SGX-ST). It is managed by Keppel Pacific Oak US REIT Management, which is jointly owned by Keppel Capital and KORE Pacific Advisors.

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