Hey fellow REIT investors! Today, I want to talk about something that’s been bugging me a little. You know I usually look at REITs with a long-term lens, but sometimes even the best REITs make certain moves that leave me thinking… “Hmm, is this really the best timing?”
And that’s exactly what’s happening with two familiar names this week – Frasers Centrepoint Trust or FCT and Keppel Pacific Oak US REIT or KORE. Both of them are making significant announcements: FCT’s proposing a major acquisition, and KORE is seeking unitholder approval to change their trust deed. And while the proposals may have their own merits, I can’t help but feel the timing is just… off.
Let’s dive into both cases and I’ll share why I think investors – especially those who’ve held on through tough times – might not be jumping with joy.
But before we dive in, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own some of the REITs discussed, but what works for me might not work for you.
Alright, let’s get started!
FCT – A Strong REIT, But Is This the Right Time?
Let’s start with FCT. This is a well-managed REIT with a resilient suburban mall portfolio, and I personally respect the way the managers have run things over the years. But this week, they dropped a big announcement: they’re proposing to acquire the remaining interest in Northpoint City South Wing for over $1.1 billion.
Now on paper, there’s a lot to like: the mall is a familiar asset to the REIT, it is fully occupied, integrated with transport, and serves a growing population catchment area. There’s potential for asset enhancements initiatives, operational synergies with existing properties, and even a projected 2% DPU accretion. So why am I not jumping to subscribe?
Because the unit holder dilution and impact on gearing just doesn’t sit right with me.
FCT is raising no less than $400 million through a placement and preferential offering, with issue prices below both their Net Asset Value per unit and even the price of their last placement for the previous acquisition for Nex shopping mall. The private placement at $2.09 is below their book value of $2.23 and the $2.18 price for Nex’s acquisition. This is dilutive to existing unit holders like us!
It’s also going to raise $200 million in perpetual securities. While this does not increase the official gearing ratio, we should always view the gearing risks of a REIT by including pepetual securities as well. This brings total gearing to above 42% – still safe, but higher than what many investors are comfortable with.
And here’s the other significant issue: timing.
We’re starting to see signs of an uptrend in REIT share prices, driven by the lower interest rate expectations. Why raise money now, especially through equity, when perhaps a few more months could have given FCT better pricing power? Perhaps units would trade above N.A.V. and the equity fund raising will not be dilutive anymore.
Source: www.reit-tirement.com
Plus, many investors are still uneasy about the potential impact of the upcoming RTS Link to Johor Bahru. Will it affect footfall at Northpoint City? While the management argues that population growth in the catchment of Northpoint City will offset that, uncertainty tends to freeze decision-making – and I suspect many unitholders are still processing this and are undecided.
Now, I want to be fair – I also get that the seller may have wanted to close this deal sooner rather than later, especially ahead of potential market shifts. And maybe management saw a window before interest rates start to turn more volatile again. But from a unitholder’s perspective, I think many are feeling that this deal came just a little too soon.
That said, FCT is a strong REIT, and the property is strong. I expect the rights issue to be fully subscribed. But are investors enthusiastic that the transition is taking place right now? From what I’m seeing… probably not.
KORE – Finally, a Dividend Comeback? Wait, Not Yet…
Now let’s move to the second case – and this one is even more sensitive.
Keppel Pacific Oak US REIT or KORE just released its notice for an upcoming EGM. And the proposal? Amend the trust deed to allow for higher borrowing limits and introduce a new metric for distribution rights. Now, you may remember that KORE shocked investors in 2024 by suspending distributions. Since then, investors – many of whom have been long-suffering – have been patiently waiting for dividends to resume.
So imagine the reaction when, instead of a simple “we’re resuming distributions soon”, we get… another EGM proposal to amend the rules by which dividends will be declared and distributed to investors.
Now, the changes would actually bring KORE’s trust deed more in line with US-listed REITs, especially in terms of distribution flexibility and treatment of realised gains and losses.
What KORE is referring to is a structural difference in the US office market — unlike in Singapore, landlords in the US are typically responsible for significant capital expenditure just to secure or retain tenants. This includes funding tenant renovations, paying leasing commissions, and offering generous incentives, all of which can eat into cash flow and reduce distributable income. In contrast, the Singapore office market tends to be more landlord-friendly: tenants usually pay for their own fit-outs, and lease incentives are minimal. So, when KORE says the US office market “requires substantial capital injection from landlords,” they’re highlighting a key operational challenge that doesn’t apply to Singapore REITs to the same extent.
Hence, from a management standpoint, the EGM proposal makes perfect sense—they don’t want to risk having to halt dividends again if something unpredictable happens.
But here’s the issue. From a retail investor’s perspective, the environment has changed. In 2024, when the dividend suspension was first announced, the macro backdrop was more negative—rising rates, falling asset values, and panic in the US office sector.
But now? Interest rates are falling. Property values in the US have started stabilising. And there’s growing investor optimism.
Which makes the timing of this EGM proposal feel off. Investors are finally seeing light at the end of the tunnel… and just when they’re expecting to hear good news, they’re asked to approve a proposal that feels more like defensive posturing than a reward for patience. The share price dropped more than 7% a day after the EGM proposal was announced. This is a bit weird, as the prices didn’t move when it was first announced, but slumped on the second day. I suspect this is due to the low media coverage of the EGM, but in any case, the market didn’t like it.
And there’s no sweetener. No clear signal that dividends are coming back soon. No special payout to make up for the past. And that’s why I personally think this EGM may be a struggle for management to get the approval of their investors. I’ve read through the proposal in full. It’s not ridiculous, and I understand the reasoning behind it. But there’s nothing in there that gives investors an incentive to vote “yes”.
If KORE wants this to succeed, it needs to engage investors better—explain the rationale more clearly, give visibility into when distributions might resume, and maybe, just maybe, show a little goodwill to those who have stuck with them.
The Dividend Uncle’s Take – Sensible Moves, Wrong Time
If you ask me, these two REITs are both making strategic decisions that may make sense in the long term, but the timing just doesn’t feel ideal.
For FCT, it’s a solid acquisition, but they probably could’ve waited a bit. Better pricing for the equity raise, and more clarity around RTS Link could’ve made this a home run. Instead, it’s more of a cautious “okay, lah.”
For KORE, I see the logic of wanting to strengthen the REIT structure and avoid another dividend freeze. But the way this is presented—without dividends first being restored, without something tangible for investors—it feels tone-deaf. Especially in a market that’s finally turning a bit more positive for US office REITs.
I’m not saying either move is doomed. But when investor sentiment is just starting to improve, you need to ride the wave, not paddle against it.
Let me know what you think. Do you plan to subscribe to FCT’s rights issue? Will you vote “yes” to KORE’s EGM? Or why would you vote “yes”? I’d love to hear your thoughts in the comments.
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Until next time, invest wisely and stay steady!
The Dividend Uncle 
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