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KORE11's Dividends Expected to Drop Up to 50% with End of Minimum Guaranteed Income, Entering New Phase of Operational Exposure
- Kinea’s fund projects monthly dividends between R$ 0.60 and R$ 0.63 after December 2025, following the end of the Minimum Guaranteed Income (RMG)
- With a direct impact on returns, the case reignites debate over the effects and limitations of this mechanism in real estate funds
By: SiiLA News
07/28/2025 Since its IPO at the end of 2023, KORE11 has stood out among office real estate funds for offering one of the highest monthly yields in the segment: R$ 1.25 per share. Part of this performance was supported by the Minimum Guaranteed Income (RMG), a mechanism often used by REITs to cushion the initial impact of vacancy or the incomplete stabilization of newly acquired assets.
According
to the latest management report, this phase is nearing its end. Kinea, the
fund’s manager, expects the RMG to run out by December 2025. From then on,
dividends are expected to undergo a significant adjustment, with projected
monthly payouts between R$ 0.60 and R$ 0.63 per share — a drop of up to 50%.
“Considering the fund's current revenue generation, RMG consumption, and
vacancy absorption projections, annual dividends should stabilize between R$
7.20 and R$ 7.56 per share,” stated the manager.
The projected dividend cut indicates that KORE11’s portfolio is not yet capable of independently sustaining the level of returns initially presented to the market.
This scenario, now officially disclosed by the manager, had already been anticipated by SiiLA analysts in early 2024, following the fund’s IPO. At the time, a report published by REsource pointed out that although the REIT offered an attractive dividend yield, it was heavily reliant on the RMG — and that the real test would come when the fund had to “stand on its own.” Read the full article: Minimum Guaranteed Income Is Kinea’s Bet in New Office REIT with Class B Properties
While RMG can be useful as a transitional mechanism for developing or still-stabilizing properties, experts consulted by REsource warn of the risks associated with its prolonged use. When applied from the IPO — as in the case of KORE11 — RMG can delay critical evaluation of a fund’s organic revenue generation and may reveal structural weaknesses only once the subsidy ends. The end of the RMG will bring to light, more transparently, the actual performance of the assets.
Transparency Praised, But Investors React
Despite the projected drop in dividends, Kinea’s transparency in communicating the future scenario was well received by many investors. Still, there was criticism — mainly because the annualized yield, previously around 15%, is expected to fall to approximately 9%. The manager itself referred to this new level as the fund’s “cruising speed.”
In addition to the changes in distributions, the fund has also been hit by a decline in its share price. Since the IPO, KORE11 has seen a 29% drop in market value. According to data from the Clube FII platform, its share price peaked at R$ 112.93 and is currently trading around R$ 71.
RMG Cases Highlight Limits of Cash Generation
Although widely used in the sector, the RMG mechanism is increasingly questioned by analysts, investors, and even fund managers. By temporarily guaranteeing a distribution flow not supported by actual property operations, RMG can distort metrics such as Cap Rate and create a perception of profitability that does not reflect the assets’ true performance. This raises the risk of investment decisions being based on figures inflated by a temporary mechanism.
In August 2024, a REsource article highlighted the impact of RMG in transactions like River One and Torre Crystal, where guaranteed income directly influenced pricing and return expectations.
In KORE11’s case, with the RMG ending in December 2025, the fund will, as of 2026, operate exclusively on revenue generated by the properties in its portfolio. Occupancy rates, rental values, and the ability to absorb vacant space will become the key drivers for sustaining distributions going forward.
Portfolio Overview
KORE11’s portfolio consists of four commercial properties — three in São Paulo and one in Rio de Janeiro. In São Paulo, the fund owns the Morumbi Office Tower in the Chucri Zaidan region. With 19,300 sqm, the property currently has a 14% vacancy rate, below the regional average of around 18.4%, according to Market Analytics platform data. Another asset is the Alameda Santos building in the Jardins area, which also shows a 14% vacancy rate, while the regional average is 13.6%.
The Corporate Plaza in Chácara Santo Antônio is 100% occupied — the only fully leased property in the portfolio.
In Rio de Janeiro, the fund owns a tower in the Centro Empresarial Botafogo. The building, located on the city’s waterfront, has a 9% vacancy rate and is considered a Class A asset.
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